Tuesday, 6 May 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in the Parliament assembled. The Petition of certain citizens of the Northern Territory respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the pastoral and rural sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering the man on the land in the organisation of his affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Senators Chaney (from 14 citizens) and Kilgariff (from 12 citizens). To the Honourable the President and members of the Senate in Parliament House assembled. The petition of the undersigned citizens of Australia respectfully showeth that we believe that our protected wildlife are not suitable subjects for laboratory experimentation and that repetitive and needless experiments should be prohibited. And your petitioners as in duty bound will ever pray. by Senators Robertson (from three citizens) and Short (from 188 citizens). To the Honourable the President and 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 Senators Robertson (from 18 citizens) and Watson (from 26 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 522 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. by Senators Knowles (from 24 citizens) and Robertson (from 25 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the 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 Senators Knowles (from 60 citizens) and Robertson (from 19 citizens). To the Honourable the President and the members of the Senate in Parliament assembled The petition of the undersigned citizens of Australia respectfully showeth: That the Australian Bill of Rights is a harmful, dangerous, divisive and unnecessary proposal, the provisions of which are dictatorial, harmful and against the true interest of the people of Australia. Your petitioners pray: That the Senate reject the Bill. And your petitioners as in duty bound will ever pray. by Senator Robertson (from 104 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 numerous provisions exist in industrial legislation and awards which purport to provide special protection to women workers but which have been shown to be detrimental to their achievement of equality in employment. Noting the relevant provision in Article 11 of the United Nations Convention on the Elimination of All Forms of Discrimination against Women to which Australia is a party your petitioners request that urgent action be taken to ensure that these legal barriers to equality be removed. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 32 citizens). Petitions received. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) in recognition of the contribution of the Northern Territory Conservation Commission (NTCC) and its predecessor the Northern Territory Reserves Board, to the development of Uluru National Park; and (b) in view of the extensive knowledge of the NTCC rangers of the park, and the excellent relationship which they have developed with the local Aboriginal people, urges the Federal Government to act to resolve the situation which has developed in relation to Park management, whereby the NTCC is to be excluded from participation in the management of Uluru National Park. 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 World Heritage Properties Conservation Act 1983 to make more effectual provision for proper protection and conservation of property to which the Act applies. Senator COONEY(Victoria) —Pursuant to Standing Order 109A I give notice that, at a later hour this day, I intend to withdraw Business of the Senate, Notice of Motion No. 1 standing in my name, for the disallowance of the Superannuation (Salary) Regulations (Amendment). Senator MACKLIN(Queensland) —As part of a world-wide protest, I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the struggle of the Hopi and Navajo peoples in the United States (US) to prevent the destruction of their sacred Big Mountain in Arizona; (b) condemns the US Government for its intended use of the Displacement Law (PL93-531) to forcibly evict 10,000 Hopi and Navajo people in order to mine uranium from Big Mountain; and (c) urges the Australian Government to express its urgent concern to the United States Government about this significant human rights and ecological issue. Senator CHANEY —My question is addressed to the Minister representing the Attorney- General. I note the statement by the Chief Justice of the High Court of Australia issued today and I ask the Minister: How does the Government propose that the Parliament might determine disputed matters of fact presented by Mr Justice Murphy in his response to all matters allegedly involving him in volume 2 of the Stewart Royal Commission of Inquiry into Alleged Telephone Interceptions and the Don Thomas allegations? Senator GARETH EVANS —The situation is that the Government simply will not give any further consideration to that matter unless and until we hear further from the High Court of Australia after the High Court has been through such processes as it decides it wants to undertake to resolve this matter. Senator CHANEY —I have a supplementary question, Mr President. I draw the Minister's attention to the fact that the Chief Justice has put out a statement saying that the justices do not intend to conduct any inquiry or make any finding as to the conduct of Mr Justice Murphy. I ask the Minister to reconsider his answer, in light of that and other comments made by the Chief Justice, and tell us on what basis this matter is simply to be left in abeyance. Senator GARETH EVANS —I draw Senator Chaney's attention to the last sentence of the Chief Justice's statement in which he said: The other members of the Court agreed to postpone further discussion until Mr Justice Murphy has made such response as he wishes to make. What may emerge from that further discussion of the Court among its members is a matter for the Court to determine. The Government will simply wait until it hears further from the Court. If the Court decides that it has a continuing problem, clearly it will be a matter for the Government and the Parliament to look at further. If the High Court decides at the end of the day that it does not have a problem, nor do we. Senator COATES —I ask the the Minister for Community Services whether his attention has been drawn to an article in today's Mercury newspaper in which a management consultant for the Tasmanian Spastics Association is critical of a recent Federal Government grant for respite care in Hobart. Can the Minister indicate whether this new service will affect the existing respite care service run by the Tasmanian Spastics Association? Senator GRIMES —My attention has been drawn to the claims of a management consultant who was very critical of the Federal Government funding of, in this case, a State government department to provide for the co-ordination of respite care services in Hobart. I point out that the management consultant was one Ms Carmel Holmes who, until the last election in Tasmania, was the Liberal member for Denison and who, some few weeks after she was a Liberal member, recently attempted to become an independent member of the Upper House and failed there, too. I am amazed that she should be so critical of a proposal to provide for co-ordination of respite care services in Hobart. One of the consistent pleas of parents who have attended forums and meetings with me and the State Minister for Community Welfare has been about the lack of information on such programs and the lack of co-ordination in the delivery of such services. I was very happy that my Department had been able to provide a grant of $42,000 to the State Department of Community Welfare for a respite care service for intellectually and physically disabled people in their homes and in the homes of host families. Far from being wasteful expenditure of public money, the new service is designed to complement the existing in-home caring services which are offered by the Tasmanian Spastics Association. That Association has recently been granted $76,000-odd for its program of respite care for the children of southern Tasmania. The program to which we have recently given a grant is to complement and supplement that program-not to act in competition with it. I suggest that Ms Holmes direct her energy to giving credit where credit is due and not fall for the simple formula of merely criticising everything that is initiated by this Government-apparently even those things initiated by this Government to assist the Tasmanian Government. I do not know what Ms Holmes thinks she will achieve by this. She has not achieved much in the two recent elections, and I hope that this sort of behaviour will consign her to the political dustbin where she belongs. Senator DURACK —I refer the Minister representing the Attorney-General to comments by the Attorney-General on the national Today show this morning, when he said that the Government was put on notice by the Chief Justice of the High Court of Australia only last Friday that there was some uncertainty about the position of Mr Justice Murphy. I ask: Was not the Government considering volume 2 of the Stewart report of the Royal Commission of Inquiry into Alleged Telephone Interceptions and the allegations by Don Thomas in the context of the judge's position on the High Court before the Chief Justice spoke to the Attorney-General last Friday and, if not, why not? Senator GARETH EVANS —Of course the Government was considering the recommendations of volume 2 of the Stewart report at that time. To answer the question, however, as to whether there was anything in that volume which may have had significance for Mr Justice Murphy's future would be to reveal the contents of that report. To answer the question either way would be to reveal the contents of the report. That is not something the Government is proposing to do, for good reasons articulated last week. Senator JONES —My question is directed to the Minister representing the Treasurer. Does the Foreign Investment Review Board investigate directors of companies and possible corrupt practices in its review of foreign investment proposals? Can the Minister confirm that the FIRB has so investigated the Iwasaki tourist resort at Yeppoon on the central Queensland coast? Senator WALSH —I have noticed in the Age newspaper today and also in the Australian Financial Review, if not in other newspapers, that a son-in-law of the Queensland Premier, Mr Folker, was appointed as a director of the Iwasaki Sangyo company, which runs the Yeppoon tourist resort, on Christmas Day 1984. Mr Folker is reported as being the manager of a farm at Kingaroy, which is a long way from Yeppoon. For those two reasons I imagine that he would be uniquely well qualified to be a director of the Iwasaki tourist resort company. I am sure that his appointment would have had nothing to do with the fact that he is the son-in-law of the Queensland Premier. Likewise I am sure that the $55,000 paid by the same company as part of a land exchange deal to the Premier's son, John Bjelke-Petersen, had nothing to do with the fact that John Bjelke-Petersen is the son of the Premier. I notice that one or two other matters were put forward in the Age newspaper as well. If I can drop the irony now, given the prima facie case of some sleazy, under the table deals in regard to that company and the favoured treatment it has received on many occasions from the Queensland Government, it is a matter I will refer to the Treasury, but as far as I know there is nothing in the FIRB regulations that would allow the FIRB to do that. Senator Chaney —I raise a point of order. My point of order is that by the end of the answer the Minister was making a direct allegation of corruption against the Queensland Government and I ask him to withdraw it. The PRESIDENT —I listened to the Minister and I thought the Minister was speaking generally about the Queensland Government, not about any particular individual. If I am wrong in that, and the Minister did relate his remarks to an individual Minister in the Queensland Government, I ask him to withdraw them. Senator Walsh —If anybody wants to construe my remarks that way, naturally I am happy to withdraw. I completed my answer and I am happy to let the public record speak for itself. Senator Chaney —Mr President, I wish to address you on the point of order. This is the second time in a short period that the Minister has used the same technique of naming individuals and then moving on to make a general allegation. In this case he mentioned several members of the family of the Premier of Queensland and then went on to make a general allegation of corruption. The Minister, with his smart-Alick manner and the attempts he makes to play to his gallery of supporters, is clearly showing contempt for the forms of this place by using that verbal technique to avoid being in breach of Standing Orders. The point I make is simply this: What Senator Walsh is doing is firstly naming individuals and then linking those individuals to conduct which he would not be able to directly accuse them of under the Standing Orders. Senator Walsh —Tell us how your brother- Senator Chaney —There is a typical example of that interjection. Senator Walsh referred to a brother of mine on a matter which has been aired in this place on many occasions, in the same way as there has been an inquiry into the matter which is consistently run at my colleague Senator Michael Baume, and where there has been a clearing. The issues he raised by way of interjection against my brother were dealt with by a royal commissioner, Mr Justice Smith, and there is a very clear statement as to my brother's innocence. This is a typical example of the sort of smear on which I have risen with respect to Premier Bjelke-Petersen. Mr President, I ask you to examine not just the immediate sentence in which the accusation of corruption is made but the totality of the answer, which clearly tries to tie that to the individual concerned. Senator Gareth Evans —Boring. Senator Chaney —I note the interjection of `boring' on my left. The fact is that for a very long period this Minister has engaged in this and similar techniques. The Opposition believes that it is entitled to the protection of the Chair and the protection of the Standing Orders and that he should be called to order. Senator Chipp —Mr President, on the point of order: As this Senate would know I am not a self-appointed protector of Senator Walsh-nor would he wish that. While I have great respect for the point of order raised by Senator Chaney, I ask you to weigh what I am about to say before you make a ruling on this very important matter. If it is put to you that a Premier of a State, a Minister in a State government, a Prime Minister of this country, or a Minister in the Federal Government has a relative or friend involved in a business undertaking and that those Ministers or heads of state make a decision that leads to the benefit of those relatives or close friends, and that in those circumstances a responsible Minister in this Senate cannot condemn that practice, I would have thought that if you rule that way, Mr President, the processes of open democracy would have been eroded in this Parliament. Senator Grimes —Mr President, speaking to the point of order, I believe Senator Chipp has made a pertinent point about the first part of Senator Chaney's rather serious and sanctimonious point of order. I think the second point Senator Chaney seemed to be making was a point he made in this chamber on a previous occasion since he has been in Opposition, that is, that he is somehow offended by Senator Walsh or other people in this place blackguarding people collectively. I also used to complain about that when in Opposition over and over again, day after day, when Senator Sir John Carrick as Leader of the Government in those days used that tactic every day. As that practice was obviously approved of by Senator Chaney and his colleagues, and obviously no one was going to make any attempt to outlaw it, we decided the best approach was: `If you can't beat them, join them'. If Senator Chaney had been on his feet complaining of such practices in those days I might have had some reason to take him seriously. I certainly do not take him seriously on this occasion, nor do I think this chamber or you, Mr President, should do so. The PRESIDENT —I do not uphold Senator Chaney's point of order. Standing order 418 specifically states: No senator shall use offensive words against either House of Parliament or any Member of such House, or of any House of a State Parliament, or against any Statute, unless for the purpose of moving for its repeal, and all imputations of improper motives and all personal reflections on Members shall be considered highly disorderly. The standing order does not relate to points that are made or matters that are raised against governments generally. I would think that to consider a government as a collective Ministry and to include that within standing order 418 is not the intention of the standing order. I do not think the standing order can be used in that way and I therefore do not uphold the point of order. However, I would appeal to Senator Walsh, as I have appealed before, to remember the refinements of debate in this place and to keep matters away from a near breach of the Standing Orders. I call Senator Walsh. Senator Walsh —I had finished my answer. Senator CHIPP —I ask the Minister representing the Minister for Health a question concerning Medicare. I apologise that I have not given him proper notice, knowing that it is not a question related to his portfolio, but it is a serious question to which I would like a considered answer. It may be that he cannot give that answer today. Does the Minister agree that the health insurance system in Australia was or is one of the best in the world? Does the Minister agree that it is under peril because it is being abused unmercifully by a small number of unscrupulous doctors? Does the Minister further agree that he is disturbed, as I am, that when certain medical entrepreneurs get on television and claim that they are going to make $10m out of Medicare for the next year that puts Medicare in danger? Does the Government consider that the elimination of bulk billing, except for pensioners and persons who are in disadvantaged circumstances, would halt this abuse of Medicare virtually overnight? Senator GRIMES —Yes, I do think we have a good health insurance system. That does not mean it cannot be improved. Certainly the health insurance scheme is under some stress if medical practitioners, or anyone else in fact, abuses the system. I also agree with Senator Chipp that a small number of medical entrepreneurs in this country seem to have been abusing Medicare, abusing the health insurance scheme. They have been abusing not only Medicare-the public health insurance scheme-but also the private health insurance scheme. They are not only entrepreneurial general practitioners but also entrepreneurs in radiology, pathology and other areas. As I say, they do not necessarily only abuse the public section of that health insurance system; but they can also abuse the private section, and they can abuse it in many ways without being detected because the records are not as good. Senator Chipp made the assumption that by eliminating bulk billing we would solve all those problems. I remind honourable senators that back in 1968-69 a Liberal government realised that things were not well with the health insurance system and initiated an inquiry into that system. In those days we did not have bulk billing as it is known now and similar concerns were around then. Bulk billing has, in fact, got advantages in that it ensures that cost is not a barrier to some low income people in their seeking health care- Senator Chipp —I said `except for that'. Senator GRIMES —I will come to that in a minute. It provides for administrative simplicity, it provides for prompt payment, it provides for very significant administrative changes for both doctors and the health insurance system, and it also has an effect, as it had in Canada, of restricting doctors' fees. It is all very well to say that we will just have bulk billing for low income people or particularly for pensioner beneficiaries and unemployment beneficiaries. We run into very real definitional problems there in that there are people who are not pensioners, or not beneficiaries or low income earners in the work force, but who may have a particular reason for having great difficulty paying their medical bills-for instance, they may have children with recurrent illnesses such as asthma, epilepsy or respiratory illnesses. There is also an assumption in what Senator Chipp said that by removing the capacity to bulk bill for these people somehow all our troubles will be over. They will not be over under those circumstances. Sure, bulk billing may be abused by a small number of doctors. I do not know whether I can cite the facts exactly, but for instance, in the first six months of 1985-86 compared with the same period in 1984-85 the number of direct bill services increased by about 18 per cent, the number of services per patient for those who were direct billed decreased from 2 per cent to 1.97 per cent while the number of services to patients who were actually billed increased. The number of services per provider increased slightly for those who were direct billed. There was no change for those who billed their patients. There were very marginal changes in the first six months of this year compared with the first six months of last year. The experience under the previous health insurance system was that bulk billed patients were not overserviced to any great degree more than those who were billed directly. The situation is complicated. There will always be a group of doctors who will rip off the system. We cannot stop that just by getting rid of bulk billing. I point out also that entrepreneurial doctors of the type about whom Senator Chipp is talking are not necessarily all bad. We must ask ourselves why so many people go to such entrepreneurial services. They do because they are open, available and accessible, whereas the doctors whom they visited previously are not. If those entrepreneurial services have the effect that they have had in Sydney of ensuring that doctors' surgeries are open on Saturdays, Sundays and all sorts of times that people need them, in that small regard they may be better. I will get detailed figures from the Minister for Health to demonstrate to Senator Chipp that by wiping out bulk billing we do not just wipe out the abuse of the health insurance system. There are considerable benefits in bulk billing. Some of the best health services in the world are based completely on bulk billing. I suggest that the next time that Senator Chipp is in Western Europe he talks to some of the people of the social democracies there which have health insurance schemes that work very effectively and efficiently. The PRESIDENT —I draw the attention of honourable senators to the presence in the gallery on the right of a delegation from the National People's Congress of the People's Republic of China. The delegation is led by Peng Chong, Vice-Chairman of the National People's Congress, and the Panchen Lama, who is also a Vice-Chairman of the National People's Congress. The delegation so far has visited Sydney, the Hunter Valley, Brisbane, Cairns and Port Douglas-where it had the opportunity to see something of the Great Barrier Reef. After Canberra, it will visit Wagga Wagga and Melbourne before returning home to China. On behalf of all honourable senators, I extend to the delegation a very warm welcome to the Senate and to Australia. Honourable senators-Hear, hear! Senator REYNOLDS —I ask the Minister for Veterans' Affairs whether he is aware of a proposal by the Brisbane Crematorium to recycle crematorium niches containing the ashes of Australian soldiers who died as a result of their war-caused injuries. Is it true that the Commonwealth accepted responsibility through the Office of Australian War Graves to maintain these memorials in perpetuity? Will the Minister inform the Senate of the steps he has taken to ensure that commemorations to Australia's former soldiers will be maintained and reassure next of kin that their relatives' ashes will not be disturbed? Senator GIETZELT —I am aware of the problem to which Senator Reynolds refers. This matter was first raised in a grievance debate in the other place by the honourable member for Moreton on 1 May. He followed it up with a question without notice to my colleague Mr Holding, who represents me in the other place. As a result of that question I had some inquiries made in respect of the matter that has been raised by Senator Reynolds. I understand that there is a proposal to backdate tenure on the commemoration niches at this crematorium. In other words, unless a further fee is paid, niches will be recycled. I draw the attention of the Senate to the fact that only last month Messrs Peacock and Tim Fischer put out two Press releases which stirred up a hornet's nest in the veteran community. On a television show they stated that Australian war graves in Libya were under threat by Colonel Gaddafi's regime. They accused me of not being concerned. Of course, I expressed considerable concern about it but I pointed out that the story was a beat-up. However, here we have a case where our war graves are threatened in Queensland and not a word has emerged from Mr Fischer in respect of these matters. It would appear that the greatest threat to Australian war graves does not come from overseas situations but here at home in Brisbane where the coalition parties' big business friends, including a former Treasurer of the Queensland National Party, were involved in an attempt to change the situation of war graves in that State. It is their complete subservience to the quick dollar mentality which prompts one to ask: `Where are Messrs Fischer and Peacock in defending Australian war graves in Brisbane against the big business bulldozers of the Queensland National Party?' I pay tribute and give credit to the independence and the moral fibre of the honourable member for Moreton, who is prepared to stand up against this bare-faced opportunism and this outrageous assault upon Australia's war dead by leading lights in the Queensland business community. I say quite categorically to the Senate that my Department will continue to maintain the veterans' niches and memorial plates in the relevant columbarium. I will be instructing my Department to cease negotiations with any crematorium which seeks to backdate tenure and, therefore, exact a further contribution from the Commonwealth Government. I also call on Mr Fischer, who showed such deep concern about a beat-up newspaper story concerning the bulldozing of war graves in Libya, to prevail upon his National Party colleagues in Queensland to ensure that this unthinkable desecration of war graves will not occur in our own country. Senator COLLARD —My question is addressed to the Minister representing the Attorney-General. Is it true, as implied by the Attorney-General on last night's Four Corners program, that the Government was proposing to initiate an inquiry into the allegations against Mr Justice Murphy? If so, what form was that inquiry to take and why was that inquiry not proceeded with in view of today's statement by the Chief Justice that the High Court of Australia is not conducting any inquiry into nor making any findings on the matters concerning Mr Justice Murphy? Senator GARETH EVANS —I think I have said as much as can usefully be said on this subject. The Government was considering certain contingency plans yesterday, depending on what the response of the High Court was yesterday in its meeting that we knew was taking place. In the light of the response the High Court gave, it has become unnecessary, at least for the moment, to proceed with any such contingency planning for the reasons I indicated in my answer to an earlier question. Senator McINTOSH —Has the Minister representing the Minister for Foreign Affairs seen an article in the 25 April to 1 May edition of the National Times newspaper entitled `US gets tough with Australia over Nuclear Free Zone'? Does the Minister agree with the assertion contained in the article about the United States Administration's view that Australia's support for the South Pacific nuclear free zone proposal is for internal party consumption rather than a serious commitment to the concept? Does the Minister also agree that the United States Administration's view has come from contact with United States and Australian diplomats in Washington? If the Minister does not agree with these assertions, how does he explain the apparent misconception on the part of the diplomats referred to? Will he outline proposals which the Government has to clarify its position to other governments? Senator GARETH EVANS —The Government has seen the article in question. Neither the Minister for Foreign Affairs, nor anyone else in the Government for that matter, agrees with the assertion in the article that the Government's active role in the creation of the South Pacific nuclear free zone was largely, as the article states, `a response to internal party pressures on nuclear issues'. The SPNFZ Treaty is a regional response to long standing and deeply felt concerns about nuclear issues, especially nuclear testing in the region and the dumping of nuclear waste in the oceans of the region, and a desire to keep the region free of major power rivalries involving nuclear weapons. The Treaty contains substantive and important provisions on the acquisition, testing and stationing of nuclear explosive devices. Three draft protocols invite the nuclear weapons states to respect the main provisions of the Treaty in regard to their territories within the zone, not to use, or threaten to use, nuclear weapons against parties to the Treaty and not to test nuclear explosives anywhere within the zone. The Treaty has been widely welcomed by the international community as a significant contribution to arms control and disarmament. The United States Administration has been extensively briefed including by Australian diplomats in Washington, on the substance and intent of the Treaty. Moreover, on 1 October last year senior Australian officials who took part in the negotiation of the treaty thoroughly briefed a wide range of United States agencies on the Treaty and the background to it. The records of the discussions do not in any way support the view expressed in that article that there is any misconception among United States officials as to the origins of the Treaty. The Government has been informed that the Administration is studying seriously and with an open mind the Treaty and its draft protocols. This was confirmed to the Prime Minister by President Reagan during Mr Hawke's recent visit to Washington. The Government is aware that some agencies within the United States Administration are sceptical about the whole concept of nuclear free zones, but this attitude is a United States perspective and is in no way attributable to the manner in which Australian officials have presented the Treaty. In addition to the extensive briefing already provided, including formal consultations in February of this year with a delegation of officials from South Pacific countries that drafted the Treaty, which delegation was led by a senior Australian diplomat, there has also been ministerial contact with senior figures in the United States Administration to emphasise, in particular, that the Treaty is fully consistent with Australia's obligations under ANZUS and fully respects the freedom of the seas under inter- national law. The PRESIDENT —I draw the attention of honourable senators to the presence in the gallery on my left of former Senator Lajovic, a former senator from New South Wales. On behalf of all honourable senators I extend a warm welcome to him upon his return to Canberra. Honourable senators-Hear, hear! Senator ARCHER —I ask a question of the Minister representing the Attorney-General. Is it true, as reported in today's Age newspaper, that Mr Justice Murphy was given the opportunity by the Stewart Royal Commission of Inquiry into Alleged Telephone Interceptions to answer allegations concerning his actions? If so, what was his response to that approach? Senator GARETH EVANS —To answer that question would be perhaps to reveal the contents of sections of the Stewart Royal Commission report, volume 2. I do not propose to do so. Senator SIBRAA —My question is directed to the Minister representing the Minister for Foreign Affairs and refers to the ANZUS Treaty and port access. Is the Government aware of the so-called China formula which has allowed visits to Chinese ports by British warships? Could this formula form the basis of resolving the port access problem that exists between the governments of New Zealand and the United States of America? Senator GARETH EVANS —The term `China formula' apparently refers to arrangements reached between the Chinese and British governments for a visit to Chinese ports by British warships in the next few months. Chinese policy, like that of New Zealand, is not to permit nuclear weapons to be brought into its ports on visiting ships. British policy, like that of the United States, is not to confirm or deny the presence of nuclear weapons on particular ships. The formula in question appears to involve acknowledgement by each country of the other's position. Whether those arrangements might provide a precedent for resolving or helping to resolve the port access problem between New Zealand on the one hand and the United States and Britain on the other is not something on which the Australian Government would wish to express a view. We can only hope that it may do so. Senator Sanders —The Chinese and the Americans have not got together on that. Senator Elstob —Why are you so anti-American? Senator GARETH EVANS —I can understand America being anti-Sanders. As the Government has said on many occasions, it does not seek to involve itself in some sort of intermediary role in the New Zealand-United States problem. As we have also said on an equal number of occasions, we would welcome progress in resolving the dispute and an early return to full trilateral co-operation under ANZUS. Senator KNOWLES —I direct my question to the Minister representing the Treasurer and refer him to the Treasurer's estimates that the net revenue gains from the fringe benefits tax will be $330m in 1986-87 and $625m in a full year. Will the Minister advise how much of the projected gain comes from taxes levied on the Commonwealth, the States or local governments and authorities, and thereby met directly by increases in taxes and charges levied on the general public? Senator WALSH —I do not know the answer to that off the top of my head. I will seek an answer from the Treasurer. Senator ZAKHAROV —My question is directed to the Minister representing the Minister for Foreign Affairs. What are the likely economic consequences of the outbreak of coffee rust in Papua New Guinea and what help can Australia offer in fighting that outbreak? Senator GARETH EVANS —The consequences of the outbreak of coffee rust in Papua New Guinea are very serious indeed. Coffee is Papua New Guinea's major agricultural export earner; 48 per cent of Papua New Guinea rural households produce some coffee, and approximately 75 per cent of the total crop is produced by smallholders. Export earnings from coffee are expected to reach $300m in 1986, of which some $90m can be expected to be received directly by smallholder growers. Perhaps I should say something about the phenomenon of coffee rust. `Coffee rust' is a term used to describe a family of fungus that renders the fruit of affected trees useless for commercial purposes. It spreads very quickly from plant to plant and from region to region. Once rust has taken hold on a plant or plant material it is almost impossible to eradicate short of destroying the material. There was an outbreak of this fungus in Papua New Guinea in 1965 which affected a small area of non-commercial coffee. Trees and materials in the affected area were destroyed and the outbreak was eradicated. A new outbreak of rust has been reported in three provinces in Papua New Guinea. Papua New Guinea officials estimate that more than 3,000 hectares, or 12 per cent of smallholder crops, may be affected. Industry representatives estimate that 25 per cent of the 1986 crop may be at risk. The actual fungus probably will not be identified for some months. Clearly widespread preventative spraying would be necessary to prevent its spread. It is not possible on the basis of the present information to estimate fully the final consequences and implications of the outbreak, but the orders of magnitude follow from the figures I have given so far. As to Australia's response, I indicate on behalf of the Minister for Foreign Affairs that Australia has responded speedily and efficiently in locating and transporting chemicals and equipment required for the Papua New Guinea eradication and control effort that commenced at the weekend. The Natural Disasters Organisation and the Australian Defence Force are to be commended for their efforts. Further assistance of this nature may be necessary. We are also exploring other ways of assisting Papua New Guinea's response to the outbreak. Discussions will be held with our High Commissioner over the next few days. Among the further areas of assistance being explored are the provision of scientific and technical advisers to strengthen Papua New Guinea's own expert staff; advice and assistance on the logistics aspect of the current control spraying campaign; and technical and other support for the education campaign that will need now to be directed at producers. Senator CHANEY —My question is addressed to the Minister representing the Attorney-General. I refer to his latest refusal to deal with matters relating to Mr Justice Murphy and his refusal to answer the question put by Senator Durack. I quote what Senator Evans said in Question Time today: To answer the question, however, as to whether there was anything in that volume which may have significance for Mr Justice Murphy's future would be to reveal the contents of that report. I remind the Minister that his colleague the Attorney-General yesterday in a statement formally issued by him pointed out that Mr Justice Murphy was being given an opportunity to answer all matters `allegedly involving him as identified in volume 2 of the Stewart report'. I draw his attention to the statement by the Chief Justice of the High Court of Australia, in which it is said: Mr Justice Murphy sought an opportunity to see the relevant material in the confidential volume of Mr Stewart's report. I draw his attention to the fact that the Attorney-General, on the National Today Show today, told several million Australians, no doubt, that there were references to the judge in the second volume of the Stewart report. Having pointed out that that is a matter put on the public record by both the Attorney-General and the Chief Justice of the High Court, I again ask the Minister: Was not the Government considering volume 2 of the Stewart report and the Don Thomas allegations in the context of the judge's position on the High Court before the Chief Justice spoke to the Attorney-General last Friday, and if not, why not? Senator GARETH EVANS —Despite the squalid little campaign now being waged by the Opposition with increased desperation and franticness as the prospect of some political prize seems to elude them, despite that campaign which has been a continuing one, as we all know, for the last two years, I do not propose to get into any public discussion here or anywhere else as to either the content of Stewart volume 2 or any evaluation of its weight or its implications. Senator CHANEY —Mr President, I ask a supplementary question. The Minister, in his usual way, has misrepresented the question in his answer. The question related to what the Government was doing: Was the Government considering the judge's position in the context of that report and of the Thomas matter on Friday before the Chief Justice spoke to the Attorney-General? Senator GARETH EVANS —I have already answered that question twice today. I have no intention of adding anything further. Senator COOK —Has the attention of the Minister for Finance been drawn to the denial yesterday by various Opposition members that the former Treasurer was advised by Mr Stone before the 1983 election that the prospective deficit was nearly $10 billion? Are those denials correct? If not, how did Mr Howard's 1982 Budget blow out the prospective 1983-84 deficit? Are there any similarities between Mr Howard's 1982 Budget and the promises he is making now? If so, what are they? Senator WALSH —My attention did not really have to be drawn to the denial coming from across the aisle. I noticed it, and I thought that after 12 years in the Senate I was fairly cynical and hard-bitten, but I must say that I was astounded that the Stalinists across the aisle are attempting to rewrite such recent Australian political and economic history. The fact that Mr Howard was advised of the true prospective Budget deficit early in 1983 appeared in many contemporary newspapers, but for a concise summary I refer anybody who is interested to Paul Kelly's book The Hawke Ascendancy, on pages 410 and 411. I quote a few sentences from that book: . . . it was public knowledge during the campaign that the Government's estimated 1982-83 deficit had risen from the Budget figure of $1,674m to about $4,000m . . . On 19 January Treasury wrote Howard a memo critical of the long-proposed National Economic Summit concept but also warning that the deficit for 1983-84 might be double that of 1982-83, that is, about $8,000m . . . During the campaign, on 21 February, Howard suggested in a qualified fashion that the deficit for the following year might be about $6,000m. Senator Michael Baume —That is not a projected deficit. That is his deficit. You are deliberately misleading the House. Senator WALSH —Go back to writing prospectuses for Patrick Partners. It continues: . . . on Monday, 28 February . . . Stone met Howard and gave him firm advice that the projected 1983-84 deficit was about $9,000m . . . On Friday, 4 March, the day before the election, Stone rang Howard to inform him that the projected 1983-84 deficit was $9,600m. That is almost $10 billion, exactly as I had said. Senator Cook also asked me: How did the 1982 Budget blow out the prospective 1983-84 deficit? There are basically two answers. In 1982-83 on both the outlays and revenues sides there were massive miscalculations, to put a charitable interpretation on it, of the type which blew out the 1982-83 deficit from, in round figures, $1.7 billion to $4.5 billion, or in other words boosted real outlays by more than 8 per cent over those of the previous year or, if one takes account of the fact that there was an additional pay day and pension day in the previous year, boosted real outlays in his Budget over his second last Budget by more than 9 per cent. This is the man who now advocates austerity in government expenditure. Because of the factors I have mentioned there was a higher base for the deficit following the 1982-83 Budget outcome. The other major reason was that the full year cost of the expenditure and taxation changes which had been incorporated in the last Howard Budget, that is, the 1982 Budget, added almost $3 billion more to the deficit. That Budget was brought down by the man who was unquestionably the most irresponsible Treasurer the country has ever had. Senator Cook also asked me whether there was any similarity between Mr Howard's record in his last year as Treasurer and his more recent record as Leader of the Opposition. There is, indeed, an alarming similarity in that he displays the same propensity for fiscal irresponsibility as Leader of the Opposition as he exhibited as Treasurer. I cite just two examples. In the last year or so Mr Howard and his deputies, none of whom he has contradicted, have run around the country making firm expenditure promises which would add $1.5 billion to outlays. They have also made-principally, in this case, Mr Howard-promises on the taxation revenue side of the Budget which would cost revenue up to $5 billion. The cumulative effect of the fulfilment of those promises, if any government were to introduce them, added to the present deficit would produce a deficit of about $12 billion in the next financial year which, as a proportion of gross domestic product, would be still somewhat lower, however, than the prospective deficit which this Government inherited from Mr Howard in the autumn of 1983. Senator PETER BAUME —My question to the Minister representing the Minister for Health follows the answer he gave to Senator Chipp earlier in Question Time and concerns Medicare and bulk billing. I ask the Minister: Is it not possible to continue an entitlement to Medicare benefits whether or not an entitlement exists to the use of bulk billing? To that extent, is it not true that bulk billing is an administrative procedure associated with Medicare rather than an essential component of Medicare? Will the Minister not agree that the only consequence of restricting general access to bulk billing would be to require some people to make a personal claim on Medicare to obtain a Medicare benefit in respect of certain medical services? Is not the concern about bulk billing the fact that some people are often not aware of what payments are being claimed for services said to have been given for them or to them? Senator GRIMES —As Senator Baume says, bulk billing is not an essential part of Medicare. It just happens to be a very desirable part of Medicare and a desirable part of the health insurance system. Senator Baume also rightly says that if one has a system of bulk billing, a system of health insurance which insures people against individual items, there are circumstances in which patients do not know exactly what is being claimed and what is not. I accept that, but the same situation also exists in the private health insurance system and always has. Under the private health insurance system in this country patients make claims for repayment or payment to doctors. The items are coded and have numbers against them. Senator Baume knows as well as I do that for years certain items in medical benefits schedules were abused. I can think of a couple now but I had better not mention them. That factor exists in both private and public health insurance systems. As long as one has a system whereby people are paid under fee for service and that system is as complicated as it inevitably is under our health insurance system, the capacity for people to rip off the system will be there. The best way to prevent them from doing so is to increase the likelihood of detecting their doing so. That is what this Government is about and what it will continue to be about. Senator McKIERNAN —My question is addressed to the Minister representing the Minister for Aviation. There are a number of articles in today's Press regarding attempts by Qantas Airways Ltd to re-enter the Australian domestic aviation scene-a right which was denied by the previous Government in 1979. Specifically, Qantas wants the right to fly overseas visitors around Australia on its internal flights. Will the Minister comment on the current situation? Senator GIETZELT —The Senate will be aware that Qantas is not allowed to sell empty seats on its flights from, say, Perth to Sydney or in other parts of Australia. That right was withdrawn in 1979 by the then Minister, Mr Peter Nixon, as part of the low cost international fare arrangements. However, this Government accepts that the environment for aviation in Australia has changed very significantly since 1979. It would be absurd to allow to continue a situation in which some 17,000 spare seats weekly on Qantas flights throughout Australia are not being used. However, a decision to restore inter-line rights will need to take into account a number of factors. The Government is currently giving consideration to those. They include the effect on domestic airlines and on Qantas and the interests of the travelling public. Of course, the Government has appointed Mr May to carry out a review of a number of matters, including inter-line flight rights in Australia. Until that review is carried out, the Government is not able to resolve the matter raised by Senator McKiernan. It is expected that that report will come down some time this year and something may eventuate after the inquiry to remove the unsatisfactory position of such a large number of seats not being used because of existing trade practices. Senator NEWMAN —My question is directed to the Minister representing the Minister for Defence. In my maiden speech last week I expressed concern about the Australian Army Reserve. Is it a fact that an advertising campaign which has cost the taxpayer $2.5m has resulted in a net loss of 547 members of the Army Reserve? Is it a fact that training hours have been slashed, that local recruiting campaigns are being restricted and that members are being advised that payment for attendance at parades should not be taken for granted? Is it a fact that, although the approved strength of the Reserve is 30,000, the strength as at 31 March 1986 was only 23,175 and the effective strength is more like 18,000? Finally, if this is the situation, is it any wonder that morale in the Reserve is at rock bottom? Senator GARETH EVANS —That is obviously a question more appropriate to be put on notice and I ask Senator Newman to do so. Senator VALLENTINE —I address my question to the Minister for Resources and Energy and it concerns a proposal that spent fuel rods from the Lucas Heights nuclear reactor will be shipped to the United States of America in June. How many fuel rods will be in each shipment? How much plutonium is in each fuel rod? How many shipments will go this year? What is the total cost of each shipment? Has the option of storing spent fuel rods in Australia been considered and what would be the cost of this? Finally, what proposals are there about what to do with the highly enriched uranium that will emerge from reprocessed fuel rods? Senator GARETH EVANS —That question not being appropriate to be put on notice, I will do my best to answer it. The Government is seeking to send back to the United States of America for reprocessing a total of about 450 fuel rods. So far as each shipment size is concerned, as the design and approval procedures for the container which will be used to transport the high flux atomic reactor spent fuel elements to the United States have not yet been completed, a definite capacity has not been decided, but will be in the range of 100 to 120 elements. The 450 spent fuel elements are estimated to contain about one-quarter of a kilogram of plutonium, with each fuel element containing slightly more than half a gram. It is unlikely that arrangements will be finalised in time for shipments of spent fuel to commence this year. It is expected to be early next year before the first shipment will take place. I am not able to release details of the cost of each shipment as this information is confidential to the commercial interests involved. The relevant contracts, in any event, are still being finalised and when this is done the overall cost certainly will be made public. The option of continuing to store the spent fuel at Lucas Heights was carefully considered by the Government. As almost all available space for fuel storage at Lucas Heights is currently full, however, further fuel storage space would have had to be constructed or else the HIFAR shut down. Construction of interim additional storage was estimated to cost over $400,000 but was not considered to be a desirable option by the Government as this would only defer the decision on eventual long term disposal of spent fuel. I should say also that the disposal of spent fuel is consistent with the Government's nuclear non-proliferation objectives by reducing the inventory of highly enriched uranium stored at Lucas Heights. Final disposal in a deep repository in Australia would be prohibitively expensive, costing in the order of tens of millions of dollars, and would require the establishment of processing facilities, contrary to the Government's commitment against further stages of the nuclear fuel cycle in Australia. No decisions have been made on the final use of the highly enriched uranium to be recovered from the spent fuel elements. However, under the Australia-United States safeguards arrangements this material will be available only for peaceful uses as designated by Australia. In particular this material could be used, of course, as further fuel for the HIFAR reactor. Senator JESSOP —Has the attention of the Minister for Resources and Energy been drawn to an article in the Adelaide Advertiser last month in which there were photographs of people describing themselves as the Bike Ride, which is an independent group with members throughout Australia? Is he aware that the group comprises some 50 cyclists of various ages, including a number of children of school age, whose purpose is to visit Olympic Dam and other uranium mines, defence centres and foreign military bases in all Australian States on a trip lasting 18 months? The spokesman, Mr McKinnon, claimed that the group aimed to increase the awareness of peace issues of the people working in those industries and this has incensed workers at Olympic Dam, not to mention workers in other industries. In the light of the Minister's acknowledged expertise about both uranium mining and joint facilities and their importance to the future of world peace and security, will the Minister state whether or not, apart from the dole, this group is subsidised out of what seems to be a bottomless pit available for so-called peace activities, if not out of peace funds? Is the group receiving financing from the Federal Government in any other respect and, if so, out of what appropriation? Will the Minister indicate whether the Government approves of diverting young children from their proper studies in this way, especially if the Government is subsidising them in any way? Senator GARETH EVANS —Senator Jessop's bike riders have not done much to increase my awareness of peace issues because I am afraid that I have not heard of their existence. I will endeavour to find out what facts might lie behind the question and I will take the other aspects of it upon notice. Funding for the International Year of Peace is a matter for the Minister for Foreign Affairs and I will seek his advice also. Senator CROWLEY —My question is directed to the Minister for Education. I have had a number of representations from the Nganampa Health Commission out of Alice Springs concerning the problems of education for Aboriginal people in the communities of northern South Australia. What capacity does the Commonwealth Government have to address educational needs of this sort and what, if any, initiatives have been taken by the Government to tackle this and similar problems of education for isolated or disadvantaged students? Senator RYAN —In recent years the conventional form of assistance for education of young Aboriginal students living in remote areas has been by way of payment of the Aboriginal secondary grants scheme, an allowance which pays for travelling and school expenses, books and other incidental items. Although that has provided educational opportunities for some young people in isolated areas, it has by no means been successful for all or even a majority of young Aboriginal people living in isolated areas. Problems of homesickness, cultural shock, inappropriate school environments and so forth have meant that many young Aboriginal people have dropped out of their boarding schools and returned home to their communities at an age below school leaving age and have had no constructive activities available for them. In recognition of this, last year the Federal Government announced a $1m pilot program for developing remote area educational programs suitable for adolescent Aboriginal students, and in particular for those who did not wish to go away to school or whose families did not wish them to go out of the community and who intended-as far as they could be sure at that age-to stay in their communities and, therefore, required a more vocationally oriented-community oriented type of education. The $1m is being spread amongst Queensland, South Australia, Western Australia and the Northern Territory to fund, I think it will be, half a dozen projects. One of the projects in the Northern Territory, for example, is a mobile educational unit which will take vocational education suitable for Aboriginal adolescents into some of the remote communities. There is also a program developed in South Australia for its remote areas. At the same time we are making increased efforts to train teachers, either Aboriginal or non-Aboriginal but preferably Aboriginal, in a way that will enable them to teach successfully in these very remote areas. Senator Crowley will probably be aware that a South Australian college in her State is a leader in this respect. It has a very successful program whereby teachers from the remote area communities-that is, members of those communities-are trained to teach mainly on the job in their own communities. They are not required to leave their communities for extended periods. They are able to carry out most of their training in their communities with the support of staff from the South Australian college, which means that the problem of cultural gaps, cultural inappropriateness and so forth is overcome. In fact, in recognition of the South Australian college's development in this regard that project has now become one of our Government's key centres for teaching and research; that is, it receives additional funds to enable it to develop its work at a very high standard and in a way which, we hope, will enable it to be a model for teacher training for Aboriginal teachers for remote communities throughout those States which have such remote communities. It will probably be a few months before we can start evaluating the pilot project, but all of the relevant States and the Northern Territory have co-operated with the guidelines developed by me in consultation with the National Aboriginal Education Committee. I hope, and expect, this new development will mean that Aboriginal students living in remote areas will not face nothing after primary education, which is the circumstances they were once in, and are still in in a number of places in Australia-that they will have the opportunity to undertake some useful community oriented and culturally appropriate education. Senator GARETH EVANS —Yesterday Senators Chipp and Sanders asked me about the quantity of depleted uranium resulting from enrichment of Australian uranium in the Union of Soviet Socialist Republics, on behalf of our uranium customer countries, that is now located in France. I undertook to give them an answer today and I now do so. Perhaps I should say at the outset that the definition of depleted uranium, which is widely misunderstood, not least by the Australian Democrats, is uranium in which the content of the fissile isotope uranium 235 is less than the 0.7 per cent normally found in natural uranium. While depleted uranium has some reactor uses as a blanket for neutron capture in fast breeder reactors, as was said yesterday, it is perhaps more familiarly known for its non-reactor uses, taking advantage of its great density-for example, yacht ballasts, counter weights in large aircraft control systems, and in shielding for radiological purposes. The situation as to quantum is this: The Australian Safeguards Office has advised me that there are 159,991 kilograms of this material presently stored in France. That amount largely reflects I guess, the volume of enrichment activity that is being carried out there. Only two countries have passed on Australian origin nuclear material to the USSR on the all-in all-out principle-Finland and Sweden. The 159,991 kilograms in France to which I have just referred is, I am advised, all Finnish material sent on there after it has been returned to Finland from the USSR. Tails derived from Australian origin nuclear material enriched in the USSR on behalf of Sweden are all, in fact, now in the United Kingdom. I have some further information about the procedures that are involved in tracking this material. I suggest it might suit the convenience of the Senate if I were to seek incorporation of those paragraphs in Hansard. The PRESIDENT —Is leave granted? Senator Chaney —No. The PRESIDENT —Leave is not granted. Senator GARETH EVANS —Very well. Under Australia's bilateral nuclear safeguards agreements the Australian Safeguards Office maintains inventories of Australian origin nuclear material as it moves through the nuclear fuel cycle. Procedures to enable this to be done are provided for in the administrative arrangements to the agreements which establish a system of records and reports by which the Australian Safeguards Office is kept informed of international transfers of Australian origin nuclear material. This is so whether the transfer is between two of Australia's bilateral partners or between one partner and the USSR, in whose territory the Government has agreed that AONM may be processed on an all-in, all-out basis. The administrative arrangements also provide for periodic summary reports of inventories of AONM to be exchanged between ASO and its counterpart organisations. These reports provide the basis for periodic reconciliation of accounts kept by ASO with those kept by its counterparts, defining the amounts of nuclear material and nuclear items subject to Australia's bilateral safeguards agreements. The way in which the Australian Safeguards Office accounts for Australian uranium is clearly set out in its 1984-85 annual report which I recently tabled in Parliament. Senator GARETH EVANS —Mr President, I also have a reply to Senator Hill's question asked of me yesterday about United Kingdom and New Zealand intelligence. Again, I think it might suit the convenience of the Senate if I were to incorporate the reply in Hansard, and I seek leave accordingly. The PRESIDENT —Is leave granted? Senator Chaney —No. The PRESIDENT —Leave is not granted. Senator GARETH EVANS —I remind you, Mr President, that I am normally requested by Senator Chaney to incorporate these matters-I have been on a number of occasions in the past. I mention that for the record, and I will now proceed to give the answer that I promised to Senator Hill. The absence of a New Zealand representative from meetings of the Joint Intelligence Committee in London relates to the difficulties that are associated with the attendance at those meetings of the United States of America representatives. As far as we are aware, this exclusion does not affect the provision to New Zealand of intelligence from United Kingdom sources. The responsibility for passing United Kingdom defence intelligence to New Zealand lies with the United Kingdom authorities. To the extent that the Australian defence intelligence output contains United Kingdom based information, there is no restriction by the United Kingdom on its transmission to New Zealand. In general, the Government will continue to abide by the long established principle of not passing intelligence obtained from one country to any third country without the prior consent of the originator. With regard to the provision of Australian sourced material to New Zealand, Australia will continue to provide New Zealand with access to material of Australian origin under stated release conditions that existed prior to New Zealand's present difficulties with the United Kingdom. The Prime Minister, in a statement to the House of Representatives on 27 February 1985 about the New Zealand-United States dispute, said: . . . whatever the outcome Australia will maintain active intelligence co-operation with New Zealand based, I insist, on material of Australian origin and in that way reflect the very close bilateral relationship between the two countries. Senator RYAN —Yesterday Senator Sheil asked me for some information regarding a purchase by the Chisholm Institute of Technology in Victoria of a shopping centre. I have available the information sought in Senator Sheil's question and I seek leave to incorporate the answer in Hansard. The PRESIDENT —Is leave granted? Senator Chaney —No. The PRESIDENT —Leave is not granted. Senator RYAN —Funds are provided to the States for institutions such as the Chisholm Institute of Technology under the terms of the States grants legislation. This requires institutions to provide the Commonwealth Tertiary Education Commission with statements by qualified auditors certifying that Commonwealth grants have been expended in accordance with the provisions of the legislation. In addition, institutions are required to provide an annual statistical return to the CTEC which includes details on expenditure patterns across the range of activities undertaken by them. I am advised that the Chisholm Institute of Technology has complied with the requirements of the legislation. However, in addition to receiving direct financial support from the Commonwealth, many institutions have access to other sources of funding, such as interest earnings, bequests or through links with industry. The Government encourages institutions to pursue appropriate alternative sources of income. As I indicated previously, I asked for the matter of the purchase of the Caulfield Plaza shopping centre by the Chisholm Institute of Technology to be investigated. The CTEC has sought advice from the appropriate body in Victoria-the Victorian Post-Secondary Education Commission. Advice given by VPSEC indicates that: Firstly, the funds used to purchase the site were provided entirely from accumulated monies generated by the Institute's extraneous activities. No government funds were involved. Secondly, no government funds have been used for servicing costs. These are met from rental and lease income from the tenants of the Plaza. Thirdly, staff involved in managing and operating the Plaza are paid from extraneous funds. Fourthly, no Commonwealth funds have been used to manage or to assist with staffing of the Plaza complex. Fifthly, plans for the transfer of the general management of the Plaza to external property managers are well advanced. As I understand it, the Institute decided to purchase the shopping centre site in view of its proximity to the Caulfield campus. Over the longer term this purchase will provide the institution with the opportunity to expand on to the site and it will therefore ensure that the institution retains the capacity to expand in the future. The Government encourages institutions to undertake activities which will enhance their flexibility in meeting the needs of their students. Activities such as that undertaken by the Chisholm Institute deserve the support of governments and I have no intention of reducing Commonwealth funding to the institution. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.17) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave not granted. Senator BUTTON —The Statute Law (Miscellaneous Provisions) Bill (No. 1) 1986 continues the practice of introducing an omnibus Bill into each sitting of the Parliament as an expeditious way of making a large number of non-contentious amendments to legislation not otherwise being amended. Some of the amendments made by this Bill tidy up, correct and update existing legislation. Other amendments are of minor policy significance or are matters of routine administration. None of the amendments made by the Bill has any significant financial impact. Many of the proposed amendments will be self-evident or sufficiently explained by the explanatory memorandum circulated with the Bill, I propose to confine my comments to addressing the more noteworthy changes included in this Bill. Air Navigation (Charges) Act 1952 The amendment will clarify the Commonwealth's ability to impose charges to recover costs incurred in providing maintenance and development grants for aerodromes owned by local authorities under the aerodrome local ownership program. Antarctic Treaty (Environment Protection) Act 1980 The Act implements the agreed measures for the conservation of Antarctic fauna and flora agreed amongst the states parties to the Antarctic Treaty. The Act enables permits to be granted, subject to certain conditions, for scientific activities to be carried out in areas designated as specially protected areas. As the Act now stands, a permit cannot be granted for the use of aircraft in specially protected areas. This restriction on the use of aircraft places an unnecessary restraint on the research which can be undertaken. It has also created considerable logistical difficulties and hazards for scientists engaged in field studies in specially protected areas, particularly where the area is an island. These problems could be obviated by limited and carefully controlled use of helicopters. The purpose of the proposed amendments to the Act is to enable this to occur. The landing or driving of aircraft in specially protected areas is consistent with the agreed measures for the conservation of Antarctic fauna and flora. It is intended that permits granted for the use of aircraft will be subject to whatever conditions are necessary for the responsible management of the specially protected areas in accordance with the spirit of the agreed measures. Wherever possible the conditions applied would be based on existing specially protected area management plans. Archives Act 1983 The amendment ensures that one of the original intentions of the Archives Act is achieved. This intention, in line with a long-established convention prior to the proclamation of the Act, is to provide privileged access to Commonwealth records not otherwise available for public access, including records not in the open access period. Regulations made pursuant to this amendment will prescribe the classes of persons to whom such access, called `special access', may be granted. They will also prescribe the classes of records which, in accordance with arrangements approved by the Prime Minister may be made available. At present only the purposes for which Commonwealth records may be made available to a person under special access arrangements may be prescribed by regulation. Audit Act 1901 The purpose of these amendments is to facilitate the legislative reforms necessary to effect the initiatives of the Government with respect to the auditing of statutory marketing authorities-SMAs. Under these reforms, statutory marketing authorities are being provided with the option, through their enabling legislation, of appointing a private sector auditor to undertake the audit of their accounts. However, where a company auditor is appointed, the Auditor-General is to retain a discretionary power to conduct any of his usual audit functions under the Act having regard to the need to avoid unnecessary duplication of audits. Australian National Airlines Act 1945 Australian National Railways Commission Act 1983 Australian Shipping Commission Act 1956 The borrowing provisions of these Acts have been amended to allow borrowing or raising of money to be undertaken consistently with terms and conditions in the Treasurer's approval. This is designed to enable these bodies to undertake borrowings on terms and conditions which are no less favourable than those in the approval and thereby to respond more easily to changes in the financial market conditions. To further allow these bodies to respond to financial markets and to ease administrative burdens, the amendments also allow the Treasurer to delegate his power to approve and guarantee a borrowing or raising of money other than from the Commonwealth to an officer of the Department of the Treasury. Such delegation will be used only for routine borrowing approvals within approved borrowing programs. Matters involving questions of policy will continue to be dealt with by the Treasurer. Australian Capital Territory Electricity Supply Act 1962 Norfolk Island Act 1979 Northern Territory (Self-Government) Act 1978 Overseas Telecommunications Act 1946 Pipeline Authority Act 1973 Postal Services Act 1975 Snowy Mountains Engineering Corporation Act 1970 Snowy Mountains Hydro-electric Power Act 1949 Telecommunications Act 1975 The borrowing provisions of these Acts have been repealed and replaced with more modern provisions which are consistent with the previous borrowing powers of the authorities but which clarify the power of the authorities to borrow or raise money, with the Treasurer's approval, by the range of modern borrowing techniques available. In addition, the new provisions allow for a borrowing or raising of money to take place on terms and conditions that are no less favourable than and consistent with those of the approval. Except for the amendments to the Northern Territory (Self-Government) Act, the provision will allow the Treasurer to delegate his power to approve and guarantee borrowing or raising of money to an officer of the Department of the Treasury. Such delegation will be used only for routine borrowing approvals within approved borrowing programs. Australian Institute of Marine Science Act 1972 and National Measurement Act 1960 These Acts both require that money shall not be expended otherwise than in accordance with estimates of expenditure approved by the Minister. The Acts also require particulars of proposed expenditure for each financial year commencing on the following first day of July to be furnished to the Minister and that further particulars be furnished at any time specified by the Minister. At present these requirements extend to moneys received under schemes such as the special youth employment training scheme and commonwealth employment scheme. The requirements, however, are not suited to such moneys because the receipt of funds under these programs at irregular times during the course of a financial year makes it necessary to seek ministerial approval a number of times each year. Also, because most grants and subsidies are approved at short notice, they cannot accurately be included in estimates. This means that each time a grant or subsidy is approved, estimates must be revised and resubmitted to the Minister for approval. The amendments will limit the requirements for ministerial approval of financial estimates to such moneys as are appropriated from time to time by Parliament for the purposes of the Acts. There is of course a need for the Minister to be informed of other moneys received by the Australian Institute of Marine Science and the National Standards Commission, and regulations will be drafted under the Acts to provide suitable reporting and approval requirements for those moneys. The Australian Institute of Marine Science Act is also being amended to increase the financial limit of contracts which may be entered into by the Institute without ministerial approval from $50,000-set in 1972-to $100,000. Commonwealth Inscribed Stock Act 1911 At present, no power exists for the Treasurer to delegate his powers dealing with applications for transmission of stock. The amendments will enable the Treasurer to delegate those functions, which are purely administrative, to officers of the Treasury or the Reserve Bank of Australia. The Act also does not enable the Registrar of Inscribed Stock to rely upon a power of attorney if the principal has become mentally incapable after executing the power of attorney. In some States and Territories, certain powers of attorney may remain in force notwithstanding the incapacity of the principal. The amendment will enable the Registrar to rely on powers of attorney in those circumstances if they are effective in the relevant State or Territory. Crimes Act 1914 Crimes (Taxation Offences) Act 1980 One of the amendments to the Crimes Act will exclude offences committed against the laws of the Australian Capital Territory from the application of the provisions dealing with police powers to arrest without warrant. New, more comprehensive provisions are to be incorporated in the Crimes Act 1900, New South Wales, in its application to the Australian Capital Territory along the lines of a recommendation by the Australian Law Reform Commission in its 1986 report on domestic violence. The amendment will be proclaimed only when the Territory provisions are brought into effect. The Crimes Act creates the offences, amongst others, of fraud on the Commonwealth and conspiracy to defraud the Commonwealth or a public authority under the Commonwealth. The level of penalty for such conspiracies is to be increased, following judicial criticism of the inadequate penalty level, to a level that reflects the seriousness of the offence. The penalty reflects the Government's concern that persons convicted of large scale conspiracies to defraud the Commonwealth may be appropriately dealt with by the courts. The amendment of the Crimes Act concerning fraud, and the amendment of the Crimes (Taxation Offences) Act 1980, which deals with sales tax and income tax offences, provide an adequate level of penalty for the offences concerned. Family Law Act A section is to be inserted in the Act to enable Australia to withdraw the reservation attached to its accession to the Hague Convention on the Recognition of Divorces and Legal Separations. Australia acceded to this Convention on 24 September 1985, but with a reservation as to its application to the external Territories. This reservation can be removed when the new section is in operation. The other provisions relate to the Institute of Family Studies and arise out of recommendations made by the Review of Research Bodies in the Attorney-General's portfolio which reported in December 1985. The name of the Institute is changed to the Australian Institute of Family Studies to recognise and promote its national and international reputation and to bring it into line with other national research bodies such as the Australian Institute of Criminology and the Australian Institute of Multicultural Affairs. Other amendments arise out of the recommendation in the Review report that the Attorney-General should be able to refer particular research issues to the Institute and to assign some priority to those referred issues. Amendments to financial provisions concerning the Institute bring them into line with those governing other national research bodies. Federal Court of Australia Act 1976 The amendment will enable the Chief Judge to direct that a matter coming before the Federal Court of Australia in its original jurisdiction be adjudicated by a Full Court, if he or she considers the matter to be of sufficient importance to justify such a direction. Judges' Pensions Act 1968 On occasions, judges are requested by the Government to perform tasks which are not within the normal scope of judicial duties such as, for example, to serve as a royal commissioner. Also, there may be occasions where a judge may not be available to perform judicial duties because of an extended period of absence due to illness or for recreational purposes. The purpose of the Act in providing for pensions for judges and for other office holders who have been brought within its scope would be frustrated if a judge were to put his pension entitlement at risk by accepting tasks not within the ordinary range of his or her duties. This would certainly be so where, at the request of or by appointment by the Government, the judge served on a royal commission or some other inquiry. Nor would the purpose of the Act be served by making the minimum judicial service for qualifying for a pension depend upon factors not under the control of the person; for example, if absence through prolonged illness did not count towards that service. The amendment provides therefore that any period of authorised leave of absence by a judge or former judge counts as part of the period of service as a judge for the purpose of his or her pension entitlement. Radiocommunications Act 1983 The amendments will enable inspectors to take appropriate action in emergencies to protect radiocommunications that are essential to the safety of human life. Where a transmitter on unoccupied land or premises or in an unoccupied vessel, vehicle or aircraft is interfering with radiocommunications that are essential to the safety of human life, an inspector may, where necessary, enter without warrant and adjust the operation of the transmitter to prevent the interference continuing. These powers may be used only in defined emergencies and must be exercised as sparingly as possible in each situation. All reasonable steps must be taken to notify the owner as quickly as possible of the action that is being taken in respect of a transmitter so that the owner may take whatever steps are necessary to minimise any resultant inconvenience or detriment. Snowy Mountains Engineering Corporation Act 1970 The amendments remove the nexus between the Snowy Mountains Engineering Corporation and the Public Service Board in relation to terms and conditions of employment for Corporation staff. They will enable the Corporation to move into line with consulting engineering industry norms and to provide its staff with similar conditions to those which its competitors apply in the market place. At the time the link is broken with the Public Service Board, the existing terms and conditions of existing staff will be preserved. States and Northern Territory Grants (Rural Adjustment) Act 1985 These amendments remove administrative impediments to the operation of the rural adjustment scheme. Administrative problems have been raised by the States with the operation of the scheme and certain unintended anomalies resulting from the administrative arrangements have been pointed out. The amendments correct these anomalies. Repeal of spent and inoperative Acts No comment is necessary about most of the Acts being repealed. As 1986 is the International Year of Peace, it is appropriate that I briefly mention the background to the repeal of the various treaties of peace Acts. They were passed after the Second World War to give Parliament the opportunity of discussing the treaties with ex-enemy states and to enable the then Government to make regulations to give effect to the treaties. As it turned out, it was not necessary to make any regulations and the Acts can be repealed without affecting the operation of the treaties themselves. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Mr President has received a letter from the Leader of the Opposition (Senator Chaney) requesting a change in the membership of the Standing Committee on Industry and Trade and Estimates Committee B. Motion (by Senator Button)-by leave-agreed to: (1) That Senator Archer be discharged from further attendance on the Standing Committee on Industry and Trade and that Senator Parer, having been duly nominated in accordance with Standing Order 36aa, be appointed a member of the Committee. (2) That Senator Messner be discharged from further attendance on Estimates Committee B and that Senator Walters, having been duly nominated in accordance with Standing Order 36ab, be appointed a member of the Committee. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.35) —I move: That the Bill be now read a second time. The purpose of the Australian Meat and Live-stock Corporation Amdendment Bill 1986 is to amend the Australian Meat and Live-stock Corporation Act 1977 to provide increased flexibility for the Corporation in the exercise of its commercial and financial responsibilities. This will involve the removal of many of the present requirements for ministerial approval of what might be called the day to day operations of the Australian Meat and Live-stock Corporation. The amendments provided for in this Bill complement the restructuring of the statutory arrangements for the meat and livestock industry which this Government commenced during 1984 and continued in 1985. Previous changes have streamlined the operation of the industry's statutory organisations and have resulted in more appropriate mechanisms for ensuring the accountability of the AMLC through corporate planning and an annual general meeting. In accordance with policy relating to primary industry statutory marketing authorities, as set out in the recent Government policy statement, the present amendments provide for more flexibility in the AMLC's operations and places reliance on the corporate plan and annual general meeting to ensure appropriate accountability to both Parliament and industry. The amendments in this Bill are supported by the industry and follow on from the invitation of the Minister for Primary Industry (Mr Kerin) to industry to identify areas where administrative procedures could be rationalised to benefit the industry. The current amendments should provide the AMLC with a more effective capacity to address the marketing challenges facing the industry now and in the future. The amendments will not impose any new cost burdens on the Commonwealth and some savings may result to the AMLC through streamlined administration and financial management procedures. The Bill provides for the removal of the requirement for specific prior ministerial approval of purchase of property over $100,000 by the AMLC, purchase and sale for export of meat and livestock, the terms and conditions for employment of staff and of consultants and the operation by the AMLC of facilities and services in connection with the marketing or sale of meat and livestock. In order to increase the flexibility of the Corporation's financial operations it is proposed to remove the requirement for ministerial approval of borrowings by the Corporation with the exception that where the AMLC wishes to borrow in excess of $5m in any financial year the approval of the Treasurer will be required. The Corporation will be empowered to lend money in connection with the performance of its functions. In accordance with the commercial principles behind these changes the Bill will remove the option currently available to the Corporation of securing a Commonwealth guarantee for its borrowings. At the same time the Corporation will be empowered to exercise its own discretion in deciding on the bank or banks with which it will maintain accounts and in deciding the nature and form of the investments in which reserves and other monies not immediately required are held. In accordance with the new statutory marketing authority guidelines, the Bill provides the Corporation with the option of using a commercial auditor in place of the Auditor-General. The appointment of a commercial auditor will require a resolution at an annual general meeting of the Corporation and can only proceed where the Auditor-General reports favourably to the Minister on the suitability of the proposed auditor. The appointment must also be agreed to by the Joint Parliamentary Committee of Public Accounts. The Auditor-General shall retain full auditing responsibilities where no commercial auditor has been appointed. In addition the Auditor-General's power to independently audit the Corporation and report to the Minister is to continue. The Government has considered it appropriate to provide licenced exporters of meat and livestock with the right of appeal to the Administrative Appeals Tribunal against decisions by the AMLC to make orders to transfer, cancel or surrender export quota allocations made under section 16j of the Australian Meat and Live-stock Corporation Act. As honourable senators will have noted from the statutory marketing authority policy statement, it is the Government's intention that the Minister for Primary Industry have a general power of direction over the activities of all Commonwealth primary industry statutory marketing authorities. This power is seen as a reserve power to be used in exceptional circumstances and accordingly strict provisions regarding the publication of such directions are included in the Bill. Directions under this amendment must be given in writing and then only after consultations between the Minister and the Chairman of the AMLC. The directions must be notified in the Commonwealth of Australia Gazette and tabled in both Houses of Parliament within 15 sitting days of issue. The Corporation will be required to report all such directions in its annual report together with a statement of their effects on AMLC operations. The opportunity is also being taken in the Bill to clarify the power of the Corporation to be involved in the provision of services or facilities in connection with the sale and marketing of Australian meat and livestock. In this regard the Corporation is developing facilities to take advantage of computer technology consistent with its function to promote the sale of Australian meat and livestock. The reforms incorporated in this Bill should enable the Corporation to further improve on the effectiveness of its role in the marketing of Australian meat and livestock. They will enhance the statutory structure provided for this most important industry by removing unnecessary impediments to its commercial effectiveness. I commend the Bill to honourable senators. Debate (on motion by Senator Sheil) adjourned. Senator COONEY(Victoria) —I now withdraw Business of the Senate, Notice of Motion No. 1 standing in my name relating to Superannuation (Salary) Regulations (Amendment), pursuant to the notice of intention I gave earlier today. I seek leave to make a statement. Leave granted. Senator COONEY —The Superannuation (Salary) Regulations (Amendment) are regulations made by the Minister for Finance under the Superannuation Act 1976. They are complex machinery provisions designed to provide the rules whereby certain payments of shift allowance are, or are not, to be treated as salary for the purpose of computing entitlements to superannuation. Prior to the regulations it was thought that shift allowance had to be paid continuously for 12 months prior to retirement before it could be counted as salary. Thus, it was thought that a shift worker who worked a day time shift that does not attract any allowance would not be entitled to include many months of shift allowance payments as part of his or her salary for superannuation purposes on retirement. The harshness of this interpretation appears manifest and eventually the Administrative Appeals Tribunal held that shift allowance formed part of `salary' in the ordinary sense of the word and the regulations were not relevant to determining what constituted salary. The Federal Court of Australia rejected an appeal against this decision lodged by the Commissioner for Superannuation. Because of the new open-ended nature of the definition of salary it has been necessary to make regulations to regulate the treatment of shift allowance as salary for superannuation purposes. The Senate Standing Committee on Regulations and Ordinances Committee can have no quarrel with these new rules on the grounds of their policy, or their basic substance. However, within the complex structure of the regulations there is conferred upon `a person authorised by the Commissioner' a power to take a class of discretionary decisions which could adversely affect a person's entitlement to superannuation. If a contributor became a shift worker during the 12 months period ending on his or her death or retirement, and shift allowance was paid regularly during this final period, entitlement to have those payments included as salary for superannuation purposes is dependent on the issue of a certificate by an authorised person. This authorised person must first be of the opinion that there is a likelihood that shift allowance would have been regularly paid during a full 12 months had the employee not died or retired. Unlike every other administrative decision that can be taken in connection with superannuation, this decision of an authorised officer is not subject to review by the Administrative Appeals Tribunal. Yet this decision is no less important than other reviewable superannuation decisions. It is taken by the very same officials who take other reviewable decisions. An adverse or arbitrary decision can have serious financial effects on a contributor or his family. Clearly, because of the risk that unfair and harsh decisions can be made there ought to be a right to challenge an adverse decision of an authorised person. There ought to be a right of appeal to the AAT against the personal `opinion' of that official as to what is and what is not `likely' on all the facts of a particular case. Since June 1979 at the latest it has been known that this class of important discretionary decision is not subject to appeal to the AAT. It appears, and the Committee accepts, that there was nothing deliberate or calculated about the absence of review rights in this instance. The problem was caused by a drafting oversight. In 1979 the AAT in McLinden's case held that this class of authorised persons' decisions was not reviewable because only decisions of the Commissioner and his or her delegates are reviewable. The Commissioner could not provide that his or her delegates, rather than authorised officers, should take these particular decisions because under section 25 of the Superannuation Act the Commissioner cannot delegate powers conferred under regulations. He or she can only delegate powers conferred under the Act. Thus, there was an oversight in the otherwise protective scheme of appeal rights. The Administrative Appeals Tribunal formally and publicly identified the flaw in June 1979. In 1980 the Administrative Review Council recommended that it be remedied by expanding the definition in the Act of `reviewable decisions' to include decisions of authorised persons. In 1980 the then Minister for Finance accepted this recommendation. However, it was not implemented. In 1981 the Administrative Review Council again recommended expanding the definition. In its fourth, fifth, sixth, seventh, eighth and ninth reports to date the Administrative Review Council has repeated its recommendation. It was hoped it would be implemented in one of a number of major superannuation amendment Bills over the past seven years. However, these Bills all came to grief even before they were introduced into the Parliament for reasons completely unrelated to this question of providing proper appeal rights. Since 1979 there have been, as I understand it, 10 Statute Law (Miscellaneous Provisions) Bills which are, by definition, designed to cater for machinery amendments and oversights of this kind. Had there been within the Department of Finance any serious commitment to providing for review of administrative decisions, it is to be expected that in seven years officials would have commandeered some space in one of those statute law Bills to make the amendment. If there had been within the Department any concern for possible injustice or harshness, this solution would have been used as soon as the first superannuation amendment Bill had failed to make progress. However, where officials' decisions are not legally subject to review of the kind available before the AAT, there is a tendency for them to become peremptory, and possibly capricious. The belief develops that the decisions need not be subject to review because, having been made by the class of officials concerned, they are invariably and intrinsically correct. Part of this Committee's remit is to try to persuade Ministers and officials to accept independent appeals in order to underwrite the quality of important administrative decisions. The Committee has asked the present Minister for Finance (Senator Walsh), in view of the long delays which have characterised the history of this matter, to make an amendment to section 154 of the Superannuation Act and place that amendment in the statute law Bill currently before the Parliament. Since that Bill has already left the House of Representatives, the Minister has agreed to amend section 25 of the Act in a proposed superannuation amendment Bill to be introduced in the Budget sittings, and later to amend the regulations to bring the errant class of decisions under the umbrella of review. He has undertaken that, if that Bill fails to pass, he will seek an amendment to section 154 to be placed in the Budget statute law Bill. The Committee has accepted this undertaking and respectfully commends the Minister for his decisions to act to provide for adequate review rights in this matter. I seek leave to incorporate in Hansard the correspondence relating to this matter. Leave granted. The documents read as follows- PARLIAMENT OF AUSTRALIA THE SENATE STANDING COMMITTEE ON REGULATIONS AND ORDINANCES 18 February 1986 Senator the Hon. Peter Walsh, Minister for Finance, Parliament House, CANBERRA A.C.T. 2600 Dear Minister, At its meeting on 13 February 1986, the Committee considered the Superannuation (Salary) Regulations (Amendment) (being Statutory Rules 1985 No. 326, tabled in the Senate on 5 December 1985). The Committee seeks your views in connection with the reviewability of a particular discretionary decision under the regulations. The regulations amend the principle regulations to provide that in certain circumstances, shift allowance is included in salary for superannuation purposes. Regulation 8e (4) provides as follows: ``(4) Where- (a) sub-paragraphs 3 (b) (i) and (ii) apply in relation to a person to whom this regulation applies; and (b) a person authorized by the Commissioner for the purposes of this regulation is of the opinion that there is a likelihood that, if the first-mentioned person had not ceased to be an eligible employee, shift allowance would have been payable on a regular basis to the person during the period of 12 months that commenced on the day on which the period referred to in sub-paragraph (3) (b) (ii) in relation to the person commenced, the authorized person shall give to the Commissioner a certificate to that effect specifying the day on which the first-mentioned period commenced.'' The decision of the ``person authorized by the Commissioner'' to decide on the ``likelihood'' under Regulation 8e (4) (b) appears to be not subject to review by the Administrative Appeals Tribunal. Under Section 154 (1) of the Superannuation Act 1976 a reviewable decision ``means a decision of the Commissioner, or a delegate of the Commissioner''. It was held in Re McLindin and Acting Commissioner for Superannuation ((1979) 2 ALD 261) that the Administrative Appeals Tribunal had no power to review a decision under a Regulation which enabled an officer authorized by the Commissioner to issue certain certificates. This was so, the Tribunal held, because ``the decision is not taken by the Commissioner or his delegate but by the officer himself acting in his own right'' under the terms of the Regulation. The provisions of the present Regulation 8e (4) (6) appear to be in similar form and the decision would not be reviewable under the decision in McLindin's case. The Committee draws your attention to paragraph 76 of the Fourth Annual Report (1980) of the Administrative Review Council, where the Council recommended that section 154 of the Act be amended to facilitate A.A.T. review. As you know principle (c) of the Committee's terms of reference states that the Committee scrutinises delegated legislation to ensure that it does not unduly make the rights and liberties of citizens dependent upon administrative decisions which are not subject to review of their merits by a judicial or other independent tribunal. It would be useful if you could let the Committee know whether there is any reason why the A.R.C.'s 6 year old recommendation cannot be implemented to ensure that these regulations conform with the Committee's principles in the matter of review of discretionary decisions. Yours sincerely, Barney Cooney Chairman MINISTER FOR FINANCE PARLIAMENT HOUSE CANBERRA A.C.T. 2600 1 May 1986 Senator B. Cooney Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA A.C.T. 2600 Dear Senator Cooney, I refer to your letter of 18 February 1986 seeking my views in relation to the reviewability of discretionary decisions made under regulations made pursuant to the Superannuation Act 1976 (the Act). As noted in your letter, the decisions referred to in regulations 6 and 8E of the Superannuation (Salary) Regulations are not reviewable by the Administrative Appeals Tribunals (AAT) because they are made by a ``person authorised by the Commissioner'', and such decisions have been held by the AAT not to come within the definition of a `reviewable decision' in sub-section 154 (1) of the Act (i.e. ``a decision of the Commissioner or a delegate of the Commissioner''). The wording of regulations 6 and 8E was not designed to avoid review by the AAT. Rather, it was necessitated by the wording of section 25 of the Act which, while providing that the Commissioner may delegate his powers under the Act, does not provide that he may delegate powers conferred on him by regulation. I understand that the then Minister for Finance in a letter of 3 January 1980 to the Attorney-General, indicated his agreement with the Administrative Review Council's (ARC) recommendation that the Act should be amended to facilitate the review of decisions currently made by authorised persons under the Salary Regulations. I understand, however, that the ARC's recommendation failed to achieve legislative status in the intervening period because of difficulties associated with a series of Superannuation Amendment Bills whose introduction in the Parliament was delayed by a succession of problems unrelated to the recommendation. While I am opposed in principle to non-elected bodies having de facto power over expenditure, I nevertheless recognise that the situation has been reached whereby virtually every decision-making power under the Act and regulations is reviewable. Given this situation, I appreciate the desirability of achieving a consistent approach. In my view, however, rather than amending section 154 of the Act, as recommended by the ARC, a more desirable approach would be to amend section 25 to enable the Commissioner to delegate powers conferred on him by regulations under the Act. Consequential amendments could then be made to regulations 6 and 8E of the Salary Regulations to enable the relevant decisions to be made by the Commissioner or his delegate, instead of a ``person authorised by the Commissioner''. Such decisions would then be `reviewable decisions' for the purposes of section 154. I have asked that amendments along these lines be taken up when next the Act is amended. Yours sincerely PETER WALSH PARLIAMENT OF AUSTRALIA THE SENATE STANDING COMMITTEE ON REGULATIONS AND ORDINANCES 5 May 1986 Senator the Hon. Peter Walsh Minister for Finance Parliament House CANBERRA A.C.T. 2600 Dear Minister, At a special meeting on 5 May 1986, the Committee considered your letter of 1 May 1986 in reply to the committee's letter of 18 February 1986, concerning the Superannuation (Salary) Regulations (Amendment) (S.R. 1985 No. 326). The Committee thanks you for your letter and the indication in it that accidentally overlooked rights of review will be remedied when next the Superannuation Act is amended. While the Committee appreciates this decision, it is concerned that, given the delays which have already surrounded attempts to provide reasonable review rights in this matter, it may not be appropriate or acceptable under the Committee's Principles to carry out the solution you propose if a quicker and simpler remedy is available. The Committee considers that a quicker and simpler means of correcting the 7 year-old gap in protective superannuation review provisions, would be to use the Statute Law (Miscellaneous Provisions) Bill, currently before the Parliament, as a vehicle for a suitable amendment to sub-section 154 (1) of the Superannuation Act 1976. Such an amendment could simply insert ``decisions of a person authorized by the Commissioner'' into the definition of a ``reviewable decision'' in that sub-section. This solution would not, of course, preclude you from later implementing the course of action proposed in your letter concerning an amendment to section 25 of the Superannuation Act and a subsequent amendment of the Regulations. However, the Committee is strongly of the view that the problem of the absent review rights should be corrected as soon as possible, and in the most direct way possible, in order to terminate the delay which has obstructed the provision of reasonable rights of redress for aggrieved contributors. An amendment to section 154, placed in the current Statute Law Bill, would be seen to be a decisive and laudable gesture on your part to remove inconsistencies which exist in contributors' rights of review. As you know, Principle (c) of the Committee's Terms of Reference, requires it to scrutinize delegated legislation, on behalf of the Senate, to ensure that such legislation does not unduly make the rights and liberties of citizens dependent on unreviewable administrative decisions. The absence of appropriate merits review of authorised persons' decisions under Regulation 8e (and Regulation 6) of the Salary Regulations is, prima facie, an infringement of the Committee's Principles. Your indication of an intention to remedy the problem in a particular way is welcomed and appreciated. However, the solution you propose will inevitably involve some delay until the Superannuation Act is next amended and some further delay until the Regulations are also consequentially amended. In the case of inadequate review rights, the Committee has a responsibility to ensure that, as far as possible, in the interim until amendments are made, individuals are not unduly prejudiced by the absence of review rights in delegated legislation which infringes the Committee's Principles. In practice, the Committee discharges this responsibility by indicating that it will ask the Senate to disallow offending regulations unless there is a ministerial undertaking to correct the problem in an acceptable way at the earliest reasonable opportunity. If there were no history of delay to colour its views, the Committee's attitude in this matter may have been somewhat different. However, while not in any way ascribing that delay to you personally, the Committee cannot disregard it and the possible injustice to which it may have given rise and may continue to give rise. Further delay would, therefore, only aggravate an already unfortunate situation. Having considered all of these matters at its special meeting on 5 May, the Committee agreed that, in regard to the Superannuation (Salary) Regulation (Amendment), it would be proper to seek a ministerial undertaking from you that the Government will make an appropriate amendment to section 154 of the Superannuation Act, to be placed in the current Statute Law Bill. Such an undertaking would enable the Committee to seek leave of the Senate to withdraw its notice of motion of disallowance of the Regulations tomorrow, 6 May 1986. Acknowledging the important commitment you have already given, and not in any sense attributing to you any past delays in this matter, the Committee respectfully asks you to reconsider the issue as a matter of urgency. Given the highly unusual facts of this particular case, the Committee is of the view that, to discharge its responsibility to the Senate for scrutiny of Regulations which do not offer adequate review rights, it should recommend disallowance of the Regulations in the absence of such an undertaking. As you will realise, time for discussion in this matter is very short. Some time elapsed before the Committee received your letter in answer to the Committee's initial queries. The Committee's notice of motion of disallowance has twice been postponed. The Committee urges you to accept its solution as, on the one hand, a course clearly preferable to disallowance action, and on the other hand, a more expeditious course than that proposed by you. The Committee is obviously very interested to have your views and it will urgently consider any further reply from you. The Committee would be very grateful if you would reconsider the question of review in the light of previous delays and accept the Committee's recommendations as the way forward in this matter. Yours sincerely, Barney Cooney Chairman MINISTER FOR FINANCE PARLIAMENT HOUSE CANBERRA A.C.T. 2600 6 May 1986 Senator B. Cooney Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA A.C.T. 2600 Dear Senator Cooney Thank you for your letter of 5 May 1986 concerning the reviewability of discretionary decisions made by persons authorised by the Commissioner for Superannuation under the Superannuation (Salary) Regulations made under the Superannuation Act 1976. You will appreciate that the Statute Law (Miscellaneous Provisions) Bill is the responsibility of the Attorney-General, and as the current Bill has already passed through the House of Representatives I do not think I can give any undertakings in that regard. However, I have already set in train action to address a variety of necessary ``housekeeping'' changes to the Superannuation Scheme in a Bill currently planned for the Budget Sittings this year. I am still of the view that the more desirable approach would be to amend Section 25 of the Act with consequential amendments to the Regulations and it is my intention to proceed with those amendments in that Bill. However, should those amendments prove impracticable because of legislative programming constraints I will seek inclusion in the next Statute Law Bill of an appropriate amendment to Section 154. Yours sincerely PETER WALSH Debate resumed from 2 May, on motion by Senator Button: That the Bill be now read a second time. Senator McKIERNAN(Western Australia)(3.48) —When debate was interrupted on Friday I was talking about the success of the community employment program over the last three years. I had commented that in my State of Western Australia some 1,698 projects had been undertaken, creating 9,197 jobs. A total of $100.3m has been spent on those projects. When the Western Australian figures are compared with the national figures, it can be seen that Western Australia has got its fair share of the total funds. The national figures involve expenditure in excess of $1 billion, over 100,000 jobs created, and over 18,200 projects completed or undertaken. The average term of employment for those participating in community employment program projects in Western Australia is 50 weeks. The figure proves that the CEP is meeting its target of reaching the long term unemployed. The figure of 50 weeks is lower than that of Tasmania or Queensland. The average figure in those States was 69 weeks and 54 weeks respectively. Perhaps the Western Australian figure could be interpreted as being a further indication of the dramatic improvement in the Western Australian economy since the election of the Burke Labor Government in that State. Further proof of the value of the CEP and how its targets are being achieved is provided in figures on the participation rates of special groups. Female participation rate targets largely have been achieved. On projects other than jobs on local roads, women comprise 43 per cent of participants to date. That rate is now in the region of 50 per cent so far for 1985-86. On Jolor projects women's participation rates rose from 8 per cent in 1983-84 to 25 per cent so far in this financial year. Significant increases in the participation rates of other special groups-for example, migrants with English language difficulties, Aboriginals and the disabled-have been recorded and are greater than the representation of these groups in CEP registers. The CEP has gone a long way towards achieving its objectives. It has been effective in creating over 100,000 jobs and has been efficient in doing so. Its cost effectiveness can be measured in a number of ways. The following are but some examples. Seventy-six per cent of all CEP funds, over $1 billion, is spent on labour. The cost to the Commonwealth of each individual job of six months duration is $9,892. Perhaps the best indicator of the CEP's efficiency is that its administrative costs amount to only 3 per cent of the CEP budget. The CEP was designed as a job creation program and as such has proved to be eminently successful. The community at large has also benefited from the program. The benefits have been considerable through projects involving community services and facilities, road upgrading, parks and gardens, sports, recreation and tourism facilities, environment enhancement and arts and heritage. Previous speakers have identified some of the projects and their costs. I am tempted to repeat the details of projects that I am aware of in the area with which I am most familiar-Wanneroo in Western Australia where I live-but in the interests of time I will resist the temptation. The only comment I make is that the local council of the Shire of Wanneroo, now the City of Wanneroo, was slow to recognise the value of the CEP. Some would even say that the Council was reluctant to involve itself in any way with the CEP in the very beginning. The hesitancy shown by the Council was eventually overcome thanks to the very good work done by local State and Federal members of parliament. The residents of the City of Wanneroo now enjoy a large number of recreation facilities that they would otherwise not have enjoyed had it not been for the CEP. The work at the Whitford Nodes, the nature trail surrounding Lake Joondalup and the major planting of Australian wild flowers in the median strip of Wanneroo Road are only a few examples of the many millions of dollars of expenditure within the city boundaries. I commend the City Council for its albeit late but very useful involvement in the CEP. I particularly mention for commendation the Mayor of Wanneroo, Councillor Nick Trandos, under whose stewardship the Council's participation in various projects ensured that money was spent in the most effective and economic way available. I also mention a further project in which another City of Wanneroo councillor is involved. This project, the CINARMY farm project, is designed to involve mentally retarded people in a market garden. It is well on the way to being a most rewarding and valuable experience for a small minority of the population that is often the first to feel the knife edge of economic downturn. The farm project received a CEP grant of $120,000 and has been in operation for some 15 months. According to Councillor Sybil Roberts, it is well on the way to becoming an economically viable long term project providing meaningful employment and activity for a number of disadvantaged and often forgotten people. As distinct from some Opposition speakers, I have sought to be positive in my contribution to this debate. It is a disappointment that some of the Opposition speakers, whilst saying they supported the Bill, sought, perhaps unconsciously, to discredit the CEP and certain projects that were conducted under it. I hope that this negativeness will not serve to undermine the continued effectiveness of the CEP. I hope that the trade unions as well as political parties such as the Liberal Party of Australia will continue to apply for CEP funding. I close my speech by repeating and elaborating on a point made by my fellow Western Australian colleague in this place, Senator Peter Cook, earlier in the debate. Senator Cook made the point that criticisms of individual projects are really criticisms of the relevant State consultative committees that have the task of assessing project applications against agreed principles and priorities. Formal applications for projects are made in the first instance to the CEP secretariats where Commonwealth and State officers determine the viability of projects against established criteria set down in the program guidelines. Proposals which meet these criteria are then passed on to the State consultative committees which have the task of comparatively assessing project applications against agreed priorities. These broad-based committees comprise representatives of Commonwealth and State or Territory governments, trade unions, local government and community group organisations. This representation on the committees ensures that projects recommended for funding reflect community and target group interests. The consultative committees make recommendations for formal joint approval by State or Territory Ministers and the Commonwealth Minister's delegates. In all cases only those projects which meet CEP guidelines are recommended for approval. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.58) —in reply-I thank honourable senators for their general support of the Community Employment Amendment Bill 1986. The Opposition is not opposing the Bill. There have been some criticisms in running regarding the limited success of the community employment program-which is a sort of value judgment about the program-costs, limited skills acquisition by participants and alleged favoured projects of left wing or other groups of dubious origin in the light of the values held by members of the Opposition. All those sorts of criticisms have been made. They do not go very much to the substance of the CEP which has had enormous successes, with more than 100,000 jobs having been created as at 28 April 1986. Of 64 per cent of all placements employed for nine months or more, 43 per cent were women, 11 per cent were Aboriginals, 7.4 per cent were migrants and 11.6 per cent were people with disabilities. These people are all citizens of this country. Many of them had not been able to obtain employment previously. The Government welcomes the fact that this program has been helpful in getting them into suitable employment. The Bill addresses the concerns of many long term unemployed persons who have suffered labour market disadvantages. Whilst I could give Opposition members a long lecture on the benefits of the scheme and some statistics which may be helpful to them, I merely commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 12 March, on motion by Senator Button: That the Bills be now read a second time. Senator WATSON(Tasmania)(4.01) —The Apple and Pear Export Underwriting Amendment Bill 1986 and the Australian Apple and Pear Corporation Amendment Bill 1986 both concern the export of Australian apples and pears and they have the support of the Opposition. The Apple and Pear Export Underwriting Act was introduced by a Liberal-National Party Government in 1981 to guarantee growers a minimum return by the Commonwealth when the prices received fell below the average achieved in previous years. The Act was to apply to the production of apples and pears during the 1981 to 1985 export seasons. The legislation provided a very much more expedient scheme than the previous system of stabilisation it replaced in that it did not shield producers from the market realities. Instead, it gave the industry insurance against sharp downturns in price without obscuring longer term market trends. Payouts were made when the average export return was less than the underwritten price. The Apple and Pear Export Underwriting Amendment Bill proposes that the underwriting scheme be extended for a further five years and makes several amendments. For example, the floor price is to be dropped from 95 per cent to 85 per cent of the average return, but on the average of the best three of the preceding four years rather than the average of the four preceding years. While a number of growers may be disappointed in the floor price reduction, the ability to take the average of the best three years rather than the average of all four years is much more just to all the producers. Payouts in a low price season will not be limited by a preceding bad year. The underwriting scheme is an attempt to level out the peaks and troughs within the industry and to ensure that, should there be an unexpected fall in the value of apples and pears sold overseas, producers will not immediately be forced out of business. In fact, there has been only one instance when the Government has had to provide assistance under this scheme. That was in 1981, when the Commonwealth paid $4.8m to the industry. The other proposed amendments to the Act are that the scheme should now apply to forward sales, which are all sales made prior to shipment, and at risk sales, which relate to produce shipped before sale. It is argued that without such an inclusion the underwriting scheme given to the apple and pear industry is not meaningful. I believe that the incorporation of these clauses in the Bill is particularly significant. Of Australia's apple and pear sales, a sizable proportion fall into the category of forward and at risk sales. Indeed, the majority of Tasmanian apple sales are classified as at risk transactions. Therefore, it is most important to the industry that these amendments be accepted. The export of apples and pears in the 1985-86 season is estimated to total $61m. While the apple and pear industry accounts for only about 2 per cent of Australia's gross rural product, given the present state of our economy the contribution of this industry cannot be overlooked. In the last season the export of fresh apples amounted to 30,000 tonnes-a rise of 2,000 tonnes on the previous season. The 1985 crop was the largest since 1979. However, competition in the world market has increased significantly, with Australia losing much of its comparative advantages. Countries such as New Zealand, South Africa and some South American nations have made the successful export of Australian produce all the more restricted. The Bureau of Agricultural Economics has pointed out the uncertainty surrounding export levels. Furthermore, conditions created by the existing economic climate in Australia mean that our apple and pear industries are fighting uphill battles. Along with our other export industries, these industries have to cope with an inflation rate which is well above that of other exporting countries, the continued loss of millions of dollars from the primary industry budget since 1983 and Australia's inflexible wages policy and excessive regulation, which because of transport and export licensing fees limit our markets. These have all been impediments to the industry. The Government's inaction over a plant variety rights scheme also places Australian apple and pear producers at a great disadvantage in relation to their competitors. Again, I challenge the Government and ask it to take up the recommendations of the Vice-Chancellor of the University of Tasmania that Australia should proceed with a plant variety rights scheme. Unfortunately, the problems will not go away. In fact, they could even worsen for Australia in the world market. The apple and pear industry was once the life blood of the Tasmanian economy. While Tasmania can no longer lay claim to being the primary apple producing State, it is still very much concerned with this industry, particularly in the south of the State. In the past the State has had to battle with special problems which have disadvantaged Tasmanian growers; for example, the problems of cold storage, containerised shipping and rigid shipping schedules that cannot always be met by producers who have to cope with seasonal variations. The recent strike affecting the Australian National Line prevented packaging for apple exports reaching the State and thus threw out export schedules. Given the uncertainty surrounding export levels and the trying conditions facing Australian apple and pear producers, the need for the proposed export underwriting Bill is quite clear. The purpose of the Australian Apple and Pear Corporation Amendment Bill 1986 is to amend the relevant sections of the Act dating back to 1973. At present apple and pear exporters cannot operate without a licence. Licences are issued by the Minister for Primary Industry on the recommendation of the Corporation and are subject to eligibility criteria such as financial standing and marketing experience. The amendments put forward in the legislation before us today will remove the Minister from the day to day administration and make the Corporation solely responsible for the issue of licences. It also provides for periodic review of export performance of licence holders. As a way of improving declining market performance the Corporation will implement a policy to restrict the number of export licence holders. This is an effort to achieve greater co-ordination of export activity and it is to be in consultation with the industry. Unsuccessful licence applicants will have the right of appeal to the Administrative Appeals Tribunal. The Opposition agrees that the reduction in the number of export licences may act to improve the terms to growers. It must be noted that the restriction of licences will not offer exporters exclusive access to markets. That is, the licence does not gain a value of its own purely because of this restriction. For example, a grower does not need a licence in order to export because that grower can take advantage of making his fruit available to overseas markets by having the fruit exported on his behalf by any exporter of his choice. However, the Corporation, by pursuing a policy of licence restriction, will be better able to guarantee a quality product on the overseas market. The Minister for Primary Industry (Mr Kerin) has given an assurance that the implementation of the policy to rationalise the number of exporters will be gradual so as to avoid adjustment problems within the industry. The Australian Apple and Pear Corporation Amendment Bill also requires the Corporation to undertake corporate planning. The Opposition supports this initiative as it also should improve the operation of the Corporation and its accountability to industry and government. The long term performance of the Corporation can only be assisted by these measures. I believe that the Apple and Pear Export Underwriting Amendment Bill and the Australian Apple and Pear Corporation Amendment Bill will be of benefit to the apple and pear industry and they therefore have our support. Senator MACKLIN(Queensland)(4.10) —The Apple and Pear Export Underwriting Amendment Bill and the Australian Apple and Pear Corporation Amendment Bill have the support of the Australian Democrats. I would like to make some brief comments with regard to the Apple and Pear Export Underwriting Amendment Bill. The situation in agro-politics today is that we will not hear very much about this Bill, because it improves the conditions with regard to apple and pear growers. Doubtless those people in the industry who do not wish to say anything in favour of a government when it improves conditions, but rather wish constantly to harp on conditions that are not good and where government has failed, will not raise the issues that here there has been extensive discussion with the industry, that the items here are very much the type of items for which the industry was looking, or that the final result in this Bill goes much beyond the Industries Assistance Commission recommendations and the previous situation with regard to the underwriting. The Government is to be commended for this initiative and for the way it has come up with a package that will be supportive of the industry. In particular I refer to the fact that the legislation provides for picking three out of the best four years. That seems to me to be very useful in terms of any industry because it gives a closer approximation to the type of support that is needed by leaving out the bad season or the downturn season so that the best three years are able to provide the level of support at 85 per cent in the subsequent years if necessary. With regard to the Australian Apple and Pear Corporation Amendment Bill, the Democrats do not have any major concerns. However, we have one concern with regard to the powers that the Corporation will have. The Corporation will be solely responsible for the administration of policy, particularly with regard to determining the issue of licences. I have some concern with this, not because of anything that the Apple and Pear Corporation has done but because of what some other corporations have done. I refer particularly to the Australian Dried Fruits Corporation, which has established monopoly operations with regard to foreign markets. It seems to me to be totally in opposition to the best interests of our primary industry that we should allow any corporation to move to the point where it may decide that it will issue only one licence to export to any particular country. While ultimately that might be seen to be beneficial, so that in an export market there is not competition of one Australian company against another whereby one company may seek to bid down the price of a product, I believe that in the long run such monopolistic operations will stymie the development of new markets and will prevent the expansion of the markets to which the monopoly is given. I believe that there are very real cases in terms of the Dried Fruits Corporation where that is the case. I instance India, where there is the possibility of expansion of markets but where markets are not being expanded at the moment as a direct result of the monopolistic licensing policies of the Corporation. I believe that in general a reasonably competitive operation is desirable. The normal arguments that one would use against monopolies can be used against monopolies in these situations. They become lazy and basically have the opportunity of writing a cheque without doing very much work, because there is no competition in terms of the provision of products packaging or alternative sale arrangements. The status quo prevails, which ultimately is detrimental to the expansion of our markets in overseas countries. I hope that the Corporation, when it is given these powers to solely determine the issuing of licences, will not go to that extent. I am heartened in some way by the retention of the right to appeal to the Administrative Appeals Tribunal. However, I am not at all sure that that appeal will be sufficient in terms of overturning any particular application. I am concerned also about the way in which the Apple and Pear Corporation may use these powers, which are almost identical to the powers of the Dried Fruits Corporation. For example, I would be critical of the Dried Fruits Corporation with regard to the way it has imposed an impost by saying that one needs a licence before one can purchase the commodity and that unless one purchases the commodity one cannot have a licence. The Corporation has managed to sew up the whole thing and made it tighter than a drum, and I believe that the Government needs to look closely at what is happening in terms of that particular market. While the Democrats generally support giving the Corporation this flexibility with regard to the issuing of licences and the ability to operate in a way that will enhance the market, I simply raise a word of caution that there are some so-called enhancements of the market by the establishment of monopolies which I believe ultimately will be detrimental to the market. However, by those comments I do not wish to take away from the support of the Democrats for the initiatives of the Minister for Primary Industry (Mr Kerin) in this regard and for the constructive and purposeful work that he and his Department have put into the new underwriting scheme. We hope that this scheme, similar to the underwriting scheme which has gone before, will need to be used only very rarely. We hope that the industry will be buoyant in each of its subsequent five seasons for which this legislation will run. We hope that, when we come back to look at this legislation at the end of that time, unlike Senator Watson we will not have to refer to its having had to be used on at least one occasion. Let us hope that it does not have to be used on any occasion. Senator RYAN(Australian Capital Territory-Minister for Education)(4.18) —I thank honourable senators for their contributions to the debate and commend the Bills to the Senate. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment or debate. Debate resumed from 2 May, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator DURACK(Western Australia)(4.20) —The coalition supports the Oil Comp- anies (Stock Loss Reimbursement) Bill 1986, which provides oil companies with a very legitimate compensation for stock losses suffered by them as a result of government regulations and policies which were in place when oil prices fell so rapidly earlier this year. The Opposition is concerned, however, that the oil companies will not be fully compensated, and that the Government will continue to pass the cost of its policies of oil market regulation on to consumers and to the oil industry. In summary, the Opposition takes the view that government regulation has placed the oil industry in a cost-price squeeze and has forced oil refiners to suffer stock losses. Under normal market conditions oil companies would have been able to limit stock losses by delaying their stock purchases and delaying price reductions on sales. However, the compulsory allocation system for the purchasing of oil and the price controls imposed by the Government under its policies prevent this normal commercial operation. These stock losses were incurred in January and February this year. The oil price fell dramatically in the middle of January, but no adjustment for oil prices was made by the Government until 1 March, by which time the oil companies had had to continue to uplift Australian crude oil at prices which were far in excess of the world price. Suddenly, on 1 March, the Government adjusted those prices to something equivalent to the world price. The refiners have estimated their losses, as a result of these circumstances, at between $550m and $600m. It should be emphasised that this legislation will only partially reimburse refiners for their stock losses, because the compensation is for losses on stock purchased in February. It does not apply to January, when, the Government has argued, refiners took supplies at acceptable risk conditions. The reimbursement is also less the value of sales from those stocks between the 1 March import parity price adjustment and the subsequent Prices Surveillance Authority price determination on 14 March. So the question remains about the $300m which the Government accepts that the oil industry has lost during this period which is not covered by compensation. The Government has argued that the earlier losses may be made up if the price increases in the future. The Government also argues that companies will be able to effectively recoup nearly half of any remaining losses via company tax deductions. But given no price recoupment in the foreseeable future, the companies will incur losses of about $150m. This is little comfort for the oil industry, which will be forced to wait for compensation which may never occur, and, if it does, will occur only after a substantial period in which substantial damage will have been done to company results, shareholder returns and share prices. This is a good example of the extent to which the Government apparently has not thought, or does not want to think, about the commercial reality of its decisions or of its policies. A disturbing feature of the Government's attitude generally to this industry-and this is another example of it-is to be seen in a speech given by the honourable member for Dunkley (Mr Chynoweth) during a debate in another place on this same legislation. On 30 April he said: Oil companies without any shadow of doubt are the ugliest and most avaricious of any sector of industry within Australia. Senator Sanders —Hear, hear! Senator DURACK —I suppose that will only be bettered by Senator Sanders when he speaks in this debate. The honourable member for Dunkley is in good company when joined by Senator Sanders of the Australian Democrats. The honourable member for Dunkley, Mr Chynoweth, continues by saying that the answer to curbing this is to be found in the Australian Labor Party Platform, from which he then quotes. He says that the Platform states that the ALP will establish a public corporation-we have an ALP government so we can assume that this is the Government's policy as well, otherwise it will be in trouble. The ALP platform states: Establish a public corporation, responsible to the Commonwealth Government, to participate in the development of Australia's oil and gas resources, such that the corporation- (a) will have strategic as well as commercial objectives; (b) may, with the approval of the Government, engage in any of the activities of an integrated oil company; (c) may operate independently or in joint venture with private or other enterprise; (d) will act commercially when participating with private companies, but may explore and locate reserves without seeking to develop them immediately, in the national strategic interest, when acting solely; (e) will be funded as appropriate by Commonwealth grants and loans and by public borrowings, provided that its commercial operations incorporation provides a satisfactory return to its investors. The honourable member for Dunkley goes on to say: This is a part of the Australian Labor Party policy that I feel we should implement immediately. Why should these companies dictate to this Government the orders of some faceless overseas board? I believe that the Government has been blackmailed into giving the oil cartel a $125m handout. That is provided for in this legislation. We must make certain that it never happens again. So there we have the true attitude, I think, of the Labor Party. There is part of the ALP platform and there is the call by a prominent member of the Labor Party in this Parliament for the implementation of that totally socialist approach to this industry. This legislation, which may be seen to be in light of a sop to the industry, is, as I have said, brought about by the total lack of commercial reality of this Government. If it can, by its policies, reduce the oil industry to a state of impotence and perhaps bankruptcy, that will more easily pave the way for its socialist objectives. Of course, the Opposition does not share this view. This legislation would never have been needed at all if the Government had taken the advice that the Opposition has been giving it for the last 12 months-namely, to proceed to de- regulate the oil market, which it was considering 12 months ago. Despite clear indications that world oil prices were going to fall quite dramatically and may stay at low levels for some time, the Government has consistently refused to make the necessary policy adjustments to permit a more flexible response to the oil crisis. The Government has had plenty of time to adjust that policy. However, it has been unwilling to do so. While it has made some changes to the IPP formula to reflect the growth of the non-OPEC spot market, the Government has refused to fully deregulate pricing and the allocation system. As I have said, if deregulation had been put in place a year ago when the Government was considering it, and the Opposition encouraged it, that would have enabled the oil industry to adjust much more flexibly and efficiently to the recent downward price movements and the market changes which have occurred since January this year. Unfortunately, the Hawke Government seems to be unable or unwilling to pursue deregulation initiatives in the oil market, despite its claim to be keen on deregulation and the reduction of controls on business. This is another good example of how the performance of the Hawke Government falls sadly short of its rhetoric. I believe that in this case the Government has been heavily influenced by the union movement and some sections of the oil industry which have been opposed to deregulation. Mr Harris of Ampol Ltd, a notable critic of deregulation-although I have reason to believe from what he has told me privately that he does believe in a free market-was quoted in another place by the honourable member for Canberra (Mrs Kelly) as having stated at a recent petroleum exploration conference in Adelaide that he was critical of the Opposition's attitude. Mrs Kelly has seized on this as proof that the coalition's policy of deregulating the oil market is opposed by everybody in the industry-oil refiners, oil producers, the trade union movement and the community generally. I think Mr Harris would be rather surprised by assertions that his comments at that conference purported to represent all of the oil industry and the trade union movement, let alone the community at large. In fact, there is very considerable support in the industry for deregulation of the oil market. In a submission by the Australian Petroleum Exploration Association to the Federal Government on 7 June last year-the industry had been invited by the Government to submit a discussion paper on deregulation-APEA said: The Association has supported the introduction of a free market by the 1 June 1986 for some producers, but where this applies APEA urges the Government to provide time for commercial arrangements to be made to cope with the new system. That is very similar, I might say, to what the Opposition has been saying. APEA, incidentally, represents 107 companies exploring for and producing oil and gas in Australia. In addition, 149 companies are associate members of APEA. Companies which provide services to those oil explorers and producers are associate members of APEA. So it really speaks on behalf of over 200 small to medium oil companies. That statement indicates at least some support for deregulation of the oil market. In its submission to the Industries Assistance Commission inquiry on petroleum products in September 1985 Esso Australia Ltd supported a truly free market for indigenous crude oil. Other oil companies not represented by APEA have also given their support to deregulation policies in this area. In a speech to the annual conference of the Institute of Directors in Australia in Adelaide on 7 March this year, the Chairman of Shell Australia Ltd, Mr Kevan Gosper, said: I believe that the most effective framework within which to prepare for the uncertainties of the 1990s is a free market for oil in Australia. The Government considered this last year and decided to postpone any real moves in that direction. I urge most strongly a recon- sideration of that decision. BP Australia Ltd in a position paper released in February this year also indicated support for a free market in Australian crude oil. I have had expressions of support for deregulation of that market from a number of other people in the oil refining industry who have been in touch with me. I do not propose to mention them or quote from letters they have written to me. However, I can assure the Senate that there is very widespread support in the oil industry, particularly in the refining side of it and, as I said, in the production and exploration side, for the views of the Opposition. Therefore, it is totally misleading to seize, as the honourable member for Canberra did in another place, on some fairly unrepresentative view of one figure in the industry-namely, Mr Harris of Ampol-in remarks he made in Adelaide as an indication that the Opposition is completely out of tune with industry thinking. That is not the case. Indeed, the evidence suggests that the remarks attributed to Mr Harris-from what I have since discovered, they may have been taken somewhat out of context-certainly can be of no support whatever for the claims made by the honourable member for Canberra. Support for the views of the Opposition comes from not only the oil industry but also other industry representatives who have indicated that they support them as a means of ensuring lower fuel prices, which are so vital to the health of our economy. In a statement on 6 February this year the President of the Confederation of Australian Industry said: Australia's competitors are taking full advantage of lower oil prices to decrease their energy costs. Our unfavourable balance of payments situation demands that we must also take all possible steps to improve Australia's international competitiveness. The prompt flow-on of lower world oil prices to Australian industry would be an obvious and rational move in that direction. The Australian Automobile Association, which represents four million motorists throughout Australia, has also argued that the Government's oil policies are untenable and should be changed. As far as I can see, the only body that is registering strong opposition to deregulation is the Australian Council of Trade Unions. That opposition seems to be based on the fact that it thinks a few jobs of oil workers may be lost and that some Australian coastal shipping jobs may also be at risk. There is the real power behind the throne, as ever with this Government-namely, the views, the pressure and the influence of the ACTU. That seems to be the reason why a year ago, when this Government published a discussion paper and indicated a move in the direction of deregulation, it backed off. That was because of the influence of that body. Last year the Opposition was very critical of the non-decision, as I have described it, of the Government on deregulation in the oil industry and a lack of nerve by the Minister for Resources and Energy, Senator Gareth Evans. I said at that time: Despite the free market rhetoric espoused by the Hawke Government, Senator Evans showed little resolve to pursue deregulation in the face of opposition by big brother-the ACTU. Indeed, Senator Evans was unable to offer more than a whimper in defence of his position. The Coalition does not believe that deregulation of the oil market should be dumped in the too hard basket to suit Government and union convenience. The Coalition is not prepared to leave the future of the oil industry unclear and is committed to introducing a free oil market when in Government. The Government has refused outright to bear the burden of current regulation and to provide full compensation. Instead, it has forced consumers to pay for its policies by increasing petrol tax by over 200 per cent. The Prices Surveillance Authority, at the Government's behest, has also introduced a wholesale surcharge of nearly half a cent a litre to provide some compensation for these stock losses. So the consumer is bearing a further burden on top of the 200 per cent increase in the excise on petrol. Given the revenue greed of this Government and its attempts to renege on the commitment to reduce the new tax on petrol, there must be doubts whether that surcharge will ever be lifted. The implications of this revenue shift are considerable. The fall in the price of petrol at the pump has not borne heavily on the Commonwealth Government. Most of the price benefit to consumers is a cost to oil-producing companies. The potential volatility of tax revenues is somewhat reduced. There is no case for reducing the proposed personal income tax relief or increasing other taxes on the grounds of revenue lost. This view has been expressed by the Business Council of Australia in its February 1986 bulletin, with which the Opposition certainly agrees. Consumers have suffered enough from the high taxes of this Government. They are entitled to some relief. This high-spending Government must be forced to accept fiscal limits and make expenditure cuts so that it can afford to reduce petrol taxes and compensate the oil industry and consumers. To do this, the Government must get its own Budget and its own house in order. In a recent speech in Adelaide, Mr Gosper, to whom I have already referred, said: . . . the industry's concern for its future, the problem of stock losses for the refiners, and indeed the political and economic dilemmas that faced the Government would have been diminished considerably if a free market existed for crude oil and for petroleum products. Again, he has reiterated a view he expressed last year. He goes on: Instead, the events of recent weeks show that the actual price paid by consumers is as much determined by the Government's revenue needs as by the economics of supply, demand and cost. The oil industry today is large, diverse and much more mature than was the infant industry of 10 or 20 years ago. It should be able to stand on its own feet. This cannot be achieved while it is overregulated and overtaxed. The Opposition supports assistance where sudden policy changes jeopardise investment, particularly where government regulation imposes added costs and constraints on ability to compete and adjust to market changes rapidly and efficiently. That is why we support this measure, unnecessary as we believe it would be if the right policies were pursued by government. It is only because the wrong policies have been pursued by government that we support the measure. Given the importance of maintaining adequate oil exploration and development incentive and the need for equity in government policy, the Opposition also supports appropriate relief for oil explorers and producers, both as a short term assistance measure and as the necessary corollary to deregulation of the oil market in the long term. Consumers have received some benefit, but not anything like the full benefit they should have received from the lower oil prices of recent months. The Government has compensated itself almost fully for its revenue losses but the oil explorers and producers have suffered almost the full burden of those lower prices. They have entirely missed out, yet this Government and this nation have to look to them to maintain as far as possible and for as long as possible our level of self-sufficiency in oil. Incentives must be provided and maintained for them. The Government says that it is considering this matter. We have not heard much from the Government on what it has done about its consideration of these matters. Perhaps the Minister will tell us about that when he replies to the debate. As I have said, the Opposition supports this Bill but maintains that the Government should pass on the full drop in world oil prices, not half, to consumers. It should provide immediate tax relief for oil exploration and development and should move to deregulate fully the oil market, with further fundamental tax reform to lower community and industry costs and to increase industry efficiency and competitiveness. Senator SANDERS(Tasmania)(4.46) —Madam Acting Deputy President, the Government has signed a bad piece of paper in bringing in the Oil Companies (Stock Loss Reimbursement) Bill. That is bad enough in itself, but it is asking the taxpayers to bail it out. You and I and all the taxpayers of Australia will be asked to give the oil companies a windfall. This is one of the shonkiest Bills to come before this Senate in my presence, which is not long term. The Bill is a real giveaway. At a time when the Government is looking for ways to cut the social services and welfare budget by $1.4 billion, it has made a deal with the oil companies to pay $125m in compensation for stock losses. That is a scandalous giveaway. This is a far bigger scandal in its own way than are other scandals coursing through the corridors of this Parliament. Where is the media? Why are its members not here with pens poised to send the message to the Australian people that the oil companies will be given $125m? Only our faithful representative of the Australian Associated Press is here, who will do his best I am sure. I wish that the media members in these Houses would raise their sights above their political navels and take on some of the more important issues. This deal that the Government made was strictly a deal by the Government, not by the Parliament, and the Australian Democrats were certainly not part of the deal. We were not consulted; Parliament was not consulted, and we are under no obligation to honour this deal. Our obligation is to those Australians who will suffer because education, welfare and housing services will be cut so that the banks can receive $140m in compensation and oil companies can receive $125m. What reasons are given by the Government as to why we should support this Bill? The first is that government revenues would have been disastrously affected if the oil refiners had not taken their allocation for February. We are told that the cost to the Government would have been $350m in lost excise revenue. Senator Gareth Evans —Spot on. Senator SANDERS —The Minister for Resources and Energy (Senator Gareth Evans) says that the figure is spot on, but I suspect that it is an overstatement and takes no account of the excise which would be received in later months when the refiners purchased more than their normal monthly quota to make up the stock decrease. Alternatively, the Government would receive penalty duty-the Minister should try to deny this-under the Customs Tariff (Stand-By) Duties Bill if the refiners sought to import oil to make up the difference. The Minister rubs his head. Whenever he cannot agree with my arguments, he chooses to make out that I do not understand the issue. I am sure that that will be his defence in this instance. Clearly, the Government would have lost some revenue and will continue to lose revenue whatever deal it strikes as long as its revenue is tied to the price of oil. While the Organisation of Petroleum Exporting Countries and the multi-nationals were ripping off the world by charging $US28 per barrel, this Government was laughing all the way to the bank. Total crude oil excise in 1985 was over $4 billion. This Government is now so dependent on oil revenue that it can no longer take the economically rational course of conserving Australian oil by importing oil while the overseas price is about $16 to $20 per barrel. It also would be a very wise conservation move to conserve our oil. Under the present system Bass Strait oil reserves will fall by half over the next seven years. At present rates of usage, total world oil reserves will last another 35 years. One would think that, in this situation, the windfall revenue received by the Government would be put to good use, with at least some of it going into the development of alternative energy sources. Yet in 1984-85 this Government spent a pitiful $15.8m on energy research and development, and not very much of that on renewable resources. That is $15.8m out of $4 billion. In the seven years 1978-79 to 1984-85, under the national energy research, development and demonstration program, a total of $15.6m was spent on energy conservation technology and $4.8m on economic, social and environmental issues. Those figures come from page 15 of the 1984-85 annual report of the National Energy Research, Development and Demonstration Council. The Minister also claimed that a failure to indemnify refiners for February inventory losses would have been disastrous for domestic producers. Let us see who these domestic producers are-these poor little fellows who will be disadvantaged! The domestic producers referred to are amongst the wealthiest companies operating in Australia. The largest, of course, is Esso-BHP-the Big Australian-which alone accounted for over 160 million barrels of oil last year. The major refineries, such as Mobil, are simply satellites of the oil cartel transnationals. The British Petroleum Co. of Australia, which calls itself the Quiet Achiever, had a worldwide profit in 1984-85 of $6.2 billion-that is, $9m a day. We are constantly deluged by commercials from the Big Australian and the Quiet Achiever which tell us that their interests are solely to keep Australians happily coursing down the highways in their petrol powered automobiles. These companies-the Big Australian and the Quiet Achiever-have no motive at all other than to make a lot of money-bushels of money, pots of money-at the expense of the Australian consumers. I have pointed out that the Quiet Achiever has profits of $6.2 billion-$9m a day. I am obliged to the honourable member for Dunkley (Mr Chynoweth), who was mentioned in this place earlier today, for these figures. It is instructive to look at the way these poor `domestic' oil companies-Ampol, Shell, Mobil, BP, Caltex and Esso-deal with the financial difficulties of those they do business with. The honourable member for Dunkley, who claims to have coined the phrase `the Quiet Deceiver' instead of `the Quiet Achiever', quoted from a report on the Australian Broadcasting Corporation program The Investigators-this is recorded at page 2725 of the Hansard of 30 April 1986: . . . Kel Gouch . . . launched a scathing attack on BP following what he describes as the comp- any's jackboot tactics . . . Now the breach, according to Kel Gouch, is that he was late, 12 days late, in paying his December account. Now, that's not the $150,000 in cash he pays BP every month for petrol, but rather an oil bill for $800. For this the Quiet Achiever saw fit to warn him that a repeat breach could see his lease terminated and BP would throw him out . . . Strong stuff, but Mr Gouch doesn't stop there. The apparent desire, he says by BP to resort to bullying, harassment and baseball bat tactics designed to engender fear and compliance on the part of its dealers could be said to strongly resemble the approach adopted by dictators in days gone by. The honourable member for Dunkley said: I agree with that. These are the needy domestic companies that the Government has promised to reimburse-people who will actually go after a guy who has been selling $150,000 a month in petrol because he is 12 days late in paying his bill. When oil prices increase and the oil companies get windfall profits again, as they will, will the Government recover the $125m compensation bill paid for the windfall loss? I doubt it very much. Let me quote from another speech on this Bill in another place. Page 2731 of the Hansard records what the honourable member for Maranoa (Mr Ian Cameron), a National Party of Australia personage, said: . . . what was happening when the price was going up and the companies had enormous stocks that they had bought in at the cheaper price? At the end of six months the Government sat around a table and a formula on the dollar was set for the light Arabian crude oil. Obviously, while the price of imported oil went up, so did the price of our oil. But no consideration has been given to the fact that the oil companies may have had a few tankers around the coastline full of 40,000 or 50,000 tonnes of crude oil bought at the cheaper rate which was then sold to the refineries at a higher rate. That situation does not seem to have been taken into consideration. I say to the Minister that in business we know that what goes up must come down. However, we find in a report in the Melbourne Sun of 17 April, under the headline `Oil money to be paid back': Canberra-The Federal Government has been forced to agree to recoup $125 million it is paying as compensation to six oil companies when world oil prices go up again. Caucus yesterday approved the legislation to compensate the six, but only subject to a commitment the Government recovered the money from their windfall profits when prices rise. Who made that commitment? Is it in writing? Is it to this Parliament? Is it even to the Caucus? Apparently, it is to the Caucus. Unfortunately, however, the article continues: One MP said yesterday while backbenchers still were unhappy about the payout, they realised they could not block it because Senator Evans had concluded the negotiations with the companies, and it had gone too far. Madam Acting Deputy President, I put it to you that it has gone too far. This man is running wild; his Government is running wild. Was this simply a private undertaking? Will the Minister pay back this money out of his salary? How will he manage this? Was this simply a private undertaking or is the Minister willing to repeat it to the Senate? Will the Minister give us the information on how he will recoup this money? I hope he does. Finally, the oil companies, in their normal fashion, have grossly overstated their inventory losses. According to the Government, the companies will be able to recoup nearly half their losses via company tax deductions. This is the way stock losses in the oil industry have been dealt with in the past. It is the normal business practice for other industries, and the Australian Democrats see no reason to support special deals for the oil industry. Furthermore, we resent being bulldozed into an expensive handout by the Minister who hastily signed away $125m of taxpayers' money before his Caucus could even stop him. It is high time that the Government, and the oil companies which control it, realised that the taxpayers are sick and tired of juicy deals for transnationals. The Australian Democrats reject this Bill and urge all honourable senators who really care for the welfare of Australia to help defeat this scandalous giveaway. Senator NEWMAN(Tasmania)(4.58) —The Oil Companies (Stock Loss Reimbursement) Bill is a surprising Bill. It awakens in me all sorts of memories and I would like to take the Senate for a short walk down memory lane. I am sure that it will help honourable senators to see what a surprising Bill this is. In October 1979 the man destined to be the world's greatest Treasurer, the honourable member for Blaxland (Mr Keating), said: The great petrol rip-off must be curbed. Only Labor will stop this pernicious tax by stealth. In December of the same year he said: Petrol would be up to 30 per cent cheaper under a Labor government. This man, who was shadow Minister for Minerals and Energy but who was destined to be the world's greatest Treasurer, was still convinced of this in 1980 when he told the National Press Club: A Labor Government will freeze the price of Australian oil. We'll say `Thus far and no further' on the collection of this tax without mandate, this $3 billion which the Government will raise . . . and that way Australians have the benefit of having an oil field in their own country. Mr Keating went on in the same vein later in that year when he claimed: What we have now seen is a massive tax by stealth operating on the Australian public with every petrol pump in the country becoming a branch of the taxation office. That is why I described this Bill as a surprising Bill. It is surprising because it has not taken the Government and the world's greatest Treasurer long to break those promises and this Bill is tangible evidence of their failure. In case the people of Australia have forgotten, this Government has been quite happy to stand beside the petrol pump with its hands out, regardless of criticisms by its members when the pricing scheme was introduced. The Government's hypocrisy was revealed when it was put to the test when international oil prices fell. The rationale behind the oil parity pricing scheme was that the price would move up and down with world prices so as to achieve parity between foreign and indigenous oil and thus encourage oil exploration. This Government was perfectly happy to reap the benefits to fund its deficit when prices were high but it held on like a greedy schoolboy when prices fell. Its desperation to keep the oil money flowing is demonstrated by the way in which, by a sleight of hand, prices were reduced, only to be raised again by another levy. This is only putting off the evil day. The deficit can be reduced only by governmental self-control. Government spending cannot go on willy-nilly. The crunch has come. The Government has taken the coward's way out. However, taxpayers and consumers are not deceived. If the Government grasped the nettle and allowed the industry to adjust flexibly to movements in prices, we would not be faced in the future with more situations similar to that which we are facing today. Today we are dealing with a Bill to partially compensate oil companies for losses occasioned by government action. When government is involved in a market-place all sorts of distortions can occur. I draw the Senate's attention to the ridiculous situation we now have: International oil prices have fallen, but the Government took overlong to react; our petrol prices have fallen, but only by half the amount they should have, yet at the same time we are sending liquefied petroleum gas to Japan at $US186 per tonne under contract while the Tasmanian Gas Company is having to pay $A269.50 a tonne. The Australian price went up approximately $8 a tonne on 1 April, a particularly apt day when one considers that it was not only April Fool's Day but also the day on which the price of oil fell by $6.10 a barrel. Tasmanian consumers of LPG have to ask why they must be expected to pay increasing amounts for their own Australian LP gas at the same time that, as taxpayers, they are being required to fork out under this Bill. It is not the wealthy or big companies which are suffering losses here. The reticulated town supply in Launceston uses LPG and pipes it to pensioners, and to restaurants and other small businesses. It vitally affects our economy. It is not atypical. I again quote the Treasurer, who stated: If the Government is to carry the burden of a rational energy pricing policy, then the public also should reap some of the benefits of their sacrifice. It is interesting that the Treasurer should recognise the sacrifice of the public. His Government seems to recognise problems in a meaningful way only when they are suffered by big business or big unions. This Bill is clear and irrefutable proof that this Government has no understanding of the needs and problems of small business in Australia. If there were any understanding of the problems of small business, we would not be faced with this brazen attempt to buy friendship in the big oil companies while the taxpayer foots the bill. The Bill before the Senate provides for a sum of nearly $125m of taxpayers' funds to be paid by way of compensation to six oil companies for losses sustained as a result of government action. Does the Government not realise that for every action of government the whole nation is affected? In this case the decision to reduce the price of domestic crude oil supplies, firstly by $16.62 a barrel on 1 March and then by $6.10 a barrel on 1 April, had immediate and dramatic effects. It appears that the oil companies have suffered loss through no fault of their own, but there is no doubt that they alone will not be carrying the cost. The Australian taxpayer is being asked to foot the bill to the direct extent of nearly $125m. But that is not where it ends. The companies are passing on their costs to their customers. Here again the taxpayer pays, this time in his role as consumer. He consumes the fertiliser, the heating oil, the chemicals and the plastics, and these costs are not being reduced along with the reduction in the domestic crude oil supplies. Their prices are being maintained to help the companies recoup the cost of the government action. The taxpayer and the consumer are not the only ones footing the bill for the Government's action. Small businesses are feeling it severely. What I find particularly strange is that the Government distinguishes between the losses suffered by big business and the losses suffered by small business. The proportion of pain remains constant. As one dealer said to me this week: `They're supposed to be the party for the worker. Don't they care about us little blokes?'. Last week at Question Time I asked the Minister for Resources and Energy, Senator Gareth Evans, some questions on this subject. I draw the Senate's attention to the fact that these questions related to the Minister's own portfolio. Yet Senator Gareth Evans had to come back later and amplify his answer. His knowledge of the subject was so sketchy that he could not answer fully at Question Time. The Minister also claimed that it was his understanding that nobody had suffered any significant losses at the retail level and as such the question of compensation did not arise. Later he amended his answer to read: I do not doubt that there may have been some experience of small inventory losses around the place, but I reiterate the point I made earlier that those losses are really quite negligible and within the scope of ordinary criteria of commercial risk-quite unlike the situation confronting the refiners . . . Out of his mouth he condemns himself. The Minister reveals his reliance on a public service brief. That answer shows no awareness of the realities of the market-place or of the true situation which faces petrol retailers. Surely he of all people should be aware that they are usually small businessmen in a very small way, they are very dependent upon their relationship with their oil company and upon their local share of the market. The Minister claimed in his second reading speech that retailers were not obligated-I presume by that that he meant obliged-to purchase high priced stocks in February. Retailers must maintain their stock levels which usually vary from one to two weeks' supply. Many dealers in my State were not notified by their oil company or the Government as to when the price would be changed, so they continued their arrangements with their suppliers which require 48 hours notice to vary. The dealers cannot dictate the size of their delivery; they must take the whole load. This is particularly hard on the very small businessmen. Dealers, in their innocence, were accepting deliveries up to and including the Friday before the price was dropped on the Saturday. Retail prices dropped on the Monday. Senator Gareth Evans —No wonder they are having trouble with their businesses if they are doing things like that. I have no doubt at all that they are in difficulty. Senator NEWMAN —The Minister is continuing to show his ignorance. The Minister also claimed that retailers are free to set their prices on the basis of market forces. He alleged that they had the commercial option of not lowering their prices until higher stocks were exhausted. What ignorance he displays! This is the Minister for Resources and Energy who does not understand the small margins upon which petrol retailers operate and the pressures of the market-place. Senator Sanders —He is only a lawyer after all. Senator NEWMAN —Be careful. Normal fluctuations are hard enough for retailers to deal with but a sudden drop of 5c is too much to cope with. When some dealers have contracts which require them to pay for the fuel only as it is drawn out of the pumps, they are free to drop the price at a moment's notice. Their competitors are forced to do the same. These dealers are working on very small margins. Much of their business is restricted by the oil companies to tiny margins for fleet holders of credit cards. As for the remainder of their business they are doing well if they gross 5c a litre. Some have lost sums varying from $1,500 to $4,000 depending on the size of their tanks. These are the small businessmen who already spend too many hours working for the Government-calculating, deducting and paying their employees pay as you earn instalments, satisfying the inquiries of the Department of Social Security, filling in forms for the Bureau of Statistics, completing prescribed payments forms, conforming to inspection requirements and satisfying licensing regulations. In 1978 the Federal Government set up an inter-departmental committee to examine the burden of paper work imposed on small business by governments. The Australian Bureau of Statistics undertook a survey of small business enterprises to establish the perceived cost to small firms of completing government forms. During 1978 this amounted to $215.3m, an average cost of $604 for each small enterprise. But that was eight years ago, and since then the prescribed payments scheme has been introduced and has imposed further paper work burdens on small business. If this paper work is carried out personally by the proprietor of a small business, these expenses are not even claimable as a tax deduction. Small businessmen work hours for the Government, are inspected by one government inspector after another, and then are expected to grin and bear it when they have losses foisted on them by direct government action. Obviously losses of $1,500 to $4,000 per retailer are small beer to the Government but I remind Senator Evans that it is indicative of the Government's lack of concern or understanding of small business that he can describe these losses as negligible. Losses occasioned by the rough and tumble of free enterprise are one thing; losses directly attributable to government action are quite another. The Minister for Resources and Energy does not understand the commercial realities of his portfolio unless those realities come in the form of big companies. His Government's action has caused stock losses not only to the big oil companies but also to the small businesses-to the petrol retailers. These are the family businesses of Australia, the forgotten men and women who battle and risk their all for reward. These are the little businesses that the Government can find no justification for helping. I remind Senator Evans that only a year ago he went on the record as follows: Sooner or later the dollar is going to float back to more realistic levels . . . When that happens, obviously consumers will get the benefit of that in terms of reduced prices at the pump and the Government will lose the additional revenue . . . It is as hard and fast- referring to his guarantee- as I can possibly make it. I think we would be in an impossible political situation if . . . when the other side of the equation came up, as it undoubtedly will, we ran away from that. I ask the Senate and our fellow Australians to watch Senator Evans and his Government running away from that. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.12) —in reply-Until Senator Newman spoke I thought the only real opposition to the Oil Companies (Stock Loss Reimbursement) Bill 1986 was from the Australian Democrats, who have expressed the view that the legislation is, in their words, shonky, scandalous, a windfall and a give-away of an indefensible kind. Senator Newman departed a little bit from her party brief and gave us some further variations on that theme-although no doubt she will vote to support the legislation-suggesting, as she did, that it was a brazen effort by us to buy the friendship of the oil companies. That theme very much echoed what Senator Sanders had to contribute. Senator Durack —She is only worried that you are only worried about the oil companies. That is what is worrying her. Senator GARETH EVANS —I am indebted to Senator Durack for that clarification, though I am sure Senator Newman will not be. I am sure she thought that what she was saying was clear enough. However, I thank Senator Durack; that is appreciated. Let me say at the outset that the Bill is nothing like what has been described by both Senator Sanders and Senator Newman and, if it were, that media storm which looked as if it were going to erupt at one point, not to mention the storm within my own Party, would still be very much with us rather than having dissipated as instantly as it arose once people in the media and in my Party-and, indeed, everywhere else except within the ranks of the Democrats, and also apparently including Senator Newman-appreciated what this legislation is all about. It is not in the nature of a give-away, and the last people who will be heard to be making that suggestion, even privately, are the oil companies, for reasons that I will explain. It is not in the nature of a give-away of any kind; it is in the nature of a prudent arrangement by the Commonwealth to stop what would otherwise have been a much greater drain on Commonwealth and taxpayers' funds. Let me put the facts of this matter on the record once again. The compensation payment that we are talking about, the reimbursement in issue here, is to compensate the industry for the small part of its now accumulated stock losses, following the world oil price collapse, that occurred when, at the Government's request, they went on lifting something like 13 million barrels of Australian crude oil during the month of February at a price of $16 a barrel higher than they would have been able to get that crude for on the world market. As a result, they faced a total additional cost of something like $210m. The payment of $125m is in the nature of a partial rebate of the $350m worth of crude oil excise revenue the Commonwealth collected from that continued program of liftings during the month of February-$350m which the Commonwealth would not have been able to collect had the oil companies ceased that program of liftings during the month of February. They undoubtedly would have ceased that program of liftings, had not the arrangement been entered into to compensate them at least for that particular component, the $125m of direct payment, with the remainder of the $210m being picked up by their opportunity to recoup in the market-place in the period before the Prices Surveillance Authority wholesale price determination took effect. That was a very good deal from the Commonwealth's point of view-$350m worth of revenue which it would not otherwise have received, less $125m payable to the companies under the legislation now before us; a net gain to the Commonwealth and the country of $225m. They are the arithmetical realities of this arrangement. It is not good enough for Senator Sanders to dismiss that airily by saying we would have been able to recoup that $350m later on anyway. Of course that claim is premised on the assumption-which I assure him is false-that the allocation system would have been maintained intact had it fallen apart during the month of February in the way he is suggesting. I will come to the question of what the future of the allocation system would have been, but on the assumption that the companies just ceased lifting for February but then picked up their liftings again in April, May and June-which is a wildly implausible assumption; let us assume it anyway-I can tell Senator Sanders that his claim that over the remainder of the year they would have picked up the necessary further liftings from the Australian producers, which would have produced over time that revenue result for the Government, is false. The short point here is that some of them were overlifted already in the month of January in such a way that they had no obligation to pick up this extra amount over the course of the year. When I talked previously about their obligation to pick up during the month of February I was talking in terms of commitments they had made concerning pick-ups during February. Some of those commitments were in excess of what they were technically obliged to do under the allocation system. That is the first point. They were not necessarily obliged at all to pick up over the course of the year that particular amount in question. The second point I make is that in a falling price market, even had they picked it up, they would have been doing so at a price and accordingly at a revenue return to the Government very much less than the price we are talking about as having been applicable during the month of February. The import parity price now is very much less than it was in the month of February and it has continued to decline through the course of the year. That all sounds very technical but it is necessary to be technical from time to time-even though it is beyond the range and skill of the Democrats to focus on these matters-in order to point up the hollowness of some of the assertions continually made. So that is the starting point, and I suppose from many points of view that is where the argument could simply be left; case rests. But let me go on with the other legs of the argument just so people appreciate the full enormity and irresponsibility of the crude, vulgar, populist claims that are being made by the Democrats on this occasion-that this is some sort of windfall payout to the oil companies or, as Senator Newman would say, an attempt to buy some friendship with them. The next leg of the argument is simply this: If we had not reached the agreement we did in the month of February to ensure a continued program of liftings during the month of February to produce the revenue result I have talked about, that would have meant not only the permanent disappearance of that particular chunk of revenue-net revenue when we take out this payment-but also, I can assure the Senate, the collapse of the allocation system, creating a situation whereby without any opportunity to prepare for it, phase it in and accommodate it, we would have gone straight into a free market environment-one in which there would have been much more imported crude and much more imported product. The Opposition-this was the nub of Senator Durack's contribution to the debate-said what a terrific thing the free market was and that if we had had one all along we would not have had this allocation system and price constraints that were operating back in the month of February. Therefore, refiners would not have been caught in a stock loss situation and this legislation would not have been necessary. That may all be true, but the arguments in favour of a free market system have to be established on a cost-benefit evaluation rather than simply asserted. The reality is that, although there is a case to be made, there are arguments in favour of a free market and those arguments are very much present in the Government's mind. We considered them in 1985, and we will consider them again next year with a view to possibly introducing a free market in 1988. Any immediate plunge into a free market system, in particular a complete free market system with no regard to the particular problems of the on-shore producers in Australia, would reduce them to the status of producers of the marginal barrel, absolutely at the mercy of the refining companies, even more so than the retailers for whose position Senator Newman's heart was bleeding earlier. Even in an environment where there are things to be said for a free market in principle, if not a complete free market, there is nothing much to be said for an immediate plunge into a free market situation in the environment in which we would have found ourselves had this occurred with the collapse of the allocation system back in February. There would have been a massive loss of government revenue, there would have been a massive further deterioration in our balance of payments on the assumption that a free market environment applying then would have sucked in-maybe not necessarily in the longer term but in the environment prevailing earlier this year-some of that massive amount of cheap crude oil and cheap product which is sloshing around the world at the moment. The incentive for people to buy that rather than domestic Australian crude would have been very great indeed, with obvious implications not only for our domestic producers but also for the balance of payments situation. There would have been enormous difficulties with the Australian refining industry, not least two refiners in particular whose position is well known to be marginal economically at best-and all this was spelled out in the 1985 review I prepared when this matter was in issue. I am referring in particular to Ampol in Brisbane and the Mobil refinery in Adelaide, which between them involve something over 700 jobs. Those refiners would have been in an impossible position in the event of a sudden move to a free market situation, given the enormous temptation there would have been, and in fact still is in the circumstances prevailing in the world oil market, to import massive amounts not just of overseas rather than domestic crude oil but rather of refined product from overseas sources. We would have had a problem immediately with the on-shore producers. They have a problem at the moment in terms of their exploration and development, but many are surviving-those of them with a production arm-on the basis of the existing allocation system in a non-free market environment. Some 8,000 people are employed in on-shore oil development and production, and a great many of those jobs would have been at risk, too, had we plunged into a system of a collapse of the allocation scheme with all that that involves. This is why Ted Harris made some comments in Adelaide at the Australian Petroleum Exploration Association conference, in the course of a speech which comprehensively demolished the pretensions to economic respectability of the Opposition in its pronouncements in this area. He said on behalf of Ampol, and I believe he was also speaking for a great many people in the industry: I have read with interest the recent avalanche of press statements coming from the Opposition spokesman, Senator Durack, calling for a `free market' and the lowest possible petrol prices. What I want to say to him is this, that if cheap petrol is the predominant objective then we can fix that very quickly. We will simply have a milk run of tankers bring product into Australia from huge surpluses available from the Middle East and elsewhere and to hell with exploration and production and efficient refinery capacity, and employment and capital investment. Need I really say any more? That is the nub of this argument. Senator Durack —I will send you a copy of a letter he has written to me, which may give you a different view. Senator GARETH EVANS —I thank Senator Durack for that suggestion. I am always grateful to receive correspondence from him, whether he has written it himself or is simply passing it on. All I know is that, on the subject of Senator Durack's views on free markets, what Mr Harris was prepared to say publicly in the very public forum of the Australian Petroleum Exploration Association conference in Adelaide a few weeks ago was that those suggestions-if not necessarily beyond proper analysis in implementation over time, in the context of the claim for immediate flow-on and immediate benefits from a free market, the claim that is made that immediate cheaper prices will result for the consumer-mean that there is a substantial downside to be taken into account, as I have spelt out and as he has even more adequately than I. That has to be taken into account by anyone who claims that, had we not entered into the arrangement embodied in this legislation, somehow all would have been right with the world. It would not have been right with the world. We would have had an instant collapse of the allocation system, instant pressures on the on-shore producers, instant massive pressures on the refining industry, instant pressures on the balance of payments, further pressures on government revenue. While on the subject of government revenue, I interpolate that Senator Durack's suggestion that there has been no sacrifice at all from the Government's point of view in this whole course of events, as it has unwound over the last few months with the collapse in oil prices, is simply not the case. There has been a massive renunciation of revenue return from the Commonwealth compared with what would have been the case had we not forgone that revenue. I refer to the $150m in the remaining part of 1985-86 and the $420m in the full year next year, as a result of our decision in March not to recoup fully the amount of revenue forgone as a result of the decline in local prices and the massive reduction in excise revenue. The Government has already made that obvious sacrifice in terms of its revenue. There is a great deal more pain than that involved for the Government in terms of its revenue calculations for this coming year because production is so low at the moment. This was simply the revenue effect of changing the differential tax recoupment I was discussing a moment ago. There is a further point that needs to be made, coming back to the line of argument about why this Bill is justified. It will be recalled that the first point was that it was not a give-away of $125m; it was a net gain of $225m for the Commonwealth. The second point I have been making is that many other downside effects flowing from the collapse of the allocation system undoubtedly would have occurred. The third point I make is that there was no real alternative at the time for reimbursing the refiners for the stock loss incurred for February other than going down the route of direct payment. There was a technically available alternative which some of them still want us to allow them to pursue, and that is going to the Prices Surveillance Authority and getting authorisation for maintaining wholesale prices at a higher level than they otherwise would be to give them an opportunity for recoupment in the market-place. That may have been technically available, but to allow that avenue of recoupment or reimbursement to apply would have meant that consumers would not have received anything like the substantial benefits they have already-the nearly 6c they got in March, which is what we are talking about here. Not only would that have generated some anxiety for consumers, but more importantly from an economic and good government management of the country point of view, it would have meant that we did not get any benefit at all in inflation and CPI terms from the world decline in oil prices. As it is, the most recent CPI figures have not shown up any benefit from the decline in oil prices simply because they occurred too late in the March quarter for that to be so. But a benefit there will be from the March adjustment alone, something of the order of a 0.5 of a CPI percentage point in the first instance and something over 1 per cent in due course. It was important and necessary, for the health of the Australian economy and the maintenance of our competitive position as compared with other countries, to go down this route. The final point I make to the Democrats is that, if this Bill were by some mischance to be defeated and this measure involving $125m were to be disallowed, the Government would be in honour and duty bound to allow the refiners, under those circumstances, to go back to the Prices Surveillance Authority and seek through that mechanism recovery of the full amount of $125m that is involved in the present legislation. That would involve an immediate increase in the wholesale price of petrol of something like 5.3c per litre for at least a month which would completely undermine the inflationary gains we have been making in recent times. That is the whole picture in terms of the rationale for this legislation. Let me make one final point, again about the claim that the refiners are somehow the grateful beneficiaries of a handout in this respect. I have indicated that from the Government's point of view it certainly does not amount to a handout because we were the net beneficiaries in revenue terms. It should also be absolutely clear from an industry point of view that the refiners-my sympathies are not confined to the refiners; other people in the oil industry have been suffering very seriously as a result of the downturn in oil prices-have accumulated uncompensated stock losses after tax of something over $300m. Even after this $125m is paid to the industry as a whole and even after one takes into account the opportunities for recoupment the refiners have had through the existing delays in the implementation of new wholesale prices and through the modest allowance that has been made in the most recent PSA decision to enable some recovery for stock losses, the refiners are still lamenting to the tune of some $300m as the situation stands at the moment. Anyone who, under those circumstances, whether it is the Democrats or Senator Newman, says that somehow the Government is buying friendship, irresponsibly making giveaways in a way that does not have regard to any considerations of equity and justice, needs to bear that point in mind. That compares with the total profitability for the whole industry of the order of magnitude of $300m or $400m last year, last year being the year when profits were, for the first time in two or three years, for most companies in the black at all. A period of substantial losses. Senator Sanders will know that neither of us is prone to weeping tears of blood for the oil companies. They are big enough and strong enough to look after themselves. Many of the representations I receive from them I treat appropriately. But there is a reality about the economic plight they have been facing as a result of the drop in oil prices, and where their losses, as was the case in February, are the product of Government policy and a specific Government request in order to maintain the integrity of that policy, I believe that we have no alternative but to act accordingly. I have made it clear in public statements on behalf of the Government that if and when prices come back up it is perfectly appropriate that action be taken to recover anything that could properly be argued as a windfall gain. For the record I repeat what I said in my Press statement of 16 April: Should crude oil prices move in the opposite direction as dramatically in the future, appropriate measures will be taken to ensure that the refiners do not accrue stock gains of a windfall nature (i.e. over and above what is necessary to enable them to recover residual losses they have accrued during the present period of price collapse) and that the Government is recompensed for its present financial support, to the extent practicable. That is the position. I believe that it is an evenhanded and balanced position. I understand what Senator Newman was saying about the position of the small retailers. I can repeat only the points that I made to her in the answer I gave to her question to me in the Senate the other day. The position of the small retailers is very different, from all sorts of points of view, from that of the refiners. I do not want to go through those issues again. The basic point is that maybe the small retailers are not properly informed. Maybe they are unaware of the time that elapses between the announcement of a change in import parity pricing and the Prices Surveillance Authority's change in the wholesale price determinations. But the opportunity is there for them to inform themselves. The system has been around now for some considerable time. There is a gap. There is a delay. The stock period for the service stations is short enough to enable them to adjust their inventories accordingly. They are under no constraints so far as the PSA in concerned, although I acknowledge that there are competitive constraints on their ability to recoup in the market-place. Generally speaking, they are not bound by the regulatory apparatus that is the case with the refiners. It has to be said for the benefit of people who are always preaching the virtues of free enterprise that such losses as small retailers have incurred, and they have been minor, have been what can be regarded only as ordinary commercial risk, associated in some instances with an insufficient appreciation of the room for manoeuvre available to them. I do not know, at the end of the day, whether Senator Newman had any particular consistency about her speech. On the one hand she was berating me for spending too much of the taxpayers' money on the refiners. In her next breath she was berating me for not spending a bit more on behalf of the Government to pay to the retailers to put them in the same position as the refiners. Senator Newman —You didn't listen. Senator GARETH EVANS —I listened very carefully. I simply say that at the end of the day this measure is thoroughly justified for all the reasons I have outlined. I am grateful to the Senate for its general support of the measure, however churlish that support may have been, and to those who have indicated their willingness to vote for the measure. I wish the Bill an appropriately speedy and robust passage. Question put: That the Bill be now read a second time. The Senate divided. (The Acting Deputy President-Senator R. C. Elstob) Ayes . . . . . . . . . . . 59 Noes . . . . . . . . . . . 6 —— Majority . . . . . . . . . 53 —— Archer, B. R. Kilgariff, B. F. Aulich, T. Knowles, S. C. Baume, Michael Lewis, A. W. R. Baume, Peter McClelland, DouglasBjelke-Petersen, F. I. MacGibbon, D. J. Black, J. R. McIntosh, G. D. Bolkus, N. McKiernan, J. P. Boswell, R. L. D. Maguire, G. R. Brownhill, D. G. C. Morris, J. J. Childs, B. K. Newman, J. M. Coates, J. Parer, W. R. Coleman, R. N. Puplick, C. J. G. Collard, S. J. Ray, RobertColston, M. A. Reid, M. E. Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crichton-Browne, N. A. Robertson, E. A. (Teller)Crowley, R. A. Ryan, S. M. Devlin, R. Sheil, G. Durack, P. D. Short, J. R. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Gietzelt, A. T. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walsh, P. A. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Hill, R. Zakharov, A. O. Jessop, D. S. Chipp, D. L. Mason, C. V. J. Haines, J. Sanders, N. K. Macklin, M. J. (Teller) Vigor, D. B. Question so resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 14 March, on motion by Senator Ryan: That the Bill be now read a second time. Senator WATSON(Tasmania)(5.46) —The wool industry and the Opposition have no general disagreement with the Wool Industry Amendment Bill 1986. It will bring the wool industry into line with revamped arrangements which are now operating in 12 other rural industries, the most notable being the recently established Australian Meat and Live-stock Research and Development Corporation. The Bill will significantly reorganise the management of funds available for research and development in the Australian wool industry. At present the finance in this industry is controlled by the Wool Research Trust Fund, which is the largest in Australia with a budget in 1985-86 of $25m and with a reserve of $44m. Part of the Fund's annual budget is allocated to the Commonwealth Scientific and Industrial Research Organisation and to the Bureau of Agricultural Economics for research. But under this legislation a new body is to be established, the Australian Wool Research and Development Council, which will control the finances. According to the Government there are four ways in which it is anticipated that this body can act to improve the present system. Firstly, it will improve the efficiency and effectiveness of wool research and development. Secondly, it will identify more precisely areas of wool research and development specific to the needs of the industry. Thirdly, it will improve account- ability for expenditure. Fourthly, it will encourage more effective use of resources and skill in research and development. This legislation will result in the loss to the CSIRO and to the Bureau of Agricultural Economics of their automatic right to wool research and development funds. For example, they will now be obliged to compete for funds on a project by project basis and will not receive an automatic lump sum allocation. In 1984-85 the CSIRO spent $5m on wool production research. It must be recognised that over the years this organisation has had a tremendous impact on the wool industry. In addition, the Australian wool textile industry has worked closely with the CSIRO in developing new products and techniques. Currently, over 20 projects are being jointly researched; most of these are not of a short term nature. Whether the loss of the previous automatic grant will adversely affect the CSIRO's wool research remains to be seen. However, I suggest that in the long run the increased competition will improve the efficiency of bodies involved in research and encourage them to strive for maximum achievement while at the same time minimising costs. Research and development is essential to maintain and increase Australia's market position. In the past the Australian Wool Corporation has had a successful research and development policy which has resulted in ongoing success for the Australian wool industry. It has been very beneficial financially. The industry has always been prominent in Australia's development as a nation. Wool is predicted to continue to be our most stable rural commodity and the future outlook, according to some, is fairly optimistic. However, I must admit that I do not always share that high degree of optimism. Despite significant increases in consumption in the major markets of the world-Europe, Japan and the United States of America-and the rising price for a whole range of wool types, unfortunately Australia has unavoidable increases in farm costs which will offset the high returns of these so-called prosperous times, and as a result some sectors of the industry are seeking an increase in the floor price scheme. I think this is somewhat unfortunate. As I indicated, there are some worrying signals which need to be heeded now. Firstly, the price of wool has not fully reflected the devaluation effects of the Australian dollar. Secondly, the Australian Wool Corporation's stockpile is still in excess of one million bales. Thirdly, although there has been a significant premium in the price of woollen products over their synthetic competitors, the fall in oil prices will tend to widen this difference, requiring additional advertising support to maintain sales at current prices or additional results of research flowing through to the industry. Fourthly, I submit that wool has never been cheaper in real terms, but that this does not really imply that prices cannot fall further. Fifthly, wool's share of the fibre market is not increasing and stands at only about 5 per cent of the total market. The problems with regard to price will inevitably be associated with an appreciation of the Australian currency, if that happens. There is also a disturbing trend that more and more farmers are moving from other industries which are currently depressed into producing wool, which could result in an oversupply situation. Finally, I draw attention to the situation in the People's Republic of China, which has become a great market for Australian wool and is already an important buyer. Many people see the development of closer relations with China as a major plus for the wool industry, particularly in the light of the considerably increased demands, not only for wool but also for our rams and top breeding stock. In the short term this growing trade is a tremendous achievement, but I would like to sound a very loud and clear warning about the future prospects because I do not think that in the long term they are all that rosy. I believe that China has the capacity to topple Australia from its pre-eminent position if its record over the past few years is anything to go by. Let me give some examples. In the area of cotton, in 1982-83 China produced 13.6 million bales. In 1984 this had risen dramatically to 25.3 million bales. Over the same period production in the United States of America dropped from 15.6 million bales in 1982 to 13.3 million in 1984. Similarly, in 1982 China's cotton yield was 500 pounds per acre, increasing to 600 pounds per acre in 1984. Across the sea, America's yield dropped significantly below that of China and in my view the same sort of situation could happen with wool if China applies itself to the wool industry as it did to the cotton industry. At the moment China produces slightly less than two-thirds of its total requirements of wool. Although China has the third largest sheep population in the world, behind Russia and Australia, it has been unable to satisfy demand, with the result that imports have increased fivefold in the past five years. In money terms that has meant an import cost in excess of $500m. Of course, this has led to problems of foreign exchange and China's take of wool has not been even because of that problem. China's goal is to become self-sufficient in wool as soon as possible. I do not believe that this should be too difficult for it. China's yield per sheep is less than half that achieved in Australia. By improving this yield it is not too difficult to presume that it will not be too long before China is satisfying its increasing demands from its own resources. Increasingly we are finding delegations of Chinese people coming to Australia, looking at our studs and taking notes which will be taken back home and applied in a practical manner. Australia is helping considerably in China's quest for self-sufficiency through improved quality and increased production. Providing China with high quality genetic material and superior breeding stock would increase the yield. Increasing the yield would also provide China with more basic materials for its anticipated increase in the production of wool textiles and apparel exports. In fact, China increased its exports of wool and allied textiles by some 17 per cent in 1984 and this is expected to increase even further over the next decade. China's lower costs of production in some areas could put pressure on international markets and depress orders for wool from Australia's traditional wool buyers. In spite of the increases in sales of wool to China, our share of the Chinese market has fallen. Australia and New Zealand each export about 40 million kilos of wool to China. The most dramatic increase in sales comes from South America, whose share of the Chinese market has risen from 14 million kilos in 1982 to 40 million kilos in 1984. I therefore believe that we must be careful not to fall into the trap of expecting China to become the saviour of our most important rural industry. Our most pressing task today is to convince the Chinese that it would be cheaper, more efficient and more cost-effective on its part to continue importing high quality wool from Australia, rather than spending generations trying to come up with a product of equivalent quality. Tasmania is the centre of the superfine wool industry of Australia. In February this year at the annual wool sales a world record price for superfine wool was established by the Japanese from Fujii-Keori Ltd, which has held the world record price for some years. That firm considers the Tasmanian superfine wool to be the best in the world. This wool derives from pure bred saxon merino sheep, a breed that has remained virtually unchanged for close to 200 years; but that does not therefore mean that there has not been years of research and selective breeding to make that breed what it is today. Two hundred years of research and development cannot be transported to another country, nor do I believe that it should be transported. We should be doing all in our power to maintain supremacy in our superfine wool area and to develop new techniques and types of wool to keep ahead of changing demands. Our future will be determined, no doubt, by our investment in research and development and by our enterprises and achievements in the marketing area. This Bill aims to give greater emphasis to research and is geared towards a more efficient and effective program of development in the wool industry. It will improve the ability of the Australian Wool Corporation to approve and monitor all research projects according to the agreed corporate and operating plans. One point that must be raised concerns the question of financial costs imposed by the Bill. While the proposed legislation is likely to be advantageous to the management of research and development funds, the policy of the Wool Corporation to date has proved successful. The Government must give assurances that the changes will not impose higher administrative costs or reduce the number of hours spent on research. It is important also that growers maintain a say in research matters. Despite some reservations I may have, I believe that the wool industry will benefit by the changes initiated in this Bill. Well managed research and development is fundamental to the industry's growth and future prosperity. It is vital that we develop and exploit new opportunities for wool and improve economic efficiency at all times in production and processing in order to ensure that Australia remains at the forefront in the production of wool for world markets. I commend the Bill to the Senate. Senator BROWNHILL(New South Wales)(5.59) —The main purpose of the Wool Industry Amendment Bill is to make changes to the organisation and administration of wool industry research and development funding. The responsibility for wool research and development will now fall to a new Wool Research and Development Council. The Council will have nine members and will be responsible to the Australian Wool Corporation. The coalition supports this move, which has been made with the support of the industry and will make the industry more accountable. The new Council Chairman will be appointed by the Minister for Primary Industry (Mr Kerin) from a panel supplied by the AWC, so the industry itself will have a say in its own affairs. Four of the Council will be nominated by the AWC and four will be nominated by an industry selection committee. The wool industry remains one of Australia's greatest industries. The Bureau of Agricultural Economics has estimated the gross value of wool exports for 1985-86 to be in the order of $2.8 billion. This represents 26 per cent of total rural exports and 8 per cent of Australia's total exports. Wool production this year will again be the second largest contributor to our country's export earnings. Fine wool production in Australia is not among the best in the world-it is the best in the world. Australia produces fine wool better than any other country. Our merino flocks are the envy of wool growers everywhere. I add that New South Wales now holds the fine wool record price for the world which was taken away from Tasmania some time ago by Mr Gill from Walcha. It is of very great concern to me, and I know to the wool growers throughout Australia, that we are allowing our best blood lines to be exported to a number of countries. This is something that this Government should be addressing itself to at the moment. The argument has continued for a long time amongst governments and within the industry itself. Certainly, the Chairman of the Australian Wool Corporation, David Asimus, has put his and the Corporation's position on this very strongly to the Government. At the National Agricultural Outlook Conference in Canberra earlier this year, David Asimus said that the Corporation had recommended the reintroduction of a merino export embargo. Senator Watson has already remarked on exporting our expertise in merinos to the rest of the world. Mr Asimus said: While there is no strong evidence either way, the Corporation considers the further liberalisation of export restrictions would not be in the best interests of the Australian wool industry, and the embargo should be reintroduced. He went on to say that Australia's reputation for top quality wool was not solely based on genetic material, but also reflected the husbandry, marketing and management skills that had evolved in the country's competitive, commercial en- vironment. He argued against the making of those skills freely available to the rest of the world. I totally agree with the sentiments he expressed. If we start exporting our merino rams or semen we are giving our competitors the best opportunity they will get to take over our markets. Last year Australia trebled its exports of wool to China. It is being particularly aggressive in developing a new market there, as Senator Watson has already said. Of course, Europe is our largest market for merino wool and it is this market that we should be trying to protect and not throwing away to our potential competitors. Spain could emerge as the biggest threat to that market. Spain has the potential to substantially increase and improve its merino flocks. Having just entered the European Economic Community, Spain will be in exactly the right position to lock Australian wool out of the EEC market. I am concerned that merino breeders, such as Don Vanrenen, who only recently was elected President of the World Federation of Merino Breeders, does not share my view. I believe that short term gains from lucrative overseas sales should not colour the argument. Obviously the world will pay top prices for our rams and semen, but the short term advantages will soon be forgotten if countries such as Spain decide to alter their programs from mainly meat production to wool production, and if they get the genetic material with which to do it, of course they will try. It is folly to believe that Spain, or any other country, will buy our best merino rams simply to increase their present activities of producing lean meat or for purely domestic requirements. A similar argument is raging at the moment in the angora goat industry. Again, short term considerations must be weighed against the long term benefits for the Australian angora industry. The Federal Government is about to finalise, if it has not already done so, its Merino Export Review Committee report. I hope that common sense will prevail and that the members of that Committee will take a long term view. The changes being made to the wool industry under this legislation to improve organisational structure for research will really be wasted if, at the other end of the scale, we are selling off our expertise and our genetic material. Research has played a significant role in the development of our wool industry. There have been a number of research projects undertaken by such organisations as the Commonwealth Scientific and Industrial Research Organisation, with its defleecing program. There has been considerable work in the development of improved hand pieces, automated mechanical shearing, research into better methods of handling and storage, and bale design. It is important that the research continues to be relevant to the industry. This legislation, with the establishment of a new Wool Research and Development Council, will ensure that the research remains relevant to the industry and addresses problems to which the growers and the industry itself need answers. The five-year plan, which is also envisaged in this legislation making the Council accountable to the Parliament through the AWC, is important. The Opposition agrees with the Government's desire to obtain the greatest value for the dollars spent. The five-year strategic research and development plan is a move in the right direction. I commend the legislation to the Senate. Senator GRIMES(Tasmania-Minister for Community Services)(6.06) —I thank honourable senators for their support for the Wool Industry Amendment Bill. I will make only one comment on matters raised by Senator Watson and Senator Brownhill and that is to clarify the position which may have been somewhat confused concerning the export of merino rams and other genetic material from Australia. I think it is worth while putting on record that, as Senator Brownhill says, there is a considerable difference of opinion amongst the wool growing fraternity on this matter. It is not just a simple matter as Senator Watson and Senator Brownhill tended to put it, and all we have to do is to put a ban on the export of such material and everything will be okay. Senator Watson —What about the warnings about the consequences of doing that? Senator GRIMES —I point out to Senator Watson that the Merino Export Review Committee, which has some expertise in this area, has been looking at the problem, as he knows. Senator Watson —Self-interest. Senator GRIMES —What does the honourable senator mean by self-interest? That body was established to look at this matter. It has looked at the effects on the wool industry of the present arrangements for the export of rams and other genetic material. It prepared a draft report which was released on 1 May. The findings of that report, as both honourable senators well know, is that the export of merino rams and genetic material does not pose a threat to the Australian wool industry. It recommended a gradual easing of the restrictions in view of the significant opposition-which opposition we have heard here today-the limited number of merino rams available through the auction system and to allow adequate time for adjustment. It was required to produce a draft report which was to be released for public comment, which is what is happening now. I hope, and the Minister for Primary Industry (Mr Kerin) hopes, that everyone will read the report and consider it critically and not just make blind assertions that such exports are bad. Once there has been sufficient public comment the Committee will prepare its final report and that final report will be submitted to the Minister and the Government, and at that time the decision will be made. There is plenty of time for the Opposition to put its views and to put some evidence to back those views. With respect, and I know it is difficult in a debate such as this, we have heard the views but not much evidence to back them. The Committee has looked at the evidence. The Minister has it in mind that any changes that will be made will be put into place for the 1986-87 ram auction sales which commence, I think, in July of this year. So I think the Minister has taken a responsible approach to this matter. He has set up that review and there is plenty of time for public comment. All those in the industry will be able to put their case for and against it. The Minister will, by that stage, be saturated with advice from all sources, and I hope will not be too saturated to make a proper decision. I am sure he will not be. I thank honourable senators for their support and I will not delay the Senate any further on this matter. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 30 April, on motion by Senator Walsh: That the Bill be now read a second time. Senator JESSOP(South Australia)(6.11) —My remarks are directed to the Customs and Excise Legislation Amendment Bill 1986 and will refer largely to the question of the maturation of Australian spirits. There are some differences of opinion among manufacturers of these products in Australia, but the manufacturers of better grade products are combined in their condemnation of the decision of the Government with respect to the two-year maturation requirement. Some weeks ago I asked the Minister for Industry, Technology and Commerce (Senator Button) certain questions regarding this decision. The Minister failed to answer the questions and promised to supply me with a comprehensive reply from his Department. Unfortunately, I am still awaiting that reply. I would have appreciated it if the reply had been produced prior to this debate. Senator Grimes —When was this? Senator JESSOP —It was a few weeks ago. Senator Grimes —At the Estimates? Senator JESSOP —No, in the House. The Senate may recall that I asked: Is the Minister aware that maturation is an essential, integral step in the production of brandy, whisky and rum without which the oxidation and chemical change does not occur to produce the taste, aroma and characteristics attributed to these spirits? In whose interests has this decision to abolish compulsory maturation been made? . . . What steps will be taken by the Government to prevent the market being flooded with cheap rotgut local or imported spirits? In the short reply Senator Button was able to give, he said: I believe that there are very few countries where maturation under regulation is required as it has been required in Australia in the past. I am afraid that the Minister is mistaken because every country which distills quality brandy, whisky or rum insists on maturation of those products, even though in those countries they might use unmatured spirit to manufacture spirits such as vodka and gin. As far as brandy is concerned, in the United States of America for example, and in the European Economic Community, a minimum two-year maturation period is required. In South Africa I believe the period is a minimum of one year, and in countries in which brandy is blended, such as Singapore and Malaysia, they require the use of products which have had two years maturation. With respect to rum-I do not know a lot about rum myself- Senator Macklin —Go on! Senator JESSOP —My colleague from Queensland knows all about this. It is true that neither the United Kingdom nor the United States has any requirement for the maturation of rum, but then rum is not distilled in the United Kingdom or in the United States. All rum in those countries is imported. As far as whisky is concerned, the United Kingdom and the United States of America, of course, are distillers of whisky and both countries place great emphasis on maintaining the quality of whisky, both from a marketing point of view as well as from the point of view of the health of the consumers. Therefore, both countries insist on a minimum of two years maturation with respect to their whiskies. It should be noted that the great rum producing countries, including Puerto Rico and Mexico, which import more than 80 per cent of the rum into Australia, insist on maturation of that particular product. As a matter of fact, in their advertising in the United States, these firms make much of the virtues of maturation with respect to the quality of their product. The Minister might be able to tell me in whose interest this change has been made and on whose advice it was carried out. I understand from what I have been told that Sir Jack Egerton is a director of a rum distillery, and it would be interesting to know what role Sir Jack played in the formu- lation of this Government decision. I say this quite seriously. What arguments did Sir Jack employ to the Prime Minister (Mr Hawke), the Minister for Industry, Technology and Commerce, and the Minister for Health (Dr Blewett) which were so persuasive that our wine growing, sugar growing and brandy and rum distilling industries should be put at risk? Senator Macklin —Is that Beenleigh? Senator JESSOP —I think Beenleigh Rum Pty Ltd is out of business. I ask the Minister: What arguments did Sir Jack use to get three such important people to visit Brisbane in a VIP jet specifically to discuss the matter with him? Senator Puplick —Oh! Senator JESSOP —That happened. Sir Jack could not have argued on the basis of quality, quality control, health or authenticity of the product. I suspect the only real arguments used were about how to keep the distilleries from going broke. The arguments used by Sir Jack could not have been devoted to the long term interests of the Queensland sugar industry, Australian grape growers, or the reputation of the Australian brandy, whisky or rum industries. Historically, I think we are all aware of Australian servicemen being blinded and otherwise poisoned by bad spirits in the First World War, in the Second World War and at other times in countries in which quality control of spirits did not exist. I mention servicemen because they were in such numbers in those countries and they were under such administrative control that the effect of bad spirits on their health was well recorded. Undoubtedly merchant seamen and other Australian travellers have suffered the same fate. Certainly it was the experiences of British sailors in the seventeenth and eighteenth centuries in relation to bad spirits that led to the regulations requiring maturation being first promulgated in the United Kingdom. We ought to have regard to the historical question of effects on health before we remove quality control on spirits. It certainly seems strange to me that the Government is spending $100m on discouraging people from taking drugs but then turning around and deregulating the quality of one of the most used of all drugs in Australia. There are other factors, however, that are of greater importance to Australia and its whisky, brandy and rum industries. Senator Grimes —What is the view of the whisky and brandy producers on this? I thought they were in favour of this. Senator JESSOP —The message I have from the quality brandy producers in South Australia and from the quality rum producers in Queensland is that they disagree with what the Minister has said. Anyway, there are other factors that are of greater importance to Australia and its whisky, brandy and rum industries. One of those is the primary producers who provide the feedstock for the distilling industries. I want to deal with those factors under three headings-quality and price, importance to primary industry, and international standing and importations. I believe whisky should be matured because the great whisky producers of the world insist on their product being matured. Australian whisky is a very palatable product but it could not be said to have the same relative quality or prestige, at least when measured by the share of the whisky market that is enjoyed by our brandy and rum products. I have not seen Corio whisky for years or the other whisky that was famous in Australia some time ago. People lean towards drinking brandy and rum in preference to Australian whisky. It is fair to say that brandy and rum producers have striven for and gained home recognition and some international standing. In the years ahead brandy and rum will join our wines in being internationally recognised. I hope that we will see the day when they will attract international awards. That will happen if we mature them properly. Maturation of rum is essential for refining. Moreover, the community expects rum to be matured because historically it always has been matured. The label `rum' should be reserved for maturated spirit which has been distilled from sugar cane or molasses. Sugar cane and molasses have some interesting properties. They can be distilled and the unmatured spirit can be used to make vodka, gin, or even to drive a motor car, but unless the spirit is matured it should not be called rum. Such unmatured spirit, or ethanol as it really is, could properly be called cane spirit, as it is in South Africa. Senator Macklin —Jungle juice. Senator JESSOP —Exactly, but it should not be thought of or sold as rum. Similarly, brandy must be matured. All the excellent Australian brandies are matured beyond the compulsory two years. They have steadily improved in quality and certainly are better than all imported brandies other than cognac and armagnac. Some are better than the younger imported cognacs. I recommend that Senator Grimes buy a bottle of St Agnes seven star brandy. He will find that what I just said is true. Senator Grimes —I cannot afford it. Senator JESSOP —The Minister did quite a bit to the brandy industry a few years ago, I recall. The Government has claimed that the deregulation of maturation will make cheaper products available to the consumer. Let us examine that claim. I cannot give figures for Australian whisky, but from the inquiries that I have made the figures which I will give the Senate for rum and brandy will be substantially the same as for Australian whisky. For rum, the Bundaberg Distilling Company Pty Ltd claims that the cost of maturation is 15c per 750 millilitre bottle. That amount is not insignificant but is minuscule when compared with the excise which, last September, was $6 for a 750 millilitre bottle. It is a fair bit. That amount has increased each quarter, as it has for so many other products. The Australian Wine and Brandy Producers Association has estimated that the cost per 750 millilitre bottle of maturing brandy is of the order of 35c, about twice the cost of maturing rum, but again is insignificant compared with the excise on that bottle. If the Government is concerned about the cost of the product it should stop its quarterly excise increase, which would relieve consumers very quickly and would also be very helpful to the industry. Maturation has an important part to play in the viability of cane and grape growing. At a time when the Government has been forced to provide grape growers with a subsidy to pull their vines and the Government is also involved in financial support to reduce sugar cultivation, it should not be contemplating legislation to further disadvantage growers by reducing the quality of the end product. Because of the maturation of both molasses spirit and grape spirit the brandy and rum distillers are able to buy grapes and cane at times of oversupply. This enables growers to be cushioned in good growing years. At the moment up to four years supply of distilled product is maturing. If the distillers were to decide to stop maturing the spirit-which the better manufacturers will not do; nevertheless the Government proposal would permit it-they would not need to take any grapes or sugar for four years. This cannot be in anyone's interest. Mr Acting Deputy President, you know the Angoves family and their reputation for quality brandy. They regard this matter as being very critical. I am sure that all honourable senators from South Australia in particular would sympathise with their desire to maintain the high standard that has been achieved in the past. If the Bill is passed, an extension of time should be given to grape growers, many of whom will have made their decision to continue cultivating grapes on the basis of providing them to the brandy-making business. If the Government permits cheap and nasty rum, brandy and whisky substitutes to come into this country and, at the same time, imposes an increasing excise on the home-grown high quality matured products, the amount of grapes and cane needed for the home industries will be further reduced. The Government will therefore have lost tax revenue as cane and grape growers go broke and in the meantime it will have to increase vine pull schemes and cane substitution schemes. Our balance of payments will be further affected adversely. Recently, Australian wine sales in Japan were affected by the reported use of softeners in Austrian wine. Senator Elstob very properly raised that question only yesterday. The Japanese had difficulty in discriminating between Austrian and Australian wines. Reversing this market disadvantage required both energy and money. I am not quite sure whether I would agree with the way in which Senator Elstob would like to identify Australian wine by putting a kangaroo on the label. That could be a good idea but other ways must be considered. I commend Senator Elstob for his interest in the matter. Senator Collard —Ask Senator Elstob about the coconut wines during the war. Senator JESSOP —They also caused some visual problems for people during that period of our history. Senator Grimes —Have you ever drunk Emu brand port-style sherry? That was great stuff. Senator JESSOP —No, I have not. Manufacturers of Australian quality wines are experiencing difficulties in getting their wines accepted in international markets, particularly in England and Europe, because of the marketing of low quality Australian-made wines before and just after the Second World War. The brand name `Emu' would have appeared on some of those wines. That matter was also mentioned in answer to Senator Elstob's question yesterday. We know of the recent wine scandal which will adversely affect the Italian wine industry. We should not contemplate doing anything that would put back our wine and spirits businesses, which have great potential for export markets. For decades the French have enforced appellation control as a means of protecting the name of good products, not only at home but also abroad. Australia should not contribute to the downgrading of honest names such as Australian brandy, whisky and rum. I fully support the Opposition proposal that the maturation of whisky, brandy and rum be retained. I understand that later in the debate my colleague Senator Messner will move an amendment along those lines. I hope that honourable senators will see its importance in preserving the quality of our spirits that has been built up over many years. If the amendment is agreed to not only will it help the quality of our Australian rum, brandy and whisky; it will also be a tremendous help to the primary producers who produce the grapes and other commodities necessary for the production of these high quality goods. Sitting suspended from 6.30 to 8 p.m. Senator MACKLIN(Queensland)(8.00) —This evening we are discussing cognately the Excise Tariff Amendment Bill and the Customs and Excise Legislation Amendment Bill. These Bills cover a relatively wide area of amendments-some insignificant changes and some important changes. However, for the sake of the debate tonight, I wish to limit my comments to clause 27 of the latter Bill, which seeks the repeal of two sections of the Spirits Act 1906. The essential problem that we are talking about is the maturation period for brandy, whisky and rum. I suppose that, at the outset of the debate, I should declare my interests. I do not drink any of those. First of all, I would like to take the Senate back to the origin of this discussion. In September 1977 the Industries Assistance Commission was asked by the Government to consider the question of assistance to the protection of goods falling within Customs tariff items 22.08 and 22.09, which cover potable spirits and allied products and industrial alcohols. In July 1979 the IAC released a report which did not make any recommendations on the subject of maturation but said only this: . . . suggests that the existing legislation should be amended to ensure that the standard of maturation achieved during the statutory period is uniform and, as far as possible, is non-discriminatory between imported and domestic goods and between domestic spirits of all types. Since there was no action on the part of the Government at that time, this suggestion presumably was not acceptable, although later, the Government, following up these suggestions, sought to establish an inter-departmental committee. It also requested that the Food Standards Committee of the National Health and Medical Research Council review the existing standards for wine, spirits and liqueurs. This operation started in 1979. The Food Standards Committee of the National Health and Medical Research Council considered the matter of rum maturation and recommended that it be retained. However, following that recommendation there was more extensive political lobbying. Essentially, that situation carried through to 1983 when the Public Health Advisory Committee reported on the revised model food standards regulation for spirits and liqueurs in paragraph 6.4.3 of its report. That paragraph states: PHAC noted the detailed background provided by the Food Standards Committee on the question of whether the current mandatory requirement that rum be matured for 2 years, should be deleted. PHAC accepted the view of the Food Standards Committee that a change in the current requirements that rum be matured for 2 years in wood was not warranted and noted that this requirement had been included in the revised Standard for Spirits and Liqueurs. PHAC also agreed with the Food Standards Committee that the question of whether rum should, or should not be matured was not a health issue. PHAC directed the Food Standards Committee to devote its time and attention to health related issues in the future. That is a bit of a backhander. In other words, there was a clear indication at that point that progress with regard to the distillation and maturation of those spirits had reached such a standard that the Public Health Advisory Committee did not feel it was any longer a health consideration. That brings us to the ninety-ninth session of the National Health and Medical Research Council in June 1985. When meeting on the model food standards regulation it put out several proposals. Proposal 3 (b) states: Brandy shall- (i) have been matured in wooden containers for not less than 2 years. Proposal 5 (e) states: Whisky shall be matured in wooden containers for not less than 2 years. Proposal 6 (b) states: Rum shall be matured in wooden containers for not less than 2 years. So we have a fairly consistent pattern. Those bodies that looked at the model food standards regulation agreed that the requirement of maturation in wood for two years be retained. Of course, the model food standards, have progressed since June 1985 to the point where, for example, the South Australian Government has accepted them, other State governments have them under consideration and I believe that a number of State governments are due to accept them. I think it is fairly important to this debate that we note that the intent behind the model food standards is to get agreement between the Commonwealth and the States on a regulatory and uniform system with regard to a whole range of food matters. One problem that has bedevilled our Federation has been this difficulty of getting the general agreement of all those various governments on really essential items. This item, for example, has received constant attention at constitutional conventions and it has been agreed. The food standards which I have just read out include in the definition of brandy, whisky and rum the essential ingredient, as part of the definition, that they be matured for two years. This problem is a multi-faceted one. One area is precisely that-the notion of the definition of those spirits. I remind honourable senators that when settlers first came to Western Australia, they looked at the black birds floating on the water and decided that they were not swans, because swans, by definition, were white. Later, it was accepted that we could have black swans. So there is an ingredient in this debate of the question about whether or not the maturation in wood for two years is an essential part of the definition of rum, whisky or brandy. If we look at the international situation, we see that an almost universal position is taken. Indeed, those various spirits are generally defined as requiring a two-year maturation period. Obviously there is an arbitrariness in the definition so it is possible to have a spirit named whisky, brandy or rum which has not matured for two years. The situation that applies currently in Australia, and has applied up to this date, is that any product which is sold as whisky, brandy or rum must have had two years maturation. There are a considerable number of imported rums in Australia, although the major one comes from Puerto Rico and is marketed under the brand name of Bacardi. It is a white mixer rum that has been extremely successful on the Australian market. It is imported non-matured and is matured in Australia. The operation is covered by customs and hence we are able to know very clearly that all rums on the market have had the two-year maturation period. At one stage the major distiller of rum in Australia-the Bundaberg rum company-put out a white rum which was singularly unsuccessful in the market. I am not quite sure why that was because I do not drink the stuff. When one looks at the marketing strategies of the Bundaberg distillery one could not but be amazed at how it managed to allow Bacardi to get into our market and to take the major proportion of our white rum market. It is a pity that, having the most efficient sugar cane producers in the world, and hence the cheapest sugar cane, we allowed somebody from halfway around the world whose liquor is based on sugar cane to export to Australia. I find this inconceivable. The reason probably stems much more from the marketing strategies of that company than the product itself. I turn to where the industry stands currently. Senator Grimes, by way of interjection when Senator Jessop was speaking before the suspension of the sitting for dinner, said that he thought that the Wine and Brandy Producers Association was in favour of the Government's legislation. This is somewhat of a difficulty because the Australian Wine and Brandy Producers Association is opposed to the legislation but the Wine and Brandy Co-operative Producers Association of Australia is in favour of the legislation, so I suppose Senator Grimes may get one out of two, at least. In my State there are two rum distillers-Bundaberg and Beenleigh. Bundaberg wishes to retain the two-year maturation period and Beenleigh wishes it to go. In other words, Beenleigh is in favour of the Government's proposal. It should be clearly said that both sides have relatively clear vested interests. In recent years Bundaberg has invested very heavily in new vats and hence is very interested in retaining the maturation requirement because of the investment it has made. At the time that this legislation was being discussed Beenleigh was broke and had no money to put into buying vats and hence it has a very clear vested interest in having the maturation level removed. I am not at all sure that we should make a decision on that matter. I would also like to point out that this piece of legislation will not come into force until 1 April 1990 under section 26. The Government has been cognisant of the fact that, particularly because of the downturn in the brandy industry-presumably Senator Messner, who will follow me, has some interest in this matter-companies are currently holding stocks equivalent to four years sales by volume. That is extraordinary. The normal period is about two years but there has been a significant downturn in sales and companies have stock maturing for four years. If one adds four years that brings it to 1990 so obviously the Government has been cognisant of the situation in the industry and has sought to make sure that there can be a phasing-in operation. I certainly commend to governments that when they draw up legislation they take those matters into account. The more alarmist notions in some of the things that Senator Jessop said cannot necessarily be substantiated, particularly the types of problems that may occur with grape intake. If one saw the commercial brandy operations playing themselves out, the natural course of events would be that the companies involved would offload their brandy year by year over the next four years. They would not necessarily seek to take in any grapes until the third year if they wished to get entirely out of the market. That economic problem has to be faced with regard to not only brandy in South Australia but also rum in Queensland. Another matter which I must address with regard to this piece of legislation is the market-place and how it may react. I emphasised to the people who made representations to me on this matter that the Australian Democrats are a free enterprise party. We believe that the market-place and the way it operates should not be excessively cluttered up by regulations unless there are good reasons. There were a number of good reasons in this area, one of which is consumer protection. In other words, the consumer knows what he is buying. I refer again to Senator Jessop's colourful phrase that people were buying jungle juice or some other type of cane spirits. Senator Puplick —Whose colourful phrase was that? Senator MACKLIN —I did mention it but Senator Jessop entered it into the record. The consumer, provided he knew what he was buying, would be in a position to make a distinction between non-matured brandy, wine or rum and matured brandy, wine or rum. That again raises the first question I asked as to whether we should allow somebody to market a product called unmatured rum or whether we should keep the word `rum' purely for the product which is matured and come up with a different name for the other. I am more familiar with rum. It would be possible for the Bacardi firm to market a product called Bacardi. It would not have the word `rum' on the label and I am quite sure that it would maintain its share of the market. When one has worked through the myriad of arguments one sees that people on either side seem to be pushing a case which is exaggerated. One finds it difficult, as my party in its deliberations ultimately found, to see what types of distinctions one ought to rely on with regard to clause 27 in particular. Our final position in favour of not voting for clause 27 was determined by the model food standards debate. Senator Boswell —Sold out Queensland again. Senator MACKLIN —The honourable senator should listen instead of having a good wine, brandy or rum. I said that the Australian Democrats will vote against clause 27. Senator Boswell —Don't be modest. Senator MACKLIN —It must have been a good dinner. Senator Boswell —You haven't been drinking too much and you ought to be commended. Senator MACKLIN —I acknowledge the interjection. It is the first one I have had from Senator Boswell for quite some time. Our position was determined by the extraordinary situation that the Government will find itself in with regard to the model food standards. The South Australian Government has already accepted the model food standards and other States are rapidly proceeding to do so. We cannot get uniformity of standards unless the Commonwealth co-operates. The Commonwealth, which has absolute power with regard to imports, is an essential ingredient in the whole exercise. There seems at this stage to be no good reason to pursue this matter but good reason to leave it alone. Pursuing this line would create further confusion and concern within the State governments that are moving towards and have agreed to adopt these standards. I raise this political problem with which obviously the Federal Government would be confronted: South Australia, with its brandy industry, and Queensland, with its rum industry, I am quite sure would find it very difficult politically, even with the best will in the world, to co-operate and change those model food standards in the light of the industries in those States. Being even-handed, I have selected a Labor government and a National Party government. That would be the case for obvious political reasons that all members of this chamber well know about. I do not think those State governments could co-operate with the Federal Government in this matter, hence we would find ourselves back where we were before we had general acceptance by the States of the propositions put to them by the Commonwealth in regard to those model food standards. From the analysis and research we have been able to do I do not think it is a matter of great moment. I must admit that that analysis really turns on trying to counter-guess what might be some commercial decisions made by companies, and if those companies made particular commercial decisions there could be a very significant economic impact, particularly on grape growers. As I say, that would really be to try to counter-guess the commercial decisions made by those companies, and it is somewhat difficult to know precisely what they would do because most of those companies have products well established in the market which require maturation. As I put it to the people who are making representations to me, presumably these products have a niche in the market not simply on the basis of advertising but on the basis of taste, consumer support and consumer preference. Hence the companies would not make any wholesale commercial decision to get out of that product of maturation and go into some other product; they would remain with the matured product and probably attempt more vigorously to sell that product. In terms of the general way the market operates, with a bit of vigorous selling, that product ought to be able to retain its market share. So I do not really foresee a wholesale desertion from those various product areas, simply because that does not seem to me to be the way the companies operate, or the way a company would operate with regard to a well-known brand in the retail market. Our decision has been influenced heavily by the confusion that would arise as a result of abandoning those standards-for no good reason, as we see it. We believe that the commercial disadvantage certain companies see if this measure is defeated also will not flow on. I believe those companies that have good brand names can simply drop the words `rum', `brandy' and `whisky' from their labels and not be in contra- vention of any State labelling laws and hence be able to sell their product under their copyright brand name, such as Bacardi in relation to rum. I feel that, on balance, the maturation levels ought to be maintained for those products called whisky, brandy and rum and that that be in a settled context, in that we maintain conformity with those countries around the world that see themselves as having a stake in any one of those particular products. I refer to the Commonwealth of Puerto Rico, which has provided Australia with a great deal of its rum. That country maintains maturation levels and Scotland, with its whisky, maintains maturation levels. So those countries that have a product they wish to promote and sell around the world have maintained those maturation levels. It seems to me that that is where we ought to stay, and that the new range of products now available, which can be produced chemically without maturation and without the injurious effects that such a process previously had, can also be promoted and obtain a market share in a free market being sold as some other type of drink. Senator MESSNER(South Australia)(8.25) —Mr Acting Deputy President-- Senator MacGibbon —Is this a meeting of the brandy club? Senator MESSNER —Yes, this is the first meeting of the brandy committee on this very important matter. I would like first of all to address myself to some of the other aspects of this legislation. I refer initially to the Bounty and Subsidy Legislation Amendment Bill, which covers a number of matters affecting bounties in respect of computers, high alloy steel products, ships, agricultural tractors and equipment, commercial motor vehicles, metal working machines and robots, and grain harvesters and equipment. I indicate that the Opposition has no difficulty with the amendments being proposed in the legislation, and we do not intend to oppose it. There is just one matter, though, that I would like to draw to the attention of the Senate and which the Minister for Industry, Technology and Commerce (Senator Button) might be able to explain in the course of winding up the second reading debate. I refer to the subsidy for grain harvesters and equipment. The intention of the legislation is to amend the principal Act to close a loophole relating to the sale price used for inflating bounty claims. As I understand it, if an item-say a grain harvester-is sold by a manufacturer to a dealer in such a way that it later sits unsold on the floor of the dealer's showroom but becomes depreciated in terms of its value in the marketplace, and there is subsequently a need to discount the price of that grain harvester in order to effect a sale and the dealer decides to take that up with the manufacturer and obtain a rebate or a discount from him on the original price of the goods, then the bounty that was paid earlier to the manufacturer of the grain harvester would be adjusted by claiming back from the manufacturer that part of the discount or rebate that has been granted to the dealer. That is certainly a reasonable proposition, but it seems to me that seeking to amend the legislation in this way, bearing in mind that a considerable time could elapse after the vehicle is first sold to the dealer and then sold to the customer, might mean that the bounty could be quite easily avoided in some other way by dealers getting into cahoots with the manufacturers and receiving discounts in another form. One does not have to be too clever to work out how that might be done. I am concerned that, if the Government's intention is to close this loophole, this may not be an effective means of doing it. I would like to hear the Minister's comments in that respect. I turn to the Excise Tariff Amendment Bill. That involves two matters, one of which concerns inwards duty free concessions. I can see that Senator Puplick can hardly hold himself back as he wants to speak on this matter. As honourable senators will recall, the Opposition opposed the original legislation in respect of duty free shopping. This amendment will exclude from excise duty locally produced excisable items that are sold in inward duty free shops. In view of the fact that this arrangement is in place, we have no objection to it as Australian domestic producers would be penalised if this amendment were not to be enacted. The other matter in this Bill which deserves some comment relates to the excise concessions in respect of vice-regal purchases of excisable items such as tobacco, alcohol and so on for private use. The Opposition feels that this is a reasonable proposition because, as the original proposals were enacted many years ago in circumstances where vice-regal persons came from Britain rather than having been born in Australia, these kinds of concessions were necessary to attract people to Australia to perform those duties. I stress that apparently these concessions will be removed not from excisable items purchased for official purposes but only from excisable items purchased for the private consumption of those persons. Consequently the Opposition does not oppose that measure. The other Bill with which the House is dealing is the Customs and Excise Legislation Amendment Bill, which touches on several matters, mainly of a technical nature, to which we have no objection. There are amendments to the Coal Excise Act and to the Customs Act affecting protected cultural objects, and other amendments relating to ships' stores, the power to detain and search suspected persons and so on. However, the most important aspect of this legislation is the amendments in clauses 25 to 27, which seek to remove the maturation requirements in respect of spirits-whisky, rum and brandy-produced within Australia. This topic was well covered by Senator Macklin in his contribution to this debate. Indeed, I was pleased that he came to a similar conclusion to that of the Opposition in seeking to remove from the Bill the clauses which seek to omit that important maturation provision. I wish to make two or three points in connection with the brandy industry in particular in South Australia as that is a most important part of the wine and grape industry in my State. It should be recognised that the brandy industry does not exist by itself but relies on the grape and wine industry. It is significant that for many years the wine and grape industry was able to take care of itself. It would look after surpluses of grapes produced in bumper years by distilling that material into spirit, which later could be used in the manufacture of brandy and fortifying spirit for ports and so on. The brandy industry in a sense is a safety valve for excess production in the wine and grape industry. As such it cannot be severed from the wine and grape industry. If in some years there is a tendency for the brandy industry not to be accorded the same high regard in the market that it is accorded in other years, its capacity to take care of the surplus production in the grape industry is diminished. Consequently there will be economic effects which will tend to put more pressure on governments to take care of the problems of the wine and grape industry in certain areas. That is a fundamental point that must be recognised. The brandy industry is a means by which the industry as a whole can look after itself rather than rely on Government support. This is recognised by the granting of a concessional rate of excise for Australian-made brandy. We in South Australia fully support that measure which was reinstated by the Fraser Government in, I think, 1982. If brandy production is to become a recognised and powerful industry with a capacity to sell it products in the market-place, and thereby help out the wine and grape industry, it must be highly regarded and must have a future and the potential to grow. The industry has divergent views as to how that can be achieved. Those who are engaged in the production of quality brandy are concerned about the removal of the maturation requirement of two years. On the other hand, others tend to produce what might be called the lesser quality brandies and are interested in developing alternative markets and products. Many people are seeking to break into new product developments by virtue of the abolition of the two-year maturation requirement. The Minister adverted to this topic in his second reading speech. He said clearly that the Government was contemplating that brandy manufacturers would be able to use this new provision which would emerge as a result of the passage of this legislation to produce new products which could be marketed all over Australia but which would take advantage of the brandy excise laws and would not be required to be matured in wood for two years. It is his view, and it is probably the view of some parts of the brandy production industry, that that is one way of expanding the market for brandy-like substitutes. However, I must at this point draw the Senate's attention to the comments of the National Health and Medical Research Council, which has considered the definition of brandy over a long period. I have the report of a meeting of a working party of the Council, established to review the standards for wine, spirits and liqueurs, which met back in 1980. It determined: . . . that the nature of brandy required that it be matured in wood for at least 2 years. The product not matured for the required period in wood could not be designated as `brandy' because it would not possess the taste, aroma and characteristics . . . The working party went on to say that, whilst the Industries Assistance Commission might have a sound point of view on the subject of deregulation and considered that the maturation provision could be deleted for certain spirits, `the Working Party agreed that brandy was not one of these spirits'. The point is clearly made that the National Health and Medical Research Council felt that brandy is only brandy when subject to the maturation requirement of two years. By the way, the working party at that stage decided that the requirement for two years maturation should be retained by the Government. What are the effects of allowing a situation to develop in which the product is not brandy in the real sense of the word? From all the divergent comments I have heard, I have formed the view that the majority of the industry is in favour of the retention of the maturation requirement because the Government's move is seen as premature. There is no attempt to protect the quality market by ensuring that labelling requirements are put into place, whether they are conducted by the States or otherwise. Nor are there requirements that proper testing and certification procedures be adopted by importers of brandy from overseas. It is quite clear that that set of considerations is well in the forefront of the minds of distillers in South Australia. The Adelaide News of 2 May indicates that there is concern in the industry that brandy brewed in illegal stills could be sold in South Australia and could pose enormous health threats to South Australians. These views are not necessarily supported by the Australian Wine and Brandy Producers Association. However, I notice that Mr Nettlebeck, who is the Executive Director of that association, is quoted in the Adelaide News as saying that jobs might be threatened as a result of brandy makers adjusting stocks for the changeover regarding the maturation period. Certainly less brandy would be put into wood and stored for later use. I believe that to be a very important consideration in terms of South Australia. Certainly the Riverland areas of South Australia are subject to very violent fluctuations in market conditions. It does not seem to be reasonable that, at a time like this when protection from imports is not being given to the brandy industry, we should be seeking to reduce the industry's capacity in this way. This move is premature without proper safeguards as to labelling being put in place to protect the industry. During the Committee stage of the debate the Opposition will be moving to defeat clauses 25, 26 and 27, or Part VI of the Bill, which amends the Spirits Act by removing the maturation requirement for brandy. I have set forth our reasons for so doing and believe that they are soundly based. They have the support of the Australian Wine and Brandy Producers Association which represents the majority of producers in this country. I believe that my colleagues will support this stand. I am looking to some of the Queensland Liberal Party and National Party senators to discuss other aspects of the maturation problem as it affects, in particular, the rum industry in the sugar cane growing areas of Queensland. I am sure that Senator MacGibbon will be speaking forcefully on that matter. I conclude by reiterating the point that the Opposition will be opposing the removal of the maturation requirements. Senator PUPLICK(New South Wales)(8.44) —I address my remarks to the Excise Tariff Amendment Bill 1986. The purposes of this Bill have been dealt with already by a number of honourable senators. I do not intend to debate the Customs and Excise Legislation Amendment Bill 1986, particularly as it affects brandy, whisky and rum, as I think those aspects have been adequately covered by Senator Jessop and Senator Messner, supported on this occasion by Senator Macklin on behalf of the Australian Democrats. I presume that the force of their collective argument gives a new interpretation to the phrase `in vino veritas'. I confine my remarks to the clauses of the Excise Tariff Amendment Bill which go to the question of inward duty free shopping. Doubtless the Minister for Industry, Technology and Commerce (Senator Button) will be reasonably unsurprised to hear that this is a matter to which I wish to direct my attention, in exactly the same way as undoubtedly my friends from the Department will regard my views on inward duty free shopping as the continuation of a long and boring saga with which we have all been intimately concerned for some considerable time. Nevertheless, clause 6 of the Excise Tariff Amendment Bill makes certain changes which are consequential upon the insertion in other Acts of the permission to establish inward duty free shopping at Australian international airports. The clause inserts a new item, No. 21, into the Schedule of tariffs as a consequence of the introduction of inward duty free shops at international airports in Australia, legislation for which was approved late last year. The proposed item will remove the excise duty on excisable airport shop goods, particularly alcoholic liquor and tobacco products purchased at these shops, provided that the quantities of such goods, in combination with customable airport shop goods, do not exceed one litre of alcoholic liquor or 250 grams of tobacco products. The first inward duty free shopping facility was opened recently, on 1 May. On that date the Minister for Aviation (Mr Peter Morris) issued a Press release to indicate that he had been involved in the opening of the first inward duty free facility at Sydney (Kingsford-Smith) Airport. I do not want to traverse in detail the nature of the contracts let for the extension of inward duty free shopping to existing concessionaires at Australian airports other than to say that I regard it as an absolute disgrace for the Government to have taken this step without calling competitive tenders for the provision of this service. After all, if people who had known that inward duty free shopping would be introduced as of 1 May 1986 had been in possession of that evidence when in May 1984 they were required to submit their tenders for five-year contracts for the operation of duty free facilities at airports such as Sydney (Kingsford-Smith) Airport, they would have drawn their tenders quite differently. Existing concessionaires have been given an additional benefit, essentially at the expense of their competitors in a very cut-throat market which their competitors were not in a position to bid for when those concessions were introduced. I note the arrival in the chamber of my friend Senator Button, a person intimately familiar with the operation of the inward duty free shopping industry. Undoubtedly he understands the fundamental unfairness of this situation. That is undoubtedly one of the reasons he fought so hard against the introduction of inward duty free shopping when he was presenting his Cabinet submissions. Unfortunately, as with the fringe benefits tax on cars, he was monumentally rolled by those who have more Cabinet authority than he. Nevertheless, the Minister for Aviation, in his Press release of 1 May, applauded the introduction of the inward duty free arrangement, which is now being assisted by the provisions to which I have already adverted in clause 6 of this legislation. He made some quite extraordinary claims about the benefits flowing to airlines and passengers from the introduction of inward duty free shopping. In the course of my speech I propose to indicate once again why I believe that the airlines and certainly the shopping and travelling public do not gain the benefits alleged by the Government. The Minister in his Press release alleged that airlines will save about $1m a year in fuel costs. Aeroplanes are supposed to weigh less because people will not bring duty free liquor, tobacco or perfume-the three items which are to be sold at inward duty free facilities-on to aeroplanes with them. Senator MacGibbon —How did they arrive at that figure? Senator PUPLICK —Senator MacGibbon is right in asking how they arrived at this figure. If one goes to the report of the Industries Assistance Commission entitled `Passenger Concessions' dated 6 November 1985, one sees that at page 85 under the heading `Fuel and other Savings by Airlines' it states: The Australian Retailers' Association said that, if 80 passengers on a 747 deferred purchases of their liquor and tobacco entitlements, the total weight reduction would be 144 kg or 0.05 per cent of the weight of the aircraft (around 275 tonnes). Qantas has estimated that for 1985-86 potential fuel savings would be in the order of $450,000. The Commission goes on to state: A number of participants denied that such fuel savings were significant. Senator MacGibbon —Was that 144 kilograms? Senator PUPLICK —It was 144 kilograms, or 0.05 per cent of the weight of the aircraft. In order to get to that, one has to assume, firstly, that people will not seek to purchase tobacco or perfume at overseas destinations when they know that a number of tobacco and perfume products are simply not available in Australia. For instance, one of the most popular female cosmetics brands, Clarins, is not permitted under the terms of its franchise agreements to be sold duty-free in Australia. So anybody who wishes to purchase that particular brand of cosmetic duty-free must buy it overseas; it is unavailable in Australia at duty-free prices. People know things like that when they are shopping around for fairly expensive products. One has to believe, having seen the sorts of cigars, for instance, which are available duty-free in Australia-a totally limited and insufficient range-that people will not buy tobacco products overseas when they know that at duty-free stores at Australian airports the same range of goods is not available. A significant item is alcohol. One has to believe that people will not buy alcoholic beverages overseas and consume them on the aeroplane-they are still entitled to buy them duty-free in Singapore and bring them on to the aeroplane-and then buy a replacement bottle when they get to the inward duty-free store in Sydney. But people will do that. After all, it is basically a long flight to Australian ports from anywhere other than Port Moresby or Auckland. This matter was specifically referred to in a case in 1983 in the Federal Court of Australia entitled John Raymond Steiner and Lynne Janine Steiner v Magic Carpet Tours Pty Limited in which the judge, His Honour Mr Justice Wilcox, remarked on the extent to which there was a problem of people buying alcohol to consume during a flight and them repurchasing when they get off the aeroplane. So that matter has in fact been tested. I therefore repeat the point that I made when we were debating the introduction of inward duty-free shopping in Australia-that this is of no substantial benefit to the airline industry but certainly will have the effect of increasing Qantas's ability to sell liquor on board the aeroplane. What it will do is to carry extra liquor, sell it to the passengers on the aeroplane and tell them: `If you buy your liquor from the airline now and let us give it to you now, you will not have to get jammed up in the inward duty-free store when everybody else gets off the jumbo aircraft and tries to buy inward duty-free purchases between the point of disembarkation and the Customs barrier'. The inward duty-free store has to be located between those two points according to the terms of the legislation passed by the Parliament last year. The next point I raise is that I am not yet persuaded that this is not simply a method by which the Government intends to reduce the overall level of concessions available to Australian travellers. An article in the Canberra Times of 29 April under the heading `Duty-free cuts expected' made it quite clear, as indeed has Senator Walsh on a number of previous occasions, that this Government intends to wind back on the level of concessions available to passengers from inward duty-free shopping. I make the next point about the relative price charged at airports compared with the price charged by duty-free shops not located at airports. An article by Seth Gregory in the Sydney Morning Herald some time ago stated: Say you are planning a trip to Hong Kong and you're in the market for a new camera. Your best first step is to price the camera in Australia before you leave. You can do this by visiting retail outlets, but it is much wiser to price it in city duty-free shops. (Forget the airport establishments; ours are just as expensive as those overseas). It is simply true, as Choice magazine and others have pointed out, that the prices of goods at duty-free shops at airports, particularly the shop at Kingsford-Smith Airport, which is run by a foreign company, not an Australian company, are considerably higher-- Senator MacGibbon —They are an absolute rip-off. Senator PUPLICK —As Senator MacGibbon said, it is an absolute rip-off in terms of the relative price of goods available. The Sydney Morning Herald on 29 April 1986, under a heading `Duty-free: where not to go broke saving money', an article by Gareth Powell, indicated that the off-airport duty-free shops in Australia are indeed the cheapest in the world. The article states: In duty-free, as in so many other things, Australia is once again the lucky country. Very probably the best duty-free bargains in the world are to be found in Australia. And some of the best duty-free bargains in Australia are to be found in Sydney. Most of the credit for this splendid state of affairs lies with Sterling Nicholas Duty-Free which in 1969 took out a summons against the Federal Government. It saw no legal reason why it should not sell duty-free goods away from the airport. By April 1971 it was still seeking clarification from the NSW Supreme Court of the Airport (Business Concessions) Act. It was not until 1972 when Senator Chipp, the then Minister for Customs-he was then the honourable member for Higinbotham-took the first steps to make off-airport duty-free legally available in Australia. It is the price at the off-airport duty-free shops which is outstandingly the benefit available to Australian duty-free travellers. The IAC, in the report to which I have already referred, at paragraph 7.4.3 indicated that there was an alternative approach if we were to go down the track of inward duty-free shopping. It states: Some participants have put forward a scheme which they suggest would overcome some of these problems. This would allow intending travellers to purchase goods at Australian duty free shops before departure. The goods would then be held in bond until their return to Australia. Packages would be collected from a booth within the Customs area at the airport. It is claimed that this method would not provide the same security problems as a supermarket style duty free store- I interpolate here to say that the IAC indicated in its report the paramount concerns expressed by the Australian Customs Service and all the witnesses who appeared before the IAC about the Customs and policing matters related to inward duty-free shopping. The report continued: It is claimed that this method would not provide the same security problems as a supermarket style duty free store, and that, as passengers would not be delayed very long, it would overcome some of the passenger processing problems. If the export objective of duty free shopping is abandoned in favour of maximising passengers' utilisation of import concessions, there would be little to criticise in such a proposal. Let us bear in mind that at the end of a very exhaustive inquiry the IAC recommended: The Commission therefore considers that passenger import concessions should not apply to goods purchased in Australia by arriving persons before they pass through the Customs barrier. A number of duty-free operators in Sydney have approached the Australian Customs Service to seek permission to sell goods to passengers prior to their departure, to be collected by those passengers on their return. A letter addressed to one of the people making representations, Mr B. L. Cody, the senior assistant secretary of Inland Services, made the point that sub-section 96 (B) (3) of the Customs Act and sub-section 61 (E) (2) of the Excise Act prevent this from being done. If this Government is serious about inwards duty free shopping, there is no reason that it could not make the necessary amendments to the Customs Act and the Excise Act to allow a person departing Australia to make a purchase at a competitive price at an off-airport duty free store and on return to Australia collect his or her goods from a booth located between the point of disembarkation and the Customs barrier, in order to have it properly verified that the goods had been through the process of inwards duty free and had not been entered for home consumption. I put it to honourable senators that the Government is not prepared to go down that track for no reason other than some very much unexplained deals which have been made involving the Minister for Sport, Recreation and Tourism (Mr John Brown) and the airlines, in particular Qantas. It is about time that people started to realise that the primary beneficiaries of this whole inwards duty free proposal are foreign companies which were granted concessions for a five-year period, without mention of their access to inwards duty free shopping, in the face of competition from Australian companies who would have put in different tenders if they had known that inwards duty free shopping was going to be introduced. If the Australian companies had not believed that the clear recommendation of the IAC against inwards duty free shopping would weigh heavily with the Government, we would be looking at an entirely different situation. I put it to honourable senators that this legislation to give effect to the operation of inwards duty free shopping in relation to the decision already made by this Parliament on this matter, with the support of the Australian Democrats-except Senator Haines, who voted with the Opposition against this legislation-has led to a situation where not only has the IAC expressed concerns about loss of revenue, loss of security and the general undesirability of inwards duty free shopping, but also Australian travellers are being ripped off by Government dictate on the question of inwards duty free shopping. Although it is not possible to go back at this stage to undo that damage to the rights of the travelling public in Australia, which I hope the next Liberal-National Party Government will be able to rectify, nevertheless it is worth making the point, which I shall continue to do whenever such Bills are before the Senate, that this Government is involved in a massive financial rip-off of the Australian travelling public by this inwards duty free proposal which it has put into place, I suggest, not only in defiance of the IAC and contrary to the views clearly expressed by Senator Button and the more rational members of the Cabinet, but by an entirely reprehensible deal done between the Minister for Sport, Recreation and Tourism and Qantas. Senator MacGIBBON(Queensland)(9.03) —The Senate is debating cognately the Excise Tariff Amendment Bill 1986 and the Customs and Excise Legislation Amendment Bill 1986. I wish to confine my remarks to the clauses 25, 26 and 27 of Part VI of the latter Bill. I will be supporting the amendment moved by Senator Messner to delete those clauses from the Bill because they are clearly against the interests of the Australian industry and the country as a whole. That Part of the Bill provides that the compulsory maturation requirements, that spirits be held for several years in bond before sale to the public, be deleted. The proposal is that this be phased out between now and 1 April 1990. Having read the debate in the House of Representatives and the second reading speech of the Minister for Industry, Technology and Commerce (Senator Button), one can say that the Government has argued its case very poorly and completely unconvincingly. The Government's reason for the termination of this maturation turns on two points. Firstly, the Government walks away and says that there is State and Territory legislation covering the maturation of spirits. That happens to be true, but it is also absolutely irrelevant. While legislation exists at the moment in all States of Australia requiring spirits to have some maturation, once the Commonwealth abandons that requirement, one State will move to delete it from its statute book. It will do that because all States license the sale of spirituous and fermented liquors and derive income from the licenses they grant to the selling points for spirits. The money that the States get is proportional to the volume of sales made. Since section 92 of the Constitution provides that the trade between the States shall be free and unfettered, one State will move to delete maturation requirements before the others so that it can sell liquor, probably imported liquor, which will move interstate from that one point of sale. There will be a short term profit for the Treasury of that State as a consequence of this Bill. Very rapidly all the other States will move down the same path and we will have a situation nationwide where there is no requirement to mature spirits. It would be a situation very similar to the licensing of pornographic television films; a path which the Australian Labor Party took us down, with the support of a few other people around here, some years ago. It was done for the Australian Capital Territory, but as soon as it was allowed into the Australian Capital Territory pornographic films spread throughout the whole of Australia without any method of control. The Government's first argument is the fact that the States and Territories have legislation on the books. Clearly this legislation is ephemeral and will not stand up to the test of time. The second argument that the Government puts forward is that it is a resort to market forces. I applaud Senator Walsh and the other members of the Australian Labor Party who have discovered some of the facts of commercial life. Regrettably, the commercial market-place is now far more sophisticated than the Government's concept of it. What the Government is proposing here, when it glibly talks about resorting to market forces to sort out the spirits market, is really a return to unbridled eighteenth century capitalism. The Government has a responsibility, while moving to lift the oppressive load of regulation on the community, to maintain the interests and standards of the community. The Government cannot run away from its responsibilities with respect to spirits. The Government has a responsibility to maintain standards. It has a health responsibility. Cheap liquor is by definition bad liquor. In the past couple of months we have seen the business in the Austrian wine market. It is very easy in a fermentation process to end up with methyl alcohol instead of ethyl alcohol. Ethyl alcohol in large enough quantities will kill, but methyl alcohol in very small quantities will send a man blind-and kill him. There is a very real public health factor involved in maintaining the standards of spirits. The Government's second responsibility is with respect to employment. The spirit industry directly employs quite a few people in Australia, but it indirectly employs quite a lot more. The third responsibility of the Government lies in the balance of payments. By killing off the spirit industry in Australia we will open up the spirit market in this country to imports and that will contribute significantly to our balance of payments problem. More than that, it will deny us any opportunity of export earnings in the future because some sections of the Australian spirit industry produce a very high quality product which can expect to have significant overseas sales in the years to come. This Bill will undoubtedly open up the floodgates for spirits coming in from overseas. In the worst possible case we will get massive importation of what might be termed bar mix spirits. If one does not worry about quality, it is very easy just to mix alcohol with a cordial-something to give it a bit of colour-and a few of the aromatic fractions to simulate the spirit involved. As you know, Mr Acting Deputy President, that happens all the time when one goes into a bar and asks for a whisky and soda, a brandy and dry ginger ale, or a gin and tonic. There is a row of taps and from these taps comes the soda water and cordial. They pour a measure of spirits into the glass, then go to the tonic tap or the dry ginger ale tap and some tasteless fluid gets squirted into the glass. What one gets is a cordial mixed with carbonated water to give the mix for those spirits. The same process, reduced to its simplest form, can be done for spirits. The Australian market would be opened up to spirits produced in that synthetic way and we would also be opened up to a massive flood of imports from countries that have surpluses. The first countries to think about are the countries in the European Common Market, with their well known wine lake. They have more wine than they can ever sell. If the Australian market were opened up, as this Bill seeks to do, the Europeans would distil a lot of that wine and without maturing it flood the Australian brandy market. The same sort of thing would happen with respect to South American producers. Brazil in particular has a huge alcohol industry based on cane sugar. It is dumping, at present, a huge amount of alcohol onto the United States domestic market, mainly for the gasocol program for their motor spirit. Certainly some of that would be available to be distilled across or mixed up and sent out to Australia as rum. Of course, we have the notorious Thai merchants mixing any sort of spirits or alcoholic beverage in back yards and producing it at a very low cost. As previous speakers have said, all countries that are in the business of seriously producing spirits require maturation of those spirits. There is a period of three years for the maturation of scotch whisky in Scotland, and in a general sense-not exclusively-the requirement is for two years for other spirits. Australia has built up an industry producing spirits. The standard achieved, particularly with Bundaberg rum, which is the biggest selling spirit in Australia-it is bigger than any brand of scotch and certainly a lot bigger than any brandy-is producing a quality product. We can look forward to a considerable export market in the fullness of time for that high quality product. I believe that some of the brandies we produce in time will be sought after on world markets. We have made an investment in capital and in skill here. The Bundaberg distillery and the brandy producers have been at this for generations and they have put a lot of time into learning the skills and procedures necessary to produce these products. They have also invested a lot of time and capital in developing markets. We cannot get on the intensely competitive international market overnight and sell a product, whether it is a rum or a brandy. Having made this investment in time, it is silly to throw it away by bringing in a Bill such as this. I am amazed at the way we go into new industries in this country, invest hundreds of millions of dollars-or even a billion dollars in some of the defence offset programs. We train people, invest all this money in the capital facility, and then walk away from it. In my own State there is a company called North Queensland Engineers and Agents. We gave it a contract to build 14 patrol boats. It became the best ship-builder in Australia, building a very complex ship to the contract price and to the contract time. The skilled work force was in excess of 650 people. The contract came to an end and the whole yard collapsed. The work force probably fell to 200. I do not know what the company is now doing-probably doing odd job work. Here was an excellent industrial facility we had built up, and through lack of foresight and lack of planning by the Government there was no continuity of work for it. I fear that much the same situation is going to happen with respect to the spirit industry if this Bill passes. I do not know why the Government went down this path in the face of all the advice against it that it received from the industry. All I can assume is that the Government was lobbied so intensively by importers that it felt that the best thing to do was to kill off the Australian industry. One of the principal lobbyists, I am informed, is the Bacardi company. Although Senator Macklin said that that company is importing from Puerto Rico, my advice is that it is producing the rum that it imports to Australia from Mexico. It may be transferred through Puerto Rico from a sales point of view, but the same company, Bacardi, has huge factories in South America producing synthetic products and things like that. It will certainly be one of the beneficiaries of the abolition of this market. One of the other arguments that are advanced against the maturation program is that, because the product is held for two years and because millions of dollars are involved in the warehousing and the vats, there is very considerable on-cost to the spirits that are matured and somehow or other we are being kind to the consumer and saving him money by getting rid of this maturation program. The exact cost of maturation is difficult to establish, but it is recognised within the industry to be no more than 30c a bottle. When one thinks that most of the products sell for at least $12 a bottle-maybe $15 a bottle-the amount of 30c a bottle is really minuscule, it is not a high on-cost. For those who doubt that figure, the simple test is to look at the retail price of matured spirits of Australian origin against the comparable price of the white spirits such as gin and vodka. The price differential does not operate against rum or brandy. In fact, it is the other way round. Australian rum is cheaper than Australian gin or vodka. The real reason for that is that retail prices are controlled by the volume sales and the volume sales for rum are higher than for Australian gin or vodka. While the individual cost per bottle is quite moderate, we have to remember that the companies producing brandy, rum and whisky in Australia have made very big investments with respect to buying oak for the vats and being able to store tens of thousands of gallons of the product for the two-year period and building the warehouses for them. Those facilities, if there is no maturation period, are lost. They are not commercially usable for any other products because they are on vineyards or in rum distilleries. The companies made that investment not of their own volition entirely but because the law requires them to do that. While I am talking about spirits I want to go back to a point I referred to some years ago in the Senate. The Government has a responsibility with respect to alcohol and public health. I am not a prohibitionist in any way at all; I enjoy alcohol in its various forms, but I recognise that alcohol is a major public drug problem. The consumption of alcohol, particularly alcoholic spirits, by young people-by people who are starting to drink-worries me. I believe that the Government has a responsibility in this area. When my Party was in power I argued that it had an obligation, from a public health point of view, to direct people towards the less dangerous forms of alcohol; put simply, towards beer rather than towards spirits. I deplore the tendency of the younger generation to drink white wine on an empty stomach. A generation before people would have drunk a glass of beer. What is even worse is the tendency of the generation just starting to drink to drink bland spirits such as vodka or Bacardi with mixers-dry ginger ale, or coke. They do not taste the alcohol in the drink. They exceed a safe level of alcohol intake through ignorance and through not being able to taste these bland spirits. I think the actions of the Bacardi company are quite criminal. Its slick television advertising of the White Light, the illusions between the White Light and the Star Wars theme-Luke Starwalker and all the rest of it-is an incitement to the young to drink Bacardi and Coke. I think that is criminally negligent. I would much rather see young people drinking beer, particularly the low alcohol beers, because beer is the drink of moderation. It is very hard to build up a high blood-alcohol level quickly with beer because of its volumetric capacity. Senator McKiernan —If they have to drink at all, that is. Senator MacGIBBON —Quite right. I thank the honourable senator for that point. I do not want what I am saying to be interpreted to mean in any way at all that I am inciting people to drink. I think that is a very good point made by Senator McKiernan. I do feel very strongly that the Government has a responsibility and that it can manifest its responsibility by making a significant excise differential favouring beer as opposed to spirits. I think spirits are rather cheap in Australia when compared with world prices and at the same time Australian beer is among the dearest in the world. When other senators and I were a lot younger we could go and have quite a few beers for a pound. One can only have about one beer for a dollar today and the major part of that cost is the excise the Government takes. The Government has a responsibility to cut down on excise on beer. I also think that the Government ought to be involved in public education programs, that if people are going to drink they ought to be taught to start in moderation-in fact, to finish in moderation. The Opposition will oppose Part VI of the Bill because we believe it will not operate for the benefit of Australia. I will confine my further remarks on this Bill to the Committee stage. Senator BOSWELL(Queensland)(9.24) —The National Party of Australia and the Liberal Party of Australia support the legislation that is going through the Senate but oppose clauses 25, 26 and 27 of the Customs and Excise Legislation Amendment Bill. The coalition disagrees with the inclusion of these clauses because they will remove the requirement of a maturation period of two years for brandy, whisky and rum. In Queensland we do not have any brandy producers or whisky producers. There used to be a Corio whisky manufactured in Victoria, around Corio Bay. I have not seen that whisky on the market for some time. We have two rum distillers in Queensland. One is Beenleigh Rum Pty Ltd, which I think now produces only small quantities of rum, and the other is Bundaberg Distilling Co. Pty Ltd, which is the largest producer of rum in Australia. It produces 60 per cent of all the rum consumed in Australia, including the imported products. It produces 30 per cent of all the Australian manufactured distillable spirits and produces and markets the largest selling individual spirit in Australia-as Senator MacGibbon said, its sales of spirit are greater than the sales of brandy, whisky or any other type of spirit. If this legislation were to go through the Senate without amendment we would see an influx of cane spirit, which is really raw ethanol, with a bit of artificial colouring and a bit of flavouring being sold as rum. I believe we would see imports into Australia of `fire water' from every country which produces a sugar cane crop. Tahiti, the Philippines and Mauritius would all be able to distil rum from their sugar crop, or even from potatoes and grain. From other crops such as carrots and turnips they would be able to distil ethanol spirit. It would not be rum. It would just be a raw spirit with colouring and flavouring. These cheap imports would be branded `rum'. They would be heavily promoted through television and radio-no doubt we would see young girls in bathing suits and young men in fun situations sitting around enjoying this raw spirit-and would be sold at the same price as rum or less. Its price would be able to include a heavy advertising component and still compete with our pure rum, brandy and whisky. These carefully orchestrated marketing and advertising campaigns would erode the sale of Queensland rum made out of Queensland sugar, at a time when the sugar industry is in a perilous state and is receiving little help from this Government. The sugar industry will receive a mere $63m or less over a period of three years, when it was promised $150m in the Kerin aid package. Senator McKiernan —Put a bit of thirst into your argument. Senator BOSWELL —Senator McKiernan should stick to comments about Western Australia because he does not understand the sugar industry. I do not accept his interjection. The Kerin package promised $150m but it was reduced to $20m a year. This Government has now brought in legislation which will further sell out the sugar industry by reducing the sale of sugar, particularly around the Bundaberg area where $6m worth at the factory level, and many more millions of dollars worth at the retail level of Bundaberg rum is produced. Of course, if this legislation comes to fruition, many tonnes of sugar cane sales will be lost in the Bundaberg area. It is very interesting to note that the Bundaberg Distilling Co. pays this Government over $60m a year in excise and sales tax. That is more than the Government is prepared to offer to the ailing sugar cane industry. The Government collects from the Bundaberg Distilling Co. $60m in excise and taxes and in the Kerin package it is prepared to give only $20m a year-one-third of that $60m excise collected-over a period of three years. That is all that it is prepared to give to help the desperate sugar industry which, through no fault of its own, is being put through hell. Senator Walsh —The fault rests with the Queensland Government. Senator BOSWELL —The fault is not that of the Queensland Government. Senator Walsh —The Queensland Government's regimentation is the cause of it. Senator BOSWELL —Senator Walsh has been reprimanded today by the Chair. I hope that that will not happen again. The Kerin plan promised $150m to the sugar cane industry. That figure was reduced in actual terms to about $63m, which is $20m a year over three years, despite the fact that this Federal Government has obtained $60m-it is probably a little more than $60m now-from the Bundaberg Distilling Company. As Senator Walsh is really interested in the sugar industry, I will tell him what the Queensland Government has put into it over the past two or three years. It has put in $20m in rural adjustment, $32m to the Primary Industry Bank of Australia, $14m in co-operative loans to sustain the co-operative sugar milling companies, $6m in interest subsidies, $20m from loans at an interest rate of 4 per cent, and $11m in direct grants and interest subsidies. That is a total of $103m. The Federal Government has put in $15m. It should be ashamed of itself. On 6 April the sugar millers and growers passed a unanimous resolution that the responsibility for a support price plan was clearly that of the Federal Government. Mr Kerin has since said that unless the Queensland Government acknowledges that some of the money that was intended to be given was price support, the sugar cane growers will not receive anything. I do not believe that the Queensland Government will acknowledge that. It has played its role by contributing $101m against the Federal Government's $15m. To get back to the problem in hand, if this legislation is passed unamended we will see the sale in the market of inferior spirits labelled as rum, whisky or brandy. The Minister for Finance (Senator Walsh) in his second reading speech said that this matter would be taken up by State laws. I do not understand how people who import brandy, rum or whisky can be stopped if they attempt to pass spirits across the borders of any State, allowing them into the retail chain. I am very grateful that the Australian Democrats have seen fit to support our proposed amendment. Therefore, the legislation will be amended. Thank goodness for that. It would be almost impossible to stop the sale of the inferior products. Rum, brandy and whisky have carved out a very substantial place in the market because of the way that they have been produced. Senator Peter Baume —They have contributed to my medical practice over the years. Senator BOSWELL —That is very good. Rum has been made in the same way for 400 years. Eliminating the maturation period would take away the profile and inherent flavour of rum. Some honourable senators have pointed out the cost of maturing rum in wooden vats. I make out the cost to be about 12c a bottle. Senator MacGibbon says that it is 30c a bottle. We will certainly not argue about 18c. That works out at about 1c a nip for people to drink a product that has been made in a certain way over a number of years. It certainly would be safer. The esters are absorbed by the wooden vats over the two years. It is then a much safer product. Senator Walsh —Safer for what? Senator BOSWELL —It is safer to drink-a much healthier product. Senator Peter Baume —It is unadulterated. Senator BOSWELL —It is unadulterated, as my colleague Senator Dr Peter Baume said. I looked at the Minister's second reading speech to see whether I could find a reason why he would want to remove the two-year maturation process. I cannot understand it. I would be very interested to listen to Senator Walsh explain it in his closing remarks. Some comments were made about deregulation. I thought that it was a pretty poor excuse to disrupt the liquor industry by allowing inferior imitations of distilled alcoholic products to take over a substantial market that has been established by the genuine product. Allowing imitations into this country under false labelling would wreck our sales of genuine brandy, whisky and rum products. I still cannot understand why a government would go to the trouble of bringing in legislation that will wreck established industries that have been operating for a long time-in the case of the Bundaberg Distilling Company for about 98 years. Beenleigh rum has been on the market, not for 98 years, I think, but certainly for 50, 60 or probably 70 years. The Government has not thought of the ramifications of this legislation. It has not come up with the bottom line. It should encourage the manufacturers and distillers to produce premium high-grade products. I can nominate some of them. Black Bottle brandy is world class, and the famous Bundaberg rum is so labelled: It is a famous product. It is sold throughout Australia. The Government should encourage the pursuit of excellence. That is exactly the opposite of what this legislation will do. The Australian distillers will have to make a cheap, nasty product to compete with the short-cut methods of some of the lower market manufacturers and to compete with the cheaper imports that will come in, which earlier I called firewater. The Democrats have assured us that the proposal amended by Senator Messner will be carried. The people of north Bundaberg will be very happy that the clause will be defeated. Senator WALSH(Western Australia-Minister for Finance)(9.39) —in reply-I have not been present for the whole debate but I have heard bits of the last two or three speeches. Senator Puplick spoke about inwards duty-free shopping. Frankly, I could not understand what he was getting at; but I did not understand the contributions by Senator MacGibbon and Senator Boswell. The facts regarding removal of the Commonwealth requirement that spirits be matured in wood for two years are as follows. The Department of Health has advised the Government-the matter has been under consideration for about two years-that there is absolutely no health reason for the requirement to remain. As far as I know, nobody in the Opposition has disputed that as a health measure. The Opposition has embarked yet again on its penchant for regimenting society. It is particularly appropriate that Senator Boswell, who is a trenchant defender of the Government of Queensland, which is more heavily into the regimentation of people than any other government in Australia, should want to retain this provision. The simple truth is that the Opposition does not trust people. The Opposition does not believe that people should have what they want; it believes that people should have what the Opposition believes is good for them. Senator Boswell —They can have what they want as long as they do not label it rum or brandy. Senator WALSH —What we seek to do is to give people a choice. If they want to buy something that has a label on it which says that it is matured in wood for three years, 10 years or 150 years, like some of the members of the Queensland branch of the National Party of Australia, they can buy that product and pay a price premium if they wish to do so, but if on the other hand people do not care the attitude of this Government is that they should be free to buy what they want. The attitude of the Opposition is that big brother will dictate to them that they will not be able to buy spirits unless they have been matured in wood for two years. It is yet another example of the fundamental conflict between the rhetoric of the Opposition and its practice. There have been a number of references to an amendment to be moved by the Opposition. My inquiries suggest that there is no amendment, or at least no amendment has been circulated. The Opposition proposes to vote against clauses 25, 26 and 27. Senator Messner —We are just opposing the clauses. Senator WALSH —Senator Boswell kept talking about an amendment. Senator Messner cannot blame me if I am confused because I have been misled by one of his colleagues. As I understand it-apparently Senator Messner agrees-the Opposition proposes to vote against clauses 25, 26 and 27. Consumer behaviour will continue to be regimented if those clauses are not carried. If they are carried the Government's belief that people should be entrusted to make their own choices on this matter will prevail. Finally, I seek leave to incorporate in Hansard a telex received by Senator Button on 24 April from the Wine and Brandy Co-operative Producers Association of Australia Inc. This telex states that the Wine and Brandy Producers Co-operative supports the legislation that this Government has put forward. Leave granted. The document read as follows- MINIC AA62632 GORDO AA80398 Ref: 1336 24th April 1986 Senator the Hon. J. N. Button, Minister for Industry, Technology and Commerce Copy of telex for your information Att: Mr J. R. Porter, Member for Barker Mr J. N. Andrew, Member for Wakefield Re: Customs and Excise Legislation Amendment The Wine and Brandy Co-operative Producers Association of Australia Incorporated, whose members are responsible for producing in excess of 24% of Australian produced brandy and whose distilling activities are concentrated in the South Australian Riverland, support clauses 25 to 27 of the Customs and Excise Legislation Amendment Bill which will phase out by June 1990 the mandatory maturation requirements for brandy, for the following reasons: Production costs will be substantially reduced for brandy manufactured and sold without the minimum of two years in wood. (Note we believe however that most brandy sold in the forseeable future will be matured brandy). Removal of the mandatory maturation requirement may provide a marketing opportunity for an unmatured brandy spirit. It is arguable whether there are significant differences in chemical composition between some ``matured'' and unmatured brandy. The provision of a 4-year phasing out period should be sufficient to prevent hardship to those distillers with heavy commitments to brandy maturation wood, and should prevent problems occurring in any particular region because of the removal of this mandatory maturation requirement. Distiller members of this association support this government initiative to phase out the mandatory maturation requirement for brandy over a period of four years. A copy of this telex has been sent to the Ministers for Industry Technology and Commerce and Primary Industry. Philip Mann Secretary/Manager Wine and Brandy Co-operative Producers Association of Australia Inc. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 24-by leave-taken together, and agreed to. Clauses 25 to 27-by leave-taken together. Senator MESSNER(South Australia)(9.45) —I rise to indicate, as Opposition senators did earlier during the second reading stage, that the Opposition will be opposing clauses 25, 26 and 27 of the Customs and Excise Legislation Amendment Bill. I think the reasons why we will be opposing these clauses have been made very clear. I am sorry that I was not in the chamber to hear Senator Boswell's contribution, because no doubt he would have drawn our attention to the very important changes that may occur in the rum industry in Queensland as a result of the removal of the maturation requirements. It will certainly have a very large effect in South Australia. At the end of the second reading debate the Minister for Finance (Senator Walsh) incorporated in Hansard a copy of a telex from the Wine and Brandy Co-operative Producers Association of Australia Inc. giving support to the Government's action. The Minister might be interested to know that that body certainly is an important organisation in South Australia but it does not represent all the brandy makers and it does not represent that group of brandy makers which is most likely to be affected by the removal of the maturation requirements. The Australian Wine and Brandy Producers Association, which represents those people and many other producers as well, voted very clearly in opposition to the removal of the brandy maturation requirements. That can be placed on the record as well. I do not have a copy of the telex but I have certainly had personal conversations with members of that group. Earlier, in the second reading debate, I read from an article which appeared in the Adelaide News of 2 May which made it quite clear, as it quoted the Executive Director of that Association as saying that this may well cost jobs in the Riverland and in those areas in South Australia devoted to the brandy industry. Senator Walsh —As many as the free lunch abolition is going to cost? Senator MESSNER —It was not specified by Mr Mettlebeck but it sounds as though the Government has not done its homework again. If it is interested in that question it might well contact that very important organisation and determine its attitude. As I explained earlier, the brandy industry should not be seen as an industry separate from the wine and grape industry. I pointed out earlier that it is a safety valve for excess grape production as those grapes are turned into spirit and later into brandy. In that way, the wine and grape industry tends to look after itself rather than being forced into accepting government handouts in years of surplus production which cause market prices to fluctuate and fall and which bring difficulties to the industry, particularly in the area of job opportunities. Brandy is a vital part of the overall South Australian grape and wine industries. I notice that South Australian back benchers on the Labor side of this chamber have not taken part in this debate and have not sought to put forward the views of their State. This is fairly typical. Whenever an issue of importance to the State comes up we find them going to water as quickly as possible. What have we heard from Senator Maguire and Senator Elstob about the impact of the perks tax on the motor car industry in South Australia? Even the Premier of South Australia, Mr John Bannon, is imploring his counterparts- The CHAIRMAN —Order! I do not think we want to go on to the car tax. We are dealing with the excise legislation. Senator MESSNER —Mr Chairman, I thought it was rather topical. I know that back benchers Senator Maguire and Senator Elstob would not have gone to bed tonight happy if that matter had not been raised. Let me come back to the brandy industry. I think it is important to recognise that impact of the removal of the maturation period will lead to the destruction of the quality end of the market. While it is clear that some people within the industry are supportive of these changes, it is important to recognise that there are no safeguards for labelling, say, imported material which cannot be certified, which cannot be checked or verified and which may well flood the market. In many ways it is already flooding the market, displacing Australian produced brandies. Why is the Government so quick to act to impose this so-called deregulatory measure when it does not take proper account of the difficulties of adjustment in the industry? Another point that is significant is that brandy, as we all know, is subject to a favourable differential rate of excise. That has been fought for by South Australian senators on both sides of the chamber over a long period very largely for the reasons-- Senator Haines —All sides. Senator MESSNER —I beg the honourable senator's pardon-honourable senators on all sides of the chamber. We are trilateral. We have maintained that rate of excise over a long period to the advantage of the industry. One of the points the Government is putting forward as a reason for the removal of the maturation requirements is that this will lead to the development of alternative products by grape growers in the wine industry and brandy makers. They will use the conditions available under the excise legislation to produce cheaper product to put on the market, although it may well not be called brandy if these maturation requirements are removed. It seems odd that this Government is seeking to institute a loophole in order to allow the development of an alternative product. That product may well undermine the future stability of the present industry. Senator Haines —But they can do that now as long as they don't call it brandy; they can produce it. Senator MESSNER —That is right, they can, and that is the whole point. The removal of this clause will lead to a change in that attitude. For those reasons the Opposition will oppose these clauses. Question put: That the clauses stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 4 —— Aulich, T. Gietzelt, A. T. Black, J. R. Giles, P. J. Childs, B. K. McClelland, DouglasCoates, J. McIntosh, G. D. (Teller)Coleman, R. N. Maguire, G. R. Colston, M. A. Morris, J. Cook, P. F. S. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Ryan, S. M. Devlin, R. Sibraa, K. W. Elstob, R. C. Walsh, P. A. Evans, Gareth Zakharov, A. O. Foreman, D. J. Archer, B. R. Lewis, A. W. R. Baume, Peter MacGibbon, D. J. Bjelke-Petersen, F. I. Macklin, M. J. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Newman, J. M. Chaney, F. M. Puplick, C. J. G. Collard, S. J. Reid, M. E. (Teller)Crichton-Browne, N. A. Sanders, N. K. Durack, P. D. Sheil, G. Guilfoyle, Dame Margaret Teague, B. C. Haines, J. Townley, M. Hamer, D. J. Vigor, D. B. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Knowles, S. C. Button, J. N. Walters, M. S. Grimes, D. J. Carrick, Sir JohnJones, G. N. Baume, MichaelRobertson, E. A. Parer, W. R. Richardson, G. F. Kilgariff, B. F. McKiernan, J. P. Siddons, J. R. (Senator Tate did not vote, to compensate for the vacancy caused by the death of Senator Missen.) Question so resolved in the negative. Clauses negatived. Title agreed to. Bill, as amended, agreed to. Bill reported with amendments; report adopted. Bill (on motion by Senator Walsh) read a third time. Consideration resumed from 30 April, on motion by Senator Walsh: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without requests or debate. Debate resumed from 17 April, on motion by Senator Gietzelt: That the Bill be now read a second time. Senator WALSH(Western Australia-Minister for Finance) —Mr Acting Deputy President, may I suggest that it may suit the convenience of the Senate to debate the second reading of Appropriation Bills (Nos 3 and 4) cognately with the Appropriation (Parliamentary Departments) Bill (No. 2) 1985-86. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Is that the wish of the Senate? There being no objection, I will allow that course to be followed. Senator MAGUIRE(South Australia)(10.00) —Tonight the Senate is debating Appropriation Bills (Nos 3 and 4) 1985-86 and the Appropriation (Parliamentary Departments) Bill (No. 2) 1985-86. These Bills provide the additional estimates of expenditure for the current financial year. They cover essential and unavoidable expenditure and enable additions to the expenditures provided for in the Budget Bills. The main components of the increased outlays are higher wages and salaries stemming from the November 1985 national wage case decision. The Bills also provide for expenditures due to unavoidable costs and price rises, and such factors as changes in the rate of exchange of the Australian dollar. They provide for expenditures due to fluctuations in these types of variables since the Budget was framed last August. Altogether the appropriations in the three Bills total some $940m, made up principally of $755m in Appropriation Bill (No. 3), $183m in Appropriation Bill (No. 4) and $1m in the Appropriation (Parliamentary Departments) Bill (No. 2). As I have indicated, that $940m is for additional outlays over and above those provided for in the Bills passed through Parliament after the August Budget was brought down and they should be seen in the context of total Commonwealth Government outlays. We are talking about additional outlays of some $940m out of a total Budget involving expenditures of $69,000m, so those additional outlays probably add only a bit over one percentage point to total Budget outlays. The amount of funds appropriated by these three Bills to some extent is offset by savings in Appropriation Bills (Nos 1 and 2), which were before the Parliament in the latter half of 1985. The savings in regard to those Bills total some $264m, so the net increase in Commonwealth Government outlays over and above those provided for at the beginning of the financial year is some $696.3m. As I have said, that comes close to adding one percentage point to our total Budget of $69,000m. I wish to go into some of the principal details of that extra expenditure. Some $297m is for extra wages and salaries to meet increases in award wages and other wage and salary costs incurred since the Budget was brought down. In addition there is a further amount of $16.9m for the Department of Community Services to implement revised subsidy arrangements for child care services in Australia. Under the new arrangements the subsidy will be paid on the basis of the number of places child care centres have for children, thus replacing subsidies previously based on the ratio of qualified staff to children. A further $70m is provided for the Department of Trade to enable the Australian Trade Commission to eliminate the backlog of eligible claims under the export market development grants scheme. In general, payments approved under Appropriation Bill (No. 4) tend to be of a more capital nature than those approved under Appropriation Bill (No. 3). For example, under Appropriation Bill (No. 4) some $16.7m is provided to the Parliament House Construction Authority, the reason for that being better than expected progress with construction in the latter half of 1985-with more work being done on that project than was expected, more expenditure has been incurred by the Commonwealth Government. That Bill also includes the sum of $21m in natural disaster relief assistance to the States, particularly due to drought in Western Australia and damage by cyclones in Queensland. Tonight I would like to take the opportunity, in the context of these appropriation Bills, to reaffirm the achievements of the Hawke Government on the economic front. Over the last three years Australia has achieved higher economic growth rates than any other member country of the Organisation for Economic Co-operation and Development. Senator Crichton-Browne —Are you going to put that together with inflation and interest rates? Senator MAGUIRE —I will be on to that shortly. National accounts data released by the Australian Bureau of Statistics show that Australia's gross domestic product grew by some 4.9 per cent in the 12 months to last December. That is the third year running that the Australian economy has recorded real growth rates of the order of 5 percentage points, so that over the three years that this Government has been in office the Australian economy has become 16 or 17 per cent larger in real terms than it was at the beginning of the Government's term. It is pleasing to note in relation to that five per cent real economic growth some very new information which has been published, I think only this week, on the performance of some of our basic industries. I instance the very strong performance currently being turned in by the Australian iron and steel industry. I know it is of great interest to constituents of mine in Whyalla that in the 12 months just ended raw steel production in Australia increased by 9.5 per cent-a very welcome increase-and pig iron production, another major output of that very basic and fundamental Australian industry, grew by some 14.6 per cent. They are very welcome growth rates and reflect a marked reversal of fortune for the steel industry. The strong economic performance of our economy in the last three years has allowed the Government very amply to fulfil its commitment to create a half a million jobs in its first three years of office. In fact the Government has exceeded greatly its original commitment. Since the National Economic Summit Conference was held in April 1983, just over three years ago, some 617,000 extra jobs have been created in Australia, which means that the Government's target of an extra 500,000 jobs has been exceeded by over 100,000 even though, in terms of the release of the data, the three-year period is not up yet. So that is a promise very amply fulfilled by the Government. The great majority-75 to 80 per cent-of those 617,000 new jobs have been created in the private sector. Further, the great majority of the jobs are full time. I am pleased to say that in my own State of South Australia, which experienced difficult economic fortunes in the early 1980s and the late 1970s, the situation has been reversed. In the three years to March this year employment in South Australia has grown by 43,000 positions-a very large number of extra jobs. It is a tremendous achievement, reversing the previous decline in the numbers in the State's work force. It is also particularly pleasing to note that of those 43,000 extra jobs in the State, some 28,000 are full time. It is particularly welcome news that in March this year South Australia recorded its highest ever level of employment-595,000 jobs. Not only was March a record month, but so were the months of February this year and December last year. It is notable that in South Australia we continue to break new records on the employment front on a month-to-month basis. The prices and incomes accord between the Government and the trade unions has been the foundation of Australia's economic recovery. Within the context of that accord-the agreement between the Government and trade unions to operate an incomes policy-we have seen a welcome reduction in the unemployment rate. It peaked in 1983 at a rate of 10.4 per cent-double digit unemployment was the legacy of the Fraser-Howard Government-and by March this year we had reduced Australia's unemployment rate on a seasonally adjusted basis to 8 per cent. That is a welcome reduction in the context of the accord. It is particularly important to note that great inroads have been made into youth unemployment as a result of the expansionary policies enabled by the accord. Last Friday a South Australian senator, Senator Vanstone, claimed that youth unemployment at present was at record levels. Clearly she has not been examining the figures and is not cognisant of the facts. The facts are that in early 1983 when the Liberal Government, which I am sure had Senator Vanstone's support, lost office, youth unemployment was measured at the rate of about 27 or 28 per cent. It is interesting to note that, on the last published figures, youth unemployment has been reduced to a rate of between 21 and 22 per cent. That is not an acceptable level and we must continue to try to reduce it. However, it is certainly true that in the three years that this Government has been in office, the youth unemployment rate has been reduced by six percentage points. While we have been having such good economic news on the national front, I regret to say that Queensland is very much the weak link in the Australian economy. I regret to say that on the latest available figures provided by the Department of Social Security on the number of persons receiving unemployment benefits, Queensland is now in the invidious position of having more persons receiving unemployment benefits than the number of such recipients in the whole of the State of Victoria. That is a most disturbing indicator of economic health, or lack of it, in Queensland. Furthermore, the number of persons now receiving unemployment benefits in Queensland total 110,367. That figure is only 8,000 to 9,000 more than the entire population of the largest provincial city in Queensland, which is Townsville. On the latest official figures made available recently by the Australian Bureau of Statistics, the population of Townsville was measured at 101,700. That points to the extent of the malaise in the Queensland economy. It is to be hoped that that poor performance can be improved to help to underpin the national economic recovery which is occurring in Australia. As to the figures of unemployment benefits to the end of March, this is probably the first time that the number of people out of work and receiving benefits in Queensland has exceeded the number of such people in Victoria. It is a staggering proposition. The facts are that on the latest available data Victoria's labour force is 67 per cent-two-thirds-larger than that in Queensland, yet more people are receiving unemployment benefits in Queensland than is the case in Victoria. Obviously, the State Government in Queensland is failing miserably in managing the State's economy. I looked at the policy speech delivered in September 1983 by Sir Johannes Bjelke-Petersen, Premier of Queensland, in which he said that Queensland's direction was straight ahead towards growth and progress. They are not my words or the words of the Prime Minister (Mr Hawke). They were spoken by the Premier of Queensland. I regret to say that the unemployment figures show that Queensland is stuck in reverse gear while the Labor States are moving straight ahead. Clearly that is the case. Let us examine another indicator of the position in the Queensland labour market. In only three months out of the 30 months that have elapsed since the Premier gave his last policy speech in September 1983 has the Queensland unemployment rate been below the national average. There are 30 months of information available from official sources. In only three of those months-November and December of 1983 just after the Premier's policy speech, and in February 1984-has the Queensland unemployment rate been below that of Australia as a whole. It is interesting to take that analysis further and look at the share of Australia's jobless living in the State of Queensland. One can do so readily with the aid of information from Commonwealth Government sources. It indicates that at the time Sir Joh announced his policies in September 1983, only 14.8 per cent of Australia's jobless lived in the State of Queensland. So at that time fewer than 15 per cent of all the unemployed people in Australia lived in the State of Queensland; but now an appalling 18.1 per cent reside in the State of Queensland. Therefore, there has been a dramatic increase in the share of Australia's jobless living in that State. It is no wonder that population movements show a net population outflow from Queensland in the economically active age groups. I instance the fact that members of the age group from 20 to 34 years clearly are leaving the State of Queensland, according to the latest interstate population figures. To sum up, those Queenslanders are voting with their feet and are migrating to other parts of Australia looking for work. Sir Joh Bjelke-Petersen has turned Queensland into the sick man of Australia and the electorate is becoming increasingly disenchanted with the substitution of rhetoric for positive economic action. I understand that tomorrow we shall be able to read the results of a new Morgan gallup poll, according to the Dateline News Digest which is available to all members of Parliament and which is being published this evening. That poll will appear in tomorrow's Bulletin and I believe that it shows a slump in the popularity of the Queensland Premier. If any reason needs to be put forward for that situation occurring-if it is correct, and I shall await tomorrow's Bulletin-then the state of the Queensland economy will be one of the causal factors. The present Queensland Government for many years has traded on its alleged competence to run the State's economy. If that Government wants to make the running of the economy its keystone for which it seeks credit when things are going well, it must take the blows, the disenchantment of the electorate, and the responsibility when things are going bad. I suspect that is what is happening in regard to that opinion poll. One of the other side effects of the accord between the Hawke Government and the trade union movement has been to bring harmony into Australia's industrial relations climate. Industrial disputes in Australia, days lost per employee in industrial disputes, are at their lowest level for 17 years-not at their lowest level in seven years but at their lowest level in 17 years. It is very interesting to note that in my State of South Australia days lost through industrial disputes per employee are now at the Japanese level. Japan has been held up for many years as a model economy by people who would criticise Australia's economic policy. Certainly Japan is one of our major trading partners. Therefore, we have to pay some attention to what is happening in the Japanese economy. It is now the case that in South Australia days lost in industrial disputes are at the Japanese level. I regret to say that unfortunately that does not apply in Queensland. The differences between the two States in industrial relations can be summarised by saying that in South Australia there is a policy of industrial conciliation, of solving disputes. In Queensland there is a very overt policy of industrial confrontation. The difference between industrial conciliation and industrial confrontation has contributed to a very high rate of days lost per employee as a result of industrial disputes in Queensland. The accord between the Government and the trade union movement certainly has worked to help stabilise and lower Australia's inflation rate. In the last year of the Fraser Government when Mr Howard was Treasurer the inflation rate-that is, the increase in the rate of prices in Australia-was 11 1/2 per cent per annum. That was double digit inflation, despite the policies of the Government that said that we had to fight inflation first, that Australians had to make sacrifices, tighten their belts and lower their expectations. That Government which was very critical of high rates of inflation left office with double digit inflation. The inflation rate is now not 11 1/2 per cent as it was when Mr Howard was Treasurer, but 9.2 per cent. The discounting of the national wage rise in the current wage case to be handed down at the end of this month by 2 percentage points below the consumer price index level and the Government's decision to pass on lower petrol prices to the community following the collapse of the Organisation of Petroleum Exporting Countries will help to ensure that the 9.2 figure is a peak rate of inflation and that Australia's rate of increase in prices will fall hereafter. Despite Opposition claims to the contrary, the prices and incomes accord with the Australian Council of Trade Unions has helped to reduce unit labour costs. Unit labour costs, or employee costs per unit of production, are at their lowest level for many years. That is proving to be of great benefit to the country and is certainly helping to raise the level of competitiveness. In 1985, for example, nominal wages or money wages rose by some 4 per cent. By comparison, wage increases in the weighted averages of the economies with which we normally trade grew by 4.8 per cent. So our wage rises during 1985 were lower than the average wage rises in the countries with which we trade. In Mrs Thatcher's United Kingdom, for example, the bastion of deregulated free market policies, wages rose not by 4 per cent as they did in Australia, but by 8.6 per cent. So there is a very interesting comparison. I notice that the Opposition is about to embark upon a policy of freeing up the labour market and moving away from centralised wage fixing. If it followed Mrs Thatcher's example, it would be looking at a situation with potentially high rates of growth of money wages at a time when this country is delivering relatively low rates of increase in that measure of income. The Government's agreement with the Australian Council of Trade Unions to defer the 3 per cent September productivity claim and discount wages by 2 per cent, I believe, will help to preserve our new-found competitiveness and ensure that any rise in import prices will not be built into Australia's inflation rate. In other words, instead of there being a 4.2 per cent rise in wages as would be the case with the consumer price index, in the current wage case the rise will be discounted by approximately 2 percentage points so that employers will be facing a 2.2 per cent or 2.3 per cent increase in wages. The 1984 Budget of this Government was the first to be brought down in conformity with the Government's trilogy of budgetary commitments. Broadly speaking, these commitments require the Government to contain the rate of growth in Commonwealth outlays and tax revenue to no more than the overall rate of growth in the economy and not to increase the deficit on the Budget as a proportion of gross domestic product. This is the first time in 17 years that any government of this country has been able to reduce these three ratios. The Hawke Government has cut the Budget deficit from $6,700m in 1984-85 to $4,900m in 1985-86. In accordance with this reduced Budget deficit, the Government has made substantial cuts to the total public sector borrowing requirement; that is, the extent to which the public sector has to go out on the market and borrow funds to finance the excess of its expenditures over its revenues. The public sector borrowing requirement has fallen from around 7 per cent of gross domestic product in 1983-84 to some 4.5 per cent in the current financial year. In recent weeks there have been many claims by doomsayers on the Opposition benches that there will be a severe downturn in the Australian economy this year, and that there is the danger of an economic recession developing from that. But I place on the record the fact that in recent weeks there have been some very significant declines in some Australian commercial interest rates. The reductions in interest rates will be watched closely by the community, which will be keen to see them continue and spread generally throughout the economy. It is a matter of record now that since the middle of February rates of interest paid by banks on 90-day bills issued by them have fallen very significantly. Indeed, rates on bank bills issued for 90 days have fallen by well over three percentage points from around 18 per cent or 19 per cent in the middle of February this year to just over 15 per cent now. So the reductions which are occurring in these important market interest rates are very welcome. Over the same period interest rates paid by the Commonwealth Government on its 10-year Treasury bonds which mature in 1996 have been cut by around 2 1/4 percentage points from some 14 1/2 per cent to 12 1/4 per cent. That is very encouraging news indeed in the financial market with the very welcome falls in interest rates. The gloom and doom emanating from the Opposition benches are clearly out of step with the assessment of the economy by independent commentators and the financial and industrial markets. The Government's commitment to budgetary restraint and the accord's stabilising influence over wages and prices will enable the economy to consolidate the three years of high growth which we have experienced into a more sustainable pattern of growth for the future. A steady growth in employment opportunities is a major objective. It will develop more fairness and equity in the community. It will provide for a steady rise in living standards. On that basis I look forward to the next Federal election with a great degree of confidence. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator COLSTON(Queensland)(10.30) —Honourable senators will be aware of my interest in the issue of corporal punishment in schools, especially its abolition. This evening I have some criticism to level against the Australian Capital Territory Schools Authority about this particular matter. My first criticism relates to a question which I placed on notice on 20 March this year. This question asked for detailed information about the use of corporal punishment in Australian Capital Territory government schools in 1985. Following comments I have previously made at Estimates committees, the Schools Authority should have been well aware that I intended to ask questions this year about this matter. The material to answer the question to which I have referred should have been readily available. Indeed, if I had asked the question at a recent Estimates committee hearing, I expect that the information would have been made available, if not immediately, then within a couple of days. I place a question on notice because I knew I would not be in Australia at the time of the Estimates committee hearings. What I wish to stress is that an answer should by now have been provided to Senate question No. 1005. I see no reason why I cannot receive an answer this week. The second matter relates to a news item I heard on Australian Broadcasting Corporation radio this morning. The text of this item is as follows: Corporal punishment will disappear from Canberra's Government schools within 12 months. The Australian Capital Territory Schools Authority has made the decision following completion of a study into school discipline policies and practices. The Chairman of the Schools Authority Council, Dr Don Anderson, said the Council is opposed to corporal punishment. Dr Anderson says only 15% of Canberra's Government schools still use corporal punishment and its use has been halved over the past two years. The Schools Authority has considered an immediate ban on corporal punishment and phasing it out over 12 months would allow schools time to learn a less authoritarian approach to discipline. I have some comments in relation to what was said. Firstly, the use of the adverb `only' is hardly appropriate in reporting that 15 per cent of government schools in the Australian Capital Territory use corporal punishment. Use of the word `only' is overdone in our society. We see steak at `only' $12 a kilo or motor vehicles at `only' $14,000. Just as people may regard $12 and $14,000 as excessive for a kilo of steak and a motor vehicle, so too would some people regard 15 per cent as an excessive number of government schools in the nation's capital which still resort to the barbaric practice of using the cane. Secondly, if the Authority has decided to ban corporal punishment, why not do it now, instead of in 12 months time? Some school principals may suffer withdrawal symptoms, but students in government schools would get a better deal now, instead of having to live under the threat of corporal punishment for a further year. But I am not sure whether the ABC radio report is as good as it appears on the surface. I made some inquiries today and it seems that the Authority may not be banning the use of corporal punishment, but merely encouraging schools to abolish the practice. If that is all it intends to do, the Authority should stand condemned as an organisation which lacks the courage of its own convictions. If it can not take a strong stand on this matter, the public may well ask what authority this so-called Authority actually has. I have been informed that the Authority briefed the media but apparently members of parliament will not receive any detailed information until a report is first issued to government schools and then released to the public in two weeks time. This seems to indicate a disdain towards those who pay the bills. Why could the Authority not advise the Parliament at the same time as it attempted to promote its media image? However, like other senators, I look forward to examining the report on its release and to debating its contents in this chamber. If copies of the report can be made available earlier than planned, the Authority may benefit from the comments of those members of parliament who have a deep and professional interest in this matter. Senator REID(Australian Capital Territory)(10.35) —Tonight I wish to refer to two communications that I have had recently from constituents which are in a sense similar and in a sense quite different. One is a letter from a constituent who lives in Ainslie. I will not read it all out but will seek leave to have it incorporated in Hansard. This constituent has sent me a copy of a letter she has written to the National Capital Development Commission. The problem that she is addressing is that, in living in Ainslie near Ainslie Village, people sometimes experience problems. In her letter she deals with the case of a person who lives at the Village coming to her house under the influence of drugs, breaking a door and entering a neighbour's house. She goes on to explain what happened. It is clear from the letter that this woman has some compassion for the problems of the people who live in Ainslie Village. Her letter to the NCDC relates also to the proposal to upgrade the Village. She feels that the 270 people in residence there are perhaps not housed in the way that is best for them and that some other type of housing facility would be more appropriate. She suggests to the NCDC that that should be looked at. I think that perhaps the letter should have been sent to the Department of Territories but both the NCDC and the Department of Territories are relevant in the consideration of this matter. The questions posed are: Is it the intention in the future to house these unfortunate people in such large groups? What are the consultants terms of reference? By what date is their report to be submitted? Does the consultant intend to talk to interested people in the community, who do not live at the hostel, including nearby residents? That is an aspect of the matter that needs to be addressed. I seek leave to incorporate in Hansard the letter to me dated 1 May 1986 and the letter, which was enclosed with it, to the NCDC. Leave granted. The letters read as follows- Winnecke St, Ainslie, 2602 1-5-86 Senator Margaret Reid, c/- Parliament House, Canberra. Dear Senator, We enclose a copy of a letter we sent to NCDC and to which we await a reply. We recently had the unnerving experience of a drug addict, who lived at Ainslie Village, coming to our house while under the influence of drugs, and breaking down an external door with a garden bench. He also went to a neighbouring house, before being arrested, and broke windows and a door in his attempt to enter. He was undeterred by the fact that the houses were occupied. There has been a break and enter crime committed at our neighbour's house on two occasions. Police found the receiver of the stolen property living at Ainslie Village. The management of the Village say that in spite of this they must give the culprits a room at the Village if one is vacant and that they have no way of protecting local residents. With such a policy, accommodation for these people should be in small units spread through the community. We have put up with the threat in the past without complaining because we felt a better solution was not far off, but now we find the Village is to be ``upgraded'' so the problem now is with us forever. We do not wish to leave the home in which we have lived for 20 odd years, so we are writing to draw attention to the problem and to request your assistance to have a better solution developed: One that meets the needs of all concerned. The matter is urgent as we understand $50,000 from our taxes has already been allocated to engage a consultant to outline options for the re-development of the Village. We and our neighbours are concerned. The manager of the Village also believes that small units spread through the community would be much better. We hope you can head off this unsatisfactory proposal. Yours sincerely, P.S. We have sent a similar letter to John Langmore. WINNECKE ST, AINSLIE A.C.T. 2602 19 April 1986. THE SECRETARY/MANAGER, National Capital Development Commission, 220 Northbourne Av, Braddon, ACT, 2601 Dear Sir, UP-GRADING/RE-BUILDING AINSLIE HOSTEL, QUICK ST. The Ainslie Village Hostel, Quick St, Ainslie has now become a very large refuge for those down on their luck: alcoholics, drug addicts, criminals, the poor and other unfortunate people. To collect people with problems, in such numbers-270-in one residential location seems to be quite improper and unfair to many of those forced by circumstances to use the facility. To put addicts into such an ``institution'' with no treatment, no supervision and no care is quite wrong, especially in view of the Government's expensive ``Drug Offensive''. Property stolen from nearby houses has been found by police in the hostel, addicts, who were living at the hostel, have smashed down doors and broken windows of nearby occupied houses. Local residents are appalled to hear that N.C.D.C. has engaged a consultant to report on upgrading the hostel and preparing the ground for this unsatisfactory state of affairs to be continued on a long term basis. Is this true? If yes: Is it the intention in the future to house these unfortunate people in such large groups? What are the consultants terms of reference? By what date is their report to be submitted? Does the consultant intend to talk to interested people in the community, who do not live in the hostel, including nearby residents? An early reply would be appreciated. Yours faithfully, Senator REID —The other aspect of the matter relates to a statement I have received from a constituent, attached to a statutory declaration, relating to the work she does on Saturday mornings in Civic as a volunteer for the Hunger Project. In these pages she recounts the morning of 8 March, when she met two men in Civic whom she describes as drunk and probably derelict. She goes on to recount the day. During the day these men were arrested and taken to the police station and released at about 5 o'clock that night, when she took them home and to a function that she attended. Subsequently, at the end of the night, as she was not able to offer them accommodation or find any accommodation for them, she took them back to what they call the Starlight hotel, which is the area behind the Australian War Memorial, where they had in fact slept the previous night and perhaps on many others. This woman came to see me about the problem of derelict men in Canberra, of whom there are a number. She was surprised to find, on making inquiries, that there really is not much accommodation for people like this and she feels that it is something that needs to be addressed. It is on that basis that the two representations have similarities. The Department is looking into the upgrading of Ainslie Village. If it is to continue, nobody would deny that it needs to be upgraded. But, at the same time, we do need to look at the needs of those who require this form of accommodation. We certainly need to look at the needs and the rights of those who live in Ainslie and who wish to live peacefully in their homes nearby; the needs of all people need to be considered. I suggest that the questions that have been posed by my constituent-that is, what is the intention and what is to happen to people like this in the Australian Capital Territory-need to be answered. I seek leave to have incorporated in Hansard the statement to which I have referred which sets out this story that occurred on 8 March because I think it is meaningful. I will not take the time of the Senate to read it out. Leave granted. The statement read as follows- On Saturday mornings, I work in Civic as a volunteer for The Hunger Project. My work is to ask passers-by if they will sign a card to support ending hunger on the planet, and to talk with interested people about the possibility of doing that by the end of the century. On Saturday 8 March, I was in Petrie Plaza, working in this way, when I spoke with a pair of young men, whose names were John ( ) and Robert ( ). I realised that they were drunk and probably derelict, judging by their appearance and behaviour, but it is my experience that such people have a very real experience of hunger and understand the fundamental issues of the question. These two men had spent the previous night-a cold night-at a barbecue site behind the War Memorial. At the time I saw them-about 11 a.m.-they were still shivering with cold. Robert was dressed in a T-shirt, jeans and thongs; John slightly more adequately. We talked about the work of The Hunger Project, and about their situation. They showed me the Good Behaviour Bonds they carried-$1,000 for Robert and $500 for John. A third person, their friend, was due to appear on some charge, and they could not leave Canberra until after that Court appearance. I suggested that we might be able to obtain some warm clothing for them from the Goodwin Market Stall. They were reluctant to come with me-`You wouldn't want to be seen with us'-but they obtained a nice new plastic bag from an expensive shoe store in which to hide their flagon of port so it would not disgrace me. We were unable to obtain any help at the Stall. It was sheltered and sunny there, so I asked John to wait for me to get my car to drive them to the Woden Rehabilitation Centre. (John claimed to have already been there, but to have been turned away as physically beyond help. This did not seem likely to me). He was certain I would not return, but I assured him I would. My car was some distance away; I had material to pack up; I had a friend to meet and explain the situation to-it was about 30 minutes before I drove up next to the Stall. When I arrived, the two were gone. Only the flagon of port remained on the pavement. I searched rapidly around Garema Place and Petrie Plaza. No sign. Returning to the Stall, I asked a gentleman sitting on a bollard whether he had seen the missing pair. Yes-the police had taken them away. No-he hadn't thought they were doing any harm, either. I had arranged to meet them?-don't worry, dear, the system will take care of them! At Turner, I explained to my friend, Leslie, the latest development, and rang the Police Station. Yes, the two men were in the Watch House. They would be released when the Sergeant considered them sober enough-about four hours, usually. After speaking with a contact in the Salvation Army, I arranged with Bruce, at Lasa, to deliver warm clothes to the jail and to try to find shelter for them Bruce explained that there was no shelter for adult men in Canberra-only one in Queanbeyan, which was often full, but he would do his best. Other commitments filled my afternoon, and when Bruce rang to say he was not able to help it was already quite late. I rang a contact in St Vincent de Paul to ask her to help, then let the Police know that I would collect the two men myself. At approximately 5 p.m. I arrived at the Station. John, Robert and a third, older man, were brought out to the foyer. The Sergeant took me aside and said that he couldn't believe I would take such people into my home. He warned me that we would almost certainly be robbed. I assured him I would ring if trouble developed, but also asked why derelicts were not arrested in the evening and kept in overnight for their own protection. The Sergeant explained that it was not the policy, and told me that there were perhaps 50 such homeless men around Canberra, who would all take advantage of me if I were to help these two in any way. John and Robert had dinner with us. They were full of jokes and fun, and told us quite a lot about themselves. Each had a wife and child. Robert was from Tennant Creek and had left home at fifteen. With a professional boxing troupe-no doubt to get away from a father who disciplined his children with a stockwhip. And they told us that in the jail they had been given nothing to drink, not washed, and allowed no blanket. When my friend rang back, she told us that the only possible accommodation would be a 2-berth cabin at the Caravan Park, for which we would need to pay $33 and claim reimbursement. We were not in a position to do this. As a family of four in a two-bedroom house, and with no experience of caring for alcoholics, we did not want to take on responsibility for them ourselves, either. So, instead, we invited them to come with us to the Woolshed, where we were going with our children anyway. They enjoyed the dance immensely, and created no disturbance at all. At about 10 p.m., we drove to Hale Crescent, Turner, to retrieve the flagon of port, and then returned them to the campsite behind the War Memorial-the place they call `The Starlight Hotel', and where they had been sleeping, 3 men under 1 blanket, in `the biggest king-size bed in Australia'. We have not seen them since. Senator VIGOR(South Australia)(10.40) —My attention was drawn to the following comments in the Fairfax Good Weekend magazine of 22 March last: If a Dalkon shield were presented to us now, it would probably still be accepted. Unless the producers give us the full information about the product, we wouldn't know there was a problem. The person quoted was the medical services adviser in women's health and family planning for the Federal Department of Health. According to that article, the Australian Government has no testing procedures to check the claims that foreign manufacturers or importers make about their products. Their word is basically taken without further question. If manufacturers or importers can get a product on to the market in some overseas country, they can sell it there. Even though the Food and Drug Administration in the United States of America requires manufacturers to apply quite serious and rigorous testing procedures to their products, fraud cannot be ruled out. A.H. Robins on several occasions withheld relevant information damaging to its further distribution of the Dalkon shield in the United States of America. It went to quite some trouble to prevent material coming out before the Food and Drug Administration. In Australia that company could probably just bluff it out. I ask the Australian authorities whether we have the powers and procedures to deal promptly with a product about which adverse reports have been made, or will the lack of information mean that the manufacturer's word will be taken in the case of serious dispute? I draw the Government's attention to my Hazardous Goods Bill, which goes some way towards solving this problem. However, I believe that we have to answer a few other questions. It is against that background that I want to put on record some disturbing facts about the development and distribution of the Dalkon shield. I sincerely hope that we have learnt some lessons from that disaster because many women and their families have suffered needlessly. In the case of the Dalkon shield there has been unethical conduct, wishful thinking and outright fraud virtually from the outset. A patent for the original invention was obtained in 1967. The device resembled a policeman's badge in shape and hence came to be called the shield. The device was then modified by the addition of five fins on either side and a new patent was applied for in November 1968. Dalkon shield plaintiffs' lawyers have contended that the concealment of the role of Dr Hugh Davis in the invention of the Dalkon shield was an initial fraud on the Patents Office. Two Special Masters appointed in 1984 by a St Paul court to examine the files of A.H. Robins made this observation about the contentions: We note that the deliberate omission of a joint inventor from the patent application invalidates the patent. Next to be concealed was Davis's financial interest in the Dalkon Corporation, the initial marketers of the shield. Davis's share of $750,000 paid by A. H. Robins for the rights to the shield, and 10 per cent of the royalties accruing to the Dalkon Corporation from North American sales, and on top of that his modest annual retainer of $20,000 as a consultant to A. H. Robins, were all concealed from the public. None of this was revealed while Davis was attacking the safety of the contraceptive pill and promoting the safety of the Dalkon shield. He paraded as an independent witness in many forums. His original foray was a brief article in the American Journal of Obstetrics and Gynaecology on 1 February 1970. The article was headed `The shield intrauterine device-a superior modern contraceptive device'. It described a study of 640 women for one year and cited five pregnancies, 10 expulsions, nine removals for medical reasons and three removals for personal reasons. The data covered 3,549 woman-months of experience and the claim was made that there was a pregnancy rate of 1.1 per cent. That was to be advertised throughout the sales of the shield. It was quite fraudulent, but that did not prevent the claim from being rehashed in the Australian and New Zealand Press and in reputable medical journals as late as 1974. By that time the shield had been withdrawn in the United States. In the initial report by Dr Davis, the fraud was manifold. The average participant in the trials had worn the shield for less than six months. Probably only eight people had been in the trial for a full year. The data went to the statistician three days after the close of the trial. This meant that injuries and pregnancies were ignored. The people who had dropped out were never followed up, nor the reasons for that. Some of the women had been told to use a spermicidal foam as well as the shield. No wonder such glowing results were obtained in this case but were never obtained by independent researchers. A. H. Robins quoted the magic figure of 1.1 per cent pregnancy rate at every opportunity, despite later evidence. In fact, the medical director of A. H. Robins made these observations when the company was examining the purchase of the market rights in June 1970: Davis' first paper on his first year experience mentions 640 insertions with five pregnancies. However, data given me for the first 14 months (Sept. 68- Nov. 69) covers 832 insertions with 26 pregnancies (none after the 11th month). That was to be devastating to A. H. Robins' defence against Dalkon shield suits. Similarly, the presence of copper and copper sulphate in the plastic from which the shield was moulded was also devastating. The original patent application said: An important aspect of the device is that it may be coated with a suitable film of material (to) enhance its effectiveness. The material could be a heavy metal such as gold, platinum, silver or copper. The copper had been mixed into the plastic since 1969, but no mention of that appeared in Davis's original article. His results, such as they were, were based on a shield that contained no copper. Two days before A. H. Robins took over the Dalkon shield rights on 12 June 1970, a vice-president of the company wrote the following in a memo: As I understand it, metallic copper was first added for the purpose of improving radio-opacity and to improve the physical properties of the plastic. Then, according to my understanding, they observed that the material with copper was apparently lowering the pregnancy rate, and at this point they reasoned that a more soluble form of copper would further improve effectiveness, so they added copper sulfate for the express purpose of improving effectiveness. He was troubled by the irritant and astringent nature of the copper salts. He was alarmed that if the device was sold to doctors without any mention of copper sulphate, that would amount to a claim that the results were attributable to the device alone. This whole thing was covered up. A. H. Robins went to extraordinary lengths to maintain that the copper additive had nothing to do with the contraceptive effectiveness of the Dalkon shield. In this way it escaped the Food and Drug Administration requirement that the proper tests on 1,500 to 2,000 people should be carried out for two years before a drug could be marketed. Other manufacturers, such as Searle with the Copper-7, told the truth and were temporarily inconvenienced by the need to conduct tests. What the Commonwealth Department of Health was told in Australia is not at all clear. In 1974 allegations that the Dalkon shield contained copper acetate which was bioactive were put to the Department. We do not know how far any investigations were carried. Dalkon shields were allowed in without quality-control checking or monitoring of distribution. That is one of the reasons why most figures relating to the shield in Australia are estimates. What we got, along with the rest of the world, was a smaller version of the shield for women who had not yet had babies. No other manufacturer had sought this particular market because of the high rate of menstrual cramps, bleeding, complications and expulsions that had followed test insertions of IUDs in childless women. A. H. Robins did not carry out any specific tests with childless women before chasing the custom of that particular group. A. H. Robins was also determined to spend as little as possible on both research into the shield and work to improve its quality, especially in relation to manufacturing standards. Employees who suggested how things could be made more safe were routinely told that it was none of their concern. The company was certainly not prepared to depress its massive profit margin-the device cost about 25 cents to manufacture and sold for over $4-in the interests of the consumer. A quality control supervisor suggested that the open ends of the multi-strand supramid nylon string attached to the shield be heat-sealed. This introduced bacteria into the womb, and the whole story goes on. Senator Gareth Evans —Don't let's hear it again. Senator VIGOR —I will jump over that section of the story of the tail and how various women became sterile as a result of the bacteria which travelled along the string into their wombs and caused enormous numbers of septic abortions-some of which were fatal. This is what eventually led to the withdrawal of the Dalkon shield in the United States. A remarketing proposal with a monofilament string never eventuated because of various other problems. In September 1974 Robins' Australian salesmen were advised by the General Manager: All I can say is persevere and hang in there as I think time will prove that our choice of maintaining the sales of the Dalkon shield in Australia rather than taking the easy way out and suspending its sales will be appreciated by the medical profession and accepted by the female population of Australia. Senator Peter Baume called for the shield to be taken off the market in Australia in November 1974, and warned of another thalidomide disaster. Early the following month the Medical Council of the Australian Family Planning Association accepted the Dalkon shield for use in its clinics. The first septic abortion report in Australia occurred in the same month. The Family Planning Association decision gave A. H. Robins a ready major outlet for the distribution of the shield, which continued beyond 1977. Originally, it was going to wait for new supplies with mono-filament strings, but that did not happen. The obvious question is: What have we learnt? I ask the Government that question. Do we have mechanisms that will more readily enable false claims to be tripped up? Do we have a patient reporting service that will provide the sort of statistics that A. H. Robins continued to withhold for years in the United States? One of its strategems used in this case was to order the medical and legal sections of its operation not to pass information to each other. What guarantees do we have that this is not happening now with other products? If the circumstances were repeated, would the Department of Health again take the word of a manufacturer when it was in such great conflict with the experiences reported by women? Whatever the Department may say, the relatives of at least three women who died believe that the deaths can be attributed to wearing the Dalkon shield. Three thousand women from Australia are joined in the class action in the United States. The voluntary reporting system that we now have does not appear to have brought to light even a small fraction of the cases brought to the attention of the Leichhardt Women's Health Centre and the Public Interest Advocacy Centre since they joined forces in 1982 to warn women of the Dalkon shield risks and to offer legal aid assistance to victims. Surely that constitutes a major problem that the Department of Health must tackle now. There is also the question of the dumping of the shields after they had been recalled in the United States of America. I believe that it is important that the Department of Health act now. Are Australian agencies and departments maintaining higher alert and vigilance procedures when there are such happenings in the United States and elsewhere on any product? I hope that we can get a considered response to the problems because people are being hurt. Senator BROWNHILL(New South Wales)(10.55) —The matter I wish to raise in the Senate tonight is one of very great concern to a number of people living in northern New South Wales. It involves the question of tertiary education and this Government's obvious bias in the provision of that education. The north coast of New South Wales has only one tertiary institution, the Northern Rivers College of Advanced Education, based at Lismore on the New South Wales far north coast. This is despite the fact that the north coast region's population is moving towards 700,000 and has almost the population of Tasmania now, which I might add has a university and a college of advanced education. The first stage of the college at Lismore was built in 1972, but 16 years later the building of stage 2 has only just started. The college has been seeking extra funding from the Federal Government for some considerable time. The Minister for Education, Senator Ryan, in fact visited the area in 1984 and said that she recognised the overwhelming need for additional resources in that area and that she was confident that the resources would be forthcoming. Regrettably, the council of the college can no longer share her confidence because in the two years since her visit nothing has happened. The real problem faced by the college is one of capital funds for such programs as residential accommodation. Another problem of the college is that the students cannot commute to the college. They live either in cities around the State or in outlying country areas. As there is no public bus or train system that will allow them the opportunity to live at home and study at the college they must reside on campus. Yet there is only residential provision for 66 of the 748 full time students; that is, less than 10 per cent of students can be accommodated at the college. Yet this college has been in existence for 15 years and has demonstrated its success and ability to attract students to it. This college is having difficulty getting funding for the obviously much needed capital works at the same time as debate is raging over a fourth university for Sydney. When one considers that people living in metropolitan Sydney have, within a radius of 57 kilometres, access to no fewer than three universities and 10 CAEs it is seen to be patently unfair. It think that demonstrates the bias this Government shows towards those living in metropolitan Australia at the expense of those choosing to live or study in regional areas. I understand and appreciate the need for economic restraint, but when this Government is actively discussing the establishment of a fourth university to service the western suburbs of Sydney I believe that a higher priority must surely be to provide funding for the north coast's only tertiary institution. I call on the Minister to listen to the call by the chairman of the college council for an inquiry into the allocation of tertiary resources and to respond quickly and favourably to the college's dilemma. Senator HILL(South Australia)(10.58) —I have referred in the Senate previously to my participation in the international observer delegation to the Philippines election. I was the only Australian and was there as a representative of the Liberal Party of Australia-the Australian Government and the Australian Labor Party as a party had refused to participate. The ALP was not prepared to stand up and be counted as supporting the hundreds of thousands of Filippinos who, on this occasion, were working for free and fair elections and were prepared to risk their lives for such free and fair elections. In fact, some 90 did lose their lives in election related incidents. I said that the delegation would issue a report, which it has now done under the title `A Path to Democratic Renewal'. It represents the finding of the mission, which I remind you, Mr President, comprised 44 delegates from 19 different nations. The report is comprehensive, covering an assessment of the electoral law, an assessment of the institutional actors-that is, COMELEC, the Philippine Commission on Elections; NAMFREL, the National Movement for Free Elections; the KBL, the New Society Movement; et cetera-and an evaluation of the electoral process, the political campaign, the role of the media and the administration of the election, looking at the pre-election phase, election day observation, the counting phase and developments during the week following the election. The delegation concluded-I suppose not surprisingly but very regrettably-that the election of 7 February was not conducted in a free and fair manner. It further concluded that because the National Assembly ignored explicit provisions in the Philippines electoral code requiring that tampered or altered electoral returns be set aside during the final counting processes and for other reasons, the proclamation of the National Assembly naming Ferdinand Marcos and Arturo Tolentino the winners of the election was invalid. Mr President, I seek to incorporate in Hansard the short executive summary from the report to which I have referred. Leave granted. The summary read as follows- EXECUTIVE SUMMARY The International Delegation which observed the February 7 presidential election in the Philippines was sponsored by the National Democratic and Republican Institutes for International Affairs and included forty-four individuals from nineteen countries. The co-leaders of the delegation were the former President of Colombia, the Honourable Misael Pastrana, and the Honourable John Hume, a member of the British and European parliaments from Northern Ireland. 1. The delegation concludes that the election of February 7 was not conducted in a free and fair manner. It is our belief that the Government of Ferdinand Marcos and the Commission on Elections (COMELEC) bear the responsibility for this failure. 2. The delegation finds that the National Assembly, the Batasang Pambansa, ignored explicit provisions of the Philippine Electoral Code requiring that tampered or altered Election Returns be set aside during the final counting process-despite protests by representatives of the opposition party. For this reason, and because of numerous other violations of the Code, the delegation concludes that the February 15 Batasang proclamation naming Ferdinand Marcos and Arturo Tolentino the winners of the February 7 election was invalid. 3. At the same time, we observed millions of Filipinos who were committed to making the electoral process work. Principally because of their commitment, the election succeeded in providing a vehicle through which the national will of the Philippines was ultimately expressed. 4. There is no single piece of ``smoking-gun'' evidence which leads to our determination that the election failed to meet a ``free-and-fair'' standard; there are instead many ``smoking-guns.'' They include the following: The campaign period was marked by numerous violations of the provisions designed to curb improper campaign practices and to limit the Government's use of its power to influence the election; The Commission on Elections (COMELEC) did not carry out its responsibility under the election code to provide equal access to the television media during the campaign period. As a result, Marcos benefited greatly from the partisan-owned and influenced television and radio media, though the opposition had reasonable access to alternatives (radio and print) media. COMELEC officials were unable or unwilling to deal with the problem of fraudulent registration. Safeguards designed to guard against double voting, including indelible ink applied to voters' fingers, were in many areas either ignored or unenforced. The combination of these two factors contributed to an undetermined amount of double voting. An estimated 3.5 million voters were disenfranchised on election day when they could not find their names on the voting register. This resulted in a voter turnout of only 76% in this important presidential election, as compared to 89% in the 1984 Batasang election. This is a major dropoff, especially considering the absence of a well-organized boycott for this election. Disenfranchisement appears to have occurred in opposition-oriented provinces or cities. For example, in the ten cities and provinces which had the highest voter turnout, the winner was the ruling party, while in the ten cities and provinces which had the lowest turnout, the opposition won in eight out of ten. Even more striking is that in the cities or provinces where the ruling party won by a margin of 150,000 votes or more, the turnout ranged between 82% and 96% of the vote. On the other hand, in areas where the opposition's margin of victory was greater than 50,000, the turnout ranged between 71 and 81 percent. Virtually all members of the delegation observed or were told by credible sources that voters were being paid on election day to vote for the Marcos-Tolentino ticket. In many areas, carbonized sample ballots were used as proof of an individual's vote and as a receipt for payments ranging between 25 to 500 pesos. Numerous instances of intimidation of voters were recorded by the delegation; members of the military, the Civil Home Defense Forces, and Barangay officials were commonly implicated. Pollwatchers from the designated opposition UNIDO party and the accredited citizen's arm, NAMFREL, were not permitted access to polling in many provinces. Problems relating to the country of votes occurred during all phases of the process. Major discrepancies between the count kept by NAMFREL-based on hard copies of precinct tally forms signed by all members of the Board of Election Inspectors-and COMELEC recurred throughout the week following the election, evidencing attempts to manipulate the vote count. Delegation members reported numerous instances wherein precincts recorded zero votes for Aquino despite the claim of the UNIDO pollwatchers present at the precinct that they voted for Aquino. Hard evidence was uncovered of `ghost' precincts, or fictional polling places, wherein the vote was completely fabricated. In one municipality of Southern Leyte, three such precincts were discovered over and above the 55 authorized. In the 55 legitimate precincts, the vote was 6,371 for Marcos and 5,876 for Aquino. In the three ghost precincts, the vote was 900 for Marcos and 9 for Aquino. While we have no direct evidence, we believe that the interference with the counting process which occurred after election day was not simply a dispute between COMELEC and NAMFREL over their `quick count' agreement; rather we believe this was part of an effort by the Government and its supporters to buy time so that the above mentioned fraud could be undertaken. 5. The above-listed violations were perpetrated by national and local officials who supported the Marcos-Tolentino ticket. While we cannot exclude the possibility, our delegation did not observe a single election code violation by supporters of the opposition party despite efforts undertaken to monitor their activities. Senator HILL —That incorporation has saved me detailing the abuses which were observed by the mission. Let me simply say that examples of such abuses which were observed were, for instance, that an estimated 3.5 million voters were disenfranchised on election day when they could not find their names on the voting register. The mission observed widespread vote buying for the Marcos-Tolentino ticket and observed numerous instances of intimidation of voters by members of the military, the civil home defence force and Barangay officials. Similarly, there were many instances where precincts recorded zero votes for Aquino, despite claims of opposition UNIDO pollwatchers that they had in fact personally voted for Aquino. The mission also received hard evidence of ghost precincts; that is, precincts that simply did not exist. In one such municipality in Southern Leyte, three such precincts were discovered and in each precinct there was a vote of 900 votes against nine-in favour of Marcos. The document to which I am referring is now obviously of largely historical value as a record of electoral abuse. It certainly records abuse which, as we know, the Filipino people ultimately refused to accept. I witnessed the motivation and determination of the young people who ultimately stood unarmed before tanks. They are an inspiration to all of us who treasure democratic freedoms but perhaps sometimes lack the courage to stand up and fight for our beliefs. Those young people, the church, the free trade unions, the independent bar, youth groups and, in fact, millions of Filipinos, now have their country back. But the challenges ahead for the Philippines are enormous. Their expectations are high but their new government faces entrenched abuse in the military, enormous economic problems and great social inequities. Any belief that the New People's Army would lay down its arms has now been shown to be unreal. Its agenda is a different revolution and democracy is not its goal. Regrettably, since Mrs Aquino came to power there have already been some 600 military-related deaths in relation to the NPA and other dissident groups. That presents for Mrs Aquino just one more challenge. The important point I wish to make is that Australia can and must help, first for the sake of the Philippines and the Filipino people, but, secondly, it is in our own interests to help. Obviously a stable Association of South East Asian Nations is important to us. A stable region as a whole is important to us, and the Western alliance is equally important to us. The Philippines is an integral part of that alliance, and I would suggest it pays a much greater price than we do in Australia. The very large United States military bases on its soil is the price it pays-which is of benefit to us. It would be foolish to overstate the role we can play, but through aid, trade and tourism, to mention just a few avenues, we can play a role in helping the Philippines in its economic recovery. It will be up to Mrs Aquino then to ensure a better distribution of that economic growth. That in turn will help the fight against the NPA which has been greatly assisted by economic and social abuse within the country. An improved economic outlook and a few runs on the board will help her greatly in acquiring the confidence she will need to reform the military. I wish to acknowledge the efforts of the international institutes of both the Republican and Democratic parties of the United States who put this mission together. That applies particularly to the Republicans as they invited my Party to participate. Regrettably the Americans are blamed for most that goes wrong in the world and are given little credit for that which goes right. These institutes believed that a role could be played to help the Philippines and democracy and so got out to do something, which, I suggest, is much more useful than staying at home and criticising. Finally, I wish to thank the Liberal Party for giving me the opportunity to participate in the mission. I seek leave to table the report to which I have referred. Leave granted. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.06) —There is no doubt about the adjournment debate in the Senate. All human life passes here. The first three contributions tonight were a spectacular demonstration of that fact. We had in succession corporal punishment, derelict men and the Dalkon shield. Many a tale could be woven around that particular cast of characters. Following that we had Senator Brownhill speaking on colleges of advanced education in New South Wales and Senator Hill on the Philippines. I will ensure that all tonight's contributions, which, with the inevitable exception of Senator Vigor's, were mercifully brief, are brought to the attention of the responsible Ministers, where appropriate. Question resolved in the affirmative. Senate adjourned at 11.07 p.m. The following answers to questions were circulated: (Question No. 806) Senator Mason asked the Minister for Industry, Technology and Commerce, upon notice, on 12 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 answer to the honour- able senator's question is as follows: (1) 6. (2) (a) Australian Industrial Research and Development Incentives Board (AIRDIB); (b) Australian Industry Development Corporation (AIDC); (c) Automotive Industry Authority (AIA); (d) Industries Assistance Commission (IAC); (e) Management and Investment Companies Licensing Board (MICLB); and (f) Steel Industry Authority (SIA). I would like to draw to the Honourable Senator's attention that the Australian Customs Service also exists under the Minister's portfolio. The Service was established by the Customs Administration Act 1985 but is not a statutory authority. (3) Other than normal appeal mechanisms already available through, for example, the Ombudsman Act 1976 and the Administrative Decisions (Judicial Review) Act 1977, the following appeal mechanisms are available within the relevant legislation which established the particular statutory authority: (a) The AIRDIB was established by the Industrial Research and Development Incentives Act 1976. Appeal Mechanisms: Section 41 of this Act provides, amongst other things, that a company which is affected and dissatisfied by a decision of the Board may, after first requesting the Board to reconsider that decision and being informed of the result of its reconsideration, apply to the AAT for a review of the decision reached on reconsideration; (b) the AIDC was established by the Australian Industry Development Corporation Act 1970-no appeal mechanisms; (c) The AIA was established by the Automotive Industry Authority Act 1984-no appeal mechanisms; (d) the IAC was established by the Industries Assistance Commission Act 1973-no appeal mechanisms; (e) the MICLB was established by the Management and Investment Companies Act 1983. Appeal Mechanisms: Section 47 of this Act provides that application may be made to the AAT for review of any decision of the Board to revoke or to refuse to renew a management and investment company licence; and (f) the SIA was established by the Steel Industry Authority Act 1983-no appeal mechanisms. (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. For example, incompetent driving would probably be 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. None of the authorities listed in answer to part (1) of this question is statutorily protected against general liability in tort. (5) (a) The AIRDIB currently has 3 cases before the AAT-there is approximately 6 months delay between listing of a case and its hearing before the AAT; (e) the MICLB does not currently have any cases before the AAT. (6) not applicable-see response to part (4) above. (Question No. 904) Senator Foreman asked the Minister for Industry, Technology and Commerce, upon notice, on 18 February 1986: (1) What percentage of motor vehicles registered in 1985 were company or fleet cars. (2) What numbers of these vehicles will be covered under the new company car tax provisions announced in 1985. (3) What was the average price of the vehicles as opposed to that of the average passenger sedan. (4) Which of Australia's major motor vehicle manufacturers supply fleet cars and what percentage share does each company have of this market. (5) What numbers of company or fleet cars are fully imported. (6) What numbers of company or fleet cars exceed $25,000 in cost and hence in the luxury class. Senator Button —The answer to the honour- able senator's question is as follows: (1) 40.4 per cent of passenger motor vehicles registered in 1985 were company or fleet vehicles. This does not include Western Australian registrations which are not separately recorded by ownership category because of State Government confidentiality requirements. These registrations include taxis and daily rental vehicles. (2) The tax will apply to any employer-provided motor vehicle (i.e. passenger car, station wagon, mini-bus, panel van, utility or other commercial vehicle with a designed load capacity of less than 1 tonne or 9 passengers) that is used by an employee for private purposes. An exemption will, however, be granted for panel vans, utilities and other commercial vehicles (but not normal passenger cars, station wagons or mini-buses), where private use is restricted to home to work travel and other private use that is incidental to the business use of the vehicle. From the available statistics it is not possible to identify all the vehicles that may be liable for the tax. Table 1 summarises the company or fleet registrations for 1985 but does not include any commercial vehicles that may be liable. Table 1 New Vehicle Registrations By Ownership* 1985 Owner Number of registrations Commonwealth Government... 4,308 State Government... 17,355 Local Government... 5,579 Hospitals and institutions... 1,381 Business... 158,696 Sub-total... 187,319 Taxi... 832 Daily Rental... 13,875 Private... 298,196 Sub-total... 312,903 Total... 500,222 * Due to State confidentiality requirements, Western Australian registrations are not separately recorded and are included as private ownership. Source: IDAPS. (3) It is not possible to define or estimate the price of an average passenger sedan (but the average values for Falcons and Commodores are slightly over $15,000). The estimated average price (at September 1985 published retail prices) of fleet vehicles that could be liable for tax is around $16,500 and for the total passenger vehicle market around $15,500. These estimates do not take account of fleet discounts or the cost of optional fitments, such as airconditioning, power steering, etc. (4) All local manufacturers supply vehicles to fleets. The fleet market share for 1985 is shown in Table 2. Table 2 Share of Fleet By Local Manufacturers* Manufacturer Share of fleet Per cent Ford... 36.5 GM-H... 22.0 AMI Toyota... 11.0 Mitsubishi... 9.4 Nissan... 7.3 Other... 13.8 * Excludes Western Australia-see note for Table 1. Source: IDAPS. Note: Local manufacturers also import vehicles and their share of the fleet market includes both local and imported products. (5) Approximately 33,500 imported vehicles were included in fleet registrations in 1985. This figure includes an estimate for fully imported vehicles supplied by local manufacturers. (6) 1985 fleet registrations included 13,395 vehicles with an average model value over $25,000. Total registrations included 18,525 vehicles above this value. (Question No. 993) Senator Reid asked the Minister for Community Services, upon notice, on 19 March 1986: (1) How many submissions were received from organisations in the Australian Capital Territory (ACT) in 1985 for capital funding under the Aged or Disabled Persons Accommodation Program. (2) Who were the organisations concerned. (3) Which of those organisations in (2) received funding. (4) Which of those organisations in (2) did not receive funding and why in each case was that so, in view of the needs of the aged and disabled in the ACT. Senator Grimes —The answer to the honourable senator's question is as follows: (1) Three. (2) Royal Freemasons Benevolent Institution of NSW (50 bed hostel project); Sir Leslie Morshead War Veterans Home Inc. (25 bed hostel project); Southern Cross Homes Inc. (ACT) (6 self-contained units). (3) None. (4) Proposals for capital funding assistance are considered on a National basis with priority being established through a ranking score. In line with Government policy certain community groups are also given priority for capital funding. These are ethnic groups, Aboriginals and young disabled people. The National Ranking Score is based on comparison of need for additional beds to the number of existing beds in an area. In the case of hostels and self-contained units, the area of need is determined by Local Government Areas. Neither the Royal Freemasons Benevolent Institution of NSW nor Sir Leslie Morshead War Veterans Home Inc. were accorded a sufficient National Ranking Score in comparison with other proposals. In relation to the proposal by Southern Cross Homes Inc. (ACT), they proposed high ingoing donations ($15,000-$20,000) from each intending resident. This does not comply with the Government's policy to assist financially disadvantaged people as a target group. Additionally the capital cost per bed was unacceptably high (preliminary estimate of $37,000/unit) and the project did not attract sufficient priority. (Question No. 921) Senator Short asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 18 February 1986: (1) What grants have been made to trade unions or business organisations to employ artists in the creative arts in 1985. (2) What is the name of the sponsoring group, and the amount involved, in each case. (3) For what specific purpose were these grants made. (4) Were the people involved employed through the Commonwealth Employment Service and did they meet the Community Employment Program guidelines in all instances. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) One Community Employment Program (CEP) project, approved in 1984 and completed on 30 April 1985, was sponsored by a trade union organisation to employ artists in the creative arts. No grants to employ artists in the creative arts were made to business organisations. (2) and (3) The Victorian Trades Hall Council and the Australian Council of Trade Unions jointly received funds of $197,385 to employ 10 art workers for 40 weeks in various unions to co-ordinate arts projects in the workplace, educate workers in the arts and assist unions to develop appropriate arts policies and activities. (4) The 10 art workers were all disadvantaged unemployed persons prior to their CEP placement and all were recruited through the Commonwealth Employment Service. (Question No. 934) Senator Bolkus asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 20 February 1986: At what stage is Australia's health and safety legislation and will it provide for such freedom of information to workers, given that the ``Right to Know'' laws enacted in 20 US states provide that workers be informed about the health effects of any toxic substances used in the workplace. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: It is intended that occupational health and safety legislation will be introduced in the current session of Parliament. The legislation will cover areas of Commonwealth jurisdictions, including the Australian Capital Territory and Australian Government employment. It will impose duties of care upon employers and others, and will provide for the participation of employees in decisions affecting their health and safety at work. Employers will be obliged to provide employees with such information and training as are appropriate to ensure their health and safety in the workplace. The States and the Northern Territory will retain responsibility for the legislation on occupational health and safety relating to their respective jurisdictions. (Question No. 955) Senator Reid asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 11 March 1986: (1) How many young people applied for the youth traineeships within the Australian Capital Territory. (2) How many young people have been placed in traineeship positions. (3) Where are the positions located. (4) What length of time elapsed from application to placement. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) 431 young people sat for the traineeship selection test to enter the Australian Public Service in the Australian Capital Territory. (2) 153. (3) The positions are located in 32 Commonwealth departments and authorities, as follows: ACT Schools Authority... 1 Attorney-General's Department... 3 Australian Audit Office... 4 Australian Archives... 2 Australian Bureau of Statistics... 8 Australian Customs Service... 4 Australian Government Retirement Benefits Office... 2 Australian Taxation Office... 6 Department of Aviation... 2 Department of Communications... 1 Department of Community Services... 3 Department of Defence... 20 Department of Education... 10 Department of Employment and Industrial Relations... 13 Department of Foreign Affairs... 1 Department of Housing and Construction... 9 Department of Immigration and Ethnic Affairs... 3 Department of Industry, Technology and Commerce... 3 Department of Local Government and Administrative Services... 5 Department of Primary Industry... 5 Department of the Prime Minister and Cabinet... 4 Department of Resources and Energy... 3 Department of Science... 6 Department of Social Security... 10 Department of the Special Minister of State... 2 Department of Territories... 10 Department of Trade... 3 Department of Transport... 2 Department of the Treasury... 2 Department of Veterans' Affairs... 4 Industries Assistance Commission... 1 The National Library... 1 (4) Applicants sat for their selection tests on either 14 December 1985 or 18 January 1986 following two rounds of advertising. All trainees were placed on 10 March 1986. Senator Walsh —On 18 February 1986 Senator Sheil asked me, as Minister representing the Minister for Employment and Industrial Relations, the following question without notice: Will the Minister representing the Minister for Employment and Industrial Relations explain how his Government can justify the following five community employment program expenditures: Firstly, the allocation of over $47,000 to the unilateralist Campaign for International Co-operation and Disarmament; secondly, $96,000 to the pro-Moscow People for Nuclear Disarmament; thirdly, $249,000 to the Victorian Trades Hall Council to set up a trade union `Art in Working Life' program; over $110,000 to the Victorian Teachers Union to fund a women's affirmative action handbook; and fifthly, over $37,000 to the Italian Community Welfare Information Service, which is a front for the Italian Communist Party? Will the Minister also inform the Senate of how many other leftist and subversive groups and activities are being funded by this Government, using the CEP scheme to launder the money? In my reply, I undertook to refer the question to the Minister for Employment and Industrial Relations. The Minister has provided the following response: The organisations mentioned by Senator Sheil have received funding under the Community Employment Program (CEP). The funding levels are as Senator Sheil has mentioned with the exception of the Victorian Trades Hall Council's `Art in Working Life' Project. The CEP grant for this project was $197,385. The expenditure of CEP funds can be justified on the basis that each project complied with CEP guidelines and criteria for funding, including the provision of additional worthwhile employment opportunities appropriate to the long-term unemployed and others specially disadvantaged in the labour market. Details of the political philosophy of prospective sponsors and participants are not sought. Accordingly, I am not in a position to answer the last part of Senator Sheil's question.