Wednesday, 16 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: Australian Broadcasting Tribunal: Television Standards To the Honourable the President and members of the Senate, of the Parliament of Australia assembled. We, the undersigned, plead that Parliament becomes aware that the Public has no legal right to influence the setting of Standards for Television Programming, that we deplore the new Standards which came into force on 1st February, and that we call on Parliament to amend the Broadcasting and Television Act 1942, section 16 (2), so that the Australian Broadcasting Tribunal, when determining Television Standards, and screening hours, shall consult with the Australian people: because at present the Tribunal is compelled by law to consult only with television stations on these matters, because the new standards are a result of such consultation, and have already been implemented without public discussion, because the new Standards are ambiguous, and without definition, because the new Standards are composed of modifying terms which circumvent the proscriptions, because the media is only motivated by aspirations of pecuniary superiority, because, in contrast, the public is only motivated by their wish to exercise pastoral care over the nurturing home environment of their children, because we believe that the Standards wrongly ascribe extreme importance to ``the storyline'' of a film screened, because we believe that the Standards wrongly ascribe total unimportance to the effects of viewing, especially violent films, on the young, the impressionable, the immature, the unstable, or the socially disadvantaged, because we refuse to accept the media-imposed assessment of community standards, and because we wish to impart our demand to be consulted, our demand to have legal status in decision-making, and the right to counsel those whose decisions so deeply affect our homes. Your petitioners therefore humbly pray that you will give this matter your earnest attention, and your petitioners, as in duty bound, will ever pray. by Senator Durack (from 32 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: 1. That we oppose the deregulation of housing interest rates without adequate safeguards to protect homebuyers. 2. That we condemn the Government for breaking its unequivocal promise not to deregulate these interest rates. 3. We express our concern that the Government's decision will cause undue hardship to many Australian families. Your petitioners most humbly pray that the Senate in Parliament assembled, should: urge the Government to reverse its decision and re-impose the interest rate ceiling. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 42 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth that: We feel a deep concern about Christopher Boyce's allegations of intrusions into Australia's domestic affairs by the Central Intelligence Agency of America. We feel disturbed by the knowledge that the U.S. base at Pine Gap is a C.I.A. operation. We deplore the secrecy surrounding the functions of the U.S. bases in Australia. We therefore pray the Australian Government will authorize a full, impartial public inquiry into all and any roles the Central Intelligence Agency of America has undertaken in Australia. We pray that this inquiry will allow the Australian public to make an informed decision about the future of the U.S. bases in Australia. by Senator Vallentine (from 150 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 inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 30 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the Australian Bill of Rights Bill is a harmful, dangerous and 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 Senator Durack (from 40 citizens). To the President of the Senate and all senators in the Parliament assembled we the undersigned do in humble duty pray that the parliament reject legislation to enact an Australian Bill of Rights which we believe is contrary to the well being and wishes of the Australian people and the Australian community. And your petitioners as in duty bound will ever pray. by Senator Knowles (from 28 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 proposed Australian Bill of Rights 1985 will transfer to the Commonwealth powers not given under the Constitution, will threaten our rights not protect them, will turn the Human Rights Commission into a Star Chamber, and will threaten the basis of freedom as enjoyed in a democracy. Your petitioners therefore humbly pray that the Senate reject this Bill of Rights. And your petitioners as in duty bound will ever pray. by Senators MacGibbon (from 12 citizens) and Macklin (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia, respectfully showeth: That the proposed Australian Bill of Rights Bill 1985 will endanger the Federal system in Australia, the State and Federal criminal justice systems, the State and Federal Police Force, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners therefore humbly pray: That your Honourable House defer debate on the Bill for twelve months and circulate the Bill for twelve months for the widest possible debate, scrutiny and discussion, and your petitioners as in duty bound will ever pray. by Senators Peter Baume (from 52 citizens) and Brownhill (from seven citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: 1. The Agreement between the United States of America and Australia concerning the Joint Defence Space Research Facility at Pine Gap terminates on 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. Your petitioners most humbly pray that the Senate in Parliament assembles, should decide that- 1. The Agreement between the United States and Australia concerning the Joint Defence Space Research Facility at Pine Gap not be extended beyond 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 Macklin (from 86 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 Senator MacGibbon (from 88 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That we urge you to oppose the Australian Bill of Rights Bill because: We get no legally enforceable rights under the Bill. The Bill does not guarantee vital rights such as the right not to belong to a trade union, the right to own private property and not be deprived of it without just compensation and the right of choice between Government and non-Government schools. The Bill gives Canberra extra powers to change our Federal system by the back door without a constitutional referendum. The Bill gives dangerous new powers to a Federal Government Commission. Your petitioners ask that the Senate, in Parliament assembled, should vote against the Bill of Rights, support Opposition amendments and seek a genuine public debate and a referendum on the Bill. And your petitioners as in duty bound will ever pray. by Senator Durack (from 518 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully shows: That we strongly support ``The A.C.T. Smoking and Tobacco Products Advertisements Prohibition Bill'' introduced by Senator Evans, because it represents the first positive national step towards the eventual elimination of wide-spread serious ill health caused by smoking tobacco. by Senator Vigor (from 150 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 distributors 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 83 citizens). To the Honourable the President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's ``White Paper'' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains Tax Hidden Death Tax described as ``Capital Gains Tax after death'' Gift Tax Increased Company Tax Employer taxes on employees' employment benefits All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject these tax proposals. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 18 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 17 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 Brownhill (from 12 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows: That human embryos deserve legal protection to enable the development of their full human potential. Your petitioners request that the Senate, in Parliament assembled, should: Pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos created by in vitro fertilization. And your petitioners as in duty bound will ever pray. by Senator Harradine (from 77 citizens). Senator BROWNHILL(New South Wales) —by leave-I present the following petition to the Senate, which is not in conformity with Standing Orders as it is not in the correct form and does not contain a prayer at the end thereof, from 12,424 citizens supporting Sea World Queensland in its bid to retain the right to exhibit live mammals, such as dolphins and whales: I support Sea World in its bid to retain the right to exhibit live mammals such as dolphins and whales. I also support the view that only by exhibition of mammals in a caring environment will humans learn to admire, respect and care for the animals of our oceans. Senator COLLARD(Queensland-Leader of the National Party of Australia) —by leave-I present the following petition to the Senate, which is not in conformity with Standing Orders as it is not in the correct form and does not contain a prayer at the end thereof, from 8,237 citizens supporting Sea World Queensland in its bid to retain the right to exhibit live mammals, such as dolphins and whales: I support Sea World in its bid to retain the right to exhibit live mammals such as dolphins and whales. I also support the view that only by exhibition of mammals in a caring environment will humans learn to admire, respect and care for the animals of our oceans. Senator SHEIL(Queensland) —by leave-I present the following petition to the Senate, which is not in conformity with Standing Orders as it is not in the correct form and does not contain a prayer at the end thereof, from 8,884 citizens supporting Sea World Queensland in its bid to retain the right to exhibit live mammals, such as dolphins and whales: I support Sea World in its bid to retain the right to exhibit live mammals such as dolphins and whales. I also support the view that only by exhibition of mammals in a caring environment will humans learn to admire, respect and care for the animals of our oceans. Senator KILGARIFF(Northern Territory) —by leave-I present the following petition, which is not in conformity with Standing Orders, from eight citizens objecting to the human rights legislation: 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. Petitions received. Senator VIGOR(South Australia) —I give notice of my intention, three sittings days after today, to withdraw Business of the Senate, notice of motion No. 2, standing in my name for the disallowance of sections 54 and 59 of the Australian Capital Territory Health Authority Ordinance 1985. I seek leave to postpone the notice of motion. Leave granted. Senator VIGOR —I move: That Business of the Senate, Notice of Motion No. 2, be postponed till three sitting days after today. Question resolved in the affirmative. Senator MACKLIN(Queensland) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to amend the Commonwealth Electoral Act 1918 to provide for the election of members of the House of Representatives by proportional representation and for related purposes. Senator REID(Australian Capital Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the division within Australian Labor Party ranks illustrated by the criticism by the Federal Labor President (Mr Wran), together with State Labor Ministers, of the Federal Labor Government's action on housing interest rates; (b) notes the report that the Minister for Housing and Construction (Mr West) abstained from voting on the issue in Caucus; (c) notes the criticism by the Minister for Social Security (Mr Howe) of the Government's economic policies and direction; and (d) calls on the Government to change its economic policies because of the damage there proposed new taxes and high interest rates are causing to Australian families. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that, according to evidence to a Senate Estimates Committee hearing, the Australian Broadcasting Corporation (ABC) has suffered a $12.8m loss in the financial year, (of which $8m relates to imported television programs), because of the substantial fall in the 85/86 value of the Australian dollar; (b) notes that this loss followed the refusal by the Department of Finance of the ABC's strong requests of May 1985, (following an initial request in late 1984, to allow it to take forward foreign exchange cover, until the Department eventually agreed in January 1986), by which time this huge loss had taken place and since when the ABC has suffered no further foreign exchange losses. (c) regrets that the action of Senator Walsh's Department of Finance prevented the ABC from adopting the proper commercial practice which it is required to follow, resulting in such a large loss of taxpayers' money; and (d) calls on the Minister for Finance to instruct his Department to cease such costly and damaging practices. Senator GRIMES(Tasmania-Minister for Community Services) —I table the report on the state of the automotive industry for the year 1985 by the Automotive Industry Authority. Bills received from the House of Representatives. Motion (by Senator Grimes) 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 Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Grimes) read a first time. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(10.12) —I move: That the Bills be now read a second time. I seek leave to incorporate the second reading speeches in Hansard. Leave granted. The speeches read as follows- AUSTRALIAN CAPITAL TERRITORY COUNCIL BILL 1986 Mr President, this is an historic occasion. The purpose of this Bill is to provide for the introduction of a democratic, responsible form of government for the Australian Capital Territory. The population has been without an effective and representative form of government for over seventy years. It stands as the last remaining significant community in the Western World having no form of local or state administration answerable to the people. The ACT was conceived amidst the squabbling between Sydney and Melbourne at the Constitutional Conventions staged in the 1880s and 1890s. A reading of debates of the time the ACT was excised from New South Wales and the historic records, show Canberra was not readily accepted, and probably still hasn't been accepted, as Australia's national capital. To indicate the depth of feeling, I refer Honourable Senators to the following excerpts from the Melbourne `Argus' newspaper in 1910-``Canberra is in a dip subject to intense heat, having a soil too poor for herbage and with no adequate source of water supply . . . The facts suggest that Yass-Canberra is very near to being `no man's land' and no sane people would expend treasure and labour in trying to make a modern city in such surroundings''. Canberra is now regarded as one of the best planned cities in the world that all Australians can be proud of. It has a thriving economy and a growing population of over 250,000 people. After the Seat of Government Acceptance Act was passed in 1909 the then residents were struck off the electorate rolls for both state and federal voting. It has only been in the last twenty years that the people of Canberra were given the right to elect a member with full voting rights in the Federal Parliament. Canberra has always had a battle to gain democratic rights-the opposition reached a peak in 1974 when certain State governments and conservative parties opposed the ACT having the right to elect senators. The Bill was taken to a double dissolution, a joint sitting of both Houses and the High Court. ``Taxation without representation'' is a long-heard and valid catchcry. The people of Canberra have a right and indeed a responsibility, to elect representatives to oversee the spending of the revenue raised in the ACT. The Federal Parliament cannot reasonably provide a forum for decisions which affect the residents of the Territory. Canberra has had a fully elected House of Assembly since 1974, but that Assembly has only advisory powers. It lacks legislative, executive and financial control and accountability. Despite the efforts of the Assembly members-and I note that some former members are now sitting in this Parliament, like my fellow Senator, Susan Ryan-the Assembly cannot fully represent the ACT community. This Bill will ensure the Australian Capital Territory is properly represented. In 1982 the Labor Party made an electoral commitment to bring self-government to the Australian Capital Territory. The Government is now introducing a form of government which allows Canberra's citizens to manage their local affairs while the Commonwealth retains management of the national interests. It is a commitment to an appropriate sharing of functions and responsibilities. The Council will have a wide range of municipal and territorial functions and powers, including welfare, housing, tourism, the environment, water, gas and electricity, public safety, transport and taxation. The Government has taken significant steps to prepare for self-government. We have initiated an integrated budget process to set priorities and allocate resources. We have asked the Commonwealth Grants Commission to conduct an inquiry into the financing of Government services in the Australian Capital Territory for 1985-86. The Council can decide to instigate regular reviews. Instead of the past situation of an administration divided among a number of Commonwealth Departments, there will now be a single, effective administration, in the Council, delivering a wide range of municipal and territorial services. In addition, most remaining Commonwealth functions of a local nature in the national capital have been consolidated in the one port- folio. This will provide for economy in administration and for efficient co-ordination with the Council's activities. The Council will consist of thirteen members, twelve part-time and a full-time Chairperson elected at the first meeting. The Government will review the part-time status of members at the time it considers the transfer of additional responsibilities to the Council. Members will be elected for a four-year fixed term from single-member electorates by optional preference voting. Now Honourable Senators will be aware that this appears to be the main cause of concern voiced against this Bill. The criticism is misguided and underestimates the intelligence of the Australian Capital Territory community. Surely Honourable Senators can recall Members from both sides of the other Chamber being voted out by the electorate of the Australian Capital Territory. Single-member electorates will ensure that the duly elected council members perform and if they do not they will not be re-elected. The system the Government is proposing is the most democratic system for the Australian Capital Territory. It is consistent with the position taken by the Government and the Joint Select Committee on the type of electoral system most suited to elections to the House of Representatives. It accords with the practice in all mainland State lower houses or single chambers. It allows the electorate to select its representatives in the most direct way, avoiding the complications and uncertainties of other systems. It provides for stable government, yet allows change in voting patterns to be directly reflected in the Council's composition. It provides for small electorates where members' performance can be subject to close local scrutiny. The Bill also provides for public funding for political parties for the first election. The Council will decide its own policy on public funding for subsequent elections. There are also provisions in the Bill dealing with the holding of early elections in extraordinary circumstances. There is provision for an early election in the event of a deadlock being unresolved within thrity days. There is also provision for the Governor-General to dismiss the Council. This is a power to be used only in an extreme situation, for example if the Council was unable to govern. The system of government has been designed for the particular requirements of the Australian Capital Territory and therefore has no direct parallel elsewhere in Australia. It protects both local interests and the national interests in the Federal capital. As well as legislative and executive authority for a range of prescribed matters, the council will exercise executive powers under various Commonwealth laws and through agency and other arrangements made with the Commonwealth. In all the years of debate about self-government in the Australian Capital Territory, the greatest myths have revolved around the question of finances. Canberrans believed they would pay more while the States believed they were paying for the facilities in the Australian Capital Territory. The studies leading up to the Government's decision have, I hope, exploded most of those myths. The financial aspects of self-government will be satisfactory for both the residents of the Australian Capital Territory and the Commonwealth Government and thus the taxpayer. Commonwealth funding will be guaranteed for the first two years to maintain per capita real standards at the time of transfer, provided the Australian Capital Territory maintains its per capita real revenue effort at the time of transfer. For the following three years funding levels will be agreed with the Australian Capital Territory Council to smooth the transition to financial arrangements consistent with Commonwealth, State and Local Government financial arrangements and principles of fiscal equalisation. The Commonwealth-Australian Capital Territory financial arrangements will also recognise the unique circumstances prevailing in the Australian Capital Territory. The Australian Capital Territory Council will have the right to apply to the Commonwealth Grants Commission for periodic reviews of its financial arrangements with the Commonwealth. These arrangements will ensure that in financial matters the Australian Capital Territory will be treated as fairly and equitably as the rest of Australia. Most State-type taxes and charges are already levied in the Australian Capital Territory. Revenue-raising powers of this kind will be passed to the new Council. The opportunity is being taken by the Government to rationalise Australian Capital Territory public finance. The co-ordination and integration of the processes of budgeting of territorial expenditure and receipts which we began last year will continue and be further refined. The Parliament, the Council and the Australian Capital Territory community will, as a result, then have information available to assess the efficiency and effectiveness of government in the Australian Capital Territory. While there will be initial costs to be met by the Commonwealth for the establishment and election of the Council, as well as short-term increases in recurrent costs until administrative and staffing arrangements are integrated, these will be kept to a minimum. The Government has taken the opportunity of rationalising planning, development, lease administration and land management. The changed arrangements provide that the Commonwealth and the Council work in partnership. Planning and development will be undertaken by the National Capital Development Commission which will be restructured consistent with this Bill. Parliamentary oversight of the planning of Canberra will remain. However the newly constituted Commission will be the servant of both the Commonwealth and the Council. The Commission will be required to reach agreement with the Council before proceeding with planning and development proposals. The Bill provides that the Council will not be able to pass laws with respect to the planning of land use or for the development of land, except as may be prescribed by Commonwealth regulation. For efficiency and effectiveness the government has decided to integrate lease administration with planning. This will be accompanied by changes to planning controls. Land use classifications will be broadened, lease conditions will be standardised and in only a limited number of cases will special lease conditions be applied. Land development and lease marketing will be undertaken by the Commission on a commercial basis-subject to Commonwealth policy directives. Land will be provided to the commission as equity capital at valuation with development funds being provided from borrowings and sales revenue. These changes will remove this activity from budget cycles, making it more responsive to demand and ending the swings in supply of land to which Canberra has been subject. The question of recognition of the Council's lack of access to, or control over, land revenues will be taken up in the negotiation of the financial agreement with the Council. Details of the Government's approach are contained in the paper entitled ``Planning, Development, Lease Marketing and Lease Management''. The Bill now before the Senate to amend the National Capital Development Commission Act 1957 was drafted before the form of self-government for the ACT was decided. The Government will withdraw that Bill. A new Bill to amend the National Capital Development Commission Act 1957, will be brought before the Parliament shortly. It will make changes to the corporate structure of the National Capital Development Commission and to its powers and functions, consistent with the changes I have outlined. Management of all land, with the exception of lease administration, will be undertaken by the Council. The Commonwealth has defined nationally significant areas in which it will set the standards and bear the associated costs. In addition, the Commonwealth, for national capital purposes, may desire a higher quality of land management in other designated areas and in such cases will negotiate with the Council on standards and financial responsibilities. I now address individual Parts of the Bill. Part I provides for the usual preliminary matters of commencement and interpretation. Senators should note that the Jervis Bay Territory is a separate Commonwealth Territory and is not affected by the Bill. Part II establishes the Council and covers the range of procedural matters necessary for the conduct of the Council's business and proceedings. Part III deals with the election of the Council and redistribution processes. These are consistent with the Commonwealth Electoral Act 1918. The Council will not have legislative power to change the electoral system. Part IV covers the Council's legislative heads of power and specific Commonwealth laws to be transferred to the Council which are listed in Schedules 1 and 2. The Attorney-General shall decide whether the Council has power to make a proposed law. This will be a technical legal decision. The Attorney will not be second-guessing the Council's decisions as a government. Senators should note the Council will not be able to establish its own courts but, with the approval of the Commonwealth Attorney-General, can vest jurisdiction in existing courts. Part V will permit the Council to implement its own administration, management and staffing. The Council may establish standing and ad hoc committees to conduct its business. The Council will appoint its most senior executives and provision is made for their remuneration and allowances to be determined by the Remuneration Tribunal. The Head of Administration will be responsible to the Chairperson for the business of the Council and the general conduct of the Council's administration. The Council will be able to make laws determining the conditions of employment of its employees or those of its authorities. The establishment of separate staffing legislation for the Council will be a very significant task requiring extensive consultation with the Commonwealth and staff organisations. The Commonwealth expects to reach agreement with the Council before it enacts that legislation. To this end, the Bill provides for consultation on staffing, terms and conditions of employment, and industrial questions relating to employees, to take place between the Commonwealth and the Council. In the longer-term these consultative arrangements will also ensure that the Council will have regard to the effect of its decisions on the Commonwealth's interests as an employer operating side by side with the Council in the ACT. The Government is concerned to ensure that national wages and industrial relations policies, and its commitment to the Accord, are kept clearly in consideration through this consultative mechanism. The Commonwealth Conciliation and Arbitration Act will continue to apply in the ACT. Accordingly, the Council will not have legislative power in industrial relations matters except in relation to its own staff and as may be prescribed. In view of the Council's responsibilities, however, it will be necessary to develop arrangements to ensure that its views on ACT industrial relations issues are taken into account. The Government will be giving further consideration to the appropriate arrangements. Financial and Audit provisions are covered in Part VI. The Council will operate its own treasury and accounting system. All Council borrowings will be subject to the Commonwealth's approval. Borrowings may be guaranteed by the Commonwealth and any financial guarantees given by the Council will require Commonwealth approval. The Council can make its own Audit Law. The Commonwealth would expect this law to be consistent with the high standards of accountability required of the public sector. The Commonwealth Auditor-General shall be the Auditor-General of the ACT Council. The Commonwealth will be able to protect its unique national interests through a variety of mechanisms. If the Attorney-General certifies that in his opinion the Council does not have the power to make a proposed law it will not come into operation. Commonwealth law is, of course, supreme in those cases where there is an inconsistency between Council and Commonwealth law. The Governor-General will have power to disallow any Council law or by-law within six months after the law is made. Council law will not bind the Crown unless the Commonwealth so provides by regulation. These protections are essential in the national capital. It is the Government's intention, however, that any potential conflicts between the Council and the Commonwealth be resolved as far as it is possible by consultation rather than by legal process. Part VII attends to miscellaneous provisions and constitutional guarantees. The ACT will be brought into line with the States and the Northern Territory by applying the provisions of Section 92 of the Constitution, guaranteeing free trade. This will not bind the Commonwealth. Transitional provisions and consequential amendments contained in the Australian Capital Territory Council (Consequential Provisions) Bill 1986 will ensure a smooth transfer of powers and functions to the incoming Council. Until the Council enacts its own staff legislation the Bill provides for staff involved in functions transferred to the Council's administration to be employed under existing Commonwealth legislation and existing awards. The staff therefore retain the normal Public Service conditions of service during this period, including the right to seek promotion or transfer to other Australian Public Service departments and authorities. The Government proposes that the Consequential Provisions Bill and the ACT Council Bill be considered in cognate debate. The Commonwealth will negotiate with the Council on arrangements for transfer of functions; application of administrative law; the financial agreement including budgetary arrangments for the remainder of 1986/87; formal consultative procedures; and establishment action. The Commonwealth will also discuss with the States the status of the Council in Commonwealth/State forums and agreements. Following enactment of this Bill the Australian Electoral Commission will initiate the established process of electoral distribution, including public participation, to permit the first Council election to be held in September of this year. It is most important that we adhere to this timetable to give the Council time to complete negotiations with the Commonwealth, take up administrative responsibility, and formulate and introduce its budget for 1987/88. It will be clear to Honourable Senators that this legislation is both comprehensive and well-conceived. It provides for a most democratic, practical and economic form of government for the ACT. It provides an electoral system the same as that available at the Commonwealth and State level. It provides the incoming Council with a wide range of powers and functions. It safeguards the Commonwealth's interest in the National Capital. It provides for an efficient and effective administration. It puts the ACT on a proper financial basis. It protects the interests of those staff who are to be transferred. In short, the residents of the Australian Capital Territory will now be properly and effectively represented in the management of their affairs. The Commonwealth and the Council will work in partnership in the administration and management of the ACT. This is indeed a milestone in public administration in this country. I commend the Bill to the Senate. AUSTRALIAN CAPITAL TERRITORY COUNCIL (CONSEQUENTIAL PROVISIONS) BILL 1986 This Bill provides essential transitional and consequential amendments relating to the establishment of the Australian Capital Territory Council. The provisions of this Bill are largely of a technical nature and are designed to ensure a smooth transition of responsibilities to the incoming Council. Part I deals with commencement and interpretation. Part II deals with transitional matters. It provides for the Minister to convene the Council's first meeting; the Council's law making power during the period between the first election and the formal transfer of functions to the Council; the Council's interim staffing arrangements under the ACT Council Bill and the Public Service Act 1922; the status of the nominee of the House of Assembly on the ACT Electricity Authority following the abolition of that Assembly; the transfer of contracts from the Commonwealth to the Council, the Commonwealth indemnification of the Council; exemption from stamp duty of land transferred from the Commonwealth to the Council; and application of the Commonwealth Audit Act 1901. The Commonwealth Audit Act, with appropriate modifications and adaptions, will apply to the Council until its own audit law comes into effect, consistent with the high standards of accountability required of the public sector. Part III effects consequential amendments to the various Commonwealth Acts specified in the Schedule. The amendments principally relate to references to the ACT House of Assembly. The Bill provides for the Council's administration to be part of the Australian Public Service until the Council passes its own staffing legislation. Staff will therefore retain their existing rights and entitlements during this interim period. It provides for consultation with the Commonwealth before the Council enacts its own staffing legislation. The Commonwealth expects to reach agreement with the Council before it enacts its own staffing legislation, and appropriate provisions on this matter are included in the ACT Council Bill. Unions and staff associations will also be consulted. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. The PRESIDENT —I have received a message from the House of Representatives acquainting the Senate that, in accordance with the provisions of the Public Accounts Committee Act 1951, Mr Conquest, a member of the House of Representatives, has been appointed a member of the Joint Committee of Public Accounts in the place of Mr Sharp, discharged. Senator MACKLIN(Queensland)(10.13) —I move: That Regulation 5 of the Student Assistance Regulations (Amendment), as contained in Statutory Rules 1985 No. 354 and made under the Student Assistance Act 1973, be disallowed. Regulation 5 of Statutory Rules 1985 No. 354 amends regulation 34 of the Student Assistance Regulations. The amendments alter the progress rules for tertiary education assistance scheme recipients and make a number of consequential amendments, among them paragraph (r) on page 7, which substitutes a new sub-regulation (12) which is substantially the same as existing sub-regulation (12). The effect of this sub-regulation is to limit another sub-regulation, that is sub-regulation (5), which provides that a student's unsatisfactory progress will not result in the loss of TEAS if the unsatisfactory progress was due to illness or other circumstances beyond the student's control. Sub-regulation (12) provides: The reference in sub-regulation (5) to the failure of an applicant to complete successfully any work of a course due to the illness of the applicant, or to other circumstances beyond the control of the applicant- and this important part- does not include a reference to an illness diagnosed, or other circumstances applicable, when the applicant commenced to undertake the work of the year in which that failure occured. According to the Department the regulation was introduced to prevent students with permanent disabilities from avoiding the TEAS progress rules. Frankly, I think that this is a classic piece of bureaucratic paranoia invoking images of hundreds of disabled people milking the Education Department by enrolling year after year in courses which they are incapable of passing. The Australian Democrats will move for the disallowance of sub-regulation 12 and our position is very clear. First, failure due to circumstances beyond the student's control should not result in the loss of TEAS. Students suffering from some known disability with a physical manifestation, for example, chronic asthma-and I wish to look at that particular disease in some detail in a moment-or other types of disabilities, such as breakdown in a family or death of a close relative or a child, should be encouraged to undertake tertiary studies where there is a reasonable possibility that despite the disability the student can successfully complete the year's study. I wish to refer to the report of recommendations by the working group of the Committee for Student Services, which is a Melbourne University study, and in particular at page 10. We find that reported there are the results of various other studies that have been undertaken on the types of disabilities that affect progress in studies. It is very interesting to note that the major item in the Finlay study of 1976 in the United Kingdom was diseases of the respiratory system. The Melbourne study, which was undertaken in 1978, also showed that respiratory diseases represented 15 per cent of disabilities, the top `disability' after contraception-in other words, pregnancy. Again in Monash University respiratory disease was second with 19 per cent. These interesting similarities were pointed out in that report. It is also interesting to note that respiratory illness is either the most or the second most frequent reason for consulting in all the data collections. In Australia the most common disease suffered by people is respiratory disease. Currently in this country 23 per cent of all children suffer from asthma or a similar disorder with chronic respiratory problems. One would conclude from that data that we are facing a situation in which at least a quarter of our tertiary students, in the normal course of events, will suffer from some type of respiratory disease. This is a classic situation. It is a pre-existing condition and, in many circumstances, the occurrence of an attack is unable to be predicted. Such an attack could occur during a vacation period in which case there would be no problem. However, it could occur at a very crucial time in studies and the pattern of control of such respiratory diseases is quite typically that most of the sufferers do not suffer a severe attack throughout a year. However, many do and although the control systems that are available are extraordinary and have developed considerably over the past 10 years, nevertheless attacks can reoccur for a whole variety of reasons. I have selected asthma because it is of that nature and it is the most widespread disorder suffered by Australians and certainly by university students. Therefore we believe, as I have already said, that failure which is beyond the student's control should not result in the loss of TEAS and students suffering from this particular disability should be able to continue their studies. Thirdly, if students subsequently fail due to the disability, they should not lose TEAS. We believe that in those circumstances the removal of TEAS benefits would amount to a punishment for a disability. Fourthly, we believe that the repeal of sub-regulation (12) would not, as the Department contends, result in `students with permanent disability avoiding the TEAS progress rules'. Each tertiary student has to abide by progress rules within the tertiary institution. The Minister for Education (Senator Ryan) has taught in such an institution, as Senator Peter Baume and I have, and we know that students are subject to quite rigorous rules within the institutional framework in terms of their progress. There are elaborate mechanisms to deal with students who have failed and who wish to appeal against that failure. Every faculty in every university has an appeal mechanism for students who are excluded because of unsatisfactory progress. Any student who fails recurrently would obviously be suspended according to the normal rules of tertiary institutions as they currently operate in Australia. It seems to me that it is far better to allow those institutional rules to operate in a one-to-one situation where there is a personal context and the people making those decisions can have input from the people engaged in providing lectures and tutorials and providing counselling to students with regard to the progress of their work. It seems to me extraordinary that we should wish to impose on that educative process a bureaucratic decision which will be made in vacuo without the benefit of that intimate knowledge and understanding of the student's educational progress. The recently introduced provisions were most welcome and the Government now confirms them by allowing students with permanent severe physical disabilities to enrol on a part time basis to receive TEAS. That is an extraordinarily useful advance which this Government has made as a result of the report delivered to it from a professor in my old department, which had been the subject, prior to the Government's announcement, of a notice of motion on my part. I believe that that Government advance does not ameliorate the effect of sub-regulation (12). It makes no provision for a disability which is not physical, nor for a physical disability of fluctuating severity. Nor does the appeal to the Students Assistance Review Tribunal limit the ambit of sub-regulation (12). In 21 of the 31 cases which have gone before the Tribunal, where the Tribunal found that failure was due to a pre-existing diagnosed illness, the entitlement to TEAS was removed. I emphasise the point that in 21 of the 31 cases to which I have referred, TEAS was removed. Appealing to the Review Tribunal is absolutely useless for those people because in every case where there has been a pre-existing condition the people have lost TEAS and were punished for that disability. Senator Teague —There have been some successful appeals. Senator MACKLIN —There have been none. In a minute provided by the Department, five examples are given of successful appeals. Senator Teague —That is what I am saying. Senator MACKLIN —The minute provided shows that the successful appeals suggest that the Tribunal had the power to modify the effects of sub-regulation (12). I go back to my remarks when I said that they did not limit the ambit of sub-regulation (12). We are talking about sub-regulation (12) in a new context. The appeals did not modify the effect of that sub-regulation. The third example refers to a student with a hearing disability whose appeal was upheld on the basis that that disability could not have been anticipated. There is no reference in sub-regulation (12) as to whether the effects of the disability could have been anticipated. Sub-regulation (12) is direct in its wording. According to the Department the Tribunal was incorrect in allowing the appeal, and the Department would be entitled to ask the AAT to reverse the decision. That is the Department's position in regard to that matter, although it does not even come into play with regard to sub-regulation (12). This suggests that sub-regulation (12) is so strict and unreasonable in its terms that the Student Assistance Review Tribunal is forced at times to reach decisions which clearly repudiate sub-regulation (12). Senator Teague —But the Department has not gone to the AAT. Senator MACKLIN —No, it has not, but it said that it would be entitled to do so. That gives us an indication of the thinking of the Department. I have informed the office of the Minister for Education and the office of the shadow Minister that the Australian Democrats would support leave being given to the Government to immediately reintroduce a new regulation, identical to regulation 5 in all aspects, except for the inclusion of sub-regulation (12). We would expect that the Minister, if this regulation is disallowed, would take that option. I believe that there is a further opening to the Government-to bring in a new sub-regulation (12) which would avoid the types of problems that I have suggested. I will rehearse what we believe that type of regulation could look like. We believe that if a student is in receipt of TEAS and fails due to illness, the student will retain his entitlement to TEAS for the following year, but will first be required to undergo an examination by the Commonwealth Rehabilitation Service, which presently does the assessments for the enrolment of TEAS recipients with severe physical disability. If the CRS assesses students as capable of successfully carrying out only 75 per cent or 50 per cent of the course load, students would retain their TEAS entitlements only if they enrolled for the 75 per cent or the 50 per cent, or whatever the CRS recommendation is. In other words, they would be required to carry that out as a pre-condition to receiving TEAS. Senator Teague —But that is the current situation. Senator MACKLIN —No, this is in regard to physical disability. I am rehearsing how we could alter the regulations in regard to people who do not fall under that category. If, on the other hand, the CRS assesses that the student is capable of completing a full load and the student subsequently fails that year's work due to a recurrence of the type of physical disabilities that I have been talking about-for example, a severe asthma attack at a crucial time such as leads to failure-because the student has followed the recommendation of the CRS, that would not be grounds for losing TEAS entitlement. In other words, we would be able to have the type of control that the Minister and the Department are obviously seeking with regard to a number of students. We would not be having open slather. We would know specifically the probablilities and the possibilities according to a close diagnosis of that person's medical condition or physical disability, as is already the case, and we would then be able to make an assessment. The assessment done by the CRS, I would suggest, is an assessment based on a reasonable prediction. Surely we can ask no more of the individual student. Senator Peter Baume —What do you think would be the consequences of this disallowance if it were successful? Senator MACKLIN —As I have already said, if this is disallowed we would be happy for the Government to bring in the rest, leaving that sub-regulation out. I would then hope that the Government could seek-- Senator Ryan —We couldn't do that for six months. Senator MACKLIN —That could be done-by leave. I have just said `by leave', Minister; if you had not been nattering to the people beside you, you might have heard. I have already informed the Minister's office and Senator Peter Baume's office that we would be quite happy to give leave. I am quite sure that Senator Peter Baume would be happy to give leave to the Minister to reintroduce a regulation identical to regulation 5 in all aspects, except for that particular sub-regulation (12). The Government could then move to bring in a new sub-regulation. I have rehearsed how I believe that sub-regulation could be worded to carry out what seems to be the intention of the Government without, I think, any added burden to those people who suffer from a disability. I think that at the moment we are being incredibly unfair with regard to those people who suffer from, for example, respiratory ailments or other problems. In fact, we are adding increased pressures to them. One is aware that in fact pressures can affect people suffering from such respiratory conditions by, for example, bringing on an attack. Stress is one of the major contributory items, certainly in regard to asthma. I believe that what we need to do is to make sure that we are not putting in place bureaucratic mechanisms which in fact provide further stumbling blocks for such people. I am very much aware that the regulation has been in the Student Assistance Regulations in almost identical terms. However, I have moved this disallowance at this time because it gives us the opportunity of raising yet again what I believe is an unfortunate regulation. It is an area in which I think we should err on the side of compassion and support, not on the side of rigidity. I believe this is a very important point. Although we do not actually have any statistics covering university students, the general community statistics show that 23 per cent of people suffer from some type of respiratory problem. They show, indeed, that that seems to be a continuing medical problem in our community which can exhibit itself at any time and which may, in fact, exhibit itself at a time of maximum sensitivity, such as during a student's educational progress. I hope that the Minister will look favourably on this suggestion. It seems extraordinary that there should be such a defensive operation in regard to what I believe is a matter that we should seek to deal with as compassionately as possible. I finish by commending the Government for the moves it has already made, particularly with regard to allowing the continuation of the tertiary education assistance scheme to those people who suffer from physical disabilities to allow them to have a reduced work load and hence its support for additional educational opportunities for disabled students in Australia. Senator RYAN(Australian Capital Territory-Minister for Education)(10.33) —The Government opposes the attempt to disallow regulation 5 of the Student Assistance Regulations as explained by Senator Macklin. Although I recognise that Senator Macklin is making this attempt in good faith he is quite misguided. First of all, he is misguided as to the effects of the present regulation and the opportunities for students who suddenly suffer from a disability to have that recognised. Also he is misguided in his understanding of the legal effect of his disallowance motion should it be successful. Senator Macklin —How? Senator RYAN —I am just about to explain that. In the first place, the successful moving of this disallowance would mean that the old regulation, which is very similar, would be reinstated. However, more seriously, the beneficial effects in this entire regulation would not apply. Senator Macklin —You could do it by leave. Senator RYAN —I do not think that we really need to be instructed about Senate procedures by Senator Macklin. The regulation has introduced beneficial changes to the current academic progress rules and the rules covering course changes. It clarifies the distinction between various levels of courses to reflect existing policy more accurately and it makes drafting changes consequential on substantive changes. Senator Macklin's concern is about sub-regulation (12), which modifies the tertiary education assistance scheme concession for students who incur failures due to illness or other circumstances beyond their control and withdraws the concession if the illness or circumstance was apparent at the beginning of the year in question. The regulation is not new but repeats, with some drafting changes, former regulation 34 (12). The disallowance motion would revive that former regulation 34 (12), which in its initial form took effect on 1 January 1979, and would deprive the students of the beneficial changes to the TEAS rules. About 30 students a year would be adversely affected by the regulation and the cost of repealing it would be $90,000 a year annually. We oppose Senator Macklin's attempt because the underlying policy that students with permanent disabilities should not avoid the normal progress rules is sound and has been accepted by successive governments. I point out that for students with severe permanent physical disabilities, modified progress rules were introduced from the beginning of this year. The case of a student who has a permanent disability- Senator Macklin —Physical. Senator RYAN —Physical disability, yes-has been covered. Senator Macklin spoke at great length about asthma sufferers. If a student can establish that he or she has a permanent condition which is likely to disrupt his studies, that student would benefit from the concession. My colleague Senator Peter Baume would be much more competent to comment on this, but I would think that a severe asthma sufferer would have a history of that and would not have difficulty in establishing his or her entitlement to that concession. As for non-physical problems, if a student has some sort of nervous breakdown, of course there is the possibility for an appeal to the Student Assistance Review Tribunal in that circumstance. Indeed, at the beginning of the year it does not seem that the student's progress is going to be affected by a disability, but where those circumstances change during the year, there is the appeals procedure. I simply disagree with Senator Macklin, who says the fact that 10 out of 31 appeals were successful suggests that the Tribunal is not working. I think those figures suggest that it is working. I think a third of appeals being successful is quite a good result. It seems that Senator Macklin thinks that unless every appeal is successful, there is something wrong with the appeals procedure. I simply repeat that there has been a modification of the progress rules for students with an established disability and that students who find that their disability does affect their studies in a way that they were not able to anticiapte during the year are able to appeal and that the success rate of the appeal procedure is very high. Over all the regulation provides many benefits to students and those benefits add up to a good case for not accepting Senator Macklin's suggestion. I think that the procedures established in this regulation are fair. Certainly student bodies generally throughout Australia are satisified with the Student Assistance Review Tribunal. There is a good rate of success and I am not aware of any discontent amongst student organisations about the way the procedures are operating. Should Senator Macklin's disallowance motion be successful, it would be quite chaotic because previous regulations would apply and the opportunity to amend those problems would not present itself immediately. I understand that the Liberal Party of Australia is satisfied with the operation of the present regulation, will not be supporting Senator Macklin's disallowance motion and I thank it for its co-operation in this matter. Senator PETER BAUME(New South Wales)(10.39) —The Opposition parties gave very careful consideration to the motion which has been proposed by Senator Macklin. The motion goes to issues of fairness, to issues of a fair go and to issues of equity. We considered that it required the most careful consideration to see the balance that should be struck and the way in which the disallowance should be approached. We are aware, of course, that there is not a single equity issue. There are the issues of equity as they apply to students with disabilities, and they are matters to which Senator Macklin has referred. There are issues of equity as they relate to those students as against other students who may wish to have access to the tertiary education assistance scheme and, of course, there are issues of equity as they relate to the benefits of students as against the interests of the whole body of taxpayers. There are a whole series of issues of equity and Senator Ryan, in responding, has indicated that there are rules which try to make sure than the various issues of equity are approached in a reasonable way. We took very great care about the motion which has been proposed by Senator Macklin because if there are students with particular disabilities who require special attention and special consideration we wanted to make sure that they receive that consideration. First, we are aware of the special provisions which already operate to help students with disabilities. I understand that Senator Ryan has referred to the fact that students with certain disabilities can have altered progress requirement; they can take twice as long to complete a course and still be considered to be making satisfactory progress. This suggests that there is some recognition of the special circumstances and the special needs of people with disability. In the procedures and the rules there is this particular provision to allow for some of the needs of these students. Senator Macklin referred to this I thought with generosity. We would all agree that this is one response which will help the class of students about whom we are talking today. Secondly, I understand that students can, if they need to, as a result of their disability, withdraw from the course up to two-thirds of the way through the year and do so without forfeiting their right to TEAS. This privilege is not available to other students. It is another recognition of the special needs which these students have and of the way in which the regulations have been cast to try to take account of the needs of these students. Thirdly, we are aware that they can appeal to the Student Assistance Review Tribunal. From the example which has been given we are aware that the success rate in some of these appeals is not inconsiderable. I make the point that the initial decision to withdraw TEAS is not taken lightly; it is a decision which is taken only after a lot of departmental consideration. The Tribunal still finds in favour of students on appeal, indicating that the appeal mechanism is not one which can be criticised. The next point that concerns the Opposition is that the rules presently in place already provide for the procedures to which Senator Macklin is objecting. The effect of disallowing this set of regulations would be to leave the existing regulations in place. They are regulations which do almost the same thing. As Senator Ryan said, all that is being achieved in the regulations which are sought to be disallowed is a redrafting of an existing situation, one that has been policy and which has been in operation since 1979. If in fact it was a change of policy, if in fact the Government was proceeding to change the rules of the game in a significant way, that would be quite different. The Government is not changing the rules, it is changing the drafting within which these rules are presented. The Opposition has taken all those matters into account. We do not support the disallowance motion, but we do it against the background of a continuing and very deep concern for the difficulties which are faced by students undertaking tertiary education, students who are carrying into that tertiary course disabilities, whether they are chronically ill or disabled, which add to the load which they have to bear. We are aware of their special needs. Everyone who has taken part in this debate has acknowledged their special needs. The fact that we are not supporting this disallowance in no way lessens the concern we have. The Minister for Education (Senator Ryan) has a capacity to follow the course which has been proposed by Senator Macklin whether or not this disallowance succeeds. If Senator Macklin wants the rules changed, it can be done whether or not this disallowance succeeds because if the disallowance did succeed, the rules to which he objects would still stand by virtue of their being presented in previous regulations. On behalf of the Opposition I indicate that we do have a willingness to look at any changes to the student assistance regulations which may be presented in the future should firm evidence come to light that students are being disadvantaged, that students with disability are being disadvantaged and that the regulations are not operating to their benefit. I conclude by observing that while students do not hesitate to make representations to us on many matters, and while we have had many representations on a number of matters before the Senate in the last year, we have not had representations on this matter from students who are adversely affected by the present arrangements. We are grateful to Senator Macklin for bringing this matter forward. As I say, it has caused us to make a very deep examination of this matter and to give careful consideration to it. It is only after that consideration that we have determined not to support the motion for disallowance. Senator MACKLIN(Queensland)(10.45) —in reply-I am disappointed that in fact my motion will not succeed. It is a pity, and I find it passing strange that many of the reasons-I am sorry, Senator Harradine. I shall be closing the debate. I do not know whether Senator Harradine wishes to contribute. The ACTING DEPUTY PRESIDENT(Senator Coleman) —I am sorry, senator, but you have started to address the Chair and by so doing you are automatically closing the debate for others. Senator MACKLIN —I apologise to Senator Harradine. I did not know that he wished to participate in the debate. I think it passing strange that some of the reasons that were given for opposing my motion were reasons that relate to the way in which this chamber operates in regard to regulations. I must say that I found extraordinary the argument that the disallowance of the regulations would in fact mean the reinstatement of others. It was argued that that is one of the reasons why we should not agree to the motion. It seems to me that unless this chamber is able to use its disallowance power, in terms of the fact that it does not agree with the regulations which are now being promulgated, regardless of the subsequent activity that has to go on, the ability of this chamber to do its work in regard to looking at those regulations is severely denigrated. If regulations are dis- allowed, the Government should have to go back, look at them and bring new ones into this chamber-after this chamber has expressed its views. We should not have to express our views on the basis that something then might or might not happen. Surely we should express our views on the basis of the value of the regulation itself. I must admit that I also do not buy the argument that since the student assistance regulations have been in existence since 1979, they should remain. I expressed in my previous comments the view that since a new regulation was to be introduced, it was obviously the time to look at the regulations again. I only wish to express my disappointment that those types of arguments should have been used as reasons why the disallowance should not take place. I also indicated that this chamber has control over whether or not leave is given to deal with a subsequent set of regulations. That matter again seems to have eluded the Minister for Education (Senator Ryan) entirely. I still do not believe that the essential item I raised has really been addressed, and I think that the problem will remain. I also find its extraordinary that the Minister and the shadow Minister said that they have not received representations. That might reflect on what the students feel might be the type of response they get if they make representations to the Australian Labor Party or the Liberal Party of Australia. Question resolved in the negative. Debate resumed from 15 April, on motion by Senator Gietzelt: That the Bill be now read a second time. (Quorum formed). Senator LEWIS(Victoria)(10.50) —Madam Acting Deputy President, perhaps I may explain that I thought that there was going to be a vote on Senator Macklin's motion. As a result I was not in the chamber when the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill 1986 was called on for debate. I presume that we are dealing with the three veterans' entitlements Bills as a package? Senator Robertson —No. Senator LEWIS —The indication is that at this stage we are simply dealing with the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill 1986. Senator Robertson —We will deal with the three at the Committee stage. Senator LEWIS —The proposal is that they will be dealt with together in Committee. Senator Gietzelt —We would be happy to have a cognate debate. Senator LEWIS —They ought to be dealt with cognately. The DEPUTY PRESIDENT —Is leave granted for a cognate debate on the three Bills at the second reading stage? In fact, two of the Bills have passed the second reading stage. Senator Macklin —Mr Deputy President, the other Bills are at the Committee stage. I am not quite sure how we can have a second reading debate and a Committee stage debate together. The DEPUTY PRESIDENT —I was only repeating a request. It seems to me that the only sensible procedure is to go ahead with the second reading debate on this Bill-that is, the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill 1986. The Bills may then be considered cognately at the Committee stage, if the Committee so orders. Senator LEWIS —Thank you, Mr Deputy President. I am glad that has been clarified. The situation is that on 29 November the Senate sent back to the House of Representatives the Veterans' Entitlements Bill 1985 with a number of requests for amendments. On that date, and before dealing with that Bill, the Government adjourned the House of Representatives. Therefore, the Bill has remained on the Notice Paper of the House of Representatives since 29 November 1985. This week, for the first time since that date, the Government has at last brought the Bill into the House of Representatives and dealt with the Senate's request. So the delays that have occurred in dealing with that Bill are entirely the responsibility of the Government. Yet the Minister for Veterans' Affairs (Senator Gietzelt) has been disinforming people that the Opposition has delayed the Bill. The whole machinery available to the Government has been engaged on a massive disinformation campaign. In fact, the Opposition has been totally responsible in its approach to the Veterans' Entitlements Bill, as it will be in relation to the measure before the Senate now, the 1986 transitional provisions Bill. Let us look at the actions that we have taken to date. The Opposition has moved or supported 41 amendments to the Veterans' Entitlements Bill. There were other amendments which we considered but which we did not put or, if the Australian Democrats moved them, which we did not support. In some cases we accepted the Government's arguments in relation to amendments. In other cases we acknowledged that there were policy differences between us and the Government. We also acknowledged that the Australian Labor Party was in government and therefore we should not attempt to substitute our policies for those of the Government. I believe that our approach should be recognised as being fair and responsible for an opposition to adopt. I hope that when the Australian Labor Party gets into opposition it adopts a similar approach to our measures. Within the parameters that I have outlined, we moved or supported only those amendments which we believed to be essential. There were 41 of them. That our judgment was right has been proven by the Government's response to those amendments. The Government has accepted 40 of the 41 amendments. During debate on those amendments the Minister for Veterans' Affairs argued bitterly against every amendment and complained about the 41 which were carried. But, as I have said, since then he has been promoting the view that our action in carrying those amendments had delayed passage of the Bill. Let us look at the facts. The simple truth is that the Government has accepted 40 of the 41 amendments. So our judgment and our bona fides in this matter have been proven, not by rhetoric from us, but by the actions of the Government. The correctness of our judgment as to the essential need for those amendments is now a self-evident truth because the Government has accepted them. Why are we sticking on that forty-first amendment? Why do we just not accept that we won 40 amendments and we should give in on the last one? The simple reason that we are sticking on the forty-first amendment is that our judgment on it is also correct. Honourable senators will remember that I explained that this was not simply the last of the amendments which we could or might have supported if we wanted to be difficult or behave badly as the Opposition parties. This forty-first amendment is the last of those amendments which, on a careful and proper analysis and within the parameters that I have mentioned, we decided were essential to the Bill. What is this amendment? It proposes to delete- The DEPUTY PRESIDENT —Order! Senator Lewis, some of the points you are developing now would be more appropriate at a later stage. All we are dealing with at the moment is the Veteran's Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill. Senator LEWIS —I recognise that, Mr Deputy President, but the situation is that the Government is in effect rejecting all of the 41 amendments that were carried and it is bringing in its own 40 amendments. That Bill deals with those. Of course-- Senator Macklin —It does not deal with any of them. Senator LEWIS —No. But the transitional Bill will implement the decisions of the Government with the carriage of the veterans Bills. I shall endeavour, where I can, to limit my speech to the transitional Bill. One has to acknowledge that that is not easy. I merely say that, in due course, I will be moving the amendment which proposes to delete the retrospectivity in clause 119. I shall deal with that amendment in the Committee stage. I must point out that we will be endeavouring to persuade the Senate to stick with the forty-first amendment. The Minister's disinformation attack which I have been talking about has caused great uncertainty within the veteran community, as it was clearly intended to do, because he threatened to renege on the 40 amendments successfully moved by the Opposition parties and the Australian Democrats, all of which greatly improved the Bill, together with the removal of other anomalies that will be removed by this legislation. In consequence, some organisations have waivered under pressure. In addition, the new legislation is so complex that few ex-service organisations really understood the full ramifications, the exceptions being the Australian Veterans and Defence Service Council, representing 16 ex-service organisations, and the Victorian branch of the Returned Services League, both of which vigorously exposed the shortcomings in the legislation. I must say that the spiteful attacks on the Chairman of the Australian Veterans and Defence Service Council, Rear-Admiral Guy Griffiths, and the intemperate language used in correspondence to him has been deplored by ex-service organisations. I suggest that the Minister simply did not like the shortcomings in the legislation being exposed; in other words, he did not like being found out. I said previously, when addressing the Senate on the other veterans Bill, that veterans expected that they would be compensated for the reduced life span that many were likely to suffer as a result of war service. Under the guise of simplifying the legislation they are being exposed to a shabby cost cutting exercise at a time when a growing number of veterans are entering their twilight years. In Senate Supplementary Estimates committee hearings this continued erosion of benefits was revealed. There was a reduction of between $20m and $24m in the granting of totally and permanently incapacitated pensions and a reduction of $3m in travel allowances. These cuts come on top of the cutbacks introduced with the assets test as it is applied to service pensioners. That burden has fallen very heavily on service pensioners, more so than on general pensioners. It seems to me that significant cost cuts could be achieved by the Department adopting a less adversary role towards its clients. As I said, the Opposition has been most responsible in pressing amendments. These have been moved after careful consultation with veterans' organisations. Defects remain in this legislation. There is clearly a need, in our view, for a monitoring committee to be established, but I shall talk about that later. I understand that the reason the Government has finally brought this legislation back before the Senate is that there have been some defections in the ranks of the Australian Democrats. I do not know what it is all about, but, no doubt, in due course we shall see what the result will be. The bulk of the blame for this cynical cost-cutting exercise against veterans must rest firmly on the shoulders of this Labor Government. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.03) —in reply-The Veterans' Entitlements Bill was passed by the House of Representatives on 12 November last year. Then this chamber, in a subsequent debate later that month, made 35 amendments to the Bill and requested the House of Representatives to make another six amendments. The Senate exercised its powers to request the House of Representatives to amend the definition of `allied veteran' in clause 35 (1) of the Bill to recognise eligibility for service pension of service rendered after September 1957. It also decided to make various amendments to clauses 68 and 69 of the Bill so as to continue repatriation cover for new enlistees in the Defence Force after the commencement of the Act. The House of Representatives-where governments are made-rejected those requests, together with the 35 Senate amendments. However, the Government has, properly and adequately, in a spirit of compromise and co-operation, indicated that the requests would be acceptable in a form set out in a message to the Senate, which we will be subsequently discussing in Committee of the Whole. It also proposes other amendments in response to and in place of those moved by the Senate. In all, the Government will be dealing with 39 of the 41 requests and amendments made by the Senate. One other amendment will be resolved by administrative action. In all cases the spirit, if not the form, of the Senate amendments will be preserved. A great deal has been said by Senator Lewis of the delays with this legislation. The Government, as Senator Lewis conceded, is entitled to present legislation in accordance with its policies and its program, and it has done precisely that. The Opposition is entitled to take a contrary point of view, as indeed are other representatives in the Senate. However, the Government still had to make decisions in respect of its legislative program and its commitment to the various constituents that make up the Australian community, in the belief that the Bill finally presented to the Senate represents a compromise and represents what can be said to be the views of the overwhelming majority of the veteran community. The Government has treated with respect the concerns of the Senate in the way in which it has debated and dealt with its requests. The service pension eligibility of allied veterans who served after 1 September will be preserved. Repatriation cover for new enlistees in the Defence Force will continue, pending the development of a military compensation scheme. So it is not true to say that the Government has not sought to accommodate the views of the Senate. The Government has met the Senate more than half way in regard to its other amendments. It is not true to say that the legislation has been in a dormant position because of the Government's intransigency. The purpose of the delay in dealing with the legislation has been to consult further with the veteran community. There has been an extensive consultative process during both the pre-parliamentary determination period in 1985 and in the period since the sunset clause was established by decision of the Senate. It is true that there has been some criticism of the legislation. Of course, there is criticism of most pieces of legislation. However, the Government, in a spirit of conciliation and co-operation, has sought to accommodate the various views that have been expressed by the veteran community. I have had in writing from a great number of the leaders of the veteran community their support for the early passage of the legislation. Senator Lewis spoke about the complexities of the Bill. Of course, it is a complex piece of legislation. But it has been designed to bring in- to one piece of legislation 65 years of government legislation, most of which has been ad hoc and most of which has related to a particular set of circumstances or conflict in time. The purpose of it, with all its complexities, is never- theless to rationalise and simplify the process for those who operate in the administrative side of the system as well as those who aim to become part of the system as applicants. The areas in which each of those parties will operate will be clearly defined. There has been, of course, a great deal of misrepresentation and a great deal of concern as a result of misrepresentation. Some veterans groups have clearly misunderstood the Government's intentions. They have clearly not appreciated the many gains that are encompassed in the legislation. Such organisations have said that the veterans are losing benefits. Of course, that is not so. There are many gains in the legislation. Those gains, of course, have persuaded most veterans organisations which have looked at the legislation sincerely and conscientiously, to support its early passage. In the intervening period-that is, during 1986-I have had, as has the shadow Minister for Veterans Affairs, Mr Tim Fischer, numerous conferences with the veterans organisations. There was a summit meeting earlier this year which unanimously agreed to the early passage of the legislation. This was done subsequently by the special national executive meeting of the Returned Services League. Most correspondence from a variety of organisations, supported the general thrust of the legislation, while recognising that not every aim, objective or agenda item of the veterans community has been encompassed in the legislation. It was never the intention that this piece of legislation would include all the ambit claims of the veterans community over the last 20 or 30 years. In fact, Senator Messner, in establishing the advisory committee, made the very point that it was not to be seen as a net to take into account all of the various claims, justified or unjustified as they may be. It was never the intention of the legislation to accommodate all of those demands. If governments were able on the basis of a healthy economy to accommodate all those demands, one would almost see the end of the veterans organisations. They are in place for the purpose of raising issues from time to time which have some justification and to present those points of view to government. I conclude by saying that the view has been expressed that there are a number of matters that are still outstanding which are not embraced in this piece of legislation, with all its positive features. They are matters which will be taken up in a Budget context. Of course, that is the way in which the veteran community has operated in its relationship with government ever since the veterans movement was established after World War I. We ask, therefore, that the Senate take a mature position in respect of this legislation and take on board the positive aspects of the legislation, so that we have its early passage and those benefits that are conferred upon many people in the veteran community will be able to be enjoyed. Question resolved in the affirmative. Bill read a second time. Motion (by Senator Gietzelt) agreed to: That the Senate, having considered Message No. 292 from the House of Representatives, suspends so much of the Standing Orders as would prevent the requests for amendments and the amendments previously made by the Senate in the Veterans' Entitlements Bill 1985 being rescinded, and as would prevent the Bill being recommitted to the Committee of the Whole; and that such requests for amendments and amendments be here- by rescinded and that the Bill be recommitted forthwith. In Committee Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.12) —I believe that the most convenient procedure for the Committee to follow would be to take the Bill as a whole, after which I will seek leave to move the Government's requests for amendments and amendments. After these have been dealt with the Opposition's amendments could be considered and then those of the Australian Democrats. I believe this arrangement will best provide for the orderly consideration of the Bill and avoid the possibility of creating unnecessary confusion for the Committee of the Whole. I draw the attention of my colleagues on the other side to the fact that we are dealing with 60 amendments. I believe this procedure would be the most expeditious way in which to deal with those matters. The TEMPORARY CHAIRMAN(Senator Townley) —Is it the wish of the Committee that that practice be followed? There being no objection I will allow that course to be followed. The Bill. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.13) —by leave-I move: (1) Requests: That the House of Representatives be requested to make the following amendments: No. 1-Page 40, sub-clause 35 (1), definition of ``allied veteran'', lines 21 and 22, leave out ``, before 1 September 1957,''. No. 2-Pages 87 and 88, sub-clause 68 (1), definition of ``defence service'', line 32 (page 87) to line 11 (page 88), leave out the definition, insert the following definition: `` `defence service' means- (a) continuous full-time service rendered as a member of the Defence Force on or after 7 December 1972 and before the terminating date; and (b) in the case of a person who- (i) was rendering continuous full-time service as a member of the Defence Force immediately before the commencement of this Act; (ii) continued so to render continuous full-time service until and including the day immediately before the terminating date; and (iii) was, immediately before the terminating date, bound to render continuous full-time service as such a member for a term expiring on or after the terminating date, includes the continuous full-time service rendered by the person as a member of the Defence Force on and after the terminating date and before- (iv) the expiration of that term or, if that term is deemed to have been extended by sub-section (4), (5) or (6), the expiration of the extension of that term; or (v) the lawful termination of the person's ser- vice as a member of the Defence Force otherwise than by reason of the expiration of the term for which the person is bound to serve, whichever occurs first, but does not include any period of peacekeeping service;''. No. 3-Page 89, sub-clause 68 (1), after definition of ``peacekeeping service'', add the following new definition: `` `terminating date' means the date fixed by Proclamation for the purpose of this definition, being a date not earlier than the date of commencement of an Act establishing a Military Compensation Scheme.''. No. 4-Page 89, paragraph 68 (4) (a), line 34, leave out ``the commencement of this Act'', insert ``the terminating date''. No. 5-Page 89, paragraph 68 (4) (a), line 37, leave out ``after the commencement of this Act'', insert ``on or after the terminating date''. No. 6-Page 90, sub-clause 68 (5), lines 3 and 4, leave out ``the commencement of this Act'', insert ``the terminating date''. No. 7-Page 90, sub-clause 68 (5), line 5, leave out ``after the commencement of this Act'', insert ``on or after the terminating date''. No. 8-Page 90, paragraph 68 (6) (a), line 17, leave out ``the commencement of this Act'', insert ``the terminating date''. No. 9-Page 90, paragraph 68 (6) (a), line 20, leave out ``after the commencement of this Act'', insert ``on or after the terminating date''. No. 10-Page 90, after sub-clause 68 (6), add the following new sub-clause: ``(7) Sub-sections (4), (5) and (6) do not apply to a person who was bound to render continuous full-time service as a member of the Defence Force immediately before the terminating date unless the person- (a) was so rendering continuous full-time service immediately before the commencement of this Act; and (b) continued so to render continuous full-time service until and including the day immediately before the terminating date.''. No. 11-Page 90, sub-clause 69 (1), line 35, leave out ``Subject to sub-section (2)'', insert ``Subject to this section''. No. 12-Page 90, paragraph 69 (1) (a), line 38, leave out ``commencement of this Act'', insert ``terminating date''. No. 13-Page 91, paragraph 69 (1) (b), lines 1 and 2, leave out the paragraph, insert the following paragraph: ``(b) is serving in the Defence Force on or after the terminating date and has so served continuously since a date before that date,''. No. 14-Page 91, sub-paragraph 69 (1) (c) (i), line 6, leave out ``, being service that ended''. No. 15-Page 92, sub-clause 69 (2), line 8, at end of sub-clause, add ``unless, under sub-section (1), this Part would apply to the person by reason only of his or her having rendered that further period of service.''. No. 16-Page 92, after sub-clause 69 (2), insert the following new sub-clause: ``(2A) Where a person renders continuous full-time service as a member of the Defence Force at some time after the commencement of this Act and before the terminating date but has not so rendered continuous full-time service continuously from and including the day immediately before the date of commencement of this Act to that time, sub-section (1) does not apply in respect of the person unless- (a) the person completes 3 years' effective full-time service as such a member before the terminating date; or (b) the person's service as a member or officer of the Defence Force is terminated as provided by paragraph (1) (d) or (e), whichever is applicable, before the terminating date.''. No. 17-Page 130, after sub-paragraph 102 (5) (a) (i), insert the following new sub-paragraphs: ``(ia) the Cross of Valour; (ib) the Star of Courage;''. SCHEDULE E (2) Amendments: No. 1-Page 1, clause 2, line 7, leave out ``on 5 December 1985'', insert ``on a date to be fixed by Proclamation''. No. 2-Page 7, clause 5, at the end of clause, add the following new sub-clause: ``(12) In this Act, a reference to a person, or a unit of the Defence Force, that was allotted for duty in an operation area shall be read as a reference to a person, or unit of the Defence Force- (a) that was so allotted for duty in accordance with administrative arrangements applicable in the part of the Defence Force in which the person was serving, or of which that unit formed a part, as the case may be; or (b) that is, by an instrument in writing signed by the Minister for Defence, deemed to have been allotted for duty in an area described in item 4 or 8 in Schedule 2 during the period specified in that item.''. No. 3-Page 9, paragraphs 6 (5) (a) and (b), lines 28 to 43, leave out the paragraphs, insert the following paragraphs: ``(a) shall be taken to have commenced- (i) if the person was in Australia on the day as from which the person was allotted for duty in that area-on the day on which the person departed from the last port of call in Australia for that service; or (ii) if the person was outside Australia on the day as from which the person was so allotted for duty-on the day as from which the person was so allotted for duty; and (b) shall be taken to have ended at the expiration of- (i) if the person was allotted for duty from an operational area to another area outside Australia (not being an operational area)-on the day on which the person arrived at that other area or on the day as from which the person was allotted to that other area at a time when the person was in that other area; or (ii) in any other case-on the day on which the person arrived at the first port of call in Australia on returning from operational service.''. No. 4-Page 39, sub-clause 34 (3), line 14, after ``served'', insert ``on the person''. No. 5-Page 61, paragraph 47 (8) (a), line 41, leave out ``dependent'', insert ``dependant''. No. 6-Page 61, paragraph 47 (80 (b), line 42, leave out ``dependent on'', insert ``dependant of''. No. 7-Page 63, clause 47, at the end of clause, add the following new sub-clause: ``(13) On and after 1 May 1986, paragraph (3) (a) shall be read as if `$520' were omitted and `$624' were substituted.''. No. 8-Page 111, sub-clauses 84 (6) and (7), lines 28 to 35, leave out the sub-clauses, insert the following sub-clause: ``(6) Subject to section 93, where a person, other than a person included in a prescribed class of persons, is provided with treatment under section 87 or 88, the person is liable to pay to the Commonwealth in respect of that treatment- (a) unless paragraph (b) applies-charges in accordance with a scale of charges determined by the Commission, by instrument in writing, being charges based on charges payable for treatment as private patients in public hospitals in Australia; or (b) if the person is not ordinarily resident in Australia-the cost (as determined by the Commission by instrument in writing) of an incidental to that treatment.''. No. 9-Page 132, after sub-clause 105 (3), insert the following new sub-clause: ``(3a) Where a scheme prepared by the Commission in accordance with sub-section (1), or an instrument under sub-section (2), has been approved by the Minister, the Commission shall furnish copies of the scheme or instrument to the Minister, and the Minister shall cause copies to be laid before each House of the Parliament within 15 sitting days of that House after the Minister received those copies.''. No. 10-Page 139, sub-clause 110 (1), line 32, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 11-Page 139, sub-clause 110 (2), line 34, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 12-Page 142, after clause 114, insert the following new clause: Review of decision, &c. ``114a. (1) Subject to sub-section (2), a person who is dissatisfied with a decision of the Commission in respect of an application for- (a) clothing allowance; (b) funeral benefits under section 99, 100 or 101; (c) decoration allowance; (d) Victoria Cross allowance; (e) recreation transport allowance; (f) temporary incapacity allowance; or (g) loss of earnings allowance, may request the Commission, in writing, to review the decision, and, where such a request is duly made, the Commission shall review the decision, or cause the decision to be reviewed by a person to whom the Commission has delegated its powers under this section (not being the person who made the decision). ``(2) A request under sub-section (1) to review a decision of the Commission shall set out particulars of the grounds on which the request is made, and may be made within 3 months after service on the person to whom the decision relates of notice of the decision, but not otherwise. ``(3) Where the Commission reviews a decision under sub-section (1), the Commission may affirm or set aside the decision and, if it sets aside the decision, it shall make such other decision as it considers to be in accordance with this Act. ``(4) Where the Commission makes a decision, in substitution for the decision set aside, granting an application for an allowance specified in sub-section (1), it may approve payment of the allowance as from a date not earlier that the date as from which the Commission could have approved payment of the allowance if it had made the substituted decision in place of the original decision. ``(5) Sections 60 and 62 apply to a review under this section in like manner as they apply to a review under section 59 and, for the purpose of their application to a review under this section- (a) references in sections 60 and 62 to section 59 shall be read as references to this section; and (b) references in section 60 to a review shall be read as references to a review under sub-section (1) of this section. ``(6) A reference in sub-section (1) to a decision in respect of an application for funeral benefits under section section 99 shall read as not including a reference to a decision of the Commission to grant, or refuse to grant, an approval of a kind referred to in paragraph 99 (3) (a), (b), (c) or (d).,'' No. 13-Page 144, after sub-clause 116(3), insert the following new sub-clause: ``(3A) Where a scheme prepared by the Commission in accordance with sub-section (1), or an instrument under sub-section (2), has been approved by the Minister, the Commission shall furnish copies of the scheme or instrument to the Minister, and the Minister shall cause copies to be laid before each House of the Parliament within 15 sitting days of that House after the Minister received those copies''. No. 14-Page 152, paragraph 127 (1) (a), line 13, leave out ``within the period and in the manner'', insert ``within a reasonable period and in a reasonable manner''. No. 15-Page 152, paragraph 127 (1) (b), line 17, leave out ``within the period and in the manner'', insert ``within a reasonable period and in a reasonable manner''. No. 16-Page 152, paragraph 127 (1) (b), line 21, leave out ``on a date, and at a time and place'', insert ``on a reasonable date and at a reasonable time and place''. No. 17-Page 153, sub-clause 131 (1), line 23, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 18-Page 153, sub-clause 131 (2), line 36, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 19-Page 153, sub-clause 131 (2), line 41, leave out ``as the Commission considers reasonable'', insert ``as are prescribed''. No. 20-Page 154, sub-clause 131 (3), line 1, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 21-Page 154, sub-clause 131 (4), line 6, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 22-Page 154, sub-clause 131 (4) lines 10 and 11, leave out ``as the Commission considers reasonable'', insert ``as are prescribed''. No. 23-Page 154, sub-clause 131(5), line 12, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 24-Page 154, sub-clause 131 (6), line 16, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 25-Page 154, sub-clause 131 (6), lines 19 and 20, leave out ``as the Commission considers reasonable'', insert ``as are prescribed''. No. 26-Page 154, sub-clause 131 (7), line 21, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 27-Page 154, sub-clause 131 (8), line 31 leave out ``as the Commission determines'', insert ``as are prescribed''. No. 28-Page 154, sub-clause 131 (8), lines 35 and 36, leave out ``as the Commission considers reasonable'', insert ``as are prescribed''. No. 29-Page 155, sub clause 131 (9), line 10, leave out ``as the Commission determines'', insert ``as are prescribed''. No. 30-Page 155, paragraph 131 (11) (e), line 32, leave out ``tha'', insert ``that''. No. 31-Page 155, sub-clause 131 (12), line 36, after ``59'', insert ``,114A''. No. 32-Page 175, clause 174, at end of clause, add the following new sub-clause: ``(4) Where the Commission, under section 114a, affirms a decision of the Commission in respect of an application for an allowance or benefit referred to in sub-section 114a (1), or sets aside such a decision and substitutes another decision for it, then, subject to section 29 of the Administrative Appeals Tribunal Act 1975, application may be made to the Administrative Appeals Tribunal for a review- (a) of the decision so affirmed; or (b) of the decision made by the Commission under section 114a in substitution for the decision so set aside.''. No. 33-Page 177, clause 176, at end of clause, add the following new sub-clause: ``(6) Where the Administrative Appeals Tribunal, upon application under sub-section 174 (4) for a review of a decision made by the Commission with respect to an application for an allowance under section 97, 102, 103, or 104, grants the allowance referred to in that section, or increases the rate at which the allowance so referred to is to be paid, the Tribunal may approve payment of the allowance, or of the allowance at the increased rate, as the case may be- (a) if the application was made within 3 months after service on the applicant of a document setting out the terms of that decision-from a date not earlier than the earliest date as from which the Commission could, if it had not made that decision, have approved payment of the allowance, or payment of the allowance at the increased rate, as the case may be; or (b) in any other case-from the date on which the application under sub-section 174 (4) was made.''. No. 34-Pages 198 and 199, clause 206, line 16 (page 198) to line 43 (page 199), leave out the clause. No. 35-Page 200, sub-clause 208 (1), line 42, before ``make'', insert ``knowingly''. No. 36-Page 201, paragraph 208 (1) (b), line 8, before ``obtain'', insert ``knowingly''. No. 37-Page 201, paragraph 208 (1) (c), line 11, before ``obtain'', insert ``knowingly''. No. 38-Page 201, paragraph 208 (1) (d), line 15, before ``obtain'', insert ``knowingly''. No. 39-Page 201, paragraph 208 (1) (e), line 18, before ``make'', insert ``knowingly''. No. 40-Page 204, sub-clause 215 (3), line 17, leave out ``this section'', insert ``sub-section (1)''. No. 41-Page 204, paragraph 215 (3) (a), lines 20, and 21, leave out ``4 December 1985'', insert ``the day immediately preceding the date fixed under section 2''. No. 42-Page 204, paragraph 215 (3) (b), line 23, leave out ``5 December 1985'', insert ``the date fixed under section 2''. No. 43-Page 204, clause 215, at end of clause, add the following new sub-clauses: ``(4) The Principal Member of the Board shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the operations of the Board during the year that ended on that 30 June. ``(5) The Minister shall cause a copy of a report furnished to the Minister under sub-section (4) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report. ``(6) The first report to be prepared and furnished to the Minister under sub-section (4) shall be a report on the operations of the Board- (a) under the Repatriation Act 1920 in respect of the period that commenced on 1 July 1985 and ended on the day immediately preceding the date fixed under section 2; and (b) under this Act in respect of the period that commenced on the date fixed under section 2 and ends on 30 June 1986.''. Senator MACKLIN(Queensland)(11.13) —We are dealing with 60 amendments that have been moved by the Government. As has already been indicated by Senator Lewis, they are substantially the amendments which were considered last time that we debated the Bill before Christmas, some four months ago. They are a significant advance on what was contained in the original Bill. I think it is important that it be noted by the veteran community that the Government has acceded to these requests. They are not just of an inconsequential kind. Many of them go to fundamental points with regard to the legislation. They seek to maintain as far as is possible, given the numbers in this place, the types of benefits which have been provided to veterans over the years. I think it is a pity that there are some in the community who would wish that there be changes to these types of benefits in a way that suggests that we should no longer pick up the community's obligation in this area. Undoubtedly we will face a significant growth in costs in the future. These amendments seek to rectify a number of defects in areas where we believe the allowances should not have been denied. For example, they seek to continue the extension to the allied veterans, and certainly this is the wish of the wider community. The acceptance of these amendments will present a Bill which obviously has the support of the majority of people within the veterans community. The Returned Services League, the War Widows Guild, Legacy and the Regular Defence Forces Welfare Association have all indicated their support for the Bill's passage once these amendments have been accepted. The Australian Veterans and Defence Services Council has disagreed with that view. I must say that I wish to associate myself with some of the remarks made by Senator Lewis about the inc- redibly intemperate way in which much of this debate has gone on and the vilification of individuals who in fact operate solely for the benefit of other people-to support their previous comrades in arms and to try to ensure that they now receive the support that is their due from the community. Senator Lewis referred in particular to Rear Admiral Guy Griffiths. Certainly, in his dealings with the Australian Democrats Admiral Griffiths has always behaved in the most honourable and forceful manner in pursuing the aims of the organisation of which he is the President. I believe that many of the stumbling blocks to the progress of this legislation were the very odd letters and even odder Press releases that went out in a flurry from the Minister's office on various occasions and which, in many ways, sought to pit one section of the veterans community against another with a view to the early passage of the Bill. In fact all that those letters and Press releases have managed to achieve is the four-month delay which has occurred in the passage of this legislation because the tone of them and the way in which they were put together lent no honour or dignity to the way in which the Minister was conducting this campaign to get his legislation through. The suggestion that all may be fair in politics is bad. Some things are obviously unfair and unjust, particularly when they apply to individuals who are merely going about the support of their comrades and are trying to get for them the benefits to which they believe they are entitled. I hope that in future, when obviously we will be addressing this issue again-if not by way of amendments, then at least when the various items in this regard are raised-subsequent debates will be carried on with the acknowledgment that the people who operate in this area all do so with good will. While we may not and cannot agree with everybody-this is fairly obvious as groups within the veterans community take opposing views-we do not have to disparage one group in order to support the other. We can acknowledge that they all put forward their views with sincerity and, if we agree to disagree with them, we should disagree on the basis of argument. I would also like to raise the fact that since this Bill will pass through the House today or tomorrow, depending on how we get through the amendments, it will in fact clear the way for the Government to make announcements about the various programs that it has claimed it has had to put off making decisions about until it saw what happened to this Bill. Of particular concern to me is the situation we obviously face on repatriation hospitals. The greying of the World War II veterans, who form the vast bulk of the veteran community, presents us with a significant problem in the next 20 or 30 years. Obviously those problems will grow apace. By and large, those veterans are now in their sixties and in the normal course of events aging will exacerbate any problems that they are suffering. I am sure that we will find increasing demands made on our repatriation hospitals. The Government has announced upgrading and refurbishment of the various repatriation hospitals around Australia and we certainly expect that this will continue apace. I refer here to the warning of the Brand Committee of Review of the Repatriation Hospital System which recommended 6 per cent across the board staff increases. I believe that that recommendation must be met, and met urgently. The suggested cost of that is about $10m in 1986-87. Considering that we have recently had evidence in the Estimates committees about one area-I sought to move an amendment but was unsuccessful-in which it seemed that the Government would recoup about $75m from the totally and permanently incapacitated area and the disability award area, I see absolutely no reason within Government economic statements why that full 6 per cent should not be given, and given immediately. The Prime Minister (Mr Hawke) has made a very strong statement that there will be no cutbacks in 1986-87 and I am sure that the Minister is as thankful as I am that the Prime Minister has made a public statement on that matter. I am sure that it strengthens his hand in the Budget negotiations. I would also hope that that might be seen in the light of the types of savings that the passage of this Bill undoubtedly will make and that the redirection of those liberated funds should be towards the veterans community and must fulfil the major recommendations of the Brand Committee. Senator LEWIS(Victoria)(11.23) —I wish to support the remarks of Senator Macklin and refer to and repeat some of the remarks that I made earlier. Again, I wish to point out the responsible attitude being taken by the Opposition parties, including the Australian Democrats. In effect, we are abandoning the wording of the amendments that we carried some four months ago and accepting that the Australian Labor Party is in government and that the Government has picked up the spirit of our amendments and wishes to use its own wording and formulate its own amendments. We will not argue about words; we are prepared to accept the Government's proposals. The result is, of course, that the effect of the amendments that we moved will now become law. I refer particularly to the removal of that discriminatory 40-year rule which, I believe, no decent government applying its mind to the subject would ever have dreamed up. I really cannot understand how the Minister for Veterans' Affairs (Senator Gietzelt) could have proposed such a measure. Also I cannot understand how he could have proposed a measure that he has now agreed to remove-the discrimination against allies who fought alongside us during the Vietnam war. There is a host of other minor improvements in this legislation. Nevertheless, there remain defects in this Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill 1986 and we are aware of them. In our view there is clearly a need for a monitoring committee to be established. That committee should be independent and have particular reference to the totally and permanently incapacitated changes which are causing very real concern to many veterans organisations. That committee should also ensure that the legislation is not having effects that were not intended. If clause 119 is passed without our amendment, that committee should closely scrutinise the effects of it. Indeed, the Opposition calls on the Government to establish such an independent committee as soon as this legislation is in place. We can assure the TPI community that we shall direct our attention to the consequences of this legislation on its members during the course of the next election campaign. However, as I have said previously, the Opposition parties are adopting a responsible approach to this legislation. We will not be supporting the amendments of the Australian Democrats to that part of the legislation which the TPI community would wish us to change. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.25) —I remind the Senate that the Veterans' Entitlements Bill was dealt with by the House of Representatives last year. A number of amendments were made by the Senate and it requested the House to make other amendments. The House of Representatives has rejected those requests for amendments, but in a spirit of co-operation and comprise it has indicated that in dealing with these matters the requests would be acceptable in the form set out in its message. The Government also proposes to move amendments to the VEB in response to and in place of those moved by the Senate. I thank the Opposition and the Australian Democrats for the spirit in which they have referred to some of those amendments in globo. In all, the Government proposes to deal with 39 of the 41 amendments or requests made by the Senate. Because of drafting and practical difficulties, not all of the Government's amendments are in the exact form proposed by the Senate. I appreciate what Senator Lewis has said; the spirit of the Opposition amendments has been considered in the redrafting of those amendments. The Opposition indicated in the House of Representatives that it accepts the Government's requested amendments. However, as was indicated by Senator Lewis, the Opposition proposes to move amendments to clause 119. That is a pity, because a great deal of discussion took place with the veteran community in respect of that clause. I would like briefly to outline the requests and amendments that the Government proposes should be made to the Veterans' Entitlements Bill. The Government proposes that amendments should be made to clause 35 of the Bill which will remove the limitation on the eligibility for service pensions of allied veterans who served after 1 September 1957. This will mean that allied veterans of the Vietnam conflict will be eligible if they satisfy the eligibility criteria for members of the allied forces. In keeping with the agreement reached with the ex-service community, the Government proposes that requests should be made for the amendment of clauses 68 and 69 of the Bill to continue compensation coverage for those members of the defence forces who enlist after the commencement of the VEB, until such time as a military compensation scheme is in place. The Bill provides for termination of this coverage on a date to be proclaimed. A proclamation will not be made until legislation to establish the military compensation scheme is in place. Arising from the Senate amendments related to the report of the Senate Standing Committee for the Scrutiny of Bills, the Government proposes amendments to provide for the Administrative Appeals Tribunal review of decisions relating to allowances and other benefits; limitations on the scale of charges able to be fixed for treatment in repatriation institutions; prescription by regulation of the conditions for payment of travelling expenses under clause 110 and 131; the tabling in Parliament of the vehicle assistance scheme and the veterans' children's education scheme; and the amendment of clause 208 so that an offence occurs only where a person knowingly contravenes the provisions detailed in the clause. Other amendments which the Government proposes should be made to the Veterans' Entitlements Bill in response to the Senate's amendments include the extension of the list of decorations which attract payment of a decoration allowance under clause 102 to include the Cross of Valour and the Star of Courage, tabling of Veterans' Review Board annual reports, and the deletion of clause 206 which provides a statutory defence of civil suit in respect of the contraction of acquired immune deficiency syndrome. I point out to the Committee that the Government has not accepted the Senate's amendments to clause 119 of the Bill, which relates to the standard of proof to be applied to claims for pensions lodged prior to 15 May 1985. I do not think it is unreasonable to require that there be evidence of a reasonable hypothesis of a service relationship in the determination by the Repatriation Commission of such claims. The Returned Services League and other major ex-service organisations referred to by Senator Macklin accept the provision made by clause 42 of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Amendment Bill for the application of the reasonable hypothesis requirement. The Returned Services League has asked that I deal in my remarks with one concern it has regarding the interpretation of sub-clause 119 (3) of the VEB. The concern is whether the question of whether there is a reasonable hypothesis should be determined on the civil standard of proof. As was indicated in the opinion I tabled in the Parliament last December, the opinion as to whether a reasonable hypothesis remains or does not remain constitutes satisfaction beyond reasonable doubt. The Senate also sought a right of review of decisions made by the Repatriation Commission under clause 122, which related to the distribution of unpaid moneys on the death of a pensioner. Because of practical difficulties this amendment has not been accepted. The Commission will institute administrative procedures, however, in order to ensure that equitable distribution will take place. In particular, the Commission will give notice of its intention to disburse unpaid moneys by the placing of notices in newspapers. The Opposition has indicated-I thank it for this-that it accepts the Government's response to this amendment. Two Government initiatives have been included in the Government's proposed amendments. The first will give a legislative basis for the decision to extend benefits to those servicemen who served in Vietnam in continuous full time service, in any capacity, between 31 July 1962 and 11 January 1973, but who were not allotted for service. Included in this group would be, for example, service personnel who served on the HMAS Sydney. This amendment will provide that a person or unit will be taken to have been allotted for duty in an operational area where the person or unit was allotted for duty in accordance with Defence Force administrative arrangements, or where the person or unit is deemed to have been so allotted by an instrument in writing signed by the Minister for Defence. The second amendment relates to an increase in the guardian's allowance payable to single service pensioners with children on 1 May 1986. This initiative was announced in the 1985-86 Budget and was included in the Social Security and Repatriation (Budget Measures) Amendment Bill 1985. The provision was not included in the Veterans' Entitlement Bill when it was introduced last year, but it was intended to introduce an amendment Bill in these sittings to allow the increase to apply from 1 May 1986. As the VEB did not become law last year, the amendment is being proposed at this time. The Government has proposed also that a formal amendment be made to the Veterans' Entitlement Bill to provide for a commencement date to be fixed by proclamation. In conclusion, for the information of the Committee I mention that the Repatriation Commission has advised that arrangements were put in place to implement two understandings reached with the Opposition and the Australian Democrats last year. The first of these was not to make adverse determinations on the basis of the 40-year rule embodied in the standard of proof provision applying under the present legislation. In response to the second understanding, the Commission has also identified cases where the application of the new standard of proof provision made by clause 119 of the VEB could lead to a favourable decision for review after the VEB comes into operation. I urge the Committee to support the Government's amendments. They are offered, as I said in my second reading speech, in a spirit of compromise to enable this important piece of legislation to come into effect as soon as possible. I would like to make some brief reference to the remarks made by Senator Lewis and particularly the remarks of Senator Macklin in respect of Rear Admiral Griffiths. I was present at the summit meeting of veterans organisations convened by the Returned Services League, at which representatives of all the major service bodies were present, including Rear Admiral Griffiths. A unanimous decision was taken at that meeting that the Bill should be supported and that outstanding matters would be subject to further negotiation in the Budget context. At that meeting Admiral Griffiths assented to that agreement. Subsequently, however, he made public statements, which were circularised to all members of parliament, repudiating that agreement and setting out opposition to the proposed legislation. I ask honourable senators who have raised this matter what they would do in those circumstances. Members from all political parties, including my own, wrote to me seeking information in respect of Admiral Griffiths's comments. I had to point out the misrepresentations that were inherent in those circularised statements. I do not resile from the fact that he is able to criticise the Government, the Minister and the decision made by the veterans' summit meeting, but I am entitled, and in fact I am obligated, to reply to those criticisms. I do not believe that there is any justification for the criticism. If one gets involved in the political processes, one is entitled to the `give' and one is obliged to take what one gets in respect of the public controversy that arises thereupon. In regard to the question about the totally and permanently incapacitated pension, I point out that that is not a point of contention. In respect of this legislation, I addressed, as did the shadow Minister, Mr Tim Fischer, the Totally and Permanently Incapacitated Congress of the Australian Federation of Exservicemen and Women earlier this year. They have unanimously pressed for the passage of the legislation and did not raise the questions that have been raised by some persons in respect to this debate. I offer that not in the spirit of seeking to widen the controversy, but to explain the Government's position, the Minister's position, and the reasons why, in the political process, one has to set out, to the best of one's ability, the facts as one sees them. Senator LEWIS(Victoria)(11.37) —I had not intended to speak further on these amendments, but I have been drawn into responding to the defence of the Minister for Veterans' Affairs (Senator Gietzelt) of himself in regard to what I can only describe as his spiteful attacks on the Chairman of the Australian Veterans and Defence Services Council, Rear Admiral Guy Griffiths. The Minister's intemperate language used in correspondence to him is deplored by the Opposition parties. I do not want to speak for Senator Macklin, but it is obvious from his previous remarks that he deplored the language. It is deplored by ex-service organisations and people throughout the ex-service community. It is grossly unfair to Admiral Griffiths that not only has the Minister attacked him in correspondence, but also he has now made that attack worse by expressing similar views in the Committee in this debate. I regret very much that he has done so. So far as the matter of the totally and permanently incapacitated pension is concerned, I simply say to the ex-service communities which are concerned about that pension that this is a decision of the Government. It is prepared to carry the can, and we are not prepared to support the Australian Democrats' amendment-which I gather they will move in relation to that matter-for the very reason that we recognise that the Australian Labor Party is in Government and needs to raise revenue and to spend the money in the way that it determines-it has to carry the can for its decisions. That is different altogether from the matter of retrospectivity, which is not a question of raising the money and spending it in accordance with principles; it is a matter of carrying out a fundamental principle. I will debate that at a later stage. Amendments agreed to. Senator LEWIS(Victoria)(11.41) —I move: Page 147, after sub-clause 119 (7), add the following sub-clauses: `(8) Notwithstanding any provision of any other Act, where a claim for a pension of a kind referred to in sub-sections (1) and (2) or an application for a review of a decision relating to such claim for a pension was made before 15 May 1985 and not determined before the commencement of this Act, this Act shall have effect in respect of that claim or that application as if this section required the Commission to grant a claim for a pension unless the Commission is satisfied, beyond reasonable doubt, that there is no sufficient ground for granting the claim. `(9) Where a claim for a pension of a kind referred to in sub-sections (1) and (2) or an application for a review of a decision relating to such a claim for a pension was made before 15 May 1985 and determined before the commencement of this Act, the person who made the claim or the application may request, in writing in accordance with a form approved by the Commission, the redetermination of that claim or that application. `(10) Where a request is made under sub-section (9), the claim or the application in respect of which the request is made shall be deemed not to have been determined, and shall be determined in accordance with sub-section (8). `(11) A claim or an application determined under sub-section (9) shall be deemed to have been so determined on the day on which that claim or application was determined before the commencement of this Act.'. This amendment adds paragraphs after sub-clause 119 (7). The effect of the amendment is to delete retrospectivity in clause 119. Retrospectivity is not some political philosophy which can be ignored when it is inconvenient, or, as Senator Walsh would have people believe, and in particular as he would have the back bench of the Australian Labor Party believe, ignored when the Government wants to take some money away from some people so that it can use it in some other way which it believes might have a higher priority. That is the approach which Senator Walsh has apparently persuaded members of the Labor Party to adopt in regard to numerous measures. In particular, I refer to taxation measures. Apparently he has been so persuasive in his arguments along these lines that he has persuaded the Minister for Veterans' Affairs, Senator Gietzelt, to adopt a similar attitude in regard to retrospectivity so far as it affects the veterans community. However, the Liberal and National parties say that retrospectivity simply cannot be ignored because it is convenient or because the Government wants to spend the money in some other ways. No. Let me explain the word `retrospectivity'. It has come to be a sort of shorthand way of expressing a simple principle which is, or should be, fundamental to the people living in a democracy. That principle is this: The people-and after all, this is their country, not this Government's or the Treasury's-of this country are entitled to know at any one time what the law is. When they act in accordance with that law, no government has a right at some later stage to alter the law so that it is different at the point in time prior to the date of their actions. It follows that if a law is to be changed, it must be changed for the future; that is prospectively, not retrospectively. That is a simple truth for all governments in a democracy, as opposed to a dictatorship. It should be a simple truth for this Government. If this Government were seriously concerned about the rights of Australians, this principle would be enshrined in its so-called Bill of Rights. There is one exception to this principle which has come to be accepted. That exception is where a government decides to confer a benefit on a citizen or citizens retrospectively. But it must be acknowledged that even when a benefit is conferred retrospectively, a group of people in Australia suffer as a result of that retrospectivity. They are the taxpayers. The taxpayers at large foot the bill. I understand and accept that exception. However, it is, of course, not relevant here. What happened in this case was that in May 1985 the Government said, in effect: `Decisions of the High Court in interpreting the Veterans' Entitlements Bill have allowed applicants for pension to succeed when the Government believes they should not succeed. Therefore, we are going to change the law to stop them from succeeding'. We of the Opposition say: `Okay, you are the Government. If that is your decision, so be it. You carry the can. That is your responsibility'. In other words the Government is endeavouring to overcome the decisions of the High Court of Australia in the O'Brien and Law cases. We say that that is fair enough, that the Government is entitled to do that as long as the veterans community understands what it is doing, However, the Government is not satisfied with that approach of the Opposition parties. It now says: `Look, we want to go back and alter the law for all of those people who have applied for pensions and whose cases had not been dealt with as at May 1985 when we told you about this'. We of the Opposition say: `Hang on, you cannot go back beyond May 1985 when you told the people about this decision. That would be changing the law retrospectively'. Some people say `retroactively'. I do not care one way or the other. In other words, the change will be activated right back so that it will not matter when people made their applications for pensions because they will not be dealt with on the basis of the law as it stood at that date when they made their application for a pension; they will be dealt with on the basis of law which the Government announced in May 1985. We say: `You can only change the law in regard to the future as from May 1985-from the date you announced it'. However, the Government says-we understand this argument; we have heard it before: `We reckon we can save about $40m if we deal with all those applications under the new principle. When we get that $40m we will do all sorts of good things for the veteran community'. However, we say: `You cannot do that in a democracy. It is as simple as that'. This is a democracy. Even this Government acknowledges that it is a democracy. We say that the Government cannot go back in dealing with those applications. We understand that there is at least one application which is 20 years old. We say: `You cannot go back and just alter the law and say that those applications will be dealt with under the new law because it will give you an extra $40m to spend on all sorts of goodies for the veteran community if it lets you have that $40m back'. We say that we understand the Government's dilemma. We faced this dilemma when in government and we failed. We took that action once. We will never do it again. That is a basic and fundamental rule of this country which ought never to be broken if possible. Sometimes there are screaming reasons why one feels that the law ought to be broken. Sometimes these reasons are overwhelming. However, at least some on our side of the Parliament say: `We will never do it again. We have fallen for that argument once but will never fall for it again'. What I can say to the Senate is that there are no screaming, overwhelming reasons to break that fundamental principle of democracy in this case. The Government's desire to save $40m is not an overwhelming reason. Indeed, notwithstanding the Government's statements that it wants to spend the money on this and it wants to spend the money on that, how can it face up to the people of this nation and say: `We are prepared to change this Act retrospectively in order to save $40m'? Once the Government has done that what will be the situation with regard to all other laws which the Government could change to save money. The Government could go back, for example, and increase the fees in court cases in order to raise revenue. It could increase fines. It could do all sorts of things retrospectively if the only argument in favour of such an action is that one can save some money. The Minister for Veterans' Affairs has persistently stated, and stated quite erroneously, that the ex-service community has not supported the Liberal and National parties' amendment to clause 119 in respect of retrospectivity. However, I say that as late as 2 February this year the Partially Blinded Soldiers Association of Australia said: The retrospectivity clause is outrageous. It appears as a deliberate attempt by the Minister or the Treasurer, or both, to avoid paying the disabled veteran money to which he is rightfully entitled. The Government is quibbling about a national debt to its disabled fighting men, those who preserved for us the benefits and way of life we enjoy in Australia today. What response can the Government make to that allegation? I suggest that it cannot make any response. That was the way the law stood when these applications were lodged. The applications ought to be dealt with on the basis of that law. The Federated TB Sailors, Soldiers and Airmen's Association of Australia said: . . . until your Government returns to meaningful discussions with the ex-service community as a whole, and eliminates the ill-feeling engendered by the contents of your letter to Rear Admiral Guy Griffith, then the atmosphere of goodwill which has existed between veterans and governments since 1916 will continue in limbo. I draw that statement in the letter to the Minister's attention in regard to his massive disinformation attack on us. The question of retrospectivity is a matter which I understand causes governments great concern. However, when we come to realise that we are not talking simply about political philosophies but are talking about fundamental beliefs in a democracy, we see that governments must be required to face up to and accept the cost of not altering laws retrospectively. So the legislation will cost $40m. The Government will just have to find that $40m. That certainly cannot be put as some overwhelming reason for going back and changing the law in regard to all of these applicants who lodged their applications before May 1985. That is why the Opposition has moved this amendment. Senator MACKLIN(Queensland)(11.55) —The amendment the Opposition has moved is similar to the amendment moved by the Opposition last time we debated this piece of legislation. It refers basically to those people who have either put in a claim for determination prior to 15 May or who are in a situation where there is a review with regard to a claim and that review was put in place prior to 15 May. This is an area that obviously involves something which in the last few years has become a very important political item and one which is not easy to deal with. I remember very well being abused by members of the Government, now the Opposition parties, when I opposed the retrospective application of tax laws introduced by the Fraser Government. Those laws were, in fact, an immense intrusion into the civil liberties of many Australians. I maintained at the time that those matters could have been dealt with by the law as it then stood if that law was applied by the people who were then in Government in the way that it should have been applied. The position I took at that stage has subsequently been vindicated by judgments of the Federal Court of Australia and the High Court of Australia. Subsequent to that date there have been a number of occasions on which a benefit has been conferred retrospectively. Senator Lewis suggested that there was one exception. There is not one exception; in fact, there are two exceptions. The exception he mentioned was where a benefit might be conferred and, indeed, this place has conferred a benefit retrospectively. The other exception was one that, in fact, Senator Lewis and every member of this House voted for, when we passed a piece of retrospective legislation in regard to our own salaries. In other words, the other exception is where those people so affected accept the situation. That is relevant to this particular debate because there is a considerable body of opinion within the veteran community that they wish to accept this situation with regard to the current context, for reasons it has put forward in letters to all members of this chamber and the House of Representatives. It is also interesting to note that a little later in the debate I will move another amendment to clauses 20 (3) and 20 (4) identical to the one I moved last year in regard to totally and permanently incapacitated pensioners. That undoubtedly is retrospective because everybody over the age of 65 is now deprived of the right to actually put in an application, is deprived retrospectively of the ability to make a claim. The cost of that will be far higher than the cost of the amendments the Opposition is currently supporting. I cannot quite see how the Opposition says that this is the Government's business with regard to 20 (3) and 20 (4) where there is obviously a retrospective application of this to all those people over the age of 65, but with regard to this amendment, it is sticking on that matter of principle. I hope that the Opposition will support me when it comes to that subsequent amendment I intend to move, possibly not on the basis of the substance of the argument but hopefully on that matter of principle with regard to restrospectivity. I presume the Opposition's argument will be that it is not retrospective and, indeed, this is one of the difficulties we are facing with this particular clause because the sixteenth report of the Standing Committee for the Scrutiny of Bills said: While it is clear that this provision will put applicants in a new and less advantageous position, the Committee indicates as a matter of record that it accepts the Government's view that the application of the altered standard of proof in the determination of claims and appeals after the date on which the amending legislation came into operation does not involve any retrospectivity . . . It is a seemingly fairly clear statement from that Standing Committee. In other words, there is certainly a considerable area of disagreement. It is interesting to note that in the middle of last year the forerunners to the Veterans' Entitlements Bill 1985, which still lingers on in terms of various pieces of legislation, will be moved aside by this Bill being enacted and I was the only senator to raise this issue. The Scrutiny of Bills Committee at that particular time found itself in somewhat of a quandary, as it seems that the Government had probably accepted two versions, had them both drafted and put them both into the Bill at the same time. It is understandable how the Scrutiny of Bills Committee managed to get itself into difficulty, but it is interesting that no other senator in this place at that time raised any difficulties with regard to the retrospective elements of the Bills that have now gone through various changes and which now appear in the amendment that the Opposition has moved. I would have thought that if those amendments are not to be accepted at this time, they ought not to have been accepted previously. The reasons given at that time were that the Opposition did not actually see them as retrospective, so I would suggest that already there is a fair history over some nine months of a difficulty with regard to what type of retrospectivity is involved here. The type of retrospectivity involved here, if any, is certainly not of the kind that the Fraser Government introduced or the Hawke Government attempted to introduce in the 1983-84 Parliament and, indeed, in this Parliament with regard to taxation measures. I personally opposed those items of retrospectivity. Speaking as the Australian Democrats spokesperson with regard to veterans' affairs, my colleagues have accepted the report of the Scrutiny of Bills Committee. I personally do not and hence I will be supporting the Opposition's amendment because I feel that the element of retrospectivity which is there ought not be there. However, my colleagues, in reviewing the matter, have come to the decision that the continuing support we have given in the past to the Scrutiny of Bills Committee ought be continued in this case. One other item was raised in passing by Senator Lewis, which I think is an important one. That item is the point I have raised already of the problems facing the repatriation hospitals. Whether we like it or not, it seems to me undoubted that the Government would use the passage of this amendment-can I say that it would have been successful because undoubtedly the Government would back down if pressed-to avoid fulfilling any of those further commitments which are pressing. Whether we say it is on their head or anything else, that undoubtedly would be the political case, so my colleagues and I had to approach the matter not simply on the basis of the way the Government continuously in debates says we do not have to worry about types of decisions that are made because we are not in government, but on these particular occasons it gets terribly concerned about the types of decisions made. I wish it would be consistent with regard to its position because, even as late as yesterday, Senator Ryan said in this place that we did not have to worry about decisions that were made. If that is the case, I would be very interested to hear from the Minister for Veterans' Affairs (Senator Gietzelt) at the table whether we do not have to worry about decisions made in this case. With regard to the decision that is made, I and my colleagues had to look at the political consequences. We believe that if a decision had to be made as a matter of priority as to where that money should be spent, we had an obligation to make a priority judgment with regard to whether or not that money should be spent on upgrading the staffing in repatriation hospitals, in carrying out the obligations that the Government has said it wishes to carry out in regard to those ex-servicewomen who are currently being denied their rightful entitlements with regard to a gross operation of sex discrimination which this Government said it is reviewing, but that since it costs money it had to review it in the Budget considerations. I hope that it will review that and, in fact, remove that sex discrimination in regard to ex-servicewomen and that it will carry out a range of other vastly needed reforms that all those who deal with this area know need urgent attention, urgent support and that it will cost money. In our deliberations on this matter my colleagues and I believed that we then had an obligation to make a decision with regard to where that money should go. Quite clearly the decision was made that other needs were, undoubtedly, more pressing. I say to the Government: The Minister has not indicated to me, in any shape or form-I say this for the record because we do not want to get into a misunderstanding-anything with regard to any of those areas. We have had no discussions on them whatsoever other than the representations that I have made in a formal way to the Minister. So there is no undertaking on the part of the Minister on this matter. We will be expecting to see those types of urgent needs satisfied in the Budget because the savings the Government has made-this has been displayed in the Estimates committees which are in process at the moment-are of such significance as to enable the Government to fulfil each of those areas that have been either under review or are currently under review. The Government has expressed some desire to look at this matter in a Budget context. We believe that it has now freed up sufficient funds to be able to undertake expenditure in all of those areas without quibbling about the cost. The Government has already saved far more money than it would spend on any of the urgent proposals that the veterans community has put to it for 1986-87. I reiterate that my colleagues will be opposing this particular amendment on the basis of the support of and judgment by the Senate Standing Committee for the Scrutiny of Bills after long and careful deliberation that these particular clauses do not involve any retrospectivity. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(12.07) —I will be as brief as I possibly can. I think I should respond to Senator Lewis's views in particular because he has made a great deal of what he calls retrospectivity in respect of clause 119. The Government disputes, I dispute and the Senate Standing Committee for the Scrutiny of Bills disputes that retrospectivity is involved and, therefore, we should not lose sight of the basic issue in question. The Veterans' Entitlements Bill maintains the right of every person who lodged a claim prior to 15 May 1985 to have that claim determined on the basis of the criminal standard of proof of beyond reasonable doubt. The changes which apply from that date require that in respect of every claim, including claims lodged before that date, there be material raising a reasonable hypothesis of a connection between incapacity or death and service for the claim to be granted. The irresponsible alternative view put by the Opposition is that claims made prior to 15 May 1985 should succeed even where there is not even a scintilla of evidence of a war service connection. In other words, automatic acceptance of all claims lodged before 15 May 1985 is what is really being advocated by the Opposition. I point out that this view is not supported by any of the major ex-service organisations which seek just and equitable benefits for their members. What is the purpose of having a determining system if the O'Brien decision was going to be the general rule by which applicants for pensions or increase in pensions were going to be determined. Senator Macklin has quite correctly drawn attention to the fact that the Senate Standing Committee for the Scrutiny of Bills, in its sixteenth report, has agreed that no retrospectivity is involved in this matter. I will not repeat the arguments because they are there for those who want to examine the Committee's views. Senator Tate, the Chairman of the Committee, wrote to me confirming the view that I have expressed. He also advised that the form of words I have quoted was agreed to by all members of the Committee who were present at its meeting on 27 November 1985 and that there was no request by any member of the Committee to note any dissent as to the wording adopted prior to the meeting of the Committee on 19 February 1986. When the Opposition decided to make an issue of this, the matter was brought forward for further consideration. I do not think that anybody in the veteran community of any substance would suggest that the O'Brien decision should be the general decision for applicants who appear before tribunals. The Government is entitled to take the necessary legislative steps in respect of that decision which was such an open-handed decision as to make the determining system superfluous. The major ex-service organisations do not support the Opposition's stand on this matter, and neither indeed does the majority of the Australian Democrats. Every person who has looked at this fairly and objectively has agreed with the Government's propositions. Yet we have Senator Lewis quoting one organisation-the Partially Blinded Soldiers Association of Australia; an important organisation, but a very small organisation-on its attitudes to the retrospectivity issue. I should quote back to Senator Lewis what that organisation said: That the whole Bill should be scrapped. Even Opposition senators would not put themselves in a position where they had to support that view. Obviously they have been misinformed or are uninformed on the positive features of this Bill. Senator Lewis, from the views he expressed, is aware that the National Secretary of the Returned Services League wrote to me on 13 February this year on behalf of all of the major ex-service organisations. Time will not permit me to deal with all the points in the letter other than to say that that meeting that he informed me of, which embraced all the veteran community's principal organisations, recognised: . . . the retrospective nature of the legislation but felt that this was not unreasonable given the additional undertakings that the Government was prepared to make, especially in regard to cover for the regular forces. The meeting also felt that if there was insistence on the principle of retrospectivity it would need to apply not only to the standard of proof but also to dependants' allowances and eligibility for special rate TPI pensions. Given the above, the meeting considered that the Bill should be enacted as soon as possible. That is what we are seeking to do. As we do have a timetable problem, I will leave my further argument on this matter to be argued at some other time because there is an urgency to get this Bill dealt with by the Senate today so that the matter can go back to the House of Representatives and then back to the Senate before we rise this week. Senator LEWIS(Victoria)(12.13) —I thank Senator Macklin for all his assistance in this regard. As I understand it, the Senate Standing Committee for the Scrutiny of Bills was, in effect, saying that there was no technical retrospectivity because decisions had not yet been made on those applications so it could not be said that benefits were being taken away from people. I want simply to say that, as a former Chairman of the Senate Standing Committee on Regulations and Ordinances and as the current Deputy Chairman of that Committee, which is constantly looking at retrospectivity matters, from time to time fine lines have to be drawn. Quite frankly the Liberal and National Parties draw that line in regard to the provision to which Senator Macklin referred in relation to the Australian Democrats' amendment to section 24 because we believe that that relates to future applications. However, very fine lines need to be drawn from time to time. I would like to give the Committee an example of the sort of thing that worries me considerably. Every union organisation in Australia has lodged with the Australian Conciliation and Arbitration Commission an ambit claim which relates to all sorts of things, including retirement at age 45, the payment of very large sums of money on retirement, a large amount of annual leave, and a 25-hour week. The unions have lodged all sorts of outrageous ambit claims that at some stage or other they may wish to press. Does that mean that no future government dare pass legislation which would affect those ambit claims? Because those claims have already been lodged, could it be said that we should not deprive those unions of the opportunity to press them because to do so would be acting respectively? That is a much finer line for Senator Macklin to think about than the one that he raised with me. Senator Macklin —It would put your colleagues in difficulties. Senator LEWIS —Yes, it certainly would do that. It would certainly put me in difficulties. But that is the sort of problem that one can get into when one looks at questions of retrospectivity. However, I cannot believe that one can honestly say here that the applications which were lodged prior to May 1985 will not be affected by this legislation. In fact, the Minister for Veterans' Affairs (Senator Gietzelt) has clearly indicated in his remarks about the different kinds of onus of proof that they will be affected. So there is no doubt that retrospectivity is involved, and in our view that should be opposed. Question put: That the words proposed to be added (Senator Lewis's amendment) be added. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 33 —— Majority . . . . . . . . . 4 —— Archer, B. R. Knowles, S. CBaume, Michael Lewis, A. W. R. Bjelke-Petersen, F. I. MacGibbon, D. J. Boswell, R. L. D. Macklin, M. J. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Newman, J. M. Chaney, F. M. Parer, W. R. Collard, S. J. Puplick, C. J. G. Crichton-Browne, N. A. Reid, M. E. (Teller)Durack, P. D. Sheil, G. Guilfoyle, Dame Margaret Short, J. R. Hamer, D. J. Teague, B. C. Harradine, B. Watson, J. O. W. Hill, R. Withers, R. G. Kilgariff, B. F. Aulich, T. Haines, J. Black, J. R. Jones, G. N. (Teller)Button, J. N. McKiernan, J. P. Childs, B. K. Mason, C. V. J. Chipp, D. L. Morris, J. Coates, J. Ray, RobertColeman, R. N. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Ryan, S. M. Crowley, R. A. Sanders, N. K. Devlin, R. Sibraa, K. W. Elstob, R. C. Siddons, J. R. Evans, Gareth Tate, M. C. Foreman, D. J. Vigor, D. B. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Grimes, D. J. Walters, M. S. Colston, M. A. Vanstone, A. E. Robertson, E. A. Townley, M. McClelland, DouglasJessop, D. S. McIntosh, G. D. (Senator Maguire did not vote, to compensate for the vacancy caused by the death of Senator Missen.) Question so resolved in the negative. Senator MACKLIN(Queensland)(12.24) —by leave-I move: (1) That the House of Representatives be requested to make the following amendment: Page 17, sub-paragraphs 13 (2) (c) (i) and (ii), lines 7 to 11, leave out sub-paragraphs, insert ``, in receipt of a pension under this Part,''. (2) That the House of Representatives be requested to make the following amendment: Page 17, after sub-clause 13 (4), insert the following new sub-clauses: `(4a) Where a person who is a dependent of a member of the Forces within the meaning of the Repatriation Act 1920 was, prior to the commencement of this Act, in receipt of a pension under Part III of that Act, and the Commonwealth, but for the operation of this sub-section, would not be liable to pay a pension to that person under this Act, the Commonwealth is liable to pay a pension to that person as if the Repatriation Act 1920 were in force after the commencement of this Act. `(4b) Where a person entitled to pension under sub-section (4a) elects to receive, in lieu of that pension, a payment equal to the amount of pension payable to that person during the period of 5 years following that election, such an amount is payable to that person in lieu of that pension.'. (3) That the House of Representatives be requested to make the following amendment: Page 19, after sub-clause 13 (8), add the following new sub-clause: `(8a) Where a pension payable under the Repatriation Act 1920 to a person who is a widow of a member of the Forces within the meaning of that Act ceased to be payable by reason of that person's marriage, and that person is divorced or that person's husband dies, the Commonwealth is liable to pay a pension to that person in accordance with this Act as if that person were the widow of a veteran.'. (5) That the House of Representatives be requested to make the following amendments: Page 27, paragraphs 23 (1) (a) and (b), lines 3 to 9, leave out the paragraphs. Page 27, paragraph 23 (3) (b), lines 41 and 42, leave out ``, not being a veteran who has attained the age of 65 years,''. (6) That the House of Representatives be requested to make the following amendments: Page 28, paragraphs 24 (1) (a) and (b), lines 11 to 18, leave out the paragraphs. Page 28, paragraph 24 (1) (c), line 19 leave out ``that''. Page 28, paragraph 24 (2) (b), lines 35 and 36, leave out ``, not being a veteran who has attained the age of 65 years,''. (7) That the House of Representatives be requested to make the following amendment: Page 29, after clause 24, add the following new clause: Exceptional disability allowance `24A. (1) Where (a) a veteran is not entitled to receive a pension under section 24 by reason only of the operation of sub-paragraph 24 (2) (a) (i); and (b) the Commission is satisfied that the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, increased after the veteran ceased to engage in remunerative work, pension is payable to the veteran under section 24 notwithstanding that sub-paragraph.'. (8) That the House of Representatives be requested to make the following amendments: Page 108, after paragraph 81 (1) (b), add the following new word and paragraph: ``or (c) an allied veteran within the meaning of Part III, and who is an Australian citizen,''. Page 109, paragraph 81 (2) (a), at end of paragraph, add ``, or an allied veteran within the meaning of Part III who is an Australian citizen''. (9) Amendments: Page 23, sub-clause 19 (4), lines 13 and 14, leave out ``the claim shall, by force of this sub-section, be deemed to have been refused'', insert ``the Commission may refuse the claim''. Page 160, paragraph 137 (2) (b), at end of paragraph, add ``or as the Board requires for its purposes''. These amendments and requests take up again various items which we have raised previously and which we still consider to be defects in the legislation itself. The first amendment applies to clause 13, which limits the payment of a pension to a dependant if the death of a veteran is due to a war-caused injury or disease, unless that veteran is receiving a special rate totally and permanently incapacitated pension. Amendment No. 1 would have the effect of ensuring that on the death of a general rate pensioner from non-accepted disabilities his widow would continue to receive a pension. Amendment No. 2 relates to sub-clause (4) of clause 13 and it covers dependants' pensions also. The Minister for Veterans' Affairs (Senator Geitzelt) has maintained that none of the benefits available to veterans prior to the passage of this Bill will be removed. Here in the Bill we see the removal of such a benefit, and that amendment seeks to retain that benefit. Amendment No. 3 relates to clause 13 (8). That provision in the legislation would enable war widows who marry after 29 May 1984 to retain their war widows' pension. My amendment provides for the restoration of a pension to a war widow who has lost it under the existing legislation because she has remarried. The rights of that very small group of people have actually been lost in the amendments that have been made. In all fairness and justice the amendment should be accepted because they are the only group of people who are now disadvantaged under the Government's expansion of benefits in this area. The proposed amendment to clause 19 (4) seeks to take out the words `deemed to have been refused' and to insert the words `the Commission may refuse the claim'. This is being proposed to try to provide some flexibility and discretion to the Repatriation Commission. I rehearsed at some length the arguments for that proposition in the previous debate on 28 November 1985. They are to be found in Hansard of that date at page 2453. Amendments Nos 5, 6 and 7 deal with the TPI pension. I suggest that is really the last remaining major item that has not been effectively dealt with. I am still extremely concerned about people over the age of 65 who have subsequently lost their right to make application. I predicted-I will be interested in the next year to see whether my prediction comes true-that the changes the Government has made to the legislation will cost the Government money rather than the reverse. I am quite sure that veterans, on advice from their organisations, will now make application at the time prior to retirement when they have the ability to sustain a case under those amended provisions rather than, as many of them have done, wait until they feel they can wait no longer. It is now in their interests to make the application at the earliest possible date, and I believe that the effect of such action will to add considerably to costs. There are many veterans-all of us in this chamber have met some of those veterans-who have not applied for pensions that are available to them but have rather soldiered on, as it were, because they believed that they were capable of looking after themselves and they did not wish at that stage to be a burden on the public purse. I believe they must now put aside those feelings in their own interests and in the interests of their spouses and make sure that they put in their applications at the earliest possible date. Amendments Nos. (8) and (9) cover items that I have raised previously. First of all, amendment No. (8) relates to an allied veteran who is an Australian citizen. The arguments in that case were rehearsed previously at quite some length when we debated this question and I do not wish to go over them again. They are to be found in the Hansard of 28 November of last year. Likewise, that is the case with the arguments with regard to clause 137 (2). I believe that of all those amendments the most important one relates to the TPI. It seems to me that the situation could very well rebound on the Government. At a later stage we will have to review that issue because I believe an injustice is being perpetrated on those veterans. At the close of my remarks may I say that the submission of the Australian Veterans and Defence Service Council rehearses quite a number of those points. While it also supported the Opposition's position with regard to the amendments that the Senate has just voted on, it also supported, probably in even stronger form, the proposal that something be done with regard to clauses 23 and 24. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(12.32) —The amendments proposed by the Australian Democrats are largely those which were moved in the Senate last year, and they are not accepted. Honourable senators will recall that arrangements for dealing with amendments were agreed on 5 December last year. Those arrangements were in conformity with views agreed on by the major ex-service organisations. In the light of that understanding reached in December, the Government is not prepared to accept the amendments. Senator HARRADINE(Tasmania)(12.33) —A number of amendments have been moved by Senator Macklin. I want to have one of them clarified and that is amendment No. 3, relating to the insertion of an additional sub-clause after sub-clause (8) of clause 13. I suppose that a number of us have received representations on these questions. I certainly have. I have a particular case in mind of a person who had been receiving a veterans' allowance and who remarried in June 1983 and the benefit ceased. The Government has restored that benefit to people who have remarried since 29 May 1984. As I understand Senator Macklin's amendment, the position of that constituent would be covered. I feel that it is important for the Government to tell us how many people are involved. I know the Government has put forward the view that 29 May 1984 was the date on which the announcement was made and therefore that would be the date from which the benefit would be restored. That does not seem logical to me. It is certainly not logical to the people who are affected. I would have thought that if the Government were going to make a date it would make it the date of the election in 1983. I have been searching around for an appropriate date, and that date would cover the constituent for whom I am concerned, but it may not cover some other people. The logic of it should be that if the principle is that a person who is receiving a veterans' allowance does not lose it on remarriage after 29 May 84, why not apply that principle across the board? As Senator Macklin has said, presumably there are not very many persons in that category. I support the proposition that the principle be accepted and applied across the board. In the absence of any detailed information from the Government which would indicate that this would create an intolerable economic burden on the Government, I think it deserves the support of the Committee. Senator MACKLIN(Queensland)(12.35) —The intent of the amendment is to pick up the situation-I think they are few-of a war widow having remarried. Of course, under the previous legislation she would then lose her pension. Under this legislation it will be restored. Of course, the widow who has previously lost her pension upon her remarriage, and her second husband dies or they are divorced, is left totally out in the cold. It seems to me to be a rather extraordinary situation. Someone who could very well have suffered the death of two husbands ought to be treated, under my amendment, as a person who is entitled to the pension. The Government, in its own amendments, has shown that it accepts the principle that that person should not be deprived of support. But by inserting a cut-off date-I realise that there must obviously be some type of cut-off date-of 29 May, that circumstance arises. My amendment, of course, seeks to avoid that and to provide the benefit to any widow who finds herself in that situation subsequent to the passage of this Bill. Senator LEWIS(Victoria)(12.37) —I was waiting for the Minister for Veterans' Affairs (Senator Gietzelt) to respond to Senator Harradine and Senator Macklin. I say simply that from the Liberal and National parties point of view, we recognise that these are policy decisions of the Government. We cannot impose our policies, or what we believe the Government ought to be doing, on the decisions that the Government has decided to make. As I said previously, having made its bed, it must lie in it. In regard to retrospectivity in relation to clause 24, the only thing I want to add is that the proposal is that people would have been treated differently if they had been born earlier. The Government is taking away a prospective benefit. That, in my view, does not fall within my definition of retrospectivity. Indeed, it happens every time, for example, that the Government changes the tax laws, when the Government perhaps takes away a prospective benefit. So I do not believe it falls within my definition of retrospectivity, although I understand that it falls within the definition adopted by Senator Macklin. Question put: That the requests for amendments and amendments (Senator Macklin's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 53 —— Majority . . . . . . . . . 45 —— Chipp, D. L. Mason, C. V. J. Haines, J. Sanders, N. K. Harradine, B. Siddons, J. R. Macklin, M. J. (Teller) Vigor, D. B. Archer, B. R. Hill, R. Aulich, T. Jones, G. N. Baume, Michael Kilgariff, B. F. Bjelke-Petersen, F. I. Knowles, S. C. Black, J. R. Lewis, A. W. R. Bolkus, N. MacGibbon, D. J. Boswell, R. L. D. McIntosh, G. D. Brownhill, D. G. C. McKiernan, J. P. Carrick, Sir John Messner, A. J. Childs, B. K. Morris, J. Coates, J. Newman, J. M. Coleman, R. N. Parer, W. R. Collard, S. J. Puplick, C. J. G. Cook, P. F. S. Ray, RobertCooney, B. Reid, M. E. (Teller)Crichton-Browne, N. A. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Ryan, S. M. Elstob, R. C. Sheil, G. Evans, Gareth Short, J. R. Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Gietzelt, A. T. Teague, B. C. Giles, P. J. Watson, J. O. W. Grimes, D. J. Withers, R. G. Guilfoyle, Dame Margaret Zakharov, A. O. Hamer, D. J. Question so resolved in the negative. Senator MACKLIN(Queensland)(12.45) —I wish to raise one outstanding matter on the Veterans' Entitlements (Transitional Amendments) Amendment Bill 1986 with the Minister for Veterans' Affairs (Senator Gietzelt). This relates to a suggestion, made originally by Rear-Admiral Griffiths, which I put to the Minister last year, about the need for a monitoring committee. Having served on the Joint Committee on Electoral Reform, I have noticed how useful it is to look back over massive changes to legislation in the light of experience. I believe that a monitoring committee should be set up comprising representatives of the ex-service community, that it should report to the Minister after the operation for 12 months of this Act and that the Minister should undertake that that report will be tabled. I believe that the Government should then respond to that report as to what types of changes, if any, are needed in legislation and what changes the Government will be willing to accept. If the Department of Veterans' Affairs can provide this committee with all necessary administrative assistance, particularly the statistical data on how each of the changes and the rules affect veterans, we will see much greater support-and probably unanimous support-from the veteran community for the operation of the Act, provided those people know what is happening and how it is happening. I believe that that is the best way in which this matter could be handled. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(12.47) —In his speech Senator Macklin referred to the need to establish a committee to report on the first 12 months' operation of the veterans' entitlements legislation and in particular on any aspects of that operation which are of concern to the ex-service community. I am happy to give such an undertaking. I will set up such a committee. Membership will include representatives from the ex-service community and the committee will report to the Parliament in the Budget sittings of 1987. The Government will respond to that report as soon as possible thereafter. I also indicate that the Department of Veterans' Affairs will provide administrative support to the committee in its work, including access to statistical information concerning the determining system, and will bring forward briefing papers on any relevant matters arising out of the passage of the legislation. Bill, as amended, agreed to. Bill reported with amendments and requests; report adopted. Sitting suspended from 12.48 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Prime Minister (Mr Hawke) left Australia yesterday for official duties in the United States of America and Europe. He will return to Australia on 28 April. During his absence the Deputy Prime Minister and Attorney-General, Mr Lionel Bowen, will be Acting Prime Minister. Senator CHANEY —I ask the Minister for Finance: Is it a fact that the reversal of the decision to quarantine farm losses is the most costly single item in the Government's rural package? Does the Minister recall telling the Senate on 19 March that reversal of either or both the quarantining and capital gains tax decisions `would make absolutely no contribution to easing the present fiscal problems in the agricultural sector'? Did he also in the same answer say that the removal of neither the capital gains tax nor the quarantining of farm losses, which is now such an important part of its rural package, will have any effect on farm sector profitability? In the light of those expressed opinions of a few weeks ago, does the Minister agree with the Leader of the Opposition who has described the package as a disappointing hoax and the President of the National Farmers Federation who has said that it amounts to a total non-recognition of farmers' problems? Senator WALSH —In regard to McLachlan, if he thinks it is worth nothing and wants to make an offer to the Government that the Government should take it back again, it will make our Budget problems a lot easier. It is worth a great deal to the Government and me, in putting together the Budget, whether McLachlan thinks it is worth anything or not. It has not been a reversal. Firstly, Senator Chaney should get his facts straight. The decision has not been reversed. It has been announced that the Murrumbateman hobby farmers, for whom Senator Lewis speaks in this place, will be addressed in a different way, and there will be some other changes relating to valuation of stud stock and so on. As a point of fact it is quite wrong to say that there has been a reversal. Therefore, the figures that have been used of $65m and $45m are also incorrect. In regard to forestry, I have conceded right from the beginning-although I have never been asked a question about it in the Senate-that in my view there always was a problem with forestry investments, and that constitutes about 10 or 11 per cent of the $65m. In regard to there being no contribution to farm sector profitability, I stand by that statement and I am quite willing to let what will happen be the judge of me on that. Senator VIGOR —Is the Minister for Resources and Energy aware that the March trade figures show that a large proportion of the drop in our imports is due to Australia importing less fuel? In view of the rapid expected rundown in Bass Strait oil reserves by 1993, would it not make sense to buy oil while prices are low and conserve our own oil to sell when prices are higher and to use when oil is scarce, or are we so caught up in the balance of payments problems that we cannot afford to take advantage of cheaper prices for oil and are using our own reserves at an increasing rate? Will the Minister take steps to stop the oil multinationals ripping off the Australian community, rather than providing them with a $125m subsidy at the taxpayers' expense? Senator GARETH EVANS —I will ignore the invective in the last part of the question. We will have ample opportunity to debate the merits of the Government's currently proposed legislation in this place later, without too much of a populist, shark feeding frenzy from that corner of the chamber, if we can help it. As to the basic question, fuel import figures are subject to some volatility, particularly in the light of the current situation, in crude oil markets and through stock adjustments. To the extent that the dollar value of fuel imports shows a marked reduction in March as compared with January and February, a great deal of that simply reflects the massive cut in oil prices over that period and does not necessarily reflect a drop in volume at all. There is simply no evidence to suggest any trend towards domestic production of petroleum replacing petroleum imports in the Australian market. In fact, domestic production has declined markedly in recent months from an average of 555,000 barrels per day all through 1985 to below 472,000 barrels per day in March this year. Most of this fall is due to reduced exports of crude oil from the Bass Strait. It is not government policy to intervene in the production decisions of Australian petroleum producers in the manner suggested by Senator Vigor. It is apparent that the current low oil prices are resulting in reduced production from Australian oil fields and considerable volatility, as I have said, in supply decisions of refiners and distributors. It is the case that current low oil prices are creating difficulties for the Australian oil industry. Any action to further reduce domestic production in the way that has been suggested would undoubtedly exacerbate this problem and further discourage exploration and development at a time when it is extremely important for our long term oil supply situation that such activity should continue to occur. Senator ZAKHAROV —Has the Minister representing the Minister for Health seen the report in today's Age which states that the company which contracted to deliver the Government's anti-drug booklet had instructed its staff not to deliver to boxes which request no advertising matter or junk mail? What action will the Government take to ensure that all householders will receive this material? Senator GRIMES —I am afraid that I have not seen the article in the Age to which Senator Zakharov referred. I would certainly be concerned if the anti-drug booklets were not delivered in the manner promised. I will refer that matter to the Minister for Health. I will find out why I have not got an answer already and will get the answer to Senator Zakharov as soon as possible. The PRESIDENT —I bring to the attention of honourable senators the presence in the Presidential Gallery of a delegation from the House of Representatives of the Federal Parliament of Malaysia. The delegation is led by the Honourable Aw How Cheong, the Parliamentary Secretary of the Ministry of Energy, Tele- communications and Post. On behalf of all honourable senators I extend to the delegation a warm and friendly welcome to Australia and to the Senate. Honourable senators-Hear, hear! Senator MESSNER —I refer the Minister for Finance to the growing rental accommodation crisis as a result of the Government's decisions on negatively geared investments and capital gains taxation. Is the Minister aware of a joint study by the Real Estate Institute of Australia and the Western Australian Government's housing body, Homewest, which showed that more than 85 per cent of property owners had no intention of acquiring new properties because of the tax changes? Is he aware also of a 25 per cent increase in home rentals over the past year, as revealed by a Master Builders Association survey? Now that the Government has belatedly decided to drop its farm loss quarantining proposal, because of the damage that would cause to primary producers, will it review its decisions on negative gearing and the related capital gains tax? Senator WALSH —No. Senator JONES —My question is directed to the Minister representing the Special Minister of State. In the light of the Federal Government's drug offensive and the Prime Minister's support and pledge on law enforcement, has the Minister's attention been drawn to a television program broadcast by Channel TVO Brisbane on 17 March 1986? During the course of this program it was alleged that a number of offences had been committed through the use of Telecom equipment in Brisbane. Channel TVO claims to have in its possession tapes that outline the misuse of telephones in the Telecom system. This misuse included money changing hands for placing taps on phones, claims that telephones are being used for industrial espionage and sabotage, transfer of inside betting information on horse racing, de-activating burglar alarms and systems, rigging of telephone accounts, and overseas phone calls to arrange international drug shipments. In respect of the drug offensive, what action, if any, is being taken to investigate these claims by the Federal Police or any other authority? If action has been taken, have there been any arrests, transfers or continuing investigation, or any investigation into the matters raised by Channel TVO in its program on 17 March 1986 or in any subsequent programs? Senator GARETH EVANS —It appears that I have no brief on this question. Something seems to have gone genuinely wrong, Mr President. It is a question without notice that I have received from Senator Jones. I will seek some information on it and give it to him in due course. Senator KNOWLES —Is the Minister representing the Treasurer aware of a study by the National Institute of Economic and Industry Research predicting a loss of 35,000 car sales this year because of the company car tax, and figures published yesterday which show a 36 per cent drop in fleet and business sales during January and February compared with 12 months ago? Does he concede that with such a severe downturn occurring in the industry, the prospect now is for a much lower revenue result from the car tax, and, on our calculations, a likely net gain of only $49m as against the Treasurer's September prediction of $350m? In the light of its change of mind about quarantining farm losses, will the Government reconsider the fringe benefits tax, which is threatening so many thousands of jobs in the motor industry for a relatively insignificant return in revenue? Senator WALSH —For those who are familiar with the recent political history of Western Australia, it should come as no surprise at all that a Western Australian Liberal senator habitually defends the interests of tax evaders and avoiders in this Parliament. Western Australia, in the late 1970s and the early 1980s-- Senator Chaney —Mr President, I raise a point of order. There is a clear provision in the Standing Orders that the question should not be debated. The Minister, in responding to a question which is quite clear, simple and straight forward, commences by entering into a debate on quite irrelevant matters and in quite abusive terms which we have come to expect. In the interests of the continuation of orderly Question Time, when senators get a chance to ask their questions, I ask that you ask the Minister to simply answer the question that has been put to him. The PRESIDENT —Senator Chaney and all honourable senators will know that how a Minister chooses to answer a question is a matter for the Minister himself or herself. In this case, though, I ask Senator Walsh to take heed of standing order 100, which does not allow debate on a question, and to bear in mind standing order 100 when he replies to the question. Senator WALSH —Certainly, Mr President. I certainly had no intention of debating it. I just want to put a few facts on the record. One fact is that Professor Hewson, that well known guru of the Liberal Party, has said that Senator Chaney is not up to leading the Liberal Party. So I can understand why Senator Chaney is eager to change Professor Hewson's mind by raising spurious points of order. It is a matter of historical record that Western Australia, particularly the Western Australian Liberal Party, in the late 1970s and the early 1980s, was the refuge, the sanctuary, the home, of the largest tax avoiders and evaders in all of Australia. The majority of the members of the Western Australian Liberal Party finance committee in the late 1970s were in fact subsequently revealed to have been bottom of the harbour tax evaders. That was through the period when Senator Knowles was an office-bearer-a senior vice-president, I think-of the Western Australian Liberal Party. So it should come as no surprise at all to those who are familiar with that history that the Western Australian Liberal Party, and the senators who represent it here, stand up to protect the interest of tax avoiders and tax evaders. I am wondering whether the next question in this puerile sequence will be-- Senator Short —Mr President, I raise a point of order. I draw your attention to your previous ruling in relation to standing order 100. I suggest that Senator Walsh is not obeying your previous ruling. The PRESIDENT —Order! I have given the Minister a fair go and I ask him to answer the question specifically. Senator WALSH —I was about to do that, Mr President. I wonder whether the next question in this puerile sequence will be from a member of the Opposition repeating the false assertions regarding the employment effects of the abolition of the free lunch as stated by an organisation which was known by the acronym BAND. Senator ROBERTSON —I direct my question to the Minister representing the Minister for Foreign Affairs. It has been reported in the Darwin media that the United States has made application to establish a military base in that city. Could the Minister confirm that such an approach has been made, and if so, the Government's reaction to it? Senator GARETH EVANS —I think that is more of a defence question. I am afraid I do not have a detailed briefing on it. I will check and see whether I can give Senator Robertson an answer before the day is out. Senator KILGARIFF —I direct my question to the Leader of the Government in the Senate. It concerns the decision of the Australian Labor Party Caucus to suspend Senator Georges from further meetings pending a final decision of his membership of the Party. Will this action affect any of Senator Georges's functions in this place, in particular his position as Chairman of the important Joint Committee of Public Accounts? Senator BUTTON —The decision to which Senator Kilgariff refers will not affect any of Senator Georges's functions in this place, as Senator Kilgariff describes them, such as the chairmanship of committees and so on. I hope that Senator Georges will continue to exercise his functions as a senator with his normal acumen and diligence. Senator FOREMAN —I direct my question to the Minister for Veterans' Affairs. Now that the Veterans' Entitlements Bill has virtually passed into law, will the Minister respond to criticisms that a group of ex-servicemen who served in Vietnamese waters on the HMAS Sydney, her escorts and the Boonaroo and Jeparit have been consistently denied repatriation benefits? Will the passage of the Bill have any effect on the entitlements of these ex-servicemen? Senator GIETZELT —Senator Foreman asks me a question with respect to the Veterans' Entitlements Bill and the transitional provisions and consequential amendments Bills associated with it. It is true that the Senate this morning dealt with that Bill and made certain decisions relating to the legislation. The Bill, however, has not yet passed into law. It requires further consideration by the House of Representatives, and it will come back to the Senate, I hope, some time tomorrow. However, I think that we can say that the legislation is as near to being passed as it can be. Arising out of that, the Government's commitment to those who served in the circumstances described by Senator Foreman will enable them to participate in the areas of responsibility under the Department of Veterans' Affairs. My colleague the Minister for Defence has the responsibility of classifying persons who were involved in the Vietnam conflict on special duty. He has indicated that those who served on the HMAS Sydney, her escort vessels and the Boonaroo and Jeparit will come under that classification and will qualify under the legislation which, we trust, will be passed some time tomorrow. In those circumstances those eligible persons will be able to apply for disability pensions for service-related incapacities or death, in the case of their widows, and for service pensions for repatriation treatment entitlements. Many of them will be able to participate in the defence service homes loan scheme. However, I would point out, having regard to a number of representations that have been made to me, that this will not be retrospective for the purpose of taking over existing housing loans. Senator MICHAEL BAUME —My question is addressed to the Minister for Finance. I remind the Minister of evidence given yesterday before the Senate Estimates Committee C that the Australian Broadcasting Corporation required an extra allocation of $12.8m this year to cover extra costs of imported television programs, capital and other items resulting from the devaluation of the Australian dollar and that this huge extra allocation of Australian taxpayers' money arose because of the refusal of the Department of Finance to accede to the ABC's strong request of May last year to be allowed to take out forward cover on its foreign exchange commitment, eventually allowing it in January 1986 after this huge loss had been suffered. Since then no further losses have been incurred. I ask: How many other instances are there of government authorities such as the ABC which are supposed to adopt proper commercial practices being prevented by his Department from taking protective foreign exchange cover, as the ABC had requested? What has been the cost of such action by his Department over the last two years? Senator WALSH —The fundamental ignorance displayed in that question perhaps helps to explain why Patrick Partners became insolvent years ago when Senator Michael Baume was helping to run it and defaulted on the money which had been left in its care by all the widows and orphans. Senator Chaney —Mr President, I rise on a point of order. The PRESIDENT —Order! The Minister should withdraw that last remark contained in his answer. Senator WALSH —That bit about the widows and orphans? I withdraw that because I am not really sure who lost money on it. The PRESIDENT —Order! I ask the Minister to answer Senator Baume's question specifically. Senator WALSH —I am, Mr President. The losses referred to of $12.8m are in fact the difference between the ultimate cost of programs and equipment estimated just over 12 months ago at the exchange rate that prevailed 12 months ago and the final cost; that is, an estimate at a particular exchange rate and the final cost. Senator Baume assumes that the difference between those two figures, which he said was $12.8m-that roughly accords with my recollection of it-was something that was lost because the ABC was not allowed to take out forward cover. He is making that assertion without either knowing or making any allowance for the cost to the ABC of taking out the forward cover. Nobody knows what the cost would have been of taking out the forward cover for the particular dates on which the delivery of the equipment and programs was due. It may well have been more than $12.8m, in which case there would have been a saving. Senator Baume continues to display in the Senate the profound ignorance of this issue which he displayed at the Estimates committee meeting yesterday afternoon in spite of the attempts by the relevant ABC official to enlighten him on the subject. On the broader question of forward exchange cover insurance and so on, the general policy of the Government and, so far as I know, all previous governments is that the Commonwealth is its own insurer in matters of foreign exchange exposure and insurance in general. Senator Michael Baume —What about the Wheat Board? Senator WALSH —I am about to come to that. The Commonwealth's policy is that the Commonwealth is its own insurer on matters of foreign exchange risk exposure and of general mercantile insurance. Some agencies-the Wheat Board is one; I thank Senator Baume for his prompting-have been allowed to borrow overseas in the past. As I recall the evidence yesterday of Mr Le Gallant, an ABC officer at the Committee, he had first casually mentioned the question of allowing the ABC, given that, although it is a Budget funded authority, it is not an agency of the Commonwealth in the way that a department of State is, to take out some forward exchange cover in the way in which I understand the Wheat Board does. That was a casual mention in about December 1984. More serious discussions took place in about April or May of 1985. I am not sure when the approval came through, but I think it was some time before the end of 1985. Senator Michael Baume —January 1986. Senator WALSH —Okay, that is a month's difference. If other bodies which exist under Commonwealth statute wish to make applications to the Government, they will be considered on a one to one basis. The assumptions which Senator Baume has made and which he spelt out then are quite false. Likewise, of course, his assumptions about those outstanding contracts for the delivery of capital equipment and programs which the ABC still has. Whether the ABC will reduce the cost or increase the cost ultimately through taking out forward exchange cover is an empirical question which can only be answered empirically and not in the way in which Senator Baume seeks to answer it. Finally, a major reason for the ABC's being permitted to operate in a more commercial way, if one likes to use that term, is that it is one of those agencies which is given a budget within which it is expected to live. Not necessarily as a matter of reducing the final outcome cost, the ABC has chosen to operate in this way-that is, to use hedging-because its outcomes are more predictable in that way. The final costs may be higher or lower but they are more predictable. For that reason the management decision was taken. Senator MICHAEL BAUME —I ask a supplementary question. Mr President, recognising your admonition yesterday about supplementary questions, I simply want to draw the Minister's attention to the fact that I specifically asked him whether there are any other instances of requests from government authorities for permission to seek forward cover being held up or rejected by his Department and what is the cost of such hold-ups or rejections? Senator WALSH —There are none that I know of which are presently under consideration or which have been rejected. I will check that. I can only assume from the part of the supplementary question as to what is the cost that Senator Michael Baume is ineducable. Senator AULICH —My question is to the Minister representing the Minister for Foreign Affairs. I ask: Following the events of yesterday in Libya, what is known about the situation of Australians presently living in that country? Senator GARETH EVANS —Following yesterday's events the Department of Foreign Affairs has been in contact with our embassies in Bonn and Rome, which are the communication points into Libya for us, and a number of private companies employing Australians in Libya to establish the welfare and whereabouts of Australians in that country. The Department has also been receiving inquiries from next of kin and friends in Australia. There are approximately 25 to 30 Australians known to be in Libya at present and about 10 or 12 others whom the Department understands also are in Libya. However, this latter information cannot yet be confirmed until next of kin or employers can be contacted. The Australian Embassy in Bonn has reported that the Embassy of the Federal Republic of Germany in Tripoli, which, as I have indicated, represents Australian consular interests in Libya, has received calls from a number of Australians in Libya advising that they are safe and well. Details of their names and next of kin are not yet available. The Embassy has also said that it has received no reports of any Australian being injured. The Department of Foreign Affairs will continue to monitor the situation closely and keep next of kin informed. I should mention also that consistent with usual practice in these matters, the Department of Foreign Affairs yesterday issued a travel warning advising Australians contemplating travel to Libya to consider doing so only if it is essential. There are some other points that can usefully be made in respect of that travel warning practice and I will be happy to do so at the conclusion of Question Time in answer to Senator Hill's foray into this subject yesterday. Senator VANSTONE —My question is to the Minister for Education. I refer the Minister to the much publicised booklet entitled the Drug Offensive and in particular to the paragraph headed `Boys on Girls on Drugs'. I remind the Minister of direct quotations from young men, namely: `When girls lose control they look cheap, real pushovers.' . . . `You expect girls to be different. It's kind of expected when guys throw up or flake out. But when girls do the same thing it's bad. It's wrong. You just don't want to know them.' `I can't stand it when girls lose control . . . it's hard to explain but they sort of lose all their dignity . . .' I further refer the Minister to the editorial text, presumably approved by the Government, which includes such gems as: Boys just don't respect girls who allow themselves to lose control. . . . If only girls really knew what boys think of girls who are on drugs . . . How does the Minister reconcile the use of these archaic sexist stereotype references in Government material when she so strongly disapproves of it in educational and other material? Senator RYAN —Senator Vanstone is probably aware that the booklet she referred to was produced by the Commonwealth Department of Health and I think it has gone out under its aegis, so I do not have ministerial responsibility for it. I did read some of the extracts that Senator Vanstone referred to and I was surprised by them. But my interpretation of them was that they attempted to reflect existing attitudes in the community, attitudes which I surely agree with Senator Vanstone ought to be changed, but attitudes which exist nonetheless. I imagine that the writers of that booklet were merely trying to put the most unattractive representation on drug taking possible so as to dissuade young people from that course of action. I do not think the writers were, in that particular publication, trying to deal with sex stereotyping-there are many other publications of the Government which try to deal with that-but rather to reflect, in a way that is very accessible to those groups of young people who are most susceptible to drugs, a very unattractive picture of the drug taker, similar to some of the images in smoking campaigns which are also extremely unattractive but which are used as a sort of aversion therapy, I suppose, with the hope of dissuading, in this case, young girls from drug taking. I do not really think there is a conflict between that aim and the general equal opportunity aims of our Government. I agree with the implication that it is unfortunate that stereotyped attitudes prevail but I hope that in this particular case the use of them may have some beneficial effects for young girls who might otherwise be vulnerable to drug taking. Senator VANSTONE —I have a supplementary question. Do I understand from the Minister's answer that she is telling the Senate that the end in this case-to put girls off taking drugs-justifies the means, namely in this case the use of sexist phrases, and if she is saying as a matter of principle that the end does justify the means, would she justify that approach in her Department? Senator RYAN —I am saying that the end in view of this booklet, which is to dissuade young people, in particular young girls, from drug taking, is an end that I hope will be achieved. Senator VALLENTINE —My question is to the Minister for Veterans' Affairs. I refer him to his response of 9 April to a question from Senator Maguire regarding reports that Colonel Gaddafi could bulldoze Australian and Commonwealth war graves in Libya. The Minister responded that the story was a beat-up and without substance. Does the Minister still believe that the sanctity of our war graves in Libya is assured? If not, can he indicate from where he believes that the major threat to their sanctity emanates? Senator GIETZELT —It is true that Senator Maguire asked me a question about a beat-up story a week ago which suggested that Colonel Gaddafi was somehow threatening Commonwealth war graves, including Australian war graves, in Libya. I indicated that there was absolutely no justification or substance in the exaggerated responses given by Opposition spokesmen, as well as some other people. That is a matter of some regret because people were unnecessarily alarmed by statements that the Colonel was involved in the possible bulldozing of the 8,000 Allied war graves in Libya. In point of fact, of course, the war graves are under no threat at all from a domestic point of view in Libya. The war graves are located in Tripoli and at the time at which I responded to Senator Maguire, I completely deprecated any suggestion that they were under threat. However, since that date there has been an escalation of tensions in the region as a result of the death and destruction that has flowed from the bombing which has taken place. The Government has urged both sides to mediate and to resolve their differences rather than to engage in hostilities. I think all of us would agree that that is a very important objective. However, having said that, and bearing in mind that the Commonwealth war graves are the responsibility of the United Kingdom, I would imagine that Mrs Thatcher's involvement in the bombing of Libya would probably place the Commonwealth war graves under some form of retaliation or jeopardy if, of course, Colonel Gaddafi were to retaliate. Whilst the Government is concerned about the living, as indeed I am in my capacity as the Minister for Veterans' Affairs, I am concerned about the sanctity and the protection of the war graves in Tripoli. I would hope that the actions that are taking place in that region will not put the war graves under any form of threat because already I am beginning to receive letters expressing concern about the statements that were made 10 days ago from relatives of those who lost their lives in Libya during World War II. Undoubtedly, of course, the situation has changed dramatically since then because there was no substance in that story at all. I do not know how well precision bombing takes place, but I would imagine that there is now a greater threat to the sanctity of the war graves in the post-bombing period than there was previously. Senator SIDDONS —My question is directed to the Minister for Industry, Technology and Commerce. Over the last week we have seen $2.5 billion invested in share market deals between Elders and Broken Hill Proprietary Co. Ltd that has not increased the productive capacity of either company one iota. I put it to the Minister that this is a symptom of a much larger malaise, and I ask: Is the Government concerned that, while productive investment in plant and machinery actually fell from $13.75 billion in 1983-84 to $13.5 billion in 1984-85, the cash involved in successful takeovers jumped from $1.9 billion in 1984 to $4.2 billion in 1985, and stock market indices jumped 40 per cent between January 1984 and January 1986? Does the Government consider that these figures are signs that investment is being seriously misdirected in this country and will it move to introduce measures to prevent the misdirection and the increasing concentration of the ownership of Australian industries? Senator BUTTON —The matters raised by Senator Siddons are serious matters and are matters of concern. I personally have expressed concern, certainly when takeovers of this size took place in the non-trade exposed area of the economy a year or so ago. There have been a number of inputs from various sources to the debate about investment decisions in Australia. Apart from saying that I think the questions are worthy of continuing examination I just want to make one or two comments about the particular matters which Senator Siddons has raised. In the last part of the question Senator Siddons suggested-it was perhaps not intended in the way that I heard it-that increasing concentration of ownership in Australian industry was, in itself, a bad thing. I think it may be in itself a bad thing in the circumstances which were illustrated by Senator Siddons in the earlier part of his question. I am not sure that it is a bad thing in other sections of Australian industry if it means that there is less fragmentation of industry and a greater concentration of productive capacity than there has been in the past. I just wanted to make that qualification quite clear. I would like to add two or three other comments. First of all, some of the elements of the Government's tax package will reduce the incentive for investors to engage in non-productive activities. The paper being prepared by the Treasury on the question of negative gearing may well be relevant to that issue and that will require close examination by the Govenment and others. But with regard to the taxation proposals which the Government is in the process of implementing, just let me make the point that it is the Government's belief that it will encourage investment in much more productive activity than has been the case in the past. I refer to the Australian Financial Review editorial commenting on the tax package on 24 September last year. It made this point: It is by now apparent that the imputation elements of Mr Keating's tax package have the ability to bring enormous changes to Australian share markets. The whole balance between the ability to draw tax-free dividends and the old principle of seeking tax-free capital gains has been altered. The change has reinstated, at one stroke, the share markets as the main raisers of capital in the country. It has spectacularly altered the traditional notion that capital gains must be the main source of profits. It goes on: It will encourage investment in shares that seem to have the quality of paying consistently reasonable dividends. Quite apart from that, I think it is important in looking at this issue that one cannot necessarily draw valid conclusions from the big figures which Senator Siddons quoted and, indeed, from the aggregate figures which he referred to in drawing a comparison between investment in plant and equipment and investment in takeovers, to short circuit a longer description. I think it is important to recognise that former shareholders of companies which have been the subject of takeovers will, in theory at least, use the proceeds of those share sales by investing, hopefully in the light of a new tax package, in productive activities or, alternatively, by conserving and, in that sense, assisting production in Australia or overseas. It is not immediately obvious that these funds would have otherwise been forthcoming in the course of freeing up the market or investment in more productive activities. There are other benefits from the changes which have taken place and will continue to take place. One cannot quantify the benefits, but I am sure it will be a benefit in the fact that it may provide a welcome infusion of new blood on the boards of companies which, to say the least, may need it. Senator REYNOLDS —Is the Minister representing the Attorney-General aware of strong criticism of the extension of phone tapping powers to State governments in special circumstances? What role will the Federal Government have to prevent abuse of these powers, particularly in States like Queensland where the Council for Civil Liberties believes these powers may lead to further harassment of citizens with opinions contrary to the National Party minority Government? Can the Minister guarantee that the proposed phone tapping powers will not legitimise illegal interference with telephone lines like that discovered at the Brisbane fertility control clinics late last year after the Government had harassed women at those clinics? Senator GARETH EVANS —Senator Archer asked me a question yesterday covering some of this territory which I will be in a position to respond to after Question Time. But the Attorney-General has advised me in response to the sorts of issues that Senator Reynolds has raised that he is aware that there has been some criticism of the Government's proposal to extend telecommunications interception powers to the police forces of certain States and Territories. The proposals arise out of agreements reached during the Special Premiers Conference on the National Campaign Against Drug Abuse held in Canberra last year. Under the proposals, interception powers would be available only to the police force of a State or Territory where the State or Territory requested such powers and where it had laws providing adequate safeguards against abuse. The safeguards would be at least as stringent as those which presently apply to members of the Australian Federal Police under the present Telecommunications (Interception) Act 1979. Participating States and Territories will be required to maintain and comply with those safeguards at all times. The powers will be exercisable only pursuant to a judicial warrant in cases involving drug trafficking offences. The proposals will, in no way, legitimise illegal interference with telephone lines. Senator DURACK —Has the Minister representing the Treasurer seen reports of a visit last week to Mount Magnet in Western Australia by the head of the gold tax inquiry, Mr Gutman, which alleges that everybody who spoke to Mr Gutman decided he had already made up his mind to recommend the implementation of a corporate tax on gold mining and that the residents of Mount Magnet were so incensed by his attitude that they proceeded to organise a very large successful rally? Is the Government aware that Mr Gutman has made up his mind on this question, or has it any reason to believe that he may have done so? Will the Government assure the Senate that Mr Gutman was not selected by the Government in the expectation that he would give a report favouring a tax on gold? Will the Government seek assurances from Mr Gutman that he has not in fact made up his mind on the subject of the inquiry and that it is worth while for all those opposed to the tax to persevere with their representations to him? Senator WALSH —I did see reports of a meeting at Mount Magnet. I frankly do not know whether Mr Gutman has made up his mind or not. I would not expect that he has, but I frankly do not know. However, what I do know is that the Leader of the Opposition, Mr Howard, has made up his mind. I am afraid I cannot cite the precise date. I think I can deliver to the honourable senator, within half an hour if he wishes it, a cutting from the West Australian newspaper of about April last year in which Mr Howard says: `Yes, well of course gold should be taxed'. I do not know whether Mr Gutman has made up his mind or not, but I do know that Mr Howard has, and he is for applying taxation to gold. Senator BOLKUS —My question is directed to the Minister representing the Minister for Foreign Affairs. I refer the Minister to reports that Australian rugby players will again be invited to participate in South Africa. Can the Minister indicate the Australian Government's attitude to any such players going over there? Senator GARETH EVANS —The Government is aware of the reports to which Senator Bolkus refers. Even if the players concerned were to be invited as individuals and play in a non-representative capacity, such a visit would clearly be inconsistent with the spirit, if not the letter, of the Gleneagles declaration. The Government would regard itself as bound by the terms of that declaration to discourage any players from accepting such invitations. Any players considering such invitations should realise that to accept would weaken international efforts to bring pressure on South Africa to abandon apartheid through the mechanism of the sporting boycott. The boycott has achieved considerable success in the past and the continuing unrest should serve to convince Australian sportsmen of the need for the pressure to be maintained to assist the process of change in South Africa. The experiences of the rebel Australian cricketers should also serve as a warning to Australian sportsmen that the South African Government will use any sporting visit to that country for its own political ends. Senator PETER BAUME —My question is directed to the Minister representing the Minister for Health. I remind the Minister of the difficulties which faced a former Deputy Prime Minister of this country when he admitted that he had signed a letter which he had not read. I refer the Minister to evidence given yesterday at an Estimates committee meeting and to the admission by the Department of Health that the Minister had signed a letter-- Senator Elstob —The first letter was right and the second one was wrong. Senator PETER BAUME —I thank Senator Elstob. The Minister had signed a letter which said, inter alia: Indeed, a causal link between smoking and mortality has not been established scientifically. I remind the Minister that Dr Blewett subsequently wrote another letter, in which he said: I wish to advise that this letter was sent in error and that neither I nor my Department has any doubt about the clearly established causal association between smoking and lung cancer. Besides asking the Minister which version is correct, I ask whether Dr Blewett reads his letters before he signs them. Did he read the first letter before he signed it, and, if so, why did he sign it? Senator GRIMES —The second version of the letter was the correct version. With the exception of Senator Elstob, Government senators accept that there is a scientifically proved causal relationship between cigarette smoking and increased mortality. I do not know whether my colleague Dr Blewett reads in detail every letter he signs. I should imagine that he reads almost every letter he signs. If he gets anything like the mail some of us get, he may actually delegate to some of his trusted staff the job of checking such letters. He may actually trust some members of his staff to sign those letters. I suppose that what happened in this case, if that is what happened, is that a silly mistake like that got through. I remember that as Minister for Social Security I used to receive many thousands of letters a week. I used to have to send out replies to thousands of letters. I actually trusted some members of my staff to check those letters. I was willing, under those circumstances, to sign those letters. They were routine letters. I make no bones about this. I would be surprised if there were not Ministers in previous governments who were in that position. What happened was simply that a letter containing incorrect facts was sent out. That error was detected and a correction was sent out. I would be very surprised if Dr Blewett is the first Minister to whom that has ever happened; I would be very surprised if he is the last Minister to whom that will happen. To compare those circumstances with the circumstances in which a letter was allegedly signed by a previous Deputy Prime Minister is absolute nonsense. It is drawing a very long bow and it shows how desperate Senator Baume is to find decent questions to ask in this place. Senator ELSTOB —My question is addressed to the Minister for Education. Has the Government moved to establish an Asian studies council, as recommended in the Association of South East Asian Nations report? What functions are envisaged for the council? Will it serve to encourage economics and business students to attain appropriate expertise in Asian languages and culture? Will the Minister consider using bicentennial funds to promote awareness of business opportunities in the ASEAN region-for example, by setting up information stalls-as part of the celebrations in 1988? Senator RYAN —I am pleased to inform Senator Elstob that the Government is almost at the completion of the process of establishing an Asian studies council. On receipt a couple of months ago of the report of the committee that was set up to review Asian studies in Australia, we very quickly set about adopting one of its major recommendations, which is the development of an Asian studies council. In co-operation with the Minister for Foreign Affairs and the Minister for Trade, I am now working on proposed terms of reference for that council. We are seeking a suitable eminent Australian or a person from an Asian background to chair that council. We are looking for someone who will have the confidence of the Australian and Asian communities. We hope that this council will not be just another body full of goodwill but having little outcome. We hope, rather, that it will assist in the development of Asian studies not only at school level but also at tertiary education level, which again, while serving the traditional function that Asian studies have in Australia-that is, exposing young Australians to the cultural, literary and historical development of our Asian neighbours, will go beyond that and will assist tertiary institutions and schools to develop courses which bear a relationship to the economic developments and the trade prospects in the area. One of the findings of the Asian Studies Review Council was that there has been a drop in the number of students undertaking Asian studies in recent years, at school level and at tertiary level. It appeared that one of the reasons for the decline in interest by students was that many of the courses, although of intrinsic interest, did not provide any sort of vocational qualification for young people wanting to work in areas that related to the region. Senator Hill —The other problem is the weighting against the teaching of Asian languages. Senator RYAN —Mr President, Senator Hill is interjecting but I cannot hear what he is saying. I know that there is great interest on both sides of the chamber in this matter. Senator Elstob's question has come a little early in the sense that we are on the verge of making a major announcement about the council. When we do, and when we have the wide-ranging terms of reference and the appropriate membership of the council, I will be very happy to put down a statement in this place, so that all senators who are interested, such as Senator Hill, can make a contribution. This ought to be a bipartisan matter. I think we all agree that our relationships in the region must be developed further. Yesterday's greeting of Prime Minister Lee Kuan Yew was an example of the kind of improved relations that we have with the region. But we all recognise that there are further opportunities for improved economic and other relationships. The education system, via appropriately developed Asian studies, has a really crucial contribution to make. I will conclude my answer at this point. However, I promise the Senate that an opportunity will be given to debate this matter when we have finalised our decisions. Senator NEWMAN —My question is directed to the Minister representing the Minister for Transport. Will the Minister inform the Senate as to the progress of a matter referred to the Inter-State Commission in August last year-namely, the review of the Tasmanian freight equalisation scheme? Is it not a fact that later matters have received priority while Tasmanian businesses suffer? Senator GIETZELT —From time to time I am asked a number of questions relating to the freight equalisation scheme in Tasmania. For some reason the Minister for Transport has not kept me fully briefed with respect to the question asked by Senator Newman. I apologise to her. There is absolutely nothing in my brief that indicates that I can advance any answer other than what I have given Senator Watson and other senators in the past. Senator CROWLEY —My question is directed to the Minister for Education in her capacity as Minister assisting the Prime Minister on the Status of Women. Does the Government's rural package make any specific provision for women in rural areas of Australia? Has any money been allocated to address the needs of rural women? Are any special steps being taken under the National Women's Consultative Council consultations to provide for rural women to have their voice heard as part of the national agenda for women? Senator RYAN —Yes, it is certainly the case that an important element of the rural package that we announced yesterday will deal directly with the needs of rural women and with an improvement in services for rural women. Our decision to include that element in the package has come about because of the very active and effective representations made to govenrment by rural women about their needs. One of the developments in the women's movement that has been quite remarkable in recent years has been the capacity of rural women, disadvantaged as they are by the distance and sometimes by isolation, to get together and organise effective submissions and effective consultations with government. For example, we have recently funded the Country Women's Association to undertake a very widespread survey of the needs of rural women. We look forward very much to the results of that survey because we are confident that it will provide us with a very good database and some very good directions on further development of policies for rural women. It is certainly the case that rural women suffer from information problems. Even where there are a range of services of benefit to women in country areas, the women who could benefit from those services are often not well informed about them because of distance and other factors. So part of the program which we announced yesterday will be the granting of $100,000 for projects aimed at improving access by rural women to services. Opposition senators interjecting- Senator RYAN —It is all very well for members of the coalition parties opposite, whose parties have been in government federally for many more years than Labor and who have failed utterly to deliver anything for the needs of rural women, to boo and moan and carry on. Despite the fact that rural women have had many more years of government federally by coalition governments than by Labor governments, they have precious little to show for it. I have had the experience many times in country areas throughout Australia where I have been undertaking consultations with rural women of having rural women saying to me, a Labor Minister in a Labor Government: `This is the first time we have had the opportunity to speak directly to a Minister in government about the needs of rural women'. The $100,000 project money will go to rural women's organisations for projects which they will design and which will give women in their areas better access to information, better access to services and more opportunity to participate in policy-making and the benefits of the policies of our Government which, I conclude, have been already, in three years, more beneficial to women living in country areas of Australia than anything that our conservative predecessors ever managed to achieve. Senator BUTTON —During Question Time on 10 April, Senator Watson asked me a question which was illustrated by some vivid-or livid in his case-figures about spare parts being brought into Australia from overseas and delays in Customs clearances. I undertook to give the honourable senator some further information, and that is as follows. The procedures for clearing goods through Customs were extensively revised during 1985 and by last December were in place in all ports throughout Australia. These provide as a standard that the bulk of goods will be cleared by Customs within four hours of documents being delivered to the Customs houses. However, goods selected for random check and for special audit are cleared within two to three days if no impediments are disclosed during Customs checks. There is no distinction amongst goods eligible for these arrangements; that is, there are random checks. However, any importer can represent to senior Customs officials critical problems which he may have, such as maintaining production or meeting maintenance requirements, and special arrangements can be applied to facilitate urgent clearance, if necessary. During 1985 some public servants took industrial action which delayed the clearance of goods through Customs. In addition there were disruptions to computer services, principally at Melbourne Airport, which added to the delays. These were exceptional and were resolved by the end of December. Since that time goods have been clearing within the standards specified. Senator BUTTON —I undertook to get an answer to a question from Senator Haines. While I think I gave her a very adequate answer, her appetite for facts is insatiable. I said that I would provide further information in relation to a question which she asked me about a holiday resort in the Blue Mountains. Opposition senators interjecting- Senator BUTTON —I expect those sorts of interjections, especially from Senator Boswell after his performance in attempting to interject during a previous answer. Let me say in brief-I can give a more detailed answer in writing-that there have been several environmental inquiries into this proposed development conducted under New South Wales legislation, including a challenge mounted in the State Land and Environment Court. Special legislation was enacted within the State Parliament and assented to on 15 May 1985, with the intent of enabling the development to take place. There has been no inquiry under the Commonwealth Environment Protection (Impact of Proposals) Act. A legal opinion was sought by the Department of Arts, Heritage and Environment from the Attorney-General's Department. There is no legal impediment to the Australian Industry Development Corporation funding this project arising out of Commonwealth legislation. Senator Haines also asked me, I suppose in my own ministerial capacity, whether there was use of foreign capital by the AIDC in funding this project. The answer to that part of the question is that the AIDC will not be undertaking specific foreign borrowings to finance this project. The general overseas borrowings of the AIDC are detailed in its current annual report. I should repeat the point made in my earlier answer that the decision of the AIDC to fund this project was taken on commercial grounds. The AIDC is not subject to government direction in respect of its decisions. Senator GARETH EVANS —During Question Time today Senator Robertson asked me a question about the status of media reports on the possible use of Darwin as a United States military base. I am able to respond now on behalf of the Minister for Defence as follows: The Minister for Defence understands that the report in question in the United States was a congressional study which was prepared for a committee of the United States Congress. There is no evidence whatever that it reflects the views or policies of the United States Administration. The Government cannot speculate on the options which the United States might consider in the very hypothetical possibility that the Philippines Government might not renew the leases on the United States bases in 1991. I can say, however, on behalf of the Government that the Australian Government does not allow permanent basing or the establishment of foreign military bases on Australian soil in time of peace. There has been no approach from the United States Government on this suggestion. Senator GARETH EVANS —As I also foreshadowed, I have an answer to a question put to me yesterday by Senator Archer in my capacity as the Minister representing the Special Minister of State, relating to possible increased powers for the National Crime Authority. The answer is as follows: Yes, the Government will empower the National Crime Authority to intercept telephone conversations under similar controls as those which apply to the Australian Federal Police. Following consultations with the States, the Commonwealth is also now finalising legislation to amend the Telecommunications (Interception) Act to extend intercept powers to State police as well as the National Crime Authority, subject to the conditions which I mentioned earlier today in my answer to Senator Reynolds on behalf of the Attorney-General. Both the National Crime Authority and the AFP are presently empowered under general search warrant provisions to open mail suspected of carrying illicit drugs. Nonetheless, the Government proposes to strengthen this area by creating a new offence of sending illicit drugs through the mail, with the AFP, NCA and State police being empowered to examine suspect mail. Senator GARETH EVANS —I wish to respond to a question put to me yesterday by Senator Hill in my capacity as Minister representing the Minister for Foreign Affairs, relating to travel warnings to Australian citizens. I undertook to seek further information from the Department as to the usual practice in relation to the issuing of such warnings. I am able to advise as follows-- Senator Hill —Sensitive diplomatic decisions. Senator GARETH EVANS —As I said yesterday, there are a number of sensitive diplomatic considerations as well as practical ones governing the issue of travel warnings. For fairly obvious reasons the Government cannot put itself in the position of officially predicting major civil disorder or military action in a particular country before it actually occurs. The Government is not in any event in a position to direct Australians to travel or not to travel overseas. The issue of a travel warning is made only when it is evident that the safety of Australians in the country concerned would be in serious jeopardy. As I said in response to Senator Aulich's question following yesterday's events in Libya, the Department of Foreign Affairs issued a news release later that day, which stated that, as a result of the current situation in Libya, Australian citizens contemplating travel to that country are advised to consider doing so only if it is essential. In situations such as this the Department affords appropriate assistance to all Australians who might be involved in any manner. Again, as I said earlier in Question Time, the Department has been in close contact with the Federal Republic of Germany, which represents Australia in Libya, and has not received any reports of Australians who have been injured in the attack. There has been no confirmed report about the movement of expatriate employees to military camps. I believe the Department's action in emergency situations overseas is effective and that it is known and appreciated by those who have received advice and assistance. The PRESIDENT —I have received a letter from Senator Peter Baume proposing that a matter of public importance be submitted to the Senate for discussion, namely: The crisis facing Australia's sick and injured in need of hospital care. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator PETER BAUME(New South Wales)(3.12) —There is a crisis facing Australia's sick and injured in relation to the availability of hospital care. It is a crisis which did not exist three years ago and it is, among other things, one product of Medicare and the Medicare system. When I am ill, when members of my family are ill, when my children were young, if they were ill, we wanted care to be available for ourselves and for them when it was needed. When they needed hospital care, I wanted hospital care to be available, and it was available then. When hospital care is needed to deal with an emergency, to correct some painful or debilitating condition, to determine a diagnosis, to institute treatment, to begin the rehabilitation of some disability-whatever the need-we want hospitals to be available when the need is there and when we are in need. That is a reasonable request for any citizen of this country. Every Australian wants to know that he or she can look to care when it is needed. Today they cannot do that. Today they cannot be secure. They cannot be certain. We are not worried today in this discussion about ideology or about the funding mechanisms for health care. We are concerned about whether we can get access to care and to service today. This is not available in Australia today. Politicians use the word `crisis' too freely. Sometimes it is justified; sometimes it is not. I think the events in Libya yesterday deserve the word `crisis'. But I also believe, sadly, that the situation facing our hospitals today is a crisis for all Australians. The crisis is due to increased rights of access to the public hospitals which were granted by the Medicare system. We were all promised that we would have a right of access to a bed in a public hospital once we paid our Medicare levy. The crisis is due also to a vastly reduced capacity of that same hospital system to respond not only to the increased need which Medicare has given, but also the existing need. The crisis is due in part to large scale closures of hospital beds. The crisis is due in part to large and unprecedented resignations of the staffs of public hospitals which cannot stomach any more and are getting out. The crisis is due in part to new and artificial limitations on the services which hospitals have omitted to offer. I refer to things such as the restriction of operating lists, the refusal to let people schedule operations or tests even though members of the community require them. The crisis is due in part, even in our repatriation hospitals, to the closures of beds and to the turning away of repatriation beneficiaries who are entitled to care. The crisis is due, finally, to a refusal by State governments to allow the proper development of alternative hospitals, private hospitals, to take up the need unmet by the public hospital system. All of this has happened under a Federal Labor Government which has introduced Medicare and, in so doing, promised to every Australian a right of entry to a standard bed at no cost above the levy, as part of their entitlement under the Medicare scheme. It has occurred under a Labor Government which has failed to provide the enormous extra resources which are essential to make that Medicare promise a reality. It has happened while we have had Labor governments in the States which cover about 80 per cent of Australians-the four mainland States under Labor care. Available figures confirm the truth of what I am saying: Hospital care for Australians is no longer available in adequate amounts. Figures released monthly show ever increasing waiting lists for admission to public hospitals in Victoria. In Victoria, in which the Labor Government is now in its second term, recent figures show that 27,900 people were on public hospital waiting lists at the beginning of January. The situation is worse now that we have reached the month of April. So 27,900 people may have been waiting for an operation on a prostrate, the replacement of a hip or the removal of a cataract. Each of those conditions is disabling and each of them is fixable and curable. But those people have to wait. The waiting lists are worse now than they were in January. In my State of New South Wales we know that more than 30,000 people are awaiting admission for the same kinds of conditions, and an examination of the situation in other States will show that exactly the same thing is occurring. Let me say here that the people do not seek admission to hospital for fun. It is not something to do if one has a spare day. People do so because they are in need. They do so because they are in danger, at risk, in pain or because they are disabled. Those are the reasons that people need and seek hospital care. The expectation of Australians is that they will be able to redeem the promises made so freely by Labor governments when they introduced Medicare. Those promises clearly cannot now be delivered. Many people wonder why the waiting lists have increased. Previously our public hospitals served a particular population of people-many of them elderly, many of them pensioners-who were able to be admitted to hospitals fairly quickly. They now have to share the number of available beds in the public hospitals with many others who have gained new rights to those beds since Medicare was introduced. They find that they have less of everything-less beds, less resources, less operating time and less staff. It is the elderly client, the pensioners, those who are dependent upon the public hospital system, who now find that they are infinitely worse off, and it is they who make up a large part of the waiting lists. In the past three years we have seen several things. First, we have seen a mass exodus of trained nurses from the hospitals in which they trained and the profession which they love. The governments which are responsible for hospital care, and the hospitals themselves, have proved quite incapable of attracting the nurses back. So we have hospitals with fewer nurses than they have ever had, at a time when the need for their skills is greater than it has ever been. The nurses are saying that they are unwilling to be part of the system. They are unwilling to be part of the second rate system of delivery which has been imposed upon them. They are unwilling to be part of a system for which they were trained and to which they have devoted their lives. I did not think I would ever see this happen. It is not an ideological matter on the part of the nurses of Australia. It is not that they are abandoning the hospitals because they do not vote Labor or because they do vote Labor. It represents despair and disillusionment on the part of the nurses. It is so deep and bitter that they are leaving the profession. They are leaving the hospitals which they served in crisis at a time of crisis because they cannot stomach any more. That is the first big factor. The second factor that has led to a great rundown in our hospitals has been a divisive, destructive and unnecessary confrontation with the doctors who provide the professional services in the hospital system. That was so bitter that the doctors did something unprecedented-they withdrew their services. They placed their own careers in jeopardy. They acted to withdraw from the professional activities that are their lives because they knew that Australians were being cheated, that the system was disintegrating and that Australians were getting and would get less care. I will demonstrate this with examples in a little while. They acted because the crisis was so great that they felt they could do nothing else. It is a matter of history now that many of the doctors' main demands were met by the Government, which finally had to listen and give in. The third factor which is affecting our hospital system is the situation in public hospitals-the hospitals to which we wish to go to exercise our rights under Medicare, rights which were promised to us. These hospitals should be increasing their resources, increasing beds and increasing access to them in order to make good the redemption of Labor's promise of Medicare beds for all. These hospitals should be delivering on the promise of Medicare. But the public hospitals of Australia are under the tightest budgetary control ever, with diminished budgets in real terms, real reductions in their operating budgets when they should be increasing them, and real reduction in the services which they can deliver when they should be increasing those. They are cutting operating lists and operating times when more Australians than ever before are waiting for services. The great public hospitals of Australia are closing beds at a time when more beds are needed. Let me give an example. There is a heartbreaking shortage of neo-natal beds in New South Wales-that is, emergency beds for the care of new born children, little infants. In New South Wales the authorities have closed 14 of the State's 51 specialised neo-natal beds-about a quarter of them have been closed. Infants are being airlifted from New South Wales to Victoria for care. Of course Victoria is also experiencing the same squeeze on beds. One great obstetrics hospital in Sydney, King George V Hospital, has turned away as many as 100 referrals of infants in need of care, 100 babies needing emergency or specialised assistance. That is just one example of what is going on in the hospital system at present. I will give another example. I refer to the great Sydney teaching hospital, the Royal North Shore Hospital, at which the Minister for Community Services (Senator Grimes) and I trained as doctors. It is one of Australia's great hospitals. It had about 965 beds before Medicare was introduced. Those beds provided services for a vast population-perhaps one million people overall. The hospital has been forced to close 100 of those beds as a result of Labor's budget rationalisations. One hundred beds have been taken out of the system at a time when more beds are needed. Another 100 beds have been closed as a result of the shortage of nursing staff because the nurses are voting with their feet and leaving the system. It is true that a few of those beds were regained after Sydney Hospital and the Mater Hospital were closed; but, in fact, the number of beds available for the care of people in my part of Sydney has been diminished in a major way by government fiat and government incompetence. Let us consider the position in the repatriation system. At the Repatriation General Hospital in Heidelberg there were 504 beds on establishment. Of these, 133 are closed because the Department of Veterans' Affairs cannot get nurses to work for it under the Commonwealth award. Thus, there are 370 beds open; nevertheless, up to 50 veterans a week, including 20 who we are advised would fall into the category of those in severe need or requiring essential rather than elective surgery, are being turned away from Heidelberg Hospital because its beds are not open, it cannot get nurses to enable it to operate and the Government under which it works cannot provide the required resources. Here in Canberra the Woden Valley Hospital lost 50 beds between June 1985 and March 1986. That represents about 15 per cent of the total number. The Royal Canberra Hospital lost almost 60 beds between last November and March this year. In a four-month period 60 beds out of a total of 438 were taken away. It is clear that the community is worse off. The waiting lists are increasing and the numbers of beds are being reduced. Of course there is a crisis and of course people are worse off. Let me illustrate the extent of the crisis for individual patients with some real examples of Australians who are disadvantaged. First, let me refer to Dr David Johnson, a contemporary of mine. He is a well-trained staff cardiac surgeon. He is not a money grubber. He has gone public to set out the problems. His patients have been unable to get beds so that he can operate on them. Yet Medicare promised that everyone would be entitled to a bed when one was needed. Dr David Johnson's patients needed surgery, many of them for coronary and artery diseases, and three of his patients have died while they were awaiting surgery. After the decision was taken that they needed an operation and before they could receive it, they died. They probably died unnecessarily, needlessly, pointlessly. I ask honourable senators to imagine that those patients were not just disembodied statistics but were their mothers or fathers, or even themselves, in need of cardiac surgery for coronary or artery disease, waiting for an operation and facing the prospect of dying because they could not get a bed in a public hospital and they did not have the resources to seek a bed elsewhere. The result is that patients are waiting and waiting and waiting, even when their conditions are urgent, disabling or serious. I refer honourable senators to information that we have had from the Australian Capital Territory. Dr Edward Fleming wrote to the Minister for Health (Dr Blewett) and that letter was provided to me by my colleague Senator Lewis. He describes a number of patients who cannot get beds in Canberra. I will not mention their names; I will use just their initials. Mr S. has an obstructed hernia-and he cannot get a bed! What kind of country is this? Mr A. has a total obstruction of the oesophagus. He cannot swallow anything. But no bed can be found for him inside the hospital system. What kind of country is that? Mrs E. has bilateral cancer of the breast and no bed is available to enable her to be operated on. There are two other patients who have cancer of the breast. It could be my wife or my mother. It is a matter of grave importance that in a country such as Australia we cannot provide resources under the promise of Medicare. There is another patient who has obstructive jaundice and an inflamed gall bladder and three others who have strictures of the oesophagus so that they cannot swallow. These are some practical examples of the restrictions on admission to hospital beds and some of the hardship that this means for Australians. Not only does the Opposition support a fair go and a fair and good health system for all Australians, not only do we support the provision of hospital facilities to meet all our needs for hospital care, not only do we look to the provision of enough operating and efficient services to redeem Labor's promises made so freely under Medicare; we go further; we demand these things. Because it is clear that the hospital services in Australia are falling apart today, because it is clear that beds are being closed and nurses are leaving the system in droves and will not come back, because governments are reducing the money available to the services, because we see a magnificent hospital system in disarray and despair, we demand that the Labor Government, which gave us Medicare, whether we wanted it or not, should now give us the services that it promised would come with Medicare. Those promises included the right to admission to a standard ward bed whenever a person was sick; none of this business of a person with cancer of the breast or someone with a constricted oesophagus being unable to get a bed. When we need beds we should be able to get them. The Government should provide these things, whether it wishes to avoid doing so or not. The Government should do it because what is happening is unfair to all Australians. It is not good enough and we demand that the Federal and State Labor governments fix the crisis which they, alone and clumsily, have laid upon us all. The only justification for Medicare in the end is if we citizens of Australia get better services and better access to services as a result of the introduction of Medicare. That is what Medicare was supposed to be about. Of course, the situation is worse, not better. There are fewer beds, less resources and less care, and the situation is getting worse still. Senator Lewis —As we predicted. Senator PETER BAUME —As we predicted. This crisis is real and immediate and one which the Labor Government must fix as a matter of urgency and honour. It is necessary for me to say, sadly, that we have no confidence that it will do so. Senator GRIMES(Tasmania-Minister for Community Services)(3.31) —We have been spared that sort of speech from Senator Peter Baume for some time and I had thought that maybe we would be spared it for a while longer, but it looks as though the Opposition, as usual, has run out of things to bring up, so we have had to listen to the emotional nonsense that we have just heard. I remind Senator Lewis and Senator Peter Baume that for the seven years of the previous Government I was the Opposition spokesman on health in this place. For each of those seven years I stood up-- Senator Withers —You made the same speech. Senator GRIMES —Every year I made the same speech-Senator Withers is right-because every year we debated legislation introduced into this place, frequently by Senator Peter Baume, to have yet another health scheme in this country. We had seven. Every year I finished my speech with the same words: `We will be back again next year because this will not work'. We were back again next year because none of those schemes worked. People used to say `I feel another health scheme coming on'. None of them worked because the former Government did not know how to make them work, yet Senator Peter Baume has been preaching to us. I was disappointed with the last five minutes of Senator Peter Baume's speech, because he said something I have not heard him say before and which I did not expect to hear him say in this place. I can get up and say: `I know two people who died in recent times while waiting for cardiac surgery and waiting for a bed in one of Sydney's leading private hospitals'. Am I entitled to get up and say, therefore, that the private hospital system is crook because that happened to those people, who had conditions from which one may die at any moment? This is absolute nonsense. If I got up and made a statement like that, Senator Peter Baume would laugh at me, but it happens to be true-I do know two people who died while waiting for cardiac surgery, waiting for beds in private hospitals, as people will always wait for beds in public hospitals and private hospitals. Dr David Johnson did not say that those people would not have died if those beds were available. He was asked that specific question and he did not say that. He was not a contemporary of Senator Peter Baume at university; he was a contemporary of mine at university-he was in my year at university-so Senator Baume was wrong there. Senator Peter Baume has done what so many Opposition and conservative politicians do in this place. They come in and say that we have problems in our hospital system and in our health system, which we have, and they are all due to the Federal and State Labor governments; that none of the problems existed before the Labor Government came to power three years ago. That is hogwash and Senator Baume knows that it is hogwash. We have had an increasing shortage of nurses in this country for the past 10 years and we are now suffering from that increasing shortage of nurses. The previous Government, the Fraser Government, did two things to aggravate that shortage of nurses. Firstly, it cut funds to the States for hospitals year after year. The Federal governments, both Labor and Liberal-I remind Senator Baume that nowhere is the shortage of nurses worse than in my State of Tasmania, which has a Liberal Government in its second term of office-cut funds to the States, and the State governments had to cut the available funds to hospitals. Funds were cut in, amongst other areas, nurse training and recruitment, and we are suffering the end result of that. The second thing from which we are suffering is that for the past 10 years or more there has been a rebellion amongst the nursing community, who have not been willing to continue to accept what they consider to be second-class conditions; conditions of pay and work which are not comparable with those of their peers in the community. Therefore, they leave the nursing profession and get other work. It is ludicrous, as I have said in this place and other places, that nurses working in highly stressful situations, for instance, in intensive care or post-cardiac surgery care, receive lower wages and worse conditions than someone such as a legal secretary. No wonder nurses leave, are burnt out and do not continue in that profession. This Government decided to do something about that situation by, firstly, talking to the nurses about the training they receive. They claimed, reports claimed and we claimed that one of the ways to overcome this difficulty is to provide nurses with adequate college-based training which nurses receive in most countries, and we are doing that. We are trying to assist nurses, as we have in the Australian Capital Territory, by improving their conditions, but we cannot reverse a process which has been going on as long as this one has. This bleeding from the hospitals of qualified nurses into other professions and areas has been occurring for the past seven to 10 years. It is not a phenomenon which has arisen just since the onset of Medicare. The problem is that as long as we in this country treat medicine and medical care in the health system in the way in which Senator Baume has treated it, by saying in this debate `You are in government, all the fault is yours; we are not in government, none of the fault can be ours' we will never get anywhere. I have said that before in this place when I was in opposition, and I say it again now that I am in the Government. There are lots of multifaceted problems in the health system and we should have a debate about those problems. Senator Baume's first statement was that the basic problem in our hospitals is due to `the increased rights of access to public hospitals by the Medicare scheme'. Senator Baume said that that has resulted in people deserting the private hospital system and flooding the public hospitals. Therefore, in the words of Senator Lewis by interjection, we have apparently ruined the private hospital system and overloaded the public hosptial system. That is not so and Senator Baume knows that it is not so. Senator Peter Baume —I did not say that. Senator GRIMES —The honourable senator should read what he said. I quote the exact words of Senator Baume when he said that the reason for the breakdown in the hospital system was `the increased rights of access to public hospitals by the Medicare scheme'. Senator Lewis backed that up by saying that we had provoked the collapse of the private hospital system. The continued claim that Medicare is responsible for the long waiting lists in public hospitals is made to justify the attempted undermining of Medicare by Opposition members, but it is not a claim which is made by any State government department, nor even by the conservative State Ministers for Health. In fact, at the recent meeting of State Health Ministers, not one Minister made the claim that Medicare was responsible for the waiting lists in their systems. Several of them placed on the record that Medicare was not responsible. Victoria and some other States, including my own State of Tasmania, have analysed why the waiting lists are as long as they are and what the problem is. As Senator Peter Baume has correctly said, the main reason for the increase in waiting lists is not because of increased demand but because of a very real decrease in productivity in hospitals, by bed closures, and in particular by staff and nursing shortages to which Senator Baume rightly pointed. But those nursing shortages have been developing for many years. Some States, such as Victoria, have developed a comprehensive plan to overcome this problem. They look at the whole problem and say: `We cannot solve this problem just by throwing money at it. We look, first of all, at nursing shortages, and we introduce constructive strategies to overcome the very real dissatisfaction of nurses with the system, to overcome the very real difficulties as nurses see them. We develop clinically acceptable, and what might be called socially acceptable, waiting times, in consultation with the profession'. I can remember as a member of the medical profession more than 12 years ago that we had waiting lists for people wanting varicose vein surgery of well over a year, sometimes up to two years. We had waiting lists for tonsillectomies, for those who were unwise enough to want them, of a couple of years. We had waiting lists for all sorts of elective surgery of that period back in the 1960s. In fact, that was one of the reasons why a previous Liberal Prime Minister, Mr Gorton, looked to start an inquiry into the health and health insurance system. We must move to get long stay patients out of some of the public hospital beds which they occupy. We can do that by two methods. The first is by making sure that those in nursing homes, which is my area of responsibility, are in fact people who are really in need of nursing home care, therefore making way for long stay people in acute beds. In Victoria some long stay patients have been moved to private hospitals. We can increase domiciliary care to enable the convalescence of people at home-which has been done in so many countries overseas-thus avoiding the unnecessarily long stay in hospitals for people who have non-urgent surgery. We can increase day surgery, which is more appropriate, cheaper and quicker, and which will remove pressure from in-patient facilities. We can look at and attempt to do all those things. I believe, and the Commonwealth believes, that this is a professional and constructive approach to the problems which everybody recognises. The Commonwealth also recognises that the primary responsibility for hospitals, particularly the day-to-day administration of hospitals, is, in fact, a State government responsibility. Of course the Commonwealth has a clear financial commitment, and we have upheld that commitment. We have increased funding of the States for public hospitals by twice as much as we had under the Fraser Government. But the problems will not be solved by just pouring money in in this way. The Royal Australian Nursing Federation has also publicly expressed the view that the waiting lists are not, in fact, due to the Medicare system. It has consistently stated that and pointed that out. At its recent annual conference it made further mention of this and again pointed out that the problems went far beyond just the problems of Medicare. Senator Lewis should know-Senator Peter Baume does know-that the evidence does not support the view that people moving from the private hospital sector to the public hospital sector for treatment is the cause of our hospital waiting lists and our bed shortages. In 1983 the private hospitals in this country had an overall occupancy rate of about 60.9 per cent. In 1985 the occupancy rate had increased to 61.2 per cent. How there can be an increase in private hospital bed occupancy and somehow at the same time, as Senator Lewis claims, have a bleeding of people away from the private hospitals into the public hospitals is beyond me. Currently there are many applications on hand for additional private hospital beds. Since the introduction of Medicare there have been applications for 28 new private hospitals and extensions to 46 hospitals involving over 3,500 beds-hardly a picture of an industry in decline. The private hospitals are currently selling for $150,000 per bed-a record price. It is not a picture of an industry in decline. Recently a public company was floated to purchase private hospitals and the share issue was over-subscribed in the few minutes after being floated by about $40m-hardly a picture of an industry in decline, of an industry being bled by people moving from private hospitals into public hospitals. It is the repetition of that sort of nonsense, that sort of ideological claptrap, that Senator Lewis goes on with in this place, which clouds the debate in this place. In fact, there has been no mass exodus from private hospitals to public hospitals as a result of Medicare. We have a mixed system, public and private, and we will continue to have a mixed system. Senator Peter Baume attempts, in an unfortunate way, to paint those doctors who conducted a dispute in New South Wales in the last couple of years as martyrs, as a group of people who were in fact struggling to maintain our public hospital system and who resigned only as a result of their frustrations with the system. Most of the people who resigned and who stayed out belong to one group of surgeons in particular-the orthopaedic surgeons. They were the leaders in this dispute. I suppose that they exemplify one of the problems we face in this community in that in some areas of medicine, in the technological areas such as orthopaedic surgery, but particularly cardiac surgery, in recent times there has been great development in new techniques, for the benefit of us all-including me-in the capacity of the profession to perform surgery which was impossible in years past, and in its capacity to expand in this area at a rate that no one would have predicted even 10 years ago. That applies particularly in orthopaedics. In orthopaedics we have also had the biggest closed shop that exists in any profession in this country-the most restrictive closed shop anywhere. The people who are the political leaders of the orthopaedic profession, the wealthiest members of the orthopaedic profession, are also the people who control the training of orthopaedic surgeons in this country, who limit the training and who vigorously limit entries to that profession, despite expanding opportunities recently, and who particularly, I might add for Senator Giles and Senator Haines, limit the entry of females into that profession. I do not believe that they can continue to do so. I do not believe that any government can allow them to continue to do so. I do not think we can allow them to hold this country and the patients of this country, particularly the patients in New South Wales, to ransom in the way that they did last year. There are many other contributory factors to the difficulties that Senator Peter Baume pointed out. I am not running away from the fact that there are those difficulties. There has been the extraordinary expansion of technological methods of diagnosis and investigation-everything from computerised axial tomogram scanners and their successors, to new nuclear medicine techniques, to new bio-chemical techniques. Instead of having those techniques introduced in a sensible and planned way, on a basis of need, the previous Government allowed the untrammelled introduction of, for instance CAT scanners, to be used and abused under the previous health care system-not under the Medicare system-so that, in fact, we had the ludicrous situation at one stage of a group of general practitioners in Sydney having a CAT scanner for the pure purpose of raising money, not for any benefit of their patients. That sort of untrammelled use of new technology is being questioned and restricted closely in the United States of America, the home of free enterprise. It is something which is violently resisted by the medical entrepreneurs in this country; but it is also something about which, I must admit, I have heard Senator Peter Baume express concern in this place at other times. In the short time that is available to us to debate this matter we cannot get up here and give long expositions on some of the things we think are important in the health profession. I think some honourable senators who will follow me will mention some of the things that should be mentioned. One thing which Senator Peter Baume did not mention and which I am sure following speakers will mention is the fact that good health and the efficient use of health resources in this country rely on not only the provision of medicines but also the introduction of good public health measures, which is a particular concern of Senator Crowley, and good industrial health measures, which is a particular concern of both Senator Crowley and Senator Giles, and also on the general preventive health care, which I understand is of considerable interest to Senator Haines. In the one minute I have left in which to speak I cannot talk of these matters or of the necessity for any other mechanisms of this type. All I wish to say finally is this: We have difficulties with the delivery of health care in this country, and we have always had them. We have had them since the late 1950s and early 1960s when Sir John Gorton, the then Prime Minister, recognised that. We will not solve them just by blaming members of one political party. The DEPUTY PRESIDENT —Order! The Minister's time has expired. Senator HAINES(South Australia)(3.52) —Today we are debating the matter of public importance proposed by Senator Peter Baume in regard to the crisis facing Australia's sick and injured in need of hospital care. I do not think that there is a great deal of dispute about the fact that there is a problem reaching crisis proportions in this area. What has caused the crisis and what has caused the problem is, it would appear from the debate today, in dispute. Certainly, how we fix the problem appears to be in dispute. One side of this debate appears to be arguing that the abandonment of Medicare in itself will solve the problems, presumably on grounds that the introduction of Medicare alone has caused problems. That argument seems to overlook the fact that waiting lists are not new in this country as far as the public hospital sector is concerned. Certainly they existed under the previous Liberal Government. Indeed, looking back over newspaper reports about the problems facing the sick and injured who do not have access to a hospital bed it is interesting to see the change in attitude along the way. If we go back a few years to 1978-79 and look at what happened in Victoria-by the way, it is Victoria now which has one of the highest waiting lists-we can see that Victoria had one of the highest waiting lists then. When the then shadow Minister for Health in that State was complaining about this-the man who, after the accession of the Cain Government, became the Minister for Health for a while-he was arguing that it was a problem for these people and that the then Liberal Government in Victoria ought to do something about the more than 8,000 Victorians who were then waiting for admission to public hospitals for operations. What did the Opposition's spokesperson at that time say? He said some rather extraordinary things. In fact, Mr Houghton rejected the claims made by Mr Roper that the present waiting list of about 8,000 pointed to what he had previously called a deplorable lack of proper hospital facilities. He argued that the waiting list was no cause for concern at all. In fact, he asked what was significant about it and then went on to make this rather extraordinary statement: If we had no waiting list there would be a glut of hospital beds and people would be paying $140 to $150 a day. Senator Lewis —Good grief, there is a hell of a difference between 8,000 and 28,000 on a waiting list. Senator HAINES —Is Senator Lewis agreeing then that 8,000 is acceptable, but more than that, not counting population increases and so on, is a real problem? Senator Lewis —There has to be some moderate waiting list but you say that 28,000 people and over 12 months is reasonable. Senator HAINES —I did not say that any waiting list in Victoria or anywhere else was reasonable. The point I was making is that it seems to be a political attitude that is affecting some honourable senators in this chamber with regard to that. Senator Lewis —Why do you always attack us? Senator HAINES —I ask Senator Lewis to give me a moment to explain what is causing these problems. They are not entirely political. Had Senator Lewis waited for 30 seconds before going off his head he would have heard me say that there is no doubt at all that the extension of public hospital treatment to people other than those traditional recipients of it-that is, pensioners, beneficiaries and people who are in need of major surgical intervention-who want it and are prepared to take it under Medicare is a major problem. It is probably one of the major problems causing the long waiting lists. I am not going to argue about that. In fact, I recall pointing it out in letters to pensioner organisations which were writing to me in 1983 saying: `Keep your fingers off Medicare because it is going to be beneficial to the country'. When I said to them that their waiting lists would extend and that they would run into problems, they dismissed that as a figment of an overfanciful imagination. Let us make no mistake, there is no doubt that the introduction of Medicare in that regard has caused problems relating to waiting lists. It will continue to do so until some action is taken in regard to things such as gap insurance which will encourage people to take out additional insurance and to make use of the increasing number of private hospital beds which not only are available but also are in use. In addition to those problems are the sorts of staff shortages already mentioned. I mentioned also the problems of bed, and, for that matter, whole ward closures, resignations, which Senator Baume mentioned, and, of course, the particular problem facing the nursing profession in an increasing number in this country over the last few years. I for one do not blame them for taking the sorts of actions that they have. For decades nurses have been the recipients of low salaries, massive responsibilities, extraordinarily long working hours and a very low status in comparison to other medical profession colleagues. This is an undeservedly low status. In fact, in many ways they have been treated as lackies and not given the due salary and esteem, in other than the eyes of patients, that they have deserved. Senator Lewis —Hear, hear! Senator HAINES —I am glad to hear Senator Lewis say `Hear, hear!' because it is a problem which should have been corrected many years ago and which has not been helped by a recent court decision that rejected the whole concept of the value of the work done by nurses as far as salaries are concerned. People such as nurses and speech therapists in largely female dominated professions have faced these sorts of problems for far too long. As I said, I for one do not blame them at all. Of course, an additional problem that was raised by Senator Grimes relates to the inappropriate use of beds by people who should be better placed in nursing homes or hostels or given some sort of community care which, up to date, has not been available. However, just as important as an issue and one which can be attended to without vast amounts of money and one, which if remedied, would in fact save the country money, is the increase in waiting lists in the last decade or so caused by the increasing number of people occupying public hospital beds because of various forms of anti-social and highly preventable behaviour, the sort of behaviour that has caused massive diseases and injuries which are preventable, which are costly to repair or cure and which society seems to accept with a complacency that is staggering. An increasing percentage of the health care dollar in Australia is going towards mending problems which are preventable and which could and should have been prevented. Many skin cancers, lung cancers, respiratory tract diseases, broken bones and eye injuries due to car crashes and the victim being flung through the windscreen and so on should never have occurred in the first place. The statistics with regard to people who are occupying public hospital beds with those sorts of preventable diseases and injuries are quite extraordinary. Australian society, and I presume Western society generally, is far too prepared to take the attitude that if people come down with this sort of problem, somebody will fix it up for them and, furthermore, that somebody else will pay for it to be done. Whether it is getting skin cancers from ignoring the advice of the medical profession, pharmacists and others with regard to the amount of exposure one gives to one's skin by lying out in the sun, whether it is alcohol-related accidents, whether it is lung cancer and respiratory diseases caused by smoking, whether it is work accident-related injuries that stem from unsafe working conditions or whether it is heart attacks, various forms of drug dependancy, alcoholism and stress caused by pressures that are applied to people in ordinary life, it does not matter. Those diseases are preventable and they ought to be prevented. Governments at both State and Federal level ought to be doing something to encourage people to take far greater care of themselves and their offspring, for that matter, than they are currently doing. Yet we have a Government which in its most recent drug campaign, while it paid some attention to the problems of legal drugs, has certainly not emphasised that particular problem. Senator Peter Baume —Mostly illegal drugs. Senator HAINES —Right. The emphasis is on illegal drugs. Nobody is arguing that that is not a problem. Senator Crowley —Not in South Australia, Senator. You ought to know better; it's your State. Senator HAINES —Illegal drugs; not a problem in South Australia! Senator Crowley —They are a problem, but they are not a preoccupation. Senator HAINES —They are a problem everywhere; but, if Senator Crowley wants to expand on that when her moment of glory comes, she can go right ahead. Illegal drugs are a problem but the damage done to the human body by the use of legal drugs of one sort or another is massive and the cost to the community is horrendous and is increasing. Yet we have a South Australian Government which is quite happily allowing a grand prix to be sponsored by a brewing company. The juncture of those two things-car racing and alcohol consumption-strikes me as one of the most extraordinary things for any government to allow. Senator Sheil —They pay sales tax on the grog. Senator HAINES —They may well pay sales tax on the grog, as Senator Sheil so eloquently put it, but I suggest that it is hardly enough to make up for the damage to health that the consumption or inhalation of those two particular drugs-alcohol and tobacco-cause. Senator Townley —It works on a community rating. Senator HAINES —I beg your pardon, Senator. The ACTING DEPUTY PRESIDENT(Senator Coleman) —Order! Senator Haines, it would assist if you would direct your remarks through the Chair. Senator HAINES —It would assist us if the honourable senator behind me refrained from inane comments. Of course nobody is going to shoot people who get sick. The point is to encourage people not to require the treatment, not to do the things that abuse their bodies and which require the treatment in the first place. There is no doubt that health care in Australia is in an unsatisfactory state for a large number of reasons and one of them is that the emphasis in this country, as in many other Western countries, is on cure rather than prevention. Prevention is a whole lot cheaper to put into effect than curing a problem once it has arisen. Not only does society get given the good housekeeping seal of approval for abusing itself through advertisements, even members of the medical profession are not particularly geared, because of the sort of education they receive at the moment, to treating problems before they become serious ones. Stress related illnesses are still beyond the coping of large numbers of ordinary general practitioners because they simply have not-it is no fault of their own-been given the sorts of lectures and counselling when going through university that would enable them to recognise and deal with those sorts of problems in ways other than allowing the problem to continue until we finish up with a heart attack or some other result of stress related illnesses. Killer diseases are causing this country an excessive amount of health care expenditure and are at least as much a problem as far as causing waiting lists as the introduction of Medicare, nursing problems and resignations in the medical profession or even the rather unconscionable behaviour of certain doctors in New South Wales last year. Senator TOWNLEY(Tasmania)(4.06) —I would just like to remind the Senate that we are not discussing lecturing people about how to avoid illnesses, we are talking about the crisis facing Australia's sick and injured who are in need of hospital care. This matter of public importance was moved by Senator Baume today and, along with other people like myself who supported it, it is now being discussed by the Senate. I think it is something that is of importance to this country. I think any government has to realise that there are two things that worry a person most. First of all, is their hip pocket nerve. We all know that at election time one can quite often lose an election if one does not appeal to people's hip pocket nerves. The other thing that worries them is their health when they are well. When people get ill, they worry about their ills and their health more than anything else, and they do not want those ills attended to in six months time or 12 months time, they want to get into hospital and have them treated in a reasonable amount of time. That is not possible in this country at the moment. They certainly do not want their treatment delayed because the hospital system of this country just cannot accommodate them. That is becoming increasingly the case, as I will point out in a moment, in this country. Any doctor would know that it is never wise to put off the treatment of any medical case. Rarely does any condition that requires surgery get better with the elapse of time. Mostly it gets worse and, as has already been said, many of the cases of people who are being kept out of hospitals are disabling and in many cases the total health and life of the person concerned is at risk. A few years ago this Government decided, in its usual socialist way, to bring in a medical scheme which it said would be all things to all people. A bed when needed was promised. Apart from eating up more and more of the taxpayers' dollars, there seems to be a real concern amongst those doctors whom I come in contact with of the ability-I should say the inability-of the public hospitals to cope with the system that we now have. We have tens of thousands of people needing treatment who are waiting for public hospital beds and at the same time thousands of nurses are leaving their profession due to the bad working conditions that they have to put up with. It is obvious that if thousands of people are waiting for hospital treatment, some of them will be dying prematurely because of the grim queues that are outside the hospital waiting areas. Maybe if people physically had to queue up outside the hospitals we would see just how enormous this crisis is. The word `crisis', as used by Senator Peter Baume earlier, is certainly the word that should be used to describe the situation in this country at the moment. What has been said in some of the papers around Australia and by some of the medical people within this country? One article I have here is the Australian Health Review, volume 8, No. 4 of 1985. Under the heading `Nursing in the Mid-Eighties-Condition Critical', I will read the abstract because I think it described fairly well the conditions we have in this country. Senator Giles —I agree with every word of it. Senator TOWNLEY —Senator Giles can have a go in a moment, if she would like. I think she really should read some of these things because she obviously does not know as much about them as she professes to, judging from the noise coming from that area. The article reads: Nursing in the mid-1980s is in a chronic state of crisis. Inadequate wages, poor working conditions, lack of career opportunity, low morale, disillusionment, and high levels of stress have each contributed to the inability to recruit and retain nurses in the health care system. In the next twelve months decision makers must come to terms with the chronic problems affecting the industry, and speedily introduce radical changes if a major breakdown in the health care system is to be averted. Those are not my words; this is out of the Australian Health Review. There is an article in the Age of 13 March last year, entitled: `AMA calls for $300m boost to ``save'' teaching hospitals'. It states in relation to all teaching hospitals: Steady deterioration of equipment and facilities, and a gradual decline of elective surgery in the face of growing patient numbers. The exasperation of specialist surgeons with `resource constraints' in teaching hospitals `and their subsequent movement to specialist private hospitals'. That is just part of the article which I think was on page 3 of 13 March. Again, that was a year ago. What happened in that year? Absolutely nothing. Senator Peter Baume —It has got worse. Senator TOWNLEY —It certainly has got worse. Later in that year, in September 1985, there was an article in the Sydney Morning Herald headed: `A cool billion needed'. It states: Dr Errol Pickering, the executive director, said there had been chronic under-funding of hospitals in the past 10 years. Most of the underfunding has been during the Labor Government's period in office. The article continues: These included large metropolitan teaching hospitals and smaller country hospitals. The lack of funding had meant that buildings and capital works had been ignored in favour of more pressing clinical needs. Dr Pickering said: Patients are often accommodated in hospital wards not much changed since the turn of the century . . . What is the Government doing about the health situation? As I said a moment ago, not very much. An article in the Australian of 6 January this year is entitled: `Waiting list for surgery tops 50,000 nationwide'. Earlier Senator Grimes said that we were being emotive. If he were one of the 50,000 who wanted to have something taken off his bald head or an artery changed somewhere in his body, would he want to be one of the 50,000 who has to wait, sometimes for months, to get treatment? That is the kind of situation that is now hitting this country. On 19 February there was an article in the Age entitled: `Tight hospital finances mean longer waiting lists, says lobby group'. That is six weeks after the previous article which stated that there are 50,000 waiting nationwide. The Sydney Morning Herald in February carried the heading: `Hospital association warns that staff may not get paid'. Then in the Australian of March this year there was an article entitled: `Baby care in hospitals ``critical'' '. It states: A crisis point-- the very word used by Senator Peter Baume- has been reached in NSW and Victorian hospitals because of the severe shortage of neo-natal emergency facilities caused by a lack of skilled nursing staff in public hospitals. From those few articles-I have many more here-I point out too that the problem is not new and it is getting worse. It is very well described by a doctor in a letter to Dr Blewett on 10 March this year. I will not read all of the letter, but in the last sentence he describes people who could not get into hospital for periods of up to five weeks. He states: May I submit with respect that the public hospital system in Canberra in particular and Australia in general, so espoused by you, is in disarray, that there is a monumental refusal by you to either acknowledge the fact or attempt to remedy it, and that the system is now so open to corruption that it no longer matters what disease you have to gain admission or treatment-the main requirements are who you are and who is your doctor. That is a pretty sad state for a health scheme of this country to come down to. I am sure a doctor would not have written a letter of that kind had he not been pretty fed up with the problems we have in this country. We have a sad record of damage to the health scheme that this Government has to own up to, the scheme that it forced upon Australians. We have all heard too of the industrial turmoil of the doctors resigning and putting their jobs at risk. Nurses and others are completely fed up with the system. Public hospital facilities and services are continuing to deteriorate as hospital resources become strained beyond their limits by the increased demands that Medicare has forced upon them. Of course, there has been no increase in funding to compensate for those increased demands. Beds have been closed off due to staff shortages despite the growing list of over 50,000 people waiting for surgery. Increasing medical benefit costs with incentives such as bulk billing does lead to some overservicing and to overutilisation at an enormous cost to the taxpayers of this country, on top of the very high Medicare levy that they have to pay. So we have side effects to these problems. The medical training of new doctors is at risk because hospitals are unable to provide an appropriate mix of patients because the not-quite-so-urgent patients are shunted to the rear of the queue. Some will never get the surgery that they want. This was said about the hospitals in England. I hoped that it would never be like this in Australia, but it is. It is time that this Government and in fact any government realised that it is now a very serious situation and something has to be done about it. We have also seen the Government increasing the cost of prescription drugs, so it is quite a financial strain on those who are chronically ill to pay for the medicine that they need to take. I have an interest in that matter. I have always proposed that people on long term medication should be able to get sufficient drugs to last them for a long time, the same as somebody who just takes them for a short time. I could go on, but surely from what we all know, from what we have all read and from what we have all heard said by both sides of the House today, we know that there is a crisis. It was admitted by Senator Grimes. I believe that the situation in this country is a scandal; it is a disgrace. The people of Australia deserve better health care and, as Senator Peter Baume said earlier, they demand better service. People should be able to opt out of Medicare and return to the private sector to take pressure off the public hospitals. They should be able to opt for a private scheme if that is what they want. I finish as I started by reminding the Government that people worry about their health above all else. When they are ill their families worry about it. Any Government that cannot set up a suitable system I believe places itself at risk. The system we have obviously needs to be changed. Unless it happens the health of the people of Australia will continue to decline and the Government will rightly suffer at the next election. Senator GILES(Western Australia)(4.18) —I must confess to a little confusion about the matter of public importance that we are debating today, namely: The crisis facing Australia's sick and injured in need of hospital care. What we have heard so far from the Opposition in propounding this particular opinion is not a careful analysis of the needs of Australia's sick and injured or their need for hospital care per se but what seems to be a concerted attack on the public hospital system-full stop. I believe this completely ignores a whole wide range of issues which should be canvassed if we are to have an intelligent discussion upon this very important matter. However, it seems to me that the whole thread of the Opposition's case is not so much a concern about Australia's sick and injured but, in fact, the crisis in its own ranks about its proposition, or range of propositions, which will take the place of Medicare in the future if it regains government and fulfils its promise to dismantle Medicare. This confusion seems to be evidenced by the fact that two points of view have been placed before us, one from the Leader of the Opposition (Mr Howard), which is that Medicare will go, and the other one from the shadow Minister for Health, the honourable member for Barker (Mr Porter), who wants, as do some senators who have spoken this afternoon, to allow people to opt out of Medicare. I can understand their confusion. They had all those years in which to try an amazing range of permutations and combinations in relation to health insurance. What did they finish up with? They finished up with a complete and utter mess. And what have we? The present Government introduced a universal medical scheme which, in the very years in which we have had to put it into position, has become the most popular medical scheme that Australia has ever seen. The Minister for Health (Dr Blewett), in answering a question in the House of Representatives, said: For instance, by getting rid of Medicare he will have left a private health contribution rate for a family of between $25 and $30 a week . . . Is it any wonder that the majority of Australians say that the system we have now is a good one? The Minister continued: . . . a 61 per cent satisfaction rate, is the most popular health scheme in the last 10 years. All those opposite have behind them is those five schemes-one scheme every two years. The surveys show that 90 per cent of the Australian people value the service delivered to them through the Medicare offices. So we welcome both the idiotic calculations and the decision to fight the next election on Medicare. The Minister was assuming that wiser counsel would not prevail in the meantime. We are in obvious agreement on one matter. I would have been happy if it had been the subject of a separate debate. Maybe we could look towards that. I refer to the question of the shortage of nurses, the question of beds being closed as a result of that shortage and the question of what should be done about it. In the seven years of conservative government in this country we saw very little in the way of initiatives to resolve the difficulties of what obviously was going to be a severe shortage of nurses in the 1980s. There was a cutback in nurse training in most States and we could see at the time that this would lead to disaster. However, the powers in those days were obviously not prepared to look ahead to the day when we would be desperate for trained nurses. The responsibilities of the previous Government in that regard should not be forgotten. I refer especially to its rejection of the notion of transferring nurse training to tertiary education and to upgrading nurses' status. What about the responsibility of governments and private employers for the conditions under which nurses would be encouraged to come back into the work force and to stay in the job which many of them love to do and would leave only regretfully? Of course, we cannot look at this subject by just focusing on the strains that are being put on public hospitals at this stage because we have within our system a consider- able reliance upon beds for private patients in public hospitals as well as the use of private hospitals. Of course, the question of nurse shortage goes to the staffing positions in what can be described as the three tiers involved in the care of patients. This Government has had the opportunity over the last few months of becoming involved in a really sensible discussion about the conditions under which nurses work. That happened in the Australian Capital Territory towards the end of last year, when the stress on nurses employed by the Australian Capital Territory Health Authority had become absolutely intolerable, and, as a result of some rather painful but ultimately successful negotiations, a package was put together. That package included obvious but unusual conditions of employment for nurses in Australia, such as child care for the children of nurses who wanted to work but who had nowhere else to leave their children at odd hours. It included the capacity for nurses to be employed part time and to work the hours with which they could cope in view of their other responsibilities-bearing in mind that the vast majority of nurses are mature women with households to run. Perhaps the most progressive of the conditions that were included in this package was an agreement that nurses would be consulted about such things as admission policies, which in the past have resided almost solely in the first instance with administration but which, once again, frequently have been overridden by either visiting or resident medical staff, who in many cases tend to overbook and to completely disregard the capacity of their trained nurses to cope with the work load. In that way strains have been put on nurses, and that has led to the sorts of industrial disruptions that we saw in the Australian Capital Territory last year. I believe that this package could serve as a model for the rest of Australia. I would like to commend it to State governments and the administrators of private hospitals. They should actually consult their nursing staffs about what conditions would make it easy for them to remain within the work force, and would lead to the sort of work satisfaction that would attract and keep nurses, what would help reduce the tension and stress that have become part and parcel of the nursing profession over the years. On the question of nurses' wages, to which Senator Haines briefly adverted, a comparable work case was placed before the Australian Conciliation and Arbitration Commission just a few weeks ago. That case was thoroughly opposed by the employers, who were completely unprepared to acknowledge the fact that the rates at which nurses were being paid nowhere near reflected the responsibilities, the level of training and the circumstances under which they had to work. I hasten to ensure employers that the comparable work concept is not dead. I hope that it gets a great deal more support when it is raised again. I would like to refer to another element-a very important element-in the stress that is placed on hospitals. Senator Haines referred to the sorts of illnesses and injuries that are engendered by behavioural factors. The behaviour of our medical profession is not always the most rational. Prevention, of course, is a golden rule. It is one which more and more medical practitioners are learning. However, in the meantime, excessive elective surgery-in many cases this is what is clogging up the system-is something that medical practitioners have not yet learned to monitor, and which the system has not yet learned to deal with. This is not a problem that is peculiar to Australia. In the United States of America, for example, many health insurance funds have instituted mandatory second opinion requirements for elective surgery, so that if I go to a doctor in the United States who recommends that my appendix be removed or that my child's tonsils be removed, and this is not a lifesaving operation but is something in the opinion of the doctor that could be done at some time in the future, I am then required to consult a second doctor to find out whether in fact the operation is necessary. We know perfectly well that as medical insurance data becomes more sophisticated and the collection of morbidity statistics becomes more comprehensive, it is possible to detect trends in elective surgery in Australia which in many cases are completely without medical explanation. For example, I refer to a recent study of caesarian sections. Details of the study have recently been published. It was carried out at a large Sydney teaching hospital on 120 women aged 18 to 44 who gave birth for the first time-primipara. Among them, the caesarian section rate was 23 per cent. The survey report makes reference to a study carried out in Dublin in 1980 on 1,000 patients, showing a caesarian section rate of around 5 per cent. Looking for medical reasons why in 1986 Australian women-young, healthy Australian women-are being delivered by caesarian section is really a task for a detective. Why on earth is this the case? Is it dystocia? Is it disproportion? Are all those women in their late 30s? Are they all tiny Vietnamese women who are married to enormous Australian men and who are having babies that are too large to deliver vaginally? It is absolutely amazing. The stress on the system of caesarian sections as against vaginal deliveries which, in most cases, one suspects might well have come to a successful conclusion is absolutely unexplainable. There is certainly nothing in the figures that would demonstrate a greatly improved infant survival rate-perinatal survival rate-nor is there anything to prove that the maternal survival rate has changed as a result of this greatly escalating rate of caesarian section in Australia today. That point also applies to not all but very many colocecostomies, appendicectomies and tonsilectomies. I appreciate the fact that thorough studies have not been carried out in Australia to work out which of these operations are essential and which are not, but there is a very strong suspicion that, if the medical profession were to set its mind on co-operating and making certain that the hospital system worked efficiently, we would have nothing like the crisis that the Opposition seems to feel is at this moment, as the Oppo- sition describes it, unprecedented in Australia. In fact, a great deal has been done in the last three years to ensure that in the future the hospital system will be able to cope a great deal better. We hope that the behaviour of the medical professionals and those who are responsible for their working conditions will also greatly improve in the near future. Senator SHEIL(Queensland)(4.32) —The most startling revelation to come out of this debate is the fact that the Government does not seem to think it has a health care crisis on its hands at all. It does not even recognise that there is a problem. I think it is eminently clear from the debate today that we do have a crisis on our hands. Almost the first speech I made in this Parliament was made to a joint sitting of the Houses of Parliament when the Whitlam Government rammed through the Medibank legislation. That was really the starting point of the crisis that exists today. All that has happened has been predicted and was eminently predictable. I could even go back and quote from my speech then. The problems that would be caused to the hospitals, the doctors, the patients and the pharmaceutical industry were all mentioned back in those days. Senator Crowley —Was it bad then, Senator? Senator SHEIL —The storm was gathering, but fortunately the Whitlam Government went out of office and the Fraser Government got in. Instead of getting rid of Medibank, as it was then, with the broad sword, the Fraser Government put band-aids all over it and it took a few years to get rid of it. The Fraser Government had only just got rid of Medibank when it lost an election, the Hawke Government came in and Medicare came in. That was bigger and worse than Medibank ever was. I wish to reiterate for a start that the promise of free health care at the point of delivery is a promise that is incapable of implementation because it creates an unlimited demand for which there is only a limited budget. As the demand goes up and the budget gets spent, the two move away from each other. So we get dissatisfaction amongst patients, hospitals and their staffs, doctors and the pharmaceutical industry-the whole business. It is indicative that if a problem is taken to the Government it will pretty soon convert that problem to a crisis. Government does not hold the solution; government is the problem in these areas. The fact that the Government does not admit that there is a crisis and therefore will not be taking any remedial action to fix up the situation as it exists today is an even more serious aspect of the health care crisis that we have on our hands at the moment. If we look at the situation at the moment, it is in a shambles because the Minister for Health (Dr Blewett) has isolated himself from the various sectors of the health industry. He has alienated the public hospitals. They will not talk to him. The private hospitals are in the same boat, as are the doctors. When Mr Hayden was bringing in the Medibank legislation he alienated the doctors to such an extent that he thought if he ever got sick he would have to go to a vet. The current Health Minister is putting himself into the same sort of position. He is isolated now. I mention waiting lists. The figures that have been quoted today are horrific. Upwards of 70,000 or 100,000 people are on hospital waiting lists. I know there were waiting lists before, but they were much smaller. There will probably always be waiting lists, but the current level of people on waiting lists is horrific and the things that are happening to people who need urgent treatment are horrific too. Some instances have been cited today, with some people on hospital waiting lists actually dying. That is something we were actually trying to avoid in a health care system that, it was said, wanted to be fair, equitable and cheap. I think the operative word is `cheap' because once governments promise unlimited health, they cannot deliver and they start restricting it. The Medicare side of the Government's health scheme at the moment has exploded, obviously due to the bulk billing system. Now the Government is trying to put a brake on that. Hospital expenditure has exploded. Now the Government is trying to put a brake on that. What that means, in effect, is that it is restricting the services. In other words, it promises everything, but once it realises it cannot deliver, it has to restrict. Once it starts restricting we get dissatisfaction in all sections of the industry. I would say that there is a mounting groundswell of discontent now, particularly amongst the patients. Only about 10 per cent of the people are sick at any one time, so it would take quite a deal of time for all the people to realise that they are being taken for a ride by the health care system. Once they have had experience of the system in Australia, their discontent becomes evident, and it is mounting at the moment. With regard to the doctors, I do not think we could ever have dreamt at one time that doctors would be withdrawing their services, resigning en masse and going on strike. These actions were put down by the Minister to the fact that we had a closed shop of orthopaedic surgeons who were money hungry-I suppose he was trying to make that out-and did not want to have any competition, but that was not the case at all. The New South Wales doctors' strike was a dreadful occurrence. The Government caved in in the end and had to pay an enormous amount of compensation just to get things back on an even keel in the case of the equipment in the hospitals and teaching facilities, and it had to catch up with the losses that occurred during the dispute. The pharmaceutical industry is in the same boat. The prices of drugs were kept down to such a low level over many years that the research and development sector of the drug industry in Australia virtually left our shores. It has hardly even come back now. Right at this very moment-it was mentioned in the Senate today-dilantin has lost its government subsidy because the Government is still arguing with the manufacturer over its price. It is an essential drug for many epileptics. Senator Peter Baume —Three hundred thousand people. Senator SHEIL —Three hundred thousand; I thank Senator Baume for that figure. It is an enormously important drug for people but the Government is arguing with the manufacturing firm about its price. Many of the people who are epileptics, of course, are unable to work full time, so they are in an even worse position. Patients have found that with the Government trying to restrict the services to them they and their doctors have been subject to investigations and inquiries-the midnight knock at the door. There has been great disquiet amongst people because of the fishing expeditions that have been conducted to find out whether doctors have been over-servicing; in other words whether they have been costing the system more. Heaven knows, I think it has probably cost the Government more to search than to carry out an ordinary computer analysis. The Government is controlling everything. It has announced that it will tell doctors what pills they will prescribe for what diseases, how many should be prescribed, how many repeats should be issued, under what conditions one can be admitted to hospital and for how long one can stay in hospital. The controls on the whole system are getting more and more intolerable. I was disappointed today to hear of the extent of the degradation of the nursing profession, a once noble profession. Everyone loved, respected and looked up to nurses. I can remember stories of the nurses who had to walk through the gardens at Woolloomooloo in Sydney, through all the places where the gangsters used to hang out. No nurse was ever molested. In fact, if anything, the gangsters looked after the nurses better than the police could have done. I am sure that if anyone had touched a nurse, the gangsters would have made sure that the case was taken care of properly. We have a shortage of nurses. There is a shortage in the intake of nurses. Nurses are not completing their training. They are resigning from the system. They are attending mass meetings to complain about stress, their low wages and long hours. It has got out of hand. The shortage of nurses, if considered together with the shortage of beds and the reduction in operating times, adds up to a health care crisis. Even in Canberra the Government cannot run away from that problem. The Federal Government is entirely responsible for the health care system in Canberra. It pays for it. This afternoon reference has been made to the horrific matter of people on waiting lists who die before they reach the top of the list, and people's inability to have operations. I read recently in the Hansard that serious eye operations for children and adults are not being performed. Heaven knows how many beds in New South Wales have been shut down. I think the figure is over 1,000. In that State there is now a new health plan to organise its health administration into regional areas. I looked at what is proposed and it is almost exactly the same as the group area establishment committees that were set up in Great Britain to help run the national health scheme. They were a remarkable flop. In fact, national health schemes similar to the one that we have in Australia have been tried in countries that are similar to ours, such as Canada, which has Medicare, the United States, which has Medicaid, the veterans' administration, Scandinavia, West Germany and Great Britain. They all have one thing in common: They are all failures. I do not know why we must keep going down that same road. But the group area establishment committees, as I would call them, in New South Wales, will not fix the ingrained problems in that State. The current budget for health in Australia is $17,000m a year. It is hard to comprehend that sort of a figure. But there is a shortfall of $800m. That is a crisis. Somebody somewhere must go short because of that. The Medicare levy covers about one-fifth of that amount. The future, of course, is even bleaker, especially in the public hospitals in Victoria and New South Wales, because they have recently announced their funding, which is at a level lower than the current consumer price index. But hospital expenditure increases by a far greater amount than the CPI, largely because any equipment which must be bought is purchased overseas and there has been an enormous devaluation of our dollar. Despite all that has been said this afternoon, the private hospitals are in a bad situation which will become worse, particularly because of the disincentives for people to take out private medical insurance. When one adds to that the sudden and ruthless introduction of categorisation and accreditation that has been applied to private hospitals, they have more or less had their heads put on the chopping block. These are the very hospitals that several Ministers of this current Government have chosen to go to for important treatment. They have bypassed their own public hospitals. I think that shows that they feel they might get a better deal in the private hospitals than at the public hospitals. I hope all of their problems are solved in these private hospitals before they wreck them too. Some have already been forced to close, but others have been forced to pull in their horns, restrict the updating of equipment, services, facilities, and staffing. The Government's previous policy of promising free health care caused a flow of patients from their homes to hostels, to nursing homes, to hospitals. Now there has been a complete reversal and upheaval. The Government wants them to go from the hospitals to the hostels, to the nursing homes and back to their homes. The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! The honourable senator's time has expired. Senator CROWLEY(South Australia)(4.47) —I suppose the one good thing about my being able to speak is that I am the last speaker and I will not have to listen to any more of the remarkable piffle sponsored by the Opposition. Such is the topic of this matter of public importance that Senator Peter Baume has hedged all his bets and talked about a crisis facing Australia's sick and injured in need of hospital care. Unfortunately, I was not able to be present when Senator Baume spoke, so I did not hear him spell it out. But I was advised by my colleague, the Minister for Community Services (Senator Grimes), that he had nothing special or new to say. There is no doubt that the matter listed, in terms of Australians who are sick or injured and in need of hospital care, is a matter for serious consideration. Any number of ministerial meetings, documents, publicity and so on, indicate that this is a problem of which the Government is aware. But I do not think that by any criteria it could be called a crisis. Certainly I do not believe we should be fooled by the Opposition's claim that it is new. Indeed, Senator Sheil was busy telling us, by way of some kind of a defence, that when he first came here, and I do not know when that was, but it was a long time ago-when was that? Senator Sheil —It was in 1974. Senator CROWLEY —The crisis was alive and well then. Although we know that the Whitlam Government was extraordinary, I believe that even Senator Sheil must acknowledge that it did not create that problem in just two years. It was something that had been growing. Senator Withers —It did. Senator CROWLEY —I am delighted to hear Senator Withers say anything because it proves he is not dead. It did not achieve all of that in two years. In fact, it was not able to get through the Medibank proposal in two years because, after all, we know what the Opposition, as an obstructionist Senate, did in those years. It did not allow the introduction of Medibank so it cannot be held responsible for the disaster. The Government was trying to address the serious problem of providing adequate hospital care for those who needed it in this country. If honourable senators opposite thought it was so terrible, why did they stuff around in the seven years-seven years, good and true-during which they were in government? They introduced five different health systems, not one of which shortened the waiting lists. I will give the Senate some hard data, some figures, particularly for the edification of Senator Sheil. In the early 1960s-it was a reality even before he came here-we had waiting lists in public hospitals. It is not a recent phenomenon. In the early 1960s people had to wait 15 months for a varicose vein operation and up to two years for a tonsillectomy, neither of which would have been too major or too urgent, and quite clearly the sort of thing one would expect could be placed on a longer waiting list, rather than be seen as an urgent matter. Senator Townley managed to skate right over anything like a definition of `a reasonable waiting period' and, without having heard him, I presume that Senator Peter Baume would acknowledge that there is a difference between urgent surgery and the needs of patients who must be treated urgently in hospital and those who have a problem that can be treated in a more gentle way or those who seek elective surgery to deal with problems. This word `crisis' is a grab bag which has given Senator Peter Baume an opportunity to kick the Government. Well, we do not mind, Senator Baume; we will head it off with a pass and send it right back. Essentially he wants to kick the Government about hospitals because of all the things he has tried to attack the Government about, the only thing that seems to get any recognition, in his view-and he is wrong again-is Medicare. So he has gone back to a tired old record of giving the Government a serve on Medicare. I suggest he look at this again and he might see why it is a very silly thing to do. The Opposition has nothing to put in place of Medicare. Opposition members and senators say that Medicare is bad so anything else would have to be better. As I have already said, they had seven years in government with five different schemes, none of which was any better. In fact, none of them enjoyed the support which public polling now shows Medicare enjoys. In fact, Medicare is favoured and supported by 61 per cent of the Australian population and it is the most favoured health care scheme that we have had in 10 years. The Opposition wants to attack Medicare because it has nothing else to put in its place. So it says `If it is health, let us whack Medicare'. This shows how wide of the mark members of the Opposition are because the matter of hospital waiting lists and the crisis-if one wants to call it that; I would rather call it a problem-over hospital care is obviously a State matter. Therefore, the only way in which we can really discuss this in the Senate is by having a whack at Medicare. There are any number of State Ministers of Health, both Labor and Liberal, who say that Medicare is not responsible for problems in public hospitals and with hospital waiting lists. The Royal Australian Nursing Federation has also made statements to the effect that Medicare is not responsible for waiting list problems in public and private hospitals. In fact, the RANF alludes to the sorts of problems that Senator Peter Baume would have been much better off speaking about instead of giving us a grand old serve in the same old boring way. I am surprised that he even dares to do it because there is a lot of evidence that the Opposition has nothing to put in place of Medicare. Even more than that, the Opposition is divided. For example, take the statements of the shadow Minister for Health. I was delighted to hear Senator Giles say that she could not even recall his name. That is not difficult; he is just a shadow. I think his name is Mr Porter and he comes from South Australia. He was very, very busy rabbiting away in the Estimates Committee last night, feeding questions to Senator Baume so that we could all be enormously edified by his potential for knowledge. Mr Porter goes around the country saying that when he is the Minister for Health the Opposition will allow people to opt out of Medicare. It is just as well he does not run into the Leader of the Opposition, Mr Howard, because Mr Howard is running around the country saying that he will do away with Medicare, that the Opposition will have nothing to do with it. I do not know why the Opposition continues to put up debate about Medicare when quite clearly it has no policy and it is divided. The Opposition is not even appreciative of the fact that the Australian people appreciate Medicare and the general provision of health services in this country. Perhaps Mr Howard, who said by implication on television recently that he would do away with Medicare altogether and thus save $3.7 billion, is innumerate as well as being a discredited former Treasurer. Perhaps it has never dawned on the Minister for Finance, Senator Walsh, that the reason Mr Howard was discredited is that he is not very good at numbers, let alone policy. Apparently he does not appreciate that the polling for Mr Howard and his popularity suggests that if Medicare is an issue on which he is running, it is not doing him any good. According to the Minister for Health (Dr Blewett) in the House of Representatives, if Mr Howard intends to save $3.7 billion by doing away with Medicare, he is wildly wrong. He could not do it. The $3.7 billion includes $1.3 billion raised by the levy. If he does away with Medicare he will do away with $1.3 billion, so he will not get his $3.7 billion that way. Further, he would have to acknowledge that of the $2.4 billion left from Medicare costs, $1 billion goes to medical benefits for pensioners and the disadvantaged. Mr Howard is on record as saying this: I think the provision of essential welfare is necessary . . . obviously there are some items of welfare that can't be cut, and I have never argued and no sensible person would argue that you should take benefits away from persons who really need them. That is a quote from Mr Howard. If he really believes that he is not going to take welfare away from those who need it, I presume that he will not take $1 billion from medical benefits for pensioners and the disadvantaged. So he is now down to $1.4 billion out of his potential $3.7 billion that he thought he could save. Also, he has forgotten that he would have to subsidise private insurance. Once Medicare goes we will be back on the previous system and even if one took the figures from 1981 under the Fraser Government and subsidised 30c in every dollar for private health contributions, one would find that Mr Howard had just lost the rest of the money that he intended to save. He would not make any gains at all and he would certainly not win any votes on the platform of kicking Medicare or trying to abolish it. That is why I am very surprised that Senator Peter Baume is so ill-advised or ignorant that he should take this opportunity to have a whack at the Government about Medicare yet again. It does the Opposition and his Party absolutely no good at all. The public has said that and the public understands it. The public also appreciates something that the Opposition does not-the public is not stupid. It knows that the difficulties about waiting lists in public and private hospitals are complex. It knows that the points raised by speakers on this side-by Senator Grimes and Senator Giles, and to some extent by Senator Haines-are right; that the problem is to do with hospital administration, bed closures and staff shortages. Senator Haines raised the problem of illnesses caused by lifestyle. I would go further than she did and try to include not only those illnesses or injuries due to personal lifestyle, but also those matters which involve occupational health and safety; in other words, matters outside the individual's responsibility which contribute to ill health. Senator Giles also raised the point that elective surgery increases waiting lists. Also, we have no idea of whether those numbers on waiting lists which people were quoting in this chamber include those cases where people have their names on the lists of more than one hospital. Senator Giles and I both know from the inquiry into private hospitals and nursing homes that many patients in the community put their names on a number of waiting lists for both nursing homes and private hospitals. I would be surprised if that kind of behaviour was not sometimes carried into the waiting lists for elective surgery. I think we have had quite a number of explanations here showing that the reason for extensive waiting lists in hospitals is not a matter of Medicare difficulty. Surprisingly, in as much as it is a matter for Medicare, it has to do with the small part of Medicare which funds the provision of hospital services through the public system. In the time left to me I would like to draw the Opposition's attention to another piece of monumental illogic. Opposition members keep arguing for the abolition of Medicare so that people can be given a choice. We have had Medicare; we have experienced it and the people in this country like it. When people exercise the choice, under the Medicare provisions, to seek their medical attention and care in public hospitals, suddenly the Opposition says that they cannot do that because it is increasing the waiting lists; they should go into private hospitals. Thus the Opposition argues that people in the community can have a choice as long as they agree with it. That is an insufficient understanding of what choice is really about. I wish to take this opportunity to comment on a point I made as an interjection in Senator Haines's speech. Apparently I left her with the impression that I was suggesting that so-called illegal or hard drugs were not a problem in South Australia. If that was the impression I gave, I hasten to correct it. I thought that she was alluding to the South Australian Government's response to the drug education program. The emphasis in South Australia has been as much on the lifestyle drugs of alcohol and cigarettes as on the hard drugs. Further to that, we need to look at those drugs which are normally provided by prescription, the so-called standard medical drugs, such as aspirin, Bex and valium, which also contribute to the drug problem in this country. This is particularly so in terms of the cost that is picked up in the hospital system when such people overuse those drugs, after being prescribed them or choosing to use them themselves, and find themselves yet again in a hospital bed. Thus they contribute to the demand on hospital beds that Senator Peter Baume raised today in his matter of public importance. One other point on which I would like to comment is Senator Townley's extraordinary claim. I would not dare even try to contemplate answering Senator Sheil's claims. He claimed the lot and then negated it all with the next set of claims, so it is beyond me to understand where he stands on anything, except that it was all happening before he got here in 1974, and with that, I must admit, I do not have too much dispute. The Minister for Health today released the preliminary estimates of health expenditure for 1982-83, 1983-84 and 1984-85. Those estimates, prepared by the new Australian Institute of Health, were based largely on the statistics gathered by the Australian Bureau of Statistics. The figures indicate a slowing in the rate of growth of health expenditure during the first full year of Medicare. This goes to the point raised by Senator Townley: The cost of health is growing and growing, blowing out through the roof and impossible to contain, and that is what happens if it is given to-- Senator Walsh —Those humbugs want the cost of compensation to continue to blow out because they are trying to sabotage the Government legislation to contain it. Senator CROWLEY —Thank you, Senator Walsh. I am not quite sure where that fits into my contribution, but if it means that the Opposition is foolish, I am entirely in concurrence with that view. The Minister for Health said that it was significant to look at those figures because there has been an enormous series of complaints and charges against Medicare in that it does not contain costs. The figures to this point show that it is successful in containing the expenditure on health at a constant between 7.5 and 7.6 per cent of gross domestic product for six years. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. The discussion is concluded. Senator WALSH(Western Australia-Minister for Finance) —I seek leave to make a ministerial statement on economic and rural policy and to incorporate the statement in Hansard. Leave granted. The statement read as follows- Previous Liberal-Country Party governments have responded to successive rural recessions with measures of a largely ad hoc nature. Some of these responses have been of assistance to the sector and have become part of the fabric of farm policy. Others have been ineffective for any purpose other than as a placebo or an ideological fix. They have not seriously addressed the problems; they have quickly disappeared as the crisis has passed-as did the beef incentive payment scheme, for example. The Hawke Government's approach is different. We have analysed the nature of current rural problems very carefully. We have not restricted ourselves to farm policy. We have also looked at economic and industry policies and at policies directed toward non-farm, rural and provincial Australia. My speech today is a summary of the comprehensive analysis of farm and rural policies as set out in the accompanying Government statement on economic and rural policy. We have found cases where our policies should be changed. But the broad thrust of our policies has emerged intact. Many of us in this House have had experience of previous farm crises. My own experience on a farm goes back to the 1950s and 1960s. Most of us can recall the late 1950s drought, wheat quotas, the wool crisis, the dairy crisis and beef crisis of the 1960s and 1970s and, of course, the 1982-83 drought. In times of crisis in rural and provincial Australia reaction by farmers is at first slow; institutions and governments also are slow to act. But once the seriousness of the situation is realised, and because personal stress brings out basic political attitudes, it is usual for there to be dissent, unrest and exploitation of these attitudes by the opportunists. Farmers are not whingers; they are gamblers. Farmers are realists; they rarely make extreme demands. Farmers feel they are victimised because they work in some isolation, in a setting where they cannot control the weather, the middlemen, the markets, the unions and the governments. We now have a situation, quite apart from political attitudes and exploitation, which is termed a so-called rural revolt. However, at the end of the day once the emotion has been expended, once the simple-minded simple solutions have been disproved, once the demagogues have been dismissed, I have always found that it has been necessary to analyse calmly what the problems are, and what can be done, in terms of overall economic and social policy. This statement is about reality, analysis and directions. The Place of Primary Production in Australian Society The first reality I want to identify clearly is the place of primary producers in particular, and country dwellers in general, in Australian society and the Australian economy. Some 36 per cent of Australians live and work outside our major capital cities. Some 7 per cent directly depend on the primary industries of agriculture, forestry and fishing for their livelihood. Thirty per cent of all Australia's small businesses are in primary production. Of course, farms and other small businesses are not in the same situation. Farmers compete on world markets, while most other small businesses complete against each other. Taking into account multiplier relationships, perhaps some 20 per cent of Australians owe their livelihood to primary production either directly or indirectly. With primary production providing some 37 per cent of Australia's exports, the standard of living of all Australians is affected by primary production. Rural Australia is an integral part of our history, our culture and our environment. No government can ignore this contribution of the rural sector to our society and our economy. This Government does not. What the Hawke Government does-and this is different from our political opponents-is to recognise the true nature of this contribution. The only policies that work are those that contribute to the long term health of the sector in its market environment. Individuals in need are helped effectively only by measures that are properly targeted on those individuals. Not all country dwellers are farmers, nor do all country dwellers depend on primary production. But all country dwellers do have common problems of access to the range of public and other services that are taken for granted in the cities. It is for this reason that this Government does not confine its rural policies to farmers alone-we are in the business of addressing the problems of all Australians. Nature of the Current Rural Problem There can be no doubting the very substantial economic successes that the Hawke Labor Government has achieved. Australia's economic growth is the most rapid in the Western world. Our job creation record has greatly exceeded our targets. Only last week it was recorded that we have now created almost 620,000 new jobs. This outstanding record has reflected a number of factors, not the least being our successes in the areas of wages and fiscal and monetary policy. The fundamental problem is that, by and large, the rural sector has not shared in this economic success. According to the Bureau of Agricultural Economics, the real net value of rural production-that is, the Bureau's key indicator of farm income movements-is projected to fall by 21 per cent in 1985-86, with a further 21 per cent fall projected for 1986-87. Average farm cash operating surplus is projected to fall by 25 per cent in 1985-86 to $19,600, after fluctuating from $19,500 in 1982-83, the lowest in recent times, to $27,500 in 1983-84, the highest in recent times. Average farm incomes on family farms-which allows for depreciation-is projected to fall by 66 per cent. This does not, however, include imputed or off-farm income. Rural land prices are falling in some areas in an inevitable response to present lower returns and unrealistically high prices in the past. The proportion of farms assessed by the BAE as being `at risk', that is, having a negative cash margin and less than 70 per cent equity, is up from 5 per cent in 1984-85 to 7 per cent in 1985-86-12,000 farms. Employment growth in non-metropolitan areas was very close to that recorded in metropolitan areas. However, country areas generally have not experienced the same dramatic falls in unemployment as have the cities. I emphasise that there has still been a fall in the non-metropolitan unemployment rate. The major causes of the poorer country labour market performance have been more rapid population growth and stronger growth in female labour force participation. The gap between country and city female labour force participation rates has narrowed as country women have increasingly sought to take their rightful place in the community. The broad statistics on farm incomes I have cited so far need to be qualified in two major respects. The first is that there is substantial diversity across commodities, regions and individuals. It is both unreasonable and dishonest to infer that all farmers are in trouble. For example, the projected change in average farm cash operating surplus in 1985-86 ranges from a fall of 52 per cent for wheat and other crops to an increase of 10 per cent for beef farms. Of course, international price movements, seasonal conditions and overseas policies can always confound such estimates. Estimates are estimates. It is a simple fact that the current and prospective income problems are concentrated in certain commodities, such as wheat, sugar, dairy, rice and horticulture, and in certain areas, such as the eastern wheat belt of Western Australia and the Mallee districts of Victoria and South Australia. As a result, the falls in rural land prices have been by no means universal. Similarly, there has been a great deal of talk of farm debt problems, and this is undoubtedly the heart of the problem for many individuals. Nevertheless, according to BAE estimates for June 1985, some 28 per cent of farmers had no debt and a further 18 per cent of farmers had less than $20,000 debt. This is in contrast to the 12 per cent of farmers, including 25 per cent of wheat farmers, who had more than $150,000 in debt. This diversity shows that no grand fix-it solution can work. The problem needs to be addressed on an individual basis. The second qualification is that it is entirely wrong to compare the BAE's farm income estimates with estimates of average weekly earnings and so suggest some comparison with wage earners. The two sets of statistics are totally incompatible, as the BAE's farm income statistics make no allowance for either off-farm or imputed income. Whilst the statistics show that there are declining farm incomes, they do not, of themselves, demonstrate an individual welfare problem. This, too, needs to be addressed on a case-by-case basis. Obviously, if the averages are low, there is a welfare problem at the bottom end. Consequently, proper policy settings cannot be directed at simply supplementing all farm incomes. Rather, they need to be directed at solving the underlying problems of primary production, transport, marketing and adjustment. Any special assistance needs to be carefully targeted on individuals. Causes of the Problem It is important for all of us, including both producers and governments, clearly to establish the causes of the current problems. The simple fact is that adverse world market trends are the reason for the failure of the farm sector to share fully in Australia's general economic growth. Average export returns for Australia's primary products have increased by only 5 per cent in the two years to 1985-86, despite a currency depreciation of the order of 25 per cent. This implies that average world prices for our exports have fallen by around 20 per cent. Had world prices not fallen, rural incomes would be over 50 per cent higher than is currently projected. Instead of a fall of over 30 per cent in the real net value of rural production over the past two years, we would be looking at an increase of 6 per cent. There is little prospect of immediate improvement. Projections for 1986-87 suggest little increase in world prices. It is simply not possible, in the face of these figures, to lay all the blame for the problem at the door of the Australian Government. Our overall economic policies cannot be blamed, as the rest of the economy has been doing very well. Tariff and other industry policy measures cannot be blamed. The direction of movements in protection has been generally downwards for some time, particularly through the measures being implemented by this Government. In any case, Australian agriculture adjusted to our historically high levels of protection decades ago. World prices are the problem. The Government does recognise that the impact of general economic policies can fall unevenly. At a time of low commodity prices, farmers are less able to withstand high interest rates. The problem is not high rural debt levels-the use of debt finance is less in the rural sector than in other sectors-nor is it high interest rates alone. The problem is the conjunction of high interest rates and low returns, exacerbated in some areas by a series of poor seasons. The `Grand Solutions' Rural populists have proposed alleged quick cures to these problems, including massive subsidisation of the farm sector. The rationale for these proposals is often the `tariff compensation' argument-that farmers lose from protection for manufacturing industry and so should be compensated. The logic behind this argument is extremely faulty. I repeat that Australian agriculture adjusted to our high protection levels decades ago, and recent movements in protection have been downwards. The protection of other industries is not the cause of the current problem. It is true that protection imposes a cost on all Australians, including farmers, and that farmers would particularly gain from a reduction in protection. In recognition of this, the Government is reducing protection levels. For instance, our decisions on the car industry are resulting in reductions in effective assistance of an estimated 10 to 15 per cent per year. Any so-called `compensation' during the time it takes for these measures to have their impact would make no economic sense and, in particular, would make no equity sense. People should be assisted according to need. The final problem with `tariff compensation' is that no-one has yet worked out a form of assistance that would not make other problems worse. For example, we could simply provide massive price support across all commodities. As European and North American experience shows, this simply does not work. Europe's agricultural subsidies have thrown a million people out of work, while the farm problem in the United States is much worse than in Australia, despite massive subsidisation. It is government cave-in to farmer demonstrations and revolt overseas that has accentuated the problem. In these countries, subsidies represent most, if not all, of the total level of farm income. Subsidies would provide a windfall gain for current producers, but would do nothing to prevent a recurrence of the problems in future as market fluctuations continued. By encouraging over-production, subsidies exacerbate the problems. By encouraging reliance on governmental support they reduce the dynamism and self-reliance that is the strength of Australian agriculture. The budgetary costs would also be enormous. An equivalent level of support to that provided in Europe and the United States could cost us anything up to $5,000m. We simply cannot afford it. Any attempt to do so would so destabilise the macro-economic environment that it could make farm sector problems worse. Finally, and most importantly, it would totally fail to target assistance on those most in need. Twenty-five per cent of Australia's farmers produce 60 per cent of the output, so it is obvious that this 25 per cent would get 60 per cent of the benefits of such an approach. Another popular but irrational form of assistance would be to provide massive general subsidies on farm interest rates. This, of course, would be even worse, as it would subsidise only one input-debt finance. It would distort the pattern of assistance across commodities, regions and individuals. To the extent that debt is not correlated with need, there would be perverse distributional consequences. Interestingly, the sector's total interest bill is less than the amount of `tariff compensation' that is often claimed. The Balderstone report in 1982 suggested that interest subsidies could be delivered through a loading on the tax deductibility of interest rates. This would be even more inequitable, giving greatest assistance to those with the highest incomes. The conservative parties' policy favourite of tax deductibility has never done a thing for farmers with low, or nil, taxable income. Another set of `grand solutions' relates to the current privatisation fad. The Government is reviewing the regulation that exists, implementing deregulatory measures where appropriate, and acting to improve the efficiency of public sector operations. This includes our reforms of statutory marketing authorities, the dairy industry and sugar industry restructuring. What counts is not necessarily ownership, but the quality of management and the incentives provided by the regulatory environment. These issues were ignored by previous governments for too long. We all know what would happen with wholesale privatisation. In the case of Telecom Australia, for example, the $490m provided in 1984-85 in cross-subsidisation of non-metropolitan rentals and local calls would be lost. I note that the dries in the Liberal Party have yet to direct their attention to the primary industry statutory marketing authorities. In short, the grand solutions provide no solution. The Government's Approach What the Government is doing is implementing those measures that do three things-strengthen the sector's long term competitiveness, assist those most in need, and complement our general social and economic policy approach. It is true that we have changed the worst examples of the National Party's legacy, but we have also improved those special programs that specifically benefit primary producers. I particularly refer to tax averaging, the diesel excise rebate and the various commodity underwriting arrangements. No other sector receives these benefits. Our policies need to be set against a background of understanding the market environment of the sector. Despite all the rhetoric, there often does not seem to be much understanding of the nature of markets or of the free enterprise system. Primary production is a form of business activity and therefore should be treated as a business activity. All markets involve risks, and all market participants should know the risks. Accordingly, farm policies need to be consistent with other economic and industry policies. However, the Government is prepared to give specific assistance to a single commodity where required, and the sugar industry is a good example. Last September, Cabinet took a decision to provide up to $150m in assistance to the sugar industry provided that the Queensland and New South Wales governments matched $1 for $2 price support, up to an agreed level, and that the industry agreed to a beneficial level of deregulation. While the New South Wales Government and industry agreed to the proposal, the recalcitrance of the Queensland Government, which legislatively controls the industry, has resulted in drawn out, inconclusive discussions, rather than effective negotiations on price support and deregulation. The Commonwealth Government has now decided that it will support sugar prices up to a maximum of $230, $225 and $220 per tonne for each of the years 1985, 1986 and 1987 as long as the cost of this support does not exceed $54m in Queensland. This offer is on the basis that the Queensland Government accepts that its offer of $27m interest cost on early season advances and Sugar Board stockholdings represents price support for the industry, thus meeting the Commonwealth's stipulation that State Government contribution for price support is provided on the basis of $1 for each $2 from the Commonwealth. The Government will also participate in the development of measures for farm and mill adjustment on the basis of discussions between the Queensland Minister for Primary Industries and myself on 14 March this year. It is proposed that a consultative body be established for the planning and implementation of regionally based industry adjustment, giving priority attention to the area affected by Cyclone Winifred, which includes Babinda mill. The decision by the Commonwealth to provide a $100m package for the sugar industry indicates its preparedness to assist specific industries in times of need so long as they are prepared to adjust to changing market and technological circumstances. The measures I shall announce are not some major change from the policy approach we have been following for the past three years. Rather, they are the natural development of that approach-an approach that recognises the central role of macro-economic policy; an approach that addresses the much needed and long awaited reforms of marketing institutions and systems; an approach that addresses all legitimate cost difficulties and the need to secure the long-term resource base of the sector; and, most importantly, an approach that recognises the importance of all country dwellers, not just primary producers. Macro-economic Policy It is becoming increasingly recognised that the most important issues facing the rural sector relate to general economic policy. Specific commodity policy, while important, pales by comparison. We need to recognise, however, that primary production represents less than 10 per cent of economic activity in Australia, so there is no way we are going to redesign our entire economic policy for the sole benefit of that, or any other, sector. No sector, group or interest in our federal, pluralist, private enterprise society ever gets all it wants. Nevertheless, general economic and labour market success implies, by definition, the implementation of appropriate policies for the rural sector. Success means minimal inflation, strong economic growth, and international competitiveness. These are precisely the prerequisites for a healthy rural sector. We have had substantial success on all of these fronts. The BAE's projections are for rates of farm cost inflation of 8 per cent in 1985-86, reflecting the impact of the currency depreciation, and 3 per cent in 1986-87. This compares with the 11 per cent rate we inherited-3 per cent coming up, 11 per cent when we came to government. If the 11 per cent inflation rate had continued, the net value of rural production would have been some $1.5 billion lower by now. Instead of a fall of 30 per cent over the last two years, we would be looking at a fall of around 60 per cent. Our record of strong economic growth has brought benefits to all country dwellers through improved job opportunities and to primary producers through stronger domestic demand for their output. The floating of the currency has lifted our international competitiveness to record levels. Due to its export exposure, the farm sector is a major beneficiary of this. The BAE estimates that if the currency depreciation had not happened, the farm sector would have been around $1,000m worse off. If our predecessor's policy of maintaining an overvalued dollar had continued, the fall in the real net value of rural production would have been around 40 per cent in 1985-86, not 20 per cent. The Government's general economy policy stance is, of course, subject to continuing review. It has also been reviewed in the context of this statement. Monetary Policy Interest rates are the main cost concern of the rural sector at present. As I have pointed out, they are not of concern to all farmers, as many have little or no debt. They are of very great concern to many individuals. The story has been put around the bush that interest rates are high solely because we are artificially propping up the Australian dollar, and that a different policy stance could simply and quickly result in Australian interest rates falling to equal overseas rates with an equivalent depreciation of the currency. I can assure honourable members that things are not that simple. The fact is that the recent stance of monetary policy has been necessary to moderate domestic demand and restrain growth in the monetary aggregates, as well as provide some stability to the dollar. The cleanliness of our float is shown by the size of the depreciation we have been prepared to allow. While policy has been important, the increase in interest rates late last year was also due to other factors. These primarily related to lags in the operation of policy and the unexpected strength of domestic demand. At the same time, the balance of payments deficit was increasing and the impact of reduced public sector borrowing had not yet been felt. Many of these factors are turning around. Tight monetary policy has achieved its objectives, and the Government is now allowing market induced falls in interest rates to take their course. At the same time, the effects of the currency depreciation and reduced public sector borrowing are being felt. As a consequence, interest rates have already started to fall. For example, 90-day bill rates have fallen from 19.75 per cent to around 15 per cent, while 10-year bond rates are at the lowest level since 1980. The scene appears to be set for further falls. The rural sector wants interest rate reductions. It is getting them-not through an irresponsible monetary policy, but because of the success of our responsible but unpopular policy stance-a stance that was necessary to ensure that primary producers, and all Australians, reap the benefit of the currency depreciation. In the meantime, the Government recognises the difficulties that high interest rates are causing for a number of primary producers. While we cannot accept an across the board subsidy, we do support appropriate measures targeted to those most in need which have the effect of strengthening the sector in the long term. These are precisely the objectives of the revised rural adjustment scheme, which is an accepted form of assistance with a successfully functioning administrative operation. The Government will constantly liaise with the States' rural adjustment authorities to ensure there is as much flexibility as possible in administration. In order to enhance the ability of this scheme to achieve its objectives, the Government has decided to increase funding under part A of the scheme by $20m in 1986-87. This will channel additional funds of about $220m into the sector and represents a tenfold increase in loans supported under the scheme since 1982-83. We have also decided to conduct a program to ensure that primary producers are aware of the provisions of the scheme as it may affect them. In addition, the Government has reviewed the foreign investment guidelines relating to rural land. In the current economic climate, the restriction could be acting to exacerbate the declines in land prices that are occurring in some areas. We have decided, therefore, to lift the threshold above which foreign investment proposals are subject to approval from $1m to $3m. This effectively exempt the majority of rural properties, without allowing massive purchases to go unchecked. Fiscal Policy Agro-political spokesmen have, for some years, been very fond of calling for reduced public spending and borrowing. This is based on the links between spending, borrowing, taxation, interest rates, inflation and the exchange rate. There has always been an excessively ideological aspect to this position, but the Government recognises that these links do exist. As a result, the Government has committed itself to the trilogy, whereby the Budget deficit, Commonwealth spending and the burden of taxation should not increase as a share of gross domestic product over the life of the current Parliament. This is the most severe self-discipline ever imposed on any Australian government. A shift in the mix of economic policy, with fiscal policy playing a larger role to reduce the burden of monetary policy, is an important objective this year. This represents a necessary tightening of fiscal policy at a time of rising capital market demands, as such it will not exert a depressing influence on economic activity, but will leave room for private sector expansion. The rural sector will benefit, mainly because of the further easing of financial market and interest rate pressures to which such restraint contributes. This stance does imply, however, the closest scrutiny of all outlay items. No portfolio can be exempt from this, least of all my Department, relating as it does to a constituency that has always supported reduced expenditure. Nevertheless, in addition to the cost of the decisions I am announcing today, and because of the problems facing the rural sector, the Government has decided to give high priority to retaining those expenditure programs which affect the farm sector in the 1986-87 Budget. The benefits to primary producers could be much greater, and come on top of the benefits of the recent fuel price decisions. On the taxation side, the Government has announced a number of measures to improve the operation of the taxation system in terms of its impact on both economic activity and equity across individuals. This has centred on a crackdown on tax avoidance and evasion opportunities-the $3,000m leakage allowed by our opponents in the past. Because of the substantial reductions in tax rates that are at the heart of this package, the farm sector will be a major beneficiary. Some of the decisions embodied in the tax package have been subject to criticism from rural spokesmen. By and large, I reject this criticism. The capital gains tax is necessary for the proper taxation of all forms of income. It has been designed carefully so as to effectively exempt the farm sector without creating a tax shelter. The great majority of rural properties will not be subject to the tax for generations, if ever. Similarly, the fringe benefits tax will bring in to account forms of income currently untaxed. The major criticism has focused on the proposal to quarantine farm income for taxation purposes. The Government has reviewed this matter and, in the light of some potential inequities, has decided not to proceed with this measure but to pursue an alternative approach. This represents a cost to revenue of $65m. The problem of tax abuse in the primary production area will now be addressed with more closely targeted remedies. As a first step, we have decided that breeding costs by registered stud breeders up to the time of birth of progeny are to be taken into account in the trading stock valuation for income tax purposes. The Government's motivation regarding quarantining was correct. Many of us will agree with the phrase `we are living beyond our means'. I would be happier with the phrase if it were not being uttered by the `haves' instead of the `have nots'. There is no reason why the community should allow tax shelters so that those with high incomes can make massive capital gains and push up the price of farm land in the process. If the claims of some of the critics of quarantining could be believed, we could expect a substantial recovery in land prices to result from this decision. Unfortunately, I do not expect this to be the case-the fundamental cause of the weakness in rural land prices is the low level of farm incomes. Wages Policy The central tenet of much rural criticism of the Government's economic policy relates to our wages policy. I want clearly to state here and now that, given the demonstrable success of the Government's wages policy, we are not about to change our basic direction. Our current centralised wages system is working, with wage inflation having fallen dramatically while still allowing real incomes to be maintained. As a result, the previous imbalance in factor shares has been corrected. This development has played a large part in the achievement of strong economic and employment growth. Critics of the system need to demonstrate that an alternative system could deliver more in terms of wage restraint and reduced industrial disputation. The facts of history are against them. The catchcry of many critics is the need for `flexibility' in wage setting. In most cases, they do not know what they are talking about. The accord has, for the first time, introduced macro-economic flexibility into wage setting in the form of wage restraint at a time of strong economic growth. Unlike our opponents, we do not need to resort to severe deflationary policies and consequent spiralling unemployment. This capacity for macro wage flexibility through the accord has already been demonstrated by the agreement to discount the current national wage case for the effects of the currency depreciation. The basis for much rural criticism of centralised wage fixation is a desire for capacity to `pay' on an industry basis to be the central issue in wage determination. What the critics are saying is that people in similar occupations should receive different remuneration. Why should this concept apply to employees and not any other input? I wonder whether it is also being suggested that equipment suppliers, banks, local stores and everyone else who supplies farmers should also charge farmers less than their other customers. How is the workforce to be so browbeaten that it would accept such an inequity? Farm leaders appear to believe that their preferred system will result in depressed industries paying less in wages than they do now. Unfortunately for them, the lessons of history are different-`capacity to pay' would mean that the more profitable industries would pay more, with all other industries quickly experiencing a flow-on. Just look at the disastrous effects on the economy of the 1981-82 experiment with deregu- lation. Where is the economic logic in that? One could only imagine the effect on economic growth, on the incentive for entrepreneurial dynamism, of a system where by every time a firm improved its productivity it was hit by a wage increase. How would an industry subject to wide fluctuations in its fortunes-such as the farm based industries-guarantee that it could reverse wage increases granted in upswings? The proposals are recipes for both an industrial relations and an economic disaster. This is not to say, however, that there would not be some advantages in achieving increased relative wage flexibility, but only insofar as it did not endanger the macro wage outcome. Achieving this balance will be a difficult and challenging task, but one which the Government will continue to pursue. Flexibility is available under the current system, as it is always open to an industry to argue its incapacity to pay national wage cases. The National Farmers Federation has taken advantage of this in the past. The Government has indicated that flexibility will also be available in the implementation of the superannuation reforms that are proposed to be paid from the current national productivity case. As previously announced by the Minister for Employment and Industrial Relations (Mr Willis), rural workers must expect that they will receive the benefits of the new arrangements towards the end of the two-year phasing-in period. Naturally, this will not preclude discussions being undertaken beforehand to settle the detailed implementation of the schemes. Income Side Measures The rural debate in this country has become excessively focused on narrow-minded discussions of particular cost issues. As I shall outline in a moment, the Government's record on these issues is impressive, with substantial further gains in the pipeline. Nevertheless, as the major problem for the rural sector is declining receipts on world markets, this is the area that needs to be addressed first. Trade Policy World trade growth has underpinned the health of our rural sector in the post-war period. It is essential, and inevitable, that it do so again. We must make every endeavour to maximise both the growth in trade and our share of it. This requires concerted action on both the demand and supply side of international markets. On the supply side, the Government has been most active in expressing Australia's concerns on the international scene about the subsidisation practices of certain major agricultural producers. We have changed the abusive tactics used by our predecessors for more calmly reasoned argument, pointing out the adverse effects of these subsidisation practices on world markets, other countries including the Third World, and, indeed, on the subsidising countries themselves. We have had some successes in this regard. Last year we were able to negotiate the Andriessen Agreement with the European communities which protects our major Asian beef markets from the intrusion of subsidised European beef. This year, the Minister for Trade (Mr Dawkins) was able to achieve an important contribution in winning improvements to the United States Farm Act, as reflected by the United States congressional decision to reduce the size of its export subsidy program; it halved it. There is still a long way to go. Our determination to continue our efforts is demonstrated by the departure of the Prime Minister (Mr Hawke) later today to further pursue these issues. The problem of agricultural production and export subsidies is directly related to the ineffectiveness of the General Agreement on Tariffs and Trade disciplines in respect of agriculture. The Government is giving priority and using every possible avenue to ensure that the problems are effectively addressed in the GATT and the new round of Multilateral Trade Negotiations. We are particularly seeking to strengthen GATT rules so as to phase out direct export subsidies for agriculture and improve our access to markets. Simultaneously, the Government is pressing forward with bilateral trade arrangements. An important aim is to fully secure Australia's position in the growth markets of the Pacific Basin, North Asia, the Middle East and North Africa. Trade agreements, with appropriate emphasis on agriculture, have been concluded with most countries of the Middle East, while an Agricultural co-operation agreement with China has been signed and an agreement with the Union of Soviet Socialist Republics is at an advanced stage. A high level group of officials and the rural and exporting communities is being convened to develop a more comprehensive strategy for bilateral agricultural trade policy. The necessity for broad recovery in the world economy is also important in rejuvenating demand for agricultural imports in world trade. The Government is involved in discussions in a number of world fora which seek to promote policies designed to achieve the highest sustainable rate of output and employment growth. Marketing Arrangements Ever since becoming Minister three years ago, the reform of the various statutory marketing authorities has been one of my top priorities. Our marketing arrangements need to be as flexible and commercially oriented as possible if they are to achieve their objective of maximising returns to producers. I have therefore established a policy for statutory marketing authorities that removes unnecessary bureaucratic controls, and replaces the politically motivated appointments of our predecessors with a procedure that ensures that only the best people for the job are selected. It is impossible to estimate the gains from this policy. An improvement of even one per cent in our rural export returns still amounts to over $100m. To illustrate the magnitude of the potential benefits, our decision to allow the Australian Wheat Board to borrow overseas, alone, saved Australia's wheatgrowers some $50m in 1984-85. As a further step in improving marketing arrangements, we have decided on a comprehensive reform of marketing for the horticultural industry. Australia has performed poorly in both traditional and newer horticultural markets in recent years. This is partly due to a lack of co-ordination, infrastructure, research, and promotion. The Government has decided, therefore, to establish a Horticultural Marketing Corporation, together with complementary industry selection, policy and research organisations. Commonwealth support of $10m over five years will be made to these organisations. This includes $5.85m for the Corporation, $1.9m for the Policy Council, $1.25m for the Research Fund, and $1m for research on overseas quarantine barriers. In the 1985-86 Budget, the Government agreed to provide $7m over four years to the Australian Meat and Livestock Corporation to encourage marketing innovation. We have also secured the basis of wool promotion expenditure, with a financial commitment of about $32m this financial year. The newly created Australian Trade Commission-AUSTRADE-will enhance Australia's export performance, while its export, finance and insurance arm is providing extensive insurance support for Australia's rural exports. There is no question that agriculture needs greater sophistication in producing for market requirements and developing better marketing systems. In order to encourage change in these areas, the Government has agreed to the establishment of a special fund of $25m over five years for innovation in agricultural product development and marketing. No marketing measures are worthwhile if the incentives to producers, processors and exporters are all wrong. Such a situation currently prevails in the dairy industry through the export pooling arrangements. These arrangements encourage unprofitable exports at the expense of both producers and domestic consumers. Our recently announced reforms to the dairy marketing arrangements will correct this situation. Cost Side Measures As I pointed out earlier, our success in restraining inflation and hence farm cost increases has been of substantial benefit to rural producers, as well as to the economy as a whole. The Bureau of Agricultural Economics projects that the index of prices paid by farmers will increase by only 3 per cent in 1986-87, compared with 8 per cent in 1985-86 and the 11 per cent rate we inherited. This reflects generally lower inflation and, in particular, lower fuel prices and interest rates. Today's decisions will further reduce the rate of cost increases. This is a substantial achievement, one that deserves recognition by all those associated with rural communities. Fuel Prices Fuel prices to primary producers have fallen significantly recently as a direct result of our decision in last year's Budget to fully rebate the excise for diesel off-road use by primary producers. This is in addition to the benefit to primary producers, like all users, from the recent petrol price reductions. These decisions are saving farmers over $300m per year. Primary producers are the only users in receipt of this full rebate. It has been suggested that we should extend the rebate to include petrol excise. This raises a number of difficulties with respect to cost, equity and administration. The Industries Assistance Commission is considering the fuel excise system. In considering its report, the Government does not envisage a reduction in the benefits to primary producers represented by the current diesel exemption. Fertilisers The Government currently provides assistance to fertiliser consumption through subsidies costing some $55m annually. We have also provided a $10m subsidy so as to exempt farmers from the effects of anti-dumping action on certain fertiliser imports. Both these measures are currently subject to review. As recognised by the National Farmers Federation, fertiliser subsidisation is less than an ideal method of delivering assistance to primary producers. Nevertheless, in the light of current rural sector problems, the Government has decided that the overall cost of fertilisers to farmers will not increase as a result of any decisions which may flow from these reviews. Tariffs and Industry Policy There has been increasing recognition by primary producers in recent years of the costs to them of tariffs and other forms of industry protection. As a result, farmers have come to realise that they have effectively been sold out over the years by political representatives who supported `protection all round'-that is, members of the National Party of Australia. There has, however, been a great deal of confusion about which forms of protection have been imposing these costs. Some believe that tariffs on farm inputs are the major cause of these costs. Others tend to ignore the costs arising from protection for some agricultural commodities. The fact is that anyone who is not receiving protection is paying for all forms of protection, either through higher prices for particular inputs or through a higher exchange rate and a higher overall domestic cost structure. The present Government is the first government in Australia's history to adopt a program of protection reductions on a long term sustainable basis. Our approach is to consider each industry's situation and difficulties, and implement a package of measures that reduce unwarranted assistance while strengthening the industry's long term competitive position and prospects. Such packages have been implemented for the steel and car industries in particular, along with some smaller industries. Rural industries cannot expect to be exempted. Our decisions on the dairy, tobacco and dried vine fruits industries include aspects that reduce the high levels of assistance these industries receive. In a number of cases, the forms of regulation and assistance provided to rural industries are perverse in their operation. Nowhere is this more obvious than in the sugar industry, where the regulatory framework redistributes income within the industry resulting in higher costs to the industry as a whole. The Government will be continuing with its present approach when considering the reports of the Industries Assistance Commission on industries currently under inquiry. These include textiles, clothing and footwear, pulp and paper, and the chemical and plastics industries. This will result in all major highly protected industries having been reviewed since we came to office. As a result, over time, decisions on these industries will further reduce reliance on high levels of protection and promote internationally competitive activities. The Government is confident that the continued application and extension of its policies towards manufacturing, with competing interests properly balanced and in full co-operation with affected parties, will progressively reduce the costs of protection imposed on the farm sector. The Government also carefully considers the forms of assistance, in order to minimise the impact on users. Accordingly, it was decided in last year's Budget to replace the tariff on grain harvesters with a bounty, so reducing farm costs by some $14m per year. The Government has now decided to take further action to reduce tariff-induced farm input costs. The tariffs on agricultural and horticultural machinery for soil preparation and cultivation will be replaced with a bounty providing equivalent assistance. The IAC will be requested to advise on the appropriate bounty level and arrangements. These will apply from today, cover existing stocks, and will cost an estimated $39m in the first year. In last year's Budget Speech, the Treasurer (Mr Keating) indicated that the Government was disposed to replace tariffs on agricultural chemicals with bounties when considering the IAC Report on the chemicals industry. A final decision will be made in the context of the IAC's final report. However, the Government is committed to reducing the price of these chemicals for farmers, either by bounties or the reduction of tariffs or a combination of the two. In the meantime, we have decided to remove immediately the 2 per cent revenue duty where it now applies to agricultural chemicals, at a cost to revenue of $0.4m in a full year. Bovine and Tuberculosis Eradication Campaign The bovine brucellosis and tuberculosis eradication campaign-BTEC-is on target to meet its objective of national disease-free status by 1992, with the BTEC trust fund currently in a healthy state. As a result, the Government has decided to reduce the BTEC component of the livestock slaughter levy by $1, at a saving to the industry of its own money of about $6m next year. We have also decided to amend section 36AAA of the Income Tax Assessment Act to permit profit from the sale or destruction of animals for BTEC purposes to be offset on a head per herd basis and to be assessed as income over 10 years. Off-Farm Costs The area of downstream costs has become increasingly contentious in recent years. The Government has already achieved substantial successes in restraining these costs. Our SMA reforms are improving the value for money primary producers receive from their marketing institutions. After many years, progress is finally being made in creating a single national inspection service. This, along with other measures, has resulted in substantial cost savings, estimated at some $16.8m per annum. I might point out that, had the National Party allowed changes in the Victorian Parliament, there would have been another $2.3m saving. A review of relevant legislation has identified some export controls on wheat products, timber and some livestock which can no longer be justified. Through the Business Regulation Review Unit in the Department of Industry, Technology and Commerce, a wide range of regulations are being reviewed. One of the priority areas of particular relevance to primary producers relates to food laws. Of course, the most important aspect of restraining off-farm cost increases has been our success in reducing overall inflation. Nevertheless, we recognise that there needs to be eternal vigilance in this area, and further measures are required. To this end, the Government has decided to offer to the States the establishment of a joint inquiry into the costs and efficiency of wheat transport and handling. The inquiry will take the form of a Commonwealth-State royal commission, to report within 12 months. The terms of reference will be developed between Commonwealth and State Ministers. In its consideration of the two task force reports on liner shipping and shore-based shipping costs, the Government will seek measures which continue to enable exporters to negotiate further commercial improvements in shipping arrangements. The liner shipping report calls for shipping arrangements to promote Australia's overall trading interests and advocates the maintenance of a competitive regime for liner shipping, with shipping lines free to operate commercially either within or outside conference arrangements and with minimal government intervention or regulation. Some rural lobby groups have suggested to me that they should receive funding from their industries through the Commonwealth's compulsory levy mechanisms. I cannot agree to this request, as I do not believe it is appropriate for the Commonwealth's ability to raise compulsory levies to be used for this purpose. Nevertheless, the Government does recognise that there is a need for improved consultative mechanisms with all those involved in the rural scene. We have decided, therefore, to offer to establish a Rural and Allied Industries Council involving the National Farmers' Federation, industry and trade union representation. The Council, modelled on the successful operation of the manufacturing industry councils, would provide a forum for regular consultation on all issues affecting the rural sector, including the review of conditions in the sector and the identification of major impediments to its development. Resource Base A major concern of the Government since taking office has been to secure the resource base of the sector. We have instituted the national soil conservation program, which is receiving $5.2m in Commonwealth funding in 1985-86. We have also broadened the scope of the tax concession available for soil conservation expenditure to include all land degradation expenditure. We have placed rural research funding on a sound long term basis, with a guaranteed Commonwealth matching contribution of up to 0.5 per cent of the gross value of production of each industry, and reformed the institutional arrangements. I have already announced improved research arrangements for the horticultural industry. With the agreement of the Agricultural Council, the National Drought Consultative Committee was formed in 1984. As a result, we now have a consistent set of drought policy measures. The principal drought measures are concessional finance for carry-on, restocking and restoration, and freight rebates for the transport of livestock, fodder and water. Our nation's most important resource is, and is increasingly, the talents, skills and dedication of our population. Understanding of advanced technology and of its application to rural industries is becoming essential for future success in primary production. Commercial management skills are also becoming of even greater significance. While many of the advances required of the rural education system are being met in varying degrees by individual educational and training institutions, we have decided to examine further the adequacy of rural educational and training services. The Government is also concerned at the relatively low level of participation by country youth in senior secondary and tertiary education. The Government has already acted to improve assistance for students and their educational opportunities in country areas. It will also be considering the scope for further action, in conjunction with the States, to increase educational participation. As a first step, the Department of Education has been allocated $388,000 to implement several initiatives to improve the access by rural people to information on Commonwealth education assistance schemes. Rural and Provincial Affairs As I acknowledged at the beginning of this statement, agricultural policy needs to be set in the context of the overall perspective of the needs of country dwellers. Not all country dwellers are farmers-in fact, most are not-and not all country dwellers are directly or indirectly dependent on agriculture for their livelihood. But all country dwellers, whether farmers or not, do have special needs and concerns that should be addressed by Government. Access to Services The Hawke Labor Government is the first government to take its responsibilities in this area seriously. Our Party platform commits us to ensuring that no disadvantage occurs to country dwellers, and to develop special institutions and programs where necessary. Both myself and my colleagues in relevant areas have been very active in precisely this direction. The Minister for Transport (Mr Peter Morris)-Australia's greatest Minister for Transport-has taken many initiatives to improve our transport system. Substantial gains have been made in the areas of improved operation of the Australian National Line and Australian National Railways, the shipping reviews to which I referred to earlier, and securing the funding of roads and road safety. The Minister for Aviation (Mr Peter Morris) has allocated substantial sums of money to airports in rural and provincial centres. The number of airports receiving development and maintenance grants has increased. Coupled with assistance to rural air services, this has meant a substantial improvement in the quality of services in rural Australia. The Minister for Communications (Mr Duffy) has presided over a massive expansion in services to rural areas. These include remote commercial television services, AUSSAT, and Telecom's Rural and Remote Areas Program. Incidentally, the last mentioned is still to be endorsed by our political opponents. Through these initiatives, we are now more than ever before one nation, with more equal access to each other. The Minister for Employment and Industrial Relations (Mr Willis) has ensured that the community employment program is equitable in its treatment of non-metropolitan areas. Under this program, we have so far approved $422m in grants for projects located in non-metropolitan areas providing employment for almost 43,000 long term unemployed persons. The program of Commonwealth general purpose financial assistance for local government is particularly significant for rural councils as it contributes, on average, the equivalent of about one-third of their rate revenue. The level of program funding will be at least maintained in real terms in the coming two years. For the coming year, there will be no change in the basis of distribution of funds between councils. However, in subsequent years there will be a gradual change in favour of the most needy councils, including rural councils. The labour force participation of country women, including in agriculture, has been increasing for many years. This reflects both a greater equality of roles between the sexes and changed perceptions by rural women of the roles they have always undertaken. This development has gone largely unrecognised by many National Party and agro-politicians, who continue to cling to unrealistic attitudes on the role of women. We have decided to provide $100,000 for a rural Womens' Access Program to fund projects aimed at providing the access of all women in rural areas to services and employment. This is in addition to the national survey on the needs and priorities of rural women that is being undertaken in collaboration with the Country Women's Association. We have taken the opportunity of our review of rural policy to consider also some of the more general measures in this area. We have decided to establish a working group to advise on the most cost-effective means of providing greater access for rural areas to Commonwealth Government administration, including the delivery of cash payments and to information on the range of Government programs. Studies by the Department of Community Services on the delivery and effectiveness of its programs in remote areas have also been commissioned. We have decided to expedite negotiations with the States on improved travel arrangements under the isolated patients travel and accommodation assistance scheme. We have decided to allocate $0.5m in 1986-87 for fostering strategic plans for country centres and surrounding regions to provide a basis for future development by the private sector and State and local government. We have decided to further integrate rural policy development, particularly through the operation of the Rural and Provincial Affairs Unit in my Department. We have also decided to develop a research proposal on policies to increase the relevance and effectiveness in rural areas of housing policies and programs. Welfare Measures In the light of the current income difficulties, the Government has reviewed existing income security measures available to primary producers and has decided to make a number of improvements. Part C of the rural adjustment scheme provides household support for up to three years to producers considering leaving the industry. This has been successful in alleviating on-farm hardship. It has been decided to increase funding under Part C by $1.8m in 1986-87. This is an open-ended commitment, so it is anticipated that all applications for assistance will be met, including an expanded presence in those States currently under-utilising this aspect of the scheme. Various State and private initiatives already in existence have demonstrated that counselling services, particularly financial counselling services, for primary producers can have beneficial local and national economic effects through the encouragement of appropriate adjustment and to reduce personal and social stresses associated with poor financial circumstances. The Government has therefore decided to establish a rural counselling service, under which the Commonwealth is prepared to provide matching funds to help community groups employ a counsellor. The service is estimated to cost the Commonwealth $900,000 per year. One industry with special adjustment problems is the fishing industry which, in a number of cases, needs to reduce activity if fisheries are to be managed on a sustainable yield basis. Successful adjustment assistance has already been provided in respect of the northern prawn fisheries. We have decided to extend this assistance to all fisheries that are subject to effective management arrangements. Conclusion The cost of the initiatives I have announced is not large when compared with the total value of rural production. It is certainly not large when compared with the benefits to the sector of our rural economic policies. However, these measures do represent all the remaining specific measures that can be taken for the rural sector. Any further expenditure at this time would not be justified either against the need for fiscal constraint or for equity reasons. The solution to the rural sector's problems must come through a recovery in international markets. We will continue to do our utmost in this area. In the meantime, the major rural sector concerns must be on appropriate macro-economic policy management. The Hawke Labor Government has demonstrated its credentials, with further substantial economic gains in prospect. I know today's statement will not satisfy everyone-nothing ever does. However, in many ways this is an historic statement. No government has ever presented such a comprehensive, wide-ranging policy review from the standpoint of the rural, or any other, sector. No government has ever been as active as we have been in promoting the revenue concerns of Australian agriculture. No government has given more recognition than we have to the needs of all residents of rural and provincial Australia. In the immediate future there will, of course, be further consideration of fiscal measures in the budgetary context, and continuing reviews of wages and monetary policy. The interests of the rural sector in particular, and country residents in general, will continue to be well to the fore in these deliberations. For the longer term, the Hawke Labor Government has established a return to strong economic growth in Australia. We all benefit from this, including the rural community. We will continue to frame our policies with this longer term perspective in mind. Those who seek spurious quick fixes will not find us receptive. Those who are interested in policies for the long term benefit of all Australians will find much to support in this statement, much to support in our overall economic and social strategies, much to be thankful for in our record, and much to look forward to in the future. Senator WALSH —For the information of honourable senators I table a paper entitled `Economic and Rural Policy-A Government Policy Statement'. I move: That the Senate take note of the statement. Senator COLLARD(Queensland-Leader of the National Party of Australia)(5.02) —I move: At end of motion, add: `, but the Senate is of the opinion that the Hawke Labor Government has- (a) failed the sugar industry totally and has watered down the original offer of assistance to such an extent that hundreds could be forced off their farms; (b) failed to remove Government excise and tariffs from essential input costs to rural industries; (c) failed to give relief from the interest rates which are an added crippling burden; (d) while providing $108m, $35m of which will be spread over 5 years, failed to acknowledge the $442m ripped off the farm sector in Labor's Budgets since 1983; (e) failed to make any attempt to remedy the situation revealed by the Burueau of Agriculatural Economics forecast of a further 21 per cent fall in net farm income in the next financial year; and (f) failed to address the underlying problem of high costs and low productivity in handling farm produce beyond the farm gate, and is in total confusion over its policy on the quarantining of farm losses, as indicated by Senator Walsh's comments in Question Time on, 16 April 1986, and the Senate calls on the Hawke Labor Government to recognise that the farm sector- (g) provides for our domestic requirements; (h) provides much needed export income at a time of an all-time high current account deficit; and (j) provides thousands of jobs, and to treat the farm sector's difficulties, particularly those caused by its policies, more seriously and with more remedial action! This ministerial statement was brought down in the House of Representatives yesterday by the Minister for Primary Industry (Mr Kerin) on behalf of the Hawke Labor Government. I am reminded of a quote of Mark Twain who said: Few sinners are saved after the first twenty minutes of a sermon. This sermon, if one can call it that, ran for about 61 minutes, so very few farmers would see any salvation in the sermon as delivered by the Minister for Primary Industry yesterday. Interestingly, there is a paragraph in the foreword of the paper entitled `Economic and Rural Policy-A government Policy Statement' which reads: There will be some who will want simply to add up the costs of specifically new initiatives developed in this paper. Too right they will. It continues: The measures we are taking are too numerous and too diverse for that to provide any realistic indication of our commitment. That sort of paragraph raises the alarm bells and says `beware'! It is a bit like some of the journalistic jargon, such as `there has been full and frank discussion' which actually means that there has been one heck of a row. The jargon in this paragraph really means: `We are saying a lot but doing little'. So the farmers of Australia should beware. Indeed, I think they are already aware of that. There is a lot of verbiage but very little substance. The Minister spent a considerable amount of time telling the farmers what their problems are. Do they need it? Does anybody think they need it? Does a farmer who is working from daylight to dark, seven days a week, with his wife and children helping him, who is quite efficient but cannot make a go of it because of costs beyond the farm gate-costs over which he has no control, such as government imposts-need to be told for at least half an hour in a ministerial speech, in which he hoped he would get some relief, what his problems are? Of course he does not. The farming community and individual farmers have been telling for some considerable time this Government particularly and the people of Australia generally what their problems are. I do not think that anybody is under any illusions as to the dire straits in which the farming community now finds itself. I suppose one thing can be said: At least the Government at last recognises and acknowledges the problem. In other words, now it knows. After all the broken promises, about cheap fuel and no capital gains tax, we should have known, we should have been warned. There has been a build-up in the weeks before the statement was brought down; the farming community was looking forward to it. Then all of a sudden we get a whole lot of verbiage and very little substance. We should have been warned. We had heard the broken promises which have come to nothing. We had heard the build-up for this statement, but again, basically we have got nothing. I suppose it must be acknowledged that there is a philosophical problem for the Hawke Labor Government or any Labor Government in understanding the farming community. This Government still seems to look on it as a milking cow and still seems to look upon the farming community as a bottomless pit from which it can keep taking revenue to prop up its ailing economy. The cow is pretty well dry and there is not much silage left in the pit. Still the bush hangs on, but one sometimes wonders why and how. The people in the bush have always had a certain amount of resilience, and the people are still there. While they are still there they are providing a massive amount of revenue for our export income. Unfortunately there will be many casualties. On top of all this it must be mentioned that there is a drought throughout most of Australia's primary producing areas. That drought is ticking away like a time bomb which could ultimately be one of the contributing factors towards destroying the Hawke Government. On top of all the problems the rural community is facing, this drought is there. Areas which normally have high rainfalls have had very little. Many parts of eastern Queensland, and the wheat growing areas of New South Wales and Victoria are in dire straits. It does not look as though crops will be planted, let alone be destroyed afterwards by inclement weather. It has to be accepted and realised not only by this Government but also by the people of Australia that they cannot at this stage rely on the bush, the rural sector, to do what they usually do and pull this economy out of the hole into which it is slowly sliding. The Prime Minister (Mr Hawke) saw himself as the Messiah. He was going to solve all Australia's problems. We can all remember those Messiah-like election campaigns. Unfortunately, most of his policies were all about the redistribution of wealth and nothing about creating wealth. That is a little bit of plagiarism. I can recall Des Keegan saying that after the first Hawke election speech. Nonetheless, there he was, the Messiah, on stage, promising the world that he would do this and that for Australia. It is unfortunate that a sufficient number of other Australian's also saw him in that light. He gave the rural sector hope with many of his speeches; but unfortunately, yesterday was the Hawke Labor Government's day of judgment, and it failed. The farmers are still in bondage, and a lot of it has been brought about by the Hawke Labor Government's policies. Interestingly, with all the hyperbole, with all the verbiage, the farmers are not buying it. Most of the newspapers played it pretty straight, but the spokesmen for the farming community are not buying it at all. No matter what industry we look at, they are awake to the fact that there is very little in it for them. Even while the Minister for Primary Industry was bringing down this infamous statement, Mr Hawke was, significantly, on his way overseas, leaving one of his Ministers to cop the flak. One of the facts that people are slowly waking up to is that when the bush hurts, everybody hurts. Conversely, when things are prosperous in the bush, the economy bubbles along in a reasonable manner. The Hawke Government has acknowledged this. Not long after it came to power the then drought broke, and the economy picked up-nobody is denying that. As I said, the Hawke Government has acknowledged the fact that when there is prosperity in the bush and the bush is spending money, it provides for a very quick resurgence in our economy, because rural people are the people who spend money and who spend it quickly on machinery, sheds, fencing, and so on. But when the bush hurts, everybody hurts. This time the bush is hurting and it does not look as though it will cease hurting for a long time yet. That does not bode too well for this country's economy. The National Farmers Federation, some time ago, targeted five issues: First, a full flow-on of import parity pricing so that Australian consumers pay the world price for fuel; secondly, tariffs off all agricultural inputs, with chemicals as a first step; thirdly, a reduction in interest rates by freeing up the money market; fourthly, the cancellation of the next two proposed national wage cases; and fifthly, the scrapping of the proposed capital gains tax and a restructuring of the offsetting of farm losses. In other words, they were basically structural policy changes in areas of farm input costs. None of these areas has been addressed, except the quarantining of farm losses. I guess this Government has translated a `She'll be right, mate' attitude, which is indicative of most Australians to one of `You'll be all right, fellas; we'll look after you, but we won't do much'. All the farm leaders have been warning of the consequences of what would happen as a result of Government inactivity. Now, after a 61-minute statement by the Minister yesterday, we still have inactivity. The attitude seems to be that a lot of the problems will go away. Significantly, international factors were mentioned-and so they should have been. Every parliamentarian, of whatever political persuasion, would recognise that international factors have an effect. We all recognise that the European Community is dumping subsidised products on our traditional markets. We recognise that we lost out badly on the Japanese meat market. Quite significantly, when that happened very little was done about it by this Government. But one would think that when international situations are such that our rural community is suffering, any government would be trying to free up any domestic situation which was causing difficulties so that it might become more competitive, and that the Government would assist it to compete in those particular situations. As I indicated, there are few pluses in this document. What pluses there are have been more than covered by the minuses since the Hawke Government came to power. As I have mentioned, the paragraph in the foreword states: The measures we are taking are too numerous and too diverse for that to provide any realistic indication of our commitment. That was referring to the fact that the Government has not quantified what the benefits will be. Fortunately, my colleague the Hon. Ralph Hunt in the other place has done so. He puts forward a figure of benefits of about $108m. Included in that, I might add, is $35m which would be phased in over a five-year period. Ralph Hunt also quantifies the extra imposts since this Government came to power on the rural community. They are running at $442m. So in spite of this package, there is a massive deficit, or a shift of financial resources, from the rural sector to the public sector per kind favour of the Hawke Labor Government. One would have to acknowledge the fact that the sugar industry is in trouble. The proposed help to the sugar industry is a great disappointment. If ever there was an industry that is indicative of what an industry's flow-on effects are through the community, it is certainly the sugar industry in Queensland. We are the most decentralised state, because the sugar industry, right up the coast of Queensland, has provided good, solid provincial towns. Sure, this Government can go on with its bloody-mindedness towards the rural community, and towards the sugar industry in particular; but it has to understand that as well as hurting the farmers, which it seems intent on doing, there are plenty of other people down the line who rely on that sugar industry. Undoubtedly, we shall ultimately see the rationalisation of mills, and many people who are employed in the sugar industry, on the farms, in the processing industry and in the transport industry, will be without jobs. The minimum floor price needed to keep the sugar industry out of trouble is $240 a tonne. The package yesterday offered $230 a tonne. Other farmers will welcome the few pluses that there are in this document, or the few crumbs from the table. More money has been made available for farm and debt adjustment to assist those farmers with some hope of recovery but who would not be classified as commercially viable by traditional lending institutions. There have been changes in welfare benefits. Some small relief from tariff costs has been announced. The Government laid great store by the quarantining of farm losses. The abandonment of that, albeit before its implementation, is to be welcomed. I think that one has to acknowledge that there are many other failures. First of all, the Government does not appear to have accepted the forecast of its own body, the Bureau of Agricultural Economics, of a 21 per cent fall in net farm income in the next financial year. As I indicated, if the weather is against one of the major producing sections of its economy, if international markets are against it, one would think that the Government would be doing everything in its power to help it. It has failed to address the underlying problem of high costs and low productivity as well as that of handling farm produce beyond the farm date. Therein lies one of the major problems facing the farm community. One would think that with monthly current account deficit figures which show a disastrous picture, an unprecedented picture-a picture which, to my knowledge has never been seen since Federation-for a sector which is providing 40 to 45 per cent of our exports the Government would be treating it with kid gloves and would be looking after it. However, the opposite is happening because of the philosophical hang-ups which Labor governments have arising from their belief that the rural community is a milking cow. I mention that, in recognition of the fact that there are peaks and troughs in rural incomes, we introduced tax averaging provisions and income equalisation deposits. That is something which I would consider is probably one of the best things that the Fraser-Anthony Government ever did for the rural community in the long term. However, it was not long before the Hawke Government came to power and got to the tax averaging provisions with a knife. Certainly it gutted the IEDs. Significantly, those IEDS were used in the first instance, and as a continuing method, to help to finance the Primary Industry Bank. Of course, that method of helping the Primary Industry Bank has now gone because the IEDs are such that one must question whether farmers would want to use them anyhow. As well as all those problems there are also the underlying economic problems facing this country. Those problems are facing the manufacturing industry as well although, of course, they are facing the primary producers to a greater extent. As I indicated, farmers can be as efficient as they like on their farms, they can work harder than any other section of this community, but once the produce gets beyond the farm gate the farmers have no control over costs. Those people who are working in every sector of transport or processing beyond the farm gate basically are earning more than the person who produced the original product. That is a ridiculous state of affairs. As I said, that industry is providing for our domestic consumption, it is providing thousands of jobs and it is providing much needed export revenue. For this reason one cannot understand why the Government has taken the attitude that it has. As I said, the farming community would welcome any crumbs from the table that are there. However, as I indicated, I think the farming community has seen through the rural policy statement. It is not fooled by it. If this Government wants to survive, if it wants to pull this nation out of the economic hole in which it is finding itself, it has to do far better than that. The economic situation is such that we are in hock. Any recovery we have had has been a debt-led recovery. This nation is in hock. We have committed our children, their children and their children's children-generations to come-to paying off the profligacy of this Government towards other sectors of the community. The Government has ignored the manufacturing sector and the rural sector, the only sectors that can pull this Government out of the economic hole in which it is finding itself. The Government carries on in that ignorance at its peril. Senator MACKLIN(Queensland)(5.25) —Yesterday the Government brought down a significant paper with regard to the rural policy which it is pursuing and which presumably it intends to pursue between now and the next election. I think it is a very important paper. It is indeed a pity that we have not had such papers in this area in the past. In fact, in the six years that I have been here, this is the first comprehensive detailing of a government's forward policy with regard to a very important segment of Australia's economic life. I believe that the treatment which the paper has received has come in many circumstances only from a knee-jerk reaction. Much of that reaction occurred prior to the release of the document. Possibly many of the Press releases which went out were written prior to the document's tabling. That seems to me to be a pity. This is a significant area of policy. I would have thought that it was important to debate the items which the Government maintains and to test them to see whether the items the Government is proposing are indeed legitimate, useful devices for promoting the economic life of the rural sector of Australia. Merely to engage in the type of speech we have just heard from Senator Collard does not assist anybody very much. I believe that in future it would be far better if the various proposals-there are some quite significant proposals here-were to be debated on their merits. I suppose that it is a bit much to ask in the political world in which we live. However, it seems to me that it is very useful that this be done. If it were done, I think we would then find that there was a great deal to welcome in the paper brought down by the Minister for Primary Industry (Mr Kerin). I think we would then have a basis for saying where we disagree, where we believe the Government should be heading and what types of additional items the Government could well be addressing itself to. I would like to go through the items in the Government's paper in light of the statement that I made in the election campaign in 1984 to the Rural Press Club. I would like to use those items as a basis for raising what the Government has sought to do in terms of its paper and saying where I believe there can be significant advances on where the Government currently stands. In more general terms-that is, in terms of factors affecting interest rates and the money supply-it seems to me that the Government simply has reiterated its general economic policy, as one would expect it to do. However, I think there were some significant items which I raised in 1984 and which really ought to be taken into account but which the Government has not made any comments on. These are to do with the foreign banks and whether the Government has a requirement-the Government certainly has not, but I believe it should-for a significant rural finance component in terms of the entry of those foreign banks and whether the relevant Act should be amended to allow for better provision of banking facilities and services to rural areas in terms of the significant development of the banking sector in Australia. Also, I want to look at the Government's deregulation of interest rates. This is something which the Australian Democrats have not supported but which, of course, the Liberal and National parties have supported. I believe that in that deregulation there are significant problems for small business and for the rural sector. I believe that if the Government is intending to proceed in this way-it would seem to be the settled policy also of any incoming Liberal- National Party government-the Government is then required to take additional measures to make sure that the people, particularly those who have overdrafts under $100,000, have significant interest rate support. The Government has gone some way towards this in terms of actually providing some finance. It seems to me to be very odd, in the first place, to engage in this type of deregulation with regard to small businesses and then to have to prop up the interest rates which people necessarily have to pay because of the deregulation policy the Government has pursued. There should be a uniform low rate of assistance across all sectors of industry which does not favour any particular industries and which places all sectors on an equivalent competitive footing. I refer here to the Industries Assistance Commission report delivered during the Fraser years, upon which the Fraser Government took no action and upon which very little action has been taken since, in regard to the general reduction of tariffs. I believe it was one of the best reports produced by the IAC. The Fraser Government made no response to that report. It ignored its recommendations entirely. However, if it had adopted the major recommendations when in government, we would now be five years down the ten year track of that general reduction in tariffs across the board. The report's major recommendation was for a ten-year gradual reduction of all tariffs within Australia to a uniform level so that there was no particular sector or any particular industry within Australia which was favoured in competition with any other industry. Hence, industries, in terms of attracting capital and investment, would do so on the basis of their productivity and not on the basis of what type of tariff support they happened to get from some previous government or some previous friend in government. I believe if the Government had put all sectors and industries on that competitive basis over a ten-year period, we would have made probably one of the most significant contributions to the rural sector in Australia. The previous Fraser Government did absolutely nothing. This Government at least has taken some steps, unfortunately very few, but it certainly has not adopted that general recommendation from the IAC. The Government has made some statements on the rural adjustment scheme. It seems to me that there is still room-there is no mention of this-to rectify the major administrative inefficiencies occurring within that rural adjustment scheme. However, I do welcome the moves the Government has made with regard to that scheme and the additional support it has sought to supply. I have already referred to the general point with regard to tariffs and bounties. In my 1984 statement, I pointed out that the Australian Democrats would have, as a priority, bounty forms of assistance. I welcome the Government's move in that direction in this statement. I think it is an excellent suggestion and an excellent move. Bounties, of course, do not have the type of significant impact that tariffs have. Bounties have an additional benefit, which is that bounties appear in a Budget somewhere. They are up front, they are on the notice paper and they are in the cheque book. We are paying for them and one of the major objections I have to tariffs is that we never see the cost of them because they are constantly hidden from public scrutiny and public view. Bounties can at least be directed. They are a significantly more flexible instrument to deal with than tariffs, particularly with regard to the rural sector, and I am pleased to see that the Government is now moving in that direction. I hope that it may continue that forward progressive movement. Likewise, in the 1984 statement I maintained that there should be a removal of the tariff on all grain harvesters and other assistance to be provided by way of bounty. The Government has not taken that step, but it has actually made some steps down that road. I hope it will move further. Likewise, I maintained that there should be an extension of the tariff bounty to bona fide agricultural tractors and the removal of import tariffs on agricultural and veterinary chemicals. The Government has made moves in respect of agricultural and veterinary chemicals and the Australian Democrats welcome those moves to reduce significantly the import tariffs. The next area I raised was that of income equalisation and taxation measures. On behalf of the Democrats in that campaign I maintained we should have continued tax averaging arrangements to ensure that taxpayers with unstable incomes were not disadvantaged by the progressive taxation arrangements. With a view to implementing that, we maintained that there was a need for the reintroduction of a genuine income tax equalisation deposit scheme so that, firstly, the income equalisation deposits are deductible from taxation income in the year of deposit; secondly, interest rates are linked to a two year bond rate; thirdly, interest was payable on the investment component of the deposit where the investment component is equal to the balance of the deposit if tax were payable in the year of deposit; and, fourthly, safeguards were imposed to avoid IEDs as a tax avoidance measure. I think it is of enormous regret that this chamber assisted this Government in the destruction of the income equalisation deposits. Senator Kilgariff —It was a pity. Senator MACKLIN —It indeed was, when the National Party of Australia and the Liberal Party of Australia voted to assist the Government to destroy those effective deposits. I believe-- Senator Boswell —We gave the Government its Budget. Senator MACKLIN —Senator Boswell voted on a Bill. It was not even in the Budget. Senator Boswell —It was in the Budget. It was a Budget Bill. Senator MACKLIN —It was not a Budget Bill. I think it is very good that the Liberal and National parties have subsequently seen the error of their ways and are willing to look at those money Bills in a much more rational way. Senator MacGibbon —Tell us how you voted on the assets test. Senator MACKLIN —I did not vote for the assets test and Senator MacGibbon knows that. Senator MacGibbon —Because you hid under your bed. You were not in the chamber. You were not in the Parliament that day. The DEPUTY PRESIDENT —Order! The matter before the Chair is a rural debate. Senator MACKLIN —Senator MacGibbon is very large on words and very little on ideas. Income equalisation deposits, which were destroyed by the Liberal and National parties voting with the Government, I believe need to be reintroduced. Unfortunately, there is no such reintroduction mooted in this particular statement and I think we will find significant problems in time to come without some type of scheme such as that to assist those unstable incomes-incomes where there is high income in one year and low income in another year. Without some method such as an income equalisation deposit I think that rural incomes will be significantly affected by paying higher taxes in the good years and, of course, paying no taxes or very little taxes in the bad years, but that hardly compensates. The indexation of progressive tax schedules to offset the effects of inflation, which was one of the progressive measures introduced by the Fraser Government and which it unfortunately took back, is an ideal that we will probably not see attempted again for quite some time. I think that is a pity because we have what I think Mr Fraser referred to in one of the election campaigns as, taxation by stealth by simply those taxation schedules operating in terms of inflation to move people into higher and higher brackets of taxation. The next point in that campaign was that we believed there should be a complete revision of the stock evaluation sections of the Income Tax Assessment Act to take account of the differing needs and realities of different forms of primary production, including horticulture. I certainly welcome the Government's moves in this regard in this statement. It is an area which, unfortunately, has languished. It is one which, unfortunately, very little attention has been paid to in the past. I must admit that I was quite surprised to see that the Government had, in fact, moved in this area. It is something that I have raised on a number of occasions and I believe it will have some quite significant effects, with regard to that particular area. It is of a more technical concern, I think; nevertheless, a very important step forward and a step in the right direction. There needs to be, of course, the inclusion of horticulture in the definition of primary production in the Income Tax Assessment Act. Although that is not specifically mentioned in the statement, a reading of the statement does suggest that the Government intends to look in that direction in the Budget session. I hope that we may see that particular advance take place. I also believe there should be an expansion of the zone allowances into some meaningful form based on the part of the tax dollar which is forgone by people who live in rural sectors. An example of that may well be that a very large amount of money is spent in the area of arts and very little is spent in country areas. It seems to me an effective zone allowance should make a distinction for that amount of money. That money should then be returned by way of a zone allowance to the taxpayers in rural areas to enable them to purchase the things which are provided free of charge by government and government departments to the urban population of Australia. Under the rural population section of the statement I made in 1984 there is an essential part of economic planning-provision to encourage people who wish to remain living and working on the land and in rural towns and cities to do so. This would apply specifically to young people and to services such as education, health, dental care, economic and legal services. People must be assisted to keep the jobs they want to do rather than be given unemployment benefits. I welcome the first major movement in this area that the Government has taken to actually look at the rural communities as such and to look at the types of services which are provided to rural communities. It is a significant point. If one visits the outback towns of Australia one finds a significant number of professional and semi-professional areas. Jobs are available and since employers cannot pay any more than the normal type of wages which are going in the cities, they are unable to attract people to those jobs. Is it any wonder that councils in the west of Queensland find it very difficult to get shire clerks? The amount these councils offer is the same as on the coast, yet there are significant disadvantages in shire clerks taking their families to the western areas, not the least of which relates to education, dental care and health. The added burden on a person taking his family to those areas is such that he finds it better to stay in a job on the coast which is not paid as much, but his total income is actually higher than if he actually took promotion and went inland. Many of the councils are having to find money from other parts of their budget to be able to offer inducements to people to take those jobs. They are having to pay salaries way above those which are paid by other councils, hence to the detriment of the types of services they are able to offer in other areas. I welcome the Government's move in these directions. I think it is a significant move to look at people who are involved in the area. Too often when we talk about rural industries we seem to talk only about the animals or the industries. We welcome the Government's move to actually talk about the people who are involved in those areas. I turn my attention now to the next section of the statement I have made; that is, fuel, transport, storage and handling. I raised the point that there should be an effective fuel cost equalisation scheme, which we do not have. Although some comments are made about this in the government's statement, there are no significant moves in that regard. The Government announced a rebate for fuel excise for fuel used for off-road purposes and the full flow-on of the gains that were made from the lower international fuel prices. However, I am looking down the track at other excises currently on fuel. I think the removal of those excises would remove a significant impost on the rural sector. The next point that arose is the development of a national transport development program embracing the requirements of an expanding agricultural sector. Such a strategy needs to take account of the requirement to move produce quickly and economically from the point of production to the point of use. The Fraser Government, in its bicentennial program, which is being carried on by the current government, had that as one of its aims. Hopefully, the continuation of that program will go a long way to assisting in the transportation of goods. However, there are major deficiencies still in the area of the transportation, in particular, of wheat. The Government has made the promise that it will look at the royal commission with regard to the wheat industry, particularly in terms of the handling of wheat. I suppose that has to be taken at its value. Hopefully that royal commission will do its job and will report to the Government as rapidly as possible. I hope, when the Government looks at that matter, it will look at the more general aspect of transportation of products with regard to the wheat industry in particular. Hopefully this will be carried over into other areas. We also campaigned for a significant reduction of air navigation charges for light aircraft in rural areas. The general aviation sector of the aircraft industry is used out west, as it were, as taxis. Significant imposts and charges which come from those higher costs flow through from the avgas prices. I believe that there should be a removal and a lessening of those costs, but more importantly a significant reduction in the general aviation charges. The general aviation area does not by any stretch of the imagination use the type of star wars technology which is provided at all our major airports for most domestic flights. I believe that the vast bulk of the general aviation usage in rural areas is often between one property and another and on dirt strips or on other types of low grade landing areas that do not require enormous upkeep. Out of fairness to that sector, a substantial reduction in the air navigation charges is warranted. Likewise, as part of the continuing campaign the Australian Democrats proposed the abolition of sales tax on freight. We presented a detailed program to the Fraser Government, which rejected it. We presented the program again to the Hawke Government, which rejected it. I still believe it is an iniquitous operation where sales tax is added on top of tax. I believe that a method has to be used to overcome that problem. Again, there is no mention of that in this particular report. Under the heading `Weather' I made the point at the Rural Press Club that there needs to be the establishment of a permanent drought and natural disaster scheme as part of a general national disaster fund. The scheme should include insurance against weather and fire damage to crops, pastures, animals and property. Since that time the industry has made steady moves towards establishing an industry-wide insurance scheme. The results I have seen to date look very encouraging. Hopefully that will come to fruition in time. However, I think the Government has a role to play here. The types of genuflections that have been made in this report in that direction are few and far between. It is a very important area. Drought assistance ought to be given when we do not have droughts rather than when we do have droughts. When we do have droughts we have to throw money around simply for survival. Undoubtedly most of the money goes to the farmers who are most inefficient than to the most efficient farmers because the most efficient farmers have spent money on drought-proofing and other types of activities, and they are further down the line when that money is handed out during drought relief. I believe drought relief ought to be done when we do not have a drought. By doing it that way we are supporting the efficient farmer rather than the inefficient farmer. With regard to research, there is some quite significant pickup. The point I made at that time was that priority be given to upgrading rural research and ensuring real increases in research funding. The Government has done that. I applaud the Government for the significant advances it has made in that particular area in this statement. I also made the point that there should be implementation of a flexible policy in relation to the responsibility for research so that the particular industry decides whether marketing boards are to be responsible for research or separate research boards should be established. A statement was made earlier this year in regard to research boards. The Australian Democrats generally support the thrust of the Government with one major reservation: We believe that the retention of industry-elected representatives on those research boards is absolutely vital for the dissemination of research. Without that I believe that research may very well be done but not sold to the people who have to use it. The best people to sell it are the representatives who are elected to those research boards by the industry bodies themselves. The Government has made significant contributions in the statement with regard to tech- nology and biology. The Australian Democrats welcome the significant moves that the Government has made in these areas. The points made by the Minister is this respect are almost identical to the ones that I raised in a speech I made in 1984. Due to the shortness of time I do not intend to pursue them now. In the market development area, the Government has, of course, set down in other statements its policy in regard to flexible marketing boards. The policy that the Australian Democrats have maintained-in fact the Government has had to fall in line with this policy on each occasion it has attempted to deviate-is that there should always be a majority of industry representatives on the marketing boards. After all, the industry pays half the cost of the operation of the boards and they are the people who are most intimately involved. We believe that they are the residential experts in most of these areas. While the Government has moved to replace some of the board members with experts, we are happy to go along with it as long as the experts are also growers, as in most cases they are. Further, in terms of market development, we maintain that agricultural attaches and marketing intelligence officers should be appointed to serve in key markets, such as the United States of America, Japan and the Middle East, with the specific tasks of assisting with the promotion of Australia's rural produce and the reduction of overseas barriers to Australian rural exports. Quite frankly, in many ways I believe that these people are more important than military attaches. We seem to be able to afford them but not these people. It is a pity. Reference is made to this matter in two different parts of the Minister's long statement, neither of which goes as far as I would like in terms of the development of that policy. Further, of course, we should be looking at the development of a Pacific economic community with an understanding to increase the negotiating skills of member countries, particularly in the global trade negotiations of the General Agreement on Tariffs and Trade-of course, we are now into a new round of GATT-the United Nations Conference on Trade and Development, and the Organisation for Economic Co-operation and Development, which is a very important forum for Australia. There needs to be improved communications with European Economic Community consumers. I hope that the Prime Minister (Mr Hawke) in his current trip abroad to the United States of America and the EEC has more effect than the Minister for Primary Industry (Mr Kerin) and the Minister for Trade (Mr Dawkins) have had. One can only hope that he will, because no matter how efficient we become in Australia, unfortunately the European Community has a stockpile of most of the goods we wish to sell. It is able to make a profit on whatever it sells them for because it has already paid the going price. We are really in difficulties in that area and there is almost nothing we can do. Hopefully, the Prime Minister will be able to do as much as can be done. There needs to be a recognition that sectoral assistance to either import competing industries or selective export industries should be paid for by the traditional unassisted exporters. A major element in our export strategy should be to provide a uniform level of assistance to all export and import competing industries. Neither this Government nor the previous Government has given that uniform support. Although it is not mentioned in the Minister's statement, I believe it is an essential element that we must ultimately pursue. Obviously there needs to be a complete revision of the export inspection charges to ensure that they are imposed only when the inspection is required by the importing country. The rates should be flexible in accordance with the standard of inspection required, and they should be imposed to take account of the export incentives given to our major rivals in export markets which impose charges. As I say, the Government has raised a number of matters in the statement. Finally, I would like to refer to the move by the Government in regard to farm loss quarantining. I am happy to see that the discussions I have held with the Government over the last four months have paid off in some respect. As a result of the evidence which has become available, I think that the Government ultimately saw that the stance it had taken was misguided and misdirected. I think that many people are relieved that the Government has jettisoned the wide brush approach that it had taken and has looked rather at a specific type of approach to pick up any type of tax rorts that may very well be going on. I have maintained in my discussions with the Government that if it knows where those tax rorts are, it should go out now and prosecute the people involved under existing laws, because undoubtedly what is happening is illegal. Finally, we welcome the Government's rural policy. It is useful to have the basis on which a debate can take place. Hopefully we will be able to have an informed debate on the Government's policy again in the very near future. Senator MacGIBBON(Queensland)(5.55) —I rise to support the amendment moved by Senator Collard, as will all Liberal Party and National Party senators. Unlike the previous speaker, Senator Macklin, I hope that the Parliament does not get any more reports of this nature, because nothing of any benefit at all has been given to rural Australia. I do not find it surprising that the Australian Democrats do not know what to do when they are presented with a statement such as the one made by the Minister for Primary Industry (Mr Kerin). As the quintessential urban dwellers, they have never had any experience, let alone any comprehension or understanding, of what is involved in rural production or the rural industries in Australia. But above all, this report is the saddest of all statements ever presented in this Parliament. It is a dying dirge from a failed Minister. The report is untruthful, it is patronising and it is irrelevant to the needs of rural Australia. Above all, it is an enormously tedious document. It takes 40 pages to say what could well be said in four. As I said earlier, it gives no support or solid comfort to those people who are trying to earn a living off the land in this country. I heard this morning a radio broadcast in which it was said that this statement would provide, on average, about $5 a week for every farmer in the country. I do not know whether that figure is accurate. But if it is accurate, it is probably equivalent to giving every pensioner 50c a week. It is 40 pages of a very crude political propaganda exercise. As I said before, it patronises, and it thereby demeans, those people who work on the land. It narcissistically praises what the author sees as the achievement of the Hawke Government. Mr Kerin was a Minister of considerable promise when he took over his portfolio. He went around. He travelled a lot. He travelled far more than did any other Labor Minister for Primary Industry that I have known. He listened to people. He was well respected and liked in rural Australia. But in the three years he has been in office as Minister, he has shown himself to be incapable of taking any protective action, let alone a constructive action, for the people he has to look after under his portfolio. He has become very much the Barry Jones of the rural world. He is great on words, but one should not look to him for performance. I would like to look briefly at the 40-page statement. I will not bore the Senate by wading through all of it; I will just pick some of the highlights. We start with the selective use of figures from a Bureau of Agricultural Economics report on the troubles of rural Australia. The Minister lists a projected fall of 21 per cent in 1985-86 with a further 21 per cent fall in 1986-87. He conveniently neglects to say that under his stewardship there was a 13 per cent decline last year. So we are really in an enormously steep downturn. According to the Minister, average farm income will fall by 66 per cent. Which senator sitting on the other side of the chamber will take a 66 per cent cut in his income this year? How many members of the Australian Council of Trade Unions will pad up to the Prime Minister's office and say: `Please, Prime Minister, I want only 66 per cent of my wages as is given to my brothers in the rural world'? The Minister passes that over quite blithely as just a statistic of no account. The Minister then talks about what is going wrong or which branches of rural Australia are going to be concerned in the decline of incomes-the grain producers and the sheep producers. He then makes the statement that at least the income of beef producers will be 10 per cent more this year. Does he not open his eyes when he is driving in his air-conditioned LTD from Canberra Airport to Parliament House? We are in the early stages of a drought which grips the whole eastern half of Australia. That has as much an impact on the beef producers of this country as it has on the grain growers and the sheep producers. The Minister has only to open the newspapers and look at the cattle sales to realise that graziers are liquidating stock. They are selling stock that are only half finished to get money for them before they die on their hands as a result of the coming drought. I turn to page 7 of the Minister's statement and note the sophistry involved there under the delightful heading `causes of the problem'. Like a bad workman, the Minister blames his tools; the fault is everyone else's but the Labor Government's. He blames principally the lack of overseas markets or the fall in prices in overseas markets. It is true that they have some part in it, but many of the problems for rural Australia come from the inability of this Government to control the costs that rural Australia bears. It is for the Minister to dominate the difficulties, not to be dominated by them, as he is so obviously in this document. He blames everyone but himself and his Government for the sins that have been foisted upon us in rural Australia. The handicaps that one faces on the land really come from the actions of the trade union movement, because 80 per cent of all the costs on a farm come from off-farm sources. They are not generated by the way a property is managed and run; they come from goods and services that the farmer or grazier has to have to operate. Forty per cent of the cost of all those goods and services come from freight costs. The nonsense of a couple of weeks ago when the Transport Workers Union went on strike over no issue at all and held up the airlines resulted in an on-cost to the rural producer. We look in vain for any realistic economic assessment of what is going on from the statement from Minister Kerin. All we get is some very muddled thinking about overseas markets and tariffs. We find in it the typical approach of the Labor Party of putting up all its sacred cows, such as the over-valued dollar. It is not so very long ago that, under the Fraser Government, $US1.25 equalled the Australian dollar. Today, it is floating around the 70c mark. It is not correct for the Minister to claim that the Government, with its economic genius, has arrived at a true value for the dollar, not an over-valued figure. The figure of 70c has been set because that is all the money people overseas think our dollar is worth. They think it is worth nearly half what they thought the Fraser dollar was worth. The Minister went on with some statements about how it was a good float. The actual fact of the matter is that even at the 70c figure it is propped up through the Reserve Bank and is very much a dirty float. I turn to page 20 of the Minister's statement and the removal of the proposal to quarantine farm losses, something which has had an enormous impact on the rural community. It was an iniquitous move of the Government to think it could ever bring that proposal in and isolate one section of Australia's commerce. It does not matter what other field of commercial activity one is engaged in, such as running a brickworks or a pie shop, one can transfer losses from one business venture to another. There is something about rural activities that led the Government to move against their sacred cow and say it was bad. Fortunately, it now seems to have backed off, but it has backed off in a very ambivalent way. I quote from page 20 of the Minister's statement: The Government has reviewed the matter, and in the light of some potential inequities, has decided not to proceed with this measure but to pursue an alternative approach. This Parliament has never been told what that alternative approach will be, but I think the presumption can be made that the Government will use some smart lawyer trick to try to get to the same objective by slightly different means. I turn to the selling Australia's rural products. There was some praise on page 24 for what I presume was the last trip overseas of the Minister for Trade, Mr Dawkins. Let me just put this matter in perspective. I lived in Europe for a long while and I saw generations of Australian politicians and public servants trying to sell agricultural produce in that milieu before the Common Market came into being. They came as raw boys from the bush. They did not sell very much at all. I think there has been an improvement in the approach of Australian authorities to Europe, but when Mr Dawkins came along we had a total relapse back to the worst of the wild colonial boy days. Mr Dawkins was in Europe shouting and screaming, saying to the Europeans: `Why don't you dismantle the common agricultural policy? Why won't you buy our produce?' I do not think a product can be sold with rudeness. I do not think products can be sold in a rush. If people such as Mr Dawkins are chosen as the agents of this Government to represent Australia abroad, we will simply lose the markets we have at present, let alone develop new ones. One cannot operate in the way Mr Dawkins operated on his last trip to Europe. This is a symptom of a larger issue involving this Government. As Senator Collard said, we get nearly 40 per cent of our export earnings from primary production and the maintenance and development of those markets is crucially important to us. We have competitors and those competitors are the European Common Market and the United States. It is a fair comment to say that this Government does not understand what it is up against. It does not understand what is involved in the common agricultural policy in Europe. It does not understand what is involved in the United States Farm Bill. We have to be efficient to compete with those subsidising nations overseas, because they are going to go on producing. There is nothing we can do to stop them. So what we have to do is cut back the union demands which I was talking about before and which amount to 80 per cent of the costs that a farmer has to meet in producing his product. We have to get the cost of production as competitive as we can. For the information of the Senate, I wish to put a couple of points about the common agricultural policy and the United States Farm Bill. This year alone Britain is spending #2.2 billion on its farm bill-that is $4.4 billion in price support for its farmers. That is almost twice the farmers' own income. That is reflected right across the board of the common agricultural policy. That policy is directed to producing in quantity, not in quality. Farmers do not try to improve the grades of anything they produce; they just go for bulk numbers because they are being paid per unit of production, whatever that is. The Common Market does not look at things that it is short of. It has chronic shortages of products such as timber. If it is going to subsidise agriculture it should be looking at developing a timber industry to overcome some of its importing needs. It also does a whole lot of illogical things, such as paying a great deal of money to produce milk and then spending even more money on buying electricity to boil the water out of the milk and create a mountain of even more highly expensive skim milk. The illogicalities really do not matter because the cost per average citizen in the Common Market is very low. I think the figure-I could be wrong-is about $35 a year. What it costs the average person under the common agricultural policy is peanuts. However illogical, however unfair and however unreasonable it may be, it is just a fact of the market-place, and we have to get in there and compete against it. What do we do? We send someone such as Mr Dawkins to carry on like a spoiled child who has lost his teddy. The United States Farm Bill is another matter of very great significance to us. It was passed in the latter part of last year and signed into law by the President in December 1985. It will run for five years, but in its first three years $US52 billion will be provided to rural producers in the United States. That is almost as much in handouts over three years as our entire Federal Budget for one year. In private conversations I had with senior people in the Department of Agriculture in Washington this year the view of public servants at a senior level is that the realistic figure will not be $US52 billion but will amount to at least $US74 billion or $US75 billion over those three years. What has the Australian Government done? It has sent the Prime Minister away this week to try to negotiate our way out of the position of conflict with the United States agricultural juggernaut that we are facing. That is too little, and it is too late. The United States State Department representatives both in Canberra and in the consulates around Australia were telling people in Australia who were prepared to listen quite publicly that this Bill would be introduced through last year. It was introduced to help the US farmers as a counter to the subsidies coming from the common agricultural policy. There was no secrecy, least of all there was no ambush, in what the United States was going to do. It told everyone what it intended to do. But this Government, which is responsible for our management and welfare, did not do a damn thing about it. It took no notice. It did not perhaps understand that what was being said to it was a matter of vital importance to us, as 40 per cent of our exports are now at risk because of the inability and incompetence of the Hawke Labor Government. When the Bill was signed into law by the President in December there was a great flurry of activity in the embassy in Washington. Agricultural people from the Australian Department of Foreign Affairs talked to the Americans. There was a general running around. But it has now reached the level at which one cannot do a thing through the normal diplomatic channels. It has reached such a level that only the Prime Minister can cope with it. However what the President can do now that the Bill has been signed into law is very limited. He simply has no flexibility in this matter. The Prime Minister should have been talking directly to the President before the Bill hit Congress and when the Bill hit Congress. Now he goes there as a stained Prime Minister who yesterday wanted to have two bob each way, and who would not support the Americans in their foreign policy. What sort of hearing will he get when he goes to Washington? Senator Boswell —Very short. Senator MacGIBBON —Very short. That is quite right. In conclusion, this statement is a cynical exercise by the Government. The Government just does not care about rural Australia. It has done its sums and it knows very well that it cannot win one more seat in the country areas. It is a simple mercenary exercise. This is very sad because, as I said earlier, 40 per cent of our export earnings are involved in rural production. The Government has put us in a debt position that has never before been equalled in the history of this country. Our capacity to service that debt is diminishing day by day. As I think of Mr Kerin and Mr Hawke, the words of Lawson come back to me. They fit very well in the case of both Kerin and Hawke. Lawson wrote: You'd better stick to Sydney and make merry with the push. For the bush will never suit you and you'll never suit the bush. Senator BOSWELL(Queensland)(6.13) —I rise to support the amendment that has been moved by my colleague the Leader of the National Party of Australia, Senator Collard. I say to the Senate that, since the Australian Labor Party came to office barely three years ago, it has ripped $442m from the primary industries of Australia. In a pathetic attempt to win back some lost ground, the Minister for Primary Industry, Mr Kerin, produced a 43-page document full of Labor Party rhetoric, telling the farmers what was the cause of the problem. I can tell Mr Kerin that everyone involved in primary industry knows the cause of the problem. The Labor Party has been the cause of the problem for three years, during which time it has removed $442m from the pockets of the farmers of Australia. The farmers of Australia are reacting. Honourable senators will have seen their reaction. They will march tomorrow. They were marching last week, and they will go all out throughout Australia. Senator Grimes laughs about the plight of the rural industry. He sits there and laughs about the farmers who are going broke. We are not laughing about them. We are concerned about the farmers. Since the May mini-budget in 1983, 43 benefits have been removed. Four pages of benefits have been taken from the farmers that have cost $442m. We have seen so many broken promises. I refer to the broken promises on capital gains, fringe benefits and water. The list goes on and on. Probably the worst broken promise of all is the one that I want to talk about tonight-the broken promise to the sugar industry of Australia. Three years ago, in 1983, the Labor Party promised a price support scheme. In 1984 the Prime Minister stated: I undertake on behalf of the Federal Government, to you and to the industry, that we will undertake the financial commitment to assist you on the basis that the review-which is accelerated as a result of co-operation with the State Government-move towards drawing up an overall package which is going to result in a strong and viable industry. That is typical Hawke doublespeak. The rural package is a sell-out to the sugar industry. Farmers have been waiting for three years to get some measure of help from this Federal Government. What have they seen? Let us examine this package that has been presented. Over the past three years the Federal Government has put in a lousy $15m. All we have heard from the Labor Party is that the Queensland Government will not co-operate, or that the Premier will not co-operate. But let us find out what the Premier and the Queensland Government have done. The Queensland Government has put in $72m compared with the Federal Government's lousy $15m. It should be noted that the Federal Labor Government receives $60m in excise from the rum industry alone. So it could well afford to support the sugar industry. If we examine the sugar package, it is the greatest doublecross since Judas Iscariot took his 30 pieces of silver. In the latest package, this package which has been presented, $54m is allocated to the sugar industry to support a price scheme of $230, $225 and $220 a tonne for the years 1985, 1986 and 1987. Today the price of sugar on the London market was approximately $223 a tonne and rising. Under the package that was brought down yesterday the Government will have to outlay only $17m of the $54m to support the 1985 price of $230 a tonne. So let us look at the situation now. The Government's promise of $150m to the sugar industry has been reduced in the package to $100m. We then see that price support now is reduced to $63m which is made up of $17m price support and $46m rural adjustment. It is a commitment of $63m over a three-year period. The Government is getting $60m a year from excise on rum. If that is not a sell-out to the sugar industry, I do not know what is. It is a Clayton's offer and once again proves that Labor Party promises to rural Australia are not worth the paper they are written on. Mr Kerin has no integrity and Mr Hawke is a trickster. All sections of the Queensland industry are in agreement with the Queensland Government proposal on sugar. The sugar industry on 6 March this year moved a motion stating that price support was a Federal government responsibility. All sections of the industry-millers and growers-agreed with the Queensland Government's proposal. They know that Queensland has the runs on the board. It has already put in $72m compared with $15m of Federal funds. It has promised another $170m over the next three years, including $50m in direct grants. What has the Federal Government put in? It has put in $63m over three years. The sugarcane farmers of Queensland will rise up and wipe the Labor Party out of north Queensland. The Bjelke- Petersen Government has given a total commitment to the sugarcane growers of Queensland. Senator McKiernan —Let him put his money where his mouth is. Senator BOSWELL —He has put his money where his mouth is. The Federal Government's mouth is open to the tune of $15m at the moment, and his Government has put in $72m. Government senators may laugh about it, but they will not be laughing too hard when the Australian Labor Party is wiped out of Leichhardt and Herbert and loses all its State seats in northern Queensland. Let us see how they laugh then because the sugar cane farmers are not so susceptible that they will fall for this nonsense. I predict now that the ALP will lose the north Queensland seat of Leichhardt. Mr Gayler, the member, has not fought for the Queensland industry or, if he has, he is a lightweight and he has been ignored. He can pack his bags because he is gone. The member for Herbert, Mr Lindsay, has not been worth two bob to north Queensland and he will go too. Senator Reynolds will be the lone Federal Labor voice in north Queensland after the next election. I suggest that since she has been in the Federal Parliament she has been so busy attacking the Queensland Government that she has not been performing her duties. She has not ensured that the people of north Queensland have received the appropriate slice of the Federal Government cake. I suggest that Senator Reynolds refer this disastrous sugar package to the Human Rights Commission for a report on broken promises, seeing that she is so ready to refer everything that happens in Queensland to the Human Rights Commission. She should put this matter before the Commission, together with a number of other broken promises that the Labor Government has made to the rural industries of Australia. Senator KILGARIFF(Northern Territory)(6.22) —In making this response to the Federal Government's economic and rural policy which was unveiled yesterday by the Minister for Primary Industry (Mr Kerin), I wish to address briefly its impact on the Northern Territory. As my colleagues have pointed out throughout this debate, the crisis in the rural sector is having an impact all over Australia. Not only are the people on the land contending with soaring interest rates-and as we know, in many cases these are more than 20 per cent-the loss of international markets and high wage costs, but they are also now facing an increasingly severe drought. When the present Government came to power much was made of the fact that its election coincided with the breaking of the last drought. It was light-heartedly suggested by some commentators that the Prime Minister, Mr Hawke, himself was somehow responsible for the end of the drought. Senator Grimes —What do you mean by `somehow'? Senator KILGARIFF —As Senator Grimes has indicated, I believe that there are some people within the Australian Labor Party who took this claim seriously. As one who did not subscribe to that theory, I am not in any position to hold the Prime Minister responsible for the present drought. I accept that this is a natural phenomenon over which none of us has any control. However, even if the drought is beyond the control of the Prime Minister or his Government, it is within the capacity of that Government to do something to help those whose livelihoods are threatened by this disaster, as well as by the other factors which are having such a detrimental effect on the rural sector. Unfortunately, the package unveiled yesterday has failed to provide that much hoped for assistance. Reference has already been made to the reaction of the National Farmers Federation to the package. The NFF has bucketed the proposals as not providing any real relief and surely it is the organisation to judge. The disappointment with the rural package expressed by the NFF reflects the feeling of people on the land, and those who make their livelihood on the land in the Northern Territory are no exception. I speak particularly of the area in outback Australia. Central Australia is again in the grip of drought with, at last count, 51 properties being declared as drought-affected. Two of these properties are in the Victoria River region, 11 in the Barkly Tablelands and 38 in the Alice Springs region. In 1984-85 the cattle turn-off in the Alice Springs pastoral district alone was some 117,046, close to a third of the total cattle population. Drought assistance is being provided by the Northern Territory Government and many more applications for assistance are being assessed. The Northern Territory branch of the Cattlemen's Association has been fighting very hard for recognition of the drought-affected areas around Alice Springs, the centre of Australia. The Northern Territory Government has recently extended the same provisions to Alice Springs as previously applied to the rest of the Territory. There has been a recognition of the seriousness of the problem in the Territory. Yet, if yesterday's package is anything to go by, the Federal Government is not equally prepared to recognise the facts. I have been out in the drought areas during the past two weeks and some of those areas have not received rain for some two years and four months. That is a very serious situation. The only benefit to the graziers of the Northern Territory contained in the package is that the brucellosis and tuberculosis eradication campaign component of the livestock slaughter levy will be reduced by $1 from $4 to $3. This will represent a saving to the industry of about $6m per annum. While the cattlemen would welcome that, even the Minister acknowledges that this is only returning to the industry its own money. It is also important to bear in mind that the BTEC scheme has been quite successful and it would be expected anyhow that it would begin to wind down shortly, thus less money would be needed to fund the scheme in any case. That is not much of a sacrifice for the Federal Government and the Treasury. Yet the Minister is patting himself on the back for coming up with this `generous' arrangement. The other potentially beneficial aspect of the package is the amendment of section 36aaa of the Tax Assessment Act which will permit profit from the sale or destruction of animals for BTEC purposes to be offset on a herd for herd basis and to be assessed as income over 10 years. The present situation requires that restocking be undertaken within five years. With the exception of these two matters, there is little in the package for the graziers in outback Australia. Tariff concessions apply only to agriculturalists, such as wheat producers, and good luck to them too. It does not extend to the pastoralists or graziers in the outback. The big impact upon farm profitability which the Government claims this package will have will just not occur. The package will have little impact. If the Government is serious about assisting the men and women who are presently struggling to stay on the land and produce the products that are so vital to Australia's economy, I respectfully suggest that it might start by abandoning its proposed capital gains tax. As a next step, in view of the economic difficulties presently faced by pastoralists who, as a result of the drought, are being forced to sell off large amounts of stock-and we have had some discussion on this matter this evening-the Government should move to reinstate all the provisions of the income equalisation scheme which used to operate to reduce the impact of this sort of situation. We have heard tonight that this used to be in being but it has been withdrawn. Pastoralists who are forced to sell off this stock naturally generate uncharacteristically high incomes in those years when they actually sell. We have seen this over the past two years. Under the old income equalisation scheme the pastoralist was able to set the money from the sale of stock aside and draw upon it in subsequent years when his income was far lower as a result of his having sold off his income generating capacity because of the drought. Tax was not payable on the income in the year of the sale of the stock, but was spread out over the following years and paid on the money as it was withdrawn and utilised to support the pastoralist and eventually, when things began to look up, to restock the property. This meant that the tax burden on the pastoralist was reduced at a particularly difficult time. Of course, tax still had to be paid. There was no question of avoidance of tax liability. The scheme was a sensible means by which the man on the land could be assisted in times of economic difficulty. Not only did it assist the man on the land, but it was also of assistance to the nation. Yet the Labor Party did away with the scheme when it came to government. If the Government's rationale was that the drought had broken and the legislation was no longer required, then I suggest that, in view of the fact that the drought is back, the time has come to reintroduce the scheme. At least it allowed pastoralists to get back on their feet once the worst of the drought had passed. Unless the scheme is reintroduced, there is a risk that this time round pastoralists may have no means by which to pull themselves out of the hole which is created by the drought. They will simply be forced to walk away from the land. That is already happening in the eastern States, particularly on smaller properties. According to the National Australia Bank's study earlier this month, 7 per cent of farmers will find it difficult to survive in the short term and 20 per cent can be expected to be in difficulties in the longer term. The fact is that we are in the hands of `old man drought' and this is affecting all States of Australia. In addition to assisting those farmers who are already in difficulties, the Federal Government must take action to assist those who could and will fall victim to the drought which is settling on this country. An income equalisation scheme is essential if pastoralists and other primary producers are to weather the storm. I urge the Government to reintroduce such a scheme immediately. As I have said before, while this scheme would help the man on the land, it would also help the Government and the nation in the long run. I believe that it is most necessary that this scheme be reintroduced. I am interested also in the development of rural banks in Australia, including the Victorian Rural Bank. The Commonwealth and State governments have rural banks. The Northern Territory at present does not have a rural bank, but I would like to see one encouraged by the Northern Territory Government because I believe that rural banks have a responsibility to the people on the land, particularly in times of drought. The many schemes which are available now for assistance to the man on the land should be gathered into one group under a rural bank. This package does not offer much hope, but I believe that there is scope for the Federal Government to take more action because there are ways and means of helping farmers and pastoralists. I hope that the Federal Government, having been told by the National Farmers Federation that the package is not sufficient, will now take real and effective measures to do something to help the man on the land. This paper obviously has not gone far enough, but many thoughts have been put forward in this debate in the interests of all and I hope that something will be gathered out of this debate and put into practice by the Federal Government. I again go back to my suggestion that the income equalisation scheme which was operating, and I believe operating well, should be reintroduced. I believe that all honourable senators believe that the rural industry is, and has been for many decades, the real heart of Australia on which our future prosperity is dependent. Senator REYNOLDS(Queensland)(6.33) —I acknowledge the positive contribution of Senator Kilgariff. While Senator Kilgariff was very positive, we found that Senator Boswell had absolutely nothing to contribute. All he had to say was negative, negative, negative. That is appropriate for the Queensland members of the National Party of Australia. Senator Boswell's Party, which cannot come up with anything positive for the rural sector, dares to send representatives into this place-few as they are-and all they can do is stand up and carp and complain about this extensive package. If Senator Boswell is prepared to come back into this place-I note that he has run away-and say that the National Party will vote against this package and will not allow any of these positive proposals to go through, the people listening might consider that Senator Boswell is prepared to put his money where his mouth is. I appreciate that it does not matter what the Government does because there will be groups in the community-interest groups and lobby groups-which will say, as Senator Kilgariff did, that the Government's package on this or any other issue does not go far enough. That is the job of lobby groups; to make their demands and to put forward the issues of concern to the people they represent. I support their democratic right to do that, but not to just dismiss this entire document of some 15 chapters of commitment to the rural sector and say: `Take it, we do not want anything to do with it. Take back in excess of $200m and give it to someone else; provincial Australia is not interested'. That is totally unrealistic and simply demonstrates that the National Party is no longer committed to rural Australia. I am not the only person who believes that the National Party, especially in Queensland, no longer represents the interest of the rural sector. I should know because I spend more time than many people on the other side in rural Queensland. Honourable senators should remember that my only colleague on the other side who bothers to live in rural Queensland is Senator Collard. Senator Bjelke-Petersen and Senator Boswell spend most of their time in Brisbane; their offices are in Brisbane. Senator Bjelke-Petersen —I live in rural Queensland. Senator REYNOLDS —Where is the honourable senator's office? If she is so concerned about the rural sector in Queensland why does she not have an office in Kingaroy, out there in rural Australia where she is needed? I next come to the views of the people in rural Queensland in regard to the Queensland National Party. I refer to a document prepared by the James Cook University entitled `Sugar People Take a Caning-A report on the impact of the decline of the sugar industry on families in the Mulgrave Shire, North Queensland'. I have quoted from this document previously in this place, but it seems that I have to repeat it again and again to get the message through to the Queensland National Party that it is not communicating with the rural people in that State. Senator Sheil —Who represents Mulgrave? The National Party. Senator REYNOLDS —I wonder who will represent Mulgrave next time. Senator Sheil was not there when the Queensland Premier was virtually run out of Babinda and Innisfail. Mr Turner, who has been forced to resign because he has not been able to implement sensible policies to rescue the sugar industry, had to come to the rescue of the Premier because he was almost drummed out of the meeting. I come back to the quote from the report, which comes through again and again. It states: `Joh should try to get along better with the federal government' . . . `Unless extra money comes from somewhere we won't survive'. Again and again through this report comes the message that Queensland people, especially in the rural sector, are fed up with the Queensland National Party not representing their interests. I refer to some of the recommendations and conclusions in relation to the Queensland Government. Senator Boswell is always quick to say that the Federal Government does nothing, even though there is this document. I guess Senator Boswell would not bother to read it-if indeed he can read as extensive a document as this. Let us look at the recommendations of this report which were directed to the Queensland Government and let the members of the Queensland National Party tell me what the Queensland Government is prepared to do in response to these recommendations. The first recommendation states, in relation to the Queensland Government: Use the powers of the Sugar Board and the Central Sugar Cane Prices Board, to control the production of sugar in accord with advice from the ``Sugar Industry Social and Economic Research and Information Service''. Co-ordinate reductions in sugar production with the Commonwealth scheme to subsidise canegrowers . . . Subsidise interest payments on loans to canegrowers experiencing financial difficulties . . . Subsidise interest payments on loans to sugar milling enterprises . . . Subsidise interest payments on loans to small businesses . . . Grant concessional railway freight rates on the transport of raw sugar. Grant concessional railway freight rates for canegrowers on cargo related to sugar production. Extend increased service to canegrowers through the Queensland Department of Primary Industries . . . I do not hear anything from the Queensland National Party that indicates that it is listening to recommendations such as those. In fact, all I hear in this place and in Queensland is consistent, carping criticism against the Federal Government. The Federal Hawke Labor Government is the first government to be prepared to set down a comprehensive policy for rural and provincial Australia. Let no one on the opposite side of this chamber forget that fact. Do not come into this place and pretend that this is something that does not count, that this has all happened before. This is a very historic document, but I do not suppose that many honourable senators on the other side of this place have much of a sense of history. Senator Robertson —Because they have not read it; they have only had material prepared for them. Senator REYNOLDS —They have not bothered to read it and they do not want to recognise and acknowledge-which at least Senator Kilgariff was prepared to do-that this document is important in making a start in ways that have never been considered by a Federal government before. It is quite disgraceful that members of Parliament who pretend to represent rural Australia-they call themselves the National Party-attempt to say that they are the only people who can represent rural Australia. They have never come up with a document such as this. They have never been prepared to put forward genuine policies for rural and provincial Australia. I come next to an issue that I am particularly interested in-the role of rural women. Of course, this document recognises rural women. We heard from Senator Boswell in Question Time today that a $100,000 grant scheme was nothing-it was peanuts, if I may be forgiven for the expression-and that rural women did not want $100,000 to help them develop particular programs. I remind Senator Boswell that in 1985, the year of the family, when we had in Queensland a great campaign about how important families were, the Queensland Government, from memory, put up only something like $20,000 for all families in Queensland. Here we are with five times that amount to recognise the needs of rural women, and Senator Boswell comes into this place and says that it is not enough, that they do not want anything to do with it. Has the Queensland Government got a women's policy? No. Has the Queensland Government got any plans to assist rural women? No. Many people in this place would not be aware that almost every mainland government in this country has an Office of the Status of Women under the Department of the Prime Minister and Cabinet-but not in Queensland, because Queensland treats its animals better than it treats women. When I spoke recently at a rural women's conference in Mount Isa, the women were absolutely horrified to find that in every other mainland State the State Government has introduced a toll-free telephone line for rural women to have direct access to the women's policy co-ordination unit to get information about education, health, employment, law, et cetera. This has been provided for every state except Queensland. Senator Boswell —That is a Federal thing. If you are going to have a toll-free telephone, it has to come from the Commonwealth Government, you donkey. Senator REYNOLDS —Oh, Senator Boswell, who pays for it? The DEPUTY PRESIDENT —Order! There are too many interjections from my left. Senator REYNOLDS —I say to all those rural women in Queensland that I suggest that, if they really imagine that the National Party Government represents them in rural Queensland, they should make very strong and immediate representations about two things in Queensland: First, recognition of the fact that 51 per cent of the population in Queensland are women; secondly, that there is no women's policy, and no women's programs. All we have is Yvonne Chapman, and the Minister for Welfare Services, harassing single mothers. Senator Boswell —And 80 per cent of the people support her in Queensland. Senator REYNOLDS —I will tell Senator Bos- well something else about 80 per cent, if he really wants to quote that figure. If the honourable senator remembers, 80 per cent was a figure that he was not so proud of last year when the Queensland National Party ordered the seizure of 33,000 medical files from fertility control clinics. Eighty per cent of Queenslanders condemned those raids, so the honourable senator should not quote 80 per cent to me because it seems that he is very selective in using the figure of 80 per cent. In conclusion, I would like to know when the Queensland National Party will develop policies for the rural sector and for women, particularly for rural women. Senator Boswell —If you go to north Queensland you will be gone. Senator REYNOLDS —As Senator Boswell is so interested in north Queensland, I ask him: When is the Premier going to respond to north Queensland's demands to hold a referendum in regard to a separate State in Queensland? Senator Boswell is keen to represent and speak on behalf of north Queensland, but I do not notice any particular policies in relation to north Queensland, and I do not notice his Premier ever-- Senator Boswell —They are looking after the sugar industry. That is the number one priority. That is our policy. The DEPUTY PRESIDENT —Senator Boswell, you are interjecting far too much. Senator REYNOLDS —Thank you, Mr Deputy President. I am glad that you are able to acknowledge the common sense that is spoken in this chamber. I ask Senator Boswell: If the Queensland National Party is so committed- The DEPUTY PRESIDENT —Senator Reynolds, do not ask Senator Boswell questions, he might reply to them. Senator REYNOLDS —I ask through the Chair for the Queensland National Party to consider this: If the sugar industry is its number one priority; why has it taken since last September to even start to talk sense about what should be done in terms of agreeing to the Federal Government's proposal? Senator SHORT(Victoria)(6.48) —I rise to support my Liberal-National Party colleagues. I strongly support the Opposition's motion of concern at the irrational, illogical, piecemeal and overall unhelpful package of so-called rural measures announced yesterday by the Minister for Primary Industry (Mr Kerin). Let there be no mistake about what the Government has done with this package. It has disgracefully and quite untruthfully absolved itself from any blame for the grave problems being suffered by many rural industries in Australia. It has shown an arrogance towards, and a lack of concern for Australia's rural sector and its people. It has completely ignored the fundamental causes of the problem facing the rural sector, problems I might say that are common to all sectors of Australian industry and economic activity. I will illustrate some of these criticisms, but first let me point out just how small in actual volume the package is. The package represents an increase in government expenditure of less than $110m, and $35m of that is to be spread over 10 to 15 years. That increased expenditure compares with an amount of $442m which this Hawke Government has taken away from the rural sector over the three years that it has been in office. As far as being a positive contributor to the rural sector over its period of office, the Hawke Government has been a very significant taker away from the rural sector. Senator Brownhill —An amount of $442m. Senator SHORT —As Senator Brownhill has said, it has taken away $442m. I understand that later in the debate Senator Brownhill will be following up this matter. In addition to that $108m, the Government is claiming credit for another $65m which results from its decision to reverse its earlier decision on the tax quarantining of farm losses. That $65m should not be included in the package at all because it is not something that was in place anyway. We on this side of the House welcome the decision on the quarantining of farm losses. Senator Brownhill —But Senator Walsh said today that he might be doing a bit more with it. Senator SHORT —One cannot tell with Senator Walsh and one cannot tell with the Government of today because what it does one day is contrary to what it has said on the preceding day. That is symptomatic of the very grave splits within the Hawke Government in regard to the whole area of economic policy. Senator Zakharov —Ha, ha! Senator SHORT —If Senator Zakharov doubts that, I commend to her the totally conflicting statements of Senator Walsh and Mr Kerin in relation to this aspect of the rural policy. As I said, the Opposition welcomes the decision not to go ahead with the quarantining of farm losses. However, it is quite wrong for the Government to say that it has given the rural sector something in that regard. In other words, the package is very small indeed. The benefits it will provide to the average farmer are minuscule. The Government has absolved itself of any blame for the present rural crisis. The Minister said in his statement: The simple fact is that adverse world market trends are the reason for the failure of the farm sector to share fully in Australia's general economic growth. He also said: Our overall economic policies cannot be blamed-- He said also: World prices are the problem. He said: The problem is not high rural debt levels- These statements simply are not true. The problem is not just related to adverse world market trends. The problem is a vicious cost-price squeeze on farmers with the cost factor being much more important than the price factor. The cost-price squeeze is due almost solely to the policies of this Government. It is due to a blind adherence to a wage fixing system which has no flexibility and which takes no account of the capacity of the economy to pay. This is despite a situation in which for climatic and other reasons, including Government policies, the real income of the rural sector of this country, which provides 40 per cent of Australia's total exports and which, therefore, is a vital part of the overall funding of our economy, has fallen dramatically over each of the last two years. The Government has imposed taxes and charges which are at the highest level in our history. Borrowings by the Federal Government mean that every man, woman and child in this nation has an individual personal debt of $7,000. Many of those borrowings have been made to prop up the Australian dollar. The Australian dollar needs propping up because, quite frankly, the rest of the world has lost confidence in Australia and in the value of our currency. Because of the economic and foreign policies of the Hawke Government, Australia's reputation around the world as a reliable supplier of exports, as a safe haven for investment, as a growth economy and as a country in which to invest money, despite the very high borrowings and capital inflow, has been very sadly and very damagingly eroded. It has been damaged by the economic and foreign policies of this Government. Those borrowings, both domestic and foreign, have pushed real interest rates in Australia to their highest level in at least 60 years. However, Mr Kerin says that the high debt burden is not a problem today in Australian rural economies. What absolute nonsense! The wage burden, the interest rate burden, the tax burden and the government charges burden are all a result of this Government's economic policies. For the Minister to say on behalf of the Hawke Government that the economic policies of this Government have not caused any problems for the rural sector is a statement which every rural producer knows is untrue. Any person with half an ounce of nous in terms of following what is going on in this country knows that that is not true. The matters that concern the rural sector are the basic, fundamental problems facing the Australian economy, an economy which is suffering an inflation rate twice that of the rest of the Western world and which has a current account deficit in its balance of payments of $13 billion to $14 billion a year. As I said, the wages policies are completely inflexible and take no account of capacity to pay. These are the matters that concern the rural sector. These are the matters that the Government should have addressed if it were serious about assisting the rural sector. The rural sector is not looking for handouts. It has said from day one that it is not looking for handouts. What it is looking for is a government which will take account of the fundamental problems and tackle them in the long term interests of this country. The Government has totally ignored this in its latest statement. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator CHANEY(Western Australia-Leader of the Opposition)(6.57) —I move: That the Senate take note of the paper. There is no time this evening to debate this very important report on the state of the automotive industry. I have moved a motion tonight for the Senate to take note of the paper so that the matter may be maintained on the Notice Paper, thus providing an opportunity for us to debate it at a later time. I note that the report details the negative factors which face the industry at the moment, including the fringe benefits tax on company vehicles. To that extent it reflects some of the concerns expressed by the Opposition. Therefore, I look forward to an early debate on this key Australian industry. I seek leave to continue my remarks later. Leave granted; debate adjourned. The Acting Clerk-Pursuant to standing order 36aa, I inform the Senate that I have received the following notice of motion from Senator Hill: That the following matters be referred to the Standing Committee on Constitutional and Legal Affairs- (a) the role of the Parliament in relation to the Ministerial Council for Companies and Securities and the National Companies and Securities Commission; and (b) the role of the Parliament in relation to the operation and effectiveness of companies and securities legislation. Motion (by Senator Grimes) proposed: That the Senate do now adjourn. Senator KILGARIFF(Northern Territory)(6.59) —This week the Prime Minister (Mr Hawke), together with the Premiers of the States and the Chief Minister of the Northern Territory, launched the first phase of a $100m three-year campaign to combat drug abuse. I feel sure that all honourable senators would agree that something must be done to rid Australia of the menace of the drug threat. I certainly hope that the campaign will be made meaningful and will not be just another gabfest to impress the unwary. The drug problem is one which I have mentioned in this place on other occasions. More usually it is in the context of preventive measures for the north to stop drug runners bringing in their lethal merchandise in the first place. I stand by my earlier calls for increased northern coastal surveillance, which would make life more difficult for drug runners bringing in narcotics from Asia. The hard drug problem is not as severe in the Northern Territory as it is in some of the eastern States. However, the Territory has its own particular drug problem, with a higher alcohol consumption rate than the Australian average and with problems such as petrol sniffing in some of the Aboriginal communities. The Select Committee on Volatile Substance Fumes has looked into that aspect and it has now reported. These problems are, of course, of great concern to health workers in the Northern Territory. We are fortunate to have the Northern Territory Drug and Alcohol Bureau, which is researching these problems and looking at ways of reducing them. Recently the Northern Territory Drug and Alcohol Bureau turned its attention to another potential drug threat in the Territory. That threat is a substance called kava and it is this matter which I wish to deal with briefly this evening. At the outset, I should make clear that there is a good deal of disagreement over the impact of the substance on those who use it. There are some who maintain that it does users no damage, while there are other conflicting reports which indicate that it is having a detrimental effect upon users and the Aboriginal communities to which they belong. Kava is prepared from the plant piper methysticum forst, a tropical shrub of the family piperracea-pepper. The generic name piper comes from the Latin for pepper and the species name methysticum comes from a Greek word meaning intoxicant. The plant has thus become known as the intoxicating pepper. The plant grows naturally throughout Melanesia, Polynesia and Micronesia and it is cultivated for domestic use on many of the islands. The plant is prepared as a beverage either by chewing, grating or pounding of the flesh root until it is fine and fibrous, then soaking the chewed or shredded root in water, which is strained and then drunk. Alternatively, the root and other plant matter is dried and pulverised. The powder is then wrapped in cloth and infused in water, much like a giant tea bag. This is the most common method of preparation today, and in several countries the powder is produced commercially and sold in small bags. I will discuss that in a moment. With both methods, the beverage is usually mixed in a large bowl and shared by a group of drinkers using a single cup. As to the pharmacological qualities of the drink, the results of extensive animal studies have shown the major pharmacological actions of kava are, firstly, mild, centrally acting relaxant properties which induce generalised muscle relaxation and ultimately a deep natural sleep, and, secondly, local anaesthetic properties which are experienced as a numbing of the mucous membranes of the mouth and tongue when the beverage is drunk. While these descriptions certainly do not represent the substance as a dangerous hard drug, there is increasing evidence that since its introduction into the Northern Territory some years ago, kava, in certain Aboriginal communities in the Arnhem Land, is having a highly detrimental effect upon the people in those communities. The matter is one which has been under much investigation by the Northern Territory Drug and Alcohol Bureau and it has long been a concern of the Uniting Church in the Territory. Indeed, the Uniting Church has produced an extensive report on the problem. I feel that this report could be most valuable to any person with an interest in the matter. This particular report on the use of kava by Aboriginals in Arnhem Land was prepared by the Board of Church and Community for the Standing Committee of the Northern Synod of the Uniting Church. It has given permission that this report be made public. Therefore, I seek leave to have the paper tabled. Leave granted. Senator KILGARIFF —I have requested that this report be tabled because I believe it is too long and too comprehensive to have incorporated in Hansard. However, I hope that interested senators will avail themselves of it. Honourable senators are no doubt familiar with the alcohol and petrol sniffing problems of Aboriginal people because, as I said before, this problem has been highlighted in the Senate over this last year. Senator Button —A lot of alcohol sniffing goes on over there too. Senator KILGARIFF —It seems to have some effect at times, too, as does petrol sniffing. As I have indicated, in some communities the problems of petrol sniffing are extreme. By comparison, I suppose, kava seems a fairly innocuous substance. Indeed, I believe there are those who feel that, as the lesser of two evils, perhaps it should be ignored. However, even though kava does not induce the violent and aggressive behaviour often associated with alcohol abuse, there are problems associated with its use. To begin with, it costs money, and the money used is that which would otherwise have been spent by communities on food, clothing or some other essential items. It also seems that there may be some racketeering going on in the sale of kava, with Sydney and Canberra sources making large profits at the expense of Aboriginal people. In Galuwinku I have been told that kava is referred to as a million dollar industry. It is rather amazing to see that the sale of kava in Arnhem Land has grown to such huge proportions that it really is a million dollar industry. I believe there are people in Sydney and Canberra who are taking a huge rake-off from the sale of kava to the Aboriginal people. When one sees small plastic packets of kava which are sold at something like $10 to $20 a packet and when one sees people purchasing kava by the carton-perhaps 16 to 20 plastic bags to a carton-one can understand the immense amount of money that is going out of a community and into kava. There is increasing evidence that the use of kava is having a detrimental effect upon Aboriginal children, with adults neglecting their children and preferring to sit around drinking kava. We have heard of this practice over in the islands of Java and such other places. The incidence of nutritional problems in children and the incidence of truancy in communities where kava has a foothold is considerably higher than in other communities because the adults would rather just sit around the kava bowl than look after their children. There is still a great amount of disagreement over the relative merits or otherwise of the substance. I believe that the Federal Government, together with the Northern Territory Government and perhaps Queensland, should look at examining the qualities of the beverage, its psychological effect upon the users and its social effects upon the people who use it in the Aboriginal communities in the more isolated areas such as Arnhem Land. To that end, I have approached the Federal Minister for Health (Dr Blewett) and the Minister for Aboriginal Affairs (Mr Holding) as well as the Northern Territory Government. The responses I have received indicate that there is a belief that this matter should be monitored. I believe there is sufficient evidence which shows that governments should follow this matter up and I urge honourable senators to take an interest in this matter in order to ensure that no preventable damage to Aboriginal people is allowed to occur. Senator COONEY(Victoria)(7.08) —Last evening in the news service on the Canberra television station Channel 7 it was stated that at a meeting held yesterday at the new Parliament House I made a statement to the effect that the passing of the recent legislation relating to the Builders Labourers Federation was `a mistake'. I did attend a meeting of workers held at the site of the new Parliament House yesterday where I made an ex tempore address. Though it was an ex tempore address, I am confident that my recollection of what I said is accurate. I cannot recall the precise words I used but I said that I supported the Caucus decision in respect of the legislation, that it was proper for me as a politician associated with the legislation to go and see the consequences of it and that the legislation may set an unhappy precedent because unions and workers in general were put at risk in the future of having similar legislation passed against them. I did not say that the legislation was a mistake. The honourable member for Makin (Mr Duncan) in the other place attended the meeting with me. He delivered an address and according to my audience of that address and Mr Duncan's assurances to me, he did not say that the legislation was a mistake. Mr Duncan and I attended the meeting by invitation. We did not arrange it and we were able to stay a short time only as we both had another meeting to attend. Though I have raised this matter, I do not want to make a great issue of it. Of those reports of the meeting, the only one I know of in which I am identified, is the one I have referred to. At meetings which are public and in the open air it is no doubt difficult for reporters to apprehend everything with precision. However, I would like to correct any impression that in a public forum I stated that the Government's legislation was a mistake. Senator VIGOR(South Australia)(7.09) —I rise to address a matter which came to my notice because of the Report on the State of the Automotive Industry 1985 tabled today, which was written by the Automotive Industry Authority. This report is very welcome as it highlights some of the long-term problems which have bugged the Australian car industry for so long and it attempts to address these problems. The problems are not new. In particular, Australia's small local market does not provide economic manufacturing volumes, so our car industry has always required government props. It is the very availability of these props that has made the local industry sufficiently attractive to keep overseas manufacturing companies here. Over the years they have mopped up the indigenous manu- facturers so that now the Australian car manu- facturing industry is totally controlled by subsidiaries of overseas companies; and by too many of these overseas companies anyway. There are essentially three companies and the Government wants two. The total employment in the passenger vehicle and component parts industry has gone down from 1982 to 1985 and the imports of completely built up cars rose last year by 16 per cent, according to the report. The particular drawback is the disincentive to export in competition with the parent company of the operations in Australia and the tendency too look for compensatory handouts from the Australian taxpayer. The Government must solve this problem if Australia is to have a car industry that has a will to export. I see the first requirement for a successful car exporting industry as the will to export. I believe that we need to look for increasing control of parts of the industry at least by Australian interests and at getting this industry into Australian hands. To export successfully, Australian industry must compete on open world markets in terms of price, quality and design. Price has always been a hurdle for Australia with such a small domestic market. The only alternative is to offer sufficient advantages so that prices are no longer relevant. Other small countries have successfully built up car manufacturing enterprises. Volvo and Saab in Sweden are shining examples. The quality of the product makes them highly competitive on world markets. In order for us to establish an export car industry Australia needs, above all, a novel product. Innovation is the key to successful market penetration. No amount of compression of local manufacturers will succeed in exporting, unless they adopt a new design which is unique in world markets. The subsidiary companies of overseas manufacturers do little real research and development in Australia. If a subsidiary develops an innovative product, it is quickly exploited overseas. For export success we need to promote local innovative companies. I welcome the Government's promise of design grants to such enterprises. I now come to the reason why I have risen to speak in the adjournment debate. While investigating my speech on this report I rang the Sarich orbital engine company in Western Australia. We already have a very innovative product in the Sarich orbital engine. This engine has an efficiency advantage over conventional engines of 25 to 30 per cent. It is super light, super small and offers a cost advantage over equivalent engines of between $200 and $600 per car. Sarich Enterprises has also developed a fuel injection system which is able to reduce fuel usage in marine, industrial and car engines to less than half that of conventional systems. Its claim is a 50 per cent to 70 per cent saving. These designs are proven, tested in the most advanced laboratories in the world and ready to enter the market place. It amazes me that the Federal Government has not found its way clear to help establish a manufacturing plant for these products in Australia. Sarich Technologies Trust and Broken Hill Proprietary Co. Ltd are even now considering approaches from three overseas corporations seeking joint ventures to manufacture the Sarich engine overseas. One of the largest countries in the European Economic Community has directed its largest car manufacturer to approach Sarich with a view to incorporating his engine in its latest range of cars. I have it on good authority that Sarich Technologies Trust and BHP are almost certain to accept one of these joint venture offers in the next few weeks. So another Australian invention will be lost to overseas production unless we can find some way to keep such a venture within Australia. Once again, the difficulty for Sarich Technologies Trust and BHP is the requirement for a large initial investment. This will take a few years to get off the ground and it will be in competition with much heavier capital investment which will be out against them. It should be feasible to assist such an enterprise to get off the ground in Australia by offering a tax holiday or some such similar scheme for the first few years of its operation until export markets and contracts have been established. This is already on the way. To continue to pour taxpayer's money in at a rate of between $8,500 and $14,000 per worker per year, or around $100m a year, into supporting subsidiaries of overseas corporations with little will to export competitively is no solution for our car industry. The $100m to $150m in grants for research in design areas should not go solely to foreign-owned or controlled organisations because of the conflict of interest that I raised earlier. Technology transfer must be controlled so that Australia gets the benefit of Australian investment in education, research and development. I am also pleased to note the Government's intention to try to control transfer pricing and duty evasion by certain of the large car manufacturers who receive such generous support already for their local assembly operations. In order to save time, I seek leave to incorporate in Hansard an article from the Australian Financial Review of 16 October 1985 on this subject. Senator Button —How long is the thing you want to incorporate? Senator VIGOR —It is just a very small article. Senator Button —It would be courteous to show it to the Minister. Senator VIGOR —I am sorry, Senator Button was not in the chamber when I came in. Leave granted. The article read as follows- NATIONAL AFFAIRS BUTTON ASKS FORD, AMI TO SHOW IMPORT PRICES FAIR By John Durie The Federal Government has asked Australian Motor Industries Ltd and the Ford Motor Co of Australia to justify that some of their import prices under the Car Industry Plan were fair. The Minister for Industry, Technology and Commerce, Senator Button, has written to the companies' chief executives-the first time he has exercised his power to formally question the import pricing policies of any of the five plan producers. If both companies cannot justify their actions satisfactorily, they are liable to penalties. The plan says the minister may impose penalties by refusing concessional duty entry for imports and by implementing a 150 per cent penalty duty. At present there is no question that either company has imported goods at unfair prices as Senator Button has simply sought justification. In a letter dated October 7 to all plan producers, component producers and industry bodies like the Federal Chamber of Automotive Industries, Senator Button said at the time the plan was announced there were allegations of unfair import pricing. At the time, he said it was not possible to substantiate the claims but a monitoring process was established through a special unit of Customs and the Automotive Industry Authority. Senator Button said as a result of the monitoring, questions had been raised concerning the price of some imports and ``I have written to the relevant manufacturers seeking justification for the prices charged for those imports''. He did not refer to the companies concerned but both Ford and AMI yesterday confirmed that they had received a specific letter from Senator Button seeking justification of prices. In his letter, Senator Button was understood to have drawn the attention of both producers to the sections of the plan relating to unfair import pricing and to have sought details concerning specific import shipments. The other three manufacturers deny having received the first letter and this claim is backed by government sources in Canberra. Ford declined to comment further while AMI said it had acknowledged Senator Button's letter and said it would be happy to provide the relevant information. A company spokesman denied it had engaged in any transfer pricing. AMI primarily imports from its parent, the Toyota Motor Corporation in Japan, while most Ford imports are supplied by Mazda in Japan, a company 25 per cent owned by Ford Motor Co in the US. While the Federal Government has monitored motor vehicle import pricing policies, the present plan has included the first comprehensive pro- cess through the authority and a special unit of Customs. The latter primarily monitors component imports and so-called completely knocked down packs while the authority monitors imports of completely built up vehicles. They have closely monitored import policies with detailed requests for company figures and have co-operated in their efforts. Senator VIGOR —I believe that we also have a problem with the offsets program, but it is very difficult to obtain any information on this area. I rose tonight to seek some reply from the Minister for Industry, Technology and Commerce (Senator Button) who is in the chamber. I believe it is extremely important that we should preserve and nurture the inventions within the Australian community and that organisations, such as the Sarich organisation, should be supported rather than our trying to support the very large multi-national organisations to which we are currently giving aid. Senator VANSTONE(South Australia)(7.18) —Tonight I wish to make some comments about a booklet that arrived in my office today. The cover of the booklet features a picture of one of the Government Ministers, the Minister for Science, Mr Barry Jones. It has the title: Living by our Wits. Senator Button —It is hot off the presses, Senator. Senator VANSTONE —Senator Button says that it is hot off the press, so I have not had time to read it. I make it quite clear to the Senate that the comments I am making do not relate to the substantive content of the book at all. My comments are in a different area. I do not know Barry Jones. I have never met him and I have no personal complaint with him at all. I remember him from Bob and Dolly Dyer's Pick-a-Box days. I can only say: What a prize he has selected for himself here to get the Government to print an anthology of his speeches. I am disgusted at what I regard as a total misuse of government funds whereby the Government is paying for a Minister to present an anthology of his speeches to the community. I remind honourable senators that this is not the Prime Minister, this is not even the Deputy Prime Minister, and it is not even someone close to that; this is someone who is twenty-first in the Ministry, which is a fair way down. There are only four or five under that. For somebody who is not in Cabinet to make a decision that his speeches are of such importance that they should be packaged up, given a glossy cover and distributed by the Australian Government Publishing Service, I think is a disgrace. I say that for a number of reasons. Firstly, the Minister has ample opportunity and the free right to make whatever speeches he wants in the Parliament. Anyone who wants to see what he said can read the Hansard report. Secondly, there is the Ministerial Document Service. Any speech by a Minister that is considered to be of some note will be widely published through the document service and those who want to have access to the thoughts of Barry Jones can pore over the material that the service has to offer. If that is not enough, if the Minister makes speeches that are good enough they will probably be put in the Commonwealth Record. Anyone who wants to read them can read them in there. If the Minister who is twenty-first in the Ministry is not satisfied with that, there is the good old Press. This is the last resort. The real market forces come into operation in that. If he says something of substance, there is a real chance-not a 99 per cent chance but a fair chance-that the Press will report it. The public can then have the benefit of Mr Jones's wisdom through the Press. Apparently Mr Jones is not happy with this arrangement. He is not happy to select an individual speech of his of meritorious quality and have it widely distributed. He thinks that so far nine speeches of his are of sufficiently meritorious quality that they should be selected ahead of the other speeches he has made and reproduced by the Government at the taxpayers' expense in a book with his picture on a nice glossy cover entitled Living by our Wits. He thinks that this book should be sent around to every parliamentarian and anyone else who is on the free list and then made available for sale in the government bookshops. I want to know whether this is now Government practice. Can I look forward to anthologies from other Ministers? Can I look forward to the collective thoughts of Arthur Gietzelt or books of the collective thoughts of Peter Morris, John Brown or Stewart West? Senator Kilgariff —Or Senator Button. Senator VANSTONE —Or Senator Button-although, with respect, I have left out a number of senators. I would be interested in reading the collective thoughts of a number of senators on the other side. Senator Kilgariff —I don't think he would print his. Senator VANSTONE —The honourable senator is quite right. A number of honourable senators would not choose to make the decision, presumably within the Department and funded by the Government, to use taxpayers' funds to publish nine or so of their collective thoughts. Earlier in the day I thought that I might spend time going through the book with one of the new-fangled highlighters marking the word `I' just to see how many times that word was used in this egocentric booklet. However, after a quick glance I decided that it was not worth proceeding. An indication of the whole nature of this egocentric exercise is the cover of the book, which contains a picture of Barry Jones. Heavens above, this man does not know where to stop! What community interest is there for the people to know that: The major influences on my thinking in writing Sleepers were Karl Marx, especially in his Grundrisse', the three dedicatees, Lewis Memford, author of The Myth of the Machine and The Pentagon of Power . . . And so on. What boring drivel! I do not know of one member of the public who wants to know the titles of the books that have influenced this man's thinking. I think this is an absolute disgrace. It is a total waste of government money. The Government should make a decision that in future no other Minister will be given the monopoly of using government money to publish his own speeches. If their speeches are so good, let Griffin Press Ltd or somebody else come clamouring to them and say: `You're words are pearls of wisdom. We will publish them because the public wants them'. That has not happened. The public obviously does not give two hoots about what Barry Jones has to say, so he has to resort to using taxpayers' funds to publish his speeches. I regret that he has chosen to do so. Senator HILL(South Australia)(7.25) —I want to put to the Senate that the Minister for Foreign Affairs (Mr Hayden) failed in his responsibility not to issue a warning to Australian travellers in the region of Libya prior to the American attack yesterday. Madam Acting Deputy President, you will recall that in the Senate on Monday the Minister representing the Minister for Foreign Affairs, Senator Gareth Evans, advised the Senate, in answer to a question from Senator Foreman, that the Department of Foreign Affairs and the Minister had not in March issued a travel warning at a time of heightened tension. Furthermore, he said: It is not considered appropriate to issue a travel warning at this time. This was on Monday, a few hours before the attack. The Minister went on with the reassuring words: However, the Department of Foreign Affairs is closely monitoring the situation. Madam Acting Deputy President, you will similarly recall that yesterday, a few hours after the attack, when I asked Senator Evans, in his capacity as representing the Minister for Foreign Affairs, whether he considered that the Government had failed in its responsibility to Australians travelling in the area by not offering such warnings, he replied in the following terms: There are a number of sensitive diplomatic considerations, as well as practical ones, governing the issuing of warnings of that kind. He was not prepared or was not able to give any further information. Today Senator Evans certainly did not clarify the matter as to what the sensitive diplomatic considerations were, but he indicated to the Senate that now the Department and the Minister had in fact issued a travel warning-that is, several hours after the attack. To have issued that after the bombing is clearly a joke. The Minister, of course, tells us of his close relationship with the United States of America. I presume that he was therefore aware for some time of the possibility of an attack. Even if he does not have that close relationship, presumably our intelligence could tell us of the imminence of such an attack. Madam Acting Deputy President, I remind you again that on Monday the Minister said that the Department of Foreign Affairs was closely monitoring the situation. Even if we do not have such intelligence, it was clearly public knowledge that there was the possibility of such an attack. The whole of the world seemed to know, simply by reading newspapers or listening to the radio. Therefore, it was public knowledge of which the Minister was aware. As I said, the Minister spoke about diplomatic sensitivities being involved but failed today to explain what those diplomatic sensitivities were. Prudence would suggest that the Department and the Minister should have issued a note of warning, probably at the time of the last United States attack. It certainly should have done so in the weeks in between and certainly when General Walters, who is known to everyone, headed off to Europe to put to European allies the fact that America was considering-- Senator Button —Is that Shirley Walters or somebody else? Senator HILL —No, this is a different General Walters. General Walters went to Europe to give European allies notice of what the United States intended. Furthermore, it was public knowledge that United States naval vessels were again heading towards the Libyan coast. Arguably, an Australian could believe that, in view of the Minister not considering it necessary to issue a warning, he and the Department considered that it was safe to travel to Libya and to be in Tripoli. Obviously it was not safe. Therefore, in my opinion, the Minister was grossly negligent and put diplomatic sensitivities, whatever they may have been, ahead of questions of safety of Australian citizens. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(7.29) —I thank honourable senators for their contributions to the debate. I have some sort of ill-informed comments to make about what has been said. First of all, I will convey Senator Hill's views to the Minister for Foreign Affairs (Mr Hayden). It may just well have been that if the Minister had made any such announcement, it would have been interpreted as a breach of the United States alliance in view of the claims about-- Senator Hill —You have to balance these things out, don't you, Senator? Senator BUTTON —Yes, you do-in view of our claims about prescience and prior knowledge of what was likely to take place. I can only convey the honourable senator's views to the Minister. I would like to examine Senator Vanstone's views. I think we should bring down a rule about the matter she raised-probably after my book has been published. I will certainly take on board the points raised by Senator Vanstone, and something might happen as a result. Listening to Senator Vigor's speech I was reminded that somebody once said that even death is a learning experience. The honourable senator's speech was that sort of learning experience for me. His research into the motor vehicle industry should have revealed such things as the fact that there are five major manufacturers in Australia, not three. There were lots of factually inconsistent points in the comments which he made. I want to deal with what he sees as the essential issue, which is that the Government should somehow be supporting the Sarich engine and not giving money to multinationals such as Ford and General Motors, as the car plan does for their local design scheme. A lot of government money has gone into the Sarich engine over the years, as has a lot of Broken Hill Proprietary Co. Ltd money. Whatever happens, the ultimate commercial decision which is likely to be made is that if that engine is as successful as people say it will be, its success will be recognised by the major manufacturers of the world and they will tend to want to manufacture it near where the majority of cars are made. For example, Toyota in Japan makes 4 million engines a year. The whole of the Australian car industry makes 400,000 cars a year. Similar figures are available in respect of the larger United States companies. It would tend to be both an economic and a commercial decision, if the Sarich engine were seen as a solution to all their problems, to manufacture it near the major car industries. I guess that is something that will be sorted out. I do not think the Sarich engine, manufactured in Kalgoorlie, Bunbury or somewhere else and exported round the world to the car industry, would really have the same benefits to the world car industry or the same scope as it would if the other course were adopted. I do not think it is true to say that we have a motor vehicle industry that is totally unwilling to export. I think the honourable senator will see some significant exports by the motor vehicle industry in the next two or three years, and that is important. The juxtaposition of the two sides of the honourable senator's argument, if I may say so, needs further examination. Senator Cooney explained his presence yesterday at the meeting of the Builders Labourers Federation outside the new Parliament House site. I guess if one goes into the cave with the troglodytes, one tends to get into trouble, and I note his explanation. Senator Kilgariff warned us against the dangers of Aboriginals drinking kava. The only thing that worries me about his conclusion is that he ought to have a look at the Australian tourists in Fiji who are drinking it by the bucketfull and having a terrific time. I do not think the honourable senator can single out the Aboriginals and say: `We must protect the Aboriginals from the habit of drinking kava'. We have first to decide whether it constitutes a drug of addiction and a drug which is damaging. If we so decide, we might make the same rules in relation to people generally and not just the poor old Aboriginals who have to be stopped doing any of those things. Senator Kilgariff —I am not suggesting it should be stopped. I am saying it should be looked at. But I reckon there is a racket going on and they are paying thousands and thousands of dollars for something that is dirt cheap. Senator BUTTON —The racket is going on in Fiji. Australian tourists pay thousands and thousands of dollars over there to drink kava. It is the highlight of their experience. I note what has been said. I am not sure that it is the solution to the Aboriginal problem, however. I thank honourable senators for their comments. Question resolved in the affirmative. Senate adjourned at 7.35 p.m. The following papers were tabled: National Health Act-Regulation-Statutory Rules 1986 No. 47. Navigation Act-Navigation (Orders) Regulations-Marine Orders 1986- No. 1-Part 5-(Marine Qualifications-Engineer Officers) Amendment. No. 2-Part 29-(Emergency Procedures and Safety of Navigation) Amendment. Superannuation Act-Regulations-Statutory Rules 1986 Nos 48, 49, 50. Telecommunications Act-By-laws- Telecommunications (Charging Zones and Charging Districts) Amendments Nos 56, 57, 58, 59, 60, 61. Telecommunications (Community Calls) Amendment No. 40. Telecommunications (General) Amendments Nos 42, 44, 45. Telecommunications (Staff) Amendment No. 47. The following answers to questions were circulated: (Question No. 22) Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 22 February 1985: (1) Is the Minister aware of the testimony to the United States Senate Committee on Armed Services in hearings on the Fiscal Year 1978 Defence Budget in March 1977 that ground terminals for the US Air Force's Satellite Communications System (AFSATCOM) are to be installed at US Navy Naval Communications Stations (NAVCOMSTA). (2) Has equipment related to the AFSATCOM system been installed, or is such equipment scheduled to be installed, at NAVCOMSTA Harold E. Holt at North West Cape, Western Australia; if so, what is the technical designation of such equipment and when was it installed at North West Cape. (3) Has equipment related to the AFSATCOM system been installed, or is such equipment scheduled to be installed, at other locations in Australia; if so: (a) what are these locations; (b) what is the technical designation of the equipment; and (c) when was it installed. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) Neither the Australian nor US Departments of Defence have been able to identify testimony along the lines cited by the honourable senator. (2) No. (3) No. (Question No. 750) Senator Sanders asked the Minister representing the Minister for Aviation, upon notice, on 4 December 1985: (1) Is the Minister for Aviation satisfied that the Chairman of the Independent Review of Economic Regulation of Domestic Aviation, Mr T. E. May, is able to exercise unbiased and independent judgment on the 2 Airline system, given the considerable financial links between Alltrans, TNT and Ansett. (2) Does the Government concede that to appoint a person who has vested interest in the outcome of the Review he is conducting, highly irregular. (3) On what basis did the Government originally appoint Mr May as the sole member of the Review. Senator Gietzelt —The Minister for Aviation has provided the following answer to the honourable senator's question: (1), (2) and (3) The Government does not accept the suggestion that Mr Thomas E. May has a vested interest in the outcome of the Review. Mr May's interests have been known, since before his appointment to the Chairmanship of the National Road Freight Inquiry in September 1983. The Report produced from that inquiry is evidence of his objectivity and thoroughness. As a prominent Australian businessman of considerable public standing in his own right Mr May was considered ideally suited to conduct the aviation review. (Question No. 790) Senator Colston asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 11 February 1986: (1) Has the Minister for Employment and Industrial Relations received a submission from the National Council of Health Organisations in relation to Nursing Manpower Planning; if so, are any officers from the Minister's Department part of an Inter-Departmental Committee formed to report on the submission. (2) What other action is being taken in relation to the submission. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) Yes. On 12 December 1985, the National Council of Health Organisations (NCHO) forwarded a submission to me responding to the analysis of the labour market for registered nurses contained in the ``Second Report on the Occupational Share System for Skilled Migration''. The submission was prepared for the NCHO by the Queensland Nurses' Union and the NSW Nurses' Association. No formal Inter-Departmental Committee has been established to report on the NCHO submission. However, officers of my Department are co-ordinating consultation and liaison with other Departments and agencies in the course of preparation of a comprehensive reply to the submission. This course of action has been necessary in view of the far-reaching ramifications of the 16 recommendations made in the submission. (2) It is intended that the NCHO will be contacted by officers of my Department to discuss details of the submission and the views of the relevant Government Departments and agencies. (Question No. 815) Senator Mason asked the Minister representing the Minister for Trade, upon notice, on 11 February 1986: (1) How many statutory authorities currently exist under the auspices of the Minister's Department. (2) What are the names of these authorities. (3) What appeal mechanisms, if any, exist for the general public to lodge a complaint against these authorities. (4) If it is proved that any member of staff of any of these authorities is guilty of incompetence, what action, if any, could be taken by a member of the public to sue the authority for compensation; if it is not possible to sue the authority, why is that the case. (5) How many cases concerning these authorities are currently before the Administrative Appeals Tribunal, and what is the delay at present between the listing of a case and its hearing before the Tribunal. (6) If any statutory authority under the Minister's Department cannot be sued, will the Minister consider amending the relevant legislation to make this possible. Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question: (1) One. (2) The Australian Trade Commission. (3) The public has, depending on the nature of complaint, recourse to the courts, the A.A.T., the A.D.J.R., and ombudsman. (4) The Attorney-General's Department has advised that, unless an authority is statutorily protected, it is liable for the torts of its servants committed in the course of their duty. Where employees, acting in the course of their duty are incompetent and, as a consequence, loss is suffered by a member of the public, it will commonly be found that the act or omission which was seen as incompetent was also tortious. In the absence of a denial of liability the negligent giving of erroneous advice is tortious where the advice is given by a person having a duty of care to one who suffers foreseeable damage as a result of reasonably relying on that advice. Many other forms of incompetence would also be tortious, but each case would need to be considered on its own facts. The Australian Trade Commission is not statutorily protected against general liability in tort. (5) There are currently 31 cases before the A.A.T. all relating to grants determinations made under the Export Market Development Grants Act 1974. The EMDG Act is administered by the Commission. Listing of a case may take four to six weeks and a hearing generally follows eight to ten weeks thereafter. (6) Section 7(2)(d) of the Australian Trade Commission Act 1985 provides that the Commission may sue and be sued. (Question No. 884) Senator Maguire asked the Minister representing the Minister for Defence, upon notice, on 13 February 1986; (1) How many members of the Australian Defence Force hold the rank of colonel, or its equivalent. (2) What is the number of such officers in each of the 3 Defence Services. (3) How many members of the Australian Defence Force hold ranks higher than the rank of colonel, or its equivalent. (4) What is the number of such officers in each of the 3 Defence Services. (5) How many civilian members of the Department of Defence ancillary bodies have Public Service classifications equivalent to or higher than the rank of colonel. (6) How do numbers of officers holding ranks of colonel or its equivalent or higher, expressed as a proportion of the total Australian Defence Force, compare with the proportions of officers of the level of colonel or higher, in other countries. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) At 30 June 1985, 335 members of the Australian Defence Force held the rank of colonel or its equivalent. (2) The number of such officers in each of the 3 Defence Services were: Navy 92; Army 128; Air Force 115. (3) 148 members of the Australian Defence Force held ranks higher than the rank of colonel, or its equivalent. (4) The number of such officers in each of the 3 Defence Services were: Navy 42; Army 62; Air Force 44. (5) There is no formal equivalence between Public Service and military classifications. As a working arrangement for integrated areas of the Department the following guidelines are used to specify organizational relationship: `that the highest rank of service subordinate for Clerical Administrative Class 11 should be LTCOL(E) and the highest civilian subordinate for a COL(E) should be Clerical Administrative Class 10.' Within the Department of Defence and ancillary bodies, there are 414 civilian members with a classification of Clerical Administrative Class 10 (or professional equivalent) and above. (6) 0.68% of the total Australian Defence Force held the rank of colonel or its equivalent or higher. Com- parable ranks within the United States Defence Forces accounted for 0.74%. Rank details relating to other countries' Defence Forces are not available. (Question No. 888) Senator Watson asked the Minister representing the Minister for Science, upon notice, on 13 February 1986: (1) What action has the Minister for Science taken to ensure that piles of neglected garbage, debris and derelict buildings are removed from Australia's research stations in the Antarctic. (2) Why haven't adequate steps been taken to minimise the disturbance and contamination of unique plant life at Casey. (3) How will the Minister answer the stinging attack on the conduct and operation of Australia's Antarctic Bases and the outright neglect and lack of scientific achievement of the people employed at the Bases, delivered by Dr Ron Lewis-Smith, a leading British scientist. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) and (3) Many of the environmental problems reported by Dr Lewis-Smith refer only to Casey and the abandoned Wilkes Stations. Environmental management at Mawson and Davis is good. The Antarctic Division has a policy of returning non-combustible waste to Australia, a policy which has only become possible with the long-term charter of the Icebird in 1985. This practice will continue with every effort being made to not only return waste generated each year, but also to gradually decrease waste accumulated over preceding years. Combustible waste will be disposed of in high temperature incinerators which are virtually pollution free and have been in use since March at Casey and are expected to be in use by December at Davis and Mawson stations. The Antarctic Division has been aware for some time of the need to clean-up Wilkes Station which was abandoned in 1969. This was considered in late 1984 by the Division's Environment Committee which recommended a clean-up; limited restoration of the transmitter building and radome for use as a refuge and display centre; installation of a commemorative plaque; installation of a small display if possible; and allowing the remaining buildings to decay under the effect of the elements. However, most of the buildings at Wilkes are owned by the United States. Permission to go ahead with the policy was therefore sought from the US, and received in May 1985. The Department of Housing and Construction undertook an inspection of Wilkes for the Division during the 1985-86 season and a report on their findings and a work program is being prepared. Appropriate action will then be programmed for next season. However, a clean-up of the area could be hampered by the presence of undetonated and potentially dangerous explosives. A recent meeting of the Antarctic Division Environment Committee recognised that problems exist at Casey and convened a special meeting of the Committee to consider appropriate remedial action and preventative measures to be adopted in future. (2) The disturbance to plant life in the vicinity of Casey occurred some years prior to the significance of the area being recognised. Subsequently, the Antarctic Division developed a proposal for two areas around Casey to be designated as Sites of Special Scientific Interest (SSSI) under the Antarctic Treaty. A recommendation to this effect was accepted at the Antarctic Treaty Consultative Meeting in October 1985 and the two Sites will be proclaimed under the Antarctic Treaty (Environment Protection) Act 1980. (Question No. 905) Senator Michael Baume asked the Minister for Education, upon notice, on 17 February 1986: (1) Does the Commonwealth Department of Education post application forms for Tertiary Education Assistance Scheme (TEAS) allowances to all candidates for the Higher School Certificate as well as the continuing students who have received TEAS in the past and all people who have applied for admission to universities or colleges through the Universities and Colleges Admissions Centre. (2) What proportion of the posted application forms are converted into successful applications under TEAS. (3) What is the cost, including administrative cost, of posting these forms each year to such a large number of people. (4) Are such application forms readily available on request at all universities and colleges. Senator Ryan —The answer to the honourable senator's question is as follows: (1) As the combination of Higher School Certificate and Universities and Colleges Admissions Centre applies only in New South Wales, it is assumed that the question relates to arrangements for sending TEAS application forms to potential applicants in New South Wales. The New South Wales Office of the Department of education sends a TEAS application form and information booklet to the following categories of people: (a) All TEAS recipients, not in their final year and therefore likely to be continuing full-time study in the following year. (b) All Higher School Certificate candidates. (c) All applicants who have applied for admission to a university or college through the Universities and Colleges Admissions Centre (UCAC) other than on the basis of the previous year's Higher School Certificate results. (2) The proportion of posted application forms used by recipients to apply for assistance in 1985 was as follows: Continuing students: 68.5% HSC candidates: 17.3% UCAC applicants not HSC candidates: 15.7% Proportion returned-all categories: 29.4% (3) The cost of posting the material relating to 1985 applications was: Postage-$21,455 Labour-$7,028 (4) Application forms and booklets are available at educational institutions. In other States, there are some variations depending on arrangements negotiated with education authorities. Application forms are usually posted direct to people sitting the examination at the end of secondary school or those who have made application with tertiary admission centres. In all States, the material is posted to beneficiaries in the previous year who might be continuing full time study, and is available at tertiary institutions. There are a number of advantages in sending application forms direct to the categories of people referred to above. As well as facilitating an early lodgment of the application, the practice ensures that information about the Scheme is received by potential applicants particularly those who are embarking on tertiary study for the first time. There would not necessarily be economies if the only method of distribution was to make the application forms available at educational institutions. The possible savings in printing and postage would be easily offset by additional labour costs of handling additional inquiries and dispatching forms on a one by one basis. This case would particularly arise with students whose homes are not within easy access to the tertiary institution. Senator Walsh —On 13 February 1986 (Hansard, page 266), Senator Lewis asked me, as Minister representing the Minister for Employment and Industrial Relations, a question without notice regarding the ready-mixed concrete industry in the Australian Capital Territory concerning restrictions on the number of concrete agitator trucks operating in the Australian Capital Territory, the level of income of owner-drivers operating these trucks, and whether the Government intended to intervene in the matter. Senator Lewis also asked whether the Builders Labourers Federation and the Transport Workers Union had imposed bans in the Australian Capital Territory on trucks on building sites being unloaded other than by their respective members. In my reply I undertook to refer the matter to the Minister for Employment and Industrial Relations to see whether he wished to add anything to what I had to say. The Minister has provided the following additional information: In respect of the ready-mixed concrete industry in the ACT, I am aware of disagreement between the Transport Workers' Union (TWU) and the National Ready-Mixed Concrete Association (NRMCA) of the ACT over the number of concrete agitator trucks currently operating in the ACT and over a number of other matters. In that context I understand that the TWU has been approached by the Confederation of ACT Industry, on behalf of the NRMCA of the ACT, seeking discussions on this issue. The TWU is yet to respond to that approach. The matter has also been before the Conciliation and Arbitration Commission on a number of occasions, most recently on 29 January 1986. In view of the complexity of the issues involved and the significance of the building and construction industry to the ACT economy, the Government urges the parties to enter into meaningful negotiations with a view to overcoming any areas of disagreement. The Government is hopeful that those issues can be resolved by negotiations between the parties, with recourse to the Conciliation and Arbitration Commission for further assistance if required. As to the earnings of these owner-drivers, I would point out that the rates are determined by a tripartite board, comprising an independent chairman and representatives of the owner-drivers and the NRMCA of the ACT. More specifically, those rates applying in the ACT are determined in accordance with a reimbursement formula which was calculated and agreed to a number of years ago by the tripartite board. The tripartite board continues to meet in April and October of each year to determine rates in accordance with variations to costs comprehended by the agreed reimbursement formula. It is my understanding that the reimbursement formula is not a matter of dispute. In respect of the unloading of trucks on building sites in the ACT, I am advised that no industrial action is presently occurring in support of BLF and TWU claims for exclusive coverage and that trucks are presently being unloaded by a number of different unions in accordance with accepted practice.