Wednesday, 9 April 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Acting Clerk-Petitions have been lodged for presentation as follows: National Flag To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens respectfully showeth: That the Australian Flag symbolises the continuity between Australia's past, its present and its future. That we are completely satisfied with the design of the existing Australian national flag. That the presence of the Union Jack on the flag represents not a subversion to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression. Nevertheless we recognise the right of all Australians to contribute to any future decisions on the design of the flag. Your petitioners therefore humbly pray that no change be made to the Australian flag without the consent of the entire community through a referendum. And your petitioners as in duty bound will ever pray. by Senator MacGibbon (from 114 citizens). To the Honourable President and members of the Senate in Parliament assembled: The petition of the undersigned shows: (1) The Agreement between the United States of America and Australia concerning the Joint Defence Space Research Facility at Pine Gap may be terminated by either Government on one year's notice from 19 October 1986. (2) In the event of war between the United States and the Soviet Union, access by the United States to Pine Gap's facilities makes it a probable nuclear target. (3) Access by all nations to Pine Gap's capacity to monitor and verify compliance with existing and future nuclear limitations treaties could contribute to world peace and security. (4) The people of Australia are entitled to be consulted, through their representatives in Parliament, on any extension or modification of the Agreement affecting their lives, security and welfare. And your petitioners humbly pray that: (1) The Agreement between the United States and Australia concerning the Joint Defence Space Research Facility at Pine Gap be terminated one year from October 1986. (2) Public discussion and inquiry be instituted into the feasibility of negotiating a new agreement with the United Nations during the International Year of Peace offering the verification facilities of the Pine Gap base to all nations. (3) Any agreement concerning the future use of Pine Gap be referred to Parliament for ratification. And your petitioners as in duty bound will ever pray. by Senator Sanders (from 11 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in January 1983 the Latvian born nursing sister Lidija Lasmane-Doronina was arrested by the Soviet authorities and subsequently sentenced to sixteen years in a strict regime enforced labour camp with an additional three years in exile. She had been charged with maintaining contact with Baptists abroad and for being in possession of a copy of the 1975 Helsinki Accords and of having a list of the Soviet Union's transgressions of them. Since Lidija Lasmane-Doronina was only exercising her rights as guaranteed by the United Nations Universal Declaration of Human Rights to which the Soviet Union is a cosignator, your petitioners humbly pray that the Members of the Senate will intercede with the Soviet authorities on her behalf and so secure her early release. And your petitioners as in duty bound will ever pray by Senators Peter Baume (from 19 citizens) and Robertson (from 84 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That the Hawke Government should; pass on the full benefit of lower international oil prices on 1 March 1986; not increase or extend fuel taxes; and maintain its tax cut commitments. Your petitioners humbly pray that the Hawke Government honour its commitment to the Import Parity Pricing policy. And your petitioners as in duty bound will ever pray. by Senators Michael Baume (from 17 citizens) and Brownhill (from 127 citizens). To the Honourable the President and members of the Senate in Parliament assembled. Your Petitioners most humbly pray: (i) that the Hawke Labor Government pass on the full benefits of lower international oil prices on March 1st, 1986; and (ii) that the Hawke Labor Government does not increase or extend fuel taxes And your petitioners as in duty bound will ever pray. by Senator Robertson (from 69 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 Peter Baume (from 19 citizens). To the Honourable President and members of the Senate. The humble petition of we the undersigned citizens of Australia respectfully showeth that: The high interest rates on home loans of 13.5% has and is placing the recipients in a financially disastrous position, as thousands have lost their homes and thousands more will do so if these appalling conditions continue for the young and established home purchasers. Your petitioners therefore humbly pray that your House urge politicians that therefore no government or opposition in a power position should continue to tolerate this cruel, vicious procedure that shatters the very structure of family life. We need a five year period to reduce this absurdity by tackling it at its source. Firstly, interest repayments on home loans to be reduced by 2% annually for the next five years or until it is down to 6%. This would, or should diminish union demands, and cause no hazard for investors, who could reinvest in Government projects, or other worthwhile ventures and also ease the burden on Social Securities. Your petitioners in duty bound will ever pray. by Senator Haines (from 360 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 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 Senators Peter Baume (from 383 citizens), Bjelke-Petersen (from 21 citizens), Brownhill (from 73 citizens), Sir John Carrick (from 226 citizens), Morris (from 19 citizens), Reid (from two citizens) and Robertson (from 56 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 is a harmful, dangerous and divisive 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 Bolkus (from 40 citizens), Jessop (from 281 citizens) and Reid (from 46 citizens). In this session of Parliament the proposed Bill of Rights will come before the Senate to be debated. We, the undersigned, would like to voice our protest at the proposed Bill. 1. Because of the haste and secrecy with which this legislation was passed through the House of Representatives despite the fact that it will adversely affect areas of immense importance to liberty and freedom and is contrary to the spirit of the Australian Constitution. 2. The Bill is based upon the United Nations International Covenant on Civil and Political Rights which has been rejected both by the United States of America and Great Britain but accepted by the Warsaw Pact countries. We therefore believe there is a potential threat to our national security through making treaties of this kind with foreign nations, many whom do not practice the principles that they have covenanted to uphold. 3. Because our Australian Constitution states that ``whereas we the people'' give you the government these rights, the Constitution limits the right and power of government. The proposed Bill of Rights reverses this totally and states that ``we the government, give you the people these rights''. This totally reverses the nature of government in this country. 4. Our rights and the principles of freedom are now protected by current legislation, Common law and the present Constitution. 5. Because it transfers the power of interpretation of legislation from the Parliament of Australia (the democratically elected institution) to the Courts (unelected body of people). 6. Because the Bill of Rights will be administered by the Human Rights Commission which is an unelected body of people with powers which are outside and not subject to the normal processes of law-no appeal, closed hearings, no legal representation. 7. That the implementation of the legislation through a process of new educational initiatives will result in the centralised control of education and this will inevitably lead to the destruction of States' rights and just as inevitably the centralised control, by government, on human behaviour. We therefore request that you vote to reject this proposed Bill of Rights in any shape or form being introduced in Australia. Yours humbly. by Senator Gareth Evans (from nine citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That we oppose utterly and completely the proposed Bill of Rights 1985 Bill because it will: Threaten our rights by making them subject to the will of the present and future Government Give unjustifiable power to a commission not elected by the people namely the Human Rights Commission Give no protection for the family, for private property for private trade and enterprise for the churches and freedom of worship or for the maintenance of the present judicial system. As there has been no groundswell for a Bill of Rights from the greater part of the Australian community, it is our will that you take immediate action to prevent the Bill of Rights being passed by the Senate. And your petitioners as in duty bound will ever pray. by Senator Reid (from 11 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens respectfully showeth that: Regarding the proposed Bill of Rights we wish to protest as follows: (i) We are concerned about the haste with which this legislation passed through the House of Representatives and the apparent inadequate consideration of its effects on liberty and freedom in Australia. (ii) This particular Bill is based on the United Nations International Covenant on Civil and Political Rights and it has been rejected by the United States of America and Great Britain. It concerns us that Australia is prepared to consider such a move especially in the light of the fact that Warsaw Pact countries have accepted it. (iii) Our Australian Constitution states that ``whereas we the people'' give you the government these rights. The Constitution limits the rights and power of government. The proposed Bill of Rights reverses this totally and states that ``we the government, give you the people these rights''. This totally reverses the nature of government in this country. Our rights are now protected by current legislation, Common law and the present Constitution. (iv) We have a grave concern because this new legislation will transfer the power of interpretation of legislation from the Parliament of Australia to the Courts. It appears that the government is seeking to relinquish its elected responsibility. (v) The Bill of Rights, which will be administered by the Human Rights Commission, which is an unelected body of people, will be able to exercise powers which are outside and not subject to the normal processes of law-no appeal, closed hearings, no legal representation. Your petitioners most humbly pray that the Senate in Parliament assembled should reject the proposed Bill of Rights, and your petitioners as in duty bound will ever pray. by Senator Robertson (from eight citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that the so-called `Australian Bill of Rights' which is now before the Senate, is an inherently dangerous piece of legislation. Furthermore, it takes away many of the basic and important rights Australians now have. It is a blatant attempt to engineer social change according to a given ideology without the people having any say in the matter. It should be settled by a Referendum. Your petitioners most humbly pray that the Senate in Parliament assembled should reject the Australian Bill of Rights. And your petitioners as in duty bound will ever pray. by Senator Robertson (from six citizens). To the Honourable the President and members of the Senate in Parliament assembled: the humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the Bill of Rights because it adversely affects areas of the liberty and freedom of Australians. It will operate against: The States and our Federal system of Government Criminal Justice The Police Education Families Employer/Employee relations It will remove the power of the people through Parliament, by giving power to a new more powerful Human Rights Commission which is not elected, but can act as a Star Chamber. We do most earnestly wish to keep our system of Common Law. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject this Bill. And your petitioners as in duty bound will ever pray. by Senator Sheil (from 582 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 we oppose utterly the proposed Bill of Rights because this Bill will Transfer to government powers not given nor intended to be given by the Constitution Threaten our rights by making them subject to the will of this and any future Government Turn the Human Rights Commission into a political Star Chamber with unjustifiable power Abrogate Common Law and common liberty Set the State above the individual Restrict Rights to those specified by the Bill We the undersigned believe in democracy and freedom and earnestly entreat you to recognise that this Bill will undermine the fundamental basis of these. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject a Bill of Rights in this or any other form. And your petitioners as in duty bound will ever pray. by Senator Sheil (from 1,719 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 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 petitioners as in duty bound will ever pray. by Senator Jessop (from 34 and 84 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That the Bill of Rights and the Human Rights and Equal Opportunity Bill 1. Offer nothing more than is already available under Common Law, 2. Deny some Human Rights and do not include others, 3. Give dangerously wide powers to an unelected body, and 4. Could cause far more damage than they could possible cure. Your petitioners request that the Senate should: Completely reject both the Bill of Rights and the Human Rights and Equal Opportunity Bill. And your petitioners as in duty bound will ever pray. by Senator Jessop (from 21 citizens). To the Honourable President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that: The Hawke Labor Government's `Bill of Rights' seeks to make changes in the constitutional balance in Australia by intruding into affairs of individuals. Your petitioners humbly pray that the Senate, in Parliament assembled, urge the Government to: Repeal `The Bill of Rights' legislation and the establishment of `The Human Rights Commission' and not restrict the individual freedoms of Australians and its present justice system. by Senator Robertson (from 25 citizens). To the Honourable the 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 size 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 additional taxes. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 222 citizens). To the Honourable President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's `White Paper' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains Tax Hidden Death Tax described as ``Capital Gains Tax after death'' Gift Tax Increased Company Tax Employer taxes on employees' employment benefits All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject these tax proposals. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 23 citizens). To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that: 1. The Watsonia Army Barracks contains electronic communication facilities, operated by Australian and American personnel, that gives the United States the ability to pin-point Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for U.S. nuclear submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `joint Australian-U.S.' electronic communication facilities in the Watsonia Army barracks. by Senator Zakharov (from 54 citizens). To the Honourable the President and members of the Senate in parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth government 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognize that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection, storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving `property' or ownership rights over seeds to individuals, organisations or enterprises is appropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 33 citizens). To the Honourable the President and members of the Senate of Australia: The Petition of the undersigned citizens respectfully shows that there has been clear demonstration of public dissatisfaction with the mismanagement of the Victorian Otway forests, and we pray that: The constitution of Australia be reformed to recognise significant expressions of public concern, e.g. petitions, by the formation of a committee to represent public requests. by Senator Vallentine (from 59 citizens). To the Honourable the President and members of the Senate in the Parliament assembled and to the Australian Government: This petition of concerned Australian citizens respectfully points out that: foreign warships visiting Australian ports give acceptability to the increasing militarization of the Indian and Pacific Oceans; W.A. endures a visit of a foreign warship on average every 1.5 weeks; a situation of de-facto ``home-porting'' facilities exists in W.A.; there is increasing citizen concern that nuclear armed/nuclear powered warships put Australian ports and people at risk in many ways. Your petitioners humbly pray that: The Australian Government refuse entry to Australian ports to all foreign warships. by Senator Vallentine (from 186 citizens). To the Honourable the President and members of the Senate in Parliament House assembled. We, the undersigned citizens of Australia, humbly pray that the parliament act to outlaw the practice of the large petrol companies also controlling petrol retail outlets in competition with independent petrol distributers and retailers who they supply, thus acting in a position of unfair competition, and leading to the large companies exerting unconscionable pressure on those independent distributers and retailers. And your petitioners as in duty bound will ever pray. by Senator Vigor (from 73 citizens). To the Honourable the President and the members of the Senate in the Parliament assembled. The Petition of the undersigned citizens of Australia showeth: That many Australian wage and salary earners and self-employed persons do not enjoy secure retirement incomes provided by superannuation; and That the Government issued in December 1985 Guidelines for the implementation of the proposed productivity decision by the Conciliation and Arbitration Commission and draft Operational Standards for Superannuation schemes. Your petitioners therefore humbly pray that the Government: 1. Guarantees to every employee the right and freedom to select the superannuation scheme of his/her choice. 2. Protects the individual exercising that freedom of choice from any coercion, influence or other pressure which may be applied by any employer, association or trade union. 3. Will recognise only those schemes which provide genuine superannuation and reject those schemes which do not provide for- preservation of benefits to retirement vesting of employer contributions equal employer and employee Trusteeship control to ensure security of investments. And your petitioners as in duty bound will ever pray. by Senator Robertson (from 67 citizens). To the Honourable the President and the members of the Senate in the Parliament assembled. The Petition of certain citizens of South Australia respectfully showeth: that the capital gains tax is an unwarranted burden on the rural sector, which will severely affect its long term viability. That the delay by the Government in introducing the capital gains tax is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the government introduce the capital gains tax legislation without delay and that the Australian Democrats join with the Opposition in opposing it. And your petitioners as in duty bound will ever pray. by Senator Messner (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. This petition of concerned Australian citizens asks that: The Government of Australia propose to the United States of America that the continuation of the lease of the facilities at Pine Gap depends on their agreeing to the Soviet proposals of a staged programme to rid the world of nuclear weapons by 2000. And your petitioners as in duty bound will ever pray. by Senator Sanders (from 112 citizens). The Petitions of the undersigned citizens of Australia being residents of South Australia respectfully showeth: that the humble petitioners respectfully seek a delay in the new funding arrangements planned for April this year for Subsidised Child Care Centres in Australia; and express total opposition to the cuts in child care which are beginning to have a deleterious effect on children's services in South Australia. Your petitioners therefore pray and urge the instigation of:- 1. Urgent discussions with State Governments, peak bodies representing children's services, and the A.C.T.U. 2. That such discussions ensure that funding mechanisms are fully explored and ensure more appropriate funding guidelines. 3. That such discussions examine regulations for the quality assurance of children's services. 4. That such discussions be mindful of the need to retain high quality children's services and trained personnel to work in children's services. And your petitioners as in duty bound will ever pray. by Senators Bolkus (from 53 citizens), Foreman (from 60 citizens) and Maguire (from 62 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned respectfully brings to your attention: That there are individuals who have a conscientious objection to war because of their religious or general moral principles. And that the Parliament of this country has already recognised the right of such individuals not to have to participate in military service in time of war. And that all Australian taxpayers are required to contribute to military expenditure, regardless of their beliefs, through that part of their tax that is used for the Defence budget And that while we acknowledge the right of the Government to levy taxes and to decide on the expenditure of monies so collected we cannot accept that those with a conscientious objection to war should be forced to contribute to military expenditure Your Petitioners therefore pray That the Federal Government will acknowledge the right of those who have a conscientious objection to war to withhold their taxes from military allocations and enable the military related proportion of their taxes to be used for peaceful purposes only. And, as we note that taxes are collected or disbursed for specific purposes (such as for Medicare), that the Commissioner of Taxation be directed that the military-related proportion of taxes collected from conscientious objectors to war be set aside in a separate fund, the Peace Tax Fund, to be used only for peaceful purposes, such purposes to be determined by the Government. by Senator Sanders (from 291 citizens). Senator MASON(New South Wales) —by leave-I present the following two petitions which are not in accordance with the Standing Orders from 32 and 33 citizens respectively, the former requesting that section 28 (i) of the Bill of Rights Bill 1985 be blocked, and the latter requesting that the same Bill be completely rejected. We the under-signed, demand that Section 28 (1) of the Bill be blocked by the Australian Democrat Senators. I wish to have the Bill of Rights stopped. I wish to register my complete rejection of the legislation. I wish to view, discuss and vote on the Bill of Rights at a properly convened referendum. Senator JESSOP(South Australia) —by leave-I present the following petitioning letter which is not in accordance with the Standing Orders from nine citizens requesting that the Australian Bill of Rights Bill 1985 be rejected: Dear Senator, We wish to express to you our alarm at the proposed Human Rights Bill, now before Parliament. Rather than preserve the legal and human rights of Australians, now in operation, this Bill lays the way right open for tyranny and abuse of these rights. It is a Bill which has received no public debate, insufficient Parliamentary debate, and bears all the hallmarks of being hastily put together. The far reaching effects of this Bill could be devastating to the time-tested and highly-valued system of justice in this country. It is most worthy of note that the Bill is being received gladly by the leaders of totalitarian governments, but has been rejected by the democratic parliaments of Great Britain and United States of America. This nation should, in fact MUST, also reject the Bill. We urgently request that you vote against this Bill, in its entirety, when it comes before the Senate. Letter received. Petitions received. Senator COONEY(Victoria) —I give notice that it is my intention at the giving of notices tomorrow to withdraw Business of the Senate Notice of Motion No. 2 standing in my name for that day of sitting for disallowance of the Artifical Conception Ordinance 1985. I seek leave to make a brief statement. Leave granted. Senator COONEY —The Senate Standing Committee on Regulations and Ordinances has agreed to withdraw its notice of motion of disallowance of the Artificial Conception Ordinance. At a later hour of this day, I will table a report on the Committee's scrutiny of the ordinance and make a statement relating to it. Senator MACKLIN(South Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate, noting that- (a) the United States (US) wind energy industry reached a significant milestone in August 1985 with the generation of the first million barrels of oil equivalent; (b) wind generation capacity in the US is now at 1,097 megawatts, roughly the equivalent of a large nuclear reactor; (c) this capacity was installed at a cost of $1.6 billion, half the current cost of a nuclear reactor; and (d) the generation of electricity by wind has saved over 7 1/2m pounds of atmospheric emissions over the best coal technologies yet to be built, urges the Federal Government to provide similar incentives to those available in the US to assist in the equally rapid development of an Australian wind energy industry. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the broken promises of the Prime Minister (Mr Hawke) on the following subjects: the assets test, the taxation of lump sum superannuation, the capital gains tax, interest rates, the value of the dollar, petrol prices, inflation, the trilogy and the creation of 10,000 traineeships under the Priority One Scheme, culminating last week in the wilful breaking of the promise made by the Prime Minister only two weeks ago not to lift the home loan interest rate ceiling; (b) notes that the Prime Minister's determined policy of making promises he has no intention of keeping, appears to be in conflict with his continued assertions about integrity; and (c) requests the Prime Minister to advise the Senate which of his few remaining unbroken promises he intends to break next. Senator WATSON(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) condemns the Hawke Labor Government for its failure to significantly reduce interest rates; and (b) condemns the Government's discriminatory and unequal treatment of borrowers from different types of institutions, banks, building societies and credit unions as unfair, unjust and un-Australian. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators, and I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. National Crime Authority-Annual Report 1984-85-Pursuant to sub-section 61 (6) of the National Crime Authority Act 1984-together with the text of a statement by the Inter-Governmental Committee on The National Crime Authority relating to the report. 2. Law Reform Commission-Report on Domestic Violence-Pursuant to Section 37 of The Law Reform Commission Act 1973-together with the text of a statement relating to the report. 3. Commonwealth Scientific and Industrial Research Organization-Annual Report 1984-85-Pursuant to Section 57 (4) of the Science and Industry Research Act 1949-together with the text of a statement relating to the report. 4. National Pacific Cooperation Committee to the Australian Government-Report on Australia and Pacific Economic Cooperation. 5. Australian Broadcasting Corporation-Annual Report 1984-85-Pursuant to Section 63M of The Audit Act 1901. 6. Commonwealth Fire Board-Annual Report 1984-85. 7. Fishing Industry Research Committee-Annual Report 1984-85-Pursuant to Section 19 of The Fishing Industry Research Act 1969. 8. Approved Commonwealth Capital Works-report. 9. An Evaluation of The Aboriginal Study Grants Scheme: Summary and review of recommendations-report. 10. Industries Assistance Commission-Report on Electric Lamps. 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 Gareth Evans) read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.11) —I move: That the Bill be now read a second time. I seek leave, Mr President, to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill will ensure that section 50 of the Trade Practices Act does not apply to the mere transfer of a dominant position in a market from one person to another, commonly known as `bare transfers of monopoly power'. This Bill is virtually identical to provisions contained in the Trade Practices Amendment Bill 1985, which was passed by the House of Representatives in November 1985 and introduced into this Chamber on 2 December 1985. The Government is bringing forward these measures as a separate Bill having regard to views expressed in this Chamber about the Bill in its earlier form and the particular attention which has been focused on these provisions. Until the last few weeks, this provision, both before it was embodied in a Bill and afterwards, attracted no criticism and was widely supported to overcome an apparent anomaly in the existing application of section 50. This provision received the endorsement of the majority of this Chamber, but because the Bill in which it was contained encompassed other provisions, the Liberal Party of Australia indicated it was going to vote against it, which would virtually nullify the intended changes to section 50 and certainly nullify the will of the Parliament in relation to this provision. Therefore, the Government has been obliged to bring it in in separate form. The anomaly referred to above arose when the original merger test was changed in 1977 to the present test of acquisition of market dominance. Prior to 1977, the Act did not affect bare transfers of monopoly power, and there was no public discussion at the time the Act was amended in 1977 to suggest that it should cover such situations. However, a decision by a single judge of the Federal Court held that the section did extend to bare transfers. The Act was not intended to, and should not, interfere with bare transfers of monopoly power, because it is a competition statute; bare transfers of monopoly power are, by their very nature, neutral in competitive terms. In other words, the change in ownership of an existing dominant firm, with nothing more, will normally have no effect on competition. The practical difficulties arising from this anomaly were demonstrated in the acquisition in 1982 of the Swan Brewery, a dominant firm in the Western Australian market, by Bond Corporation. At that time the Trade Practices Commission decided not to take action against Bond Corporation notwithstanding the apparent breach of section 50, because the Commission felt, as a competition authority, the acquisition was at worst competition neutral. The difficulties experienced by the Commission were exacerbated because, whilst Bond applied for authorisation of the acquisition, the Commission could find no public benefit to enable it to grant authorisation. This was because the authorisation test for mergers is predicated on mergers having an effect on competition, and is therefore inappropriate for bare transfers of monopoly power. In any bare transfer situation it is often difficult to establish a net public benefit. Bare transfers are normally neutral in this area. Thus whilst the Commission did not authorise the Bond/Swan merger, it also decided not to act against it. It is clearly unsatisfactory that this situation should continue and to this end this Bill recognises the reality that bare transfers of monopoly power are not appropriate to be dealt with by the competition authority under the Trade Practices Act. This whole issue was brought to a head by the recent offer by Bell Resources Ltd for shares in Broken Hill Proprietary Co. Ltd. That bid has now been withdrawn and another bid made. These bids have caused much speculation and confusion about how the Trade Practices Act may have applied. Accordingly it is appropriate that I give some explanation as to the Act's application here. Whether the Bell offer, if successful, would amount to an acquisition by Bell of dominance in a market, is a matter which only the Court can determine. If it so held, Bell would be in breach of the Trade Practices Act once the acquisition occurred. The Trade Practices Commission can obtain an injunction to prevent such a breach of the Act taking place. Indeed, in response to the initial bid, the Trade Practices Commission instituted proceedings on 26 February seeking such an order and seeking interim restraining orders until the will of the Parliament was known; in the event the Court required Bell to give the Commission two days notice of the issuing of offer documents, which would have enabled the Commission to reassess its position at that time whether it wished to pursue an application for injunction. The Commission attempted to discontinue the above proceeding on 4 April 1986. In the event it was not able to do so and the matter has been adjourned until 14 April 1986. In any such proceedings, there is no inquiry into the public benefits or detriments of the Bell bid. The only question to be decided by the Court is whether the bid, if successful, would result in the acquisition of dominance of a market by Bell, and thereby breach section 50 and, if so, whether on the balance of convenience the Court should grant an injunction restraining Bell from continuing with its offer. The only way that an inquiry into the public benefits of this offer could be undertaken by the Trade Practices Commission is if Bell chooses to apply for authorisation of its acquisition. This it has not done. Nor is there any guarantee that it will, even if the Commission institutes further injunction proceedings; it is a matter entirely for Bell to decide. Such an investigation by the Commission cannot be initiated by the Government either. Therefore, if the Act continues to apply to bare transfers of monopoly power, that would not in any way guarantee that such transfers will be the subject of inquiry on public benefit grounds by the Trade Practices Commission or anyone else. On the contrary, the only result would be the very undesirable one that the Trade Practices Act would unintentionally make existing monopolies effectively takeover-proof because such takeovers would be prohibited by section 50, and the authorisation test would be virtually impossible to satisfy. The provisions in this bill were first mooted quite some time ago and were embodied in a Bill, and passed by the House of Representatives, in November last year, well before the Bell bid was made. The amendment will apply to any acquisition which takes place after the commencement of the legislation. Any acquisition which takes place before that date will stand to be considered under the present law. It could be argued that not to proceed with this amendment would in reality be changing the rules which could reasonably have been anticipated to apply by now. I commend the Bill to the Senate. Debate (on motion by Senator Reid) 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 Gareth Evans) read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.12) —I move: That the Bill be now read a second time. I seek leave, Mr President, to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill is to strengthen and improve the working of the Trade Practices Act 1974 in significant respects. It provides for the amendment of key provisions directed at restrictive trade practices in order to increase their effectiveness. It includes important new provisions to extend the protection afforded to consumers by the Act. The Bill also clarifies the intended meaning of a number of provisions and effects other changes for which experience with the legislation has shown a need. This Bill supersedes the Trade Practices Amendment Bill 1985. It differs from the earlier Bill principally in that proposed sub-section 50 (2C), relating to what are commonly called bare transfers of monopoly power, has been deleted. It has become apparent that the Trade Practices Amendment Bill was likely to have been rejected in this Chamber, notwithstanding that the majority of Senators support virtually the whole Bill, because the Bill contained sub-section 50 (2C). The Government is determined that the major reforms and improvements in this Bill should not be shelved or delayed as a bargaining chip in relation to the quite different question of Government action concerning Bell Resources Ltd bidding for shares in BHP Ltd. The Government will not abandon consumers and reputable, competitive businesses who need now the protection and assistance which this Bill provides. The Trade Practices Act is a most important piece of legislation for the regulation of business practices in Australia. It is now some nine years since the Act was last comprehensively reviewed and it is time to address a number of problems which have arisen. The Government has demonstrated its sound economic management and its commitment to restoring the efficiency and vitality of Australian industry, with consequent benefits in increased employment opportunities and greater availability of reasonably priced commodities. The Trade Practices Act plays an important role in ensuring that the maximum benefits are obtained through an efficient allocation of our national resources, as well as protecting the interests of the consuming public and reputable businesses. The Government attaches great importance to ensuring that the Act is effectively and appropriately achieving its dual aims of promoting efficiency through competition-and thereby ensuring goods are provided to the consumer at the cheapest price-and providing consumers and business people with an appropriate measure of protection against unscrupulous traders. This Bill together with its companion Bill-the Trade Practices (Transfer of Market Dominance) Amendment Bill-represent the outcome of a major review of both the competition and consumer protection provisions of the Trade Practices Act which was condemned immediately this Government came to office. The review, which was undertaken without preconceived notions or entrenched attitudes, led to the issuing in February 1984 of a Green Paper entitled `The Trade Practices Act: Proposals for Change'. The shipping provisions in Part X of the Act, administered by my colleague the Minister for Transport, are the subject of a separate review and are not dealt with in this Bill. That review has resulted in the recent release of the Liner Shipping Report. The introduction to the Green Paper indicated that it was intended to be a catalyst for public discussion and debate about the Trade Practices Act. The Green Paper succeeded in fostering debate, and 120 submissions were received from a wide range of groups including large and small business groups, representatives of other special interest groups, trade unions, consumer organisations, academics and other individuals. The original proposals were substantially reviewed in the light of these comments. Further changes were made following consultations earlier this year with key interest groups representing large and small business, consumers and the Australian Council of Trade Unions. The process of consultation was extensive and proved valuable. As a result of that process, a number of the provisions of the Bill differ in significant respects from the proposals which were put forward in the Green Paper. The Bill also contains some provisions, not foreshadowed in the Green Paper, to deal with specific problems that have come to light since that Paper was published. Proposals for recall of unsafe products were canvassed in a White Paper entitled `Recall of Unsafe Products' issued for public comment by the Office of Consumer Affairs in the Attorney-General's Department in June 1985. The Paper was the culmination of discussion over some years with industry and consumer groups on the options for an effective product recall system. The proposals in the Bill have been developed in the light of that process of consultation and of comments received on the White Paper. As indicated in the Australian Labor Party Platform, this Government is committed to the development of uniform consumer protection legislation throughout Australia. The Standing Committee of Consumer Affairs Ministers is actively pursuing this issue, and has created a special working party of officials. Together with the Green Paper, the Government released a list of amendments to the Act sought by the State and Territory Governments to facilitate the achievement of uniformity by making the Act a suitable basis for mirror legislation elsewhere in the Commonwealth. Public comment was invited and extensive consultation with the State and Territory Governments has taken place. Some of the amendments to Division 1 of Part V have been formulated specifically to make Division 1 a more suitable basis for mirror legislation. Several States have now indicated their willingness to enact legislation mirroring the majority of Division 1 of Part V and related provisions in Part VI of the Act as proposed to be amended. I cannot over-emphasise the importance of achieving uniform legislation in the consumer protection areas. Differences and conflicts between legislative provisions in force in the various jurisdictions can pose real problems for businesses and cause confusion on the part of consumers. By promoting uniform consumer protection legislation throughout the Commonwealth, it is expected that the costs of compliance for business, and ultimately the community, will be reduced. The Government will be actively encouraging those States which have not yet undertaken to enact mirror legislation to do so, and will be seeking to ensure that the uniformity is maintained in the future. Once the so-called mirror fair trading legislation is enacted, we will turn our attention to other areas of consumer protection law and seek to promote uniformity in those areas also. The question of uniformity is not a major problem in relation to the competition provisions in Part IV of the Act, since the States have not generally legislated in this area. In its approach to business regulation, the Government is committed to ensuring that unnecessary existing regulation is wound back, and adequate justification is put forward for new regulation. The Trade Practices Act lays down rules designed to preserve an environment in which the forces of competition can be effective and, at the same time, to protect consumers and reputable businesses from practices which are unfair. Beyond that, the Act does not seek to regulate the way in which firms carry on their businesses. Its aim is to enable businesses to make their own decisions in a free but fair market. Anti-competitive private regulation of business can be just as restrictive as, or even more inhibiting than, Government regulation without being based on the same broad concern with public interest. In improving the effectiveness of the Trade Practices Act, we will ensure that anti-competitive private regulation of business is kept to a minimum, so that free and fair competition becomes the prime regulator for business. Content of Bill The more important features of the Bill, which I will now outline, represent significant advances in restrictive trade practices and consumer protection law. Definition of `consumer' The definition of `consumer' in section 4b determines the types of transactions to which the conditions and warranties contained in Division 2 of Part V apply. The current definition, which involves a monetary limit of $15,000 on some transactions, was set in 1977. The real value of that monetary limit has been significantly eroded since that time. It is proposed to increase the monetary limit to $40,000 to restore the protection given by the Act to consumer and small business purchasers. Also, the Government sees a need to provide protection for truck owner-operators whose business is directly affected by the dependability of their vehicles. After consideration of the recommendation of the National Road Freight Industry Inquiry (the `May Report'), section 4b is to be amended to provide to purchasers of commercial road vehicles the protection given to consumers under Division 2 of Part V of the Act. Misuse of market power A competitive economy requires an appropriate mix of efficient businesses, both large and small. Whilst large enterprises may frequently have advantages of economies of scale, there are many occasions when large size does not of itself mean greater efficiency. However, a large enterprise may be able to exercise enormous market power, either as buyer or seller, to the detriment of its competitors and the competitive process. Accordingly an effective provision controlling misuse of market power is most important to ensure that smaller businesses are given a measure of protection from the predatory actions of powerful competitors. Unfortunately, section 46 as presently drafted has proved of quite limited effectiveness in achieving that result, principally because the section applies only to monopolists or those with overwhelming market dominance. Even in those cases, it can be extremely difficult for a plaintiff to establish the requisite predatory purpose on the part of the defendant corporation. The amendments proposed in clause 17 address these two problems and are designed to make section 46 much more effective. The test for the application of the section is to be reduced from that of a corporation `being in a position substantially to control a market' to a test of whether `a corporation has a substantial degree of market power'. As well as monopolists, section 46 will now apply to major participants in an oligopolistic market and in some cases, to a leading firm in a less concentrated market. The amendment will also make it clear that the court can infer the requisite predatory purpose from the conduct of the corporation or from the surrounding circumstances. Section 46 in its proposed form-which will be described as misuse of market power rather than monopolisation-is not aimed at size as such or at competitive behaviour as such of strong businesses. What is being aimed at is the misuse by a business of its market power. Examples of misuse of market power may include in certain circumstances, predatory pricing or refusal to supply. Price Discrimination I should mention that the Bill does not propose amendments to section 49 which deals with price discrimination. The Government has concluded that amendments of the kind which were canvassed in the Green Paper could have unintended and undesirable effects in particular leading to price rigidity. However, predatory price discrimination can be merely one manifestation of misuse of market power. The strengthening of section 46, and its more effective application to powerful buyers, will extend the potential application of that provision to predatory price discrimination. Mergers There has been much public debate recently about the level of merger activity in the Australian economy and the extent to which it should be regulated. Whilst the level of the debate has intensified recently following merger activity in the retail sector and in other markets, the public discussion was largely initiated by proposals in the Green Paper relating to section 50. Section 50 prohibits mergers which will result in a corporation being able to `control or dominate' a market, except where prior authorisation is obtained, on public benefit grounds, from the Trade Practices Commission. The Bill will close several loopholes which have come to light in section 50 in the last few years. The relevant provisions are directed to joint venture acquisitions and acquisitions by natural persons. Clause 19 inserts a new section 50a to deal with offshore mergers which affect a market in Australia. The Government is firmly committed to the encouragement of efficient Australian industry and to increasing our competitiveness on world markets. It has been decided that the existing `dominance' test in section 50 should remain essentially unchanged. The coverage of section 50 will not be extended beyond those mergers which result in undue concentration in a market. The competitive conduct of firms which increase their market power as a result of other mergers, will be subject to scrutiny under section 46 as proposed to be amended. At present the Act provides an opportunity for merger participants to seek authorisation from the Trade Practices Commission on public benefit grounds. Some business groups have claimed that the existing authorisation procedures are not adequate for dealing with industry restructuring. While the Government does not accept this view, this has resulted in reluctance to approach the Commission to ascertain its views on possible authorisation. The Commission has, however, made it clear that it regards desirable industry restructuring as a public benefit and has been prepared to authorise mergers for that purpose. In recognition of the reluctance and time constraints in merger cases, the Bill contains provisions designed to speed up considerably the authorisation process. In addition, the Bill widens the scope of directions which the Minister may give to the Commission pursuant to section 29. This will provide greater flexibility in relation to directions which can be given to the Commission in respect of particular issues to be taken into account, or bodies to be consulted in authorisation cases. In this respect the Attorney-General is considering directing the Commission to consult the Industries Assistance Commission in such matters. Other changes in competition provisions The Bill contains a number of other provisions which are of significance in relation to Part IV. By clause 51, the divestiture remedy in section 81 is being made more effective, particularly where the parties to the merger have conspired to breach section 50. To ensure Australia's international relations are not adversely affected, private proceedings which rely on the extraterritorial operation of the Act will require the Minister's consent. Provisions relating to the disclosure of financial interests by members of the Commission and the Tribunal are being brought into line with current practice. Also, it will now be made clear that the Court can grant consent injunctions and consent divestiture orders, and the Tribunal will be able to make consent determinations, without the need to have a full hearing of the matter. Prohibition against unconscionable conduct The green paper proposed a prohibition on unconscionable conduct by corporations in relation to a contract or proposed contract. Following consultation with business, industry and consumer groups, the scope of this amendment has been refined and the proposed section 52a will now prohibit, on a civil basis, unconscionable conduct by corporations in relation to consumer-type transactions. Where a contravention is proved, remedies under section 87 will be available, and the Trade Practices Commission will enforce the section by seeking injunctions where appropriate. The section is directed at conduct which, while it may not be misleading or deceptive, is nevertheless clearly unfair or unreasonable. For example, a corporation which attempted to take advantage of a buyer's obvious lack of understanding of a transaction might fall foul of this section. The new provisions will supplement existing provisions of Part V and strengthen the protection afforded to consumers against unscrupulous trading practices. Recall unsafe products The Act already contains provisions enabling bans to be placed on the supply of unsafe products. However, these provisions have no application to unsafe products supplied before a banning order is issued. There are at present no powers available to deal with the problem of unsafe products which have already reached the hands of consumers. The Government recognises that many industries have established voluntary procedures for the recall of unsafe products in the market-place, and it commends this responsible approach. However, to provide an adequate mechanism for remedial action across the range of potentially unsafe products, the Government considers it necessary to provide mandatory recall powers which can be used when necessary. Where no voluntary procedures exist, or the procedures are inadequate, these powers will be able to be exercised to ensure unsafe products are recalled from circulation or other remedial action is taken. Clause 35 proposes the inclusion in the Act of a new Division 1a in Part V. The new provisions, dealing with product safety and product information, represent a most important development in measures for the protection of consumers. The Division incorporates, with some amendments, the existing sections of the Act dealing with product safety and product information standards. It also includes new powers dealing with the mandatory recall of unsafe goods supplied after 1 July 1986 and notices to warn the public of goods that are under investigation. I stress that the provisions for mandatory recall are designed to provide reserve powers which will be available for use where the safety of the public is threatened and the situation cannot be handled adequately by voluntary recall schemes or other means. In all cases, primary responsibility for ensuring the safety of consumer goods remains with manufacturers and importers. The Attorney-General will be relying on advice from his colleagues the Minister for Transport in relation to motor vehicles and the Minister for Health in relation to pharmaceuticals, therapeutic goods and foodstuffs, who would undertake the appropriate consultative procedures within their areas of responsibility. Further, when the Government proposes to issue a mandatory recall order or banning order, there will ordinarily be an opportunity for suppliers of goods affected by the proposed order to seek a conference before the Trade Practices Commission before the order can be issued. In circumstances where there is an imminent risk of illness or serious injury the Attorney-General will be able to make an order without delay. In those cases which involve a declaration that goods are unsafe, there will be an opportunity for a conference after the event to review the declaration. The review procedures will provide opportunity for full canvassing and testing of the issues consistent with quick action when necessary to protect the safety of the public. Commission action on behalf of consumers Clause 55 provides for the amendment of section 87 to enable the Trade Practices Commission to obtain redress on behalf of particular named persons who have suffered loss or damage because of the conduct of a corporation or person in breach of the consumer protection provisions in Division 1 or 1a of Part V. One of the main obstacles preventing consumers from enforcing their rights under the Act is the high cost of litigation. By allowing the Commission to seek compensation on behalf of particular consumers in certain circumstances, consumers will more easily gain redress. The amendment will be particularly useful where the Commission takes enforcement action in situations such as where a large number of consumers have each been defrauded of relatively small amounts, or where a small group of consumers have lost their savings as a result of fraudulent representation. This kind of proceeding will be representative action rather than a so-called `class action'. The question of remedies for aggrieved consumers will only arise once the Commission has established a contravention of Part V in a prosecution or a proceeding for an injunction. The aggrieved consumers must be identified in the application and must have consented in writing to the Commission acting on their behalf. The Court is not empowered to make awards of damages to a class of persons, but only to particular named persons. The amount of the loss suffered by each individual by reason of the contravention will have to be established. Other amendments to Part V The Bill also contains other amendments to strengthen the operation of Part V, and their enforcement under Part VI. I draw attention to amendments dealing with misleading representations about employment opportunities, to provide greater protection for unemployed people looking for work; and with fraudulent claims for payment for unsolicited advertising, to ensure that small businesses have adequate protection against such claims. Further details of the amendment are given in the Explanatory Memorandum. Financial Impact Statement Generally speaking, this Bill will have only a minor impact on Government expenditure. This Bill does not involve additional staff or resources for the Trade Practices Commission. The only direct impact on Government expenditure concerns the administration of the reserve mandatory recall powers. This will require 5 staff in the Office of Consumer Affairs, to monitor industry product recall systems and advise the Attorney-General on the need to exercise the reserve powers when those systems are not adequate, to arrange testing of allegedly unsafe goods, and to conduct advertising to notify the public of unsafe goods. The full year cost is estimated at $250,000. I expect that this Bill will enhance the protection offered by the Act to consumers and will promote fair business practices and competition, to the ultimate benefit of the whole community. Further, if, as expected, several of the State Governments enact legislation mirroring the majority of Division 1 of Part V of the Act and repealing State legislation thereby rendered unnecessary, I expect that the costs for business and industry of complying with Government regulation in the consumer protection area will be reduced. Conclusion This Bill contains many important features aimed at promoting fair business practices and competition to the benefit of business interests and the broader community alike. In pursuing these objectives, the Government is demonstrating again its commitment to strong, efficient and internationally competitive Australian industry and to a fair market-place. I commend the Bill to the Senate. Debate (on motion by Senator Reid) 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 Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Community Services)(10.14) —I move: That the Bill be now read a second time. I seek leave, Mr President, to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The Australian Citizenship Act provides the basis for the acquisition of Australian citizenship: by birth in Australia; by descent through birth of a child to an Australian parent living overseas; and by grant to persons who have come to Australia to settle. It also provides the basis for the loss, renunciation, deprivation and resumption of Australian citizenship. Amendment of the Act in 1984 gave effect to the Government's commitment to: ensure that the Act does not discriminate between persons on the basis of their sex, marital status and present or previous nationality; and provide for review by the Administrative Appeals Tribunal of decisions made under the Act. These amendments came into effect on 22 November 1984. Australia is one of the few remaining countries which confers citizenship automatically upon a child born here (unless one of its parents was at the time of its birth a diplomat or a consular representative of a foreign country or an enemy alien). This generosity in our law can be exploited by visitors and illegal immigrants who have children born here in order to seek to achieve residence in Australia. It has become the source of increasing litigation, complaints to the Human Rights Commission and appeals to the media from people trying to avoid leaving Australia. The Human Rights Commission in its reports numbers 10 & 15 on the Au Yueng and Yilmaz cases commented that there was nothing in the international covenant on civil and political rights or in the declaration of the rights of the child which required the children of illegal immigrants to become Australian citizens merely because they were born in Australia. The Commission further commented that it might be fairer in the long run to change the rule that birth in Australia automatically results in Australian citizenship for the children of illegal immigrants. It recommended that if any change were made to the law it should be such as to ensure that such a child if it would otherwise be stateless, had Australian citizenship. The Government has accepted this approach. The Government will maintain the provision that children born to an Australian citizen or a permanent resident parent automatically acquire Australian citizenship at birth. It agrees that the children of illegal immigrants, visitors and others temporarily in Australia should not automatically become Australian citizens. However, the Government will ensure that no child born in Australia becomes stateless. Clause 4 of the Bill will restrict automatic citizenship to a child born in Australia who has one parent who is either an Australian citizen or a permanent resident at the time of the child's birth. Clause 8 of the Bill will ensure that a child born in Australia, who is not eligible to acquire Australian citizenship by birth, is an Australian citizen provided the child is not and never had been eligible to acquire the nationality or citizenship of another country. This will fulfil Australia's international obligations to prevent statelessness. A right of appeal to the Administrative Appeals Tribunal will be provided under Clause 9 against decisions that the person had reasonable prospects of acquiring citizenship of another country. The Minister for Immigration and Ethnic Affairs announced to the House that he intends to introduce an amendment to the Migration Act in the near future which will have the effect of conferring upon a new- born non-citizen child the same immigration status as one of its parents. If their immigration status differs, the child will be given the status of the one with the longer unexpired period of permitted stay in Australia. The second significant change proposed by the Bill relates to the resumption of Australian citizenship under the provisions of Section 23AA of the Act. When the Act was last amended it empowered the Minister to approve resumption of Australian citizenship in certain circumstances. Former Australians who lost their citizenship after 22 November 1984 by acquiring the citizenship of another country under some form of compulsion, economic necessity or without realising the consequences of their actions were able to have it restored. The Minister has received representations from some former Australian citizens who had lost their citizenship prior to 22 November 1984 requesting that the resumption provisions be made retrospective. The Government has agreed that the provisions of Section 23AA should be applicable to any former Australian citizen, subject to the condition that the person concerned should demonstrate a commitment to Australia. In summary the Bill, as amended, will provide that persons who have lost their Australian citizenship can apply to resume it provided they are able to show that they would have suffered significant hardship if they did not acquire the foreign citizenship or that they did not know, when acquiring that citizenship, that they would lose their Australian citizenship and that:- (a) they resided lawfully in Australia for at least two years; (b) they intend to continue to reside in Australia or to return to Australia within 3 years to reside here; and (c) they have maintained a close and continuing association with Australia. In relation to the last of these requirements, it is envisaged the ``close and continuing association'' requirement will be interpreted liberally so as not to pose an obstacle to resumption of citizenship in cases where individuals have maintained any form of close association with Australia. It is, of course, impossible to define all the circumstances in which an individual will satisfy the test of having ``maintained a close and continuing association with Australia''. The Minister considers that the test will generally be satisfied where the individual concerned, (a) has family or relatives living in Australia; and is able to demonstrate that he/she has maintained contacts with them by correspondence, telephone or by visits to them in Australia or visits to him/her; or (b) is able to demonstrate that he/she maintains significant economic, financial or business interests within Australia; or (c) maintains friendships with residents in Australia and visits them in Australia from time to time. These amendments will be effected by Clause 7 of the Bill. The Clause will also permit a child who had lost its citizenship to resume it with its parent. The third significant change which this Bill proposes relates to the form of oath or affirmation of allegiance. Candidates for the grant of citizenship are required to repeat the word ``I'' and then state their name before renouncing their former allegiance and taking the oath or making the affirmation of allegiance. This is unnecessary because the candidates have already been identified and will be identified again when called to receive their certificates. Furthermore, as members who attend citizenship ceremonies know so well, in many cases the requirement creates confusion and this confusion often detracts from the ceremony and distracts candidates' attention from the more important declaration of allegiance and commitment to obey the law. The form of oath or affirmation of allegiance also requires candidates to ``renounce all other allegiance''. Renunciation is ambiguous and unnecessary. Some candidates think that it requires them to renounce not only other allegiances but also their cultural background and all other ties with their country of origin. In many cases renunciation does not affect the previous nationality or citizenship of candidates because the nationality laws of many countries permit their nationals to have more than one citizenship. Some Commonwealth citizens, for example, find renunciation confusing because the Queen of Australia is also the Head of State in their country of origin. National consultations in 1982 and the Human Rights Commission recommend either the clarification of the phrase or its deletion. We have chosen the latter option. Clause 11 of the Bill will delete the renunciation phrase and also the requirement that candidates state their names when taking the oath or making the affirmation of allegiance. Finally the Bill will make a number of machinery and technical amendments to the Act by:- removing sex-specific language from the Act; empowering the making of regulations to permit the remission, refund and waiver of, or exemption from, fees payable under the Act; prescribing that all former Australian citizens are ineligible to re-acquire citizenship by grant within 12 months of having lost it; prohibiting the exercise of the discretion to defer consideration of an application for citizenship where the applicant has not met the residential requirements of the Act; and waiving the strict residential requirements where they have not been met due to an administrative error in the issuance of entry permits under the Migration Act. The financial impact of this Bill is estimated to be $80 000 to publicise the changes to the Act. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Senator COLLARD(Queensland-Leader of the National Party of Australia)(10.15) —On behalf of the Leader of the Opposition (Senator Chaney), I move: That Business of the Senate, Order of the Day No. 1, (Prescribed Goods (General) Orders Nos 111A and 100A-Motions for Disallowance), be postponed till 30 April 1986. These are the regulations dealing with meat inspectors, precipitated by the Mudginberri dispute. Question resolved in the affirmative. The PRESIDENT —I inform the Senate that, after consultation with the Minister representing the Attorney-General and the Deputy Leaders of the Opposition and the Australian Democrats, I instructed counsel to seek leave to appear in the Supreme Court of New South Wales prior to the commencement of the new trial of Mr Justice Murphy to submit that the Court should not allow the cross-examination of witnesses or the accused in the trial upon statements made by them to Senate committees, on the grounds that this would be contrary to the immunity contained in Article 9 of the Bill of Rights and adhering to the Houses of the Australian Parliament under section 49 of the Constitution. Article 9 states: That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament. The Senate will be aware that similar submissions were made in the same Court last year before the first trial of Mr Justice Murphy. Following those submissions a judgment was made by Mr Justice Cantor to the effect that witnesses and the accused could be cross-examined on evidence given before Senate committees. That judgment was the subject of a statement which I made in the Senate on 11 September 1985 and of debate in the Senate on that day. Subsequently in the trial witnesses and the accused were cross-examined as to the truth of their evidence given to Senate committees and submissions were made on the basis of that cross-examination. Pursuant to my instructions in relation to the second trial, counsel successfully sought leave to appear in the Court on 17 March 1986 before Mr Justice Hunt and made written and oral submissions in accordance with those instructions. Yesterday His Honour gave judgment on those submissions. The judge has concluded that in the course of the trial it may be suggested to witnesses and to the jury that evidence given to a Senate committee was untrue, that statements made to the Senate may be the subject of comment, may be used to draw inferences or conclusions, may be analysed and made the basis of cross-examination and submission, and that comparisons may be made between those statements and statements made other than before the committees. The judge concludes that parliamentary privilege extends only to cases where what was said in Parliament is the actual subject of criminal or civil action, and that what was said in Parliament may be used as evidence of an offence or to establish motive or intention in relation to what has been said or done outside Parliament. It appears that these rules are to apply to defendants as well as to witnesses in court proceedings and to members of Parliament as well as to witnesses before parliamentary committees. In reaching these conclusions the judge has rejected contrary principles expounded in a number of British and Australian judgments. I do not intend to make any detailed comment upon the judgment at this stage, but I draw the attention of the Senate to two parts of the judgment where I am advised that the judge seems not to have correctly stated what was submitted to him by counsel acting on my instructions. At page 11 of the judgment His Honour states that it was submitted that even to ask a witness whether or not he had made a particular statement to a parliamentary committee would be to impeach or question that statement. No such submission was made by counsel acting on my instructions. The written submissions accept that evidence of parliamentary proceedings may be used to prove material facts so long as there is no questioning or impeaching of the proceedings. This could well involve the type of question referred to by His Honour, but is to be distinguished from the examination of a witness or the accused for the purpose of impeaching his evidence. At page 16 and in other parts of the judgment His Honour implies that the submissions relied upon the supposed rule that evidence of proceedings in Parliament may not be given in court without the approval of the House concerned. This also was not submitted by counsel acting on my instructions, and in fact the written submissions were at pains to draw a distinction between this so-called rule, which was really only a practice, and the principle contained in Article 9. I also point out that in the first trial evidence given before Senate committees in camera and not published by the committees or the Senate was used to cross-examine witnesses and the accused. The judgment does not address itself specifically to the unauthorised use of in camera evidence, and presumably would allow any such use of in camera evidence. I present to the Senate a copy of the written submissions which were made on my instructions and a copy of Mr Justice Hunt's judgment. Copies of these documents are available for honourable senators. I will be considering the judgment, consulting Madam Speaker and honourable senators and deliberating upon what action should be taken in relation to the judgment. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.21) — by leave-I move: That the Senate take note of the statement and papers. Mr President, like you, I do not propose to comment in any detailed way at this stage on the statement and the issues raised by it except to say that it is clear that, quite apart from its immediate impact on the conduct of the Murphy case, the decision of Mr Justice Hunt in this matter raises questions of very great significance for both Houses of this Parliament. The larger issues concern the nature and extent of the protection afforded to parliamentarians and witnesses appearing before committees by Article 9 of the Bill of Rights, as a matter of law. It also raises quite starkly the question of what in principle should be the scope of that privilege. Mr Justice Hunt, in his decision, gave what is on any view the narrowest possible interpretation that one could ever take on the scope of the Article 9 protection. I make the point only that these issues require very careful consideration by the Senate and, indeed, by our colleagues in the House of Representatives. It may be that an appropriate vehicle for giving these issues that consideration would be the Bill on the privileges of the Parliament that has been prepared as a result of the deliberations of the Joint Select Committee on Parliamentary Privilege, chaired by Mr Spender, which Bill is now before the House of Representatives. It may be that, having dragged our feet for about 86 years on the clarification and codification of privilege, we should now accelerate, particularly in the light of the Hunt decision, our consideration of these very important matters. A great number of issues of substance could be canvassed. I do not think that it is appropriate for any of us to do so at this stage. Senator Chipp —When would you expect the Government to come to a decision? Senator GARETH EVANS —The Government has taken the view that matters of privilege are not party matters but, traditionally, free vote matters. The way that it has been handled so far has been for the Manager of Government Business simply to make time available in a preliminary way-but hopefully there will be more extended time later on for the debate of the Spender Bill. The decision in this matter will concentrate everyone's minds rather more wonderfully than might otherwise have been the case. It is quite possible that there will be a general disposition stretching across party boundaries now to focus squarely on these issues; work out what in principle we really ought to be doing about describing precisely how the law operates in this area and whether we accept the conclusions of Mr Justice Hunt and in getting some appropriate legislation through. All I am saying is that this is a matter to which we all have to give close consideration over the next few days and the next couple of weeks. I would think it is appropriate that we not have an extended debate this morning but simply give the matter close consideration and bring it back to the Parliament at some early appropriate time. Senator DURACK(Western Australia)(10.25) —Mr President, I support the remarks made by the Minister for Resources and Energy, Senator Gareth Evans, who commented on your statement. I would also like to say how entirely appropriate I believe your initiative was, as President of the Senate, in instructing counsel to seek leave to make submissions to the judge who will preside at the second trial of Mr Justice Murphy. As you have said, following consultation with representatives of the three major parties in the Senate, counsel was instructed and he made very adequate submissions to the judge who has now given his judgment. He has virtually rejected at least the major submissions that were made on behalf of the Senate. I think that it would be inappropriate to pursue the matter any further in the courts at this stage in light of the imminent trial and any further legal proceedings appealing from what the judge has said. However, it is quite clear that the view which the judge has taken is very different from the one that we expected, even considering differences that occur amongst ourselves as to the ambit of our privileges. I think Mr Justice Hunt's decisions as to the ambit of those privileges will be a surprise to almost everybody in this chamber and in the other place. Obviously, it is a most controversial decision which has not followed many other decisions. It is a good example of how little one can be sure of what judges will decide. Senator Gareth Evans —This is the common law at work. That is why you need a Bill of Rights. Senator DURACK —If we had a Bill of Rights we would be even more under the power of judges when making decisions about what we could and could not do. Senator Haines —Rubbish. Senator DURACK —It is a classic case. This is a judge who is taking a completely different line from that taken by many other judges. If one gives them wide powers one does not know where one will end up. However, that is by the way. Clearly the matter has to be given very urgent consideration by this Parliament. I think the time has come when we have to make these matters clear. In fairness to the judge, the Bill of Rights was stated in somewhat uncertain and old fashioned language and the judge had some difficulties. I do not think it is appropriate for this matter to be litigated any further. We, as parliamentarians, have to make up our minds promptly where we stand and make suitable declaration, hopefully by as wide agreement as we can possibly reach amongst ourselves, about the ambit of these privileges. Clearly the legislation that has already been introduced in another place and the legislation that has been introduced in this place, I think by Senator Macklin, should be brought on for debate fairly soon. Incidentally, I do not think this should occur until after the trial has concluded. But I certainly agree that this is a matter that we must attend to promptly as soon as that inhibiting factor is out of the way. It has been inhibiting us on a number of matters, the most important of which is the consideration of a report of a Senate committee which needs to be considered promptly when that trial is concluded. It is a quite serious reflection on us that recommendations of the Select Committee on Parliamentary Privilege, which are having a great effect on certain people, have not been considered by this chamber. That has not been done because any debate here on that matter may be relevant to and affect the trial of Mr Justice Murphy. There are two major matters to which we must attend as soon as that trial is out of the way. Senator MACKLIN(Queensland)(10.31) —To the motion moved by the Minister for Resources and Energy (Senator Gareth Evans), I move the following amendment: At end of the motion, add `, and the Senate considers that the Parliament should give urgent consideration to legislation to avoid the consequences of the unacceptable change in the law contained in the judgment of the Supreme Court of New South Wales'. The crux of the matter here was pointed out by Senator Evans, namely, that, for all of the period since Federation, governments have had the power to do something about section 49 of the Constitution but have not done so. As a member of the Joint Select Committee on Parliamentary Privilege, which operated from 1982 to 1984 and of which Senator Evans was also a member, I remind the Senate that we laboured mightily and produced a report. All of us on the Committee hoped that that report would lead to some urgent action. Interestingly enough, when the report was put down, Senator Evans was Attorney-General and he promised urgent consideration of that matter. Time has moved on and, urgent consideration no doubt having been given, it is now 1986 and we find another reason for not doing anything. It seems a great pity that the members of this chamber and of the other chamber take very little interest in this matter, which probably accounts for the fact that 87 years have gone by and nothing has been done. Having read the judgment-I hope that honourable senators will read the judgment-I say that it makes extraordinary reading on any account. I wish to refer to only one aspect. Unfortunately this aspect is often presented in the media as our, that is the parliamentarians, protecting ourselves. Quite frankly, one of the major innovations in parliamentary practice occurred in the Senate, interestingly and coincidentally enough under Senator Murphy, in terms of the extension of the committee system. Fairly obviously, the Senate committee system is a much more extensive, more powerful and more innovative system than that of the House of Representatives. What we are looking at here is in fact damage to our committee system. We are considering the witnesses. We are not necessarily considering ourselves. After all, parliamentarians are pretty used to taking knocks in the media or elsewhere as part of the job. But our committee system relies on our witnesses not having to take those knocks anywhere else. It relies on their being able to give evidence to committees. Although I am not a lawyer, having read the judgment I suggest that it could result in people who give evidence at in camera hearings of our committees having all that evidence rehearsed in open court. Quite frankly, what that would do to our powers, privileges and immunities as parliamentarians would be nil, but what it would to our ability to operate as parliamentarians would be a great deal and what it would do to witnesses would be devastating. If we just sit here and continue to twiddle our thumbs, that is what will happen. But I hope that members of all parties-this is not a party matter-will talk to the President of the Senate and support him in what he is doing in this regard, so that the privileges of this House in terms of our operations in committees can be protected. I look back over a number of committees and point to the Senate Select Committee on Securities and Exchange. The Chairman of that Committee is no longer with us as he is a Minister of the Tasmanian Government. By ensuring that evidence given at in camera hearings would never be leaked, that Committee was able to look at confidential commercial information and establish a law in this country which is now operating very successfully and very well. That Committee's proceedings could not have taken place unless there were in camera hearings and unless the witnesses who appeared before the Committee could be absolutely assured that the information they gave would not go anywhere else. I think it is extraordinary that we should be entertaining the idea that we have to wait until a court case is finished. I have no reason to interfere in that court case and I would suggest that any deliberation on the Parliamentary Powers, Privileges and Immunities Bill which I introduced in the Senate on 22 August has nothing whatsoever to do with that. If it is felt in any shape or form that the proclamation of the Bill by the Governor-General could impinge on that court case, I suggest that the Parliament could quite happily pass the Bill and the Governor-General could wait upon the conclusion of that court case before he signs it into law. But, quite frankly, I do not think it has anything to do with the deliberation of what this chamber thinks are its powers and privileges. I am fearful that, if we wait yet again for something else, we will be waiting for another 86 years. I emphasise that it is not a matter of protecting ourselves from the media. If we look at the report of the Joint Select Committee on Parliamentary Privilege we will see that that report states quite clearly that we were quite happy to give away quite a number of those seeming privileges. They are really no longer of relevance in today's world, whether or not our dignity is dented by what people say about us. I think it is to the everlasting credit of the Senate that the Privileges Committee of the Senate has never gone down the track of worrying about our dignity but rather it has worried about the effective use of this chamber and its committees. That is all the Senate has ever been concerned about in terms of its privileges and I am very proud that that has been the case. I cannot say that that is the case for the other place because it is not; but it is the case for the Senate. I think we have very correctly seen that our privileges are not so much for ourselves but for the good government of this country and for the protection of witnesses who come before us to provide information to enable us to make the types of decisions about laws that this country requires. Unless all of us do something about it, it will not happen. I raise again the fact that I introduced on 22 August last year a Bill which differs in its drafting fairly substantially from the Bill introduced by Mr Spender in the other place. In fact, there are only minor differences in consequence. I introduced the Bill because I wanted to give this chamber a Bill with which to operate and also to give an alternative wording. I say in defence of my Bill, and in doing so I will not impinge upon Standing Orders, that it was intended to give a much simpler wording to what the privileges are and to make it much easier for people outside this chamber to understand precisely what it was were trying to do. What I was trying to do in that Bill is what I have just put to the Senate. We are not about our own protection-I emphasise that for the third time-but we are about doing our job properly and using the privileges that have been provided to this chamber to do that job properly. I give great support to you, Mr President, in the activities that you have been pursuing with Madam Speaker. I hope that you will be able to come back to this chamber very rapidly on that. You may even consider taking the unprecedented step of sponsoring a Bill with regard to the privileges and immunities of this chamber. I know that it is unprecedented but I suggest that, at the moment, we have no action being taken and we are not likely to get any because of the enormous legislative pressure which operates on any government. I am not being condemnatory of the current Government. There has been 86 years of government in this country and nothing has happened. All governments have to look at their legislative programs. In directing my remarks to you, Mr President, I wonder whether it may not be a time for unprecedented action on your part in sponsoring a Bill in this chamber and providing time, as you are able to do, for us to debate that Bill. I would hope that you might give serious consideration to the proposal I put to you because it seems to me that without your taking some action nothing is ever likely to happen. I do believe it is your responsibility, as our Presiding Officer, to undertake some action with regard to legislation on this matter so that by the time this Parliament rises we may have a Bill to fulfil the provisions of section 49 of the Constitution. Debate (on motion by Senator Reid) adjourned. Debate resumed. Senator DURACK(Western Australia)(10.41) —The trade practices legislation that we have been debating in the Senate off and on for the whole of this current sitting period has now been split by the Government into two Bills-the Trade Practices (Transfer of Market Dominance) Amendment Bill which is before us at the moment and the Trade Practices Revision Bill. The Trade Practices Revision Bill includes all the amendments contained in the earlier Trade Practices Amendment Bill. A number of amendments were proposed by the Opposition, by the Australian Democrats and indeed by the Government. The Bill immediately before us, the Trade Practices (Transfer of Market Dominance) Amendment Bill, simply deals with one amendment to the Trade Practices Act which was previously contained in the general Trade Practices Amendment Bill, that is, the amendment proposed by the Government to section 50 of the Trade Practices Act to provide that that section, which deals with the acquisition of a dominant position in a market for goods, 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 and services and as a result of the acquisition a person is not and is not likely to be in a stronger position to dominate that market. We had reached that amendment that the Government now proposes when it was contained in the previous Trade Practices Amendment Bill. We had debated the pros and cons of that amendment and had considered amendments to it. In fact, we had disposed of that question. So what we are really doing today is having a revived debate about that issue only, in a separate Bill, the Government obviously desiring that this question be dealt with and disposed of promptly in the Parliament and not be subject to the undoubted delays that are occurring and will occur as a result of the many amendments to what was the general Trade Practices Amendment Bill, or what the Government calls the Trade Practices Revision Bill. The Opposition has exactly the same view about the transfer of market dominance amendment as we expressed here in this chamber only several weeks ago. We support the amendment, and we shall be proposing an amendment to it to make sure that it does not apply to a takeover proposal that has already commenced in a legal sense-that is, where a part A offer has been registered or lodged with the National Companies and Securities Commission. Senator Siddons —Is that amendment available? Senator DURACK —It is being circulated, but it is in exactly the same terms as the amendment we moved and debated here a few weeks ago. Senator Siddons —Do you mean the original grandfather clause? Senator DURACK —It is exactly the same as the grandfather clause that we moved before. I thought that I was making it clearer for people who may be listening and who do not know what a grandfather clause is. I thought I would explain in full exactly what it means. Senator Siddons perhaps understands better what is meant by a grandfather clause than do other people. The reason that this amendment is being made is that since 1977 when amendments were made to the Trade Practices Act, including this particular section dealing with mergers and the creation of monopolies, there have been doubts whether that section of the Trade Practices Act would apply simply to the bare transfer of monopoly power. In other words, where there is a monopoly contrary to the purposes and use of the Trade Practices Act-where a monopoly in fact has existed or exists, for whatever reason-the transfer of the ownership of that monopoly, whether by way of takeover or however, may be seen to be a breach of section 50 of the Trade Practices Act. That Act is concerned with the prevention of monopolies occurring. It is concerned with promoting competition, but it is not itself directly concerned with the Trade Practices Act. The policy of the Act is not concerned with who actually owns a particular corporation and whether or not that corporation has a monopoly power. So this interpretation of the existing section 50 which has already been made, although there is doubt and dispute about it, is certainly not within the policy of the Trade Practices Act. There may be other policy reasons quite apart from trade practices policy, such as competition policy legislation, why some interest should be taken by government, by Parliament and by the public in the ownership and performance of monopolies. But that is certainly not part of the policy behind the Trade Practices Act. The matter is one which perhaps this Parliament should address on some other occasion, but the problem with the use of the Act or its possible use for this purpose is that not only is the policy and object of the Act not concerned with this aspect, but the Act itself is not drafted appropriately. The criteria are not appropriate to the sort of inquiry and investigation which may well be justified in relation to a monopoly or transfer of the ownership of the monopoly. The problem is that the Trade Practices Act which prevents, if it does, the acquisition by takeover of an existing monopoly or the bare transfer of monopoly power, as it is called, would in general terms have that effect, but the Act provides for authorisations to be obtained by people who would be otherwise in breach of the Act. In order to establish an authorisation for conduct which is otherwise in breach of the Act, the person seeking that authorisation has to prove an actual public benefit-the authorisation of conduct which would be otherwise in breach of the Act. That authorisation procedure and that proving of a positive public benefit is apposite and appropriate for the other purposes and objects of the Trade Practices Act. It may be argued that conduct which would end up in a dominant position in the market which does not already exist may in fact be for the public benefit. That can be directly proved, but whether simply a new owner of a monopoly can be said to be able to provide any clear positive public benefit as against the previous owner is not by any means such an easy thing to do or even that can be adequately and sensibly done, certainly not within the four corners of competition policy legislation such as the Trade Practices Act. It is all about promoting competition, preventing the lessening of competition, the acquisition of monopolies and so on. This legislation is not directed to the actual control of a monopoly or the ownership of a monopoly. Those are the reasons why we accept the Government's view that this section should be amended to make it clear that it does not apply to this bare transfer of monopoly power. I reiterate that section 50 is by no means clear that it does in fact do that. There is a lot of controversy whether it does or does not. Incidentally, in the particular takeover that is in the forefront of all our minds, namely the Bell Resources Ltd takeover offer for Broken Hill Proprietary Co. Ltd, Bell Resources has at no stage seen fit to seek authorisation. One can only presume that Bell Resources' legal advice is that the section does not apply. I think there are probably very good grounds for that legal advice. There may be some other advice I am not aware of, but it seems to me quite likely that Bell Resources is maintaining that section 50 does not apply to this situation anyway. I think there are very good reasons why that could be argued, but the best reasons of all are that the matter should be clarified. When we pass legislation here, where it is uncertain that provisions may or may not apply, it is best to clarify the position. This piece of legislation clarifies the position and the Opposition supports it. Senator MICHAEL BAUME(New South Wales)(10.55) —I rise to support the proposed amendment that has been circulated by Senator Durack and also to support the general thrust of the Government's Trade Practices (Transfer of Market Dominance) Amendment Bill 1986 in specifically getting rid of a problem which clearly relates to the Broken Hill Proprietary Co. Ltd takeover. In view of other amendments to the Trade Practices Act that the Government is endeavouring to get through this House, with the assistance of the Australian Democrats, there is no doubt that there is a clear need to get rid of this particular section of it, as the Government has recommended, because of the consequences for any company that has a small subsidiary, for example, in a market such as the Australian Capital Territory, which is a nonsensically small market. I have already pointed out in dealing with other elements of the Trade Practices Act amendments before the Senate that to suggest that market dominance in a market as small as the Australian Capital Territory enables a company to be subjected to the requirements of this Act is arrant nonsense. If this section of the Act is not removed it would mean that any company that had a small subsidiary trading in the Australian Capital Territory, where it had in this minute market a position regarded as dominant, would be subject to the sorts of inquiries and so on that are required under this Act. The point I make has two consequences. In the first place it is a nonsense for the Government to require that market dominance in such a small market be regarded as market dominance. The Australian Capital Territory obviously should be regarded as part of the national market. But it also underlines the fact that if the Government is determined to proceed with its asinine change in that direction, it is absolutely essential that it get rid of this requirement. With BHP, only one of its operations is basically monopolistic and has market dominance, and that is its steel operation. If it owned a group of lolly shops which dominated the market in the Australian Capital Territory as well, and that would not be a significant element of its activities, under the Government's proposals BHP, because of its dominance of lolly shops in the Australian Capital Territory, would be obliged to come under the requirements of examination and be subject to the question of market dominance, which, as I suggest, is a clear nonsense. The fact that the steel activities of BHP are a monopoly dramatises the situation, but there are many activities of BHP which do not involve monopolistic activities. One could hardly accuse the coal industry, in which BHP has a major investment, of being an industry free of competition. It certainly is a most competitive area. The oil industry is very competitive indeed, and is subject, as we have seen, to massive fluctuations in market price. BHP's activities in iron ore are similarly excessively competitive in terms of the people in that market. In other words, in the great bulk of BHP's activities now there is in fact no element of monopoly. There is in respect of one area, and that is steel. The Government has a role in the steel industry which surely gives it the capacity to express a policy view about the manner in which BHP should undertake its activities in steel or, in fact, the manner in which BHP, dominated by a different board, should conduct its activities in steel and that, of course, is as a result of arrangements under the steel industry plan. In other words, there are plenty of other methods by which a government could properly require appropriate behaviour by that subsidiary of BHP which is in a monopolistic area. It is one of the reasons I strongly support the Government's removal from the Bill of these requirements relating to trade practices. In fact, when this came before the Parliament initially it was not even raised as an issue either by the Government or by the Opposition. In this context I should say that my personal hope is that the BHP board will be successful. I find nothing attractive about partial takeovers which leave shareholders locked into a company whose directions and attitudes may well be changed. There is no doubt that partial takeovers such as this one leave majority shareholders at risk. I am hopeful that the major institutional shareholders will at least partly remain as shareholders in BHP. In fact, I would hope that they will keep all of their holdings in BHP. One would also hope that these institutions would ensure that there would be no change in course or direction by BHP, if Mr Holmes a Court succeeds, that would in any way result in any disadvantage to the majority shareholders and lead to the advantage of the Bell Group or Mr Holmes a Court. There have been instances in the past of partial takeovers such as this resulting in a shuffling of assets, to the clear disadvantage of the shareholders in the existing company and to the advantage of the company which has made the partial takeover bid. We have to recognise that this bid is clearly not a bid for even half of everyone's holding at the moment. In fact, Mr Holmes a Court seeks only 20 per cent more. The essential point is that those people who receive a good price for a small part of their holding in BHP could well end up with a much reduced value for the great bulk of their shareholding. That is a judgment that people in the market must take. It is improper, I suggest, for governments to intrude and tell shareholders what is best for them. I think it improper that the rights of shareholders should be taken away from them by government intervention. That is why I welcome the Government's removal of this section under this amendment now. It is essential to recognise that the interest of shareholders in BHP is best served by allowing them to make up their own minds. Non-intervention in the market place has traditionally been the philosophic view of the parties on this side of the House and I must say that I welcome the Government to that position. Its conversion has been effective and I am grateful that the attitudes it so strongly opposed in Opposition are now embraced so enthusiastically in government. I conclude simply by stressing that BHP in itself is monopolistic in respect of only one element of its activities-that relates to steel-and that there are many areas where the Government can, if there are matters of public policy involved, intervene quite properly in that monopolistic area. But for any political party in Australia to suggest that there should be intervention which diminishes the rights of shareholders in relation to a company the bulk of whose activities are very competitive indeed and are in a very competitive environment on the basis that a part of its activities is monopolistic, is to create an impossible situation because there may be many companies indeed one of whose subsidiaries may be dominant in a small market under the Trade Practices Act, as the Government proposes to amend it, which would render it liable to this kind of governmental intervention. I congratulate the Government for recognising the error of its ways in this respect, but I only hope that it will recognise the error of its ways in respect of dominance in such small markets and reconsiders those other elements of the Trade Practices Act which it is resubmitting to this chamber and which will be to the disadvantage of the business community of Australia. Senator SIDDONS(Victoria)(11.04) —The Government has split the trade practices legislation in two in what can only be described as a cynical exercise designed to interfere in the takeover battle between Broken Hill Proprietary Co. Ltd and Bell. Despite the protestations from the Government and the protestations that we have just heard from the Opposition, the facts of the matter are that the Government is interfering in this takeover battle; it is interfering in the market-place in spite of its protestations. Mr Holmes a Court has now issued three takeover bids for the BHP company under the existing law. This is the third or the fourth-I have forgotten which-takeover bid under the existing law. The Government is now proposing to change the law to make it easier for Holmes a Court to get control of BHP. I find it totally incomprehensible why the Government, in the middle of the largest takeover battle this country has ever seen, is hell-bent on doing just that. It is refusing to hold up the legislation until the outcome is decided. It has refused to amend the legislation so that a public benefit inquiry can be held. It will be interesting to see whether the Government is prepared to let this piece of legislation go to a Senate committee so that we can get a balanced view on what is going on. When the ends justify the means, one gets very strange bedfellows. Judging from the Opposition's comments, it would seem that it will be supporting this Government's legislation. In other words, we shall see an alliance on this BHP takeover bid that I never thought I would see in my country, involving Mr Halfpenny and a Labor-Liberal alliance, designed to make it easy for one, Mr Holmes a Court, to take over Australia's largest enterprise. Why is the Government doing this? I leave it to Government members of this Parliament to answer that question. There must be some reason why the Government is so hell-bent on making it easy for Holmes a Court to take over BHP. Let me make the Australian Democrats' position abundantly clear. We are not taking sides in the BHP-Holmes a Court takeover battle, but what we are saying, loud and clear, is that the rules should not be changed in the middle of the game. I understood Senator Durack to say, in the speech that he has just given and in previous speeches on this issue, that the rules should not be changed in the middle of the game. But that is precisely what the Government is doing. It is changing section 50 so that there will be no public inquiry. Let us look at the history of this legislation. First, the trade practices legislation came before the Senate, and it was debated in its entirety. The Democrats worked out a strategy that would engage the Opposition's support to block that legislation. What was the Government's reaction? It then split the legislation in two. One Bill was designed to help Holmes a Court, and the other Bill was the original trade practices legislation. What are we seeing today? Part of that Bill designed to help Holmes a Court-the Trade Practices (Transfer of Market Dominance) Amendment Bill 1986, as it is now called-is to be debated first in this chamber. The important Trade Practices Revision Bill 1986 is to be debated second. Both of these pieces of legislation are taking precedence over a great backlog of legislation before the Senate. Why the indecent haste? Why are we debating the Bill on transfer of market dominance ahead of the Trade Practices Revision Bill at this point in time? The whole approach of the Government is incomprehensible. In Committee, the Democrats will be moving three amendments. Firstly, we shall move that a public detriment clause should be considered. Secondly, we shall move that this Bill should go to a committee. Thirdly, if that fails, we shall move an amendment designed to maintain the status quo of the existing law for a period of 12 months-a grandfather clause with teeth, in other words. When we debated this section of the legislation previously, I moved an amendment which would have given the Trade Practices Commission power to investigate this takeover bid on the basis of the public benefit. That was rejected by the Government and the Opposition. I concede that it is difficult for the Commission to assess what is to the public benefit. It is a fairly nebulous concept, as has been remarked on two or three occasions. In fact, what generally happens when the Commission is assessing whether something is to the public benefit is that it looks first at whether there is anything to the detriment of the public. It looks at that factor first and then, assuming that there is nothing detrimental to the public, it generally concludes that the matter is therefore, at least prima facie, possibly to the public benefit. The Democrats have conceded that the public benefit clause was difficult for the Commission to evaluate and assess, so we have drafted an amendment which will be moved in Committee. It would allow the existing amendment of this legislation, the proposed sub-section (2C) to section 50, to apply, provided the Commission is satisfied that the takeover of a monopoly is not to the public's detriment. I should have thought that the Opposition, in view of the remarks it has made, would be prepared to support such an amendment. We shall have to wait until the Committee stage to see whether that is so. If the Opposition is not prepared to support our amendment to give the Commission power to assess a takeover on the basis of its possible detriment to the public, we shall move that the whole Bill go to a Senate committee. There would seem to be very little doubt that the Opposition would support that course, because when the previous legislation was before the Senate the Opposition moved that the whole legislation should go to a committee. So there would seem to be no logical reason why the Opposition should not be prepared to support this legislation going to an existing standing committee of the Senate. The Senate Standing Committee on Constitutional and Legal Affairs would seem to be the appropriate committee to consider the matter. If that course is not supported, the third thing that we would do would be to move an amendment to delay the operation of the proposed sub-section (2C) of section 50 in the case of a takeover bid being made under the existing laws. We would move that in the case of such a bid, sub-section (2C) should not apply to that bid for a period of 12 months. In this case, Holmes a Court is the example; and of course, Holmes a Court's bid is the first time that section 50 has applied at all in the history of the Trade Practices Commission. It is the first time that the Commission has seen fit to initiate legislation on a takeover of a monopoly. So our third amendment will simply say: If there has been a bid in the previous 12 months, before this piece of legislation is gazetted, the amendment to section 50 should not apply for a period of 12 months after this piece of legislation is proclaimed. That approach seems quite reasonable to us. We do not see why the Liberal Party could not support such an approach simply because it has already indicated that it does not want to change the rules. It has removed its existing grandfather clause. However, as we pointed out previously, that clause does not have any teeth because all the raider has to do is withdraw his existing bid and issue a new bid. Holmes a Court has already had three or four goes at this. It should be no problem for him to withdraw his bid and have a fifth go. He would then get around the grandfather clause or amendment the Opposition has submitted. We have heard a lot about the fact that there should be no interference in the market-place. I hope that I have made it clear that what we are doing by passing this legislation is the exact reverse. We are interfering in the market-place. There are some very real problems with the Holmes a Court bid. I want to take a moment of the Senate's time to outline some of those problems as we see them and why we think there should be some sort of an inquiry into what is going on. Many times in this place I have spoken about the tax losses to the Government associated with the negative gearing of takeovers, so I will not go into that matter again other than to say that last year Bell Resources paid an average of only 22c in the dollar company tax on its profits. It was able to get its company tax commitment so low only because of various tax avoidance measures. On the face of it there should have been a $66.6m tax bill for Holmes a Court. It was reduced to $36m. Next year, if the company gets hold of BHP, it could pay no tax at all, as it will have, on all the figures that are available to the public, a net cash deficiency of $82m. The financing arrangements of this takeover bid are strange, to say the least. By and large they remain a mystery. Let me quote from the judgment of Mr Justice Marks in the case of BHP v. the National Companies and Securities Commission, the case between BHP and Bell over the legality of the last Holmes a Court takeover bid. Mr Justice Marks stated: Although the hearing before me has been cut short, it was quite well advanced. It was cut short by a Bell capitulation following hard on the heels of a refusal by the Court to set aside a subpoena calling on documents disclosing details of the $2 billion loan facility itself preceded by a strong prima facie evidence pointing to their importance and other possible breaches of the requirements of the Companies (Acquisition of Shares) (Vic) Code . . . The court is driven to the inescapable conclusion that the Bell interests have always been and are still bent on keeping the loan facility arrangements secret. That secrecy in the circumstances of the take-over scheme is impossible, in my view, to excuse. It is significant that Bell has never sought to explain or justify it. This conduct has been compounded recently by the highly misleading, if not deceptive, public statements of the chairman, one Holmes a Court, to the effect that the present offers have been withdrawn merely because of the length of the court hearing with overtones that this was connected with the length of the BHP case . . . In ordinary circumstances, it would be impossible to understand why a commercial arrangement for a credit facility should be other than disclosed, even though not thought to be directly relevant. The resistance in these proceedings to the disclosure is significant enough, but the secrecy is particularly ominous against the backdrop of statements of Holmes a Court to which I have referred. The Government has said that there is no need for an inquiry, yet Mr Justice Marks, who had the benefit of hearing all the evidence in court, has said that there are ominous signs. He has criticised Mr Holmes a Court for not making available the details of the financing arrangements he has brought to bear for the takeover bid. I ask the Minister for Resources and Energy (Senator Gareth Evans): Did the Ministers who interviewed Mr Holmes a Court ask for the details of the financing arrangements of the bid and, if so, is the Government prepared to make those details available to the public? I believe that no less could be expected in view of the great deal of public interest this whole takeover has brought about-indeed, rightful public interest. We saw on television last night-to my absolute amazement, and I have only the Carleton-Walsh Report to corroborate what I am saying-that the bank that is financing this $2 billion loan is itself subject to a takeover bid in the United Kingdom, and further, that the capital of the Standard Chartered Bank in the United Kingdom will be almost completely used up as a result of supplying this $2 billion of funds. Senator Gareth Evans —Don't be naive! What makes you think it would come entirely from Standard Chartered? Senator SIDDONS —I am just quoting what was said last night. I am not naive at all. Senator Gareth Evans —Haven't you ever heard of a syndication arrangement? Senator SIDDONS —The fact is that the Australian public has a right to know the details. If there is a syndicated arrangement through the Standard Chartered Bank the public has a right to know what other parties are involved in supplying this $2 billion. The fact is that $2 billion is more money than the Government could find to honour one of its promises to the Australian motorist, namely, that it would reduce the price of petrol in line with the international oil price. The Government said: `If we find $2 billion to honour that promise we will run the country bankrupt'. Yet we are sitting back and seeing $2 billion of foreign money flow into the country, and we are not even being told where the money is coming from. Senator Gareth Evans —Where do you derive the assumption that this would be necessarily foreign money? You are just laying assumption on assumption on assumption. Senator SIDDONS —It is foreign money. It is money coming from an overseas bank. If that is not foreign money, I do not know what is. We, the Australian people, and certainly the Australian Parliament, have the right to know the ultimate source of those funds, whether any strings are attached to them and what are the repayment requirements. There is no doubt that the interest on those foreign funds will have to be met from Australian currency. The Australian people will be required to earn the foreign currency to meet the interest payment on the $2 billion overseas loan. I am very concerned about this takeover bid because, as far as I can see, it is the last move down a long sad course the Australian economy has taken. Both sides of the Parliament are sitting back saying that we must pursue free market policies and that we should not interfere with the workings of the economy in any way at all. Both the Australian Labor Party and the Liberal Party are saying that. The facts are that this policy of sitting back and allowing our assets to be bought up by who knows whom with no questions asked is running this country into bankruptcy. We are already deeply in hock. We are sacrificing Australia on the altar of laissez-faire economic theory. I was fascinated to hear yesterday that no less a person than Sir Robert Menzies, on the foundation of the Liberal Party, had said: . . . individual enterprise must drive us forward. That does not mean that we are to return to old and selfish notions of laissez-faire. This is precisely what is happening right now. There has been a 180 degree turn by the Liberal Party saying: `We will let the economy rip'. Foreign debt has skyrocketed from $7 billion in 1980 to $52 billion in 1985. In five years there has been a staggering 700 per cent increase. About 30 per cent of our exports now go to pay our foreign debt. Only 7 per cent five years ago was needed to pay the interest bill on our foreign money. We cannot continue to let this happen. We are letting it happen with our largest enterprise, a company that is vital to Australian manufacturing. Broken Hill Proprietary Co. Ltd supplies the raw material for Australia's secondary industry. We will let one man gain control of that company and we still do not know how he will finance that. Will he increase the price of steel when he gets control? Will he use the resources of BHP to take over Bell Resources Ltd? Will he sell Utah Development Co. coal mining interests? We do know that he has a very serious cash shortfall on any projections. He has to do something to meet the interest bill on the $2 billion. He cannot meet it out of his existing cash flow from Bell Resources and it is doubtful whether he can meet it out of the cash flow of Bell Resources and BHP combined. Mr Holmes a Court has to do something to reduce his interest bill, and he has to do it quickly. We want to know what he will do. We cannot find out because the Government says: `There is no need to have an inquiry. There is no need to worry about this. We seven Ministers have heard from Mr Holmes a Court and we know exactly what is going on. It is all okay'. I do not believe that this Parliament should be asked to accept those sorts of assurances on trust, particularly when they come from an individual and not from a board of directors and particularly when Mr Justice Marks has already raised questions which are very telling about details of the bid. I say only that if Holmes a Court gets control of BHP it will probably mean that the economic direction of this country has gone beyond the point of no return. If BHP is taken over, the existing Australian shareholders are bought out with a foreign loan and the control of that company which is vitally important to Australian secondary industry goes to one man about whose long term policy we have no idea, we are probably getting to a point where we cannot revive Australian secondary industry. Australia has been very lucky that BHP, by and large-I do not want to defend that company-has tried to keep account of what is in the best interests of Australia. We have no assurances that that policy will continue. We know that the profits from Mr Holmes a Court's companies are very largely the result of share trading or from royalties from coal mining and other interests. In the record of Mr Holmes a Court and his Bell Resources companies there is no evidence to suggest that he has any experience whatsoever in managing and directing a large enterprise such as BHP. Mr Holmes a Court has indicated that he does not particularly want to be chairman of that company but the net effect of that takeover bid, if it is successful, will be that there will be a new board of directors, a new management of BHP. That is now unavoidable in the circumstances. Whether Mr Holmes a Court is chairman or whether somebody is chairman who is beholden to him remains to be seen, but there will be a fundamental change of direction in the way BHP is managed. In Newcastle and Whyalla one finds that the employees of BHP are very concerned. We know that BHP has given a very large undertaking to the Government to refinance and modernise the whole steel industry by spending very large amounts of money. Can we be sure that if there is a change of management of BHP that modernisation program will proceed? We have the assurance of Mr Holmes a Court that this will proceed but he cannot speak on behalf of a board of directors, particularly one that has not yet been appointed. Until assurances by Mr Holmes a Court about the future of the steel industry in this country can be authoritatively questioned and examined we have no right to allow this takeover to proceed with the haste in which it is proceeding. At the Committee stage I will call for support for the three amendments that I have foreshadowed. I believe that those honourable senators who have the interests of this country at heart will support one of those three amendments. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.32) —in reply-This matter was debated exhaustively and exhaustingly on 14 March. I do not propose to canvass all the arguments again, notwithstanding the passion which has been expended by Senator Siddons once again on this subject and, for that matter, notwithstanding his foreshadowing a further litter of amendments to the Trade Practices (Transfer of Market Dominance) Amendment Bill that, despite the normal conventions that apply in this place, he has not yet been able to circulate to those of us who will consider them in a matter of minutes. I referred to Senator Siddons's passion on the subject. I think that we are entitled to something of a horse laugh in response to his assertion earlier in his speech that he has not taken sides on this matter. All I can say is that if he has not taken sides on the merits of the Broken Hill Proprietary Co. Ltd-Holmes a Court affair, he could have fooled me. The points I make very quickly about the section 50 amendments are as follows. The change being proposed to the inquiry procedure in section 50 so far as it relates to bare transfers of monopoly power predates any suggestion of the present Holmes a Court acquisition exercise being set in train. That proposed change to the legislation was supported at the time by BHP in written representations to the Government, making and acknowledging the point that the present law was `anomalous'. That was the word used by BHP in its application to bare transfers of monopoly power. Prior to this BHP-Holmes a Court matter looming large in the popular consciousness, this change to the law had acquired complete unanimous across the board support for the merits of the matter involved. There is very good reason why the change acquired support. In the first place there was general doubt that the provision in section 50 was ever actually intended to apply to bare transfers of monopoly power. There remains only one judgment on the court records which produces the conclusion that that section is applicable to such non-competition reducing acquisitions. The second reason why section 50 has been thought inappropriate to apply to bare transfers of monopoly power and why the amendment in this Bill has been thought to be necessary is that it involves the Trade Practices Commission getting itself involved in an inquiry about public interest issues which do not relate in any way, by definition, to questions of competition. A bare transfer of monopoly power, by definition, is a transfer, an acquisition situation, which does not result in any lessening of competition. The Trade Practices Commission exists for the purpose of supervising competition policy. It is a competition agency and yet in this situation it would be a monitoring and exercising authority with respect to something which, by definition, is competition neutral. That is another reason why section 50 has universally until now been thought inappropriate to the kind of acquisition we are now also concerned about. The third reason why section 50 was thought inappropriate in its present form to apply to a bare transfer of monopoly power was that the particular test set out in section 50-that is, the test of establishing net public benefit flowing from the acquisition-is one which I think everyone agrees cannot sensibly be applied to a bare transfer of monopoly power situation. The most one could ever hope to establish in that situation is an absence of detriment. To leave the test in its present form in section 50 would be, for all practical purposes, to insulate monopolies from any kind of takeover challenge. That is the set of reasons why section 50 has been thought inappropriate. That is the set of reasons why this amendment was originally promulgated and that is why it deserves the continuing support of this Parliament. It is not a matter of changing the rules in midstream, as has been asserted rather faintly these days by the Opposition and much more strenuously by Senator Siddons in his contribution this morning. What the exercise is all about, for those who would want to incorporate some grandfather clause of the kind we will be debating later, is mounting some kind of rear-guard action to apply, or go on applying, a set of rules to a particular transaction-namely, the Holmes a Court attempted acquisition of BHP-which rules everyone, including BHP, is on record as acknowledging are inappropriate. That is what it is about. It is not a matter of changing the rules in the Government's proposed amendment; it is a matter of resisting a quite cynical rear-guard action designed to apply inappropriate rules to a particular situation. That is far more a matter of ad hoc, unjustified in-principle legislation than anything that would be involved in applying, as was foreshadowed late last year, this amendment in the ordinary way, taking effect in the ordinary way upon proclamation and biting on everybody equally, not selectively. It is not a matter of the Government taking the view that no inquiry of any form was necessary so far as this BHP-Holmes a Court affair was concerned. We have taken the view that any inquiry of the kind that might be thought to be provided for in the existing Trade Practices Act was wildly inappropriate for all the reasons I have just outlined. But it was not a matter of washing our hands of the situation and saying: `There is simply no potential public interest considerations here which require or demand examination of any kind'. Of course, we embarked upon what can properly be described as an inquiry, certainly the kind of inquiry which has been quite familiar at an executive government level in Great Britain, albeit in the context of a much more elaborate mechanism but, nonetheless, involving discretionary decisions by government after in-house government consideration. We embarked upon the inquiry to which Senator Siddons referred of having a number of senior economic Cabinet Ministers sitting down with the parties concerned and exploring, in a great deal of depth and detail, the particular issues which have attracted so much public attention. In the course of that inquiry-I think Senator Siddons might be interested in listening to this since I am now responding to some of the questions he asked me in his speech-it was not a matter of ignoring, overlooking or passing over the kinds of policy issues that have been the subject of so much public attention. It was a matter of the seven Cabinet Ministers involved scrutinising very closely the financial arrangements that were proposed and the tax implications and so on of those financial arrangements and satisfying themselves that there were no public interest considerations evident on the material before them which justified some further Government intervention. Senator Siddons asked me what, if anything, was done about inquiring into the financial arrangements contemplated by Mr Holmes a Court and whether we would make public the answers, if any, that we were given by Mr Holmes a Court. I answer him by saying that it was very much a part of the Government's inquiry to get quickly on to those basic and quite fundamental questions as to the financing arrangements and, for that matter, their taxation implications. I do not propose to make public now the various pieces of information and assurances that were given to us by Mr Holmes a Court in response to those inquiries. There are many matters of high commercial confidentiality involved and it is a matter for Mr Holmes a Court, not the Government, to decide what he wants to place on the public record and when he chooses to do so. However, I now draw Senator Siddons's attention, if he can demonstrate enough interest in this debate to listen to what I am saying, to some very important statements that have been made by Mr Holmes a Court in his Part A document that was lodged this week with the National Companies and Securities Commission. It has been a characteristic of Senator Siddons's contribution to this whole debate that he has lagged about two furlongs behind any given play. While he has absorbed, with all the gamesmanship of the Victorian Supreme Court case, what Mr Justice Marks was saying and the state of public knowledge about these financing arrangements as they existed last week, he seems to have totally ignored some very important matters that have been put on the public record in the current Part A document. I do not know whether Senator Siddons has looked at the current Part A document but many of the matters to which he referred in his speech are there specifically addressed. They are not addressed to the same degree of detail as they were addressed in the Cabinet inquiry but they certainly track over the same territory and have some of the same effect. For example, let me refer to clause 10 (3) (c) of the Part A statement as it bears upon the terms of the credit facility from the Standard Chartered Bank and let me read that clause because it is highly relevant to the sorts of concerns that Senator Siddons expressed. It states: SCB's commitment under the Credit Facility is at present to provide loans in US dollars. However, the intent of both SCB and BRL is that the lending be syndicated and that the total amount needed under the Credit Facility (or so much of that amount as is reasonably practicable) be drawn down in Australian dollars from Australian banks. BRL seeks no currency risk exposure and would intend to manage any such exposure which ultimately arises under the Credit Facility as part of the BRL's normal currency risk management operations which include hedging and swap arrangements. So the matters are addressed quite specifically. Okay, we do not have the details of the syndication-- Senator Siddons —You certainly haven't. Senator GARETH EVANS —But there are excellent commercial reasons for that, which a businessman of Senator Siddons's experience should appreciate. There are particular concerns addressed in the Part A statement in a way that Senator Siddons utterly failed to acknowledge in his speech. In terms of the $2 billion that ultimately needs to be financed by Bell in terms of its ultimate obligation to pay for that acquisition, there is a reference in sub-clause 10 (4) of the Part A statement to BRL entering into `a standby underwriting arrangement to facilitate a pro rata rights issue by BRL to its shareholders to raise up to $700m'. On any view that is a very significant matter that has now been laid squarely on the table; a standby underwriting arrangement for an equity issue of that order of magnitude clearly completely changes the kinds of assumptions that were in so many of the public prints about all this as to the gearing ratios under which BRL would operate post-acquisition. Okay, we do not have the details of those standby underwriting arrangements; but there is a statement, which has to stand up if anyone's credibility is to remain intact after this, to that effect. The point was further made by Senator Siddons that Bell, if it were successful with this and were then faced with the problem of generating the cash flow to service its debt and so on, might well embark upon an assets stripping operation of the kind that the Australian commercial world has never seen and that this will just be an exercise in chopping up BHP or divesting it of its assets in some way that would have profound and profoundly unhappy economic consequences for the nation of the kind that concerns Senator Siddons. Let us look again at what is said in the Part A statement. Sub-clause 10 (4) states: BRH and BRL have no plans that involve BHP either directly or indirectly in refinancing the credit facility and in particular have no plans that involve: (1) the sale of any assets by BRL or its subsidiaries to BHP or BHP subsidiaries; (2) the issue of any preference shares in BRL or its subsidiaries to BHP or BHP subsidiaries; or (3) the acquisition of BRL or any its subsidiaries by BHP or BHP or BHP's subsidiaries. These are very important matters that are referred to in this Part A statement. They are very much the kinds of matters that were fully explored in the inquiry on which the Government embarked. Of course, neither I nor the Government want to be taken as in any way taking sides in this matter, but what I am very concerned to ensure is that this debate be conducted in a way that has regard to the public policy issues involved, and that red herrings are not drawn across the trail and false trails are not laid in the course of this debate in the way they have been in such spectacular proliferation in the contribution by Senator Siddons. The final point that Senator Siddons made in the course of his speech was that there is a dreadful cynicism involved on the part of the Government in splitting the original Trade Practices Bill into two parts and bringing it forward in the way that we have now done. I simply remind him that a splitting operation was in fact canvassed earlier by the Australian Democrats as the appropriate way of dealing with this matter. It will be recalled that we were told, with a great deal of harrumphing and drum beating, that the legislation, if we pursued this amendment, would be defeated on the third reading and that what the Democrats would do under those circumstances would be to bring back a trade practices amendment Bill of their own dealing with everything except the section 50 amendment. The Democrats would split out of such a Bill the section 50 stuff that is the subject of this Bill, which would enable the Senate to have a vote on the other matters, of course leaving it then up to the Government to bring forward a separate piece of legislation, as we now in fact have done, dealing with the section 50 matter. So let us have no more of this particular humbug about cynicism. It has been clear all along that there is clear majority support in this Parliament both for the section 50 amendments that we are now debating and for the other aspects of the Trade Practices Amendment Bill which I hope we will debate shortly. Because of the different characters of those two majorities, there was not support for a piece of legislation that combined those two streams of amendments. It is simply a matter of common sense, not a matter of cynical opportunism, an absence of moral fibre or any of the other sordid motivations that have been ascribed to us. It is simply a matter of common sense, a common sense that the Democrats themselves displayed at an earlier stage in this debate in choosing to handle the procedures in this way. The merits are unequivocally clear in this Bill. We have debated it at what is now approaching nauseous length in the past, and I hope that we can proceed to deal with it quickly, particularly if we now have from Senator Siddons the courtesy of seeing his amendments in the Committee stage. Question put: That the Bill be now read a second time. The Senate divided. (The Acting Deputy President-Senator Haines) Ayes . . . . . . . . . . . 56 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 49 —— Archer, B. R. Kilgariff, B. F. Aulich, T. Knowles, S. C. Baume, Michael Lewis, A. W. R. Baume, Peter McClelland, DouglasBjelke-Petersen, F. I. McIntosh, G. D. Black, J. R. McKiernan, J. P. Bolkus, N. Maguire, G. R. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Newman, J. M. Childs, B. K. Parer, W. R. Coates, J. Puplick, C. J. G. Coleman, R. N. Ray, RobertCollard, S. J. Reid, M. E. Cook, P. F. S. Reynolds, M. Cooney, B. Robertson, E. A. (Teller)Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Jessop, D. S. Zakharov, A. O. Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. Macklin, M. J. (Teller) Vigor, D. B. Mason, C. V. J. Question so resolved in the affirmative. Bill read a second time. The Bill. Senator DURACK(Western Australia)(12.00) —I move: Page 2, clause 3, proposed new sub-section 50 (2C), at end of proposed 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 or of a corresponding law of a State or Territory in respect of that acquisition of shares was lodged with the National Companies and Securities Commission in accordance with that Act or such a law before the day on which the Trade Practices (Transfer of Market Dominance) Amendment Act 1986 received the Royal Assent''. This amendment adds a proposed new sub- section to the Bill to provide that the Trade Practices (Transfer of Market Dominance) Amendment Bill, which we have just supported, will not apply to any proposed acquisition where a Part A statement has been registered with the National Companies and Securities Commission at any time prior to this Bill receiving royal assent. I do not need to go over the argument again as we have already had argument in this place a few weeks ago. Clause 3 in the Bill is what is commonly called a grandfather clause. In other words, it preserves the legal situation as it stands for all those matters which have taken place prior to the Bill taking effect; for example, where an acquisition has already been commenced legally. It does not apply obviously to rumours or even to public statements that someone is going to make an offer. It applies only where a fully fledged legal takeover offer has been lodged and registered with the National Companies and Securities Commission. The law that we have just changed should not apply to any Part A statements which are in existence when it takes effect. Clause 3 has been styled in popular language as not changing the rules of the game while the game is in progress. As I have said, clause 3 is commonly called a grandfather clause. It is not unusual in legislation by any means to preserve a situation which has already occurred. In other words, this clause does not have a retrospective effect. It ensures that this legislation applies only to takeover offers or, indeed, to acquisitions-they do not necessarily have to be takeover offers-which occur after the Bill becomes law. I point out that this clause is not specific to the proposed takeover of the Broken Hill Proprietary Co. Ltd. In fact, when we last debated this legislation the Part A statement which had been lodged had been withdrawn but another statement has already been lodged and, therefore, it will apply to the proposed takeover. As the Attorney-General (Mr Lionel Bowen) said in another place when this Bill was being debated in that place, to his knowledge there is a proposed takeover of another company. I find the Australian Democrats total obsession with the takeover of BHP very strange when another major takeover is in existence. As I have said, this problem is not one of specific application to BHP; it is of general application to any takeovers which may exist. It is the sort of proposal that probably should be made in most legislation to ensure that this does not apply to events which have already occurred and are taking place. When people embark on a takeover they know what the state of the law is and they should be prepared to observe the law as it stands at that time. If events change, of course, and they have to make another acquisition at a later time, the state of the law at the time would apply. We are not trying to stop any takeovers occurring. We are certainly not putting any excessive time limits on it. We are simply saying that, until this law takes effect and we make a major change, all those legal situations which are occurring up to that point in time should be decided in accordance with the state of the law as it exists, or is thought to exist, until the amendment which we have just moved takes effect. Senator SIDDONS(Victoria)(12.04) —The amendment we are debating is identical to the amendment that was put before the Senate when the Trade Practices Commission was debated in its entirety. At that time we opposed this amendment and we will have to oppose it again for the same reasons. For the record I will just recount what our reasons were. This amendment states that proposed new sub-section 50 (2C) will not affect any takeover that is in progress before the Trade Practices (Transfer of Market Dominance) Amendment Bill receives royal assent. If it achieved anything worth while we would wholeheartedly support it but the fact of the matter is that this amendment is only misleading the public and the Parliament. It is very easily got around. All any bidder has to do is withdraw his current bid, made before this Bill receives royal assent, and introduce a new bid after the Bill receives royal assent. Then he has completely got around the problems that Senator Durack has just outlined. We can see no reason why we should support an amendment that achieves nothing at all and misleads the public. If Senator Durack and the Opposition are genuine in their stated aim of not wishing the rules to be changed in the middle of a takeover, they will support an amendment which we will be moving later which allows a 12-month period before a new bid can be made. That would achieve something, but this amendment achieves nothing. If the Bill is passed today, Holmes a Court can make a new bid tomorrow and so completely circumvent the reason for moving this amendment. We do not want to support something that will be misleading and achieves nothing. If the Opposition is genuine in its desire to make sure that a bid that is now before the Trade Practices Commission proceeds upon the basis of the existing law, it will support an amendment which allows that existing law to apply for a period of 12 months. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(12.07) —I congratulate Senator Durack on his heroic attempt this morning to defend the indefensible. Mercifully that defence was kept brief, as befitted its quality. The reality of the matter is that he knows and we all know that the grandfather clause proposal moved again by the Liberals simply does not stand up to any kind of scrutiny in principle at all. It does have a superficial attraction-the argument that the rules of the game should not be changed during the course, in particular, of some highly significant and highly contentious community controversy. It is generally true that parties have to take their rights and obligations as they find them on the law as it stands and if the law later changes, so much the better for future generations, but that does not affect the rights and obligations as they stand before the law is so changed. While it is the case against that background that one might be inclined initially to say that in the context of the Broken Hill Proprietary Co. Ltd-Bell Resources Ltd affair that BHP is entitled to rely on the state of the law as it now exists, ignoring for the moment that BHP has argued that the law was an ass in this respect when the matter was not perceived as affecting its interests-- Senator Puplick —It is flexible, too. Senator GARETH EVANS —It is flexible; that is the case. While it is the case that one might think initially that BHP is entitled to rely on the state of the law as it presently exists, I believe it is also the case that Mr Holmes a Court in this current controversy is entitled to rely on certain considerations, and I think that these considerations are the ones that should move us to reject this amendment. The first matter of relevance is the clearly articulated intention of government, without controversy and without opposition being expressed at the time, to change the law-an intention articulated publicly in the latter part of last year. It is secondly the case that there have been overwhelming majority decisions in both Houses of Parliament in favour of a change to the law. There was originally a unanimous decision in the House of Representatives, followed by a majority vote of 51 to 6 when the matter was last debated in this place and then there was an all but unanimous decision, with a single dissentient, in the House of Representatives. So a clear will has already been expressed in favour of the amendment of the law in terms of its universal application without a grandfather clause of this kind being attached to it. One might normally think that that is a relevant consideration when one is ordering one's affairs and determining what it is appropriate to rely on. The third consideration, much more legally pertinent than either of the first two, is that what is proposed by this particular grandfather clause does violence to the ordinary common and garden rule of the legislative process that the law changes when the proclamation of the amending Act occurs. There is no usual lingering effect of some pre-existing application of the law; the law itself changes from the date of proclamation. It is important to remember-this is really what is in issue and what has been completely overlooked in so many of the glib references to changing the rules-that there was no obligation already accrued as a matter of law to go through the inquiry process. No obligation has yet accrued. Similarly, there is no correlative right in the defender, someone resisting an acquisition, which in that sense has actually so far accrued. This is the case because the inquiry requirement in section 50 bites only on a completed acquisition. It is only when an acquisition has actually taken place without there having been an authorisation under the terms of section 50 that this particular prohibition in the Trade Practices Act actually has effect. There is no prohibition on a takeover offer being made without some inquiry having occurred, or there is no requirement that an inquiry be immediately set in train. There is no legal obligation on an acquirer, such as Holmes a Court, to go down that track; there is no legal right in a defender, such as BHP in the present matter, to insist on such an inquiry having occurred. The only time that obligations arguably accrue or rights arguably accrue on behalf of the defender is when there is a completed acquisition. On any view we do not at the moment, with the mere lodging of a Part a statement, have a completed acquisition. What I am saying, very simply, is that in the present situation the acquirer, Holmes a Court, is entitled to rely on the law changing in the ordinary way on the date of proclamation making it the case in the future, if that change to section 50 occurs, that there will be no inquiry requirement as a condition of the successful acquisition where what is involved is a bare transfer of monopoly power. Holmes a Court and any other acquirer around the place at the moment who may have lodged a Part A statement are entitled, on the ordinary processes of the legislative system as we know it and usually apply it, to rely on that expectation that there will not be some separate and specific provision made in effect to continue in existence for one particular person of one very small group of people an obligation which for everyone else has been removed. The short point again, putting it another way, is that far from changing the rules midstream in a way that is for Holmes a Court's benefit-- Senator Crichton-Browne —It is not Holmes a Court; it is the Bell Group. It is a public company. Senator GARETH EVANS —Senator Crichton-Browne has a mind finely attuned to distinctions of this kind, as I am well aware from his own commercial background. It is entirely appropriate that that piece of pedantry be acknowledged and find its proper place in this debate. It is the case that what is involved here is not a change of rules in midstream designed to benefit or having the deliberate effect of benefiting the Bell Group or any other acquirer that happens to have a Part A lodged at the moment. What is involved in the grandfather clause amendment that is now before us is an attempt to change the rules in a different way-to prescribe a set of rules affecting those people with Part A currently outstanding in a way that affects nobody else and in a way that is utterly at odds with the way in which the legislative process normally operates. We had this argument at length on 14 March, and I do not think there is anything more I can usefully say or put on the record to oppose the amendment that has been moved. I suggest that the Committee respond accordingly. Amendment negatived. Senator SIDDONS(Victoria)(12.18) —by leave-I move: (1) Page 2, clause 3, proposed new sub-section 50 (2c), at end of proposed sub-sections, add the following new words and paragraphs: `provided that nothing in this sub-section shall apply to- (c) any acquisition of shares in the capital or assets of a body corporate within 12 months after the day on which the Trade Practices (Transfer of Market Dominance) Amendment Act 1986 received the Royal Assent- (i) by any person pursuant to a take-over scheme or a take-over announcement within the meaning of the Companies (Acquisition of Shares) Act 1980 or a corresponding law of a State or Territory in respect of which any document or a copy of a document has been registered by, or lodged with, the National Companies and Securities Commission prior to that day, or (ii) in the circumstances referred to in sub-paragraph (i) by any person who is an associate of, or associated with, any such person within the meaning of that Act or such corresponding law of a State or Territory; or (d) any acquisition by a person of any shares in the capital, or any assets, of a body corporate where the Commission is satisfied that in all the circumstances the acquisition has resulted or may result in a detriment to the public and the Commission has within 21 days of the Commission becoming aware of the acquisition given to the person a notice stating that the Commission is so satisfied.'. (2) After clause 3, add the following new clause: `4. Section 90 of the Principal Act is amended by adding after sub-section (9) the following sub-section: ``(9a) Where an application for an authorization is made in respect of a proposed acquisition of shares in the capital or assets of a body corporate, and sub-section 50 (2c) is not applicable to that proposed acquisition by reason of paragraph (d) of that sub-section, the Commission shall make a determination granting an authorization under sub-section 88 (9) in respect of the proposed acquisition where it is satisfied that in all the circumstances the proposed acquisition would not result in or be likely to result in such a detriment to the public that the proposed acquisition should not be allowed to take place.''.'. The effect of the first of these amendments, the one relating to public detriment, will be to give the Trade Practices Commission the power to waive section 50 (2C) if it believes that a takeover will result in a detriment to the public. In this case the takeover would be conducted under the existing section 50-in other words, an inquiry will be held if the Commissioner believes that there is a public detriment. By inserting a public detriment clause we are essentially making life easier for the Commissioner. We are imposing a positive obligation on the Commission to authorise the takeover if the public detriment does not exist. The Commissioner must authorise the takeover if there is no public detriment. We are also narrowing the range of matters which the Commission has to examine. Tax, debt and restructuring matters will now have a greater role. This is all to the good because these are matters which can be assessed and evaluated. The Commission works on the notion of public detriment in a de facto way at present because it is so difficult to weigh up the public benefit. This amendment would merely formalise a situation which in a de facto way exists right now. The Government should not have any problem with these amendments, unless it believes that the present takeover is in the public detriment and it would like this Bill to be pushed through anyway. If the Government is assured that there is no public detriment, it will not affect the situation one little bit. This amendment puts the acid test on the Government. The Government has given an assurance that there is no public detriment in this takeover proceeding. If that is true, presumably the Trade Practices Commission will find that to be true and section 50 (2C) will then apply and there will be no inquiry. In all the circumstances I see no reason why the Government should have any objection whatever. If the assurances we have been given are real and there is no public detriment whatsoever, everybody will be happy. The second amendment relates to changing the rules during the game. Senator Evans said that a fundamental principle of law is involved and that once a piece of legislation is proclaimed there should be no delaying factors and no exceptions. I am sure that situation is not inviolate. There is a real problem here in that under the existing law there have been three takeover bids for Australia's largest enterprise. If the Government is to avoid the criticism that has been levelled in this debate, and certainly will be levelled by the public for many years to come, that it has changed the rules to make life easier for Mr Holmes a Court and his company to take over Broken Hill Proprietary Co. Ltd., it is not unreasonable that in this case there should be a delaying process so that the amendment the Government is so keen to see passed to section 50 does not interfere in a very important commercial matter in the community at this time. A 12-month period for the existing law to apply would probably apply only in the Holmes a Court takeover bid. It is significant that section 50 has never been applied by the Trade Practices Commissioner before. This is the first time that a change of ownership of a monopoly has been of sufficient concern to the Trade Practices Commission to initiate legal action. That it has done, and we do not know what its concern is. It is not in a position to make that public, but certainly there is something of concern and this particular section has been brought in for the very first time in the history of the Trade Practices Commission. That alone, as I said in the second reading debate, should be sufficient reason for the Government to agree to an amendment that allows a 12-month stay of proceedings in this particular case. Senator MASON(New South Wales)(12.23) —I support Senator Siddons in these amendments because I believe that the question of a public detriment clause is of considerable practical importance and in the interests of the community should be taken seriously by the Government. I agree with Senator Siddons that an indication by the Government that it will not support this amendment would tend to indicate that we have all got something to worry about because if we did not have anything to worry about, the Government would gladly support the amendment. In the Committee stage on a previous occasion I made a number of points to the Minister for Resources and Energy concerning areas in my own constituency, namely the steel towns of New South Wales. I pointed out that as matters now stand there are so many open questions that there are good reasons for concern in those cities. There is need for there at least to be scope for an inquiry to decide whether there is any likelihood in the future of public detriment in Wollongong or Newcastle. That bears directly on the question of the viability of the steel industry in those cities, which are in a delicate stage in their career. I will go into that matter further in a few moments. I asked the Minister then why he would not allow some sort of mechanism for an inquiry. I go no sensible answer from him. Senator Siddons has now brought up an amendment which would provide for that opportunity. I asked the Minister what thought the Government had given to the viability of the steel industry in Wollongong and Newcastle in the light of their circumstances now; whether the Government had investigated the areas of finance available to the Bell group and Mr Robert Holmes a Court, with the idea in mind that at some time there may be some kind of foreclosure or some circumstance arise which would affect that delicate balance of the steel industry; and whether the Government intended in that case to offer any guarantees to the steel towns that in the event of there being some problem after a takeover by Mr Holmes a Court it would support the steel industry. I have had no replies to any of that. I hope I will get a reply at some stage in this Committee debate. I would like to take the matter a little further because after having discussed it and got that completely negative response from the Minister in the last debate, I went to the trouble last week of going to Wollongong and spending a day with Australian Iron and Steel Pty Ltd. In particular, I had a lengthy discussion with the General Manager of Australian Iron and Steel, Mr J. K. Ellis. Australian Iron and Steel, of course, is the steel division of Broken Hill Proprietary Co. Ltd in Wollongong. I have some figures which I would like to draw to the Minister's attention because they have a very considerable implication for the future. According to Mr Ellis, during the remaining years of the steel plan-that is, to 1988-the Wollongong steel division alone will need extra capital of $220m in 1986, $340m in 1987 and $250m in 1988. That is $810m-nearly a billion dollars-which will have to be injected into that steel division over the next three years. Mr Ellis also authorised me to make public the fact that from 1989 onwards, after the expiry of the steel plan, between $100m and $150m a year will have to be injected into the steel industry in Wollongong alone to keep it competitive-no expansion-in the world scene. We are talking here about an industry which requires enormous infusions of capital to keep it economic and to keep it going over the next few years. Over the next decade it is most unlikely to be the place to make a quick buck. It is a particularly vulnerable industry. It is a vulner- able industry which directly employs in Wollongong alone 17,000 people and which provides indirect employment for many others. Of the 17,000 people employed by BHP in Wollongong, 13,000 are employed in the steel division. There is considerable anxiety about this matter in Wollongong. I can assure the Minister that there is no doubt about that at all. He is a senator for Victoria. I do not suppose he cares much about the steel towns of New South Wales. I think it is up to me to raise that point. A point that bears on this is that the Government has an agreement with BHP that steel prices will not rise by more than the consumer price index. Steel prices are already up to some two thirds of the CPI. There is not a great deal of room left in price expansion for that enormous capital infusion-as I said, nearly $1 billion over the next few years-to take place. In addition, Australian Iron and Steel in Wollongong has a considerable pollution problem and a very expensive one. In the city now it has been admitted and conceded by the company that it is producing carcinogens in very large quantities which affect the health of its workers. It has agreed with the State Pollution Control Commission that it will spend another $35m in the next few years on correcting this problem. The major source of the problem is the kish-the graphite-which is released into the air. I raise those figures for the Minister's serious consideration. Mr Ellis has authorised me to make them public here. I do not think those figures, certainly for after 1989, have been made public before. They have a direct bearing on the public detriment area in this matter and I ask the Minister again in this debate: Can he give me detailed and specific undertakings and assurances in the light of these figures and in the light of the delicate state of this industry that its survival has been considered carefully by the Government? In no circumstances has the Government assured itself-there has been no inquiry and it has not even gone into the matter-that at some future time the financial backers of the Bell Group Ltd may need the money. They may want to foreclose or they may want the money because of some change in the nature of the finance. Is there a stage at which that finance has to be renewed? What sort of term is that finance on? What happens at that point? Is there a situation there where those 17,000 jobs in Wollongong and nearly as many in Newcastle could be placed in jeopardy? Mr Holmes a Court could come to the Government and say: `I am sorry, this is one of the commercial realities of life. I cannot go on. It is not possible. This is not an economic industry'. He would quote back to the Minister the figures which I am quoting to him today as a justification. That is not what we want to see happen. That is why we are taking such a strong line on this matter. It is because we believe that there is the act of risk to the public detriment here. That is not a criticism of the Bell Group or of Mr Robert Holmes a Court. For all I know, his takeover could be the best thing for BHP since sliced bread. I do not know. The point is that I do not know and I do not think anybody else knows. It certainly ought to be in the interests of BHP, in the interests of the Bell Group and in the interests of the Australian people and especially the cities of Wollongong and Newcastle that some regard is taken of those points and that an inquiry is held. That can be done if Senator Siddons's amendment is passed. If Senator Siddons's amendment does not pass, I make it absolutely clear that the Government will stand hoist with its own petard. The Government will be as good as coming out and saying: `We have something to hide here, there is something wrong and we do not want it to get out'. I do not believe that is the case. I am not so cynical. I do not think that is so. All I think that has happened is that the Government has not taken this matter seriously enough. It has not understood what the implications are. It has not understood the extent of its own responsibility in a matter as large and as consequential as this. That is probably the nub of the matter. All I can say to the Minister and to the Government, even if it means adjourning consideration of this Bill, is that surely the Government or the Cabinet should be prepared to give further consideration to this amendment, which has no harm to it whatsoever. Indeed, it provides a useful power. I think everybody would concede that. It is a very good backstop and is something that would give the Trade Practices Commission a valuable role in the community. As Senator Siddons has said-I say it again-if there is some sort of inquiry made into this particular takeover bid and that Commission finds there is no public detriment or risk of a public detriment, it can tell us all that and we can be reassured. The takeover can go ahead and there will be no problem. If that is not done we can all assume the worst. We can assume that the Government either wants to conceal something or that it is too lazy and too unconcerned for the welfare of 30,000 jobs with downstream effects in Wollongong to make the small mental effort of trying to understand the situation in those cities and to allow this amendment to pass-an amendment which would be of value and would do no harm. I reiterate that it could only be of value. I implore the Opposition to support the amendment on that basis. Senators from New South Wales, I know, share my concern for what happens in Newcastle and Wollongong. We must all do that. We are all of us very unhappy and I think senators of all parties here have said that. What has happened to the steel towns already? They are having a rough time there. I have known of whole classes of apprentices who have completed their training with top marks and who have been dismissed the moment they have finished their apprenticeships. We do not want that sort of thing going on and we particularly do not want it getting worse. Finally, I am prepared to quote a responsible view of the General Manager of Australian Iron and Steel, Mr J. K. Ellis, of Wollongong, who knows his own undertaking intimately. He has authorised me to quote him in this place and anywhere else I wanted to as saying that if the steel division of BHP suffers through any consequences of a takeover, and funding were to be cut back on those figures of his which I quoted earlier, that would provide the kiss of death for Wollongong. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(12.34) — Senator Mason asked me whether the Government is satisfied about the assurances that have been given in relation to the future of the steel industry by Mr Holmes a Court on behalf of the Bell Group. I simply make the point, as has been stated publicly by the Prime Minister (Mr Hawke), that the Government was given, in effect, identical assurances by both BHP and Mr Holmes a Court as to their commitment to the steel plan and some larger associated issues as to the future of the steel industry. There is no reason in the Government's mind, based on what we know of the financing arrangements and so on which were the subject of earlier debate today, to doubt that those assurances will be met or are capable of being met. I make the further point that the Steel Industry Authority is in many ways a more appropriate body to have views about the continued viability of the industry. The Steel Industry Authority has itself been asked to inquire into the sorts of matters that Senator Mason has raised and it has declined to do so because it too has not been sufficiently persuaded that there are the kind of public interest or community interest issues involved that Senator Mason is waxing so indignantly about. Turning to Senator Siddons's amendments, I make the point, first of all, in relation to the first part of his so-called improved grandfather clause that, even on the very brief reading that I have been able to make of this clause, having received it so recently, it is perfectly apparent that it will not succeed in doing what he wants it to do. The way in which sub-clause (c) is drafted produces the following effect. If someone makes a takeover offer before the day of assent of this legislation and that offer proceeds through to a successful acquisition within 12 months, this clause bites and the offer and the acquisition are subject to the inquiry procedure. If, however, an acquirer were to make an offer on the day after this particular Bill and amendment were assented to and then proceeded to acquire within, say, 12 months pursuant to that particular offer, then that acquisition process would not be caught by this particular clause here. So the sorts of points that Senator Siddons was making about the Liberals' grandfather clause are equally applicable to his in the sense that an acquirer with half a brain would, if confronted with this clause, simply withdraw an offer already on the table, wait until the Bill is assented to, and put down exactly the same offer thereafter. In those circumstances, the so-called grandfather clause would have no effect. So, technically, as I read it-unless I have overlooked something, which is perfectly possible given the timeframe that we have had-I do not think that the clause could possibly have the effect that Senator Siddons claims for it, in the context of BHP or anything else. As to the no public detriment provision that Senator Siddons has sought also to write in here, which raises an important larger issue of principle, there are a number of drafting defects or apparent defects which also are evident in this. I do not stop to go on about those at any length, except to say that there is an incongruity between the provision in sub-clause (d), requiring the Trade Practices Commission to find detriment, and then create a situation in which it is subsequently determining whether there is detriment. It would seem to put an acquirer at a considerable disadvantage. Again, the time-frame of 21 days is arguably very narrow when the procedures are not spelt out for that preliminary threshold decision as to detriment to occur. Again, there is a further quite substantial drafting problem in sub-clause (d), in the sense that it seems clear from the way that it is drafted that it is only after an acquisition has actually occurred that this particular mechanism is triggered. It is not when there is a takeover offer on the table, but only after a successful acquisition. That would seen to create all sorts of problems in practical enforcement, requiring subsequent divestiture and all the sorts of things that have given the courts and the Commission so much headache in the past. That apart, it has to be acknowledged that, if one were to rewrite section 50 so as to have not a requirement of net public benefit but, rather, a negatively expressed requirement of no public detriment, that would certainly make section 50 a more manageable provision so far as inquiries were concerned. I have to acknowledge that, because I have been saying all the way through the debate that one of the fundamental flaws in section 50 has been that it is cast in terms of net public benefit rather than simply absence of detriment. So, certainly, if Senator Siddons could get his drafting successfully in place, this would represent some improvement on the hopelessly inappropriate character of the present clause. But that is not the end of the story. There are still all sorts of difficulties about applying the basic section 50 Trade Practices Commission inquiry regime to a bare transfer of monopoly power situation. The three points which I will make again, as I have made them earlier today, are these: First, there is still a real doubt as to whether section 50 applies at all to a bare transfer situation. We have one court case saying so but a lot of legal argument to contrary effect, and there is certainly no guarantee, from Senator Siddons's point of view, that at the end of a long litigious process there would in fact be an inquiry required by the courts. Secondly, there is the really most fundamental objection to this, and that is about the role of the Trade Practices Commission as the appropriate agency for such an inquiry. We are still here talking about situations in which, by definition, there is no element of competition reduction involved. It is simply a bare transfer of monopoly power. We have a competition policy agency purporting to make decisions in the national interest on a matter which is competition neutral in character, and that simply is incongruous and is, we strongly believe, an inappropriate role for the Trade Practices Commission to be performing. A further problem that I quickly mention is the difficulties of definition in the application of different tests to what might be a single situation. What I mean by this is best illustrated by an example. Take a situation in which one conglomerate seeks to take over another conglomerate where, by and large, there is no overlapping at all in terms of the market areas with which the respective conglomerates deal. But let us assume that in one small area of the total composite whole there is a reduction in competition, because there is one particular market where one part of one conglomerate deals with the same territory as a part of the other conglomerate which is being acquired. In those circumstances, we would have two potentially applicable tests-one being that of net public benefit, and the other one of no detriment-applying to a single takeover situation, with all sorts of enormous difficulties because it would still essentially be a bare transfer of monopoly power as to, let us assume, 98 per cent of the total transaction but as to one very small and, perhaps, technical part of it, we might have a competition reduction element, which would clearly by numerically or quantitatively insignificant but would raise all these difficult sorts of problems as a result of there being a two-tier test in the legislation. There are a number of points that can be made about this matter. For these reasons I have given I urge that the Committee reject the amendment. Senator DURACK(Western Australia)(12.41) —The Opposition will not support the Australian Democrats' amendments. In the intended view of the Democrats, the amendments go far further than our proposed amendment, which did not find favour with the Committee. They introduce all sorts of problems, most of which have been referred to by Senator Gareth Evans. I do not understand how the second limb, sub-clause (d), could work at all without knowing how the Trades Practices Commission is to be satisfied that there is a detriment, without any form of inquiry that it might otherwise undertake. It seems to be a pretty meaningless proposal. As to the other amendment, it is an entirely different concept from the grandfather clause. Although Senator Siddons has called it a grandfather clause, it is, in fact, intended to preserve the status quo-whether or not it has that effect is another matter-for a period of 12 months. Goodness knows what economic, legal or social significance such a proposal has. It might be designed to benefit BHP at present, although I do not think that 12 months grace would perhaps help it; I do not know. But apart from that purpose, I do not see what the possible justification is. Why 12 months? Why not three months? Why not two years, or never? It just does not seem to have any rationale. For those reasons, the Opposition will not support the amendments. Senator SIDDONS(Victoria)(12.43) —I want to reply to Senator Gareth Evans's criticism that sub-clause (c) was meaningless. It clearly refers to any acquisition or shares in the capital or assets of a body corporate within 12 months after the day on which royal assent is received; and then paragraph (i) goes on to say that any takeover that was in existence prior to the date of the royal assent would qualify. So, the amendment covers it both ways. It covers the period 12 months after royal assent, and any takeover prior to that day. I fail to see that Senator Evans's very scathing and sarcastic criticisms are valid in any way. Senator Gareth Evans —That might have been your intent but that is not the execution. It has to satisfy both conditions. Senator SIDDONS —It clearly refers to any takeover prior to royal assent, and to a period for 12 months after royal assent. I should have thought that that was perfectly clear and that it would have had the desired result of giving a breathing space to ensure that we are not changing the rules during an important takeover. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I inform the Senate that the Treasurer, Mr Keating, left yesterday for official duties in the United States of America, the United Kingdom and France. He will return to Australia on 22 April. During his absence the Minister for Immigration and Ethnic Affairs, Mr Hurford, will be Acting Treasurer. Senator CHANEY —Is the Minister for Industry, Technology and Commerce aware that a Bureau of Industry Economics survey of 102 Australian companies has found that more than 50 per cent of manufacturers have not experienced any competitive advantage from the massive devaluation of the dollar? I ask: Do these findings bear out the Minister's expressed scepticism about the existence of a J curve effect in the Australian economy? Given the survey finding of a 26 per cent average price rise for imported material and components last year and the now apparent fact that devaluation will have nothing like the beneficial effect predicted by the Government, what action will the Government take to reduce the cost burden on Australian manufacturing industry? Senator BUTTON —I am aware of the Bureau of Industry Economics survey only from a newspaper report. I have not yet had a chance to consider it in detail. Rather than say that it bears out my expressed scepticism about the rate and extent of the J curve effect in Australia, I would prefer to say that it discounts some of the optimism that was expressed by other commentators, including economists and politicians, late last year. I think that can be said to be a result of the survey. However, I also noticed Press reports recently of a survey conducted by the Chamber of Manufactures in conjunction with some other group which suggested, on the basis of that survey, that one could be a little more optimistic about the competitiveness of Australian products within Australia and that a majority of companies were expecting a J curve effect to operate within the near future. That was the gist of that survey. The BIE survey has been conducted over a considerable period of time. I think it was first commissioned in about October last year. I do not feel competent to comment on it in any detail until I see the results. The final question asked by Senator Chaney was: What action will the Government take to reduce the cost imposts on Australian manufacturing industry? Not having read the BIE survey and its conclusions, it might be easy for me to say that we have not formulated any response to that issue yet. However, let me say that I am not in a position on behalf of the Government to say that that is the fundamental issue which we would seek to address immediately. I am not in a position to say what steps might be taken by the Government if they were considered necessary. Senator ELSTOB —Can the Minister for Finance confirm reports that the Auditor- General's annual report has disclosed that the Australian Taxation Office has concluded that only 63 to 75 per cent of farm income was disclosed and that as little as 60 per cent of the income of small businesses was disclosed? Will the Minister comment on this situation and will he outline what action the Government proposes to take on the matter? Senator WALSH —The facts are as Senator Elstob stated them regarding the figures in the Auditor-General's report. It is important to note that those figures were compiled by the Taxation Office prior to the introduction of the prescribed payments system in 1983. That system is designed to deal primarily with industries in which significant evasion is occurring. The Government's proposal to introduce the Australia Card will also have a very significant impact on the incidence of tax evasion. In addition, the Government has in recent years allocated staff increases to the enforcement branch of the Taxation Office, which is an essential step in the campaign against evasion and avoidance and is in line with the Government's longer term aim of boosting audit coverage to 2 per cent of non-salary and wage earners by 1992. Senator MESSNER —My question is addressed to the Leader of the Government in the Senate. I preface my question by pointing out that building society lending has fallen by 55 per cent since June last year and that during January the building societies were responsible for only 19 per cent of total home lending, compared to 26 per cent in July 1985 and 30 per cent during the 1984-85 financial year. Does the Minister agree that last week's decision to protect existing savings bank borrowers will worsen the position of building society borrowers in that the societies inevitably will be forced to raise their interest rates to compete with the Government-subsidised banks? Does the Government have any intention to help the 32 per cent of Australians with outstanding building society mortgages? Senator BUTTON —The Treasurer met with the building society representatives last night. Senator Chaney —He left for overseas. Senator BUTTON —Following that meeting, as Senator Chaney says with a perceptive interjection, he left for overseas. But prior to leaving for overseas he issued a statement about this matter, particularly as to the view the Government would have expressed to the representatives of the building societies. I do not have a copy of the Treasurer's statement here. I note that it is set out in some detail in the Australian Financial Review. That is the position which the Government adopts. I am asked as a matter of opinion whether last week's decision will weaken the position of the building societies in a competitive environment in respect of interest rates. I guess that my off-hand, and not necessarily informed, answer to that question is probably yes. Senator CROWLEY —Has the Minister representing the Attorney-General seen articles in the Advertiser of 31 March 1986 addressing Family Court of Australia decisions regarding access to parents who have sexually abused their children? Is the Minister aware of this problem and can he say how many such cases have come before the Family Court? Can he comment on the problem of women being charged with contempt when they refuse to comply with an access order so as to protect their children? Senator GARETH EVANS —I have seen the article and am assured that it has also been referred to the Attorney-General for his reaction. I understand that the Chief Judge of the Family Court, Justice Elizabeth Evatt, has asked the South Australian Minister for Health to provide information to the Court about the cases giving rise to the allegations referred to in the article. It is not possible on the state of current information to say how many cases have come before the Court to date where access has been given to parents who have sexually abused their children. In ordering access, the Family Court is required to have regard to the welfare of the child as the paramount consideration. No doubt that would be a crucial consideration were the facts in issue to come to light. As to the contempt question, where a parent believes that children are at risk during access visits, the appropriate course of action, if any question of being subject to contempt law is in issue, is to take legal steps at the earliest opportunity to have the existing access order varied or suspended by the Family Court. I might mention finally that contempt of Family Court orders was the subject of a discussion paper issued by the Australian Law Reform Commission in December last year. The Commission commented that applications for parties to be dealt with for contempt of access orders were shunted by judges to avoid making a final determination and that when such applications were determined there was a tendency for the sentences imposed to be markedly lenient. Obviously, these are all considerations that will need to be borne in mind by the Government and those responsible for the administration of family law in the future. Senator CHIPP —I ask the Minister representing the Minister for Housing and Construction a question concerning interest rates. If the Leader of the Government in the Senate wishes to take the question, in view of the incredibly honest answer that he just gave Senator Messner, I would be happy for him to accommodate me. Can and, if so, will the Government give an undertaking that home loan interest rates will not rise above 20 per cent-the level in New Zealand-during the Government's term of office? Can the Minister explain why it is fair for families with existing building society loans to be subjected to higher interest rates when those with bank loans have been exempt? Can the Minister explain why banks which had no money for housing on Wednesday, when the Government's decision was made, were advertising only 24 hours later that housing loans were available in abundance? Will the Minister give an absolute and categorical undertaking that the Government will never lift the ceiling rate on existing housing loans? Senator RYAN —I am able to give Senator Chipp a categorical assurance that, for existing bank loans, interest rates will not go beyond the present 13.5 per cent. For new loans, of course, the rate will be set by the market. The Government is confident that competition will help to keep those rates down. Senator Chipp asked why the Government's decision focused on banks rather than building societies. The answer is very straightforward and important. The banks had been losing deposits, building societies had not. In June 1986, building society deposits were holding while bank deposits fell by $680m. Figures out today show that bank deposits fell a further $200m. As to why the action that we have taken directly affects bank loans and not building societies, Senator Chipp will be aware that building societies are under State control-unlike banks. It is possible for State governments to decide to take action in relation to building societies similar to that we have taken for banks. Finally, banks will lend for housing from funds that they raise, if necessary at commercial rates, until such time as their deposits build up. This is also assisted by the subsidy paid to them by the Government, which will maintain their existing deposits. Senator BLACK —Has the attention of the Minister Assisting the Prime Minister on the Status of Women been drawn to the statement by the Queensland Minister for Welfare Services, Mrs Chapman, at a recent National Party Women's Congress in Southport that government responsibility for single mothers should stop after the first child? Could the Minister outline how the Government views this proposal and the assumptions about women on which the proposal is based? Senator RYAN —Rarely have I heard such an insensitive and inappropriate comment on a major social issue as that from Mrs Chapman of the Queensland Government about single mothers. It is greatly to be regretted that any representative of any government throughout Australia should make such a callous, punitive and totally impractical recommendation. As far as our Government is concerned, I remind Mrs Chapman and any honourable senators who may need reminding that the payment of benefit to single mothers is a responsibility which our Government undertakes. The impact of the sort of suggestion that Mrs Chapman made would be to condemn many single parent families to poverty. Of course, most single parent families live in very poor circumstances anyway. The number living in dire poverty would be dramatically increased by Mrs Chapman's suggestion. There are 263,000 single parent families in Australia in receipt of a pension or benefit. These families contain 430,000 children-that is, more than one per parent. It is these children who would suffer under Mrs Chapman's proposal. The majority of sole parent families are headed by women whose marriages have broken down not, as implied by Mrs Chapman, by unmarried mothers. I point out too that sole parents include widows, divorcees and also a small number of men. Whatever moral judgments Mrs Chapman may bring to bear on the income support claims of unmarried mothers, she should realise that the children of these families would suffer most and children do not choose their parents. The majority of single parent families are headed by women, most of whom get little or no support from the father of their children. If Mrs Chapman wants to make some helpful contribution on the poverty of single parent families, she could campaign to help get fathers who are responsible for these children's welfare to contribute to it. It is particularly inappropriate that Mrs Chapman, representing the Queensland Government, should make a derogatory comment of this kind since, as my colleague Senator Walsh has pointed out to the Senate before, Queensland has one of the highest rates of illegitimacy in the country. In 1984, 17.1 per cent of total births in Queensland were out of marriage, compared with the national average of 14.85 per cent. Teenage pregnancy in Queensland has twice the incidence of any other State. I suggest that the Queensland Government, and Mrs Chapman in particular, ought to devote their efforts to dealing with those social problems instead of simply coming up with a recipe that would mean more disaster for poor women and their children. Senator SHORT —I preface my question to the Minister for Industry, Technology and Commerce by referring him to his comment last week in relation to the invitation by the United States for Australian involvement in the strategic defence initiative when he said: While the Government was not supportive of Star Wars inevitably some research will be done in association with the program and we are not seeking to exclude people from that. I ask the Minister whether he is aware of last night's statement in the other place by the Minister for Defence when he said: The Australian Government does not endorse the SDI concept, and as a result we will not be entering into negotiations of any sort to establish an umbrella agreement of this kind for SDI research. This will preclude Australian participation in research funded under the SDI program. In the light of that statement will the Minister confirm that no action will be taken to block Australian industry involvement in this research? Can he explain the extent to which he believes that this is likely to occur? Senator BUTTON —I cannot give a definitive view on that matter at this stage because the Government has not formulated finally its response to the Weinberger letter about participation in the SDI program. However, I want to correct the impression which Senator Short gave when he quoted something that I am purported to have said-in essence, that inevitably some research will be done in the SDI program. I did not say that. I said that inevitably some research will be done which may be seen as being relevant to the SDI program. I shall give some examples. Senator Short —You said `in association with the program'. Senator BUTTON —In association with the program-that does not matter. I simply make the point that there is a somewhat neurotic clamour to say that because people disapprove of the SDI program, whether on grounds of international policy and the arms race and so on or on scientific grounds, any research which may be in any sense relevant to the Star Wars program should not be done. That is an absurd view. As a matter of fact, it was put to me this morning at a Press conference in Sydney that the over the horizon radar research being done in Australia-the Jindalee program-had been designated by the United States as Star Wars research. I do not give a damn-if I might use that expression in this chamber-what designation the United States Government wants to place on research items, but it would be very silly, that designation having been made, for the Australian Government to say that there would be no further research into the Jindalee. It would be absurd. There are a number of examples of that kind. Mr Beazley's answer given in the House of Representatives last night has a considerable amount of sense about it in the light of the Government's announced policy in respect of SDI. However, insofar as the fine tuning of that policy is concerned, the Government has not examined all the issues which will finally lead to a Government statement on those particular aspects. Senator BOLKUS —Is the Minister representing the Minister for Foreign Affairs aware of recent statements made on behalf of President Reagan which rejected the call for a nuclear testing moratorium because it was `not in the security interests of the United States, our friends and allies'? Was the Australian Government consulted on our security interests and our feelings on the proposed moratorium? If not, does the Australian Government agree with this assessment of Australia's security interests? Senator GARETH EVANS —The Government is aware that, following Mr Gorbachev's surprise public proposal on 30 March for a summit meeting in Europe to deal exclusively with the test ban issue, the White House issued a statement which said, among other things, that a nuclear testing moratorium was, as Senator Bolkus has quoted, `not in the security interests of the United States, our friends and allies'. A legally binding and effectively verifiable comprehensive test ban treaty to bring to an end all nuclear testing in all environments for all time is the Government's top priority in the disarmament field. The United States Government views this step as a long term objective that would be acceptable in the context of broad, deep and verifiable arms reductions, substantial improved verification capabilities, greater balance and conventional forces and at a time when a nuclear deterrent is no longer as essential an element as it is currently for international security and stability. Clearly, as Mr Hayden pointed out in response to a question without notice from, I think, Mr Langmore in the other place on 18 March, there are, as a result, major differences between us and the Americans with regard to the timing of a comprehensive test ban treaty. A moratorium is another matter. We welcome any interruption of the nuclear testing programs and we have welcomed the Soviet moratorium. However, Australia does not regard moratoria as a substitute for the concrete steps that we are convinced need to be taken above all in the verification area to make possible the conclusion of a comprehensive test ban treaty. The Government regards effective means of verifying compliance as fundamental to the arms control process. We are confident that a comprehensive test ban treaty can be made effectively verifiable but we accept that prevailing doubts are real and must be addressed directly. The Government could not, as a matter of principle, urge any state to enter into an arms control arrangement that may not be effectively verifiable. The United States is fully acquainted with our views on a comprehensive test ban treaty and on a moratorium on nuclear testing. Similarly, we are fully acquainted with the United States views. The Government engages in a continuous dialogue with the United States on these and related issues at both the ministerial and official levels. Senator BOSWELL —My question is directed to the Minister for Education and also concerns the invitation to Australia to join in research under the strategic defence initiative. Will the Minister give a guarantee that the Government will not seek to prevent universities and other tertiary institutions from becoming involved in aspects of the SDI program? Senator RYAN —I do not think there is anything much to add to the very clear statement made yesterday by the Minister for Defence and amplified just now by Senator Button or to the answer that has appeared in Hansard which I gave in response to a question from Dr Klugman. As far as we are aware, no universities are engaging directly in SDI research and as universities operate within government policy we do not expect that they will. Senator COATES —I ask a question of the Minister representing the Minister for Aviation about the proposed change in the name of Trans Australia Airlines-TAA-and its corporate image so that it would be known simply as Australian Airlines-AA. I note that it is only a short time since TAA last had a major change in its logo; it is one of which I approve. Was the Government consulted by the Australian National Airlines Commission before this decision was made? If so, did the Government give its approval and why? Does the Minister not agree that there are very good arguments for retaining the long-standing, well recognised and even well-loved trading name, TAA, and that there are dangers in the confusion which can result from too frequent changes in corporate images and this one in particular? Will the Minister assure us all that this is not just an attempt to provide a public-relations firm led recovery? While recognising that the Commission is an independent statutory authority, will the Minister ask the Commission to reconsider what I believe to be its ill-advised decision? Senator GIETZELT —I have no brief on this matter supplied to me by the Minister for Aviation although I am aware of Press reports which suggest that the name TAA will be changed to Australian Airlines. I remind Senator Coates and the Senate that TAA is an independent corporation and is capable of making decisions on these matters as an independent authority. I think TAA would probably make some representations to the Minister in due course. I am not aware of whether it has done that but I would imagine that, as it has authority to make all commercial decisions, it has authority to act independently on all matters affecting the way in which the airline operates. However, as Senator Coates referred to a number of matters in respect of the operation of the Government airline-that authority is then delegated to Trans Australia Airlines-I will seek the opinion of the Minister and ask him to convey it to Senator Coates. Senator MacGIBBON —I ask the Leader of the Government in the Senate whether he agrees with Mr Kim E. Beazley, a senior Minister in the Whitlam Government and father of the present Minister for Defence, who said in a letter to Saturday's West Australian in relation to the strategic defence initiative: The United States has every right to develop the means of intercepting rockets intended to destroy millions of their people. If they find it, I hope they make this purely defensive weapon available to us. Does he not agree that this is a more responsible view of the strategic defence initiative than the attitude being taken by the Hawke Government, which is fundamentally pro-Soviet because it will not aid the Western democracies to catch up with the developments in the fields of laser and particle beam weapons that the Soviets have made? Senator BUTTON —I could give a short answer and say that I do not agree with the view of Mr Beazley Senior on this matter. However, it is unfair to give such a short answer because the piece of the letter which was quoted is probably taken out of context. Senator Durack —No. Senator BUTTON —Maybe it is not but I have not seen the whole letter and I am not proposing to provide a firm and definitive no on the basis of half a sentence which has been taken out of the letter. On several occasions the Government has expressed its view about the international ramifications of the SDI program. We do not agree with it on international grounds because we think that it is not contributing to an appropriate environment for nuclear disarmament which is what this Government has sought and Ministers in this Government have said that on a number of occasions. It is not a uniquely Australian view. It is a position which has been taken by a number of other governments and it is certainly one to which we will adhere. As to the honourable senator's characterisation of the Government's position on this matter being pro-Soviet, I think he would be capable of making that characterisation about almost anything we did. That is a comment on him rather than on us. Senator MacGibbon proceeding to address a supplementary question to the Leader of the Government in the Senate- The PRESIDENT —Order! The honourable senator's question is not a supplementary question. He is now endeavouring to raise new material and I rule him out of order. Senator DEVLIN —I refer the Minister for Education to a supposed cost saving proposal advocated by the Leader of the Opposition, John Howard, which would force unemployment beneficiaries to undertake a course of study. What is the Minister's reaction to this proposal? Can the Minister estimate the cost of this proposal and can he outline the Government's achievements in income support for young people? Senator RYAN —In brief, my response to this particular alleged cost saving proposal is the same as it is to all of the cost saving proposals that come forward from the Opposition in its present state, denuded of ideas and competence: It is completely shonky. I would have thought that a former Treasurer, even the discredited former Treasurer as he is often referred to by my colleague Senator Walsh, would be able to do costings a little better than that. In fact the Opposition's plan to force the unemployed into institutions to study would add to public expenditure costs and certainly not reduce them. It would add to them in a way that would be most inefficient and would be of no benefit to anybody involved. In fact, the costs would be quite prohibitive. My colleague the Minister for Finance has estimated the recurrent costs alone of Mr Howard's proposal to be in excess of $600m. These estimates assume that the scheme would be aimed primarily at the young unemployed who it is assumed would undertake training in technical and further education colleges; of course, costs would be far higher if some of the unemployed were put into colleges or universities to study. The estimates do not take account of the provision of necessary capital and equipment facilities which would of course add to the costs of this so-called savings exercise and make it totally exorbitant. But, apart from the costs involved, such a scheme would be unworkable from a practical point of view because some 40 per cent of the unemployed are out of work for periods of less than eight weeks, so large numbers of people would withdraw from the scheme upon finding employment, thus obtaining very little with any benefit from such a short period of training. Clearly, this would be very expensive and very inefficient. It is important and interesting to contrast this extravagant and ill-thought-out scheme with the very solid record of providing education, training and job opportunities which our Government has now chalked up. At this stage in our Government more than 60,000 more young people are in post-compulsory-education training than was the case when this Government took office. We have made huge inroads into the youth unemployment problem. Senator MacGibbon —Where? Senator RYAN —Well, the 60,000 young people to whom I was referring would otherwise have been on the dole. The Government would much prefer those 60,000 young people to be studying in upper secondary schools, in TAFE colleges, in universities or in colleges of advanced education than hanging around on the dole. That is the kind of solution to youth unemployment that our Government is pursuing, and with outstanding success. Senator BROWNHILL —The Minister representing the Minister for Primary Industry will be aware of recent Bureau of Agricultural Economics figures that show the cost of labour as a significant contribution to the current squeeze on our rural industries. In the light of this fact, why has the Government rejected farmers' demands that rural employees be allowed to enter into employment contracts and income sharing agreements outside the wages system? Senator WALSH —There is quite a widespread belief around the Opposition and probably in some parts of rural Australia that, if the accord and the wage fixing policy which is the principal component of it were abandoned, there would be lower wage outcomes than there have been under the accord. That is a belief, an act of faith, that is unsupported by the empirical evidence. The fact is that that policy was tried by the previous Government, by the discredited former Treasurer, in May 1981. We had a wages explosion of 14 per cent in 1981 and 13 per cent in 1982. Because of the success of the accord and the effect of Medicare, which was a major component of it, we have in fact generally seen wages rising at a lower rate than prices. As a result of productivity growth labour unit costs have been reduced to the lowest point since the late 1960s. That is the outcome of the accord-the lowest per unit labour cost since the late 1960s compared with the free market tried by the previous Government which produced wages explosions of 14 per cent and 13 per cent. Some farmers may argue that wages paid on farms would be lower under a decentralised system. That may or may not be true but it is important to note that, even if that were so, the indirect costs of labour to the agricultural sector are greater than the direct costs of labour. To say the least, it is highly unlikely that wage outcomes, or wage costs as they affect farmers, would be lower under the system proposed than under the system which exists. I add that, when the level of wages is compared with the level of net farm income as estimated by the Bureau of Agricultural Economics, it is important to note the deficiencies of that net farm income as a measure of household disposable income. It is deficient for these reasons: Firstly, it is based on a survey with voluntary compliance and the accuracy of the information provided cannot be guaranteed; that is an area of doubt. Secondly, there is no inclusion whatsoever of income earned off-farm in that BAE figure of net farm income. There is a deduction from cash flow, an imputed depreciation allowance, which in wheat farms in the most recent year averaged $27,000, that is notionally deducted from income irrespective of whether any money has been spent. Conversely-this is not an exhaustive list-there is no allowance in that BAE figure of net farm income for imputed income accruing from the fact that farmers normally have a house which is paid for by the business, whereas a number of wage earning families pay anything up to $8,000 a year on housing loans; there is no imputed income for a car or its running costs which are normally debited to the farm account. For food grown on the farm and consumed by the farm household the figure supplied in the BAE survey of $150 is the figure used. While there is considerable room for doubt as to how quantitatively important those items are that I have mentioned, that is, on imputed income or the absence of any significant imputed income in that BAE calculation, there can be no doubt that on average it would amount to several thousand dollars per household per year. Senator VALLENTINE —I ask the Minister representing the Prime Minister: Is the Government aware that the Canadian Prime Minister wrote to United States Defense Secretary Weinberger on 11 September 1985 stating that the policies and priorities of the Canadian Government do not warrant that Government's support of the strategic defence initiative program? In view of the repeated statements by responsible Ministers of the Australian Government that Australia does not endorse the SDI program, can the Minister say whether Australia has responded to the United States request for our involvement in similar terms to those used by Canada? If Australia has not responded, why have we not responded and when will we respond? Is the Minister also aware that the United States is seeking the application of strict technology transfer controls to all nations which participate in the SDI program? In the event of Australian participation, will these controls be put in place in Australia? Will Australia have to become a member of the Co-ordinating Committee on Exports of Technology to Communist Countries and be subject to its edicts? In view of the heavy restrictions on technology and information transfer sought by the United States, can the Minister explain in what manner the benefits of high technology transfer to Australia will reach the civil industrial sector? How many years lead time does he anticipate-- The PRESIDENT —Order! I have asked honourable senators to restrict their questions as much as possible and I ask Senator Vallentine to comply with that continuing request. Senator VALLENTINE —Finally, I ask the Minister: What powers are available to the Government to prevent academic or non-academic researchers based in Australia from taking Pentagon money for SDI research in the event that the Government rejects the United States offer? Senator BUTTON —As has been said on several occasions here today, the Government does not endorse the SDI program and, as a result, will not be entering into any negotiations to establish an umbrella agreement of any kind for SDI research, such as has been entered into by the United Kingdom Government and I think very few other governments-perhaps one. I am not aware whether the Canadian Prime Minister wrote to the United States Defense Secretary on 11 September. I understand that the position of the Canadian Government on this matter is that it is not co-operating with the United States Government as a government but individual companies in Canada may or may not be involved in joint ventures with-- Senator MacGibbon —That is a very important point. They are not blocking the companies. Senator BUTTON —I thank Senator MacGibbon. I am always reinforced when he interjects and tells me that I have made an important point. I feel much better about it all. I feel that the intellectual content of my answers must be substantial when Senator MacGibbon approves of them. I understand that to be the position of the Canadian Government. I was next asked whether Australia has responded to the United States request. We have not responded, as a government, to the Weinberger letter. We do not see any particular hurry about this matter; nor, I believe, does the United States. In that sense there has been no formal response. But the Prime Minister, the Minister for Defence and the Minister for Foreign Affairs have indicated the attitude which I expressed earlier in answering this question-that the Government was not supportive of the SDI program-and that matter has been indicated to the United States Government. I was also asked whether the United States would seek strict technology transfer controls and so on. I am not able to say. If it did, I think it would be counter-productive in its terms and it certainly would not be beneficial in terms of Australia or any other country participating in the program. I was asked to explain in what manner the benefits of high technology transfer to Australia would reach the industrial sector in Australia. I do not have to explain that in view of the matters which I have referred to earlier in this answer. I was then asked what powers were available to the Government to prevent academic or non-academic researchers based in Australia from taking Pentagon money. I am unable to say what powers are available. It is not a question that the Government has addressed at this stage. Senator VALLENTINE —Mr President, I wish to ask a supplementary question. The first part of my question has not been answered. I asked: Will the Government respond to the invitation? Will it respond this week when Weinberger is in Australia, will it respond next week when Hawke is in Washington, or is it not going to respond at all? If not, why not? Senator BUTTON —The Government will respond when the Government decides it is appropriate and not when Senator Vallentine decides it is appropriate. Senator SANDERS —My question is addressed to the Minister representing the Prime Minister and refers to Australia's participation in the Star Wars program. Firstly, is the Prime Minister aware of reports that, in negotiations governing British participation in Star Wars research, the United States of America has specified that the results of that research can be applied only to Star Wars and not to other potential users, that all patents arising will be the property of the United States and that British researchers will be bound by United States secrecy and security laws? Secondly, is there any reason to believe that any involvement of private companies in Australia in such research would not take place under the same arrangements? Thirdly, would this not result in a de facto brain drain from Australia-- Senator Chaney —Mr President, I take a point of order. Questions in this Question Time are very long. I ask you to discipline honourable senators in that regard. The PRESIDENT —Order! I have asked honourable senators continually to restrict the length of their answers and Ministers to restrict the length of their answers so that everyone is given a fair go at Question Time. I ask Senator Sanders to comply with that request. If he does not do so I will ask him to put his question on the Notice Paper. Senator SANDERS —Thank you, Mr President. In view of the fact that one Australian firm, Newtech Development Corporation, is already engaging in strategic defence initiative research, what will the Government do to protect its stated defence policy opposing Star Wars as well as Australian security and sovereignty? Senator BUTTON —I was asked firstly whether the Prime Minister was aware of reports about negotiations between the British Government and the United States of America in relation to participation in the SDI program and a number of conditions which are said to have been attached to those negotiations-that all patents will be the property of the United States and so on. First of all, I am not aware of the details of that and I doubt whether the Prime Minister is either. If the British Government agreed to all the conditions referred to by Senator Sanders in his question it would turn out, in my view, to be a much worse government that I ever thought it was, and that is saying something. I do not know whether the British Government has or has not agreed to all those conditions. I would think it unlikely in view of the attention that it has given in past years to questions of technological sovereignty as distinct from technological subservience. I was also asked whether there was any reason to believe that the involvement of Australian private companies would take place under the same arrangements. There is every reason to believe that it would not take place under the same arrangements because they are not desirable arrangements for either a government or a nation in terms of inverse transfer of technology, if I might call it that. Senator Sanders also asked me about the work of Newtech. He, of course, made the sloppy allegation that Newtech is engaged in what he called Star Wars research. He can characterise it in that way if he likes. Newtech was engaged in research on advanced chip technology long before the so-called Star Wars program was invented. If money is going to that company or to a joint venturer with that company in the United States which comes out of the Pentagon's defence budget, so be it. The fact of the matter is-- Senator Sanders —Doesn't it bother you? Senator BUTTON —I do not know what the honourable senator is suggesting. If he is suggesting that a company such as Newtech, having embarked on a research program in respect of chip technology, is suddenly abandoning that program because it is said to have some marginal relevance to SDI, frankly, that is not a view which I accept. If the honourable senator wants to put his Australian Democrat witch hunters into Australian universities and research institutions he should do it, but I will not be a part of it. The PRESIDENT —Order! I draw the attention of honourable senators to the presence in the presidential gallery of a parliamentary delegation from the Republic of Ireland led by the Speaker of the Parliament, Mr Fitzpatrick. I welcome all members of the delegation to Canberra and I trust that they enjoy a pleasant visit to Australia. Honourable senators-Hear, hear! Senator MAGUIRE —My question is directed to the Minister for Veterans' Affairs. I believe that the Minister would be aware of comments in the media attributed to Messrs Peacock and Fischer, Opposition spokesmen on foreign affairs and veterans' affairs respectively, that Australia should sever all diplomatic ties with Libya if Colonel Gaddafi followed through with threats to bulldoze Australian war graves in Libya. Is the Minister aware of any real threat to Australian war graves expressed by Colonel Gaddafi? Is the Commonwealth War Graves Commission in London monitoring the position? What is the latest advice to the Minister from the Director of the Office of Australian War Graves? Senator GIETZELT —I am aware of a beat-up story that has been published in one of the newspapers suggesting that possibly there is desecration of Commonwealth war graves in Libya. There is little substance to the story and a lot of exaggeration. Largely, one can say that a number of people have responded to this news item without there being any foundation to the original story. However, following the media reports which appeared in the Australian newspaper on 4 April, the Office of Australian War Graves sought advice from the Commonwealth War Graves Commission in London. I am advised that the Commission has no information suggesting that the security of the Commonwealth war graves is currently threatened. There are some 7,000 war graves of Commonwealth veterans, a little fewer than 1,000 of which are of Australians. The Mike Carlton announcement appears to have been based upon a speculative item in the British Daily Telegraph of 2 April that suggested that Libya was requesting rent. In no way have we established, beyond what was on the Mike Carlton show, that the use of bulldozers would be involved in this particular war graves area. My advice is that there is no substance to the statement made in the media, and the Commonwealth War Graves Commission has undertaken to keep us advised should there be any change in the situation. The outrageous statements that there was some serious challenge to the sanctity of the war graves in Libya that were made by Mr Peacock and Mr Fischer, who sought to compound the issue even further, deserve outright condemnation by the Parliament. The latest advice I have, received yesterday, is that my Department, having discussed the matter with the Department of Foreign Affairs and a representative of the Libyan People's Bureau in Australia, confirms that there has been no desecration, that the cemetaries are well maintained, that they are inspected regularly by the Italian Embassy and that they are maintained particularly by the locally engaged staff and supervised by staff from the United Kingdom. I repudiate any suggestion that the Commonwealth war graves section or the Australian war graves section is under any threat from Colonel Gaddafi or the Libyan Government. Senator HAMER —My question is directed to the Leader of the Government in the Senate. In view of the conclusions of the Victorian Supreme Court case concerning the Bell Resources Ltd takeover of the Broken Hill Proprietary Co. Ltd, is the Minister now able to say what undertakings Mr Holmes a Court made on the subject of the future operations of BHP to the Cabinet committee which was claimed by Senator Gareth Evans this morning to be an acceptable alternative to a public inquiry? In view of the comments made by Mr Justice Marks, is the Minister satisfied that the Cabinet committee was not misled or deceived? What information was given to the Cabinet committee on the method of financing the takeover and, finally, what methods are available to the Government to enforce compliance with any undertakings given? Senator BUTTON —If I might deal with the last part first, I have said in this chamber on other occasions, and I think it has been said publicly, that the only test of whether undertakings given have been carried out in the manner one might expect from the nature of the undertakings is, of course, the ultimate credibility of those who give them-public figures as they are, and important figures in the Australian business community. The Government is not in the position of administering sanctions, as it were, for failure to comply with undertakings. That would involve us as a government, or any government, in considerable difficulty. Senator Withers —What about the BLF? Senator BUTTON —If the honourable senator wants to ask me a question about the Builders Labourers Federation he may do so, but not in the context of dealing with this matter. As to the undertakings given by both BHP and Mr Holmes a Court to the Government at the time the last bid was in issue, I indicated subsequently, as did other Ministers, that the Government would consider publishing those undertakings at a particular time when the case in the Supreme Court of Victoria was resolved. This has happened. I am just not sure that there is not to be a new round of litigation which may affect the Government's decision on that matter. No final decision has been made on the release of those documents, although I know the matter was the subject of discussion only yesterday. A substantial number of the undertakings given by Mr Holmes a Court appear in the Part A statement in respect of the bid but I am not in a position to elaborate further than that other than to say that the question of the release of undertakings by both parties will be further considered. Senator HARRADINE —My question is directed to the Minister for Finance and refers to reports that his Department is strongly pushing for a flat rate family allowance. It also refers to proposals by another department for the abolition of the spouse rebate. Is it not a fact that family allowances are now worth less than 65 per cent of their real value when first introduced in 1976 and that the increase in the spouse rebate promised by the Prime Minister before the 1983 elections has not materialised? I ask the Minister whether the Government agrees with the following statement made by Ann Harding and Frankie Seymour in the publication Australian Society of February 1976: . . . while family allowances are often seen solely as a social security payment they actually replaced tax rebates for children in the mid 1970s, and can thus best be regarded as a taxation measure which helps to achieve equity between different family types (in the same way as the dependent spouse and sole parent rebates do). Rather than being simply a welfare program, family allowances can be seen as a taxation measure which also provides additional income to the very poor (who did not formerly benefit from the child tax rebates) and provides substantially more help to lower and middle than to high income families. Senator WALSH —When I answered a question last month I said that I would not speculate-I had decided that prior to being asked any questions-about rumours that appeared in the Press about what may or may not be under consideration by the Government on the expenditure side, and that answer stands. I will say that to the degree to which some people such as Senator Harradine use their votes in the Senate particularly to protect the ill-gotten gains of tax evaders, the rest of the community suffers. Senator Sir JOHN CARRICK —My question is directed to the Minister representing the Attorney-General, and I ask it against the background of the recent comments on Four Corners by the four former royal commissioners on drug abuse to the effect that the response by governments to their reports has been too little, too late. However, my question specifically relates to an assertion that has been frequently made, and made very recently, that there exists in the possession of authorities the photograph of a well known judge taken in the company of identified members of the Griffith mafia and other criminals, and that the photograph has been in evidence before either a recent royal commission or the National Crime Authority, or both. I ask: Firstly, has the Government knowledge of the existence of such a photograph and, if not, why has it not sought such knowledge? Secondly, what is the extent of the Government's knowledge and what action has been taken to prove the truth or falsity of the allegations? Thirdly, is the matter currently before either the Stewart Royal Commission of Inquiry into Drug Trafficking or the National Crime Authority? Senator GARETH EVANS —I have no knowledge of the matters to which Senator Sir John Carrick is referring and accordingly I am not in a position to judge whether it is just another bit of scandalous scuttlebutt that is being trailed like another stinking fish across this chamber, in the way that happened on two or three dozen occasions over the first three years of the life of this Government, or rather whether there is something more to it. I will check with the Attorney-General and see what response he cares to make. Senator ZAKHAROV —My question is addressed to the Minister for Community Services and refers to the Frankston Baptist Centre Retirement Village in Victoria. Is it a fact that that organisation is in debt to the extent of around $20m? Further, what rights to care and occupancy do the residents of the village have if the village is to be sold to pay these debts? Senator GRIMES —Yes, I do know of the difficulties of the Frankston Baptist Centre Retirement Village, as do Senator Zakharov and, I think, every other politician from Victoria. It seems that the centre is currently experiencing considerable financial difficulties. In fact, my information is that the organisation owes no less than $17m to three major creditors and over $2m to trade creditors and various deceased estates. I feel very sorry for the people who are occupants and people who have put money in to become occupants of that village, particularly in light of the fact that the Reverend Bob Payne who ran that organisation spent a considerable amount of his time attacking this Government, representatives of the party that now make up this Government; he also spent a considerable amount of his time praising the previous Government and Liberal Party politicians were beating a path to his door, until the truth of his activities came out. Now I understand he is complaining that they will not have anything to do with him and do not want to see him any more. But that, I suppose, is pretty typical. The Department of Community Services is closely monitoring the situation as it affects Commonwealth moneys paid in respect of nursing home benefits, and in respect of recurrent and capital expenditure for hostels. This includes monitoring the situation which may occur if the organisation's properties in Victoria and in Queensland, the Coorong Nursing Home, are sold. I understand that an offer to purchase the Frankston Baptist Centre Retirement Village is being considered at the moment, but I am also aware of the fact that in recent times other offers of this type have fallen through. It is ironical, I suppose, that the Victorian Government had to lend $300,000 to this organisation to help bail it out, in light of the fact that this organisation spent so much time also attacking the Victorian Government. Also recently a further loan of $100,000 has been made. We are closely looking at the situation. We have taken legal advice with a view to clarifying the Commonwealth's position should the centre and the nursing home be sold. Through the Australian Government Solicitor in Victoria we have requested that a security agreement be negotiated to protect the capital grant it receives from us. In respect of the possible sale of the Coorong Nursing Home in Queensland, it is expected that the home would continue to operate as a participating home and therefore no inconvenience would occur to the home's residents. The Department is providing advice to the organisation concerning the ongoing costs of the hostel. Information we have indicates that the hostel should not be forced to close. Advice we have also received seems to indicate that the standards of care are being maintained. Action is being taken by the Victorian Government to regulate the retirement village industry, including the protection of rights of residents in resident-funded complexes. The sad lesson out of this exercise is that people like the Reverend Bob Payne and others believe that somehow, because they are ministers of religion and apparently have pure motives, they are economic wizards. It does not mean that the people who put money in their hands are protected by some forces other than economic laws in this country. I hope though that the combined actions of the Government, the Department of Community Services, the Victorian Government and our legal authorities will enable people and the public purse to be protected in this case. Senator BUTTON(Victoria-Leader of the Government in the Senate) —Mr President, I ask that further questions-I am sorry, Senator Walters-be placed on notice. Senator Walters —Are you saying that I can ask my question? Senator BUTTON —No, I am apologising to the honourable senator, and asking that further questions be placed on notice. Senator Walsh —This humbug is going to get up now. The PRESIDENT —Order! The Minister will withdraw that remark. Senator Walsh —In deference to you, Mr President, I withdraw. Senator GIETZELT —On 20 March Senator Reid asked me a question without notice dealing with delays in connection with electricity in the Australian Capital Territory. I have been advised by the Minister for Territories that he is aware of some delays occurring in the connection of electricity in parts of Canberra. The Minister has provided the following response: Building activity has increased greatly in Canberra especially in the last year or so. In the six months to March 1986 the Authority tested and connected 1,611 new dwellings, which was 28 per cent more than in the same period of 1985. Claims which have appeared in the media have been the exception rather than the rule. In an attempt to keep pace with the accelerated land development, the Authority has employed extra temporary cable layers and diverted certain of its resources normally employed in the provision of street lighting in the new suburbs to the task of providing electricity supply. To obtain better information of the intentions and progress of various builders the Authority has recently instituted meetings with representatives of the Housing Industry Association and the Master Builders Association and two such meetings have already taken place. Senator HARRADINE(Tasmania) —I claim to have been misrepresented by an answer given by Senator Walsh and I seek leave to make a personal explanation. Leave granted. Senator HARRADINE —During Question Time I asked a perfectly reasonable question of Senator Walsh about a matter of major public importance concerning 1.5 million families throughout Australia. Senator Walsh refused to answer that question and, instead, made a completely inaccurate and slanderous statement against me in suggesting that I voted to protect the ill-gotten gains of tax evaders. I want to put that to rest completely, not only because it is a slur on anyone who voted against that legislation, but also because it is of concern to me that other people outside this chamber take up those accusations and make accusations outside the chamber. I have already had one settlement in one case on that particular question. The fact is that I have not voted to protect the ill-gotten gains of tax evaders. The fact is that what was stated at that time was that it was open to the Government to make applications under section 260 of the Income Tax Assessment Act for the recovery of moneys, and indeed that was reinforced by Special Prosecutor Gyles. Subsequent to the rejection of the retrospective tax legislation in this chamber which sought to recoup $260m, the Australian Taxation Office took three test cases to the courts and was successful. Indeed, the Melbourne Age at that time said that those test cases, one in the High Court of Australia, opened the way for the recovery of $2.6 billion-not the $260m the Government was attempting to recoup. Senator MacGIBBON(Queensland) —I claim to have been misrepresented insofar as the Minister for Industry, Technology and Commerce (Senator Button) inferred that I had selectively quoted from a letter. I seek leave to incorporate the letter in Hansard. Leave granted. The letter read as follows- US HAS RIGHT TO DEVELOP ROCKET INTERCEPTOR IF THE news media had used the correct descriptive term ``hostile rocket interception'' instead of the science fiction term Star Wars there would be less confusion. The United States has every right to develop the means of intercepting rockets intended to destroy millions of their people. If they find it, I hope they make this purely defensive weapon available to us. The Soviet Union is so jealous of its air space that it shoots down foreign airliners intruding, on the off chance that they might be taking photographs. It has no ground, therefore, for criticising the U.S. for seeking to eliminate weapons of annihilation from U.S. air space. KIM E. BEAZLEY, Hawkstone Street, Cottesloe The PRESIDENT —I inform the Senate that I have received the following letter, dated 9 April, from Senator Chaney: Dear Mr President Pursuant to Standing Order 64, I give notice that today I propose to move- `That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to abandon its fringe benefits tax which threatens thousands of jobs in the car industry and other industries.' Yours sincerely FRED CHANEY Senator for the State of Western Australia Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator CHANEY(Western Australia-Leader of the Opposition)(3.08) —I move: That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to abandon its fringe benefits tax which threatens thousands of jobs in the car industry and other industries. The caterwauling we have heard from the Ministers opposite is a good indication of their lack of concern on the matters which have been raised with the Government by industry, by trade unions and by many other commentators and the Opposition. Those Ministers' lack of concern for the jobs that will be lost in the car industry no doubt will not be lost on their constituencies. The Government has what I would describe as a Jekyll and Hyde approach to industry policy. On the one hand through the Minister for Industry, Technology and Commerce (Senator Button) it promised stability and predictability. On the other hand, it has put new and unexpected taxes which raise prices and reduce demand. On the one hand it urges industry to be more competitive and to be export-oriented, and on the other hand the Government adds to costs by new taxes on business and it brings in the accord-induced cost increases. There has just been an announcement of job losses in Western Australia through Western Mining, and although this matter of urgency is primarily directed to our concern in the car industry, I stress that there are other industries which are also affected by the Government's taxation policy. Western Mining has announced nickel production cuts, but in face of the highly competitive position that company has with continuing low world nickel prices, it has had burdens laid upon it by the Government, as well as cost increases, including those laid on it by the accord, and the fringe benefit taxes on employee housing which will hit the company. It is a wide problem. It is not something which merely affects the car industry; it significantly affects the car industry. The car industry is probably the best example of the split personality that the Government has displayed in its approach to industry policy generally. It is worth going back to see what Minister Button promised the Australian people with respect to the car plan, a plan which, of course, has had the substantial support of the Opposition. He came into the Senate on 29 May 1984 and gave us the details of that car plan. He put out a statement which included among the central aims of the car policy the holding down of the price of cars, the reduction of job losses in the short term and the provision of job stability in the industry. Instead of that we have a situation where the Government is causing the prices of cars to rise substantially, and it is doing so in a context which is an extremely delicate one because there are other factors at work in the car industry which are giving rise to difficulty and the Government is exacerbating those difficulties by its proposed changes to the taxation law. It has also, of course, changed the sales tax law. It has followed policies which have seen a massive devaluation of the dollar. We have seen record interest rates and we have seen the prices of cars rise in Australia by as much as 60 per cent on some imported models and by over 10 per cent for popular brands of locally produced cars. On top of that, because of the fringe benefits tax, the cost to companies of providing vehicles for their employees will rise by as much as $1,200 a year, which is an increase of about 29 per cent. Our concern in the Opposition is the same concern which has been expressed by the trade union movement, by the Government of South Australia and by the industry itself. In the circumstances in which the industry finds itself, that sort of change will bring about a further reduction in sales, it will be very damaging and will cause the loss of thousands of jobs in Australia. That is a breach of two of the central aims of the Government's car plan, a plan which we have supported because we believe that the industry should have stability and predictability and that there ought to be as far as possible a bipartisan approach to important areas of industry policy. The Minister came in here and said that part of the plan was to hold down the price of cars and to provide job stability. The wilful actions of this Government are, of course, moving in the opposite direction. Estimates of the impact of the tax vary but the estimates are consistent in that they all show that job losses will occur. The Government has had submissions from the Labor Government of South Australia which came to Canberra and which has been reported as saying that 4,500 jobs will be lost in that State this year; that is 4,500 jobs in one State alone. There is a comparatively modest Australia-wide estimate released by the Federated Chamber of Automotive Industries which suggests that 10,000 jobs will go around Australia. The trade union movement-a trade union movement which is usually so influential with this Government-has publicly put the figure at 25,000 jobs lost because of the Government's taxation measures. Whichever figure one selects, whether one says it is 4,500 jobs in the State of South Australia, 10,000 jobs around Australia, or 25,000 jobs around Australia as suggested by the Vehicle Builders Employees Federation of Australia, the direction is clear: Many thousands of jobs will be lost because of the new taxes being imposed by this Government. One of the important elements of what was put forward by the Government in the car plan was this promise of certainty and predictability. I would like to quote a few more words of Senator Button's from May 1984. He said: The broad outline of the Government's proposals for this industry is not negotiable, although in an industry of this kind there is always room for minor adjustments and improvements during a major program of change. The Opposition considered the car plan carefully and has consistently since May 1984 given support to the broad outline of the car plan and support to the idea that there should be stability and predictability so that the industry can plan the investment and the changes required if we are to maintain this major sector of Australian manufacturing industry which employs tens of thousands of Australians. That proposition of Senator Button's had our support and has our support. We believe that predictability and certainty are important to get both the effort and the investment that is required, but now we can see the Government bringing about unnecessary changes which strike at the whole basis of the plan by reducing demand. Perhaps the most serious is the fact that the demand is especially likely to be reduced for high local content cars which are central to our national industry and to our national interest. What is being done by the Government in the fringe benefits tax to be introduced on 1 July is being done at a critically important time for the industry because of the many factors coming together which I have mentioned. There is the devaluation, which is affecting not just those who import cars but those who import part of the components which go to making up cars, increased sales tax, record high interest rates, the introduction of unleaded petrol and then there is the final blow, the fringe benefits tax. I will not labour the situation with respect to the devaluation of the dollar but with the Laser, a car produced by the Ford Motor Co. of Australia Ltd with just over 50 per cent local content, we find an increase in price of about 18 per cent last year, which is well above the inflation rate. The Falcon rose in price by 11 per cent, which is again above the inflation rate. We find with respect to sales tax additional increases in the cost of cars being imposed by deliberate government action. We find with respect to the Government's high interest rate policy, again a disincentive to Australians to purchase cars, and we find an additional cost of upwards of $350 per vehicle because of the introduction of the unleaded petrol equipment. We have all of these things which will reduce demand and now we have the additional problem of the fringe benefits tax. The exact impact of the fringe benefits tax remains unknown but I know that the Government has had detailed discussions with the industry and it has been provided with detailed information. In answers in this place Senator Button has indicated that at the time the tax was imposed the Government had very limited information on what impact it would have. The Government is saying on its estimates that the new tax will take about $350m in extra taxes out of the community, so that is the additional burden which will be borne by businesses, although the industry estimates that the additional taxes could be as high as $570m. Clearly that must damage the motor vehicle manufacturing plan and it must do something to inhibit demand. We now have access to estimates put forward by the industry which suggest that the tax changes alone will cost the industry 35,000 vehicle sales in 1986 and 25,000 in subsequent years. The 25,000 figure which has been put forward by the Federated Chamber of Automotive Industries is a very conservative figure because if one looks at the study which has been prepared on its behalf one finds that tens of thousands more losses of sales are predicted than the industry is currently claiming. That is a very conservative figure. It believes that there will be a total reduction in vehicle sales of 90,000 in 1986 because of the other factors which I have mentioned but that there will be a 35,000 loss of vehicle sales this year because of the new sales tax. It believes that by volume there will be a 20 per cent loss of volume of sales in high content locally produced motor vehicles-the Falcon and the Commodore-and it is quite clear that there is basic agreement between the National Institute of Economic and Industrial Research Pty Ltd, which did the study for the Chamber, the Department of State Development in South Australia and the Vehicle Builders Union. The Government is faced with a virtual unanimity of view that there will be important employment consequences because of these tax increases. This is a major disruption to the plan and it is the view of the Opposition that it threatens the motor vehicle plan. In the view of the Opposition that is very bad news for Australia because the stability and predictability which was promised by the Minister was an important pre-condition for getting the sort of changes to the industry which it was unanimously agreed it required. There is plenty of evidence from the comments of the Minister that he is concerned about the impact of this tax. The Opposition believes that the Minister's car plan is in fact being threatened by the greed of the Government for additional revenue and in particular for the need of the Treasurer (Mr Keating) to introduce new taxes on business which would make up for the lack of substantial tax reform in the tax package last year. There was, I think, an inference that the industry was likely to get relief from this, but that now appears very unlikely. If the Minister is able to rise today to give us a contrary assurance, the Opposition, like the industry, will be much relieved. The likely effect on industry of the issues I have raised is that there will be 90,000 units fewer produced than the record level of nearly 700,000 sold last year. The Minister is likely to make much of the fact that the industry has been through buoyant years. That is true. There have been high sales in the last two years. But the reality is that the period of difficulty in the car plan lies ahead. For the Government to be imposing changes which reduce by up to 35,000 vehicles in one year the sales which would otherwise have been made is a severe blow to the practicability of the car plan. Until now, of course, the argument has been theoretical. The Opposition has raised in this place the predictions which have been made by trade unions, by a State government and by industry that there would be losses of sales and, hence, losses of jobs. But we have now reached the point at which we have stopped dealing with theory and we are starting to deal with reality. Already in this year we have seen a very significant drop in sales in the first three months. The Federated Chamber of Automotive Industries puts the drop in sales at 22 per cent for the first three months of 1986, compared with that of the corresponding period in 1985, with fleet sales, as a result of the tax, being down by 20 per cent in the first three months of 1986. Of course, the tax has not yet been imposed, but the reality is that companies making purchases now will bear the burden of the new tax, and there is plenty of anecdotal evidence and statements by people in industry who purchase cars for business use that, because of the tax, purchases will be postponed and will be less frequent. Perhaps I may give a few more figures. The registration of new vehicles in January 1986 was down by 13.8 per cent compared with the figures for December 1985, and down by 14 per cent compared with the figure for January 1985. We find larger drops in February, when 26.7 per cent fewer sales or registrations were made compared with the February 1985 figure. We have passed the point of theorising about this industry. We have reached the point at which the drop off in sales has become apparent, and we have a situation in which it is up to the Government to do something about the elements of the car plan which it has now put at risk and the damage which is being done to the Australian industry. What the Government needs to do during this period of serious difficulty for the industry, this period of emerging difficulty for the industry, is to hold down the price of cars, as Senator Button promised to do in May 1984, and to provide job stability in this essential industry. That is what the Government is not doing, and that is what the Opposition calls upon the Government to do. I should like to refer to some of Senator Button's comments with respect to the matters that I have raised on this motion of urgency and which bear out the hopes which he held out that the Government would behave sensibly with respect to this industry. Senator Button was quoted in the Business Review Weekly in March this year, in an article which was headed with these words: The Hawke Government is set to make significant changes to the fringe benefits tax on cars after strong representations from the industry. The Minister for Industry, Technology and Commerce, Senator Button, told the Business Review Weekly: I think you will find we've arrived at a satisfactory solution. I hope that the Minister will make it clear in his speech in this debate whether he regards no action as a satisfactory solution, because I am sure that this is not what the industry thought that he meant when he made that statement. If we look, too, at the Minister's response when the issue has been raised with him in the Senate, we find that in November of last year he conceded that the Government, when it made its decision about the proposed fringe benefits tax, reached certain conclusions. He said: Those conclusions were based on sets of quite conflicting information. I can understand that. There may have been a degree of carelessness involved with respect to the Government's actions, or there may simply have been an impossibility of predicting with any certainty what the total circumstances of the economy and the industry would be in 1986 and what the impact of the tax might be. Senator Button admitted that the conclusions that the Government had made were based on conflicting information, and he went on to say that when the survey from the Federated Chamber of Automotive Industries was published he would be discussing the results with the industry. He went on to say: . . . if any appropriate steps seem to be necessary as a result of that discussion I will take those steps in the context of the Government's deliberations. In February of this year Senator Button said in the Senate that whether or not the fringe benefits tax would be modified would depend on the assessment made of the Federated Chamber of Automotive Industries paper and discussions which were then taking place about that paper. To this point, in his utterances in this chamber and in his public utterances, Senator Button has clearly held out the view that it was quite possible that this tax would be damaging to the industry and that the Government would act appropriately if it became apparent that that was the case. I put it to the Senate and to the Minister, who is at the table, that it is now quite clear that damage is being done; it is now quite clear that the car plan, which is important to Australia, is being substantially interfered with by the Government's new tax proposals. I ask the Government to heed the Opposition's call, to remove the fringe benefits tax and to give this important industry a chance. We are not dealing with theory any longer. The predictions are being borne out. Sales are down quite dramatically; but worse is to come. The onus is on Senator Button to tell us that he will produce what he promised. The onus is on him to ensure that the Government acts in a rational way with respect to this important industry. Last year the Minister admitted that the Cabinet made its decision to tax company cars without any really reliable assessment of the impact of the tax. I suggest that that reliable assessment is now available. Now that several studies show what a devastating effect the tax will have, there is no justification for the Government to proceed with the tax. We have just seen the Government, after many months, concede the damage that its policies were doing to the housing industry. We have seen the Government turn some of its policies on its head to try to do something about an industry which has gone into a severe downturn. We now have a situation in which a second industry faces difficulties that are just as great. The Opposition calls upon the Government to do something. What we call upon the Government to do is to remove its fringe benefits tax, which is damaging to this industry and other industries. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.28) —Listening to Senator Chaney, I had the distinct feeling that he was trying to embarrass me. I find it most extraordinary, in a chamber such as this, that he should embark upon such a course. I suppose that the question ultimately which has to be resolved is whether or not he has succeeded. I begin by referring to Senator Chaney's final call for abolition of the fringe benefits tax regime generally; not, as I understood it, relating to the motor vehicle industry alone, but generally. Senator Chaney —It will not help Western Mining. It will be selective. Senator BUTTON —Senator Chaney interjects `It will not help Western Mining'-of course. But I think that the fringe benefits tax issue really must be considered in the context of the Government's White Paper on taxation and the fact that the Government was losing some $700m a year in benefits paid to employees by way of the provision of motor vehicles, free lunches, school fees, housing, and a whole range of issues-being paid not in cash but in kind, a process which was expanding very rapidly, at 25 per cent a year in terms of lost revenue to the Government. Of course, whilst that sort of thing is good for those who get the benefits of free lunches, motor vehicles, free housing or subsidised housing-benefits of that kind-it is detrimental to every Australian taxpayer who does not get those benefits. A lot has been said in the Senate about the fringe benefits tax. Let me remind honourable senators of what honourable senators opposite were saying about fringe benefits taxes in December 1985. Senator Messner-the Opposition spokesman on finance, if you please-was saying that the effect of the abolition of the deduction for business lunches would be a loss of employment in the entertainment industry, the restaurant industry and so on-the hospitality industry-of 11,000. He was ably supported in those predictions by Senator Knowles from Western Australia, who estimated the jobs loss as 10,500. It was predicted by the Opposition that, because the fringe benefit which went to business people for deductible business lunches was to be abolished, those sorts of job loss were going to occur. The estimate by Senator Knowles was 10,500. Senator Boswell gave a similar estimate to that of Senator Messner. Senator Boswell said: . . . I believe it will be around February or March-there will be a massive fall in the industry. Jobs in the industry will be lost . . . is the largest employer of youth in Australia. It . . . provides many jobs for youths . . . Other honourable senators, including Senator Michael Baume, went on to make similar sorts of predictions. Senator Baume said that the fringe benefits tax would destroy the viability of the hospitality industry. Let us consider what, in fact, has happened to the entertainment or hospitality industry as a result. Job vacancies in the restaurant and hospitality industry notified to the Commonwealth Employment Service-contrary to the projections of gloom made by honourable senators opposite-have increased by 4.1 per cent since the announcement of the tax. In respect of restaurants, hotels and clubs, the job vacancies notified have increased by 25.6 per cent. Senator Lewis —Are you predicting an increase in the motor car industry? Don't talk to us about the restaurant industry. Senator BUTTON —I am not making any predictions about that at the moment. Essentially, what I am saying, which Senator Lewis does not like, is how stupid his lot is in terms of their capacity to predict these things. That is what I am saying. Let us be blunt about it. In respect of vacancies in the skilled food and beverage trades, in December 1984 the average number of advertisements in newspapers was 173; in February 1986 it was 307. So much for the Opposition's principled assault on the abolition of free lunches for businessmen and what that was going to do to employees in the restaurant and hospitality industry. I find it surprising that Senator Chaney should tackle me for the impositions which he says have been put on the car industry. For example, one thing which he said was important was the introduction of unleaded petrol. Senator Chaney ought to know his history better than that. His Government introduced unleaded petrol, not this Government. Senator Chaney —You are misquoting me. Senator BUTTON —No. Senator Chaney said that. He said that the impositions on the car industry included unleaded petrol. Senator Chaney was attacking this Government. He said that unleaded petrol, sales tax rearrangements and now the fringe benefits tax were impositions. Unleaded petrol was the former Government's thing, not ours. We were also attacked for changing the sales tax regime for the motor vehicle industry. The sales tax regime was changed simply because the Auditor-General of the Commonwealth of Australia said last year: `There has been a rip-off going on here for many years in respect of sales tax paid by the motor vehicle industry and that rip-off has to end'. That rip-off went on all the time the Opposition was in government. It has now been changed. I am sorry that that imposition has been imposed on the vehicle industry; but the fact is that if one is in government one ought not tolerate rip-offs of the taxation system, by whomever they are made. Senator Chaney —You could change the policy. Senator BUTTON —Of course, one could do anything. We will come to that in a minute. There are now dire predictions, part of which I share, about reductions in volume in the vehicle industry-the volume of registrations and so on. If the worst of these predictions occurs in the 1986 calendar year, the motor vehicle industry in this country will be back to the point it was at in terms of volume under the Fraser Government. That would be a dreadful thing for this country, and a dreadful thing for the motor vehicle industry if it were in such bad shape as it was under the Fraser Government. That would be very bad for the industry. Senator Chaney —Will that be good enough? Senator BUTTON —Of course not. It will not be good enough, but that is where it will be. So, let us recognise that many factors go to the health of an industry such as the motor vehicle industry and not just a fringe benefits tax. There is an argument-in which I personally see some merit-that, if an industry has to depend for its viability on what is essentially tax avoidance by sections of the community, one ought to look at that. I do not entirely accept that argument, but I can see some merit in it. It may be that the solution, as Senator Chaney has just proffered by way of interjection, is not to look at the industry's problems in terms of whether we have a fringe benefits tax or not-the Government is committed to a fringe benefits tax as a principle, and I think honourable senators opposite would be, too, if they ever got into government because they could not stand the drain on the taxation system which occurs through this sort of thing-but to look at the taxation arrangements for an industry such as this in another way. I am not saying that we can necessarily do that. Governments confront these difficulties. The Fraser Government confronted revenue difficulties in 1979 by imposing a 2 per cent tax on all items imported into this country at concessional rates. That has been immensely damaging to Australian industry. Senator MacGibbon —Take it off. Senator BUTTON —I would love to take it off. That is a point. All I am saying is that governments do these things which are in conflict, perhaps, with the most desirable industry policy principles. Governments do these things and there is that conflict. Senator MacGibbon interjects, saying `take the tax off'. But the tax brings in a revenue of $179m. If one takes off that tax one has to put something on somewhere else, unless one is able massively to reduce government expenditure. There is not a hint from this Opposition that it is in any way about massively doing anything but increasing government expenditure on the basis of the promises made by its Leader, the discredited former Treasurer. Senator Chaney —But you do agree that it is a problem? Senator BUTTON —Sure. I should refer in passing to a number of other matters referred to in Senator Chaney's comments. Senator Chaney made a number of suggestions that I had by implication said that the fringe benefits tax regime in respect of motor vehicles would be changed. In part I think what he says about that is correct. It was certainly my wish that it would be modified. I make no secret of that. I have said it publicly. But, after all, governments make these decisions collectively. I do not retreat from the suggestion implicit in some of my statements that it was my hope that there would be some modification this year of the fringe benefits tax. I remind honourable senators that I always said, and persistently said, that there had to be a fringe benefits tax on motor vehicles; the rate at which it was struck was the important thing. Senator Chaney —Is it the rate or also who paid it? Do you consider that? Senator BUTTON —I do not think I need to consider that in the context of this debate. Senator Chaney —I thought that, seeing this was honesty day, you could consider that, too. Senator BUTTON —If the honourable senator cannot stand it, he had better leave the chamber. I have always publicly said-and I say again-that there was some concern about the rate in what was inevitably a predictable market downturn in 1986 following the record years of 1984 and 1985. I should add that the record year of 1985 for car production and car registrations was undoubtedly influenced by some of the facts which Senator Chaney has mentioned, such as the inevitable introduction of unleaded petrol. I think the industry and everybody else recognise that there was a pull forward effect on motor car registrations and sales because of that likely introduction in 1986. I make it clear that a lot of the comments here or anywhere else about the effects of the fringe benefits tax are made in the context of a government which, in respect of the taxation regime, has been prepared to make hard decisions. We believe that they had to be made and that they are very important decisions in the overall context of Australian taxation because there are many benefits in the taxation changes made by this Government, benefits which will be manifest in the second half of this year and throughout 1987 and will be manifest in terms of imputations in the taxation system in respect of changes to marginal rates, reductions in marginal rates and a wide variety of other smaller issues which go to the question of improving the investment environment for Australians and Australian institutions in industrial equities. There is no doubt that those things will follow in time from the tax changes which have been made. The second point is that many of the criticisms which have been levelled by Senator Chaney in his remarks have to be levelled in the light of the realities of high growth rates, a rapid increase in employment, industrial stability arising from the accord and the policies of this Government, and vastly improved competitiveness in many industries from the devaluation of the Australian dollar, which we do not claim as a government policy but is something which the government must recognise as important and significant in terms of its benefits to sections of industry. In that sort of environment, I believe that the criticisms that have been made have to be somewhat muted and taken less heed of than otherwise might be the case. Senator Chaney, in his matter of urgency, referred to estimates of production and employment made by various organisations. All I say about those estimates is that they concern me as the responsible Minister but, on the other hand, even the most serious estimates do not reduce the volume of this industry to what it was prior to the improvements to which I have referred. I do not believe that the fringe benefits tax threatens the viability of the motor vehicle plan. It makes it harder for the Government or any government to achieve the objectives of the plan, but any imposition from outside the industry does so, whether in terms of interest rates-which I concede-the effects of devaluation, currency movements or a wide range of issues. Senator Chaney referred to the fringe benefits tax threatening thousands of jobs in the car industry and other industries. I have adverted to the references that he made to jobs in the motor vehicle industry. I remind him that the year before the car plan was introduced nearly 10,000 workers lost their jobs in the motor vehicle industry. They did so because no previous government had taken upon itself the task of tackling this very difficult industry in a rational way and of reducing protection for an industry which was vastly overprotected. No previous government had taken those tasks upon itself. As the industry lumbered from one failure to another the employment loss, of course, was very substantial. Senator Chaney's matter of urgency refers to the employment loss in industries other than the motor vehicle industry. He made no reference to them in his comments. Senator Chaney —I mentioned Western Mining and Kambalda. Senator BUTTON —There has been recent discussion about job loss at Kambalda. But Senator Chaney has not referred to the hospitality and entertainment industry because job opportunities have increased rather than been lost since the fringe benefits tax came into effect. I do not think that the Government would claim that that was a direct result of the fringe benefits tax but it would certainly claim that it was a direct result of the overall economic stability of this country, strong consumer demand and a whole range of issues which are symptomatic of an economy which is basically in a state of stability and growth. I understand the motives behind the Opposition's matter of urgency. It has succeeded marginally in embarrassing me. If the Opposition wants to chalk up a success on that basis I am certainly pleased to concede it, but I make it quite clear again that the Government will not abandon fringe benefits taxes because of the sorts of arguments which have been advanced in this debate to date and, indeed, which have been advanced in the wider community debate on this issue. Senator SHORT(Victoria)(3.47) —I strongly support Senator Chaney's urgency motion concerning the need for the Government to abandon its fringe benefits tax, which threatens thousands of jobs in the car industry and other industries. Before coming to the remarks which I want mainly to make I will pick up a couple of Senator Chaney's comments and thrusts. We have severely embarrassed Senator Button on this issue but that was not really the point. We were not seeking to embarrass the Minister for Industry, Technology and Commerce but to provide comments and proposals to help perhaps Australia's major manufacturing industry. If this Government, which has responsibility for framing industry policy and the environment in which such industries are to operate, cannot set an environment which is conducive to the development of those industries, it deserves to be very severely and roundly condemned. This is what we are doing and will continue to do beyond today. In some of Senator Button's other remarks he set up a straw man about comments by my leader, Senator Chaney. The Opposition does not suggest that all the adverse factors now affecting the automotive industry and manufacturing industry generally can be changed. Obviously, it would be meaningless and quite unrealistic to suggest that. Rather, in the present context of manufacturing industry, it is meaningless, bad and bad policy to impose more burdens on the industry. That is just what this fringe benefits tax on the motor vehicle industry is doing. I want to do two things: First, to look at the detail behind the Government's original decision to impose this fringe benefits tax and its reasoning not to modify that proposal; and, secondly, to outline part of the dismal record of the Hawke Government in failing to take the necessary actions to tackle the problems of manufacturing industry and the motor vehicle industry in particular, problems which it professes to recognise but its performance shows that it does not. Defence of the Government's fringe benefit tax on the motor vehicle industry that we have heard today from Senator Button is, to say the good thing first, brave; to say the more realistic thing, it is lamentable in its lameness. Indeed it was sad to listen to. I do not believe now that the Opposition's matter of urgency goes far enough. I now feel, having listened to the Minister's response, that we should be calling for his resignation as Minister for Industry, Technology and Commerce. Senator Button —I thought you had done that already. Senator SHORT —I have. I might have to do it again too. In saying this I feel very sorry for the Minister's position because, as I hope he knows, we on this side of the House have a very high regard and respect for him personally. He is the third most senior Minister in the Hawke Labor Government and he is the Minister with overriding ministerial responsibility for providing industry in Australia with the necessary environment in which to become-as he says he wishes and I accept that-more competitive, more enterprising, more export oriented and more flexible. No amount of personal regard for him can permit me to overlook the catastrophic defeats that he is suffering in failing to persuade his Cabinet colleagues, the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) in particular, that this Government-his Government-is pursuing policies which, far from making Australian industry more competitive, flexible, enterprising and profitable, are simply worsening the problems which industry faces in this country. It is this failure to carry the day with the Minister's Cabinet colleagues which has been responsible for Senator Button's embarrassing non-defence today of the Government's decision not to abandon, or even to modify, its proposal to tax employers on vehicles provided to employees. This decision is indefensible. The overwhelming weight of carefully researched evidence from the motor vehicle industry, from impartial studies that have been commissioned, from relevant industry unions, from one or more State governments, and from a wide range of other interested parties, is that this tax will result in a major reduction in sales of locally produced motor vehicles. The Federal Chamber of Automotive Industries puts the reduction at 35,000 six-cylinder vehicles in 1986 and a continuing loss of 25,000 vehicles in subsequent years. When one takes into account the other adverse factors now hitting the motor vehicle industry, most of which I remind the Senate are factors which are government induced such as the devalued Australian dollar, the high level of interest rates, the increases in sales taxes on motor vehicles, and the introduction of unleaded petrol, the total impact of locally produced motor vehicle sales this year will be an estimated reduction in sales of 90,000 vehicles; that is, one out of every five locally produced vehicles. Job losses in vehicle manufacturing will be 3,000. There will be an overall job loss of at least 10,000 and the great majority of these jobs will be lost in small businesses, vehicle distributors, vehicle repair shops, parts manufacturers, distributors and so on. But in addition to this extensive impact on the industry broadly defined, the impact on the business sector which uses motor vehicles in the normal course of business will be simply enormous. Let me make it clear what I am talking about. It is not generally recognised just how widely this new tax will extend. To date most attention has focused on purchases of fleet vehicles by the larger companies. The effect on vehicle purchases by these companies will be very substantial as recent surveys have shown. For example, a survey by the highly professional and highly reputable accounting firm, K. M. G. Hungerfords, has disclosed that 52 per cent of companies surveyed will reduce the total value of their company fleet, 51 per cent will hold on to company cars longer and therefore buy fewer and 42 per cent will move to smaller, cheaper vehicles, most of which are imported rather than produced locally. There lies the nub of one of the Opposition's key arguments today and that is that the Government's fringe benefits tax proposals in relation to the motor vehicle industry are completely at odds with Senator Button's car industry plan, the whole purpose of which is to increase over time the local content of Australian vehicles and to make the industry viable. The two policies-on the one hand Treasurer Keating's tax proposals and on the other hand Minister Button's car industry plans-are completely at odds, completely contradictory one with the other. However, in addition to the impact on vehicles purchased by larger companies what is not generally recognised is that the new tax will also apply to most vehicles operated by small owner-operated and controlled businesses. For example, a company supplying and servicing office equipment, machines and computers, which must have vehicles in order to operate, will be savagely hit by the new tax unless it complies with enormously time-consuming and costly paper work procedures of substantiation. The cost of the new tax on business expenses will be extraordinarily high. Remember, it is a tax which the employer or the small businessman must pay irrespective of whether he is making a profit or going bankrupt. The Federal Chamber of Automotive Industries has estimated, on the basis of commissioned studies, that vehicle ownership costs for business will increase by 29 per cent. For many businesses, and particularly small businesses in the service industries, this increased cost will be crippling. The reason for the Government putting forward this new tax proposal, along with all its other new tax proposals, is to attempt to raise additional revenue to fuel its ravenous expenditure appetite. This inability of the Hawke Government to exercise discipline and restraint over its spending programs, coupled with its continual capitulation to the trade union movement in its policy development, is the reason why in Australia today we have the highest level of taxation in our history, the highest level of real interest rates in at least 60 years, the lowest value of the Australian dollar at least since the Second World War, a public debt in excess of $7,000 for every man, woman and child in this nation, a foreign debt of $4,500 for every man, woman and child in this nation-a foreign debt which is growing by well over $10,000m each year and that is equal to another $650 for every man, woman and child in Australia-and an inflation rate twice the average of other Western nations and four times higher than that of nations such as Germany and Japan. These are the facts facing Australia today; these are the facts that this Government tries desperately to conceal; these are the problems we should be tackling. How should we be tackling them? We should be tackling them by exercising responsibility in government spending, government taxation, government borrowing and the Government's approach to wage fixation, superannuation schemes and other cost impositions on business. What do we have instead? We have the fringe benefits tax on motor vehicles; we have the most savage anti-business, rag-bag tax package of proposals that has ever been brought into this Parliament. In several of these respects the Government would do well to heed the excellent contribution to the industrial relations and wages policy debate made by one of Australia's most respected former trade union leaders, Mr Charlie Fitzgibbon, in a paper prepared for the Economic Planning Advisory Council in February, a paper the Prime Minister deliberately tried to have stifled. In that paper, Mr Fitzgibbon spoke, among other things, about the need to make the industrial relations and wage fixation systems more flexible in order to develop a more co-operative spirit between management and labour. That is a philosophy very much in line-I almost said very much in accord-with the policy of the Liberal and National parties and very much against what the Australian Labor Party, the Government, has been arguing. That paper has been produced by one of the most respected trade union leaders in Australia. The paper should be widely read and in that spirit I seek leave to have it incorporated in Hansard. I consulted with Senator Button who has concurred. Leave granted. The paper read as follows- Paper by C. H. Fitzgibbon February 1986 What are industrial relations? How have they been seen and how should they be seen? What are the social and economic dynamics working on them and producing change? How should the challenges be met? THE EVOLVING NATURE OF INDUSTRIAL RELATIONS 1. Industrial relations, meaning relations between labour and capital, developed out of the excesses of capital following the industrial revolution. The desire of labour to organise was associated with the fact that disorganised they were terribly exploited and forced by economic necessity to work under conditions calculated to make maximum profit for capital or management, having no relation to any care for the welfare of the workforce involved and where any morality was the province of a very limited number of political reformers none of whom represented the capital involved. The lack of morality or traditional care was not necessarily true of other non-European states which will become important later when we consider the current position of industrial relations in Australia and the international changes impinging on current Australian problems. 2. If we look at industrial relations over the years we see it altering in line with the general alteration in social attitudes and in recent years significantly affected by the variation in power base arising from the social alterations. 3. Put simply, industrial relations are merely human relationships and as such their application will vary very considerably having relation to the personalities of the humans in immediate contact, the social norms of the day and the traditions of the participants. As those relationships have developed in modern western society other factors have impinged upon them which have materially affected the comparatively pure self-interest roles of the original combatants. On one hand to apply some justice and reasonable share to their position and on the other hand to maximise financial return. However, like the organisation of capital, the organisation of labour was quickly seen as a method of constructing a power base and a political weapon of some force in a democracy. 4. The effect of that development has been to impose another discipline within the industrial relations system. That is the development of singular interest political activities. Those activities may be used to promote the welfare of members of the organisation, or the welfare of a political party; or discord. At times there cannot be any doubt the influence has been used to promote international objectives. Since action brings reaction where one political viewpoint attempted to take control of industrial organisations other political viewpoints also moved in. 5. The existence in the labour movement of a wide range of views varying from extremist to conservative cannot be ignored in the development of industrial relations. Under such circumstances, it has been and will be in the future very difficult to obtain on the labour side of industrial relations a single cohesive force only thinking of the welfare of the nation or of only the particular welfare of the workers in the organisation. 6. Exactly the same comments apply to management and to organisations of employers developed as a counterweight to organised labour. In industrial relations there are wide-ranging views amongst the management or capital side. It should not be thought that all management is conservative, but by its nature and the constraints placed on it to satisfy shareholders there is probably more conservative management than management able to adjust quickly and easily to altered social circumstances and power structures. It is as difficult for management to accept the need for change as it is for employee organisations to accept a need for change. However, the degree of conservatism is something that has been changing with the changes in social concepts and with the changes in the power structure of the community. UNDERSTANDING CHANGE AND VARIATION IN SOCIAL PATTERNS 7. Changes are very difficult for ordinary people in the workforce to understand and accept and unfortunately often extremely difficult for many people in management or supplying capital to understand and accept. For both parties change appears to be nearly always forced on the majority rather than accepted willingly or foreseen and voluntary action taken to ensure its smooth introduction of a smooth transition from a past method to a future method. 8. Notwithstanding that position, as a matter of pure principle for both labour and management industrial relations should always be about the maintenance and, through time, the improvement of real standards of living, conditioned by the social values and economic realities of the day. The latter realities have led to significant changes in the conduct of industrial relations over the past few years. While there has always been an understanding in the Australian union movement of the need for political determination of social wage components, today there is a growing recognition by a significant percentage of the trade union movement of the need to take an interest not just in wages and other direct conditions of employment, but in a range of policies which affect real living standards. The welfare of workers and their families is as much influenced by government taxes and expenditure policies which affect the social wage as it is by direct conditions of employment. While the union movement represents some 2.6 million members, there is awareness that it should concern itself also with the welfare of worker's families-some six million Australians in total. 9. During the past few years there has also been a growing recognition, albeit too slowly, that the current economic realities are not the norms which prevailed in the period of Australia's post-war development-low unemployment and generally low inflation-and that industrial relations need to adapt to this fundamentally different situation. 10. In an interview with the Australian Financial Review, Bill Kelty offers us all a thoughtful personal insight into the experience and lessons of leap-frogging wage negotiations in the 1970s. He referred to a `sense of futility that you chase a wage gain and it's immediately followed by prices'. He tells us that `the unions went through a period of decentralisation, that is, they went through a period of relative self interest. The system broke down during that period. The experience was a sobering one'. 11. Perceptions as to how industrial relations need to adjust differ between those who favour the Prices and Incomes Accord, those who oppose it and those who favour deregulation and decentralisation of the wage determination process. Without, at this point, diminishing the importance of the choice between these different approaches, it is even more important that the need for change to the industrial relations norms of earlier periods has been recognised by some in important positions of influence. l2. That understanding has been followed by a recognition that a grab by trade unions now for a bigger slice of the economic cake could destroy opportunities for growth because this would result in self-defeating inflation and lost competitiveness in our traded goods and services industries. It is accepted by realists that unless movements in labour costs are in line with economic capacity and growth in productivity the result will be to the detriment of organised labour and Australians generally. An awareness has developed that governments cannot prevent increased unemployment and/or higher inflation in the face of unrestrained cost increases, whether from labour or profiteering. 13. While we have come a long way in developing the concept of community interest in industrial relations, there are contemporary challenges which we must face up to. These require a broader extension and acceptance of the concept of community interest than we have achieved to date. First and foremost, though, meeting these challenges will require greater understanding of the issues involved before appropriate responses can be developed. 14. In looking at these contemporary issues we should focus on the special role which the ACTU must play in carrying responsibility for industrial relations. Being based on a voluntary affiliation, the ACTU has no direct control over the activities of its members but collective rights under its rules and significant underlying strength arising from that. However, in that the trade union movement is committed to collective responsibility, the ACTU also has an obligation to promote the best interests of its members as a whole (consistent with community welfare generally) rather than the special interests of any constituent members. This is especially true when the interests of any one member are involved. 15. In this regard it is relevant that the occupational composition of the workforce is changing and this is reflected within the ACTU. While blue-collar unions traditionally constituted the bulk of the ACTU's affiliates, increasing numbers of white-collar unions have joined the ACTU in recent years. The obvious implication of this is that the ACTU has now to take into account a greater diversity of interests among its members than previously. What seems good for the blue-collar worker may not seem to be for the white-collar worker and vice-versa. What would seem to best serve the interests of private sector employees would not always seem to be beneficial for public sector employees. What may be good for workers in traditional occupations may not be good for their sons and daughters who are seeking employment in new occupations emerging with changes in technology and consumer-spending patterns. The evolving diversity of interests serves to emphasise that the solutions to contemporary problems are unlikely to be found in directly improving the position of individual groups but rather in considering the interests of the whole. 16. The development of that philosophy is the basis for the growing recognition that, in order to overcome the social and economic waste caused by unemployment, restraint in costs is required. However, concern about unemployment has also led to a temptation in some quarters to resist changes which, overall, are desirable but which may damage employment prospects in particular industries. It has also fostered proposals to maintain or increase employment and activity in particular sectors even where this can not be shown to promote employment objectives generally or to increase the size of the national base. The concern of the labour movement about the loss of employment in any industry is only natural. However, the real questions are: (a) are knee-jerk responses the appropriate ones? and (b) how should we choose the industrial relations and developments initiatives best suited to the interests of the generality of the community? 17. This paper has adverted to the different social patterns of today as compared with the social patterns that shaped industrial relations in this and other countries in the early part of the century. The significant change in the relative powers of the two major partners to industrial relations is well documented, if not completely understood. It has produced excesses as the previous division of power produced excesses on the part of capital or management. One of the reasons for the difference in social patterns is the different expectation of the people who form the workforce of a country of the Australian nature. The different levels of those expectations over past years and how those levels of expectations are growing, even though in fact the position of the Australian economy is in some ways worse than it was in previous years is important to any understanding of the problem. 18. Those levels of expectation cannot be expected to diminish, having regard to the education now available to people, their ability to gauge what others have, and the greater degree of freedom constructed within the community by a different social welfare system. 19. The interaction of these forces, while not necessarily conclusive, is powerful in shaping the activities of organisations representing that electorate. The growth of the complex social security system-inadequate as it may be in parts, does produce a difference in freedom of choice over that which existed in previous years. One aspect of it alone must give problems to any critical observer attempting to analyse current labour statistics. That is, should a figure of two per cent of the workforce still be considered as representing comparatively full employment or should that figure now be closer to five or even six per cent to take account of the increased number who opt out of the system. ECONOMIC REALITIES AND CONFLICT 20. Also, whether we like it or not, one of the major matters affecting social change and employment is the enormous difference in world trading patterns occurring over a number of years associated with the rise of Eastern or Far Eastern economies and, in our particular area, Pacific Basin economies and the development of the European Common Market. 21. Once it was said that Australia rode on the sheep's back, and there was a great deal of truth in that cliche. We had an established market for our agrarian products, particularly in the British connection. Later it was said that we rode on the miner's back. The truth of the matter is now that the market for our agrarian products has been substantially affected by, firstly, the emergence of the common market with its agricultural products and policies; and secondly, the fact that Eastern countries after the Vietnam war do have more ability to feed themselves than in the past, while in other parts of the world countries have more need but less ability to buy products. 22. In addition, where once it could be said that nations producing raw materials that were in demand were in a comparatively ``box seat'' position, as there have been developments in Chile, Brazil, India and other nations, including Papua New Guinea, which have ensured a greater availability of raw materials on a world-wide basis together with the development of new materials, the commodity market which includes much of the export of and the new wealth in Australia has come under much greater pressure and that looks like continuing at least for the foreseeable future. Worth a thought is also the effect on world inflation that a reduction in the cost of commodities, in particular oil, has had. In the overall perhaps the effect is beneficial. 23. It is also beyond doubt that the transfer of technology, eliminating in many cases the need for a large tradesman-trained workforce, but increasing the need for some with higher trained skills has arisen from the concept that goods, especially manufactured goods, should be produced where it is most valid for capital to produce goods in order to make the greatest return on capital that is possible. The technology made available in Korea or Brazil is not necessarily arising from Korean finance or Brazilian finance. The mode of manufacture for many countries these days is to design the article in a country such as Sweden or Australia or the US and have it manufactured in Korea or Hong Kong or Taiwan. 24. Capital is pursuing its traditional role, varied by the growth of multinational or supranational companies, varied by technology and social attitudes, varied by response to union power and types of government but still its traditional role. The Australian company locating off shore is matched by many others including Japanese although again tradition ensures that Japan is a much tighter society than most of the other countries in the western bloc. 25. All these forces are impacting on the Australian economy without the advantage of size of the US economy. Even significant reductions in the value of the Australian dollar may not of their own volition answer our international trade problems and so alter the balance of payments position of Australia in the way that we would want it to alter. In a very competitive world trade situation there is evidence that competing nations will not raise prices for their exports to match a drop in the value of Australian currency as against their currency while resistance has been evident to Australian exports gaining the full value of Australian dollar reductions, especially in a depressed commodities market. At the same time we have to be aware of the increased cost of servicing overseas debt created by a depreciated currency. 26. While we persist in not fully appreciating the interrelationships of all the various bits and pieces of our society we will fail to appreciate that monetary policy today almost invariably treats the symptom not the disease. It attempts very imprecisely to correct for the many other failures in the complex which we call our nation. Generally speaking, it can only react to circumstances created for it by organisations not under or in its control, leaving the economy always in a state of fragility and subject to possible extreme problems of high interest rates, inflation and high unemployment. 27. It is true that if Australia could present the position of a secure supplier it could be still in a favourable position. Unfortunately, it has not been able to develop that option to the degree that should have been possible basically because of the operation of a conflict society. 28. The social and economic dynamics just described are pressures reacting generally on the community but as always in an uneven manner and the conflicts these pressures produce are not always in the best interest of Australia. The general concept that Australia cannot afford to be in a position where it is a straight conflict society with a three-way conflict between trade unions, government and business exacerbated by those pressures is a basis for the thinking behind the concept of the Accord. 29. This does not mean to argue that conflict should be eliminated from society. Slippage and friction is as necessary for a healthy society as the right in a democracy to state a view. The problem for Australia is not that there is some conflict of the nature adverted to-it is that there is too much. Conflict arising from a number of causes, valid and invalid, directing the nation into unnecessary crisis at times and into too much attention to the posturing of single interest pressure groups, often to a stage where the ``wood is hidden by the trees''. 30. To achieve the overall best interest of this society the object and the emphasis must be to as far as practicable reduce the area of unnecessary conflict and to replace as far as practicable short-term self-interest thinking with longer-term wide-benefit planning. 31. That approach should not be interpreted as requiring people to be ``hungry today'' so that ``they may eat tomorrow''. That is not required in the Australian context. What is required is to optimise our present and future instead of demeaning it for invalid reasons. The difference is one of degree, even perhaps significant degree, but not a choice between riches or penury. 32. The current Australian example of a social accord is only an agreement between an organised trade union movement and one political party which holds government at this point of time. It does not establish a strongly corporate society in the same way as perhaps a corporate society is established by tradition in the Nordic countries. 33. However, the important point to note is that at least two responsible bodies believe that in the current phase of world development it is not in the interests of the Australian society to continue to develop in the way that it perhaps would if modelled on the English example. It is not really a worthwhile exercise to talk of Australia in respect of the American example. There are too many indications that the conflict mode of the American economy is not necessarily working as against competitive societies developing in the Pacific Basin. Notwithstanding a manufacturing industry backed by a huge military complex, limited union organisation, low labour cost escalation and a low inflation rate. American manufacturing industry seeks more and more protection and their balance of payments situation and growing foreign debt is only rescued in current terms by the amount of foreign investment flowing into what is conceived as a secure base for world money in these troubled times. 34. For us, while there is a significant reduction in the value of the Australian dollar at the same time as there is a resurgence in the economy, that reduction and resurgence is not necessarily producing expansion in Australian industry, particularly manufacturing industry. It is producing an expansion in demand that is being mainly fed by considerable amounts of imports. The imports affect the balance of payment situation. If you attempt to control the imports you may do so by protective means and that protective means can fuel the whole cycle of inefficient industry in competition with outside industry unless there is some new thinking in respect of the mode that we adopt to ensure efficient relationship, one part of the economy to the other. 35. All these pressures are affecting trade protectionism and creating clefts in each society and between societies. The effects of such pressures do not need to be detailed. They are current. They are shown up in both the Australian and American scene. However, they exist in many forms and in many countries no matter what name may be applied to them. The pressure is to sell not to buy except as necessary. To anybody who wants to think in general about the situation, the developments automatically answer the question as to whether or not industrial relations can stand aloof from all the other forces shaping economics. They cannot stand aloof and there must be an understanding that as a society we are not any longer in competition with like societies. 36. We are in fact in competition with societies which are entirely unlike. We are in competition in the world trade sense with societies in manufacturing who do not understand a `them and us situation'. In particular, the Japanese where by tradition there is complete and absolute unity of purpose between the capital and the labour in major manufacturing plants. They are part of the same operation. There is no need to talk about industrial democracy within the Japanese manufacturing scene. No manager in a large plant in Japan would be prepared to separate himself completely and absolutely from his labour. It is a co-operative activity. There is an incentive for the labour force in the well-being of the company. That incentive relates to the traditional method of employment and the traditional responsibilities which exist between the management and the labour. It does not necessarily apply to small companies or family business where other traditions apply. 37. The rise of the eastern manufacturing countries is no longer restricted to countries like Korea, Philippines, Taiwan or Hong Kong. China is busily engaged in setting up its industrial compounds. Russia has made its bargains with Fiat and Coca Cola. 38. If one believes that industrial relations, employment and well-being can hide behind protection barriers in these circumstances then one has to believe in other fallacies such as Father Christmas. 39. If you are in competition with more efficient systems, it is not intelligent nor productive to rely on modes of operation which are no longer applicable to the current situation-if they ever were-and to rely on attitudes which have proved themselves unable to stand up to these standards of competition. 40. That comment in particular applies to those who parrot support for and the adoption of the American type of conflict operation and the political input of protection-oriented pressures groups. 41. However, we do have to learn how to adjust to the current pressures. We do need to urgently apply our minds to seek solutions, not just as representatives of labour nor as representatives of capital, but merely as representatives of a society seeking the greatest possible advantage for the members of that society by transferring self-interest from what is the apparent need of the individual or single organisation to the overall need of the society in which we live. 42. Is it in our overall interest to transfer our manufacturing industry into entrepreneurial importers? Do we need to realise that if capital cannot make profit out of manufacturing regardless of what activity is undertaken by governments or other people, they will gradually move into the entrepreneurial importer situation? 43. Is it sufficient to create pockets of resistance to that merely by supporting particular segments of industry in such a way that they exist on the public purse? 44. If we, by that method, create inefficient operations do we at the same time reduce the overall standard of living of the community by requiring more and more money to be paid in taxes to support what are in fact ineffectual operations? Are we encouraging the development of systems very similar in operation to the development of the dairy subsidy system where it became profitable to farm land which was quite unsuitable for dairy farming merely based on the fact that a farmer could live off the subsidy? Is the same thing true of industry and must it be recognised that no matter what you do in respect of the provision of protection, whether it be by tariffs or bounties, you do have a charge on the public purse? 45. Consideration of these questions is not to argue in any way that you do away with all the tariffs and all the bounties and all the support for various phases of Australian manufacturing or other industry. Obviously we do not live in a perfect world. In fact, we live in a far from perfect world and there will be a continuing need for government to ensure that our producers are fairly positioned in their markets. 46. What must be accepted is that if we are to have such systems they must all be based on a non-ongoing situation designed only as a method of creating an efficient operation and a society able to recognise what it must do to compete on a reasonable basis. For that reason, and in addition to other practical steps, it is necessary to develop the concept of positive incentives and a positive sharing of responsibility at an enterprise and/or industry level, or in common with like societies become increasingly irrelevant as not only capital but expertise shift to a different world. 47. There are problems for any group of people or an organisation in adjusting their mind quickly to current pressures let alone long term thinking, especially where those pressures are of the type now existing in relation to the developments in international trade, the rise of different economies working on a different basis. There are real problems in adjusting traditional modes of thought where those traditions have grown up over a century and where traditionalists have traditional self-interest answers to non-traditional problems. 48. However, there is at least a growing concept of the difference and the need to change, but that is not necessarily a concept that is clearly understood by everybody except in those instances where direct pressure is coming on the individual or the organisation. Answers may be coloured by background and electorate or may be less applicable to people who operate on a more adventurous basis or on a purely ambitious basis for their own ends. Yet if we are to progress in this country, if we are to shake ourselves out of our apathy and reach our optimum potential, we will have to look at world developments without prejudice. We will have to learn from those developments and quickly see what we can do to change the thinking of people and organisations to a realistic appreciation of those developments. SECTIONAL INTEREST AND NATIONAL INTEREST 49. The question is how do we develop such a philosophy? How do we develop a philosophy of looking at the overall national welfare and at the same time understand clearly that the most important motivating force amongst any group is always self-interest? 50. If the last comment is true then what is required is to change the thinking of people by exposing more and more groups to the advantages inherent in a change of thinking. In other words, it is necessary to keep educating portions of the community to an understanding of the advantages of the material gains inherent in a more co-operative productive society. 51. There are illustrations current which may assist in this, providing again you can identify and obtain understanding amongst the people as to what pressures are producing the current changes. 52. There are operating examples of an alternative philosophy based on the concept of producing a co-operative workforce with a stake in the well-being of the enterprise. They exist in a number of areas which in many cases and for many reasons are ignored. 53. The example of Lincoln Electric is there for all to see. Not that anyone from the trade union movement is ever likely to laud in particular the Lincoln Electric example because it does not fit itself into the organised labour movement as do other examples. However, the example of Lend Lease building operations is there for all to see as is Fletcher Jones and Staff and numerous others. 54. They are not ordinary work incentive or contract bonus or production bonus schemes which have many flaws and anyway in most cases do not give the employee necessarily a stake in the welfare of the company over and above their employment stake. They are operations which do provide for all employees a real stake in the competitiveness of the company and its overall viability by one means or another. 55. Having relation to the demands of human nature, that advantage has got to be seen in terms of reward, whether by money, by conditions, by security or by some other means. The workforce has got to see that it is in fact sharing in the welfare of the organisation. 56. It doesn't take too much imagination in respect of any undertaking to work out that if you could improve productivity by any percentage then that almost certainly equates a reduction in the cost of the article by a similar amount and in most industries or enterprises it would not be difficult to produce significant results. It should be understood that an Australian worker does not get greater pay than his German/Japanese or American counterpart, in most cases he gets less and total labour costs per employee are generally less, but it is in the bottom line figure at the end of the day as to productive cost that shows the difference in result per dollar. 57. Since Australian workers can compare with the workers of any country, it might surprise just how much productivity could be improved if the workforce understood that the increase in productivity was going to result in an increase in their security or reward while not prejudicing their safety or principles. 58. One would like to think that we had progressed sufficiently as human beings to not require such incentives but the truth of the matter is of course that if there is no incentive there is in fact unlikely to be maximum productivity. To be effective, capital and management would clearly have to come to an understanding that all increased production did not go merely in profits to shareholders or to management and that is something that many managements and shareholders do not clearly understand. 59. They merely look at their enterprise on the basis of how much additional profit can go to the management or the shareholders without seeing that, if there is no sharing, if there is no feeling of sharing, that what they are doing is to lose out for the undertaking as a whole. 60. Successful examples of this concept, if they can grow, will be important and it may be the only way that it is possible for such a system to grow is by a gradual realisation of its advantages, with that gradual realisation probably only coming on the basis of examples growing in numbers. There is amongst some management an understanding of the value of this approach. Such a concept will work better with smaller labour forces and it will obviously work better on an enterprise basis than it will work on the industry-wide basis. THE HANCOCK REVIEW 61. It is necessary here to advert to the deliberations of the Committee of Review into Industrial Relations Laws and Systems in Australia, commonly known as the Hancock Committee. Because what is being said here could be interpreted by some as a difference to the findings of that committee. The findings were basically that due to the legal position in Australia, the basis provided by the Constitution, and the majority requirements of our society it is not possible to do away with the Arbitration System which exists in Australia and that the best interests of the country would be served by a retention of such a system modified and improved to make it more workable. 62. It is easy to show that what is contained in this concept is complimentary to those findings, not opposite to them. 63. The question which needs to be addressed is does such a system envisage an end to an arbitration system. Whether voluntary or compulsory. The answer is that it does not. Such a system can only operate in relation to the areas where it is a workable proposition. Not everybody can be included in a shareholder scheme or a profit sharing or other similar scheme. Not every organisation or enterprise is open to such a concept. For example, it would be very difficult to see how such a concept should be applied to government service. In some industries other types of schemes already operate successfully and no-one will want to interfere with a successful operation. The concept would be particularly valuable for undertakings with growth, competitive and profit potential. Whatever plan is applied, it should be a system that will operate side by side with or in partnership with an arbitration system. It should not impose a necessity on governments, whether Federal or State, to alter current systems. The Hancock Committee, in one proposal, suggested that the Federal Act should be amended to provide where a Section 10 agreement was concluded that it would have the same importance as a Federal award. In other words, as different from the past, it could not be overwritten by a State determination or a state common rule determination. However, this concept does not depend on that approach since any economic benefits flowing from an arrangement envisaged here would be outside any award and as such would not provide ammunition for comparative wage justice or any other award prescription or application. It also does not necessarily need to be adopted industry-wide. It can in fact operate on a purely enterprise basis without affecting awards. UNION ORGANISATION 64. That does not mean that you need to change the whole union system to enterprise unions. 65. What it means is, if you take the manufacturing industry for an example, that where you wanted to change what is the current conflict situation to a situation more in line with the Japanese co-operative society, it would be possible to have an agreement between the management and the labour force of an enterprise which produced basic considerations in respect of conditions but which at the same time added a positive incentive drawing the labour force into the operation of the enterprise. Such agreements are limited only by imagination and practicality. 66. This also provides an alternative to the current concepts of participatory democracy in industry. At the moment the proposals on participatory democracy have more objective application in, say, a public service situation than an industry situation. Much theory is expounded about this. It is beloved by those who expect to change reality into responsibility. Who believe or say they believe that, given the chance to be party to decision-making, employees will be happy. 67. In practice there is much more likelihood of producing a co-operative position between the management and labour at an enterprise or industry level based on the construction of a positive incentive, when participants can see pecuniary gain or greater security of employment and of that spinning off into real participation thus constructing participatory democracy within the organisation. 68. It's a position of decision-sharing which eliminates much of the false nature of narrow demands for representatives on boards of management, etc. A positive incentive that means that employees see a self-interest advantage in the welfare of the industry or undertaking as a whole and as helping to provide a long term future. 69. As the concept put in the preceding paragraphs should not be interpreted as suggesting that you develop enterprise unions, it also does not mean that you exclude organised trade unions from its operation. In fact, if you were to take the example of Lend Lease, that is the last thing you would want to do. Part of any education process will be to take organisations on an industry-wide basis along with the concept. There is finally no problem for trade unions in such an approach where there can be enormous advantage for the community as a whole. REALISTIC EFFICIENCY 70. If you can produce the standard of efficiency required from that type of organisation it means naturally that you do not have to protect industries in the same way and to the same degree that they are protected today. It doesn't mean that you do not necessarily have to provide some community incentives for industry or some protection. For example, if the steel industry plan, even with its attendant costs, can be shown to have done something at all it would be that it constructed, at least in many areas, a new feeling of co-operation between labour forces and management resulting in very large increases in productivity and, I repeat, it is those large increases in productivity that can protect the industry as a whole. The concept should not be seen as the `cure-all' for all problems of industry. It can assist quality of production, productivity and costs. It cannot replace entrepreneurial skill, it cannot replace product. It cannot insulate Australia from the vagaries of international trade. It cannot insulate Australia from overseas competition intensifying in a period of world recession. It cannot, by itself, overcome operations such as the Common Market Agricultural Policy. It does not mean that an Australian government should abandon efforts to change other governments' policies which limit the opportunity for growth in our industries or that governments should abandon their overall responsibilities to industry and employment. 71. It will not make a `silk purse' out of a `sow's ear' except where the potential for that exists. It will not make bad ideas good and under no circumstances should it lead a government to support with public money industries or enterprises that should not economically exist merely to satisfy lobbying by self-interest groups. 72. However, if such a philosophy could be gradually spread throughout the community it would start to provide a different attitude within the community; a greater realisation of where the country needed to go, what it needed to do in order to protect itself and yet at the same time it would provide the rewards to the individuals putting their effort into the concept. 73. Declining employment opportunities in areas of manufacturing industry have led to proposals by sections of the union movement in respect of that industry. Again, the challenge facing the ACTU is to evaluate whether these proposals further the interests of the whole community or merely benefit special interest groups. 74. Industrial relations cannot be conducted in isolation from the realities of a changing international trading environment. In 1983 Bill Kelty spoke of the implications of this in the context of prices and incomes policies. He argued that to be effective prices and incomes policies ``will require a trade union movement which has a perspective beyond tomorrow-a perspective which is long-term in its vision and can understand the nature of the world economy in which we live. The basic impact will be that unions will no longer be able to hide behind industrial tribunals: as a trade union movement you have got to be involved, you have got to take responsibility''. 75. Activity which promotes the national interest in no way inhibits a profitable return to the individual. In fact, entrepreneurial skill that increases the overall wealth of the community spins back into general advantages for the community as a whole. If, for example, a particular enterprise was doing particularly well, its ability to employ a greater number of people is greater; its ability to spend on investment is greater and, therefore, the spin-off for the general community regarding the amount of money its workers spend, the amount of money it pushes into the community, is obviously much greater. 76. In a period when all manufacturing industry is under pressure, a successful manufacturing industry-one which is able to compete in the international export market in particular-is obviously a great advantage to the Australian community. The fact that the workers working for an enterprise or the executive staff of an enterprise are doing slightly better or even much better in financial or other return than the general norm does not mean that it is not working to the general advantage of the community. It is in this field that a rigid concept of comparative wage justice can do harm. 77. In the practical sense it is not possible to divorce the community from the tradition of comparative wage justice, even though many examples can be seen where it works against the general interest of the community. 78. However, if the concept of comparative wage justice is enshrined, whether that is good or bad it is surely possible to accept that where the success of an enterprise comes from the efforts of the individuals making up the total of that enterprise that special rewards may come to those individuals making the enterprise more successful in such a way as to eliminate the problems of comparative wage justice through some form of profit sharing. 79. Again, there is nothing in that philosophy which in any way affects the national welfare, except in a good way. What would affect the national welfare is somebody taking a profitable enterprise and destroying its capability by seeking singular profits to the individuals, or money from the public purse not used in a constructive form for the welfare of the country. 80. It is not difficult to see a position whereby any industry, whether it be mining, agricultural or manufacturing, being improved by a co-operative spirit between management and labour. That co-operative spirit, however, will never be possible under a system whereby the returns to the individuals are restricted by any rigid system, whether that be a rigid arbitration system, a rigid concept of comparative wage justice or a rigid domination by either one of the parties which means that the profits from the enterprise are not distributed in such a way as to provide a positive incentive to produce. 81. Why is it necessary to build in a method of `overcoming rigidities?' It is quite clear that in any complex society such as ours a rigidity which prevents a reward for special endeavour will inevitably mean that there is generally no special endeavour. Very few sections of the overall population are so imbued with their responsibility to the community generally that they will produce special effort for no reward. That is shown in instance after instance in industry. If a method of overcoming that rigidity can be developed which does not affect the overall community except in a good way, that is by introducing more endeavour and more wealth, then it is in the overall interest of the community to allow that flexibility and to eschew the rigidity that prevents the flexibility from developing. 82. There are all sorts of programs around now; mooted by various people and organisations aimed at producing the type of result that I speak of. As almost nothing in the world is new, most of these are not new as profit sharing is not new. Without making any judgment about individual programs because each would need tailoring to the particular requirement of the parties, it is enough to say that to produce optimum results the total workforce or near enough thereto has to feel their involvement and advantage. THE PROVISION OF A COMMON INTEREST 83. Another major aspect of Australian industrial relations requires consideration. In the Australian arbitration system and as a result of the multiplicity of unions there will often be a conflict of interest between the persons who form, even from the union side, a council of participatory democracy. That in itself is enough to destroy its operation and often the viability of an enterprise because there is no common thread running through relationships which would give all participants an incentive to make it work. 84. In providing a positive incentive it is also necessary to provide a common thread to unite a process worker, tradesman, middle line executive, and a top line executive to work in the interest of the enterprise or industry. 85. Having regard to human nature, that common thread can only be a return to the employees which improves their financial return and their sense of security-which improves their willingness to work in the best interest of the enterprise and which provides for them and their family an improvement in their standards of living. 86. If such a thing can be provided then that will produce the common advantage necessary to mould many diverse elements together to work in the general interest of the enterprise. At that point of time the overall well-being of that enterprise must spin-off to produce improved conditions for the community as a whole. 87. How do you provide that common thread? How do you provide the common interest? The basis for long term trust works not on the principle of producing miracles in a short time but of grafting away at a problem until the problem no longer exists and the unit is working as a whole. It accepts that you cannot convince people to change in two or three minutes, or two or three weeks, or two or three years and maybe that it takes longer than that. It also accepts the fact that all the improvements in profitability, productivity and other spin-offs within an enterprise and industry should not go merely to the management or the shareholders but the improvements in productivity etc. should be shared amongst those all working to improve it. It deals with that in a multiplicity of ways. It will involve flexibility in thinking about appropriate forms of agreement acceptable to participants. It should not offer shares to be bought by only individuals who can afford them. It may provide bonus shares allocated to all employees no matter in what position. Alternatively, another form of positive incentive may be preferred but always it must be based on improved productivity and profitability. 88. It offers not only advantages for the workers employed, whether they be labourer, executives, etc. It takes in activities for their families and so binds them within the organisation and its future. 89. If you can produce such a circumstance from enterprise to enterprise it will no longer be sufficient for idealogues of either side to merely say that this is a conflict society because the one thing that no idealogue or any body else can ever overcome is a feeling of being part of, being fairly treated, and seeing the advantage of the enterprise also meaning an advantage to the individual. 90. It means that people within an enterprise do not have to hide behind or grow fat on the public purse; that they are out acting in an entrepreneurial way to improve their own undertaking. 91. It also means that once everybody in the undertaking has a stake in it, no longer can poor management exist easily because they are under constant pressure from all sections of the workforce employed. If people at the lower level see very poor management at the top creating problems for their security, their returns, they will be taking some form of action in order to bring that incompetence out into the light of day. 92. It's as necessary in the interests of the health of enterprises and industry to bring middle management and top management incompetence into the open as it is to bring into the open any lack of productivity on the part of the workforce. 93. It is not difficult to see that coupled with the current reduction in the value of the Australian dollar what a significant increase in the productivity of many industries would do. A restoration of confidence in our future in world trade may be more important than any other aspect. 94. This does not mean to argue that all enterprises can suddenly become world-wide competitive operations as a result of any such system. Obviously that could never be, but it would begin replacing what after all is in many cases a completely negative incentive within the Australian system with a positive incentive and bringing management and labour more closely together. It can produce a much more co-operative society. 95. There are examples of corporate societies which have done well but corporate societies are not necessarily co-operative societies. That doesn't mean to say that merely saying it's a corporate society or a co-operative society means that it will do well. It will take effort and conviction. 96. It does not mean applying to Australia the systems and customs of Japan or any other country. It would mean taking some of the advantages of relationships in those countries and if that is done whilst it doesn't mean one hundred per cent success it does not have to. 97. Such an operation can stand on its own feet in regard to any single enterprise or industry. The fact that one or two start off and show example by leadership may result in spin-off if other people see advantage arising from an effort. 98. There is one other aspect of sharing instead of ``them and us'' that is worth adverting to. If there is a co-operative spirit in an enterprise, if there is in fact a position where the people even down on the lowest level see the profitability of the enterprise resulting in increased affluence, better conditions, greater security, not only is there a likelihood of productivity increasing, but there is also a more responsible approach to the question of the use of power, the use of materials, the use of tools and a more responsible attitude to the use of machinery resulting in substantial savings on maintenance and damage. 99. Once workers know that their return at the end of that year may be affected by their failure to look after those cost areas, it doesn't become then a matter of merely asking for the individual to be responsible. It becomes a question of frittering away their own financial return because of irresponsibility. That would be a powerful inhibition against individual irresponsibility and no doubt group pressure would be applied to any individual to bring them into line. The group pressure coming from others seeing their material well-being being affected by any such irresponsibility. THE ROLE OF TRADE UNIONS 100. From the point of view of the trade union movement, does such a sharing spirit within an enterprise mean a lesser or greater role for organised labour? If one took the recent dispute in the Northern Territory between the Mudginberri Abattoirs and the Meatworkers' Union, one would have to conclude that it means a lesser role. However, maybe with a wider and more sympathetic understanding of the critical issues involved by the union leadership that position could be reversed. 101. There is no doubt that a great many trade union leaders with a bias to one particular ideology or with a view of the world shaped by their experiences would be resistant to any concept of sharing with capital as completely foreign to their beliefs. 102. There will also be resistance in many minds to deliberate action to prop up the current political system and there is no doubt that many criticisms can be levelled at the Westminster system of Parliamentary Democracy. Unfair, bumbling, inefficient, unstable. But what other systems have shown themselves in the long run to be better, more efficient, more fair? The answer is none. So it is wise to stay with what is shown as best and prop it up by improving it. 103. The latter viewpoint probably best describes the majority view of the trade union movement. 104. Therefore, it would be clearly desirable, rather than trying to divorce such a concept from unions, to really get unions involved in the concept by bringing them in, by not ignoring them, by in fact seeking in many cases if not their overall approval at least their tacit approval. 105. If that were possible, and the Lend Lease example shows that it is a possibility, then again that creates a measure of co-operation not generally apparent in this country. If on the other hand people believe, or organisations believe, that they can ignore the totality of the trade union movement and proceed with such a plan then the plan will take much longer to come to fruition and be much less certain and fraught with many obstacles. The object must not be to create suspicion and distrust but rather the opposite-to create trust and co-operation. CONCLUSIONS 106. Finally, it must be again emphasised that spin-offs will occur with every successful example. It does not mean that totality needs to be reached or has to be reached within any declared time. It also means that there are other ways to produce increased return for those industries which are successful whilst at the same time not interfering with the tradition of comparative wage justice nor allowing that concept to create precedents for increases to people in straight wages in industries which are not doing so well or who have not successfully applied the concept. 107. The fact that the concept outlined here does not receive sufficient support to effectively change the course of Australian industry or industrial relations poses no disaster scenario. Persons who pose disaster scenarios or for that matter utopian scenarios are at odds with the process of events. 108. Australian living standards or industry will not suddenly collapse. Accumulated wealth does not so suddenly disappear. Pressure of events both social and economic will force change anyway, albeit over a longer time and with more pain. The ``talked up'' resources boom didn't mean, when it did not completely emerge, a collapse of Australia's commodity market. It meant we sold less than we thought at lower prices. 109. However, we cannot rely on policies and activities relevant to yesterday to answer today's problems. A failure to face up to and answer the challenges inherent in current world changes means a continuation of our present gentle slide and a failure to realise anything like our true potential and therefore the true possible economic return to our people. 110. If we are to as successfully as possible answer the challenges inherent in a flexible, changing world-challenges of technology, stable government, productive life-we will need to harness the full potential of our community. To not do so will not produce disaster, merely mediocrity. Senator SHORT —The urgency motion before us today is an important matter. It certainly deserves the support of the Australian Democrats but once again they appear to have sold their souls to a socialist government, further confirming their continuing shift to the Left in Australian politics. I know that Senator Button would also like to support the motion but he, too, is captive to blinkered colleagues who continually override his better judgment. I commend the motion to the Senate. Senator COOK(Western Australia)(4.01) —The urgency motion that we are debating today refers to the need for the Government to abandon its fringe benefits tax and then goes on to propound that this will affect jobs in the car industry. Before I address that, perhaps I should give in to an indulgence and answer a point raised by Senator Short when he quoted from a paper by Charlie Fitzgibbon, the former Secretary of the Waterside Workers Federation of Australia, and said that this came close to the policy of the Liberal Party of Australia on industrial relations. I would be greatly amazed if it comes close to anything that the Liberal Party espouses in industrial relations for the very simple reason that no one in the Liberal Party knows what its industrial relations policy is. It depends on which faction of the Liberal Party one happens to talk to or which leadership aspirant one happens to speak to as to the philosophy espoused. All of the policies are confused and most are contradictory and many members do not know what they are supposed to mean in practice. So let us get it on record from the beginning that, whatever it is that the Liberal Party can be proud of, it cannot be proud of its industrial relations policy because one does not exist and no coherent expression of it can be found anywhere in any policy document of the Liberal Party. That is perhaps not a bad point at which to start in debate on this urgency motion about a fringe benefits tax. What this motion has is the sleazy image of the hot shot back lot second-hand car dealer. It is the sort of motion put forward by people from whom one would not buy a second hand car. Indeed, it has all of Arfur's shonkiness and none of his charm. The proposition is such that, if the Liberals offered it to Arfur of Minder fame, he would not touch it with a bargepole. It is sleazy in the sense that in part of it there are grains of truth but what it then does is to take those grains of truth exaggerate them out of all proportion, disinform and over-blow the rhetoric to present a false and artificial picture and then expect people to believe it. But it is just not true in that sense. The best way to unpick the mystifying rhetoric and the misleading arguments of the Leader of the Opposition (Senator Chaney) is to go back to what is in fact the case. When we came into government we inherited a tax system in this country which was haemorrhaging dramatically. People subject to pay as you earn income tax were shouldering the major burden of all revenue payments to the Government. Other forms of taxation were minimal. We came in to government when there was massive tax avoidance and evasion, with rampant bottom of the harbour machinations and a number of other matters that are well known in the public mind. That is what we inherited. We set about trying to rectify that situation with great courage and with great determination-something that the Liberal Party in all of the years that it has been in government in this country failed to do. We set about it logically, through a discussion paper, through a taxation summit conference and through widespread consultation in the community. We have now come down to legislating on the basis of those recommended changes. At this point let me nail a few of the well known furphies that are propagated by the Opposition. I see that Senator Tate is nodding; he is familiar with these furphies. The first furphy was a furphy from Senator Short about Australia being a high taxing country. The fact is that Australia is not a high taxing country if one compares it with the group economies in the world that are similar to ours. If one compares the Australian economy with the economies of the 23 countries of the Organisation for Economic Co-operation and Development, Australia ranks nineteenth in the level of taxation. Only four countries in our comparable economic group in the world have a lower level of tax. Let us nail this constant furphy, that this is a high taxing country, that comes from the Opposition benches whose members carp and criticise but never contribute a constructive idea. Let us also nail another of those furphies. Despite all the criticisms that come to us, nary a skerrick of a package of comprehensive tax reform emanates from the Opposition benches. The Opposition has lost its courage. It has decided to pick on the difficult taxes that any government has to impose to raise revenue and to criticise those. Then, when we cut outlays to compensate, it criticises because the Government is not subsidising, paying out enough or doing whatever else is needed to prop up the economy in certain areas. The Opposition cannot have it both ways. If the tax system is to be reformed, there will be some things in the package that people do not like. Is the overall symmetry of the package addressing the two fundamental questions of equity, that is, is it fair and is it efficient? Does it close off the rorts and loopholes? That is what this package does, so let us not have this carping, non-productive criticism. With those words, I will now go back to what is a fundamental problem in this whole issue. I will quote from the Income Tax Assessment Act. Section 26 of the Act states: The assessable income of a taxpayer shall include- . . . (e) the value to the taxpayer of all allowances, gratuities, compensations, benefits, bonuses and premiums allowed, given or granted to him in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by him, whether so allowed, given or granted in money, goods . . . The point is that, through all of the years of Liberal Party government in this country, that provision was in the Income Tax Assessment Act. All of those people who received benefit in kind in their employment and did not pay tax on it were rorting the system. For all of that time the Liberal Party did nothing about closing off those rorts. It did not collect taxes that were due. Because it did not bother to collect those taxes, one of the key reforms that we had to address when we came into power was to close off those rorts, in the name of fairness and equity, so that some taxpayers who held privileged positions in the economy were not advantaged to the disadvantage of the poor and underprivileged in the economy. Some were able to manipulate their tax returns to minimise their income. It is because the Opposition when in government never did anything to close that loophole that we now have to wrestle with it. It is strange that the Opposition should question what we are doing in trying to make taxes equitable and fair. Of course, the Opposition is happy to see the burden of tax borne by PAYE taxpayers rather than by any other source in the economy. It is quite happy to see that load increase. I just want to remind the Opposition that since we have been in government we have provided some tax cuts to relieve the burden that built up during that period. I turn to the substance of this urgency motion. As I do so, I note that the Minister for Industry, Technology and Commerce, Senator Button, has well and truly put Opposition members to flight over all the doomsaying and prophesying in which they have engaged on the subject of the fringe benefits tax in the hospitality industry. Despite the scaremongering tactics run by the Opposition about the hospitality industry, the truth is that it is a strong employment industry. In the labour market the shortage of skilled workers has shown up in that industry. There is a demand for employment in that industry rather than what the Opposition members were forecasting a year ago. It is not surprising that, as we come close to the date on which that taxation legislation will become law, scaremongering on this issue has arisen. I want to deal with it first of all by referring not to what Australian Labor Party spokesmen might say but by referring to spokesmen in the community who do not have a vested interest in this industry but who are commentators on the general state of the economy; I refer to those who are in a position of at least offering some dispassionate observations. The general commentary is that what we are now hearing from industry spokesman-this is epitomised in the outpourings of members of the Opposition-is a high blown rhetoric which overexaggerates the issue. If honourable senators are in any doubt about that they can turn to the Sydney Morning Herald of 18 December and read the Ross Gittins article entitled `A car-industry deal we can do without'. That article nails absolutely the misrepresentation and misinformation that abounds about the state of the industry. Perhaps that is endemic in an industry facing some form of reform. However, the Government has been careful to try to weigh in the balance the impact of economic performance of a tax which addresses equity. The original proposals put forward by the Government in the first instance have been modified with respect to this industry to take account of some of the objections raised by it. While we have taken account of those objections we are now hard up against the question of whether, by taking any further account of what the industry is saying, we would be trespassing against the basic principles of equity and fairness which now must become our priority. Let me talk about some of the exaggerations. One of the exaggerations is in the claim that sales are slowing down. It is true that sales are slowing down, but they are not slowing down to the extent to which industry spokesmen are pretending that they are slowing down. Even today an article in the Chanticleer column of the Australian Financial Review has this to say about sales in the car industry: It is difficult to judge just how real the industry's claims are because, while fleet sales are down 20 per cent this year and total first quarter retail sales are down 47,000 on the previous period last year, a drop was expected this year anyway. The industry pushed sales hard last year ahead of the expected slowdown in the first six months this year because of lower economic growth, the introduction of lead free petrol and the fringe benefits tax. The article goes on to say: A recent survey by Howard Belcher and Associates on fleet leasing has found no evidence that fleet size will drop significantly this year-so it depends on which figures you look at. I am not arguing that sales are not down; I am saying that there are good reasons why sales are down. The industry pushed forward to last year sales that would normally have occurred this year. It did this by successfully convincing a number of consumers that prices would be higher this year and they should buy now. There was some legitimate basis for claiming there would be price rises, but not price rises of the magnitude of those being projected by industry spokesmen at present. Let us look at some of the price rises that have been referred to by industry spokesmen; firstly, the wholesale sales tax changes. Of course, we do not regret modifying the wholesale sales tax changes. The Auditor-General's report indicated that wholesale sales tax was a key area for ripping off the economy and, therefore, it ought to be changed to ensure that it was properly collected. So we do not apologise for that. The second area concerns lead free petrol, or the catalytic converters that have had to be fixed to cars from 1 January this year, which has added 4 per cent to the cost of motor vehicles. Of course, that was a Liberal-National Party coalition Government initiative and we are stuck with it. This initiative is by courtesy of the former Government, thanks very much, and now honourable senators opposite are complaining about it. The other area is the fallen value of the Australian dollar, which has had an impact on prices. Of course, no one on the Opposition side-certainly no one I have heard-has said that he or she supports the value of the Australian dollar remaining at the level it was at in the period of the former Government. One of the side benefits of the fall is that there may now be an export market for component manufacturers in Australia that there was not before. There are a number of other aspects about prices, but the essential thing about prices is that last year there was record trading. This year there will not be as many sales; we will be back to a level marginally above the level of sales in the Fraser Government era. So we are still doing better than the former Government did. Indeed, vehicle manufacturers will now make some adjustment to their profit margins to accommodate keeping prices at a level which the market can stand. Prices will not rise to the extent that is being forecast. As Ross Gittins says in the article to which I referred earlier: And don't forget that there are prices and prices. A company which pushes its recommended retail price to a level which proves uncompetitive can quickly make amends with factory discounts and all the rest of it. The games those guys play, you wouldn't put it past them to deliberately put the price up and discount it back. Everyone who has ever bought a car knows that one can negotiate a tremendous number of offsets to the so-called retail price. If members of the Opposition are saying that the real retail price is the price that is being quoted they are saying it without any credibility. Finally, the tax impost itself is widely misrepresented. The Government has changed the way in which the system can be structured and there are two ways in which one can claim some advantage. There will indeed be write-offs- The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! The honourable senator's time has expired. Senator MESSNER(South Australia)(4.15) —I rise to support strongly the urgency motion which has been proposed by the Leader of the Opposition, Senator Chaney, on this most important matter affecting the car industry and other industries in Australia. We have just heard Senator Cook claim that the Opposition is somewhat overblowing this issue. Of course some of his own thinking has to be involved there because, quite clearly, he does not understand the depth of the problems which the motor car industry is now facing. At least Senator Button was honest in admitting that the industry faced a substantial downturn. Already, in the first three months of this year, the market for motor vehicles is down by about 27 per cent compared with that for the previous year. So irrespective of what industry sources are claiming for the rest of the financial year, which is of the order of 90,000 fewer vehicles this year, the figures are showing that that downtrend is already occurring. It is all very well for Senator Cook to stand in this chamber and tell us that the reason the prices for vehicles have risen has nothing to do with the fringe benefits tax but it has all to do with things such as unleaded petrol, the devaluation of the dollar, interest rates and increased sales tax. None of us wants to see sales tax rip-offs. None of us wants to see high interest rates or devaluation causing such inflationary effects. The point has to be made that the Government is in control of policy in regard to the motor vehicle industry. Its policy is to impose further costs on the industry, other than those that are already occurring, by the imposition of a fringe benefits tax. The point that has to be acknowledged is that this Government is making things harder, not easier, for the car industry at a time when it is facing difficulties. Apparently the Government's thinking applies not only to the motor vehicle industry but also to the problems of the resource industries. Senator Chaney has already referred to the problems of the Western Mining Corporation at Kambalda, where it has already sacked 200 workers, as a result admittedly, not only of the fringe benefits tax but also of falling nickel prices and so on. The point has to be made again that nickel prices are falling, so why does the Government choose this moment to impose a further tax on that industry, causing more and more unemployment? Surely that is the height of stupidity and it just points to the depth of the lack of control and policy direction of this Government. Let us just consider for a moment the size of the motor vehicle industry in Australia. It is true that, quite apart from the dealerships all over this country, motor vehicle manufacturers and their component suppliers employ some 67,000 people. If we apply a multiplier that probably would mean that something like half a million people are directly reliant on that industry in this country. Over $1.1 billion in wages is paid to employees and their families in that industry. All this means is that it is a very substantial industry, particularly in my State of South Australia. Industry and union sources show-Senator Foreman, from my State, would be able to confirm this-that if the trends that are showing up at the moment continue we will see a fall of some 4,500 people in employment in South Australia. That has been demonstrated not only by industry sources and the unions but also by the Labor Premier of South Australia, Mr Bannon. He recently faced an election with a whole lot of counterfeit promises but now he is forced to come to Canberra cap in hand to make treaty with the Federal Government to ensure that it reduces the impact of the fringe benefits tax. Those things are the critical factors in determining where the motor vehicle industry is going. We rely not only on that kind of statistical information; the fact is that when we look at the revenue implications of the new fringe benefits tax we wonder what really is in the Government's mind when it introduces such a tax. Honourable senators might recall that when the tax package was announced last September it was said that the new fringe benefits tax would bring in a further $350m of revenue for the Government. This was to be one of the key factors in ensuring that people got tax cuts in 1986 and 1987. But when we take into account the fact that there will be a substantial drop in the sale of motor vehicles, fuel and motor vehicle parts, that there will be a drop in sales tax on vehicles sold of some $82m, that fuel tax will drop by $28m, that there will be a loss of duty on imported vehicles of some $15m and so on, we find that the total of all taxes which will be lost as a result of the introduction of the fringe benefits tax and the impact on the motor vehicle industry will be $300m of that $350m that the Government claimed it would raise. In other words, a net amount of some $50m will be left after all this pain, all this unemployment and all this strife for people in South Australia and other parts of the Commonwealth who are employed in the motor vehicle industry. What is this Government really on about? I can only agree with the statement in the Adelaide News yesterday by a Mr Ken Eustice, a major motor vehicle dealer in the State of South Australia, that the car tax is insane. Of course it is insane, or perhaps the Government is insane for trying to impose that kind of nonsensical tax on the Australian people. What are the effects on employment? We have been over those quite a number of times already. What is the Government's concern about unemployment as a result of changes in the industry? Apparently Mr Keating has little concern for this because in the House of Representatives on 16 October 1985, in answer to a question from a South Australian member, he said: The implication in the question is that the Government should do an employment impact study on every change in the tax system. That is an absurd proposal. I would be in here all the time revealing the Government's assessment of employment impacts for a myriad of tax changes which affect various industries. That is what this Government is concerned about. Obviously it is not at all concerned about the employment effects of raising new taxes, and the fringe benefits tax is an employment-destroying tax. As a result it will destroy jobs not only in the car industry in South Australia but also in the mining industry and other industries right across the country. That is perhaps where we ought to take a lesson from this Government. Surely it ought to be noted now that this Government reacts only when facing a severe crisis. Take the example of the housing industry only a day or two ago when it finally woke up to the fact that its high interest rate policy, which was destroying the housing industry and, of course, destroying the opportunities of young couples to buy homes, was actually destroying jobs. This magnificent Government of ours finally discovered that some 50,000 workers in the building industry would lose their jobs as a result of high interest rates. It reacted overnight with a Keatingesque response which produced a new program for the subsidisation of interest rates through the banking system. This is the way this Government reacts. It reacts only under extreme pressure and duress, at the last moment. Perhaps we have to place the Government under such pressure to bring some sense to it. That is what the Opposition is seeking to do at present. In the last few days the Adelaide News has been running editorials on this very matter and has been putting pressure on Federal Labor members of parliament, including Senator Foreman from South Australia, to face up to their responsibilities to the State and come out and oppose the Government's taxation measures. That is what the honourable senator should be doing. That is what all South Australian Labor senators should be doing. They should be standing up for their State instead of supinely lying down in front of the Keating juggernaut. That is where we stand at the moment in relation to the employment question. Surely this pressure has to be placed on the Government by the Opposition and by the people of Australia. We have chosen this day to put a matter of urgency before the Senate in order to put more and more pressure on this Government so that it will change its disastrous policies, withdraw its fringe benefits tax and give life to the car industry and other industries in Australia. The fringe benefits tax does not impact just on motor vehicles; it impacts on resources, on the small businessman as well as the large businessman, on the farmers and on any number of small town industries right across the Commonwealth. That is the impact of this Government's stupidity. As I have pointed out, if one looks only at the car industry one will find that this tax will raise only $50m net, leave alone what other problems it might create in other parts of industry. It is true that there is rising community concern and we have a clear acknowledgment of those problems from Senator Button, the Minister for Industry, Technology and Commerce, who has the carriage of these matters. The trouble is that, while Senator Button will stand here and say he agrees with Senator Chaney that in fact the fringe benefits tax will have a substantial impact upon industry, that it will cause difficulties and a loss of jobs, he apparently does not have the weight in Cabinet to be able to influence his colleagues to the extent that they will change their minds. This is a disgraceful admission from such a Minister. He knows that his policies are wrong, that they are obviously leading the country in the wrong direction; yet he is unable to bring any change into effect to ensure that there is a continuity of high levels of unemployment. Naturally that will cause concern in the community and will draw more and more comments from the media as time goes by. As Senator Short has pointed out, there will be substantial problems with the car industry plan as outlined by Senator Button, and that has been admitted by him. Downsizing as a result of the new fringe benefits tax proposals is sure to have a further impact on the car plan and one has to ask whether the car plan is flexible enough to be able to take account of sudden changes of this kind, especially where they are induced by direct government policy changes. Clearly we should seek replies to those matters from Senator Button in his capacity as a Minister in the course of debates on this matter. Finally, Senator Cook made a nasty point about used car dealers, with the implication that no one would buy a used car-I presume he meant-from the Opposition. It might please Senator Cook to know that one of the effects of his Government's policies at present as a result of the downsizing that is occurring is to force people not to buy new cars but to start buying second hand cars. That will mean that lower income families will find it more and more difficult to buy a secondhand car as prices rise as a result of that activity. In that way again the Government's policies will impact right across the community as the result of bad thinking, and certainly bad consideration of the new taxation package. Senator COONEY(Victoria)(4.31) —The matter of urgency that is now before the House takes on the form that is followed in many debates in this place. What it really means is that one should take a tax off a particular area of activity because as a result all sorts of benefits will flow. But what the matter of urgency does not deal with is where that tax is to be imposed or, if it is not to be imposed, where the money the tax would otherwise raise is to be saved. One would have thought it would have been fairer if the Opposition had said: `That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to abandon its fringe benefits tax which threatens thousands of jobs in the car industry and other industries, and to impose the tax . . .' in some other area which it could have specified. Alternatively, the Opposition could have said that this could be brought about by cutting costs in education or family allowances. It is implicit in this matter of urgency that the Opposition is intending to cut something. The Opposition has not denied that it may cut family allowances or the amount spent on defence, education or roads. If the Opposition intends to keep on expending, does it intend to increase taxes on wages or the cost of telephones to make up the difference? It is incumbent on Opposition members to explain what they mean. They could give the House a throw-away line and say that they intend to reduce the tax on a particular benefit. But what does that mean? Where does it get us? What new policies do Opposition members intend to put in place to cover the vacuum left by such a move? It shows just how empty matters of urgency such as this become because they do not develop a constructive policy to replace the one the Government is pursuing. There is another aspect of this debate to which I shall refer. Senator Messner referred to this matter among others and said that this was a tax on the car industry. Well, it is not a tax on the car industry at all. It is a tax on benefits obtained by certain people, and by an exclusive group of people. If a person earns a certain amount of wages, he gets taxed; if he obtains those wages in cash, he pays tax accordingly. If on the other hand a person gets a certain amount of wages but nevertheless gets additional benefits or remuneration by having his children's education fees paid or by getting a car for his own use, the suggestion in this matter of urgency is that he will escape the tax that the other person would have to pay. If a person gets a wage of, say, $300 a week and is taxed upon that sum, a certain amount of that wage is taken away. If on the other hand he gets $200 a week by way of wages and an extra $100 by way of fringe benefits, the Opposition proposes that he should pay less than the person who gets his income in cash. Where is the equity, the justice in that? Why does the Opposition put forward this proposition, which it no doubt intends to bring in if it becomes the government, whereby people who earn an equal amount of remuneration are nevertheless taxed differently, because in one case that remuneration is obtained in cash and in the other case it is obtained partly in cash and partly by way of fringe benefits? Where is the equity in that? The Government is not simply about economic rationalism. It is also about social justice and equity. Where is the equity in the proposition that is now before the House? Senator Watson —We are not talking about Opposition policy. We are talking about your Government's policy. Senator COONEY —It is being said that I have got the matter of urgency wrong, but what is being said in this wording is that there is need for the Government to abandon its fringe benefits tax. That tax is put upon benefits obtained over and above the amount obtained by way of wages. The proposition remains that if a person obtains $300 by way of wages, he is taxed at a particular level, but if the remuneration is obtained in cash to the extent of $200 and the extra $100 is obtained in fringe benefits, according to the proposition put by the Opposition that person should be taxed only on the $200, whereas the person who obtained his remuneration by way of cash is taxed at whatever level applies. I suggest that that is unjust and inequitable. It was said that because of the present situation the Minister for Industry, Technology and Commerce (Senator Button) should resign. That would have been like asking Don Bradman to retire when he was leading the Australian test team in the 1940s. Senator Short —He was winning. Senator COONEY —So was Senator Button. Let me go down his batting record. Last year in 1985 there was an increase of 9.2 per cent in the passenger vehicle market over the previous year-the highest sales rate ever. The same argument also held for commercial vehicles. Let me go through the figures. In the previous year of 1984 466,000 passenger vehicles and 172,000 commercial vehicles were sold. That figure is to be compared with the 1982 figure of 152,000 commercial vehicle sales, some 20,000 fewer. That is what has happened under the present Minister. If there is a decline in the number of vehicles sold in 1986, that is understandable given the record sales that have flowed through. One of the problems in the Opposition's argument is that the tax to which the matter of urgency refers has not yet been imposed. Senator Chaney —We dealt with that. Senator COONEY —The Opposition is saying that it is reduced in terms of anticipation, that if people anticipate the tax, therefore something happens. But the Opposition has produced no evidence beyond imputation. Opposition members throughout the debate have made a lot of statements without backing them by evidence. The Opposition has merely referred to fear in the community and has sought to add to it. It has suggested that that fear has caused the present situation, without in any way producing evidence to show that it is so. Senator Robertson —It is called the Messner syndrome. Senator COONEY —Yes, I agree, it is the Messner syndrome. In talking of the way in which evidence can be used, reference was made to a statement made by Mr Charlie Fitzgibbon. It was said that he went along with all the Opposition propositions. What Mr Fitzgibbon was in effect saying was that industry, management-workers and employers-should co-operate more and more. The thrust of his remarks was that there should be co-operation in industry and that that will lead us to the vision splendid. Senator Short —But he said `co-operation through flexibility'. Senator COONEY —I am talking about through flexibility. Of course, this Government has proceeded with a flexible policy, a policy which has improved the car industry. There is no denying that is a fact. Senator Messner —Flexibility in the current circumstances, not the past. Senator COONEY —The reality if one looks at the evidence of what has happened since this Minister has been Minister of the portfolio is that the automotive industry has improved, and that has been acknowledged. What the Opposition has done is to extrapolate a very short period say that it is typical of the whole scheme and deduce from that very limited amount of evidence conclusions that just do not hold. I simply say that the way the Opposition has adopted a good political approach but a logical approach requires a much better effort than that. The other problems the Opposition faces are these: First of all, it is talking purely in economic terms in a situation which requires not only an economic approach but also a social approach. The Opposition talked in terms of reducing wages because that in effect is what members opposite talked about before. The other thing the Opposition does is to ignore its own benefits it has brought. I will stress one of those. Much criticism has been made about unleaded petrol. I would have thought that, instead of that being a criticism of the Opposition when it was in government, that is something to its benefit because a health measure has been introduced which will help the ordinary citizen of this country. Why does the Opposition suddenly resile from that position? Why does it now turn its back on a policy and a program that the Opposition put into operation and which I would have thought was something it should be proud of? Now it puts it forward as an impost on industry which should not be tolerated in some sort of way. That seems to me to be quite wrong. The Opposition should be quite proud. The Opposition says it adds 4 per cent cost to the cars. So what? What about the number of lives it will save? What about the purity of the atmosphere it will create? What about the social and health benefits? I really cannot see why the Opposition, having brought that policy in, is now turning its back on it, unless it simply wants to make a political point at this stage. I suppose that is a fair enough thing to do in a chamber like this. On the other hand, if the Opposition wants to put forward a policy which may help the Australian people, which may take us forward and which may lead to a program which can be debated in this House, really something other than what it has done ought to be brought forward. Senator Short spoke about the need to justify that vehicles allegedly used for commercial purposes were in fact so used. He said it would require a lot more work to be done to show that in fact the vehicle was used for legitimate business purposes. There are two things I want to say about that. It raises the point first of all, which may have been overlooked in this debate, that if in fact a vehicle is used in the course of business and if in fact expenditure has been made on transporting goods in the business, that is tax deductible. What is not tax deductible is that part of the use of the vehicle which is for pleasure, private use and so on. What is wrong with that proposition? If a person uses the same vehicle to do those two things-uses it for both a commercial purpose and a private purpose-why should a person not be obliged to identify the difference between the two and to pay tax on part of that and pay no tax on the other part? I think it should be clearly understood that this is not a debate about taxing the use of vehicles in business in the production of income. This is a debate about taxing vehicles and the cost of running those vehicles for private purposes. Let me return to the important point that I perhaps began with and which I have made before. In that context it is to be remembered that this is a tax on an aspect of remuneration which is paid in kind rather than in cash, and in those circumstances why should not tax be paid as everybody else has to pay tax on their remuneration? Senator FOREMAN(South Australia)(4.45) —As a senator who originally came from the vehicle industry I would like to make a few points on the matter of urgency. The importance of the vehicle industry as an employer cannot be overstated. In South Australia the vehicle industry has a special significance. It is part of the industrial backbone of that State. What is more, when all of the doomsayers opposite have had their say and when the legislation is finally brought down the motor industry will still be a major employer in South Australia and in many parts of Australia as well. The fringe benefits tax obviously worries members of the Opposition, not because it threatens jobs but because it exposes taxation rorts which they, when in government, failed to stop. The Opposition seems to want an Australia in which honest wage and salary earners pay for their lunch while unscrupulous high income earners can write off their Sunday lunch in a plush restaurant as a taxation deduction. Moreover, it seems happy that the same high income earners can drive to that Sunday lunch and away from it again in a Mercedes and write the expenses of that off as well. The Opposition has a strange view on such things. The plain fact of the matter is that the Government has had to act in this area to arrest taxation evasion on a very significant scale. The provision of a motor vehicle as part of the income package ought to attract taxation. The Government believes that any sense of equity would hold that taxation principles should be and must be fairly implied. A car which is provided for the personal use of an employee or part personal use is income. The desire of some employers to provide a car or other fringe benefits puts the taxation burden on other income earners who have no such provision. This seems to be the world the Opposition is supporting. The statement of the Treasurer (Mr Keating) in September made the situation quite clear. Motor vehicles provided as part of a person's employment will be taxed at company rates of taxation. However, if a log book is kept of the use of the vehicle and no personal use is recorded, no tax is paid. Under this method taxation is paid only on the proportion of private to employer use of this vehicle as a percentage of the total annual vehicle costs. Employers, however, can use a different method still. In that statement the Treasurer presented a formula as follows: Less than 25,000 kilometres per year, 11 per cent of the original cost of the vehicle to be paid; between 25,000 and 40,000 kilometres, 7.4 per cent of the original cost to be paid and over 40,000 kilometres, only 3.7 per cent of the original cost of the vehicle to be paid. This means that if private use does not occur, not a penny of taxation is paid. When private use is made, the formula log book method provides an adequate opportunity to treat the whole matter fairly. In my opinion, the Opposition has overstated this case to defend a growing tax avoidance scheme to the cost of the community as a whole. The Government has always put employment as a high priority and it still does. Another principle which this Labor Government has striven for is taxation justice. It is in these areas that this Government has the runs on the board-the provision of new jobs and the fight against tax avoidance. This Labor Government does not need a lecture on either of these two issues from an Opposition which failed so miserably to address either when in government. Senator CHANEY(Western Australia-Leader of the Opposition)(4.50) —in reply-I thank Opposition senators for their contributions to the debate on the motion that I have moved-namely, the need for the Government to abandon its fringe benefits tax which threatens thousands of jobs in the car industry and other industries. I particularly thank Senator Messner and Senator Short, who supported the motion. I shall not devote much time in this reply to the arguments that they put forward, which were complementary to those which I put in arguing the case originally. However, I want to comment on the defence against the motion which was put forward by the Minister for Industry, Technology and Commerce, Senator Button, and by Senator Cook, Senator Cooney and, latterly, Senator Foreman. What is clear is that no real defence has been put forward to the proposition contained in our motion. The Opposition has made it clear that a combination of circumstances is pulling down motor vehicle sales. We did not, as was suggested by Senator Button, say that all of those circumstances were within the Government's control-although many of them were influenced by the Government. What we were saying was that the present environment in which the motor vehicle industry is working is an environment in which it can ill afford the imposition of new government taxes, of new burdens which will further depress sales. In the face of those circumstances, the reality is that the Government is adding new tax burdens which will add further downward pressures on sales and which have already put pressure on the sales indeed, the industry says that 35,000 extra sales will be lost because of the imposition of this new tax, and the industry suggests that 10,000 jobs will be lost. I was very disappointed that Senator Foreman, to whom I had gently commented before he spoke that I thought that he might well speak on my team, addressed not one single remark to the question of the impact of these taxes on the industry. He confined his remarks, in what was admittedly a brief opportunity for a contribution, to the taxation questions and questions of tax equity. But he suggested that the Opposition had overstated the case. What the Opposition did was, in fact, to quote three authorities. We quoted the Labor Government of South Australia, which has come to this Government and said that 4,500 jobs will be lost in South Australia. We quoted the industry itself, which, in what appears to be a conservative statement, has suggested that 10,000 jobs will be lost around Australia. We quoted the union from which Senator Foreman has come, which has given the most expansive view as to the number of jobs which will be lost because of this tax. The union has said that 25,000 jobs will be lost around Australia. To suggest that we have overstated our case is ridiculous, because the union has said that 25,000 jobs will be lost, and we have simply put forward those three estimates, among the many estimates that have been put forward publicly, as a guide to the Government on the sort of views that are held, and we pointed out that the statistics this year make it clear that damage is being suffered already. There is a substantial reduction in the volume of sales in calendar 1986. We had a fascinating contribution to the debate by Senator Button. He concedes his embarrassment at the situation in which he finds himself. He concedes that damage has been done to the industry or that it will be done to it by this tax. He concedes defeat in Cabinet in trying to do something about it. I can well understand that Senator Short, who spoke after Senator Button, felt constrained to call upon Senator Button to resign, because, after all, we have a situation in which the Minister, who has invested a great deal of effort and political capital into the car plan, is now admitting that the actions of his own Government are counter to the thrust of the plan. That is a very serious admission for the Minister to make. Senator Cooney, who suggested that we were trying to play on fear in the community in regard to this matter, might care to look at the history of the Opposition's support for the Government in its car plan since May 1984. The reality is that we have not sought, for example, to join with elements of the trade union movement which have at times attacked the Government's car plan. We have said that we believe that it is in the interests of the industry that there should be bipartisanship with respect to the plan, and publicly and privately we have given that support to the plan. In those circumstances, it does not fairly come from Senator Cooney that we are playing on fear in the community. We are saying in this place what has been said in the privacy of discussions with the Government, by the Labor Government of South Australia, which has then told the Press, and by the Federated Chamber of Automotive Industries privately to the Government month after month before it has made that information public, and we have quoted the public statements of the trade union movement, which has been very vocal about the potential for the loss of up to 25,000 jobs. What we got from Senator Button was a series of concessions. I have labelled today `Honesty Day'. We have had many concessions from Senator Button today about some of the realities put to him in this debate and at Question Time. But I complain about Senator Button's misrepresentation of our case. We did not suggest that it was for him to reverse the floating of the dollar, that he should be reversing all of the elements which have come together to damage the sales prospects of the motor vehicle industry. What we said to him was that in the circumstances that apply he had a responsibility to do something about the new tax imposts which are being put upon the industry through the fringe benefits tax. With respect to Senator Cook's contribution, I must say that I think he is getting very confused about the faction to which he belongs. I think that he should move back to the Left faction, because again in the Senate today he conceded that he is part of the high taxing section of the Labor Party. He is famous for a number of statements in this place. Time does not permit me to go through some of his better bon mots, but I treasure his admission that the Labor Party is a high tax Party. That is one of his honest contributions to debate in this place. Senator Cook —I said that it is a low taxing country. Senator CHANEY —If honourable senators look at the report of the first seven or eight minutes of Senator Cook's speech on this topic this afternoon, they will find that he was justifying the levels of taxes in Australia. His Government is the highest taxing government in Australia's history. What he is saying is that we are a low tax country. All that I can say is that he has the decency, the honesty, to say that he supports high taxes; good on him. But I do not believe that the people of Australia support high taxes. Senator Cook may believe that, but I do not think that the people do, and I do not believe that the people employed in the car industry are interested in hearing defence of high taxes in terms of defending the imposts on this industry which are to be imposed from 1 July. Senator Cooney made a couple of statements which perhaps need to be challenged. He suggested that the fact that the tax has not yet been imposed meant that all this debate was irrelevant. The fact is that this new tax, which will apply from 1 July, will apply to vehicles purchased from this point on and, indeed, all vehicles which are currently being used. So the argument is one which is certainly not being mounted by those who have been making representations to the Government. With the greatest respect to Senator Cooney, I do not believe that that point is valid. It may well be true, of course, that the impact of the new tax will be more severe after 1 July. The Opposition believes that that may well be so. But let us hope that that will not be so, because already there has been a downturn, which we bitterly regret and do not want to see. We hope that the impact of the tax will not be any greater later in the year than it has already proved to be. Senator Cooney also suggested that there was no evidence to back up the suggestions that were made about loss of jobs. I can only say that that was a very brave statement from a Victorian senator. Bearing in mind the drop in sales during the first three months of this year, to suggest that it is now just a matter of academic guesswork is a very bold and a very inaccurate statement, and one which I think will return to haunt Senator Cooney. I believe that the Senate should adopt this motion. I believe that we should assist Senator Button to overcome some of his embarrassment by getting the Government to change its position on the fringe benefits tax. It is a particular difficulty for the motor vehicle industry. It puts under additional pressure, as Senator Button himself conceded, a car industry plan which we want to succeed for the sake of Australia's manufacturing future. It is time for the Government to admit its error and to reverse this decision. I commend the motion to the Senate. Senator COOK(Western Australia) —Mr Deputy President, I claim to have been misrepresented in remarks made by Senator Chaney when he said that I had said that the Australian Labor Party is a high taxing party. I had not said that. Reference to the Hansard report will show that I did not say that. What I said was, in reply to remarks made by Opposition senators in the debate, that Australia is a low taxing country. I cited a table of tax revenues of Organisation for Economic Co-operation and Development countries dated 1983 showing tax as a percentage of gross domestic product. Senator Lewis —This is 1986 that we are talking about. Senator COOK —This is the latest available table. In the table Australia was ranked nineteenth out of 23 OECD countries, which is to say that we are the fourth lowest taxing country out of 23 like economies to Australia in the world. That can hardly be, under any flight of fancy or emotional rhetoric, an argument for Australia being a high taxing country. In fact, it was a direct reply to the misrepresentations about Labor's taxing policies made by the Opposition. Question put: That the motion (Senator Chaney's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 8 —— Baume, Michael Messner A. J. Baume, Peter Newman, J. Bjelke-Petersen, F. I. Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Reid, M. E. (Teller)Carrick, Sir John Sheil, G. Chaney, F. M. Short, J. R. Collard, S. J. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Jessop, D. S. Walters, M. S. Knowles, S. C. Watson, J. O. W. Lewis, A. W. R. Withers, R. G. MacGibbon, D. J. Aulich, T. Haines, J. Black, J. R. McClelland, DouglasBolkus, N. McIntosh, G. D. Childs, B. K. McKiernan, J. P. Chipp, D. L. Macklin, M. J. Coates, J. Mason, C. V. J. Coleman, R. N. Morris, J. Cook, P. F. S. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Robertson, E. A. (Teller)Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Siddons, J. R. Foreman, D. J. Tate, M. C. Georges, G. Vigor, D. B. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Grimes, D. J. Hill, R. Colston, M. A. Durack, P. D. Richardson, G. F. Kilgariff, B. F. Jones, G. N. Crichton-Browne, N. A. Sibraa, K. W. Archer, B. R. Maguire, G. R. (Senator Button did not vote, to compensate for the vacancy caused by the death of Senator Missen). Question so resolved in the negative. Senator SHORT(Victoria) —Mr President, I claim to have been misrepresented and seek leave to make a personal explanation. Leave granted. Senator SHORT —In the debate just concluded Senator Cook said that I had said that Australia was one of the most highly taxed countries in the world. Australia is a much more heavily taxed country than Senator Cook suggested, but that it not what I said. What I said was that taxation in Australia is now at its highest level in our history and that that is irrefutable. Any suggestion by this Government that it has cut taxation overall is simply untrue, on whatever basis one may wish to calculate it. Senator ARCHER(Tasmania)(5.08) —I move: That the Senate take note of the paper. I commend the National Crime Authority's first annual report. I also particularly commend the work that has been done for the Authority by Mr Justice Stewart, Mr Bingham and Mr Dwyer during that period. I believe that Mr Justice Stewart's contribution to crime fighting in Australia has been absolutely outstanding. The report covers the formation period of the Authority to 30 June 1985. Much has happened since then. The comments in the report should be dealt with and considered very carefully. The report is very well written and careful. I believe that it was intended to be used and very carefully studied. I recommend that the report be read by every member of parliament. There is no doubt that crime and corruption have reached mammoth proportions in Australia. I believe that not nearly enough people are taking it seriously enough. All sorts of cosmetic things are being said and done. I believe that it is time we took the matter very seriously. It is important that we look at what is being done and at the areas where action may be curtailed because of our lack of appreciation of their operation or because of the impediments of legislation. One has only to look at the range of crimes that are covered. Page 24 of the document shows a whole group of crimes at which the National Crime Authority was looking during its first year of office. It also goes to show that lots of skills and all sorts of legislation are needed to make it possible for the Authority to do its job properly. The Costigan transfer was a massive operation and required quite a lot of work during the formation year. Australia waits for more results from the follow-up of that work. The matter of publicity has been raised. My view is that no information should be released that may prejudice personal security, interfere with any investigation or deter information from being brought forward. If we follow those rules we will not go far wrong. I do not think that it is necessary to do what one Australian newspaper suggested and put the names of people on the front page and deal with them in that way. That is not appropriate. It is regrettable that differences still exist between the Crime Authority and the Parliamentary Joint Committee on the National Crime Authority. I hope that we will be able to get them sorted out to the approval of both points of view. There is a need for substantial changes in legislation. I hope that we will be able to deal with that matter through the Committee in a bipartisan parliamentary way in the interests of ensuring that crime is dealt with more adequately. Clearly, there are deficiencies and omissions. The report suggests how these can be overcome. It concerns me that there is such a multiplicity of overlapping organisations. The Committee could well look at the organisation of crime fighting equipment in Australia and make recommendations on how we can improve it. We are all very interested in the Government's new proposal on drugs but I am disappointed to find that of the $42.26m that has been itemised as the contribution towards this fight, every cent has already been promised, or was in last year's Budget or was set aside at last year's crime summit. Not one new dollar in the money mentioned will come forward. Anybody who believes that this is a massive new onslaught into fighting crime will be terribly disappointed because that is simply not what it is all about. I ask the Government to take another look at this and see whether it can do something towards trying to patch things up and have better tools for the job. Senator CROWLEY(South Australia)(5.13) —I shall make just one small comment before I proceed to my remarks. My understanding is that moneys under the drug allocation-about $30m worth of grants in the last year-are for improving services already on the ground. It is not true that there has been no money for providing increased services for the giving of attention to individuals and support for a variety of institutions dealing with the drug problem. It is not only publicity expenditure at this point. I will comment about the National Crime Authority annual report partly because of a longstanding acquaintance through the preparatory inquiries of the Senate committee and because I am a member of the Parliamentary Joint Committee on the National Crime Authority. That goes to a point also raised by Senator Archer about some difficulties on which I will comment briefly. First, I endorse the remarks by Senator Archer about the content of this report. It is very comprehensive and gives very briefly a potted history of the need for a National Crime Authority and its emergence in its present form. Anybody who has an interest should run through the section dealing with the history of the establishment of the NCA as he or she would find it a very useful summary and a very adequate coverage of that topic. The report goes to some of the difficulties in the establishment of the National Crime Authority, not the least being the transition period when the NCA took over many of the considerations and deliberations of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. As Mr Justice Stewart makes it very clear on the first page of the report: . . . the Authority was not then, is not now, and will not in the future be merely an extension of that Royal Commission. The Authority is a national body and the Royal Commission's work was but one facet of the significant task now before the Authority. That is a very important point. Secondly, before looking at the difficulties of what material the Commission should pass over to the Authority the report addresses another very important area-administration and the appointment of staff. Mr Stewart says: In view of the specialised nature of the Authority's work and the importance of obtaining the best available staff, the Members and I were determined to play a large part in staff selections. As a result, and as the Joint Parliamentary Committee also established, a considerable chunk of the Authority's time was taken up in those staff appointments and administrative details so that, even though there was a delay in the establishment or the actual functioning of the Authority, there was a further delay as the Authority spent its time getting the staff appointed and getting satisfactory administrative procedures in place. Further in the report it was stated that much of the early work was devoted to establishing satisfactory liaison, co-ordination and co-operation arrangements with other agencies. I turn to page 17 of the report, which comments briefly on the Parliamentary Joint Committee. This report came down ahead of the report of the Parliamentary Joint Committee pointing to the difficulties that the Parliamentary Joint Committee has in its required role vis-a-vis the National Crime Authority. The report states very clearly: The duties of the Committee as set out in section 55 (1) of the National Crime Authority Act, are- first- . . . to monitor and to review the performance by the Authority of its functions. It goes on to spell out the other requirements and it is on that point that we have had considerable difficulty. The Joint Parliamentary Committee tabled its first report and a statement that addressed that difficulty. I hope that in the coming year the next National Crime Authority report will be able to say that a satisfactory arrangement has been reached between the two bodies, but it is certainly not the case at the moment. Comments during a television coverage last night on the work of the Parliamentary Joint Committee will not help that process. It is my understanding, having watched that program, that wrong information was provided about what the Parliamentary Joint Committee is seeking from the National Crime Authority. We did not intend and will not ever intend to require information that would in any way jeopardise the work of the National Crime Authority. It highlights a difficult point. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator Sir JOHN CARRICK(New South Wales)(5.18) —When the legislation to establish the National Crime Authority was before this Senate the Opposition made it clear that the Government has seriously weakened the powers of the body to pursue fully its responsibilities. Instead of being given independence to seek wherever it wanted and create its own initiatives, they were to be politically determined. We had the extraordinary situation of a Federal-State committee having the ability to determine and veto whether an issue should be pursued. It is well to remember that the Hawke Government at that stage would have proceeded with an authority which would have allowed State governments to veto the right of the Commonwealth to investigate a matter that was purely in the Commonwealth's jurisdiction. It was only by the action of this side of the chamber in amending the Bill that that absolute monstrosity was ruled out. It is interesting to know that in recent days in a public broadcast on Four Corners a series of royal commissioners came out with a very clear message. That was despite the fact that there had been some five royal commissions-the Moffitt Royal Commission on Alleged Organised Crime in Registered Clubs in New South Wales, the Woodward Royal Commission into Drug Trafficking, the Williams Royal Commission of Inquiry into Drugs, the Stewart Royal Commission of Inquiry into Drug Trafficking and the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union-which brought down reports all of which were damning indictments on our inability to deal with the drug situation. The commissioners felt that insufficient action had been taken on these reports and, where action had been taken, it was too late. Mr Justice Woodward had a strong message, as I understand it, regarding the deliberate action by the New South Wales Wran Government to go it alone in a particular way on drugs and he felt that that would stifle law enforcement. What has happened is an incredible situation. Against the background that the Government is saying that it is determined to put down drug abuse, we have in Australia a Government that has brought in legislation which has deliberately restricted the ability of governments to do this. We have had some measure of success in bringing about the trial and conviction of some drug offenders but what we have not done is get to the core of the problem. Recently in New South Wales a series of people, who were engaged in perhaps the largest of the known drug smuggling rings into Australia, were brought to trial and sentenced. I refer to the purchase of a Panama freighter which was loaded with drugs, I think, from Lebanon. The freighter was brought to just off Darwin. The drugs were loaded into barges. The freighter was sunk, the drugs were distributed by trucks and the crew was got rid of through Bali. One could even be satisfied and say: `The courts have dealt with the matter'. It is interesting that those who were tried all pleaded guilty and we must ask ourselves why they did that. That is usually a fair indication that it is safer inside gaol, rather than outside, in terms of who were the principals, the proprietors. However, the fundamental question that has not been answered is: `Who put up the enormous tens of millions or hundreds of millions of dollars which allowed this situation to occur, that is to buy a freighter and to manipulate this event?' At this moment we are dealing with employees. We are not dealing with the principals involved. Anything that a government-State or Federal-does to restrict the rights of the National Crime Authority or other authorities to hunt freely wherever the trail may lead is bad, crippling and prevents us from getting to the source. I believe that the National Crime Authority cannot do its job thoroughly at this moment because of the restrictions it is placed under. I commend it for what it is trying to do. I regret very much that a Labor Government which says that it is doing something on drugs should have put a major restriction on anyone who is achieving justice in this regard. Senator JESSOP(South Australia)(5.23) —I also want to refer to the National Crime Authority's report. I support what Senator Crowley said about the activities of the Parliamentary Joint Committee on the National Crime Authority which was set up by this Parliament. I assure the Senate that no members of the Committee have a desire to be informed about matters related to current investigations. Our duty, as we see it, is to ensure that we are equipped to report on the methodology of the Crime Authority, on the morale of the staff and matters dealing with administration rather than investigation. I expect that we have a responsibility to examine the Authority to ensure that necessary legislative powers are given to it to ensure that it can carry out its very important task with more efficiency and effectiveness. I believe that in the community at large there is widespread and growing concern about major crime and this report highlights the variety of crimes that are being brought under notice by the Crime Authority. I think Senator Archer referred to page 24 of the report which details those matters. The report states: The abuse of both legal and illegal drugs is acknowledged as one of Australia's gravest social and criminal problems. The Authority's concern about illegal drug abuse stems from the fact that four of its five references and the majority of its general investigations involve drug related offences. While there is much to praise in the drug education program that has recently been authorised by the Government, much greater effort is necessary to properly fight and find the generals who run the drug syndicates rather than the front line troops who distribute the drugs. Senator Sir John Carrick referred to that a moment ago in his speech. In this respect I suggest that the Government, through the Inter-Governmental Committee associated with the National Crime Authority, should produce the necessary legislation to give both the Authority and the Commonwealth and State police the necessary powers to combat major criminals in Australia who are a scourge on our society. In particular I support the National Crime Authority's request for legislation similar to the United States racketeer influence and corruption organisations statute and the entering into mutual assistance treaties to enable international trafficking to be countered. I certainly believe that telephone tapping to obtain the necessary evidence is justified in the case of this illegal trade. I know there is an argument about civil liberties but when we are dealing with mass murder, the introduction of drugs to school children and a perpetual pushing of this obnoxious material, I think that those matters provide an adequate reason why police should be given the right to tap telephones provided, of course, they have evidence to suggest that in doing so they will be able to follow the money trail and eventually bring to justice the major criminals whom we would all like to see behind bars and out of the way in order to prevent further problems associated with drug trafficking in Australia. The question of providing Government support for Federal and State police to do the job more effectively is essential. This has been highlighted recently, I think, by Mr Woodward, Frank Costigan, QC and Mr Athol Moffitt in his book A Quarter to Midnight. All of those comments ought to be taken account of by the Government so that the war against these severe major crimes in Australia can be effectively won. On two occasions we have had talks with the Crime Authority; we have talked with the Special Minister of State (Mr Young) and pointed out some difficulties between the Crime Authority and the Committee. We intend following up that matter shortly with the Minister and the Crime Authority. Senator PUPLICK(New South Wales)(5.28) —The annual report of the National Crime Authority allows the Senate the brief opportunity of looking at the work which is being done in the pursuit of organised crime in Australia. It demonstrates the extent to which certain elements of both the Federal and New South Wales State Labor governments are simply not serious about the fight against organised crime. The editorial in the Age of 8 April headed `NCA: the verdict of three wise men' draws attention to the effectiveness of the NCA and states that it is: . . . undercut by rivalries between the various law enforcement agencies and governments. In theory, they are all working for the same end but, as Mr Woodward noted, organised co-operation between Federal and State agencies is lacking. The editorial continued: . . . The Authority's capacity to turn back the tide of organised crime and corruption in Australia will continue to be seriously limited In the same issue of the Age attention was drawn to the fact that Mr Athol Moffitt, who headed Australia's first inquiry into organised crime 13 years ago, Mr Phillip Woodward, QC, Sir Edward Williams and Mr Frank Costigan, QC, all former Royal Commissioners, have all attacked the hobbling of the powers of the National Crime Authority and related authorities throughout Australia to deal with the question of crime in this country and it is no wonder. I invite you, Mr Deputy President, and members of the Senate, to consider what has been happening in New South Wales so far as this matter is concerned. I invite honourable senators to consider the fact that the Premier of New South Wales, the Federal President of the Australian Labor Party, has been launching the most bitter attacks upon Mr Temby, QC, the Director of Public Prosecutions, for daring to pursue matters of organised crime. I invite honourable senators to consider that the use of the no bill provisions by the Attorney-General of New South Wales has reached such scandalous proportions that Mr Masterman, QC, the Ombudsman of New South Wales, has drawn public attention to this misuse of the Attorney-General's power under government direction. As a result, Mr Masterman, a Queen's Counsel of absolutely impeccable reputation, has found himself savaged and attacked by Mr Wran, the Premier of New South Wales. I invite honourable senators to consider the fact that the New South Wales Government, in order to get itself off the hook at the last New South Wales election, announced the establishment of the Commissioner of Public Complaints. That office was set up in a way that made it totally unable to deal with the issues of organised crime. It was set up on 20 August 1984, but empowered to investigate only complaints against senior public officers and officials that occurred after that date, and then was denied the right to use its royal commission type of powers against those individuals concerned so that the Commissioner, Mr Lloyd Jones, QC, said on 5 September 1984 that his office had acted on none of the 14 complaints received because 10 of them were outside the scope of his ability to act. I ask honourable senators to consider that the very distinguished judge, Mr Francis Hutley, on his retirement from the New South Wales Court of Appeal on 19 October 1984, drew attention to the increasing tendency of the New South Wales Government to attempt to put pressure on the judiciary and to interfere with the judiciary in the pursuit of organised crime. I invite honourable senators to consider that, when the recommendations of the Costigan Royal Commission into the Activities of the Federated Ship Painters and Dockers Union were announced, the Prime Minister, Mr Hawke, said on 1 November 1984: . . . as far as my Government is concerned, we will be taking a very positive approach to (all) his recommendations . . . The Government then rejected his recommendations for the NCA powers to be extended, that a further royal commission on drug trafficking be held, that the veto power of the Federal-State Inter-Governmental Committee over the NCA's coercive powers be removed and for the institution of a taxation investigation tribunal, a tax crime investigator and a port security authority. I do not have time to draw the Senate's attention to Senator Richardson's attempt to interfere in the prosecution in the Enmore conspiracy case and the attempt of the New South Wales Government to put pressure on the magistracy over that particular matter but what I do invite honourable senators to turn their attention to is the simple fact that the fight against organised crime has been hampered in this country, both at the Federal and New South Wales level, by a Labor Prime Minister and a Labor Premier and Federal President of the Australian Labor Party who have too many skeletons in the closet to hide and who are determined to hide them, determined not to allow them to be exposed, determined to hobble the fight against organised crime in this country, and they should be ashamed of themselves. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Senator REID(Australian Capital Territory)(5.33) —It almost seems like a hoax when we have an announcement of the spending of $100m on the drug offensive. Of course, $100m is not the amount being spent, although I guess that a number of people who have seen the publicity so far may have been misled into believing that that is the case. No one could object to the concept of a drug offensive. The objects, as stated in this rather expensive brochure we have been given, are to work in the areas of drug education, treatment and rehabilitation, research and law enforcement. But we know from this report that we are discussing that drug offences are the principal offences being dealt with by the National Crime Authority. We know from the report that the drug industry is a very big and profitable industry in Australia. It is important that it is able to be attacked on a proper basis. Of the four references in the report under consideration, drugs are the basis of them, along with other things such as tax evasion and distribution offences. The National Crime Authority report also deals with some of the offences which are not included. We all know how powerless the Authority really is. The restriction of its powers has been referred to this afternoon. It has no power to tap telephones-not that that is a desirable activity, but everyone in the drug industry can tap telephones as they wish, with very little risk of getting caught or suffering as a consequence. The Authority has less power than a royal commission. The Government seems reluctant to hit into this very lucrative industry. The reports of previous royal commissioners who have inquired into the drug industry have been referred to this afternoon. I refer to the reports of Mr Woodward, Mr Costigan, Mr Moffitt and others. Let us not forget that drugs are big business and big money, but drugs are also a huge social problem. They have completely destroyed the lives of many young people in this country. They have seriously interfered with the lives of many others. We should not underestimate what drugs can do to a family. I hope this campaign that has been announced will be successful in discouraging young people from attempting to try drugs. I welcome the idea, but it does not get to the availability of drugs. The problem that we are really talking about is the need for an increase in the amount of money spent on the surveillance of shipping ports and airports. What are we seriously doing about monitoring what goes on around our coastline? What are we seriously doing about penalties for people caught in drug activities? Certainly, many of those caught are the small fry and not the big fish, but the penalties need to be sufficiently severe to act as a deterrent; at present most of them are a joke. There was a report recently of a drug boss being sentenced to 20 years in gaol for involvement in a $40m drug ring. It was also indicated in the report that a period of 13 years had been set as a minimum non-parole period. But I wonder what period he will really serve. He will probably be in gaol for about three years; that seems to be the case these days. It is pretty easy to get out of gaol. There is no longer a serious belief in this community that a gaol sentence means what it sets out to mean and that it is in any way a deterrent for those involved. How much of the $40m, or whatever the real amount is, will still be available to that drug boss when he gets out of gaol in a few years time? How seriously are we ensuring that assets are forfeited? We need to ensure that our police are properly equipped and trained. What happened to the report a while ago that stated that the Australian Federal Police was grossly undermanned and that another 1,200 police were needed? By all means let us seek to educate people on the horror of drugs and seek to turn young people against drugs. By all means let us seek to provide the best means of rehabilitating those whose lives otherwise would be virtually destroyed, but let us be serious about it and give the National Crime Authority the power to attack the source. Let us impose real penalties that act as a deterrent. Let us have adequate police resources to do the job that the police are supposed to do. Let us hope that there will be much better news in the reports of the National Crime Authority that will come to the Senate in the future. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The time for discussion of papers has expired. Given that tomorrow there will be no time allotted for General Business, and given that the papers listed here are likely to disappear into the never-never as they are wont to do in this place, I will give honourable senators the opportunity to move a motion to take note of any paper and to seek leave to continue their remarks on the next General Business Thursday. Senator CROWLEY(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator WATSON(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The time for consideration of Government papers having expired, the Senate will proceed to the consideration of committee reports. Debate resumed from 20 March, on motion by Senator Cooney: That the Senate take note of the report. Senator COONEY(Victoria) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 20 March, on motion by Senator Colston: That the Senate take note of the report. Senator PUPLICK(New South Wales)(5.45) —I want to make some remarks on the fifth report of the Standing Committee on Education and the Arts entitled `Examination of Annual Reports' and sub-titled `Another look at Children's Television'. I do so because I believe we have now got to the stage where the regulation of children's television and broadcasting for children on television and radio is no longer justified in terms of the impositions which are being made on broadcasting authorities allegedly regulating children's television for the benefit of children. In the Senate Committee report attention is drawn in paragraph 4.2 to this fact: Ninety-eight per cent of Australian homes have a television set. These are in use for an average of thirty-one hours a week. On average, children watch approximately twenty-four hours of television a week. Some children watch television for forty to fifty hours a week. This has led to a situation in which it is estimated that children will watch two full years of television in the first 15 years of their lives and will see half a million advertisements in that time, and that for every hour that they read they will have watched seven hours of television. Unfortunately, while the report of the Senate Standing Committee has many admirable things to say, in my view it repeats a lot of the extremely paternalistic and, I believe, totally outmoded concepts about the regulation of children's television. The Committee last reported on the decision given by the Federal Court of Australia in the Herald-Sun TV Pty Ltd case, in which the regulation of C classification programming on children's television had been interrupted. I said at that stage that I believed there was over-regulation of children's television. The Parliament, nevertheless, proceeded to pass legislation amending the Broadcasting and Television Act. It amended that Act in order to restore to the Australian Broadcasting Tribunal regulatory powers over children's television. The Senate Committee's examination of this matter, I believe, has inadvertently picked up at least one significant point which I think is open to considerable challenge. That appears in paragraph 4.19 of the report, which indicates that the Committee has accepted evidence from the Australian Broadcasting Corporation about its ratings for children's television. If we look at pages 481 and 482 of the Hansard transcript of evidence given to the Committee we see this claim made by Mr Farrell of the ABC: . . . the ABC alone is achieving 40 per cent of the available audiences . . . He was talking about an audience of children in a specified time framework during the week. I have a copy of a letter which was sent to Senator Colston, the Chairman of the Committee, by David Morgan, the Federal Director of the Federation of Australian Commercial Television Stations. I seek leave to incorporate that letter in Hansard. Leave granted. The letter read as follows- Senator Mal Colston Chairman Senate Standing Committee on Education and the Arts Parliament House CANBERRA 2600 April 1, 1986 Dear Senator Colston FIFTH REPORT: SENATE STANDING COMMITTEE ON EDUCATION AND THE ARTS `Another Look At Children's Television' This Report, recently published, contained comments by Mr C. Farrell, Acting head of the ABC's Children's Programs department which were extremely critical of the programming performance of commercial television stations in the 4.00 to 5.00 p.m. period reserved by the Australian Broadcasting Tribunal exclusively for programs directed specifically to children aged between six and thirteen years inclusive. Unfortunately, Mr Farrell's comments are inaccurate and therefore misleading. In paragraph 4.19 of the Report, Mr Farrell is quoted as follows: `One of the arguments that is put forward against the `C' hour is that nobody is watching. If the ABC alone is achieving 40 per cent of the available audience, then I think the commercial networks have to question seriously whether it is what they are putting into the `C' hour that is causing them to lose figures.' The `C' hour to which Mr Farrell refers is 4.00 to 5.00 p.m. Monday to Friday which has been set aside by the Australian Broadcasting Tribunal specifically for programs designed for children aged six to thirteen years inclusive. Each program telecast by a commercial television station in that period must receive prior approval from the Tribunal. Only in the case of a live sporting event or live coverage of an event of national importance may these approved programs be pre-empted. Neither Mr Farrell nor the ABC is in any position to be critical of commercial television broadcasters because the ABC ignores the Tribunal's prescriptions. In the two weeks from February 23 to March 8, 1986, all programs telecast by the ABC in this period were designed for pre-school age children. The programs in question were Play School and Mr Squiggle. Both are repeats. Had any commercial station televised either of these programs between 4.00 and 5.00 p.m. it would clearly have breached the Tribunal's Standards and, I venture to say, would have been in quite serious trouble. Mr Farrell infers that the ABC is achieving 40 per cent of the available audience between 4.00 to 5.00 p.m. Research conducted by McNair Anderson for the four weeks, February 9 to March 8, 1986 reveals: Average audience per quarter hour, 4.00-5.00 p.m. All people ABC % Sydney ... 221,000 48,250 21.83 Melbourne ... 191,500 44,000 23.04 Adelaide ... 71,750 10,750 14.98 Brisbane ... 110,750 25,500 23.02 It is patently clear from the above table that the ABC does not reach 40 per cent of the audience. More relevant to the matter in question is the fact that the ABC reaches nowhere near 40 per cent of the target audience, i.e. the six to thirteen year olds. The following tables reveal the percentage achieved by the ABC and commercial stations of five to twelve year olds. (McNair Anderson survey category). % 5-12 years olds* 4.00-4.30 p.m. ABC Commercials Sydney... 28.48 71.52 Melbourne... 28.77 71.23 Adelaide... 16.36 83.64 Brisbane... 34.21 65.79 4.30-5.00 p.m. Sydney... 26.3 73.7 Melbourne... 19.85 80.15 Adelaide... 11.11 88.89 Brisbane... 19.35 98.65 * Average audiences, Monday to Friday, February 9 to March 8, 1986. Clearly the commercial stations have the lion's share of the five to twelve year old audience between 4.00 and 5.00 p.m. Clearly, Mr Farrell's criticisms are unwarranted. Despite the criticisms by Mr Farrell and others, commercial television throughout Australia have made and continue to make every effort to produce and telecast programs which meet the Tribunal's criteria and which will attract children from the relevant age group. It is unfortunate that Mr Farrell's comments have obscured the real concern expressed by commercial broadcasters. That concern is that the criteria for `C' programs and the judgment of the Tribunal appear to be out of touch with the needs and desires of six to thirteen year old children. While commercial stations are doing their best to produce and telecast programs which will attract children and are, as illustrated, attracting the majority of children who are viewing between 4.00 and 5.00 p.m., the overwhelming majority of children within the age group do not appear to find `C' programs to their liking. Of the potential audience of 412,000 five to twelve year olds living in Sydney, at best only 72,000 (17.48%) are attracted to `C' times programs in an average week. The situation is not much different in Brisbane and Melbourne although some 30.65% of children in Adelaide watch `C' time programs. It would appear that despite the good intentions of the Tribunal, its Children's Program Committee and broadcasters, the `C' program concept in its present form is a failure. Yours sincerely DAVID MORGAN Federal Director Senator PUPLICK —I thank the Senate. Mr Morgan, in his submission, presents evidence from the ratings of the McNair Anderson survey taken in the four weeks 9 February to 8 March 1986 which reveals that, by and large, the ABC is lucky to achieve a figure as high as 23 per cent of all people in that 4 to 5 o'clock time slot and it is lucky to achieve a high figure of 34 per cent for 5 to 12-year-olds. There is no doubt in my mind, in looking at the McNair Anderson details, that the ABC has presented evidence to the Senate Committee which is simply unsustainable on the basis of evidence which can be tested from what are usually regarded as the principal reliable standards-the McNair Anderson ratings-as far as television watching behaviour is concerned. I believe that this has in part influenced the Committee in the way in which it has addressed its mind to the regulation of children's television. I believe we have got to a stage where people of the greatest good will and of the greatest integrity are regulating children's programs on television by applying to children in the late 1980s the standards which were appropriate for children in the early 1970s. I do not believe that the classification of children's television programs has in any way kept up with the changing attitude and the changing intellectual development of Australia's children. If one looks at the programs one sees that we are still back in the Play School and Mr Squiggle days among children whose familiarity with computers, computer technology and the use of computers and whose understanding of computers is, I must say, considerably greater than mine-not that that would be difficult. Under the sorts of classification procedures that the Australian Broadcasting Tribunal is still applying to children's television, I do not believe that children are being presented with educational programs or, indeed, with entertainment programs which are appropriate to children at this time in their development. I believe that the standards of the 1960s and 1970s are being applied to the intellectual development of children in the 1980s and I believe that that is now having a substantial and, indeed, detrimental effect. The quality of children's television in Australia is uniformly in decline. It is poor television; a lot of it is poorly made. It is not stimulating television; it is not relevant television; it is not entertaining in the sense that the standards of entertainment applied for children these days ought to be changing. There is almost no live broadcasting, there is almost no sports broadcasting and there is almost no current affairs type of broadcasting relevant to children. We are not dealing just with pre-school kids but with children up to the age of 14 years. We are dealing with children who are at high school, children who are being made familiar with news broadcasts and with developments in science and technology and other parts of the education system which are simply not being catered for by the level and the standard of the children's television regulation which is apparent in this country at the moment. The Education and the Arts Committee has performed over a long period one of the most valuable services for this Senate in terms of the monitoring of children's television. This is the fourth report which looks at the issue of children's television. Very few Senate committees have maintained an ongoing interest in a particular subject and have continued to report at regular intervals. If my memory serves me correctly, the first of these reports was prepared under the chairmanship of Senator Davidson, with subsequent reports being prepared under the chairmanship of Senator Teague and Senator Colston. Going back for the best part of a decade this Parliament has been kept in touch with developments in children's television through the excellent work of this committee. The Committee has attempted to come to grips with a number of these issues. However, I believe it has been substantially influenced by the Australian Broadcasting Tribunal, by the institutional people interested in maintaining children's television as it is and by the Australian Broadcasting Corporation, and it has not in fact opened the window for children's television in the way that other areas of the broadcasting spectrum-television in particular-have been opened up. It is now time for the whole C classification procedure to be put back into the melting pot. It is time for some of the standards and ideas which I think are old and outdated to be severely challenged and tested. I believe that the Senate Committee would be the most appropriate, and within Australia the most competent and informed, body to do that. I hope that next time it has a look at children's television it will not simply look at the question of how to make the existing system operate better but will in fact look at whether the existing system is relevant any longer. Senator TEAGUE(South Australia)(5.55) —I am happy to see that Senator Puplick has rightly commended the monitoring by the Senate Standing Committee on Education and the Arts of children's television over many years. Over the last eight years a most careful interest in children's television has been expressed by the Committee. I have happily been a party to those four reports to which Senator Puplick has referred-those of 1978, 1981, last year and this year. I note that he has taken up one particular matter. He has commended our interest and has suggested that the Committee would be well placed to look at the question of the C classification, which is an issue in which many viewers, the children of Australia, the commercial television stations, the Australian Broadcasting Tribunal and the Australian Broadcasting Corporation are interested. He has looked to the Senate Committee as being the best placed body to carry out any additional review. I want at the outset to reassure him and the Senate that, whilst we have been substantially influenced by the competent witnesses from the Australian Broadcasting Tribunal and the ABC who have appeared at all of our hearings, especially at the last two when we have been expressly reviewing the annual reports of those two bodies, we have been equally influenced by the commercial television stations in Australia, all of which have appeared before us or presented written material. Their witnesses have very ably presented their views to us. There has also been representations from the Federation of Australian Commercial Television Stations and from the industry as a whole, including writers, producers, film makers and, not least, the Independent Children's Television Foundation which, although based in Melbourne and although too reliant perhaps upon eastern States personnel and initiative, is nevertheless a national foundation and an organisation that I am proud was established to a large extent as a result of the original report of this Senate Committee. Whilst Senator Puplick, armed with careful representations from FACTS, has incorporated some criticism by the Federation in his speech just now and made the assessment that we have been overly influenced by the public statutory authorities, I deny that and believe that we have given, with justice, a proper hearing to all the interests involved. Uppermost in the Committee's mind-it is evident in all of our reports, not least this report in the series of examinations of annual reports-has been the interests of the children themselves. We are conscious that between 5 and 7 o'clock on any week day half of the children of Australia are watching television and that in the course of growing up in this country on average a child views approximately 24 hours of television a week. Some children view television for between 40 and 50 hours a week. Most children in Australia spend more time watching television than they do in instruction at school. It must be evident to all of us that, whilst parents, brothers and sisters and all the home influences provide the primary context for the development of children and schools rank second in that influence, television must certainly rank third in terms of the way our children's minds, lives and values are determined. We have very much kept before us the fact that television, especially at the time most children are watching it, ought to be creative and inspiring, and it ought not to be so entirely educational that it does not entertain. We think that children have as much right to find enjoyment and satisfaction in watching television as anyone else in the community. My own views are somewhat biased in that I hardly ever watch television and I do not encourage children to watch it. In fact, I am somewhat cheered by the most recent statistics that there is a decline in children's television watching habits. Apparently, the main reason for this is that videos are now so widely available to children that they are watching videos in preference to television. Senator Georges —As long as they are not watching adult videos. Senator TEAGUE —Perhaps they are watching too much adult videos. When I was pricking up my ears that there was a decline in the periods of time children watch television, I was then again put back on my haunches by the admission from our witnesses that this arose primarily because children were being diverted to watching their own choice of videos. However, there is a growing number of children who are making their own activities entirely outdoors, with their own books, with their own peers, with other children, in activities that are not just presented to them on a plate, often soporifically, on television. Senator Puplick —Does that not say something about the quality of children's television? Senator TEAGUE —I shall come to the question of the quality of children's television. Senator Puplick has said that there is in television a uniform decline. I want to say on the one hand of children's television that this is not the case with children's drama, and it is not the case especially on one commercial channel in South Australia, Channel 9, which has an excellent approach to C time television productions which have been so well received by children in my own State. Sadly, these are not emulated by all, and there is still too much that is uniformly mediocre, and worse, on our television. I draw to the attention of the Senate the fact that recently there has been the production of the Henderson Kids: the Children's Television Foundation has produced the Winners series which is made up of some eight dramas specifically geared to children aged six to 14. I happen to have watched three or four of those programs with my children and they are uniformly of a high standard. They ought to be as they have each received around $3m worth of production costs. That amounts to some $3m worth for the series as a whole. The Children's Television Foundation is to be highly commended for the excellence of the programs in the Winners series. They have shown mostly on Channel 10 on Saturday and Sunday evenings, not in C-time because they are so good that they are seen to be best broadcast at a time when a majority of the population may be watching television. Though aimed at children, those programs have a wider relevance and have been of great enjoyment to many adults as well as children. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Senator VIGOR(South Australia)(6.05) —This report of the Senate Standing Committee on Education and the Arts called `Another look at Children's Television' continues the fine tradition of that Committee. Over many years it has considered vital issues relating to children's television and its reports have thrown a lot of light on this important area. The quality of the Committee's work can be seen from last December's all party support for the restoration of the Australian Broadcasting Tribunal's powers to preclassify children's programs. Apparently Senator Puplick objected to all the parties supporting this matter. The Government dragged its feet for nine months on the matter. Indeed, I would like to contrast this to the Australian Democrats' approach and to the speedy manner in which the High Court gave its judgment on the question of standards and pointedly noted that broadcasting matters were before Parliament on 21 May last year. The Australian Democrats at that stage introduced a private member's Bill to restore the preclassification powers only two days later-two days after the original High Court decision. I have no doubt that the August 1985 report of the Senate Standing Committee on Education and the Arts entitled `Children's Television Standards' was a major factor in persuading the waverers in the Government and the Opposition ranks to vote for this measure. In considering children's television, primary importance must be attached to the well-being and nurturing of our children. We cannot allow our children to be exposed to the vagaries of organisations which mainly seek to maximise advertising revenue and to minimise programming expenditure. I am glad that the commercial stations have started to recognise some of their responsibilities to children in recent years. The report before the Senate points out a major deficiency in programs for children aged between six and nine years. It links that problem with the advertising advantages to be obtained by aiming at the older and broader audiences which may be reliable at this time. The television industry should take note of this matter and show that it is capable of discharging its responsibilities to all children without the presence of further regulations, if it wishes to have a self-regulatory role. I heartily endorse the Committee's prod to broadcasters in chapter 4 of the report. In fact, in evidence before the Committee Dr Shelley Phillips made these observations about the neglect of children aged six to nine years. She said: Six to nine years of age are crucial years for the development of imagination and make-believe. The latter is very important in a child's intellectual and personal development. When children are troubled or depressed, imagination shrivels or may stop all together. She went on to say: Researchers are increasingly producing evidence that if children are fed unimaginative stodge at a period when fantasy and make-believe are crucial, they may be rendered passive, intellectually and emotionally. They are discouraged from utilising normal outlets for coping with the world outside through imaginative ventures, make-believe and fantasy. I think that Mrs Hazel Hawke's remarks at the opening of the three-day conference on `The Challenge of Kids Television' in May last year bring the situation into proper perspective. She said: There are 4.6 million Australians aged 16 years and under. They do not yet vote but their actions will define Australian life in the next decades. Their major source of entertainment is television and most of their free time is spent in front of a television set. The tragedy is that it does so little good when it could do so much good. For every hour that children read, on a average they watch seven hours of television. Thirty per cent more time goes into watching television than receiving formal education in the first 16 years of their lives. Half a million advertisements will be seen in that time by each of those children. I thoroughly endorse the call by the Senate Standing Committee on Education and the Arts for a wider diversity of innovative, exciting and entertaining programs for the benefit of our children and the nation. I am heartened that the 9 network has recognised the value of providing stimulating fare with its C'mon Kids program since last February. Station NWS 9 in my own home State of South Australia showed that it could be done. I support Senator Teague in this matter in congratulating the station. Instead of offering the dull formula material which does not go beyond the letter of the Australian Broadcasting Tribunal's requirements, it has set up a format that has five different types of programs within a week. This keeps the children occupied and interested. It beats the opposition hollow and it attracts nearly three times the audience of any of its commercial rivals and over double of that for the Australian Broadcasting Commission between four and five. That should answer Senator Puplick's discussions about what one can really do with children's television if one tries. I am pleased that the concept has gone national. I hope that other stations will look at providing a greater variety also. That will be necessary for them to be able to gain the audiences they crave for and which they have lost since the mid-1970s. That was well before pre-classification of children's programs was introduced. The performance of the ABC in relation to children's programs suitable for the various age groups is in fact praised by the Committee. A hope is expressed that children's television will continue to get proper funding within an organisation which has been chronically under- resourced for some years now. The program Play School, as has been mentioned before, has managed to achieve as much as 50 per cent of the available audience between 4 p.m. and 4.30 p.m. in certain States. There are quite a few programs for the five to eight-year-olds, and the ABC has started to target material towards the 11 to 14-year-olds also. Paragraph 5.10 of the report states: According to ratings provided to the Committee by the ABT, the ABC has increased its share of the child viewing audience in the 4.00 p.m. to 5.00 p.m. time slot. In 1977 the ABC attracted about 9 per cent of the viewing audience in the Sydney and Melbourne metropolitan areas. By 1985, this proportion had increased to 34 per cent. I would like to join my congratulations to those already given to the ABC and I hope that it continues to provide this service. Perhaps the comments of the Acting Head of Children's Programs in the ABC to the Committee explains this. He said: The area of children's television in the ABC has always been in the forefront of our television thrust and it has been, from our point of view, something we have welcomed rather than the attitude that some of the commercial networks have taken to it which is something that has been forced upon them. This matter of attitude is crucial, just not to the children's television but to the nation as a whole. I asked a question of the Minister for Communications (Mr Duffy) last year on this area and I seek leave to incorporate the question and the answer from the Minister for Communications in relation to the activities of the Children's Program Committee of the Australian Broadcasting Tribunal. Leave granted. The question upon notice and the answer read as follows- Films for Children (Question No. 754) Senator Vigor asked the Minister representing the Minister for Communications the following question, upon notice, on 5 December 1985: (1) How many programs, pilots, outlines of program concepts and film scripts have been submitted to the Children's Program Committee of the Australian Broadcasting Tribunal in each of the financial years the Committee has been in existence, and in each year, how many of these submissions have been rejected. (2) How many have resulted in substantial modifications after initial advice about potential unsuitability. (3) What proportion of the material either (a) rejected; or (b) substantially modified, happened because the material was not aimed specifically at an under-14 audience. (4) What have been the other main causes for rejection or substantial modification of material in each year of operation of the Children's Program Committee. (5) How many of the projects given a Provisional `C' classification during each year in which it has been used, have later been rejected, or have required substantial modification in order to obtain a full `C' classification, and what has been the major problem in each such case. (6) What has been the average time for arriving at a decision as to whether a film script should have a Provisional `C' classification since the operation of the children's drama quota, and what has been the longest delay. (7) What has been the average time for dealing with the submitted finished programs, and what has been the longest delay in assessing any such program. ANSWERS (1) (Nov) 1978-1979: 37 submissions, 8 rejected 1979-1980: 230 submissions, 114 rejected (in addition, further information was sought on 3 submissions and 13 were withdrawn) 1980-1981: 167 submissions, 61 rejected (further information sought on 1, 9 were withdrawn) 1981-1982: 124 submissions, 62 rejected (further information sought on 2, 5 withdrawn) 1982-1983: 99 submissions, 28 rejected (further information sought on 2, 3 withdrawn) 1983-1984: 174 submissions, 53 rejected (further information sought on 2, 14 withdrawn) 1984-1985: 84 submissions, 25 rejected (6 were not classified `C' Drama on script although retained Provisional `C' classification), further information sought on 1, 6, withdrawn 1985-23 December 1985: 39 submissions, 5 rejected, 9 awaiting a decision for `C' drama on script, further information sought on 2. (2) It is not clear how many programs have resulted in substantial modifications after initial advice about potential suitability. (3) Children's Television Standard (CTS) 2 (a) states that `C' programs should be designed specifically for children older than 5 years and younger than 14 years. This criteria is the major reason (which is in a ratio of 4:3 to the next main reason, Standard CTS 2f) for rejection and/or need for modification. (4) For each financial year, except 1979/80, 1980/81 and 1981/82, the reasons for rejection in descending order of frequency have been as follows: 1. CTS 2 (a) CTS 2 is designed specifically for children older than 5 years and younger than 14 years; 2. CTS 2 (f) contributes to the social emotional or intellectual developments of children; 3. CTS 2 (g) is appropriate for Australian children not assuming too much of the culture, dialect or environment of some other country; 4. CTS 2 (b) is designed to entertain children; and CTS 2 (e) fulfils some special need of children; 5. CTS 2 (c) is well produced technically and artistically; 6. CTS 2 (d) can be easily understood and appreciated by children; 7. CTS 2 (h) is not outdated in content or in technical or artistic production. In 1979/80, 1980/81 and 1981/82 the pattern varied with CTS 2 (f) and (g) being the main reasons for rejection above CTS 2 (a). (5) No completed program granted a Provisional `C' classification at script stage has later been rejected for a full `C' classification, although many projects granted a Provisional `C' have not yet been resubmitted as complete programs for a full `C' classification. The number of projects that have required substantial modification for full `C' classification is not clear although some projects required modification for `C' in 1978/79 (1), 1979/80 (1), 1980/81 (3) and 1983/84 (12) in order to meet CTS 2 (a) and in 1982/83 (2) because further information/pilot was required. In 1984/85 6 scripts were rejected either because the Committee considered it could not assess the programs still at script stage with regard to CTS 2 (c) or because modification was needed to meet CTS 2 (a). (6) The average time for Provisional `C' recommendation and decision has been approximately 4 1/2 weeks. The longest delay of Provision `C' recommendation and decision has been 12 weeks. (7) The average time for `C' recommendation and decision has been approximately 4 weeks. The longest delay for `C' recommendation and decision has been 16 weeks. The timing for the recommendation/decision process depends upon when the submission is received in relation to the Committee's meeting schedule. Delays may also occur if the Committee requires further information from the applicant before making its recommendation. Senator VIGOR —These statistics show conclusively that Senator Puplick's contention cannot be supported. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Debate resumed. Senator LEWIS(Victoria)(6.15) —I rise to endorse the remarks made when he tabled this report and to congratulate him on the tabling of his first Chairman's annual report of the Standing Committee on Regulations and Ordinances. As the Whips are aware, it is not easy to get members to serve on this Committee. If one looks at the report one will see why. The Committee is involved in scrutinising delegated legislation and we are currently scrutinising about a thousand instruments of delegated legislation every year. While only a small proportion of those attract our detailed attention, they must all be read and appraised. For that the Committee is indebted to its legal advisor. For that the Committee is indebted to its legal advisor, Professor Douglas Whalan of the Australian National University, to the Committee Secretary, Mr Peter O'Keefe, and to his staff for the gruelling preliminary work they do in sifting through the regulations, ordinances and other instruments on behalf of the Committee. Secondly, the Committee is by tradition and by practice a non-partisan committee on which senators are asked to temporarily suppress the party political instincts and skills which are very important to any senator, but membership of the Regulations and Ordinances Committee is in fact a self-denying ordinance for Government senators as well as Opposition senators. It is really that matter that I wish to raise before the Senate. Government senators, as well as Opposition senators, have to look at the legislation without adopting a party political prejudice. That, of course, creates great difficulty because the application of the principles of this Committee cannot survive the interference of party political intrigue, advantage or pressure. The Committee meets each Thursday at 9 a.m. in committee room 6 and when we walk in there each member of the Committee in fact is expected to abandon his or her party political prejudice and it is my belief that we manage to do so. I congratulate Government senators for adopting the attitude of abandoning their party political prejudice when they come into that committee room. I recognise the difficulties which they have. I know only too well from our term in government that sometimes Ministers responsible for the making of delegated legislation mistakenly view the Committee's scrutiny as a threat to the political confidence which they seek to enjoy, in particular from senators of their own party. It is no such threat and it should not be seen as such. That is why I am supporting these remarks of Senator Cooney. In its more than 50 years of experience, the Committee has, to the best of my knowledge, never permitted itself to question the policy behind delegated legislation or the political reasons for its enactment. There may well be a need for a regulations merits committee to probe policies but that is not and has never been the Committee's role. The Committee, with a low-key profile and style, seeks to apply standards of agreed principles to delegated legislation and through moral suasion of its bipartisanship, to persuade Ministers to amend instruments to remove possible infringements on personal rights or insert better or clearer protections of those rights. It is worth reminding the Senate that the Committee has never lost a disallowance debate which a Minister's intransigence or obstinacy has forced upon it, and that is no mean record. The senator who is chairman of such a committee has a very difficult task of chairmanship, of preserving the bipartisanship of the Committee, of fostering and maintaining the confidence of this chamber in the work of the Committee while still retaining the respect and trust of his ministerial party colleagues. Senator Coates, the former chairman of this Committee under this Government, did that and now Senator Cooney is doing the same. I applaud them for their commitment. Senators who read the Committee's report will see why 50 years on it is still necessary that the Senate should possess this world renowned committee, its oldest and, because of the Acts Interpretation Act, thankfully one of the most powerful committees of its kind in the Westminster world. The protective safety net of the Committee's scrutiny and its disallowance power can prevent objectionable provisions appearing or trends developing in legislation which, accumulated over time, could have serious effects on the form of parliamentary democracy and on the kinds of personal rights which we all value in a bipartisan way. Like Senator Cooney I, too, urge the Ministers of this Government to read the report so that when drafting delegated legislation they can take into account the principles which the Committee, with the support of this Chamber, applies to legislation. Senator GEORGES(Queensland)(6.20) —I speak to the matter before the Chair because it raises in my mind the period I spent on the Senate Standing Committee on Regulations and Ordinances. The short time I spent on that Committee made me realise just how important the Committee was in view of the mass of delegated legislation or regulation that was being enacted by the bureaucracy. The scrutiny of the Regulations and Ordinances Committee made certain that the rights of citizens were not in any way affronted. In spite of my experiences on many other committees, I endorse what has been said, and I would consider the Regulations and Ordinances Committee to be the most important committee in the Parliament. Too often by regulation the rights of citizens are taken away; too often by regulation the bureaucracy imposes certain limitations or restrictions which limit the rights of citizens but advance its own interests. During the period I served on this Committee I came to learn, even though I had no legal training, that a lay person could contribute considerably, together with people with the legal skills that were displayed by some members of the Committee. One person in particular who served extremely well on that Committee and who had no legal background, and in fact very little educational background, because of the period in which he grew up, was Senator Cavanagh. His role on that Committee and in this place was quite precise, incisive and revealing to the rest of the Senate. There is a tendency in some omnibus legislation that comes through this place-and I wanted the opinion to be expressed by the Regulations and Ordinances Committee-to lumber together a whole series of bureaucratic decisions, and this passes through the Parliament without proper scrutiny. Just one small example would be the way in which parking fees were increased from $10 to $25 at airports throughout Australia, without proper announcement and without proper display at the airports of information to the effect that parking fees for vehicles had risen from $10 to $25-a massive increase, although it is only a small amount in itself. That was done by legislation which, I would take it, bypassed the Regulations and Ordinances Committee, because it was so done. Nevertheless, it means that there is now a device by which a considerable amount of enactment can take place without the proper scrutiny of the Parliament because such measures can be hidden in a multitude of decisions which the bureaucracy wants to impose upon us. I use the word `bureaucracy', and that may, in the minds of some, be an offensive term to use. But it is the correct term when one is attempting to encompass the whole of the Public Service. Many governments, many styles of government and many systems of government suffer by virtue of the extreme power which the bureaucracy can impose. In this place, it imposes by way of regulation. The Regulations and Ordinances Committee prevents this; it limits it. I am pleased to see that it has brought down a report which exposes another way in which the bureaucracy, through the Executive, through Ministers, has imposed its will-that is, by delay in bringing down regulations and delay in responding to the requests of the Regulations and Ordinances Committee. I am pleased that the Regulations and Ordinances Committee is insisting upon its status, upon its position and its responsibility to the Senate. I am pleased that that is so because if it does not do so honourable senators can rest assured that it will be snowed, and that devices will be created which, on the basis of a lack of attention on the part of the Regulations and Ordinances Committee, will enable the Public Service and the Executive to escape. If they escape once they will escape again. Once the pattern is developed, of course, they will exert their influence and achieve what they need. I strongly support this report which has been brought down. It is not before time that we give to our committees the recognition that they deserve. Two reports have come down in the last half an hour, one from a standing committee and one from the Regulations and Ordinances Committee, and there is another one to follow. What I object to, in a way, is that through the changes in our Standing Orders we have somehow truncated our rights as a Senate to fully debate a subject. Through my speaking for 10 minutes on this report I deprive honourable senators who follow me. Of course, this is not deliberate. It is not because the report that happens to follow is the report on dolphins and whales in captivity. Senator Boswell —I want to get on to the dolphin report. Senator GEORGES —I am certain that the honourable senator does. This is not deliberate on my part. Senator Boswell —Stop filibustering. Senator GEORGES —Surely the honourable senator is not accusing me of filibustering on such an important report from the Regulations and Ordinances Committee. I mean exactly what I say. I take the opportunity to say that the Standing Orders need to be reviewed to ensure that time is made available to fully debate important reports which come before this Senate. The Senate can have a committee-as it does-which sits for 18 months to two years on a reference and the members of that committee suddenly find that they have merely 10 minutes in which to contribute to the Senate, after two years of effort. The only way that we now manage to get a reasonable debate is by continuing from Wednesday to Wednesday with sharp bursts. I would say that that is not the way in which we should consider these reports and it is not the way in which we should consider this particular report from this particular Committee. Question resolved in the affirmative. Debate resumed from 12 March, on motion by Senator Georges: That the Senate take note of the report. Senator VIGOR(South Australia)(6.29) —Conservation issues are always two-sided. On the one hand, we have the need of society to conserve resources, environment, heritage, or the natural cohabitants of our world. On the other hand, we have the cost to society of this conservation, or the cost to be borne by certain individuals or corporations in the form of anticipated profits forgone or the extra costs incurred. The final cost in every situation depends heavily on the `politically perceived balance of public interest',-namely where the cost is seen to outweigh the advantages, no action should be taken; where the advantage of conservation is seen to be highly in the public interest while the threatening activity has no public justification, that threatening activity should be either banned or regulated in the public interest. Where both sides are seen to have merit in the public interest, part of the costs of conservation may be borne by taxpayers to enable the activity to continue while measures are installed to prevent damage to our environment. The history of humankind's effect on its environment is unfortunately very ugly. We have taken over huge tracts of land and sea for our cities, farms, transport, mining and hunting enterprises. We have hunted and killed and are responsible for the complete annihilation of a multitude of species of animals and plants to such an extent that we have endangered our own survival on this planet. Most of this damage has happened and is happening through ignorance. It is ignorance which destroys the habitats of certain native animals. It is ignorance which destroys trees. It is ignorance which makes us do many of the things that eventually will harm us. As we learn of the risks, we take measures to avoid them. It is in this light that I commend the Senate Select Committee on Animal Welfare for bringing under public scrutiny accepted practices in our society which are needlessly cruel in the light of current knowledge. Cetacea have long been needlessly exploited. Their inherent curiosity and intelligence and previous immunity from danger within the seas have led them unwittingly to expose themselves to human exploitation. Only seven years ago the Cheynes Beach whaling station at Albany, Western Australia, was still killing 700 sperm whales a year, which was its `quota' under the International Whaling Commission. The Frost report on `Whales and Whaling' suggested that the issue of whaling licences be banned except for a `licence to take, in appropriate circumstances, a limited number of dolphins live for display purposes'. It recommended that only in special circumstances should a permit be issued to take any cetacea for scientific purposes. That resulted in Parliament, in 1980, passing the Whale Protection Act in exactly those terms. As a result of the Convention on International Trade in Endangered Species, to which Australia is a signatory, Parliament later passed the Wildlife Protection (Regulation of Exports and Imports) Act 1982 which forbids the import of all species of the order cetacea-that is, whales, dolphins and porpoises-`except in exceptional circumstances where the proposed import is being transferred between zoos, is born in captivity or is for the purpose of prescribed scientific research'. Thus, the earlier Whale Protection Act allows the taking of dolphins and whales in Australian waters for display or for scientific and educational purposes; but the later Wildlife Protection (Regulation of Exports and Imports) Act of 1982 prohibits totally their import and export. In the light of the current Select Committee's findings, this discrepancy needs to be addressed. The Whale Protection Act 1980 should now be amended to prohibit the taking of cetacea in Australian waters. State laws in some cases override Commonwealth laws, particularly within the three-mile limit. State laws vary from State to State. In order to address this, the Committee's recommendation to ban new establishments for keeping cetacea in captivity will shut off the demand for the capture of dolphins and whales and allow the States to introduce laws to match the Commonwealth's laws on this issue. The Australian Democrats support the Select Committee in all its findings. We look to the Government for changes in the legislation as soon as possible to implement these findings in the `very near future'. Senator Georges —I seek a ruling from you, Mr Deputy President-- The DEPUTY PRESIDENT —Senator Georges, if you speak you will be closing the debate. I cannot call you, in the circumstances. Senator Georges —The problem is that we have had a whole series of speakers, particularly from one party, on this matter and the debate is now getting out of kilter. Senator Lewis —Does that mean that your Party is not interested in the subject? Senator Georges —It is not that. If I might reply to the interjection, the National Party has a particular interest in this matter and is participating-- The DEPUTY PRESIDENT —Order! Senator Georges, I cannot call you because if I do so you will be closing the debate, and other honourable senators wish to speak. Senator Georges —But what, Mr Deputy President, if I insist? The DEPUTY PRESIDENT —I will not call you. I call Senator Sheil. Senator SHEIL(Queensland)(6.36) —Last week I had one of the most memorable experiences of my life, which was to go swimming with whales and dolphins. I do not think Senator Georges would have done anything like that in his life. The reason I wound up swimming with these whales and dolphins was that the manager of Sea World on the Gold Coast got in touch with me because of his apprehension about the results of the report of the Senate Select Committee on Animal Welfare that has been brought down. He asked me to come over and inspect the facilities and animals there and draw my own conclusions. I was surprised to find that the Chairman of the Committee had not even been there. He had been invited to Sea World but he had not even been to have a look at it. When one gets in the water with these animals there is an initial feeling of apprehension because they have big teeth. However, they were immediately friendly and got on very well with me. They want to play with you. They take you for swims. They are interested in you. They certainly do not want to hurt you. They show a great affinity and friendship with man. Senator Georges —That is one reason why you don't keep them in captivity. Senator SHEIL —There is a lot of history to whales and porpoises and their association with man which goes back, I suppose, to Jonah. I remember that one of the books I read when I was a young fellow was The Killers of Eden. I find that the Committee has not been to Eden to look at the skeletons of those killer whales. Senator Sanders —I have been there. Senator SHEIL —Senator Sanders is not on the Committee. Those whales showed a great affinity with man. Senator Sanders —But they were not in captivity. Senator SHEIL —Ease up. The report is on whales and dolphins in captivity, not on whales out wherever the the honourable senator says they were. I remember stories we used to hear about Pelorus Jack. He was the porpoise which used to guide the ships around Wellington and Cook Strait. While he was taking the ships in there were never any accidents, but he was accidently shot. Since then there have been dreadful accidents. The Wahine was sunk and recently a Russian ship was sunk there. The report brings down about a dozen recommendations. Most of them are fairly commonsense recommendations and can be agreed with. However, three of them are very way out. They recommend that we do not catch any more dolphins, that we do not import any more dolphins and that we gradually phase out the dolphin areas we have unless scientific evidence can be shown that they should be kept, and things like that. Those recommendations cannot be supported by the evidence the Committee took. Senator Sanders —They are very well supported-and by experts around the world, I might add. Senator SHEIL —Senator Sanders's experts, not mine. Let us consider the number of dolphins. For example, what about the recommendation that we do not catch, experiment with or research other species of dolphins? There are many species of dolphins. Some of them roam the whole world. Some of them are specific to a particular ocean, some of them to a particular part of an ocean. There are dolpins that are specific to rivers, such as the Ganges, the Indus, the Yangtze Kiang and the Amazon. These dolphins may present enormous opportunities-both for us and for them. Unless dolphins are caught and kept in captivity there will be very little opportunity for any research into them. The research is important to them and us. It has been said that keeping them in captivity renders them mute and prone to stress effects and other adverse conditions. I did not find anything like that at Sea World. In fact, if one put one's head under the water and listened one would hear an enormous amount of conversation going on, not only between the dolphins but also between dolphins and whales. They certainly did not show any signs of stress and they were friendly. Senator Chipp —What are their views on the Bjelke-Petersen Government? Senator SHEIL —They would have been very happy with that. I found no evidence that they had been rendered mute or were stressed in any way. They seemed to me to be very happy. Honourable senators cannot tell me that three dolphins will stick together and let a guy ride them like a Roman chariot if they are not happy. They would have him off in no time. In fact, when I was riding them, if it looked as though I would fall off, they made sure that I would not. They would roll back under me to see that I did not-unlike a horse, for example. While I am on that subject, I can imagine what would happen if the first Stone Age man was not allowed to pat the first wolf or horse that showed signs of being friendly. They are now domesticated. Dolphins can be used for servicing divers and for research on the ocean floor. Senator Sanders —To carry bombs to plant on ships in a naval war. Senator SHEIL —I have heard of naval uses where they can put limpet bombs on ships-enemy ships, I hope. I do not see why we should not be allowed to serve each other when the relationship between us is so good. I hope that when the Senate is considering the report and when the Government is considering legislation they will take no notice of these three recommendations. I go even further than the recommendations in the dissenting report because we should be able to import dolphins. Just because we are breeding them in captivity does not mean that we should not take advantage of all the other species in the world that may be of even greater value to us as we journey through our lives together. The DEPUTY PRESIDENT —Order! The time for consideration of committee reports has expired. Senator GEORGES(Queensland) —I seek leave to make a personal explanation. I claim to have been misrepresented. Leave granted. Senator GEORGES —It is on a matter that has been raised several times. Senator Sheil commented that I had not visited Sea World-- Senator Sheil —Have you? Senator GEORGES —No, I have not visited Sea World. Senator Sheil —How have you been misrepresented if you have not been there? You have been invited. Senator GEORGES —The honourable senator is endeavouring to discredit the report by discrediting me because I have not visited Sea World. I will bring the honourable senator up to date. Senator Sheil —You were not invited? Senator GEORGES —I have been invited by Mr Lawrence to visit Sea World at an opportune time. I have had discussions with Mr George Smith, who represents Sea World. I have made arrangements to see him because he has sought my advice on what is necessary to meet the requirements of the report. I have agreed to that. The attempt to discredit the Chairman of this Committee by members of the National Party and others-- Senator Boswell —I take a point of order. At no time has the National Party tried to discredit Senator Georges. The DEPUTY PRESIDENT —That is not a point of order. Nevertheless, Senator Georges, you must stick to the personal explanation and not criticise other senators. Senator GEORGES —I am. A charge was made by someone on radio that I had received five invitations and had declined the five. That is not the case. I wish this to be brought to an end. I have had a request from Mr Smith, who represents Sea World, to visit it. That will be done at the earliest opportunity. But the misrepresentation goes further. The inference is that the Committee did not visit Sea World. That is incorrect. The Committee visited Sea World, engaged in lengthy correspondence and received considerable information from Sea World which is included in the report. The DEPUTY PRESIDENT —On behalf of the President and for the information of honourable senators, I table the report from the Joint Standing Committee on the New Parliament House on the proposed construction of the National Bicentennial Science Centre within the parliamentary zone. Senator FOREMAN(South Australia) —In accordance with the provisions of the Public Works Committtee Act, I present the report relating to the construction of the new telephone exchange building for Telecom Australia at Dalley Street, Sydney. Ordered that the report be printed. Senator FOREMAN —by leave-The recommendations and conclusions of the report of the Public Works Committee are as follows: The Committee accepts that there is a need for new generation equipment and services to meet the current and forecast needs of Telecom Australia in the northern sector of the Sydney central business district. The Committee agrees it would be impractical and uneconomical to upgrade the existing telephone exchange building in Dalley Street. The construction of a new telephone exchange building is necessary and should be built alongside the existing Dalley Street telephone exchange. The proposed three elevated cable bridges to link the new and existing telephone exchanges at second floor level will ensure compatibility of operation and cost savings by utilising the existing cable chamber. The design and construction of the proposed new telephone exchange building at Dalley Street appear satisfactory. The estimated cost of the proposed building is $13m at June 1985 prices. The Committee recommends construction of the work in this reference. Senator TATE(Tasmania) —I present the fourth report of 1986 of the Senate Standing Committee for the Scrutiny of Bills concerning the Air Navigation Amendment Bill 1986. I also lay on the table the Scrutiny of Bills Alert Digest No. 5, 9 April 1986. Ordered that the report be printed. Senator COONEY(Victoria) —I present the seventy-eighth report of the Senate Standing Committee on Regulations and Ordinances on its scrutiny of the Artificial Conception Ordinance 1985. Ordered that the report be printed. Senator COONEY —by leave-I move: That the Senate take note of the report. The Artificial Conception Ordinance deals with the status of children born by the use of artificial conception techniques. Under the Ordinance, a woman who gives birth to a child is, for all purposes, conclusively presumed to be the mother of that child, regardless of the biological history of the child. The man with whom the woman has a bona fide domestic relationship is, for all purposes, conclusively presumed to be the father of that child, regardless of its biological origin and provided only that he has consented to his partner's involvement. A man who donates semen and who is not in a bona fide domestic relationship with the woman who becomes pregnant as a result of that semen is, for all purposes, conclusively presumed not to be the father of the child. The Regulations and Ordinances Committee is concerned about this Ordinance when considered against the criteria that it applies. The criteria relate to issues involving civil rights and the appropriate vehicle for legislative change. Having considered the Ordinance and the correspondence from the responsible Minister, the Attorney-General (Mr Lionel Bowen), the Committee has decided not to recommend disallowance of the instrument under its criteria. However, the Committee considers that the Ordinance is of such a nature and the issues it raises are of such importance that it should table a report on the legislation in the Senate. The Committee wishes to alert the Senate to the fact that the Ordinance affects the rights of children, of parents and of donors of genetic material. It is to be noted that the issues raised have been debated in this chamber and will be debated again in the future particularly when the Human Embyro Experimentation Bill is brought before the Senate. In the course of the Committee's correspondence with the Attorney-General the Committee gave notice of motion of disallowance of the Ordinance while it examined the issues. This morning the Committee agreed that I give notice of intention to withdraw that notice of motion tomorrow. This may give honourable senators an opportunity to consider the Committee's report. The Committee wanted me to draw the attention of the Senate to two other Australian Capital Territory ordinances. These are the Crimes (Amendment) Ordinance (No. 5) 1985 and the Evidence (Amendment) Ordinance (No. 2) 1985. These ordinances make major changes to the Australian Capital Territory law relating to sexual offences. The Committee does not recommend that any action be taken against these ordinances but it considers that the attention of the Senate should be drawn to them. I seek leave to incorporate in Hansard the Committee's exchange of correspondence with the Attorney-General. Leave granted. The correspondence read as follows- PARLIAMENT OF AUSTRALIA THE SENATE STANDING COMMITTEE ON REGULATIONS AND ORDINANCES 18 February 1986 The Hon. Lionel Bowen, M.P. Attorney-General, Parliament House, Canberra, A.C.T. 2600 Dear Attorney-General, At its meeting on 13 February 1986 the Committee considered the Evidence (Amendment) Ordinance (No. 2) 1985 (A.C.T. Ordinance No. 61 of 1985 tabled in the Senate on 3 December 1985) and the Crimes (Amendment) Ordinance (No. 5) 1985 (A.C.T. Ordinance No. 62 of 1985 tabled in the Senate on 3 December 1985). The Committee notes that these Ordinances make quite fundamental changes to the rules concerning the giving of evidence in sexual offence proceedings and in relation to the substance of the law of rape and other sexual offences in the A.C.T. In the Evidence (Amendment) Ordinance the following points may be noted- the accused may no longer seek to adduce evidence relating to the making or terms of a complaint by the complainant; the court may direct that the proceedings be in camera; the complainant's identity shall not be disclosed without the complainant's consent; the judge need no longer warn a jury that it is unsafe to convict a person accused of a sexual offence on the uncorroborated evidence of the complainant. an accused no longer has a right to adduce evidence relating to the sexual reputation of the complainant. Admission of such evidence is subject to the judge's discretion; and in an unsworn statement from the dock the accused may not refer to the complainant's sexual reputation or experience. In the Crimes (Amendment) Ordinance the following points may be noted- the crime of rape as conventionally understood has been abolished; sexual offences have been significantly reduced and rationalised; sexual intercourse is given a very wide meaning, much of it unrelated to its conventional meaning; from the point of view of consent, sexual intercourse is viewed as a continuing act but of divisible or severable components which permit consent to be withdrawn at any time; penalties of up to 20 years imprisonment are imposed; consent to prima facie voluntary sexual intercourse is to be negated by inter alia ``mistaken belief as to the identity of the person'' and ``a fraudulent misrepresentation of any fact made by the other person''. the presumption that young people below a certain age are incapable of engaging in sexual intercourse is abolished; marriage will no longer be a bar to an accusation of and conviction for offences related to sexual intercourse. The Committee notes that these Ordinances make quite fundamental changes in the criminal law of the A.C.T. with regard to the very serious and very difficult area of sexual offences. On their own these Ordinances are highly significant. However, one of the Ordinances is the 5th in a sequence of Crimes (Amendment) Ordinances. If these and the Evidence (Amendment) Ordinance had come before the Committee (or the community) in one document as a virtual criminal demi-code instead of piece-meal over the past year, it would be clearly seen that a major recodification of A.C.T. criminal law had been undertaken by ministerial instrument without the community, the committee, or the Parliament having an opportunity to consider the scheme as a whole in the light of the accumulated innovations which it reflects. The Committee notes that with respect to the two Ordinances presently under examination the Explanatory Statement makes no reference to there having been any consultations with the A.C.T. House of Assembly, or the Local Criminal Law Consultative Committee. This may be merely an oversight from the Statement rather than a reflection of any failure to consult. The Committee would welcome your description of the extent to which consultations across the community and the legal profession pointed to agreement on these major proposals which have now become law without Parliamentary debate or sanction. The Committee notes that in making these Ordinances you have placed considerable reliance on the Tasmanian Law Reform Commission Report No. 31 on Rape and Sexual Offences (No. 84, 1982) although there are a number of other published authoritative reports on sexual crimes which have made recommendations somewhat at variance with some of those in Report No. 31 (for example, in connections with the abolition of the common law offence of rape). The Committee seeks your advice on whether, after full parliamentary debate, the Tasmanian Legislative Assembly implemented the recommendations of its own law reform experts. As you will be aware Principle (d) of the Committee's terms of reference requires it to scrutinise delegated legislation to ensure that it does not contain matter more appropriate for Parliamentary enactment. Given that there are few areas of law socially or politically more significant than criminal law the progressive promulgation of what may reasonably be seen as a criminal code (including sexual offences and property offences) must give the Committee pause in considering the application of Principle (d) to these Ordinances. The Committee would be very grateful to have your comments and advice on these matters in particular whether any consideration was given to bringing these two far reaching reform proposals before the Parliament. Yours sincerely, Barney Cooney Chairman Deputy Prime Minister Attorney-General Parliament House Canberra A.C.T. 2600 M85/4852 4 March 1986 Dear Barney, I refer to your letter of 18 February 1986 concerning the Evidence (Amendment) Ordinance (No. 2) 1985 and the Crimes (Amendment) Ordinance (No. 5) 1985, a comprehensive review of the ACT laws relating to sexual offences. These Ordinances form part of the program of reform of the criminal laws of the ACT, which my predecessor began in September 1983. The importance of a review of the criminal law was emphasised by (the then) Chief Justice Blackburn on 6 July 1983 in the case of Queen v Sykes when he said, `the criminal law of this Territory is to a degree which is scandalous, in need of review, and all Judges of this court have been saying so for twelve years to my knowledge'. The reform of the criminal law of the ACT has been undertaken in two parts. The first part, now substantially completed, involved a tidying up of archaic or non operative provisions as well as adopting some desirable reforms made interstate. The second part involves substantial reform of the laws covering particular classes of offences. So far, two Divisions of the Crimes Act 1900 (NSW) in its application to the ACT, have been the subject of such substantial review. The first was a review of property offences, which was implemented by the Crimes (Amendment) Ordinance (No. 3) 1985. The second was the review of sexual offences, implemented by the two Ordinances under discussion. Therefore, although there have been five Crimes (Amendment) Ordinances during 1985, only two of these implement reviews of laws covering the whole of particular class of offences. The programme for ACT criminal law reform certainly involves review, and, where appropriate, revision, of the whole of the Crimes Act, 1900 NSW in its application to the ACT. However, it should be noted that that Act, in its application to the ACT, is not a code. It is not technically correct, therefore, to refer to the programme as ``a major recodification''. In all non-code jurisdictions, including the ACT, nearly all the criminal law is contained in legislation: this has been the situation for most, if not all, of this century. You have expressed concern over the extent of consultation on the two Ordinances. I would point out that these Ordinances were given extensive consideration both by the ACT Criminal Law Consultative Committee and the ACT House of Assembly. The Committee considered these reforms not only at one of its ordinary meetings, but also at two specifically convened extraordinary meetings. Late in 1984, the draft ordinances were referred to the ACT House of Assembly which requested its Standing Committee on Finance and Legislation to consider them. That Committee presented a report to the House of Assembly in September 1985. It recommended that the Ordinances be agreed to, subject to certain minor amendments. The Ordinances were subsequently amended in accordance with these recommendations. I would also point out that the Office of the Status of Women was fully consulted at the outset and supported the proposals. I understand that the Office of Status of Women also undertook wide consultation amongst interested groups within the community. In preparing the draft Ordinances, consideration was given to the Tasmanian Law Reform Commission report No 31 on Rape and Sexual offences. Consideration was also given to recent reforms that had been implemented in NSW and VIC., together with reports from other Australian and foreign jurisdictions. As to your request for advice on whether the Tasmanian Legislative Assembly has implemented the recommendations of the above report I have been advised that while no legislation has been enacted giving effect to the recommendations a draft Bill is currently being prepared for consideration by the Tasmanian Government containing provisions that will give effect to some of the recommendations of the Commission, namely providing that a husband can be found guilty of the crime of rape against his wife, where the parties were not cohabiting at the time of the offence; removing the presumption that males under the age of fourteen could not commit rape; providing for the suppression of names of victims, and offenders in incest cases. In view of the wide consultation, I believe the two Ordinances cannot be regarded as falling into the same category as other delegated legislation made without prior reconsideration by elected representatives. As indicated in my letter of 4 December 1985, to your predecessor, concerning the Crimes (Amendment) Ordinance (No. 3) 1985, if the ACT House of Assembly had had legislation making powers, this Ordinance would have been law by virtue of its unanimous passage by that House. As you are aware, the issue of self-government for the ACT is a very live and sensitive one, and it would not be appropriate for the criminal law of the ACT to be contained in a Commonwealth statute. Yours sincerely, (Lionel Bowen) Senator Barney Cooney, Chairman, Standing Committee on Regulations and Ordinances, Parliament House Canberra ACT 2600. Senator LEWIS(Victoria)(6.52) —I draw to the attention of not only honourable senators but also all members of the House of Representatives-indeed all those who are listening-the report of the Senate Standing Committee on Regulations and Ordinances. It is a most important report. It deals with the Artificial Conception Ordinance 1985 of the Australian Capital Territory. The only people who are really affected by this Ordinance are the people of the Australian Capital Territory so the legislation is being enacted by way of ordinance, not legislation. Thus the matter has not come before the House of Representatives or the Senate for debate but it is a matter of national significance. The seventieth report of the Senate Standing Committee on Regulations and Ordinances of June 1981 stated: The Committee is concerned to establish a mechanism whereby the attention of the Senate may be drawn to a matter which, while not necessarily warranting disallowance under the Committee's principles, is nonetheless of such significance as to merit substantive discussion in the Senate . . . This is a matter of such significance that it warrants consideration by all honourable senators and debate in this chamber, indeed debate nation-wide. I draw honourable senators' attention to the measure which deals with what happens in regard to paternity, what happens with regard to maternity, what happens in relation to donated semen and, in particular, to the fact that the secrecy of the donor of semen is not protected. I am not sure whether that should be so but I will say this: It is my firm belief that anyone who donates semen in the 1980s and does not believe that around 20 years later, when the children are grown up, they will want to know who their father was, will have a tremendous shock. In 20 years time there is no doubt that the children will want to know who the donor of the semen was. These are matters of national significance and national importance which warrant not only debate but also the best brains of this Parliament to consider what is important and what should be borne in mind. I seek leave to continue my remarks later. Leave granted; debate adjourned. The DEPUTY PRESIDENT(Senator Hamer) —I inform the Senate that the President has received letters from the Leader of the Government (Senator Button) and the Leader of the Opposition (Senator Chaney) requesting a variation in the membership of Estimates Committee A and D. Motion (by Senator Button)-by leave-agreed to: (1) That the following senators be discharged from further attendance on Estimates committees- Estimates Committee A-Senator Coates Estimates Committee D-Senator Watson (2) That the following senators, having been duly nominated in accordance with Standing Order 36ab, be appointed members of Estimates committees- Estimates Committee A-Senator Richardson Estimates Committee D-Senator Michael Baume Bills received from the House of Representatives. Motion (by Senator Button) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage, and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Button) read a first time. Second Readings Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.56) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- BUILDERS LABOURERS' FEDERATION (CANCELLATION OF REGISTRATION) BILL 1986 This Bill and another Consequential Bill, which I will shortly introduce, provide for the cancellation forthwith of the registration of the BLF and consequential measures which flow from that action, including the re-allocation of BLF work coverage to other registered unions. Immediate legislation to achieve these objectives has become necessary because of the intolerable situation with which the industry is faced as a result of the actions of the BLF. On 20 August 1985, the Minister for Employment and Industrial Relations introduced the Building Industry Bill into the Parliament and in doing so set out the reasons why the Government concluded there was no other course than to deal with the BLF as proposed in the Bill. At that time it was clear to the Government that the BLF had established an unparalleled pattern of broken industrial agreements and undertakings and that, through its industrial excesses, it had set itself apart from the mainstream of the trade union movement generally and also from other building industry unions. The Minister went to some lengths to outline the considerable steps which this Government had taken since coming to office to deal within the established industrial relations framework with the problems posed by the BLF. However, efforts by the Government, employers and the trade union movement to achieve a permanent resolution to the problems were repudiated at every turn by the BLF. It was against this background and the immense damage being done not only to the industry, but also to the job security of building workers, by the actions of the BLF, that the Government decided it had no alternative but to pursue the course of action set out in the Building Industry Bill. Accordingly, following the passage of the Building Industry Act, the Minister applied on 6 September 1985 to the Australian Conciliation and Arbitration Commission for a declaration under the Act. He sought a declaration that the BLF had engaged in conduct which contravened agreements or undertakings to which it was a party, which seriously hindered or prevented the achievement of objects of the Conciliation and Arbitration Act or which was inimical to the prevention and settlement of industrial disputes by conciliation and arbitration. In short, Mr President, the Full Bench was asked to consider whether the BLF had engaged in conduct which threatened the very basis of our present system of industrial relations. The Minister's application was duly dealt with by a Full Bench of the Australian Conciliation and Arbitration Commission which handed down its decision last Friday. I should add that the Government's application was supported by the Governments of New South Wales and Victoria, by the Confederation of Australian Industry and by building employers through the Australian Confederation of Construction Contractors and the Master Builders Federation of Australia. This support for the Government's application emphasises the extent of concern within the community at the behaviour of the BLF and the damage its actions have inflicted on the building industry and on the economy. Because of the serious consequences of the action under the Building Industry Act the Government was most concerned that the Builders Labourers' Federation should receive every opportunity to know in detail what the Government alleged against it and to answer those allegations. The Act made such provision and there were extensive proceedings before the Commission. These proceedings occupied 56 sitting days and covered 4500 pages of transcript. Counsel representing the Government tendered 298 exhibits to demonstrate to the Full Bench that the BLF's conduct was such as to warrant the making of a declaration. The BLF itself tendered 105 exhibits, was represented by 4 counsel-including 2 QC's-and called 75 witnesses and evidence from all States, including the ACT. On 4 April, the Full Bench issued the declaration which the Government had sought. In doing so, the Full Bench concluded that: `It has been established beyond question that the Builders Labourers' Federation has rejected the standards of behaviour accepted by most trade unions in Australia. The Federation has no standards as that word is commonly understood, but reacts to events according to the view taken at the time by the Federal Management Committee. Instead of a rational policy designed to advance the interests of the members, the Federal Management Committee is addicted to slogans.' The Full Bench went on to say that: `It is under such archaic banners that the Federal Management Committee has waged its campaigns, leading the rank and file from one disaster to the next. The efforts of the Leaders have caused hardship to other workers and aroused the hostility of the other building unions. Builders labourers have been deprived of National Wage Case increases until long after other Australian workers have received that benefit; the excesses of the leadership have taken the Federation so far outside conventional trade union activity that it has been expelled by the Labour Council of New South Wales. As our review of the evidence has shown, the activities of the Federation have brought extensive dislocation to the building industry. The case against the Builders Labourers' Federation is overwhelming.' The declaration made by the Full Bench illustrates the breadth of the Federation's disregard for normal standards of industrial behaviour. The declaration specifies numerous fundamental breaches by the BLF of agreements and undertakings regarding its conduct within the Federal system. These include breaches of undertakings the BLF gave to the Industrial Registrar, the Conciliation and Arbitration Commission, the Minister for Employment and Industrial Relations, employers and of industry agreements. Those breaches were the result of many instances of extremely damaging industrial action which led the Full Bench to declare that the BLF had prevented or seriously hindered the achievement of objects of the Conciliation and Arbitration Act and had engaged in conduct that was inimical to the prevention and settlement of industrial disputes by means of Conciliation and Arbitration. Even while the hearing was before the Commission, the union showed its complete contempt for the Commission, and its disregard for its undertakings, by pursuing claims that were patently in breach of the National Wage principles and by backing those claims with widespread industrial action. The consequences of that action were very serious indeed. For example, many building sites in every Australian State have been affected by strikes, bans and threats in pursuit of claims for the 3.8% National Wage increase, other wage claims, implementation of a shorter working week and payment for time on strike. As a consequence of these actions major projects have been held up and fellow building workers have been stood down and their livelihood jeopardised. The BLF, by its actions during and immediately after the hearing, has led the Government to the view that immediate measures are needed so that the Federation should no longer remain a registered organisation. The Federation has continued to flaunt every accepted convention on which the Australian system of industrial relations depends and its guerilla tactics, industrial blackmail and intimidation are an anathema to the vast majority of trade unionists. A clear illustration of the BLF's total contempt for the system is seen from the fact that on the very day that the Full Bench's decision was handed down, more than one hundred sites in NSW and Victoria alone were subject to bans in support of various BLF claim with no regard to the normal processes of dispute settlement through conciliation and arbitration. The Government cannot allow the threat to the Australian Conciliation and arbitration system, to the building industry and to its workers posed by the behaviour of the BLF to continue. It cannot allow one organisation to disregard utterly the accepted processes of dispute settlement and prevent the establishment of a strong efficient building industry, which can make a major contribution to economic and employment growth in Australia. The stage has now been reached where: After a very lengthy hearing, the Conciliation and Arbitration Commission has made a declaration based on a careful and thorough examination of the evidence before it. That decision is a damning indictment of the BLF's behaviour; time and time again, the BLF has shown it will not mend its ways and that it has no respect for the processes of conciliation and arbitration or the system which enables it to enjoy the status and benefits of a registered organisation; the BLF has lost the support of the trade union movement as a whole; the building industry continues to be seriously disrupted by the BLF's industrial action and faces the prospect of further sustained attack; and the system itself continues to be under serious challenge. The union is clearly only interested in using every available avenue to threaten, intimidate, coerce and weaken the resolve of all those engaged in the building industry to resist unreasonable demands by the BLF while it remains registered and enjoys the privileges and protection of the system. In these circumstances the Government has decided that the responsible course is to immediately cancel the registration of the Federation. This means that the BLF will no longer be a registered organisation under the Conciliation and Arbitration Act anywhere in Australia. The Bill I have now introduced will have that effect. Without immediate action, the BLF will undoubtedly do everything in its power to string out for many months final resolution of proceedings under the Building Industry Act in relation to it and, at the same time, place massive industrial pressure on employers not to support the Government's action. The BLF has no right to the protection of the system whilst at the same time it seems intent on destroying the system. Registration under the Conciliation and Arbitration Act does not confer only rights and privileges but also involves obligations to behave responsibly and in a manner consistent with the objects of the Act. Mr President, I must emphasise that the action which this Government has already taken in relation to the BLF and what is proposed now is not intended as an attack on ordinary builders labourers. It is the leadership of the Federation which cannot be trusted and which, as the Full Bench of the Conciliation and Arbitration Commission said, has led the rank and file from one disaster to another. The Government will be concerned to ensure that the jobs and conditions of individual labourers are protected and that they are able to join appropriate federally registered unions with coverage of their work and which will properly represent their interests. It is essential in the interests of the workers concerned and the system of conciliation and arbitration that they should be able to be represented and enjoy the protection of their conditions of employment by awards and agreements secured under that system. Employers will have a vital role to play under the new arrangements. They will have to ensure that the rights of labourers prepared to work normally are maintained. In addition, builders will have to be prepared to stand firm against efforts of the BLF to maintain its place in the industry. The Government will be looking to employers to remain united in support of our action. I should add that the code of conduct to which the employers are required to adhere will be maintained and any employer seeking to deal with the deregistered BLF will risk exclusion from government contracts. Furthermore, should it prove to be necessary, the Government, with the co-operation of the State governments, stands ready to ensure the maintenance of order so that workers wanting to get on with their jobs in the industry will be able to do so without interference, threat or coercion. Mr President, the terms of this Bill are simple. Honourable Senators will note that its preamble places emphasis on the public interest in preserving the system of Conciliation and Arbitration. The proceedings before the Commission, the Commission's findings, and the BLF's continuing misconduct demonstrate conclusively how serious a threat to that system the BLF has been. Flowing from that and from the concerns I have expressed, the Bill goes on to declare that, upon its becoming law, the registration of the BLF will forthwith be cancelled. Mr President, this is a step which the Government is taking as a last resort and after the Government has shown great forebearance and patience in exploring all reasonable alternatives. However, the BLF has shunned every effort to resolve this matter within the established industrial relations processes and has alienated itself from virtually all other groups within the community, including the trade union movement. The BLF's activities have been condemned by other building unions, have led to its expulsion from the NSW Trades and Labour Council and caused the ACTU to declare that it cannot support the BLF. The circumstances confronting us are therefore unique in the history of the nation and they require a unique solution. It is in that context that the Government has decided to take the serious action contained in this Bill. Such action is essential to preserve the future of the building industry, to establish rational industrial relations behaviour in that industry, to protect the national wage fixing principles, and to preserve the authority of the Conciliation and Arbitration Commission. Most of all, this legislation is essential to secure the preservation of the federal system of prevention and settlement of industrial disputes by conciliation and arbitration. I commend the Bill to the Senate. BUILDERS LABOURERS' FEDERATION (CANCELLION OF REGISTRATION-CONSEQUENTIAL PROVISIONS) BILL 1986 I have in my second reading speech on the Builders Labourers' Federation (Cancellation of Registration) Bill 1986 explained why the Government has decided to take action which will result in the immediate de-registration of the Federation as a registered organisation under the Conciliation and Arbitration Act. This Bill which deals with three important areas that are consequential upon the cancellation of the Federation's registration, is expressed to come into operation when that occurs. These areas relate firstly to the consequences of the Federation's de-registration, secondly, to the question of the registration in the future of the Federation or a similar body, and thirdly, to the coverage by federally registered unions of work which was covered by the federation before the cancellation of its registration. I shall address each of these areas in turn. Clause 4 of the Bill provides for the consequences of the Federation's registration. Important elements of this provision relate to operation of awards and access to the Federal Conciliation and Arbitration machinery. It provides that no award applying to the Federation or its members will have any force or effect in relation to them. The clause also provides that the de-registered federation, or any association of members or former members of the federation formed in relation to the building industry, will not be able to participate in proceedings before the Australian Conciliation and Arbitration Commission or be a party to an award made by the Commission. Furthermore, the Commission will not have jurisdiction over industrial disputes brought about by such bodies or their members, or by employers who are in dispute with them. The provision makes it clear, however, that the commission is not denied jurisdiction over disputes between an employer and a registered union in relation to any of its members who may not have relinquished their membership of the federation or of some other association in the industry formed by the members or former members of the Federation. This is necessary so that Federation members who join registered unions before they cease to be members of the federation have access to the federal dispute settlement procedures and awards as members of such registered unions. The second significant area of the Bill concerns the future registration of the Federation. The Government believes that it would be entirely inappropriate for the Federation to be able to re-apply for registration immediately after its registration has been cancelled. Honourable senators need only reflect on the Federation's conduct after it was registered again in 1976 after being de-registered in 1974. Despite undertakings about its industrial behaviour and adherence to the process of conciliation and arbitration, it demonstrated within months of re-registration that it had no intention of abiding by those undertakings. Its subsequent conduct showed how little the obligations of a registered union meant to it. I refer honourable senators to last week's decision of the Full Bench of the Commission to make a declaration under the Ruling Industry Act for a clear exposition of the appalling history of the Federation's conduct after it was so re-registered. The Government therefore believes that a reasonable period should be set before the Federation can apply to be registered again. We consider that 3 years is the minimum period in which stability can be restored to the building industry without the presence of the federation as a federally registered union. Such a period is provided for in clause 5. Furthermore, the Government believes that the Federation should not be capable of registration again unless it is prepared to behave responsibly as a registered organisation. Accordingly, clause 5 also contains a requirement that a Full Bench of the Conciliation and Arbitration Commission must be satisfied that the Federation would not, if registered, engage in conduct inimical to the prevention and settlement of industrial disputes by means of conciliation and arbitration, and that such registration would not prevent or seriously hinder the achievement of an object of the Conciliation and Arbitration Act. The other requirements of the Conciliation and Arbitration Act as to registration will also apply, but any application for registration must also be dealt with by a Full Bench. These requirements also extend to any association formed in the industry by members or former members of the Federation. This will prevent any attempt to sidestep the requirements as to registration. The third important area of the proposed legislation relates to arrangements for federally registered unions to cover work of which the BLF had coverage when registered. Clause 7 provides that regulations may be made to give federally registered unions coverage of work in the industry or in connection with which the Federation was registered. This can only be done with the consent of those unions. The regulations will declare persons who work in that industry to be eligible for membership of the consenting union. Such regulations may relate to work of specified kind in the industry or part of the industry, and in Australia generally or specified parts of Australia. This is considered an essential measure to provide industrial peace in the industry, and to ensure that workers who are or were members of the Federation are able to be represented by responsible federally registered unions, to have disputes over their employment settled through the proper processes of conciliation and arbitration and to secure the protection of federal awards. I wish to emphasise that no union will be compelled to accept an extension of its existing work coverage and the Government will be consulting fully with all interested parties to ensure that the most appropriate arrangements are made. It is not our intention that these arrangements should result in disruption to the existing work coverage of any federally registered unions. Another important aspect of clause 7 is that these arrangements are intended to be of an interim nature until federally registered unions can alter their rules to cover such work. The regulations will therefore cease to operate to the extent that they are not consistent with any subsequent rule alterations made under the processes of the Conciliation and Arbitration Act. Mr President, each of these elements of the Bill represents an important part of the Government's approach to securing the proper operation of the federal system of dispute settlement, and the achievement of better industrial relations in the building industry. I stress that this cannot be achieved without the best efforts of employers, unions and workers in that industry to strive for a permanent improvement in their industrial relationships. Australia cannot afford to continue to have a situation like that brought about by the conduct of the BLF. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I lay on the table explanatory notes from the Parliamentary Library, the Department of Arts, Heritage and Environment, the Department of Education and the Australian Development Assistance Bureau on estimates of proposed additional expenditure for 1985-86. Motion (by Senator Button) proposed: That the Senate do now adjourn. Senator PUPLICK(New South Wales)(6.58) —I wish to raise very briefly on the adjournment a matter which I would be grateful if the Leader of the Government in the Senate (Senator Button), who is at the table, would simply consent to take on notice and draw to the attention of the Minister for Communications (Mr Duffy). It concerns the proposal by Australia Post to dump onto the Australian stamp market a large number-in fact $1m worth-of stamps from its own archival collection. For some time Australia Post has recognised the fact that it does not have a complete archival collection of early Australian postage stamps and for that purpose it has been seeking to build up its collection. The fact that it does not have a complete national collection of early Australian postage stamps is a reflection on what has been in the past the poor management and the poor planning undertaken by Australia Post. Therefore it has decided to raise the sum of approximately $1m and to do this for the purpose of allowing it to buy back into its own archival collection in order to establish a national collection which it should have maintained. I understand that it is interested in purchasing the collection of Ray Chapman, a former president of the Australian Stamp Dealers Association, which is reputed to be one of the most impressive private collections of stamps in Australia and may fill many of the gaps that Australia Post currently has in its national archival collection. However, in order to do so, Australia Post has decided to embark upon what is a most extraordinary way of financing, that is, by raising $1m or so by holding a series of auctions of material currently in its own archival collection. One million dollars may not seem very much in the overall budget of Australia Post but it represents about 15 per cent of the annual turnover of all Australian stamp auctions. Therefore, it is within the framework of Australian stamp auctions not an insignificant amount. In particular, Australia Post proposes to put onto the market four types of postage stamps. They are the early kangaroos, some of the early decimals, the very famous five shilling Sydney Harbour Bridge stamps and sets of the Robes and Coat-of-Arms stamps. It is important to understand that these are not cheap items. For instance, if we look at the current Australian stamp catalogue, we will see that a #1 brown and blue first watermark 1913 Australian kangaroo stamp currently has a value of approximately $1,800; for one postage stamp that is a fair amount of money. The 10 shilling grey and pink first watermark 1913 can fetch anything between $750 and $1,500. The second watermark 1915 issue, the five shilling grey and yellow, sells for around $900. The third watermark 1915 Australian kangaroo stamp, a #2 stamp, is currently catalogued at $2,800 for a single stamp. The famous five shilling Harbour Bridge stamp of 1932, a five shilling green stamp, is in the catalogue at $650 but at the moment is retailing in Sydney for between $800 and $850. The Coat-of-Arms set, which is also proposed to be included in this collection of material, will cost perhaps $200 to $250. The coronation set, the so-called Robes set, will cost $150-odd. Honourable senators may not think that dumping a small number of stamps on the market will have very much effect. But is is proposed that 60 of the five-shilling stamps, approximately 200 sets of the Robes and 130 sets of the Coat-of-Arms will be put on the market. We do not know how many of the kangaroo stamps will be put on the market-perhaps only a dozen, but maybe more. We know that in certain private collections, one of which I am aware in South Australia, some 60 stamps are held in the one collection. I know of one in Adelaide that has more than 600 kangaroo stamps, including a number of the #2 stamps. I will give an example of the volatility of the market when a large number of stamps come on to it. In 1980, to buy a Coat-of-Arms set one would have had to pay approximately $450; now one can buy one for about $225. Some years ago the British post office, although not conducting an auction, acted by a quite improper dumping of stamps on the market, a matter for which a philatelic curator was subsequently suspended pending police investigation. The so-called De La Rue set of high value castles which is catalogued for approximately #515 sterling is currently available on the market in Sydney for somewhere in the vicinity of $320, which is a very considerable difference. That poisoning of the market has taken place quite simply because the United Kingdom post office allowed these stamps to come on to the market. A number of people to whom I have spoken have indicated that perhaps one of the advantages of this will be that a large number of stamps will be bought by overseas collectors. In some respects that may be true but, in terms of the kangaroo stamps, it may also be that they will fall within the provisions of the Protection of Movable Cultural Heritage Bill which has passed the House of Representatives and is awaiting consideration by the Senate. It is certainly true that there are a number of very rare stamps varieties which one would hope would not be exported from Australia following enactment of the Protection of Movable Cultural Heritage Bill. However, what I object to is that the Government, through Australia Post-I am sure the Government and the Minister have absolutely no knowledge of this matter-is making a decision to poison the market by offloading $1m worth at least of its privately held archival stock to what will in fact be the disadvantage of collectors, of people who had bought these items in reasonably good faith for investment purposes. People who are intimately concerned with the trade will find that they are now at risk because, in order to cover its previous failure to maintain an adequate archival collection, Australia Post now wants to take 15 per cent of the total stamp auction market and poison the market by in effect dumping a large number of additional sets of postage stamps on to the market. In the course of things that we deal with in this chamber, it is an extremely minor matter to a very large number of people. Senator Button —Hear, hear! Senator PUPLICK —I am glad that Senator Button is prepared to acknowledge that it is only a minor matter. I am sure that the two million stamp collectors in Australia will be pleased to note that their intense interest in this matter is not shared by a senior Minister in the Government. Nevertheless, for those who are concerned about this, it is a matter of general principle that I do not think that a government or a government agency should use its resources in this way to raise money on the open market in a fashion that will have considerable detriment to private collectors and to people who have made bona fide investments. The best that I can hope for is that Senator Button will at least undertake to ensure that this matter is referred to his colleague, Mr Duffy, the Minister for Communications, and that some consideration is given to whether Australia Post should be allowed to proceed. I understand that the first auction is not scheduled to take place until July, but there will be four of them spread over the next 12 months or so. I do not believe that Australia Post has entered into proper negotiations with those who may be affected. I do not believe that Australia Post is attempting to raise money to fill its archival collection in the correct fashion. I do believe that the effect that this will have on the Australian market will be an undesirable one. Minor as the matter is, it is nevertheless a matter on which the Minister should take some advice and see whether he can prevent this from happening. Senator BOSWELL(Queensland)(7.08) —I wish to take just a short time of the Senate to bring before it the plight of the farmers who are down here probably for the fourth of fifth time, lobbying to try to explain and put their point of view to the Ministers of the Hawke Government. We have seen them on a number of occasions. The first group of about 50,000 farmers came down here last year, I think on 1 July. They put their problems and their concerns to the Prime Minister (Mr Hawke) but, of course, nothing has happened since that time. Interest rates have gone up. Commodity prices have fallen, although I accept that the Government has no responsibility for that. I have a summary that I have prepared that I want to have recorded in Hansard. The summary refers to points that the farmers have lost-reductions in allowances or the loss of allowances for the rural community. I plead on behalf of the rural community. At the moment the rural community is honestly on its knees, with no hope in sight. Farmers cannot keep up with the ever rising interest rates. There is just a big blank void in front of them and they cannot see how they can ever get ahead of the situation. All they can see is a great, dismal bankruptcy staring them in the face. They are in Canberra making a last desperate plea for something to be done. There are a number of things that this Government can do. It can start by restoring some of the allowances that have been taken away from them. I seek leave to incorporate a list of those allowances in Hansard. The PRESIDENT —Senator Boswell, did you show the document to the relevant Minister? Senator BOSWELL —I showed the document to Senator Button and he assured me that it would be all right. Leave granted. The document read as follows- LABOR'S ADVERSE BUDGETARY DECISIONS ON PRIMARY INDUSTRY May Mini Budget: 1983 1. Reduction of general depreciation allowances. 2. Removal of the tax incentive from the Income Equalisation Deposit Scheme. 3. Increase by 2 cents a litre the excise on aviation fuel. 4. Abolition of the special depreciation allowance for petrol storage. 5. Abolition of the automatic in out opting provisions of the tax averaging scheme. 6. Cancellation of the Bicentennial Water Resources Programme. 7. Decreasing at a cost of $10 million in 1983-84 the subsidy payable under the Petroleum Products Freight Subsidy Scheme. 8. Increasing interest payments on Telecom and Australia Post, resulting in higher telephone and postal charges. August Budget: 1983 9. Increased cost recovery percentage of export inspection to 50% from 1 October 1983, doubling the cost of export inspection charges from $18 million to $36 million. 10. Providing only $20 million for wool promotion instead of the $28 million promised in the election campaign. 11. Providing only $1 million towards the national soil conservation programme instead of the $4 million promised. 12. Placing an excise tax on fortified wine, despite the categoric election promise that there would be no sales tax or excise tax on wine. 13. Increasing the excise on manufactured tobacco by 30%. 14. Cutting back the Petroleum Products Freight Subsidy Scheme. 15. Removal of tax concessions for clearing and cultivating new land and swamp drainage. 16. Removal of the sales tax exemption for oils and lubricants. 17. Increasing by 1.5 cents a litre the excise on petrol and diesel fuel, and indexing the excise. 18. Not increasing the rebate for excise on diesel fuel for tractors. 19. Increasing the excise on aviation fuel by 0.5 cents a litre, on top of the 2 cents a litre increase in May. Senator BOSWELL —I thank the Senate. I hope that the Government will take the plight of the farmers and rural communities into consideration when it brings down its package on 15 April, next Tuesday. I know that 170,000 farmers will be looking expectantly to see some hope on the horizon. I hope that this Government honours its commitments to the sugar industry and to the general farming industries; I sincerely hope that there is some future for the wealth creators of this nation. Question resolved in the affirmative. Senate adjourned at 7.12 p.m. The following papers were tabled: Archives Act-Regulations-Statutory Rules 1986 No. 31. Audit Act-Regulation-Statutory Rules 1986 No. 36. Australian Bureau of Statistics Act-Proposals 1986- No. 2-Engineering Construction Survey. No. 3-Survey of Beach Usage-Adelaide. Australian Meat and Live-stock Corporation Act-Orders 1986- M28-Amendment to Order No. M24/85 1986 Performance, dated 6 March 1986. MQ17-Amendments to the Corporation's 1986 Quota Administration Schemes for EEC covered by Order No. MQ14/85, Order No. MQ15/85 and Order No. MQ16/85, dated 6 March 1986. Banks (Shareholdings) Act-Regulation-Statutory Rules 1986 No. 44. Census and Statistics Act-Proposal No. 3 of 1986-List of Names and Addresses of Agricultural Establishments for Bureau of Agricultural Economics. Christmas Island Act-Regulations 1986-No. 1 (Motor Traffic Ordinance). Commonwealth Teaching Service Act-Determination 1986 No. 1. Companies Act-Regulations-Statutory Rules 1986 No. 33. Companies (Acquisition of Shares) Act-Regulations-Statutory Rules 1986 No. 34. Customs Act-Notice 1986 No. 2-Specified Rate in Respect to the Diesel Fuel Rebate, dated 14 March 1986. Defence Act- Declaration under Regulation 49 of the Defence Force Regulations of certain defence practice areas, dated 15 January 1986. Defence Force Remuneration Tribunal Determinations 1986- No. 7, dated 19 December 1985. No. 9, dated 19 December 1985. Determinations 1986- No. 12-Cadet Forces Allowances. No. 13-Travelling Allowance and others. No. 14-Outfit Allowance. No. 16-Intermediate Term Duty Living Allowance and others. Defence Force Discipline Act-Regulations-Statutory Rules 1986 No. 46. Excise Act-Notice 1986 No. 2-Specified Rate in Respect to the Diesel Fuel Rebate, dated 14 March 1986. Export Control Act- Export Control (Orders) Regulations-Orders 1986- No. 4-Prescribed Goods (General) (Amendment). No. 5-Fish (Amendment). Extradition (Foreign States) Act-Regulations-Statutory Rules 1986 No. 32. Freedom of Information Act-Regulations-Statutory Rules 1986 No. 45. Lands Acquisition Act-Statement by the Minister describing land acquired by agreement under sub-section 7 (1) of the Act, for specified public purposes. Liquefied Petroleum Gas (Grants) Act-Price Determination pursuant to sub-section 6A (3), dated 26 March 1986. Live-stock Export Charge Act-Regulations-Statutory Rules 1986 No. 40. Live-stock Slaughter Levy Act-Regulations-Statutory Rules 1986 No. 39. National Health Act-Regulations-Statutory Rules 1986 No. 38. Poultry Industry Levy Act-Regulations-Statutory Rules 1986 No. 42. Public Service Act-Determinations 1986 Nos 7, 10, 12, 13, 14, 15. Quarantine Act-Regulation-Statutory Rules 1986 No. 37. Rural Industries Research Act-Regulations-Statutory Rules 1986 No. 41. Seat of Government (Administration) Act-Ordinances 1986- No. 2-Rates (Amendment). No. 3-Motor Traffic (Amendment). Securities Industry Act-Regulations-Statutory Rules 1986 No. 35. Superannuation Act-Regulation-Statutory Rules 1986 No. 43. Telecommunications Act-By-laws- Telecommunications (Charging Zones and Charging Districts) Amendment No. 64. Telecommunications (Community Calls) Amendment No. 41. GOVERNOR-GENERAL'S PROCLAMATIONS-COMMENCEMENT OF ACTS: Proclamations by His Excellency the Governor- General were tabled, notifying that His Excellency had proclaimed the following Acts and sections of Acts to come into operation on the dates specified: Foreign States Immunities Act 1985-All provisions other than sub-section 18 (2)-1 April 1986 (Gazette No. S 128, 26 March 1986). Marriage Amendment Act 1985-Sections 4, 10, 11, 12, 13 and 23-7 April 1986 (Gazette No. S 153, 7 April 1986). Public Service and Statutory Authorities Amendment Act 1985-Sections 33, 34, 36, 37, 38 and 39-1 April 1986 (Gazette No. S 134, 27 March 1986). The following answers to questions were circulated: (Question No. 494) Senator Maguire asked the Minister representing the Treasurer, upon notice, on 23 September 1985: (1) What percentage of taxpayers had taxable incomes above $22,000, in the 1982-83 income tax year. (2) What percentage of the total cost to the Budget of the Dependent Spouse/Daughter/Housekeeper rebates combined went to those taxpayers with taxable incomes greater than $22,000 in 1982-83. (3) What percentage of all taxpayers in 1982-83, received either a Dependent Spouse/Daughter/Housekeeper rebate. (4) What percentage of taxpayers with incomes: (a) between $22,000 and $31,999 and (b) over $32,000, received either a Dependent Spouse/Daughter/Housekeeper rebate. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) 17 per cent of taxable individuals in the 1982-83 income year had taxable incomes above $22,000. (2) 31 per cent of the amount of rebates allowed for dependent Spouse or Daughter-Housekeeper rebates in the 1982-83 income year were allowed to taxable individuals with taxable incomes above $22,000. (3) 19 per cent of taxable individuals in the 1982-83 income year were allowed a rebate for a dependent Spouse or Daughter-Housekeeper. (4) In the 1982-83 income year, (a) 37 per cent of taxable individuals with taxable incomes between $22,000 and $31,999, and (b) 32 per cent of those with taxable incomes above $32,000, were allowed a rebate for a dependent Spouse or Daughter-Housekeeper. (Question No. 654) Senator Durack asked the Minister for Resources and Energy, upon notice, on 7 November 1985: (1) What is the present legal status of the former Northern Territory pastoral leases known as `Goodparla' and `Gimbat' which have been resumed by the Commonwealth Government. (2) What is the present legal status of any mining tenements which had been granted over portions of these leases prior to their resumption. (3) Will the Commonwealth Government if there is any doubt about the security of tenure under any such mining leases remove the doubts as a matter of urgency. (4) Will the Commonwealth Government protect the rights of the holders of any such mining tenements in the event of the declaration of Stage 3 of Kakadu National Park. (5) What action does the Government propose to take in respect of any applications for exploration licences or mining tenements which have already been made but not granted in the event of the declaration of Stage 3 of Kakadu National Park. Senator Gareth Evans —The answer to the honourable senator's question is as follows: (1) The Northern Territory pastoral leases known as `Goodparla' and `Gimbat' have not been resumed by the Commonwealth; the present legal status of the pastoral leases is the same as that which existed prior to the granting of self-government to the Northern Territory, i.e. 50 year pastoral leases held from the Commonwealth since 1961 and 1962 respectively. (2) The legal status of mining tenements granted over portions of these leases prior to self-government is as provided under sections 69-70 of the Northern Territory (Self Government) Act 1978. (3) There is no such doubt about the security of tenure of such mining leases. (4) The rights of the holders of such tenements would be preserved in accordance with the provisions of section 8B of the National Parks and Wildlife Conservation Act 1975. (5) The Government is currently addressing various matters associated with the incorporation of the `Gimbat' and `Goodparla' pastoral leases into Kakadu National Park. Until the Government has completed its consideration of the matter I am not in a position to outline the Government's intentions regarding future exploration and mining. (Question No. 896) Senator Jessop asked the Minister representing the Minister for Foreign Affairs, upon notice, on 14 February 1986: (1) How many Afghan refugees are present in Pakistan and Iran, and what percentage of the total number of Afghan refugees does this figure represent. (2) What was the population of Afghanistan before the Soviet invasion in 1979. (3) Can an estimate be given of: (a) how many Afghans have been killed as a result of the Soviet invasion and occupation; (b) how many soldiers in the Afghan Army and the Soviet occupying forces have been killed; and (c) how many Afghans have died in refugee camps. (4) Why did the Australian Government decrease its support for assistance programs by the United Nations High Commissioner for Refugees and the International Committee of the Red Cross for Afghan refugees in Pakistan from $6.363m in 1983-84 to $4.525m in 1984-85 and an estimated $4.600m in 1985-86. (5) Is the number of refugees coming out of Afghanistan increasing, decreasing or stable. (6) Does the Australian Government provide any humanitarian aid to the Afghan refugees in Iran. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) According to the Government of Pakistan there were approximately 3 million Afghan refugees in Pakistan at the end of 1985. Official Iranian estimates put the number of Afghan refugees in Iran, as at mid-1985, at 1.8 million. These figures represent about 99% of the total number of Afghan refugees. (2) An official census conducted in June 1979, six months before the Soviet invasion, put the population of Afghanistan at 15.5 million. (3)- (a) It is not possible to provide any reliable estimate of the total number of Afghans killed as a result of the Soviet invasion and occupation of Afghanistan, but the casualties have been significant. Claims by some resistance leaders put the number of Afghan casualties in the millions but the true figure may not be that high. (b) Because of mass desertions from the Democratic Republic of Afghanistan military it is not possible to assess accurately the number of Afghan military personnel killed in Afghanistan in the past six years. However, it has been estimated that there have been 25,000-30,000 Soviet casualties in the past six years. This figure includes both dead and wounded. (c) No statistical records are kept by either the Government of Pakistan or the UNHCR of deaths in Afghan refugee camps in Pakistan. In Iran there are no refugee camps as such. A number of short term reception centres have been established by the Government of Iran but Afghan refugees remain at these centres for no more than two months before being absorbed into local communities. (4) In 1983-84 Australia's assistance to Afghan refugees in Pakistan comprised 25,000 metric tonnes (M.T.) of wheat plus freight at a cost of $4.985 million (channelled through the World Food Program) and $1.303 million for a water drilling program co-ordinated by the United Nations High Commissioner for Refugees, to which Australia pledged assistance in 1982. The latter contribution was never intended to be a continuing commitment and was provided to purchase equipment such as a water drilling rig, drilling accessories and trucks. In 1984-85 Australia's food aid contribution was reduced to $4.749 million, comprising 20,000 M.T. of wheat, 155 M.T. of high protein biscuits (and freight charges). This reduction reflected tight budgetary restraint and the need to cater for increased and urgent needs in Africa. There was also a non-food component of $190,000 covering the final payment to the water drilling project. As a result of final accounting, total figures for Australia's assistance to Afghan refugees in 1983-84 and 1984-85 have been adjusted from those used by Senator Jessop and provided in the response to Question No. 1977 of 1985. The changes in the figures result from a revision of the costs incurred in providing the water drilling equipment to the UNHCR in 1983-84, and from increases in the final delivered costs of the food aid component in 1984-85. The totals are: 1983-84-$6.288 million; 1984-85-$4.939 million. The further reduction of Australia's assistance to Afghan refugees, to an estimated $4.6 million in 1985-86, reflects the finalising of our contribution to the water drilling project and the continued need to direct aid to the crisis in Africa from other regions. (5) It is difficult to estimate the number of refugees coming out of Afghanistan during any particular period. Evidence suggests, however, that there was a marginal increase in the outflow of refugees from Afghanistan in 1985 compared to either 1983 or 1984. (6) The Australian Government does not provide humanitarian assistance to Afghan refugees in Iran. (Question No. 966) Senator Chipp asked the Minister representing the Minister for Foreign affairs, upon notice, on 14 March 1986: (1) Does the Government agree that the Soviet Union's unilateral nuclear test ban moratorium is a positive step towards a bilateral US/USSR test ban, which is in turn essential to the conclusion of a Comprehensive Test Ban (CTB). (2) Does the Government agree that Secretary Gorbachev's recently stated willingness to accept on-site verification of a test ban within the USSR removes the United States' major stated objection to a CTB. (3) Is the Government of the view that continued United States nuclear testing, in addition to facilitating the development of new nuclear warheads will allow the development of X-ray lasers for the Star Wars programme, and that this is a major factor in the United States' failure to reciprocate the USSR test ban moratorium. (4) Has the Government consulted with the United States over these matters; if so, what has been the response. (5) Is United States reciprocation of the test ban moratorium likely, in the Government's view. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) The Government welcomes any interruption of the nuclear testing programs and has welcomed the Soviet Union's unilateral moratorium on nuclear explosions. The Government agrees that the cooperation of both superpowers is essential if a comprehensive test ban Treaty (CTBT) is to be concluded. The Soviet moratorium would be a positive step towards a CTBT if both parties agreed that this was a sensible way of working towards a CTBT. However, this is not the case. The Government's own position is that the most direct path to a CTBT is to address and overcome the outstanding verification problems. This view is supported by the history of the long quest for a CTBT. (2) No. The Government agrees that Secretary-General Gorbachev's recent statements on verification are encouraging although it should be borne in mind that the Soviet Union accepted the principle of on-site inspection in the CTBT context during the 1977/80 trilateral negotiations. The Government hopes that the Soviet Union will now be willing to engage in the process of translating these principles into concrete arrangements for the verification of a CTBT. Doing so would address an important United States objection to a CTBT. To this point the Soviet Union has declined to address the verification issues which are an essential part of any process of negotiating a CTBT. (3) The United States Government has stated that a CTBT is a long-term objective that would be acceptable in the context of broad, deep and verifiable arms reduction, substantially improved verification capabilities, expanded confidence-building measures, greater balance in conventional forces and at a time when a nuclear deterrent is no longer as essential an element as currently for international security and stability. I have no evidence which would substantiate the honourable senator's statement that research into X-ray lasers for possible application in a system of defence against ballistic missiles is a major factor in the United States decision not to join the Soviet testing moratorium; although I presume it is one consideration. (4) Yes. The Australian and United States Governments have regular consultations on these matters. In the course of these consultations we have reiterated our strong support for the early conclusion of a CTBT. We have been kept informed of the United States position in regard to the Soviet moratorium and the reasons for that position. (5) No. (Question No. 975) Senator Bolkus asked the Minister representing the Minister for Foreign Affairs, upon notice, on 14 March 1986: (1) Did Australia abstain from voting on Item No. 50 (Vote number 3 of Meeting number 113, Resolution number 40/80B) in the General Assembly of the United Nations on 12 December 1985. (2) Was the subject of the vote `The cessation of all test explosions of nuclear weapons'. (3) Did 121 nations vote for the Resolution, 3 vote against it and 24 abstain. (4) Did Australia abstain; if so, why, and who took the decision. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) Yes. (2) Yes. (3) Yes. (4) Yes. Australia abstained on the resolution in question primarily because it did not provide for the development of adequate means of verification of compliance with a comprehensive test ban treaty. The issue of verification is important but technically difficult and, in our view, should be given the utmost attention in a body like the Conference on Disarmament. For this same reason, we also had difficulty with the call in the resolution in question for a moratorium on testing to precede the negotiation and establishment of appropriate means of verifying such a moratorium. Australia is not opposed to a moratorium on nuclear testing but as a matter of principle we could not support a call on the nuclear weapon States to enter into an arrangement that may not be adequately verifiable. Finally, as is clear from the title, the resolution addresses nuclear weapon tests. Australia's firm view is that a CTBT should also embrace so-called peaceful nuclear explosions. I would note that, in one place, the resolution uses the apparently comprehensive formulation `complete cessation of nuclear-test explosions' and Australia was encouraged by this change in the language of the resolution as compared with previous years. The decision to abstain was made by the Minister for Foreign Affairs. Australia's support for a complete end to all nuclear testing by all States for all time was manifested by the resolution which Australia sponsored, together with New Zealand on the urgent need for a comprehensive test ban treaty (Resolution 40/81).