Friday, 6 June 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 9 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: The proposed Australian Bill of Rights Bill 1985 will endanger the Federal system in Australia, the State and Federal criminal justice systems, the State and Federal Police Force, the State and Federal education system, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and the Australian Society generally. Your petitioners therefore humbly pray: That your Honourable House defer debate on the Bill for twelve months and circulate the Bill for twelve months for the widest possible debate, scrutiny and discussion, and your petitioners as in duty bound will ever pray. Do you believe you have the right to live a free life in society? If you believe you want rights of justice and freedom please make a statement by signing this petition. This is your right and perhaps one of the few that is left. by Senators Brownhill (from 201 citizens) and Mason (from 64 citizens). To the Honourable the President and the members of the Senate in the Parliament assembled. The petition of the undersigned respectfully showeth: That certain Trade Unions are currently forcing employers and employees to join union-controlled Superannuation schemes through industrial blackmail, thereby extending the Unions' economic power and at the same time infringing individual rights. Your petitioners therefore humbly pray that the Government: (i) Guarantee that Occupational Superannuation is a matter of individual choice. (ii) Declare illegal industrial standover tactics which force people to join superannuation schemes controlled by, or sponsored by, trade unions. (iii) Protect those companies and their employees who establish their own superannuation arrangements at the enterprise level. (iv) Ensure that union or industry-based schemes are not disguised pay rises by providing that employees must also make contributions. (v) Provide that control of the funds of such schemes is vested in the elected representative of the contributors to those schemes. (vi) Oppose any backdoor attempts at achieving compulsory unionism. And your petitioners as in duty bound will ever pray. by Senator Parer (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. Your Petitioners most humbly pray: (i) that the Hawke Labor Government pass on the full benefits of lower international oil prices on March 1st, 1986; and (ii) that the Hawke Labor Government does not increase or extend fuel taxes and your Petitioners, as in duty bound, will ever pray. by Senator Parer (from 39 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The Petition of certain citizens of New South Wales 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 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 farmers in the organisation of their 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 Michael Baume (from 15 citizens), Brownhill (from 33 citizens) and Chaney (from 14 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned members of the Shop, Distributive and Allied Employees' Association and Australian citizens respectfully showeth that: 1. The Sex Discrimination Act, passed by parliament in 1984, will automatically make unenforceable from 1st August, 1986 the weight lifting limits applicable to women employees and contained in State laws, regulations and awards. 2. These weight lifting limits have applied throughout Australia for many years and have acted to prevent many injuries at the workplace, thereby avoiding much suffering and loss of working time. 3. The removal of this protective legislation will increase the rate of injury among women employees and lead to greater Workers' Compensation costs for employers. 4. The weight lifting limits do not in any way hamper the achievement of equality and equal opportunity in employment for women employees in the workforce. Your petitioners therefore pray that the Parliament will amend the Sex Discrimination Act to enable the weight lifting limits for women employees to continue. And your petitioners as in duty bound will ever pray. by Senator Harradine (from 77 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: whereas the Federal Government is spending increasing amounts to alleviate damage done to human lives by family break-up, desertion by spouses, divorce, children in ``latch-key'' situations, juvenile crime and drug addiction, it is most inconsistent for that Government to lessen in any way the support that Australian families need to help them to survive. Your petitioners therefore humbly pray that the Senate in Parliament assembled should: 1. reject any proposed cuts to the support now provided to families by way of family allowance; 2. reject any proposal to introduce a ``flat-rate'' family allowance, but rather keep family allowance fully proportional to family size; and 3. reject any proposal to abolish or diminish the dependent spouse tax rebate. And your petitioners as in duty bound will ever pray. by Senator Parer (from 340 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned, having concern because of the spread of moral pollution in our nation call upon the Government to introduce immediate legislation: 1. To provide strict controls over importation, production, sale, hire or mailing of video-cassettes with the open sale of only G, PG, and M rated video-cassettes; and the total prohibition of the sale of R rated video-cassettes so that R rated films can only be viewed in an adult theatre by persons over 18 years. We totally reject the concept of ``X'' rated video-cassettes which would allow the legal sale of hard-core pornographic films for screening in the homes of our nation, which endanger our children. 2. To dramatically improve the Federal Attorney-General's Guidelines for Classification of Video tapes/discs which restrict the importation, production, sale or hire, screening in private homes and mailing by Australia Post so as to include the total prohibition of any pornographic, obscene or blasphemous video cassette, or film containing child pornography, bestiality, sodomy, group sex, violent sex acts with women, such as rape and pack rape, sadism and torture, etc. Your petitioners therefore humbly pray that your Honourable House will protect our society, especially women and children from moral pollution and its harmful effects. And your petitioners as in duty bound, will ever pray. by Senator Brownhill (from 13 citizens). To the Honourable the President and members of the Senate in Parliament assembled: the humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the proposed Bill of Rights because it adversely affects areas of the liberty and freedom of Australians. It will operate against: The States and our Federal system of Government Criminal Justice The Police Education Families Employer/Employee relations It will remove the power of the people through Parliament, by giving power to a new powerful Human Rights Commission which is not elected, but can act as a Star Chamber. We do most earnestly wish to keep our system of Common Law. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject this Bill. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 51 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia shows that the proposed Fringe Benefits Tax recently introduced into the House of Representatives by the Labor Government will increase the cost and inhibit future growth of small business in this great Nation. Your petitioners request that the Senate in Parliament assembled should reject this regressive Legislation as a matter of utmost urgency in the interests of the well being of all Australians. And your petitioners as in duty bound will ever pray. by Senator Walters (from 198 citizens). To the Honourable the President and members of the Senate in Parliament. The petition of the undersigned shows: Concern with the lack of adequate Rights of the Child in Australia. Your petitioners request that the Senate, in Parliament assembled should: Seek to require Amendments to Australian Bill of Rights, to include the full Principles of the Declaration of the Rights of the Child of Geneva 1924, into Article 14 (Rights of the Child) of the Australian Bill of Rights. And your petitioners as in duty bound will ever pray. by Senator Alston (from 166 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully shows: That we strongly support ``The A.C.T. Smoking and Tobacco Product Advertisements Prohibition Bill'' introduced by Senator Evans, because it represents the first positive national step towards the eventual elimination of widespread serious ill health caused by smoking tobacco. by Senator Vigor (from 60 citizens). To the Honourable the President and the members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia showeth: That many Australian wage and salary earners and self-employed persons do not enjoy secure retirement incomes provided by superannuation; and That the Government issued in December 1985 Guidelines for the implementation of the proposed productivity decision by the Conciliation and Arbitration Commission and draft Operational Standards for Superannuation schemes. Your petitioners therefore humbly pray that the Government: 1. Guarantees to every employee the right and freedom to select the superannuation scheme of his/her choice. 2. Protects the individual exercising that freedom of choice from any coercion, influence or other pressure which may be applied by any employer, association or trade union. 3. Will recognise only those schemes which provide genuine superannuation and reject those schemes which do not provide for- preservation of benefits to retirement vesting of employer contributions equal employer and employee Trusteeship control to ensure security of investments. And your petitioners as in duty bound will ever pray. by Senators Archer (from 13 citizens) and Robertson (from 10 citizens). Petitions received. Senator BOSWELL(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate, noting that 6 June is Queensland Day, the day celebrating the proclamation of statehood in 1859- (a) congratulates the Queensland people and the Queensland Government on the outstanding contribution that Queensland has made to Australia's prosperity and well-being; (b) notes that with 16 per cent of the population, Queensland earns 23 per cent of the export earnings of Australia; (c) notes that in housing, Queensland has produced 20 per cent of the total number of dwelling units in the country; and (d) notes that in commercial buildings, Queensland produced 20.2 per cent of the value of all non-residential buildings and created 72,000 jobs or 20 per cent of all jobs in Australia in the 12 months ended 18 April 1986, wishes continued prosperity and wealth to all Queenslanders. Senator BOSWELL(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) acknowledges the valuable contribution the former Leader of the Country Party, The Rt Hon. Sir John McEwen, made to the prosperity and well-being of this nation; (b) recognises that the policies that were laid down at the time that the Rt Hon. Sir John McEwen was Deputy-Leader of this nation led to: (i) Australia having the third highest standard of living in the world which has now slipped to twenty-first place due to the incompetency of this Federal Government, (ii) Australia having a negative unemployment rate compared with today's unemployment rate of around 9 per cent due to this Government's high interest rate policies, and (iii) Australia having a low home interest rate of 5 to 6 per cent compared with the current high home loan interest rates of 15 per cent and general rates of interest at 20 per cent; (c) calls on the Federal Government and the Minister for Industry, Technology and Commerce (Senator Button) in particular, to recognise their own incompetence in having mismanaged the Australian economy and to cease placing the blame on the former Leader of the Country Party for Australia's economic recession; and (d) condemns Senator Button for having challenged Senator Boswell on 5 June 1986 to defend the policies of the Rt Hon. Sir John McEwen, then refusing him leave to make a statement and responding to that challenge. Motion (by Senator Grimes)-by leave-agreed to: That the order of Business on Tuesday, 10 June 1986 be as follows: (1) Petitions (2) Notices of motion (3) Ministerial statements (4) Formal Motions-Discovery of Formal Business (5) Postponement and re-arrangement of Business (6) Business, as set down on the Notice Paper (7) At 2 p.m., Questions (8) Any proposal pursuant to Standing Order 64 (9) Consideration of Government Papers pursuant to Sessional Order (10) Further consideration of Business, as set down on the Notice Paper. Messages received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to the following Bills: Income Tax Assessment Amendment (Capital Gains) Bill 1986 Australian Federal Police Amendment Bill 1986. Debate resumed from 5 June, on motion by Senator Grimes: That the Bill be now read a second time. Senator CHANEY(Western Australia-Leader of the Opposition)(9.08) —The Senate is considering the Customs Tariff Amendment Bill 1986 and the Bounty and Subsidy Legislation Amendment Bill 1986 in a debate that commenced last night. I have pointed out that, while this legislation is important, it is a relatively minor part of trying to ensure that Australian manufacturing industry has a future in Australia. Last night I was emphasising the importance of providing a competitive environment for manufacturing and the failure of the Government to do so. As a result of that failure we are now getting all sorts of concerns being expressed within the Government itself by people such as Dr Theophanous and Mr Bob Brown and, of course, by the trade union movement about the failure of the Government's industrial policy. Over the last few days in the Senate we have heard the Minister for Industry, Technology and Commerce (Senator Button) making various admissions as to why there has been a reduction in investment over recent quarters. Senator Button admitted that interest rates were a very significant factor. He referred to uncertainty about the dollar. Yesterday he agreed that wages were an important element in determining the attitude of industry to investment and to future prospects. Now, at the time we are debating these Bills, we have discussions between the Government, industry and the trade union movement on the possible further discounting wages. However, one can only note with dismay the comments made by the leader of the Australian Council of Trade Unions, who suggested that, while the trade union movement may be prepared to recognise that there is a need for some further discounting, it is clearly not a discounting that should take place now. There appears to be no intention to interfere with the wage case currently before the Conciliation and Arbitration Commission. I can only express regret for that, given the very doleful view of the economy which has been expressed by the Treasurer (Mr Keating). It is also faintly ludicrous that we have a situation in which the Government is now talking to industry about interest rate subsidies for businesses making investments. It seems a very long way away from the Government's stated intentions of producing a more open and competitive economy where there is less reliance on forms of industry assistance than there has been in the past. This Government is now talking to both trade unions and private enterprise about whether taxpayers should be called upon to subsidise the investment in Australian industry which is required if we are to recover our economic capacity and whether taxpayers' money should be devoted to paying part of the interest bill which industry would otherwise have to pay. I can only say that there could be no clearer indication of the failure of the present Government to provide an environment which is appropriate for business than the fact that it has to get into the business of interest rate subsidies. It is only two days since Senator Button admitted in the Senate that the intentional high interest rate policies of this Government were introduced to slow down investment and to slow down economic growth in this country. About half a year after the Budget was brought down the Government is going into precisely the reverse position and talking about subsidising interest on business borrowings. That shows what a high degree of incoherence there is in the Government's present administration of economic policy. I turn to the Customs Tariff Amendment Bill 1986, which-with the one exception, which I will detail-the Opposition will support. It comprises a number of fairly substantial amendments, including the new developing country preference scheme, changes in assistance for telecommunications equipment and related parts and the removal of duty on grain harvesters and parts following the implementation of bounty payments. That last measure, of course, has the support of the Opposition. The Bill also introduces the Forum Island preference scheme-which is a simplified scheme of reimport concessions-new assistance arrangements for tableware and other goods, a reduction in the wool content requirements for wool carpets from New Zealand and a number of other lesser amendments. Notwithstanding our general support for the Bill, in the Committee stage we will move a request to seek the reversal of the proposed increases in tariffs for optical fibre and optical fibre cables and we will draw the attention of the Government to some anomalies which will result after the implementation of some of the amendments. I would like the Minister for Community Services (Senator Grimes) in his reply to deal with wool carpets. The legislation provides that an agreement made under the closer economic relations agreement will allow a reduction in the wool content in the pile of wool rich New Zealand carpets that are eligible for duty free entry. This is a reciprocal arrangement retrospective to 2 August 1985, the date on which letters were exchanged between the relevant Ministers. Representations have been made by the Carpet Institute of Australia, which has expressed concern about the fact that New Zealand is not making the same statutory changes as are being made by Australia and the Commonwealth and there is some concern about whether the arrangements are truly reciprocal. I would appreciate some reassurance from the Minister as to whether there is any significance in the different way that New Zealand is implementing the arrangement which was entered into between the two countries last year. I note our support for the removal of duty on grain harvesters and move to the provisions which relate to telecommunications and related equipment. The Industries Assistance Commission examined this industry in 1984 and recommended a phased reduction of the general 30 per cent tariff rate to 20 per cent over two to three years. In this Bill the Government proposes a 20 per cent rate phased in over four years. The Opposition will support this notwithstanding the slower rate of phasing which the Government has introduced. The Government, in accordance with the IAC recommendation, is supporting increases in the tariff applicable to optical fibre and optical fibre cables. The Opposition disagrees with these changes and considers that the tariff rates for these products should not be increased. That decision is one which, on balance, is the argument for making the changes that basically relate to the desire to have uniformity of tariff with other communications equipment and to have some reasonable parity between the tariff imposed on copper cable and that for optical fibre which is the subject of this legislation. The Opposition pays some heed to the principle of neutrality but, as I will indicate a little later, we believe that that very worthwhile principle should not be followed in this case and that we should not be adding an additional tariff in this important new area. The other argument which might be used to support the Government's proposal for a 20 per cent tariff is that apparently there is something of an oversupply of optical fibre in the world market at the moment. The world market is genuinely very competitive, and that is a further argument which might be used to support the Government's decision. On the other hand, the Opposition has a very substantial concern that we are dealing with an important new item which is going to be very important in the development of communications and related industries in Australia. Effectively, we are dealing with an intermediate good, and the Opposition is reluctant to see what should be very important growth industries in the future saddled with very high cost inputs. Part of our opposition to this is based on the fact that we believe that it is fundamentally important, as Senator Sir John Carrick pointed out in a very important speech he made to the Senate earlier this week, that we should be tackling industry costs wherever we can. To take government action which will increase industry costs is thoroughly counter-productive in the situation in which Australia currently finds itself. We do not want to see potential growth industries put under burdens of the sort which will be imposed by this legislation. The second reason we are opposing the increase in tariff is that the new industry was established in Australia prior to this tariff decision being taken by the Government. In other words, those people who invested in the industry in Australia did so knowing that there was a fairly benign purchasing policy for Telecom Australia, but without any offer or any guarantee of assistance of the sort which is now being offered by this legislation. So people have been prepared to invest in new plant where there is no tariff protection, and now the Government is saying after the event that tariff protection will be offered. We think that is a very illogical approach to be adopting. The third reason why we are concerned arises from the representations which were made by the industry itself through the Australian Electrical and Electronic Manufacturers' Association. In the representations which were made to us, in support of the Government's decision, it was pointed out: There is intense competition for tenders, and prices currently on offer are close to world prices. That is, internal competition will ensure that the tariff will not be fully used in terms of its expected impact on prices. So even at the point before we actually have the tariff in place, the industry is indicating that it is likely that the tariff will not be fully used because of the highly competitive situation which exists. It seems to me to be quite ludicrous in this highly competitive situation to be imposing new levels of protection which will ease that competitive pressure when, in fact, that competitive pressure is precisely what Australian industry needs if it is to be outwardly looking and internationally competitive in the way Senator Button claims industry must be. In that claim he is supported by the Opposition. The fourth reason the Opposition is opposing this 20 per cent tariff is that the industry is already obtaining some aid through the assistance which is available to it. That point is well made in the IAC report where it is pointed out that there has been considerable support for research and development. On page 62 of the report it states: Local manufacture of optical fibre and optical fibre cable currently receives substantial government assistance. IR&D grants have been worth an average of about 100 per cent and 30 per cent of optical fibre and optical fibre cable output respectively over the last three years. Since production of both products is very recent in this country, that might be regarded as a temporary phenomenon. Indeed, using projections of output provided by witnesses, the rates of nominal (and effective) assistance for both products drop below 10 per cent within a year or so if the average IR and D grant for the last three years were to continue. The point is that there has been a substantial level of assistance granted and there will be some continuing assistance through these means. I suppose that the fifth reason we would oppose the 20 per cent tariff is that when there is already a competitive market in Australia it seems a pity to be establishing a tariff which may entice other people to enter into manufacture purely because of the availability of that additional protection. That is not the way we want industry to shape up for what no doubt will be a very difficult and competitive future. In the Committee stage we will move a request for an amendment to that part of the Government's proposals. The only other matter which I think really needs attention in the legislation is the changes the Government has made to the developing countries preference scheme. Those changes are important not only from the point of view of the immediate impact on trade and Australian industry but also because Australia has been a leader in the field in establishing developing countries preferences. If one studies the report of Dr Helen Hughes, which is the basis for the change the Government is putting forward, one would have to say that, with the wisdom of hindsight, there may have been more effective ways of providing assistance for developing countries. Dr Hughes points out that to some extent this simply encourages distortions in trade rather than the creation of new opportunities for developing countries. It must be said that the changes the Government proposes, which are in accordance with Dr Hughes's recommendations, impose some order in an area that at present is very confused. The adoption of a general 5 per cent preference is a step in the right direction. It will be more readily understood by our trading partners and by industry within Australia. The fact that the Government has not proposed to admit exceptions is at least a step in the direction of certainty. The Opposition supports the changes that are being made to the developing countries preference scheme. The Government will need to examine very carefully the impact this will have, including the modifications that might need to be made to some of the recommendations of the IAC, where in a number of cases, for example in the recent chemicals report, it suggested that assistance should be provided and that there be no developing country preferences available. I should like some indication from the Minister as to how the Government intends to deal with recommendations of that sort. My assumption is that the Government will stick to its developing countries preference arrangements as established in this legislation and make any necessary adjustments to the assistance provided to particular industries in Australia, taking that into account rather than again getting into the business of making ad hoc changes to the developing countries preference scheme. I do not think any other matter needs to be addressed because in general the matters have been addressed in broader decisions made by the government with respect to particular industries, and they have had the support of the Opposition. I turn very briefly to the Bounty and Subsidy Legislation Amendment Bill 1986. This Bill is fairly uncontentious. It makes various amendments to six separate bounty Acts and one subsidy Act. In all these cases, since we have supported the basic arrangements brought down for computers, steel products, ships and so on and since the proposed changes do not alter the intent of the schemes, we will support the legislation. Since the Minister is now in the chamber I wish very quickly to recapitulate a number of points I made before he returned. It is a matter of great concern to the Opposition that after a very lengthy period in which the Government has tried to establish a rational framework for the development of Australian industry very considerable confusion now appears to be emerging in the Government's approach to economic management and to the manufacturing industry in particular. Senator Button's admission over the last few days that investment in manufacturing is affected by a number of factors-by interest rates, by uncertainty about the Australian dollar and by the situation with respect to wages-reminds us that these fundamentals, which provide the framework for industry, are far more important than the industry specific measures which are before us today. We are now in a situation in which the Government is talking to its trade union partners in the ACTU about the possibility of discounting wages. However, it has been made quite clear that there will be no further discounting in respect of the current wage case. I ask the Minister whether we are in a position where the postponement of action is appropriate, given the very great difficulties we face internationally and, as a result, internally. I also note with very deep regret the fact that the Government sees itself as having to tackle the problem of investment being impeded by high interest rates by raising the possibility of interest rate subsidies to manufacturers. It seems to me that this is a return to many of the industry practices of the past which the Government had indicated it was trying to get away from. It is tackling the symptom; it is not getting to the cause of the problem. It is a situation in which taxpayers are being called upon to provide a subsidy in the form of a reduction in the interest rate which will have to be payable by business investors. I think this is completely out of tune with the general approach which has been talked about by the Minister for Industry, Technology and Commerce over his three years in office. We have, in the interests of the redevelopment of the Australian industry, been prepared to give very ready support to those policies of the Government which we think have been in the interests of Australian manufacturers. We now see a situation in which the general environment being provided by the Government is quite incompatible with the general thrust of industry policy. We call upon the Government to make changes to its fundamental approach to economic management which will give some sense of realism to the industry policies which have been pursued by Senator Button. Senator VIGOR(South Australia)(9.27) —The tariffs which are the subject of the Customs Tariff Amendment Bill 1986 and the Bounty and Subsidy Legislation Amendment Bill 1986 are very blunt instruments for the protection of Australian industry. I would like to give an example. Tariff protection for Australian produced grain harvesters and combines increases the cost of all imported machines to match the protected price of Australian made machines. In turn, the costs of Australian primary producers are increased by that amount. According to the second reading speech of the Minister for Community Services (Senator Grimes), the estimated cost of this tariff to Australian farmers would be around $8.25m annually. The increased farm costs of grain production results in decreased profit margins for Australian farmers when their produce is exported and sold at ruling world prices. In turn, the decreased capacity of Australian farmers to buy Australian harvesters means that Australian manufacturers of grain harvesting equipment have a net decrease in local sales. So, in the case of grain harvesters, the effect has been exactly the opposite to that which the Minister for Industry, Technology and Commerce (Senator Button) has been trying to obtain. It is likely that overall tariff protection for this manufacturing industry significantly decreases sales and, commensurately, decreased the profitability of that industry. It also puts the burden of protection for the harvester manufacturing industry on to the shoulders of the farmers. This unjust burden in turn has meant a flow-on need for rural industry support. This has meant that more Government money has flowed outwards and as a result the Government got less revenue from this activity. It is possible for tariffs to act against the interests for which they were originally put on. As I said, tariffs are, indeed, a blunt instrument. They are a very ineffective tool and result in a very messy business situation because they cannot be directed specifically at an individual industry. It is with some pleasure that I notice that the Government is looking more towards subsidies and bounties and I am very happy with the Bills. For the same reason, I commend the Government's reduction in tariffs on most imported telecommunications products and components. However, tariffs on telecommunications products and components will be reduced only from 30 per cent to 20 per cent. At the same time a new tariff will be introduced to protect Australian manufacturer of optic fibres. We believe in a system of equity. The fledgling industry of fibre optics probably can do with some protection. We would have much preferred a bounty or subsidy system brought in for that industry, which could have been directed in a proper way and not affected those people who use optic fibres as raw materials in their manufacturing process. Tariffs have a first order advantage over subsidies. Senator Sheil —Can you tell us whether you have any evidence as to why the fibre optics industry needs protection? Senator VIGOR —Senator Sheil has asked why the fibre optics industry needs protection. I will deal with that in detail later in my presentation. We need to develop new types of fibre optic equipment. We also need to handle optical logic equipment within Australia. I believe this would flow on from having a vibrant and competitive industry within Australia which is protected from what is happening in the rest of the world. Tariffs raise money for the Government. They are a tax on imports of certain goods. On the other hand, bounties and subsidies cost money for the Government and that money must be raised by increasing taxes in other areas. The Government's inconsistent use of tariffs to protect fast growing telecommunications and optic fibres markets is coupled with its change from tariffs to bounties in many other more static markets. This can only be explained by the money that the Government hopes to raise by these measures. I am not certain that that is a good industrial policy. I seek leave, Mr Deputy President, to have incorporated in Hansard a table showing the growth in Australian imports of telecommunications equipment in the last five years and our decreasing exports of such equipment. This is a table from the report of the Australian Science and Technology Council entitled `Telecommunications Research and Development in Australia'. Leave granted The table read as follows- Australian Trade in Telecommunications Equipment 1979-80 to 1983-84 Year Imports ($ million) Exports Exports Imports 1979-80... 246 40 0.16 1980-81... 247 35 0.14 1981-82... 334 36 0.11 1982-83... 370 68 0.18 1983-84... 410 46 0.11 Source: Derived from ABS Statistics. Senator VIGOR —I thank the Senate. This is yet another symptom of the piecemeal, short-sighted and compromising attitude of the Government. I repeat: Tariffs are indeed a blunt tool. In this instance tariffs will fall heavily on imports of components used in manufacture of computers and telecommunications equipment. Yet it is this very industry that the Government hopes to establish in Australia. Companies that manufacture computers in Australia are highly export oriented. They need to be. The government does not buy their computers. Instead of buying locally made computers, the government buys foreign computers through the Department of Defence and other bodies. Australian public servants play safe and buy cheaply from the big boys. We have a colonial cringe mentality in Australia which means that we do not appreciate our own industry. This is really a problem that is not helped by this type of tariff program. The failure of the Australian Government to buy Australian products poses extra problems for our computer manufacturers in their export efforts as foreign governments ask immediately how many computers have been installed by our Government. The answer is that the number is quite small. So our manufacturers find it difficult to break into new government markets overseas. Telecom Australia and the Department of Defence have a very bad record for buying foreign equipment in preference to the equivalent local product. Other countries support their industries with preferential buying policies and assume generally that the Australian product must be very bad if our Government does not support an Australian manufacturer by buying his products. I support affirmative action for Australian industry. Australian public servants must explain their reasons for not buying Australian products, rather than being able to hide behind the `safe option'. They must always, in their buying policies, take into account the eventual cost to Australia from dependence on foreign suppliers and long lines of communication. I ask the Minister what he will do about this `buy Australian' policy. Almost all components used to manufacture telecommunications and computing equipment in Australia are imported. Extra costs of tariffs on imported components raise the cost of Australian manufacture of computing equipment. This imposes an extra burden on the industry when it comes to compete in export markets and decreases its viability. Bounties are a much more useful tool for protecting Australian industry. I hope that the Government will implement a bounty policy. Bounties can be given at varying rates depen-ding on particular aspects of an industry which the Government wishes to encourage. This does not distort the rest of the market in any way. For example, bounties can apply to selected components as well as to end products which use those components, thus doubly assisting the industry, rather than the effects tariffs have of penalising end users. We can actually make certain that certain manufacturing standards are followed by putting bounties on products with a certain technological content. Bounties are paid by the whole community and do not unfairly penalise one sector or one group, as do tariffs. The benefits to Australia of a buoyant export industry must be weighed in the balance with the cost of establishing that industry and supporting it against unfair and subsidised trading practices in other countries. Continuing support for Australian industry, on the other hand, can lead to our industry being uncompetitive, as has been raised by Senator Chaney. We can become lazy about improving our products and manufacturing processes. We can become slack about marketing our products abroad. This has been a problem in Australia for many years. We have looked at our industries as import replacing industries, rather than dynamic export-directed industries. Australian industry spends far too little on research and development to improve our productive capacity. We invest far too little in modernising plant and equipment. We rely far too heavily on local protected markets. We seek added protection when we should be looking to decrease costs and improve our product quality. I now turn to the fibre optics market which is experiencing a growth rate of between 40 and 60 per cent per annum, reflecting its high growth nature and its association with the telecommunications industry. Fibre optics have advantages over other communications media. They have a higher carrying capacity and cost effectiveness, a better performance than conventional metal cables, radio or microwave transmitters, or even satellites, and are much less vulnerable to interference, much less vulnerable to tapping. They are being used in an increasing range of military and civil applications. Their performance is improving remarkably and their price is falling at a rate of around 25 per cent per annum. Australia's telecommunications laboratories have developed new types of glass fibre made out of new materials like gallium fluoride, which can carry signals in the near infra-red region at almost 100 times the efficiency of conventional silica glass fibres. We need to protect this type of industry. This makes intercontinental optic cables extremely attractive, compared with satellites, as a means of long distance communication between large centres, and there is no chance of their being shot down. Potential export markets for such optic fibre cables are huge. However, tariffs imposed on components used by Australian manufacturers of optic fibre communication equipment may throw away our current advantage in this market. The Department of Industry, Technology and Commerce report on optical communications and fibre optics estimates a total Australian market of some $60m by the year 1990 and, hopefully, $300m by the year 1995. The Department also estimates a corresponding world market of around $5,000m a year by 1990. I seek leave to incorporate in Hansard a summary of the market analysis in this area. Leave granted. The document read as follows- Market Projections for Optical Communication Components and Systems ($m) Year Australia North America Rest of World Total Actual 1976... .2 5 5 10 1978... .2 30 10 40 1980... .3 55 45 100 1983... .7 220 180 400 Projected 1984... 3 400 400 800 1986... 6 900 900 1 800 1988... 25 1 600 3 200 1990... 60 2 500 2 500 5 100 1995... 300 7 500 7 500 15 300 Senator VIGOR —I thank the Senate. This report also includes a summary of a market research study of Australian industry using or expecting to use optic fibres. This indicates the enormous spread of applications for optic fibres across the whole range of Australian society and industry. I seek leave to incorporate in Hansard that table also. Senator Colston —Not another one! Senator VIGOR —This is the last one. I could read through the material and it would take a lot more time. Leave granted. The table read as follows- Perceived Market Opportunity Areas (Optical Communications) Market opportunity area Number of times cited Time frame Some perceptions of opportunities Telecom subscriber trunk or consumer access networks... 9 Future ``dramatic'', ``astronomical'', ``will really take off'' General telecommunications involving Telecom... 8 Now, future ``big'', ``many'', ``plenty'', ``large'' LANs for industry... 8 Now, future ``will grow'', ``rising'' Long haul Telecom links (trans-continental)... 5 Future ``very good prospects'' (for future) Defence applications (communications links, surveillance systems)... 5 Now, future ``enormous'', ``big potential'' (in future) Rural or medium haul (inter-capital) Telecom links (3 to 5 um range)... 3 Near future, (medium haul) Future (rural) ``may be an opportunity'', ``large'' Railway applications (telecommunications)... 3 Now, future ``growing'', ``big'' Industrial process control (not necessarily LANs)... 3 Now, future ``growing'' Mining applications (process control, sensors)... 3 Now, future ``growing'', ``coming`` Medical/hospital applications (LANs and diagnostic surgery)... 2 Now, future ``increasing'', ``good'' Public administration (LANs and high security links)... 2 Now, future - Submarine optical fibre links... 2 Future - Civil aviation (airport signal communications)... 2 Now, future - Power authorities (communication and monitoring)... 1 Now ``growing'' Reading aid systems... 1 Now, future ``high potential growth area'' General industrial... 3 Now, future - 58 Senator VIGOR —I deplore the Government's shilly-shallying with tariffs. The overall protection which tariffs give to Australian industry is very marginal. The disincentive caused by tariffs to Australian industry's research and development into new products and new markets is indeed considerable. The final costs of tariffs fall unfairly on Australian manufacturers in industries closely related to those which the tariffs are meant to protect. In short, Australian industry would be far more competitive without tariffs. Bounties can be substituted for tariffs without causing any disruption to the protected industry. We can phase out tariffs and bring in bounties while keeping a stable industrial base. The final cost to Australia of bounties is no more. Bounties are paid fairly by all Australians, who receive the benefits in more exports and more employment. Before I turn to the Bill which deals with bounties, the Bounty and Subsidy Legislation Amendment Bill, I wish to mention the developing countries' tariff advantage. Currently the advantage is only 5 per cent, except for textiles, clothing, footwear, steel and motor vehicles. Pacific Forum countries will have duty free access to Australian markets, except for the commodities I just mentioned. The sooner we move to a system of bounties for these particular industries the better our relations will be with those countries which produce textiles, clothing and foot- wear. By doing that, we would also, in fact, decrease the overall cost to our own people. We need to cement our economic relations with our neighbours in the Pacific economic community and we need also to use tariff reduction as a support for nations which are less well off than we are. The Bounty and Subsidy Legislation Amendment Bill batches together amendments to a number of individual bounty and subsidy Acts which subsidise Australian products competing against cheaper imported products of the same kind. The purpose of these subsidies is to provide protection to local production which is considered to be in the national interest, while not penalising other exporting industries through imposing higher costs. Many of these amendments attend to very small details, but one which I consider to be highly significant and wish to concentrate on is the amendment to the Bounty (Computers) Act, which extends the bounty arrangements for computers to include modems and multiplexers. Modems and multiplexers are communication processors which are used to link computers and other devices together, either physically or through telephone, radio or other link networks. Computer technology is advancing at an enormous rate. In 1970 the largest computers performed 10 million instructions a second; in 1980 they performed 100 million instructions a second; and by 1990 they are expected to perform 1,000 million instructions a second. Costs are also falling. The cost of one logic or gate unit in 1960 was between $1 and $10. By 1990 the price is expected to be 100,000th of the 1960 price, or the equivalent of around half a million units for $1. This increase in performance and decrease in cost has been accompanied by a similar dramatic decrease in size and an increase in performance. Consequent upon this revolution in computer technology there has been and is continuing to be a similar revolution in the use of computers in information processing, automation and control which has had enormous consequences for business, production, defence and society as a whole. Side by side with the computer revolution has been a revolution in communications technology. Increased band widths, digital data networks, packet switching, satellite technology and optic fibres have all combined to reduce the costs of transmitting information over large distances. Indeed, these trends are likely to continue at the same pace. Australia needs to get on to that band-wagon. The more far-reaching consequences are likely to come from integration of the two technologies of computing and communications. Transmission of computer data, traditional text and voice and images over the same media at the same time to the same user will see another social revolution in the immediate and medium term future. We need to get in on the ground floor of this type of technology. For example, Parliament could sit in each of our home bases in our electorates and we could be linked by multi-media networks. We could perform the work of this Parliament in a much more efficient fashion; we would no longer be subjected to the tyranny of distance. I believe that we have to buy into this new technology. We need to develop in Australia an industry which is capable of serving our needs into the future. We need an industry that is capable of providing us with the defence and surveillance systems we need. In Australia, where vast distances and a small population until now have been a huge cost, this revolution will bring the whole country together. Support for our computing and communications manufacturing is vital and I congratulate the Government for its action in extending the bounty to include the means of linking computers and other devices into modern communications networks. Briefly, the other areas dealt with in the Bills, which the Democrats support, are high alloy steel products and stainless steel flat products. It is very important that we should develop a capacity for producing these materials in Australia. We must add more `value-added' to our products. This is why we will be supporting all of the aspects of the Bills. I commend the Government for bringing in these measures. Through a sensible system of bounties and a reduction of our tariffs we can produce a strong, independent Australia. This can become a reality when we design and build our own naval vessels, which will become possible with the development of our fledgling shipbuilding industry. We can equip our armed forces with communications equipment and computers produced locally so that we will no longer have the problems of very long lines of communication, supply and consequent difficulties of maintenance. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.50) —I thank honourable senators for their contributions to the Customs Tariff Amendment Bill 1986 and the Bounty and Subsidy Legislation Amendment Bill 1986. I hear Senator Vigor's views on the relationship between tariffs and subsidies. I particularly would like to expose him to the textile, clothing and footwear industry and have him tell it about his views. It might relieve me of some of my burden if I were to do that, and I will arrange that if Senator Vigor likes. Senator Chaney asked a couple of questions. His first question was whether, in respect of the developing countries preferences, the assumption was that the Government would maintain continuity, de rigueur or whatever with that scheme. The answer is that that is a correct assumption, as far as I can possibly anticipate at this stage. He also asked a question about New Zealand carpets, particularly wool carpets, and the reduction in wool content of the pile from 80 per cent to 70 per cent, and he referred to the reciprocal agreement with New Zealand. The Australian Carpet Institute expressed concern about the fact that New Zealand was not making a statutory amendment but making the necessary changes by administrative fiat. I assure Senator Chaney that the New Zealand Government has given an assurance to the Australian Government that it will give Australian imports into New Zealand the same treatment as we accord New Zealand carpets. It believes it can do that administratively. We have been given a copy of the administrative instruction issued in New Zealand and the Australian Government is completely satisfied that the New Zealand Government will honour that agreement. In any event, from 1 January 1987 carpets will be duty free both ways between the two countries on the wool content and the pile. I think those were the two matters particularly referred to by Senator Chaney. I particularly appreciated Senator Vigor's thoughtful comments about the telecommunications industry-particularly about modems, multiplexers and optical fibres-and the need to encourage that very important industry in Australia. It is a potentially rapid growth industry, with a significant market in Australia and New Zealand to start with and a probable export potential. I thank honourable senators for their general contributions to the support of the Bills. Question resolved in the affirmative. Bill read a second time. The Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(9.54) —by leave-I move: That the House of Representatives be requested to make the following amendments: (1) Page 4, Schedule 4, item 1, proposed new item 70.18.1, leave out: ``20% FI: Free DC: 10%'', insert: ``2% FI: Free DC: Free''. (2) Page 5, Schedule 4, item 8, proposed new item 90.13.3, leave out: ``20% FI: Free DC: 10%'', insert: ``Free FI: Free DC: Free''. (3) Page 93, Schedule 9, item 257, proposed new item 70.21.1, leave out: ``20% FI: Free DC: 15%'', insert: ``2% FI: Free DC: Free''. The effect of these requests is to remove the proposed new 20 per cent tariff which has been provided for optical fibre and optical fibre cable. In the second reading debate I addressed the reasons why the Opposition had decided to oppose this increase in tariff. I know that Senator Puplick intends to speak in this Committee stage so I will not repeat those arguments, except to say that we have, of course, had very many comments from the Minister for Industry, Technology and Commerce (Senator Button) about the need for Australian industry to make a very great transition from a protected environment which can lead manufacturers to be lazy-and I am really using the Minister's words there-and one which supplies only the domestic market to an internationally competitive environment, where manufactured exports play a vital role in earning national income. As the Minister knows, he has had good support from the Opposition in pursuing that course. It is a matter of concern to us that in this case we have a situation where investment was made when the 2 per cent revenue tariff was applicable in most circumstances and where a good deal of assistance has been given through research and development and we see the Government's proposal as being a step in the wrong direction in terms of the way in which Australian industry must develop in the future. I will not rehearse all the arguments which I put in the debate on the second reading, but I commend the amendment for consideration by the Government because I believe that it is more consistent with the general policies that have been espoused, and certainly those which have been espoused by the Opposition. Senator PUPLICK(New South Wales)(9.56) —I rise to support the amendment moved by Senator Chaney which will have the effect of maintaining at 2 per cent the tariff on imported optical fibres. This is in preference to the Government's proposal which is to increase the tariff from 2 per cent to 20 per cent. On a number of occasions the Government has sought to indicate the importance which it attaches to the optical fibre industry. For instance, in its publication entitled `Record of Government No. 4, March 1983 to March 1986' there is a statement in the Department of Communications section under the heading `Introduction of fibre optics' which says: Optical fibre cable technology is an important part of the move to digital transmission in the telecommunications networks. In 1984-85 Telecom Australia moved towards developing its Integrated Digital Network through its plan to lay a fibre optic loop in the Melbourne central business district. The plan is a precursor of replacing copper wire with optical fibre cable in telecommunications links between the capital cities. It seems an absolute nonsense to indicate a commitment to the increased use of optical fibre-bearing in mind that the local domestic producers are not able by some order of magnitude to supply the existing and potential markets in Australia-but to now turn around and say that optical fibres are to be increased tenfold in terms of their cost to users and development in Australia. I wish to say something about the optical fibre industry in this country. At the moment the largest customer for optical fibre is the Government in the form of Telecom Australia and the Overseas Telecommunications Commission. For example, OTC has recently announced plans for a series of submarine optical fibre communication cables worth $1.5 billion to be built over the next decade. Telecom has been looking at the contracts for an optical fibre cable for the Sydney-Melbourne link which was let last year and which is worth $45m. Also, as I have already indicated, Telecom has a plan for the optical fibre loop in the Melbourne central business district. However, if one looks at the work which OTC has contracted out one sees that in recent years it has let five development contracts. Standard Telephones and Cables Pty Ltd is building a computer model of the submarine cable system and Amalgamated Wireless Australasia Ltd is investigating the opto-electronic design of undersea repeaters. Australian Optical Fibre Research, which is a subsidiary of Wormald International Ltd, is designing directional couplers. Austral Standard Cables and Olex Cables are working on submarine cable design. At the moment there are three principal manufacturers of optical fibre cable in Australia-Olex Cables, a subsidiary of Pacific Dunlop, Austral Standard Cables, a subsidiary of Metal Manufacturers, which is supplying Telecom, and Pirelli Cables Australia, a subsidiary of the Pirelli tyre company. These companies have been importing glass fibre for cables, but that situation is likely to change soon because two consortia have established fibre plants here. The first comprises Pacific Dunlop-the senior partner with a 51 per cent stake-Pirelli and Sumitomo of Japan, which formed Optix Australia Ltd to make fibre, and the company's Melbourne plant was opened at the end of February. The second comprises AWA, which was producing fibre in the laboratory and has now joined with Metal Manufacturers and Corning of the United States. Its Melbourne plant will supply Corning world wide as well as meeting local demand. This quite clearly indicates that the industry is healthy, growing, expanding, developing, and is doing so without the necessity of a 20 per cent tariff protection and perfectly well within the 2 per cent tariff framework. Four companies are already making transmission systems for optical fibre networks-Plessey, NEC Australia Pty Ltd, Siemens Ltd and STC. It therefore seems to me that we have an industry perfectly capable of growing and developing, with a very good track record, which is existing under the present 2 per cent regime. I note, for instance, that in the March-April issue of the International Communications Digest, which is a round up of telecommunications news from OTC, there is an article headed `New Australian Fibre Optic Plant', which states: Australia's first commercial fibre optic manufacturing plant in Victoria will have a capacity to produce 50,000 kms of fibre a year. This refers to the joint venturers, Pirelli, Sumitomo and Pacific Dunlop, I have already mentioned. That industry was established without the necessity for the 20 per cent protection this Bill now proposes to put in place. I put it to you, Mr Temporary Chairman, that the increase from 2 per cent to 20 per cent is contrary to all the recommendations the Government has been getting in this area. Pages 61 and 62 of the Industries Assistance Commission report on telecommunications and related equipment and parts, to which Senator Chaney has already drawn attention, indicate that local manufacturers of optical fibres and optical fibre cable generally have been receiving substantial assistance by way of industry research and development grants which have been worth an average of about 100 per cent and 30 per cent of the optical fibre and optical fibre cable output respectively over the last three years. On pages 10 and 11 of the Australian Science and Technology Council report `Telecommunications Research and Development in Australia', under the heading `Government Assistance to the Telecommunications Equipment Industry', there is a series of recommendations. The report states: That the government continue with its proposal to develop an integrated development strategy for the Australian telecommunications equipment industry, in full consultation with industry interests and service providers. The ASTEC report goes on to make the point that it would be entirely wrong for the Government to undertake steps which would now increase the cost of communications equipment in Australia. The Department of Science recently published a discussion paper entitled `A National Information Policy for Australia'. On page 31, under the heading `Rationale for Government Involvement', there is an indication that it is an important responsibility of the Government to maintain what force it can to keep down the cost of communications equipment in Australia and to encourage the development and transfer in Australia of new technologies. It mentions particularly the significance of the provision of information in our increasingly information-based society. Finally I refer to the Ergas report entitled `Telecommunications and the Australian Economy', which was prepared for the Department of Communications by Mr Ergas, the Principal Administrator of the Planning and Evaluation Unit of the Secretary General's Office of the Organisation for Economic Co-operation and Development in Paris. Under the heading `Main findings' he calls for a reduction in the incremental capital output ratio within telecommunications which measures the amount of capital needed to expand the network marginally. It is quite clear that the recommendations made in the Ergas report, the ASTEC report, the national information policy report, and those contained within the IAC report are all quite clear in calling upon the Government not to increase the infrastructure costs in telecommunications, which is what is being proposed in this amendment to the Customs Tariff Act. Senator Chaney has already indicated that we are opposed to this major increase in intermediate costs in an important area of communications, that the industry has already been substantially assisted, as the IAC points out, and that investment, growth and development have taken place within the 2 per cent regime. Senator Vigor, in his contribution, has given no evidence whatsoever of the need for protection for the local industry. The local industry is simply growing, developing and investing under the current regime. There is no evidence that the current regime in any way has harmed the local industry, has prevented its growth or has prevented its development. There is evidence that the cheap importation of optical fibres has benefited the Australian telecommunications industry and the consumers of telecommunications in Australia. Senator Vigor comes into this chamber and says that Australian industry will be far more efficient without tariffs and he then turns round and supports a tenfold increase in the tariff. Nobody can take seriously an argument from an honourable senator who stands up and says `What we have to do is to make sure that tariffs are reduced', while at the same time supporting a tenfold increase in the tariff. When I looked at some of the examples that he gave about the way in which he was glad to see certain developments taking place I was fascinated that he mentioned military communications. If we look at the recent contracts awarded under the Parakeet project, the defence integrated secure communications network project, or the Raven project we see how Plessey and Racal Electronics Pty Ltd and various other overseas companies have done very nicely out of the whole thing. To then turn round and say that there is some evidence of the substantial growth of the Australian industry within the military communications hardware field seems to me to be quite ludicrous. I will forbear from commenting on the proposition of conducting parliament from our lounge rooms-a prospect which is altogether too frightening for words. However, I put it to Senator Vigor and to the Australian Democrats that they have consistently in this place told us of the necessity of developing an efficient and a cheap telecommunications industry in Australia. They cannot maintain that position at the same time as supporting a tenfold increase in the tariff on optical fibres. They have told us that they believe in the reduction of tariffs. They cannot maintain that position at the same time as voting in favour of a government proposal for a tenfold increase in the tariff. They have told us that they believe in the importance of encouraging Australian industry. They cannot maintain that position by then shielding Australian industry, in a competitive and significant area, from the winds of international competition by raising an unnecessary tariff which will have the effect of protecting Australian industry in an area which, clearly, does not need protection but which will now allow a degree of feather-bedding which has never previously existed in that industry and which has clearly kept the Australian manufacturers and developers of optical fibres on their toes. If that had not been the case we would not have seen the massive increase in the development and the massive investment in Australia in the optical fibre industry. For those reasons I have much pleasure in supporting the amendment which has been moved to this legislation by Senator Chaney. Senator VIGOR(South Australia)(10.09) —I rise to comment on a few points made by Senator Puplick. The Australian Democrats are not in favour of tariffs; we are in favour of bounties. That must have been patently obvious from my speech in the second reading debate. However, in the case of optic fibres we believe that a neutrality within industry should be maintained. I do not believe that we should be disadvantaging the manufacturers of optic fibres in respect of copper cables or other means of communication. Basically, that is what Senator Puplick is recommending. We have had a 30 per cent protection to develop a fledgling telecommunications industry in Australia. However much I disapprove of the tariff system, that is all that we have had. I believe in neutrality for business. Telecommunications equipment such as copper-based and electron-based communications systems, as compared with optic-based systems, would have had a protection of 20 per cent, whereas there was no real encouragement-2 per cent-for people to move into the optic fibre industry here. It is for this reason of neutrality, rather than for any inherent support of the tariff, that the Australian Democrats are opposing the Opposition's amendment. I point out to Senator Puplick that the component in a piece of manufactured equipment or any telecommunications equipment provided by this added cost of optic fibre will be very small in proportion to all the value added costs of telecommunications equipment. So I believe that the effect will be very marginal and that there is some advantage in supporting a neutral regime. However, I hope that Senator Button and his Department will be looking very closely at changing over the system of taxing this industry. That is basically what the Government is doing. Through these tariffs it is taxing this very vast growing telecommunications industry while it is providing bounties or actually supporting other bits of the industry. I can see why the Government is doing it. It is because the effects on revenue and cost to the Government would be very high if we were providing this support through bounties. I hope that the Government will see the light and try to move over from tariffs to bounties. But in the meantime we do not believe that we should distort the market by giving an advantage to conventional, old-fashioned equipment over what I believe will be one of the most significant trends in terms of world communication development-fibre optics. I believe that the whole development of optic logic and suchlike would be disadvantaged by the Opposition's amendment. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.13) —The Government does not accept the amendment moved by the Opposition. I certainly was not persuaded by Senator Puplick's speech, which was a strange mixture of erudition, high school debating techniques and total lack of understanding of the issues. I thought it was an extraordinary speech. It did not go far towards persuading me. I thought Senator Chaney put the points more cogently in the few remarks that he made in the course of the second reading debate. But there is a bit of ideological machismo here on the part of the Opposition in relation to this issue. Opposition members presided for many years over governments which took very ad hoc approaches towards the question of industry assistance and they cemented in place the disastrous regimes which we now have. There is a bit of soul searching about these things-`Tariffs down at any price, and if the process creates all sorts of distortions in an industry, that does not matter; we have shown our bona fides on the issue'. It is no good Senator Puplick coming in here and reading selectively from the Industries Assistance Commission report and totally ignoring what it said on the issue and what it ultimately recommended. It is very nice to read a bit out of page 61 and ignore the next paragraph about the distortions which will arise in the industry. It is very nice to ignore what the IAC actually said by way of recommendation. It is very nice to ignore the fact that the industry sought 30 per cent tariffs in respect of both optical fibres and other fibres, and all communications equipment. It is all very well to refer to a whole range of other reports, which have marginal bearing on what is a very practical issue of industry assistance-whether one, as the IAC properly in my view said, provides a uniform rate of assistance for an industry of this kind, or whether by one's own regime creates distortions in the industry. The distortions would be between optical fibres and copper cable. The fact is that optical fibres will be used very much on key trunk routes and heavy routes; copper cable is more likely to be used on other routes. It is in that context that the question of distortion very importantly arises. There are other matters quite apart from the distortionary effect which are worth referring to in part. It is not true to say that one will not have a highly competitive industry in this country between the two consortia which are making optical fibres. In a sense we have too many consortia, with two. Local demand both here and in New Zealand is estimated at some 5,000 fibre kilometres per annum. One producer here in Australia claims that it will be able to service that entire market itself. An industry with two consortia will be forced, right at the beginning, into export activity; and it is a one-year-old industry. Senator Puplick said that it had got to this position without any tariff, with a 2 per cent tariff, and all that. That is not correct. It is really about a one-year-old industry, with a lot of research and development beforehand, I agree, but in terms of manufacturing it is a very new industry. I find the Opposition's amendment not very thoughtful and, for those reasons, the Government will oppose it. Senator CHANEY(Western Australia-Leader of the Opposition)(10.17) —I was slightly taken aback by Senator Button, who seems to think that any disagreement with him shows a lack of thought. Senator Button —Come on. You are in politics, not wimpish schoolboy stuff. Senator CHANEY —That is fairly typical of the Minister's response, too. It seems to me that what he is now saying is that this is an infant industry which ought to have some protection. I do not quite follow the logic of the Minister's comments over the last few minutes. He says that we have already an excess capacity in Australia, we can make more of the stuff than we can use, and therefore these people will be forced into export. I am somewhat puzzled as to why, when we are in this situation, we need to provide tariff protection. I quoted in the second reading debate the comments which had been made by the industry itself, and the industry indicated that the competitive position was such that it thought that the tariff protection would not be able to be fully used. It thought that the prices at which it was being supplied in Australia currently are at or close to world prices. If, as I also raised in the second reading debate, this is a situation in which there is a very substantial world oversupply, why is it that Australian industry should not be able to take advantage of that world market situation as our competitor countries will be able to do? The Minister can say all he likes about schoolboy debating and ideological machismo and all the rest of it, but I would like him to direct his attention to the arguments which I put and which were put by Senator Puplick. I would prefer Senator Button not to take refuge in his rather schoolboyish abuse. The points I raised were that these goods will be used in different areas of Australian manufacture. The major user, as Senator Puplick said, will be the Government itself, but there are other possible uses. The Opposition is reluctant to see potential growth industries saddled with higher cost inputs than will have to be borne by their international competitors. I would have thought that was a very sensible principle for us to be following. I referred to a speech given by Senator Sir John Carrick in this place, when Senator Button was present, when he made what I would have thought was the unexceptionable point that there needs to be a very massive effort within Australia to ensure that, wherever possible, costs of production are held down. That of course means holding the cost of inputs down. The point was made in debate by Senator Puplick and me that the industry, which I agree is a very new industry, was established without any undertaking that tariff protection of this sort would be introduced. It is my understanding-and the Minister may wish to correct me, because he has the benefit of advice and, of course, his superior wisdom-that the establishment of that industry may have had something to do with the purchasing policies of Telecom Australia, and the policies which have been followed generally involve very substantial sourcing within Australia. That is of course a different form of industry assistance, but a very powerful one nonetheless. The decisions were taken to invest tens of millions of dollars in this industry in Australia without, I understand, any undertaking from the Government that there should be this new level of protection which the Minister is now providing for it. The industry itself is telling us that that protection will not be fully utilised because of the competitive position. But it seems to me that if we have already a situation of oversupply, a situation involving a fair amount of competition, and provision of these goods at or near world prices, why in the world are we opening up the possibility that there will be a degree of featherbedding in the industry of the sort which the Minister himself has been so ready to criticise in the past? It is also said in the IAC report-I do not think the Minister wants us to read the whole of it, but if he does I will-that there will be some continuing assistance, or it is likely that there will be some continuing assistance, to this industry through industrial research and development grants and those grants have over recent years been very substantial in the assistance that they have provided. I made it clear in the debate that the Opposition regards the principle on which the IAC recommended assistance-that of having uniformity within a particular manufacturing sector-as a principle that is worthy of serious consideration. It is a matter that was seriously considered by the Opposition. We took the view that, on balance, the other factors I have mentioned are more substantial than the need for uniformity. I thought the Minister was overstating the position with respect to uniformity when he referred to the next paragraph to the one quoted by Senator Puplick which referred to copper cable. It seems to me that we are in a situation where copper and fibre optics are not in complete competition. Obviously there is a degree of competition, but much of the new technology we are talking about would use fibre optics rather than copper for reasons other than price. There are technical reasons, as I understand it, why that would be so. The next paragraph of the IAC report, about which Senator Button was so cross as to its not being referred to, seems to me not to be a complete answer to the point made by me in the second reading debate and subsequently by Senator Puplick. We happen to be dealing with an area where it has been my publicly stated view that, to the extent we can get sensible common views being advanced within the political process, there is a greater likelihood that we will get sensible conduct on the part of industry. It seems to me that the Minister is now participating with the Government in a series of measures that bear no relationship to the logic that he has been bringing to the argument over the last three years. He is now flapping about talking about interest subsidies for capital investment and various other things which seem to me to be the sort of McEwenism we have heard so much about in the Senate over the last few days. I simply ask the Minister to give us a reasoned and polite response to the issues which we have raised. We have raised the issues which caused us to take the view that, rather than support this particular aspect of the legislation, we should oppose it. If we are wrong, I should like to hear that from the Minister. I have yet to hear anything from him that shows other than petulance. Senator PUPLICK(New South Wales)(10.25) —The complaint of the Minister for Industry, Technology and Commerce (Senator Button) about the introduction of a distortionary effect would have more validity if, in fact, one were dealing with a situation in which two methods of communication transfer-namely, copper wire and optical fibre-were being used for exactly the same purposes. To the extent that there are certain types of communications which can be carried effectively, efficiently and cheaply only by optical fibre, no matter how it is priced, and cannot be carried by copper connections, no matter how cheaply that is priced, the distortionary effects of which the Minister complains simply do not appear to me to be particularly relevant. Secondly, there is a clear indication that in certain areas optical fibre communication is going to be the only effective method by which signals can be transferred. Under these circumstances, we should be doing everything in our power to keep the costs as low as possible. That is not achieved by a 10-fold increase in the tariff. Thirdly, the Minister complained about the selective use of quotations from the Industry Assistance Commission's report. The only point I make about that is that my comments in regard to the IAC report were designed only to indicate the degree of non-tariff support which had been provided to the optical fibre industry by the provision of industry research and development grants and other forms of non-tariff assistance. Finally, if the Minister wants to come in here and say that people should go and read the IAC's final recommendations and automatically act on them, he has a fair bit of explaining to do about the introduction of inward duty-free goods, given the vigorous opposition of the IAC to that piece of legislation. Question put: That the requests (Senator Chaney's) be agreed to. The Committee divided. (The Temporary Chairman-Senator M. Townley) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 33 —— Majority . . . . . . . . . 6 —— Alston, R. K. R. Lewis, A. W. R. Archer, B. R. MacGibbon, D. J. Baume, Michael Messner, A. J. Baume, Peter Newman, J. M. Boswell, R. L. D. Parer, W. R. Carrick, Sir John Puplick, C. J. G. Chaney, F. M. Reid, M. E. Collard, S. J. Sheil, G. (Teller)Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Jessop, D. S. Withers, R. G. Knowles, S. C. Aulich, T. McIntosh, G. D. Black, J. R. McKiernan, J. P. Button, J. N. Macklin, M. J. Childs, B. K. Maguire, G. R. Chipp, D. L. Mason, C. V. J. Coates, J. Morris, J. Coleman, R. N. Ray, RobertColston, M. A. Reynolds, M. Cook, P. F. S. Richardson, G. F. Crowley, R. A. Robertson, E. A. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Foreman, D. J. Sibraa, K. W. Gietzelt, A. T. Tate, M. C. Giles, P. J. Vigor, D. B. Haines, J. Zakharov, A. O. Jones, G. N. (Teller) Kilgariff, B. F. Cooney, B. Short, J. R. Bolkus, N. Brownhill, P. G. C. McClelland, DouglasBjelke-Petersen, F. I. Evans, GarethHill, R. Walsh, P. A. Vanstone, A. E. Grimes, D. J. Question so resolved in the negative. Senator CHANEY(Western Australia-Leader of the Opposition)(10.34) —Since the Minister for Industry, Technology and Commerce (Senator Button) is in such a forthcoming mood I raise some of the other concerns expressed about the Customs Tariff Amendment Bill 1986. In particular, I refer to the effect of this legislation on the canned pineapple industry. We have a situation in which certain concerns are being expressed in Queensland about trade preferences for canned pineapples. Representations have been made to the Minister's colleague the Minister for Primary Industry (Mr Kerin) about a possible anomaly which arises from the developing country preference arrangements. I am advised that in 1982 the Industries Assistance Commission recommended a reduction in tariff rates for the industry from 15 per cent to 10 per cent with the 10 per cent rate effective from July 1986. Apparently the major international competition for pineapples is from developing countries-Thailand, the Philippines and China-and with the DC preference margin of 5 per cent the effective tariff is reduced to 5 per cent. I ask the Minister whether he has had representations on that matter and whether he sees the DC preference change as flying in the face of the arrangements which the Government has put in place covering the pineapple industry. If the IAC view that 10 per cent is a reasonable long term assistance rate is the view of the Government, does that general rate need to be raised to 15 per cent to give the 10 per cent which has been recommended? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.36) —I have not looked at that matter. I will look at it at the appropriate time and make a decision about it. Senator CHANEY(Western Australia-Leader of the Opposition)(10.36) —Since there is a very strong concern in the industry about this matter, can the Minister advise-- Senator Button —So much concern that you did not mention it in your main speech. Senator CHANEY —Literally hundreds of items are involved and, as I mentioned in my main speech, there were many on which I would not touch. However, this seems a perfectly reasonable time to raise the matter. I just ask the Minister what advice he has to offer the industry, given its concerns. Should it approach him or the Industries Assistance Commission? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.37) —If the industry approaches me I will reply to any approach which it makes. If it approaches the Industries Assistance Commission it may or may not succeed in having a reference. Bill agreed to. Bill reported without requests; report adopted. Bill (on motion by Senator Button) read a third time. Consideration resumed from 8 May, on motion by Senator Grimes: 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 amendment or debate. Debate resumed from 28 May, on motion by Senator Grimes: That the Bills be now read a second time. Senator COLLARD(Queensland-Leader of the National Party of Australia)(10.39) —We are dealing with six Bills-the Dairy Produce Bill 1986, the Dairy Produce Levy (No. 1) Bill 1986, the Dairy Produce Levy (No. 2) Bill 1986, the Dairying Industry Research and Promotion Levy (Termination of Levy) Bill 1986, the Dairy Industry Stabilization Levy (Termination of Levy) Bill 1986 and the Dairy Legislation (Transitional Provisions and Consequential Amendments) Bill 1986, which will change dairy industry levies. This legislation is a result of all the discussions and toing and froing that have been going on over the last few months. We would do well to remember that it first started with the infamous and cynical agreement made prior to the Victorian election. This agreement was reached about two days before the election but it was never implemented. Legislation was introduced by the Minister for Primary Industry (Mr Kerin), but it did not meet the wishes of the industry and that legislation was severely amended in this chamber. Since then there has been a lot of discussion within the industry to try to get to the stage we are at now. I think it must be said that the industry is well aware of the fact that there is overproduction in Australia and it has acknowledged that. I understand that this year overproduction in milk will be of the order of 150 million litres. The industry is State oriented. Whether we like it or not and whether we think it is good or bad, that is a fact of life. Most of the industries have built up within State boundaries. That means that when we are changing some of the structures, looking at market support levies and all the rest of it, some areas in some States are quarantined from what is a major problem. That must be acknowledged. For instance, the State of Western Australia is quarantined. It has an industry which meets its own market. Sections of my State of Queensland are quarantined. The area in which I live-the Port Curtis district-is quarantined, as is north Queensland. The farm which I own with my brother is in the south-east corner. Although that area is not quite quarantined, it has been able not only to meet its market milk requirements but also to mop up the surplus by being very aggressive in the manufacturing and selling of manufactured milk products. It has done this quite successfully. I refer, of course, to the Caboolture co-operative area. It has to be recognised that there are significant problems in the dairy industry. Some areas are absolved from those problems, yet they are all being asked to come together and, if these Bills are passed, meet the problems that exist. In doing so they will start to make the industry in total more market responsive. Victoria is one area that comes to mind of massive overproduction of the market milk requirements. It has a major problem with mopping up the surplus manufactured milk. Victoria tells the other States that its cost of production is lower and, on the surface, that is quite true. However, one has to acknowledge the fact that a lot of the Victorian produce is seasonal milk. Of course, anyone who milks seasonally can keep down his costs of production as against someone who tries to meet the market requirements 12 months round-in good seasons and in bad, in wet and in dry weather. As one tries to meet the requirements in the drier part of the year, one obviously has to feed grain, molasses or whatever other supplements are available and so one's costs of production rise. Where we are at today is, I suppose, a compromise. Politics, amongst other things, is the art of compromise and we have reached a compromise with this legislation. I quote a letter from Mr Pat Rowley, President of the Australian Dairy Farmers' Federation. He states: It is not correct to say that the Australian Dairy Industry Conference/Australian Dairy Farmers' Federation . . . endorse this legislation but on the other hand we accept it is probably the best compromise that can be reached, given the divisions within the industry itself and overall Government policy. I think that sums it up pretty well. I suppose it is usual for honourable senators who are debating something in which they have an interest to declare that interest. I am probably the one person in the whole Parliament who, as a result of this legislation, will be forking out more money. It will cost me money. I will be a recipient of very little money because my market is not very export orientated. This legislation will make the industry more market responsive. It will see government regulations reduced, and that is to be welcomed. It will also see the levies standardised on a milk fat basis. I am paid cents per litre for market milk on a quota basis, but for manufactured milk payment is in cents per kilogram of butterfat. It is a good move to standardise the levies on a milk fat basis, but I think we have to look beyond the present and recognise that, particularly with a lot of low fat products coming on to the market. If we want to be market sensitive, we have to look to levies which go beyond the milk fat content and look to levies on protein or solids, not fat. We have products such as casein and cheese which have a high protein content. A lot of the products coming on to the market, such as the yoghurts, creams, custards, and flavoured milks, are based on low fat milk. So we have to look beyond a levy on the butterfat content alone and look to the protein content, or the solids, not the fat. That will help producers when deciding on their herds and how their breeding will operate. As I said, the payment for manufactured milk, is in cents per kilogram of butterfat. The industry requires a minimum of 3.3 per cent butterfat, but if one is to be levied on fat, one will not have a herd which produces a very high content of fat in the milk. It will be up to the producer to keep his production within the levels required by the industry and by the market. Various levies, of course, are structured for the Australian Dairy Corporation itself-for promotion, research and market supply. It should also be said that clause 6 of the Dairy Produce Levy (No. 1) Bill 1986 was the last sticking point in the negotiations. It is the escape clause or what has come to be known as the comfort clause. In order to offset the anxiety in some States about supporting exports of dairy produce via a levy on all milk in the event of the collapse of the market milk prices, the Government has agreed to insert this escape or comfort clause. The inclusion of this clause in the legislation is endorsed by all State dairy farmer organisations. As I said, that was the last sticking point in the negotiations, and the Minister for Primary Industry agreed to put that in, and we thank him for that. There is another point which is of concern for the cheese manufacturers. There are pretty strict requirements on the standard of cheese made in Australia. It is of a very high standard. As I understand it, little or no colouring is allowed, and very little, if any, preservative is allowed. That is all right; we can live with that. However, we have imported cheeses. People, as in many other instances, rave over the imports and say they are better than the home-grown products. These cheeses are not subject to the same health requirements. They should be. The question of who will be responsible for the testing and the implementation of the health requirements which are in existence for our own cheeses is placed in the too hard basket. I say in passing that it is hard enough for our own manufacturers to compete with imports, but when they find that imported cheeses are not subject to the requirements which our own producers have to meet, that is beyond the pale. In conclusion, I pay tribute to Mr Pat Rowley, who is the President of the Queensland Dairymen's Organisation, for his role as President of the Australian Dairy Farmers Federation. It has been a long hard battle for Pat. He has spent very little time attending to his own business. Over a period I saw him at airports almost as many times as I saw my parliamentary colleagues. He certainly has had a tremendous amount of work to do. He would almost reach agreement a few times and it would fall to pieces. Ultimately, he has been able to weld the industry together, diverse as it is, with all the differing problems State by State, and achieve general agreement on these six Bills which are before the Senate. Some areas and some States will not be happy, and for very good reason. They are paying into a levy scheme which will not advantage them one little bit, except that in the long run it will make the total industry more market responsive. It will help if we bring our overproduction down to a level which means that we can meet our whole milk requirements within this nation and still service the good markets which we have built up overseas. Victoria, for example, has an export market of whole milk powder. I believe Tasmania has built up some good markets overseas. If we can bring our overproduction into line with the requirements of those overseas markets and the domestic market, this legislation will be worthwhile, and those people who are quarantined will accept the fact that they are paying for something which is of no benefit to them in the short term but which will ultimately benefit the total industry. The Opposition will be supporting these Bills. Senator McKIERNAN(Western Australia)(10.53) —I suppose I ought to declare my interest in this legislation. I am not in any way connected with the dairy industry or even the farming community. In my time in this country, particularly when I was intimately involved in the trade union movement, it could have been said that I was on the opposite side to the rural community. There were a number of reasons for that. We are debating the Dairy Produce Bill 1986, the Dairy Produce Levy (No. 1) Bill 1986, the Dairy Produce Levy (No. 2) Bill 1986, the Dairying Industry Research and Promotion Levy (Termination of Levy) Bill 1986, the Dairy Industry Stabilisation Levy (Termination of Levy) Bill 1986 and the Dairying Legislation (Transitional Provisions) Bill 1986. I am doing something now which I did not think was possible two, three, or even five years ago, and that is standing and speaking in the defence of rural Australia-the farmers, the graziers and the pastoralists. In my time with the trade union movement, it could have been said that I was at the opposite end of the spectrum to them. I got a distorted picture of what the rural community was about, and that distortion arose not only from my ignorance of the industry, even though my ancestors came from farming stock back in Ireland, but also from the rural community itself-the farmers, the graziers and the pastoralists, with the dairy farmers included. When one read the papers, listened to the radio or watched television, one always seemed to be hit with a constant scream from the rural community that it was a bad year. The hand always seemed to be out for more assistance. In my early years in Australia I saw a horrific incident in Perth when the then Prime Minister, Gough Whitlam, was subjected to a barrage of abuse and even violence from the farming community in Western Australia. We saw the Western Australian Government defeated in the 1974 election because of the withdrawal of the superphosphate bounty. That was one of the main reasons for its defeat. My viewpoint became distorted because at the same time as we heard the pleading screams for help and assistance we had reports of record prices for wheat, record shipments of wheat, record prices for beef, burgeoning new markets for live sheep and so forth. I could never understand the contradiction which seemed to occur in these matters-on one hand we heard cries for assistance and on the other hand we were told that primary industry was doing very well. Imports of cars, particularly Mercedes Benz, have increased. Many imported high-cost items were being brought in by farmers some of whom were doing very well indeed. My change of opinion did not arise because of the demonstrations we were subjected to in recent months in Canberra and in other places throughout Australia or because of the actions organised in the main by the National Farmers Federation-the blockade, the sit-ins. Even the actions of farmers in King's Hall sitting down and playing Monopoly did not bring about my change of opinion. Because I am a representative of Western Australia-I see myself as a representative of all the people, rural as well as urban dwellers- I felt the need to be more informed about the rural crisis. I would have liked an invitation to attend the meetings held outside this Parliament but no invitation was forthcoming. At one stage I even considered gate-crashing the meetings but the awful crying-in-the-beer music, the country music, that was being played really turned me off. So I did not attend. Because of my history with the union movement I could understand the reactions of those people-the mass movement that we witnessed here in the last few months. I could understand their anger and frustration because certainly something was wrong along the line. The anger and frustration of the farmers perhaps was misdirected. It ought to have gone down different channels. The events of last weekend when the Prime Minister (Mr Hawke) went rural and talked in a reasonable and rational manner with the rural community show that we can get action not necessarily by taking to the streets. We have learned that in the trade union movement over the years. Now the National Farmers Federation and others are also learning that lesson. It is a very good lesson to have to learn because some of the actions in which we engage bring with them a number of dangers. One of the greatest dangers of such actions is that of dividing the nation. As a nation we are divided enough among the States. I represent a State. But we do not want to divide the rural community from city folk. If there is a crisis-and I believe there is-in rural industry it will not be solved by turning one against the other and dividing us. We have to face the crisis collectively. Some of the actions of the National Farmers Federation involved some danger that that might happen. Hopefully the National Farmers Federation is learning; I commend it for its organisation of demonstrations. It is good that people organise, stand up to bureaucracies and governments and express their points of view. But safeguards have to be built in. That is happening at the moment in the rural industry. I am a wee bit fearful of the latest reports that the NFF has organised another fighting fund, this time of $10m. It is interesting that the National Farmers Federation throughout Australia has pinpointed nine seats which it will target in the next Federal election. I wonder whether it really intends to spend $1m in each of those seats and have $1m around for the rest of its propaganda. That is a legitimate activity for any organisation to engage in. We are also looking at targeting some seats in Western Australia for the next election. We might be working in close concert with our country cousins-our colleagues in the National Party-on that matter. What brought about my greatest appreciation of the conflict in the rural sector was that in April this year I joined the Prime Minister's country task force. It is headed by the honour- able member for McMillan, Barry Cunningham, and includes two Western Australian representatives, the honourable member for Brand, Wendy Fatin, a member of the Caucus agriculture and primary industry committee, and the honourable member for Kalgoorlie, Graeme Campbell. We spent three days in Western Australia and met a very large number of people in groups and as individuals over a meal. We did not waste too much time. We met the Pastoralists and Graziers Association of Western Australia representatives, the Primary Industry Association of Western Australia representatives, members of the Country Women's Association, individual farmers and farmers of the future when we had dinner at the Muresk Agricultural College at Northam in Western Australia. We did not confine our discussions and the people we met to those in Labor-held seats. That was done with some difficulty because the Labor Party holds the majority of seats in Western Australia. We had to search around a little to find a seat that we did not hold. There are only three and one of those is a metropolitan seat. One of the very interesting things I learned on that trip-it is a reflection on me as I did not know it before-is that the Australian Labor Party holds more country seats than does any other political party. That is an achievement for the Labor Party which is seen to be anti-rural and anti-farmer. It is also a reflection on those parties which have purported to represent country interests in the past. It is also a reflection on the good sense of the rural people who elect representatives such as Wendy Fatin to the seat of Brand in Western Australia and Allen Blanchard to the seat of Moore. The people are getting good value for money in those seats. We ventured into Cunderdin in the Federal seat of O'Connor and had valuable discussions with rural people. We obtained a real appreciation of the difficulties faced by people on the land. There is no doubt that there are problems, grave problems, for individual farmers. Some farmers are also doing quite nicely indeed. Even in areas such as Southern Cross, which is on the edge of the desert, we were told that more money is being held in banks than is being loaned. The problems of the farming community arise from a number of factors with international trade being perhaps the most important and the most serious. The protectionist policies of the United States and the policies of the European Economic Community give us problems. It is said that dairy farmers in the European Economic Community overproduce by 2 or 3 per cent. To get that into some form of perspective, that 2 or 3 per cent of overproduction represents the total production of dairy produce in Australia and New Zealand. High interest rates received a good mention during the tour by the rural task force. It ought to be said that whilst the rural community and farmers are suffering bankers are doing quite nicely by charging high interest rates. They are forcing people on the land to make the hard decisions of getting out or walking off. In some cases land is sold under them. We have had many reports of that in recent months and years. I turn specifically to the Bills. There is no doubt that the dairy industry is in trouble. It could even be said to be in chaos, particularly in Victoria. What the Minister for Primary Industry, John Kerin, has done is bite the bullet. He has forced hard decisions to be made in the interests of the nation. However, some of the decisions that have been made in the national interest are going to cost farmers in some States money and they may not necessarily see this as acting in the national interest. It is unfortunate that we have a political structure within which the six States are competing against each other rather than acting as one unitary government when we could make decisions. John Kerin has done a commendable job in pulling the six States together and getting some measure of agreement on the legislation before us today. The legislation is going to hurt farmers in my State, and it is for that reason that I am speaking in this debate today. The Western Australian Government has made many representations to have changes and alterations made to the legislation because of the impact it will have on Western Australia. Whilst it could be said that the industry was in chaos in a State such as Victoria, that was not the case in Western Australia. The hard decisions that were required were made in Western Australia some 10 years ago and the industry has continued to be fine-tuned since then. The Western Australian Minister for Agriculture was told that the cost of the plan to Western Australian farmers would average out at about $171. The Western Australian Department of Agriculture has done its own estimates and, in its opinion, the figure of $171 is not a true estimate of the cost to Western Australian dairy farmers. The Department of Primary Industry in Canberra estimates that $171 to be the average loss to Western Australian farmers from farm cash operating surplus as a result of the proposed Federal dairy plan. Julian Grill, the Western Australian Minister for Agriculture, argues that the estimates of the Federal Department of Primary Industry are incorrect and are based on incorrect presumptions. He has outlined a number of shortcomings in those estimates. One is that they are based on Bureau of Agricultural Economics survey results which may not be indicative of either the actual situation or the distribution of any impact across Western Australian dairy farmers. He also argues that the figures wrongly assume production of an equal proportion of market milk and manufactured milk in Western Australia. He quotes the fact that manufactured milk represents 36 per cent of Western Australian milk production. Further, he argues that the calculation ignores 16 per cent of the milk production covered by the Western Australian special products milk quota system, which already attracts domestic market premiums and, in general, will not benefit from the proposed Federal plan. It is said that the figures also assume that the benefits, direct and indirect, from export support mechanisms will flow back to dairy farmers in the absence of administrative rigours to achieve this. Further, it is argued that there will be strong sellers with no price discounting in the Australian domestic market in the absence of pooling of export returns. We should remember that Western Australia is not an exporter of dairy products. I have asked for the plan to be recalculated. It is estimated that the cost to dairy farmers in Western Australia will be something like $2,350 on average across dairy farms. I have made representations to the Minister for Primary Industry to check the accuracy of the Western Australian Government's arguments. However, at this stage I have not received a reply. Perhaps this is partly my fault because I have not pursued this matter with the vigour I ought to have-I was expecting this debate to be brought on next week rather than today. The Western Australian Government's position can be summed up by quoting a telex which was sent by Julian Grill, the Minister for Agriculture, to Mr Kerin, the Minister for Primary Industry. Mr Grill argues that there are no sound economic reasons for Western Australia to participate in the plan. He points out that if for constitutional reasons Western Australia has to be part of the Federal plan, Western Australia would ask that some conditions be satisfied. Those conditions are set out in the telex as follows: (A) That a special mechanism is established whereby an equivalent amount to the total levy collected in Western Australia is returned to Western Australian farmers. This mechanism would recognise that: Western Australia has, through a three-tier pricing system and industry restructuring, controlled its milk production so that the industry is now geared to supply only sufficient milk and cream to meet the demand for fresh milk and short life products throughout the year. (This requires a minimum of surplus milk to be produced in the spring). Any significant reduction in the production of milk in Western Australia could jeopardise the continued availability of fresh milk and short life products to consumers throughout Western Australia at all times. Western Australia is a net importer of manufactured dairy products mainly from other Australian States. Western Australia is isolated from the rest of Australia and is not contributing to the national dairy marketing problems. (B) That all milk and cream (including UHT) entering Western Australia for sale would appropriately reflect retail prices for such products in the State of origin. That is to compensate for any dumping. In conclusion, I think the rural community is in some degree of crisis. I do not think that this Government in Canberra should be compounding that crisis for Western Australian dairy farmers, who had the foresight to sit down some years ago, take the hard decisions, rationalise and come up with a profitable and businesslike industry that has served Western Australia well. I commend these Bills to the House and I welcome the support they are receiving from all parties. Hopefully, some arrangements can be made to ensure that Western Australian dairy farmers are not adversely affected by this legislation. Senator MACKLIN(Queensland)(11.12) —Almost a year ago we debated a comparable package of dairy legislation. After some extensive debate in this chamber, three of four major amendments were made to the legislation. However, the Government then shelved the legislation because it refused to accept the amendments made by the Senate. That legislation was introduced in an attempt to rationalise the industry. In fact, the dairy industry is one of the industries in Australia which in the past have undergone major rationalisation. I think it is extraordinary that this industry should again find itself in dire difficulties, almost 10 years after the massive upheavals which resulted in many dairy farmers going bankrupt. Of course, the major problem facing the industry is the differential production operations in each State. Legislation governing the operation of the dairy industry differs from State to State. Up until recent times, there has been little control of the industry in some States, notably Victoria. This has led to a massive expansion of the industry, not so much in terms of numbers but in terms of production. There is, of course, the constitutional complication that it is possible to sell from any one State into another State. Under the Constitution, producers cannot be stopped from engaging in that operation. It is for that reason that in the last few years every State based industry saw itself threatened with a dairy war in which only dairy farmers would suffer. Of course, in the short term the consumer would have benefited but in the long term the consumer would have suffered. In the short term the dairy farmers would have suffered massively. For that reason the Australian Dairy Industry Conference was mindful of the need to come to some type of national arrangement. It is a national arrangement that not everybody can be happy with but that everybody can live with. The Kerin plan was accepted in part by various industries. Probably the strongest support came from the Victorians, although ultimately they also rejected it in the form in which it was presented. There was agreement that the Kerin plan as modified by the Senate would have been acceptable. However, it was not acceptable to the Government at that stage. The next move in this saga was when the Australian Dairy Industry Conference put another plan to each of its State affiliates. That was for a two-tiered price structure. The fourth amendment that I moved last year, almost to the day, would have allowed a two-tiered price structure plan to operate. I still believe that the two-tier price structure plan put by Mr Rowley and the Australian Dairy Industry Conference, accepted by the Government but ultimately again rejected by the Victorian dairy farmers, would have been the best plan for all of the operations in Australia, and in the long term would have had a far better chance of success than the one with which we are now dealing. But, unfortunately, we had nowhere to go on that. Without the co-operation and support of the Victorian industry, which is of course dominant in the dairy industry in Australia, there was no chance of success. We then had a subsidiary movement in the retail field which added urgency to the matter. That was the coming together of the retail chains. The reason that this added urgency was that it was fairly obvious that the retail giants could have entered into arrangements with producers in one State to sell their products in all States at a level, initially at least, way below the price for fresh milk delivered at the door. This would have destabilised the normal operations of the State industries, would have led to the demise of house deliveries in those States which have them and would then have led to a situation almost identical to that which happened with bread operations some years ago. It would also have meant a significant destruction of various industries around Australia at the expense, ultimately, of the consumer. The Australian Dairy Industry Conference saw this very clearly. Unfortunately, some of the people running the various State industries did not see it quite so clearly. With the destruction of the two-tiered price structure plan, they pushed on with a further attempt to come to some type of general agreement. I must admit that at that stage I had given up all hope of getting agreement amongst the various State based industries. I fully expected that we would be launched into a destructive milk war. However, we now have before us a package of Bills which at best I suppose have an uneasy acceptance around Australia. If this type of operation is not enthusiastically welcomed, at least there is a willingness to give it a try. Even at that low base I am particularly concerned that all State based industries try as hard as possible to make this operation work. If they do not, we will see a massive operation with dairy farmers disappearing from many of the places in which they currently operate at a reasonably profitable level. I had discussions on these Bills with a particular group of dairy farmers and pointed out to them that the actions that they wanted to take would have destroyed dairy farmers' profitability in other parts of Australia. They said that they could not care less, which is an attitude that I find totally reprehensible. But that type of attitude is all too prevalent in this country. I welcome these Bills. I welcome the grudging acceptance of them by the various State based industries. I congratulate the Australian Dairy Industry Conference for its blood, sweat and tears over the last year in getting this back into the Senate in a form acceptable to all parties. The first amendment moved last year dealt with export pooling. The Senate sought an extension of export pooling for two years. The industry agreed to accept the Government's position on this issue on the condition that an alternative mechanism be introduced, which was export licensing and which appears in these Bills. There we see the willingness of the industry to adapt to the reality of the circumstances. The second amendment was to phase out product levies. The Government proposed what I described as an absolutely crazy formula that would not have given the type of necessary market signals. The current operation makes much more sense. In fact the mechanism in these Bills is not so different from the one proposed in the amendment moved by the Opposition last year and supported by the Australian Democrats. The third amendment which related to the method of determination of export support payments is somewhat more complicated. Perhaps the Minister for Industry, Technology and Commerce (Senator Button) will respond at the close of the second reading debate as to what the Government proposes with regard to clause 98 sub-clause (2) of the Dairy Produce Bill in terms of the trend price. As I understood it, the Bureau of Agricultural Economics was to look at some type of seven-year averaging operation to determine the trend price and then to look at an 85 per cent support mechanism with regard to that trend price as an underwriting. I would be interested to know whether the Government has details of this because the Bill simply says that this will be prescribed. The change in the level of support from 30 per cent of the three-year average of export prices to 30 per cent of the current price makes the whole milk powder problem, that we were discussing last year, far less significant. Indeed, hopefully, this mechanism will work now that the industry has accepted the position in this legislation. As I have already said, the substance of the amendment of the Democrats for a two-tiered price option, which was not accepted by the Government or the Opposition parties, was what the ADIC put to the various State bodies and which the Victorian industry refused to agree with. What we now face is a somewhat uneasy future in this area. The industries have held out for two propositions, both of which the Government has accepted. The major one, of course, is consultation with the industry. I believe that that consultation is an absolutely necessary part of making these Bills work. I think that the industry has shown its willingness to engage in constructive discussions with the Government. I hope that the various State based industries will continue their support for a unified approach to the Federal Government on this matter so that the industry can, over time, adjust the amount of production, bring it back into line with our domestic market, and then look at the export operation as being an area that is supported by the entire industry in Australia, even though not all sectors of the industry actually are involved in the export operation. I hope also that the industry, in looking at the way in which this plan works, gives attention again to the two-tier price structure which means that, on the one hand, there is a guaranteed percentage of the domestic market and, on the other, there is a free operation of the export market; that is, members of the industry get what they can on the export market. I believe that the aggressive operations in the export market are currently showing some success. There seems to be some prospect of the upgrading of a number of our manufactured milk products. We need to search aggressively around the world for markets for milk products so that we might be able to use the excess that we currently have, rather than winding down that part of the industry. Eventually, we should be able to build up this export area. The European Community in the last year has cut back on its overall production to try to bring its internal surplus under some type of reasonable control. The European Community has chosen to use the two-tier price structure. I believe that ultimately the various industries around the world could co-operate on that basis. I think we could then have a sensible international export market and a stable domestic milk market in each of the producer countries. I wish this legislation well. I cannot say that I am overly hopeful that it will actually work. But I believe that, given the goodwill that has been demonstrated by the very hard bargaining that has gone on in the last years, I am positive that within the next year of two the industry will certainly abide by its commitments and the Government will abide by its commitments. We will then have at least a couple of years in which to try to stabilise the industry so that, hopefully, we will have a prosperous industry for the people who are involved in it, without the continuing upheavals we have seen in the last 10 years. Senator ARCHER(Tasmania)(11.28) —The passing of this dairy legislation will signal the start of a new era in the dairy industry. We have been through various phases, but we will now have an entirely different situation. While I was listening to the previous speakers I was reminiscing. I was fortunate enough not only to have been born and bred on a dairy farm-being one of those lucky people, I can say that I was able to milk a cow before I was old enough to go to school-but also to have held shares in a dairy company since November 1929. Senator Messner —You are not that old. Senator ARCHER —I think Senator Messner should realise how old I am and that my experience and vested interest in the dairy industry go back to that time. I was also reminiscing that, as I recall, I was elected to the Senate on 13 December 1975. Two days after the election my first visitors were a group of dairy farmers who came to see me on the basis that they had received a notification from their dairy company that they were to be paid four shillings-that is 40c-a pound for butterfat. Certainly, things are not as bad now as they were then. But the changes have not come easily. The changes that have taken place over that period in the dairy industry have been absolutely massive. Of course, I could not allow the occasion of the debate on the dairy package to pass without raising the questions that I see as being of particular importance. I would be remiss if I did not give credit to the Minister for Primary Industry, Mr Kerin, for his genuine efforts to implement a workable arrangement. He has tried to fit in as many of the requirements of the industry as he could with the philosophical pursuits of the Labor Party. I give him credit for that. My opinion is that, had he not received such bad advice in the early stages, we might have had a better and much earlier solution. But that was not the case and that is now history. I do not think that the solution that we have is ideal by a long shot; far from it. But I accept that it is the solution that is available at this time. It will need to be monitored. I agree with virtually all the comments made by the previous speaker. I particularly draw attention to clause 98 of the Dairy Produce Bill 1986 and the monitoring that will be necessary. The Government must do its part to ensure that the incomes that are available to the farmers take this into account and that no foibles or fallacies are included in the administration of the legislation. I, too, give credit to the industry leaders and the way in which they have endeavoured to achieve a solution with which they could all live. I do not think any of them have liked any of the solutions that they have offered. I think they have done a great job in trying to submerge their own views, in as many cases as they have, in the interests of what would be best overall. I think the work done over a long period by John Bennett, and latterly by Pat Rowley, along with their executive officer Clay Manners, requires special mention. I think the Australian Dairy Industry Conference, the Australian Dairy Corporation and the manufacturers have all looked at these things by taking a national view. I add to that list the job that has been done in recent years in my State by Bob Campbell and Jim Bye, representing the manufacturers and the producers respectively. They have done their best for the Tasmanian industry, while not impeding the national goals that were necessary. There are times when I have been disappointed with the attitude of the Victorians. I would have hoped that they would be able to implement and preserve more national goals. I think that is regrettable. I believe that the whole of the plan will now suffer somewhat because of their actions. I believe that there is still room, with co-operation, for changes to be made in production, the products and the markets, for the overall benefit of the nation. We do need to keep the dairy industry in operation. We need to keep it viable and to make it more viable than it has been of late. This legislation does not signal the end of the problem, but it is a recognition that the problem is there and that it must be dealt with. The dairy industry is typical of many other Australian industries. Its current lack of international competitiveness is not caused by its inefficiency, because the Australian dairy industry would be as efficient as any dairy industry in the world. Nor is it significantly caused by the international issues referred to. The main problems of the dairy industry arise in Australia, and they are all tied up with Australia's own economic imbalance. Until the Australian dollar reflects its true international value and we as a nation get the nous to restore productivity and get the economic base of the country in order, the dairy industry, other primary industries and most of our manufacturing industries will continue to struggle. No industry in Australia is more capable of genuine international competition on an equal basis than the dairy industry. I commend again all those who have done so much towards taking another step to safeguard the viability of the industry. I support the passage of the Bills. Senator WATSON(Tasmania)(11.37) —It is regrettable that these Bills, the Dairy Produce Bill 1986, the Dairy Produce Levy (No. 1) Bill 1986, the Dairy Produce Levy (No. 2) Bill 1986, the Dairying Industry Research and Promotion Levy (Termination of Levy) Bill 1986, the Dairy Industry Stabilization Levy (Termination of Levy) Bill 1986, and the Dairying Legislation (Transitional Provisions and Consequential Amendments) Bill 1986, were not presented by this Government at an earlier opportunity. It is unfortunate that the Government has allowed so many dairy farmers to pass through so much trauma, anguish and loss of sleep over the past few months. I take the opportunity to commend the outstanding leadership that has been provided to the dairy industry over many years. In particular I would like to thank the Tasmanians who have been leaders in this field, particularly John Bennett, Jim Bye and Bob Campbell. I would like also to acknowledge the changed accountability procedures, to which nobody has yet referred. The Australian Dairy Corporation has a dual accountability. It is accountable to the Parliament, and it is accountable to the industry. The Corporation, I am pleased to say, will be required to prepare and update a corporate plan covering a three- to five-year period. It will also be required to prepare operational plans annually. I wish to draw attention also to the change in audit procedures. I am surprised that Government speakers have not referred to these changes. One thing that concerns me is sub-clause 81 (2) of the Dairy Produce Bill, which provides that the Corporation auditor may dispense with all or part of the detailed inspection and audit of any accounts or records referred to in sub-section (1). Not only is this practice unfortunately increasing in the corporate sector; it is now also creeping into statutory authorities. That is regrettable. Another unusual step is the attempt to move away from having the Auditor-General report on the statutory authority audits. We notice that clause 82 provides that the Corporation may appoint a company auditor to be the auditor for the Corporation. We all know that the powers of the Commonwealth Auditor-General are very much wider than those of auditors operating in the corporate sector. However, there are new provisions which are a little unusual and which I believe we should refer to in this debate. Before appointing an outside auditor the matter must be referred to the Joint Committee of Public Accounts. In other words, the Auditor-General must inform the Minister that he is satisfied that the company auditor is a suitable auditor for the Corporation. Furthermore, the Joint Committee of Public Accounts must be satisfied, and that could mean an inquiry, before it agrees to the appointment of the company auditor. These are somewhat unusual provisions, but I believe that reference to the Public Accounts Committee is a necessary provision in terms of proper accountability to the Parliament. I concur with the increased financial powers given to the Corporation as it can now engage in futures trading. Investment in the short term money market is now permitted and the opportunities for such investment increased. I therefore support the Bills. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.40) —I thank honourable senators for their support of this legislation, the Dairy Produce Bill 1986, the Dairy Produce Levy (No. 1) Bill 1986, the Dairy Produce Levy (No. 2) Bill 1986, the Dairying Industry Research and Promotion Levy (Termination of Levy) Bill 1986, the Dairy Industry Stabilization Levy (Termination of Levy) Bill 1986 and the Dairy Legislation (Transitional Provisions and Consequential Amendments) Bill 1986. I take the point that the gestation period for these Bills has been a long one and there have been a lot of difficulties along the way. I thought that Senator Macklin made some very good points about that. I commend the Bills to the Senate. Question resolved in the affirmative. Bills read a second time. The Bills. Senator MACKLIN(Queensland)(11.42) —I raise one point in the Committee stage. The Minister for Industry, Technology and Commerce (Senator Button) may have the information. In respect of clause 98 of the Dairy Produce Bill, has the Government yet determined how it will prescribe the trend price per unit of dairy product? What mechanism will be used? Will it be the seven-year averaging operation which the industry put to the Government? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.43) —I apologise to Senator Macklin. I do recall his question; I made a note of it at the time. The method of determining the trend price, I understand, has been determined and it will be published by regulation. Everybody will be totally aware of the method because of its publication by regulation. Bills agreed to. Bills reported without amendment or requests; report adopted. Bills (on motion by Senator Button) read a third time. Senator Crichton-Browne-I wish to have my name recorded as opposing this legislation as is provided for under the Standing Orders. Debate resumed from 9 April, on motion by Senator Grimes: That the Bill be now read a second time. The DEPUTY PRESIDENT —Is it the wish of the Senate that the Australian Citizenship Amendment Bill and the Migration Amendment Bill be debated cognately? There being no objection, it is so ordered. (Quorum formed) Senator MESSNER(South Australia)(11.45) —It is a mere truism that any change to the Australian Citizenship Act immediately arouses interest in the Parliament and in the community generally. The community is vitally concerned about changes in citizenship which deal with the character, identity and political and legal status of all Australians. In the Australian Citizenship Amendment Bill the Government brings a range of proposals before the Parliament without consultation with the wider community, migrants or the Opposition parties. As with the Australian Bill of Rights Bill, which is subject to debate in the Parliament-we are not sure whether the Government intends to proceed with that Bill-the Government wrongly believes that it has been given a mandate to change the character of Australian citizenship. The Government will, it seems, make these changes by pushing through this Bill regardless of community or public opinion. The Opposition rejects those jackboot techniques. The Minister for Immigration and Ethnic Affairs (Mr Hurford) reflects a new trilogy; a lack of consistency, a lack of clarity in this legislation and, most important of all, a lack of consultation. What does the Government propose in the Australian Citizenship Amendment Bill? Firstly, it seeks to address the claims of residency based on children born in Australia. Secondly, it seeks to change the situation of Australians in Israel who have lost their citizenship. Thirdly, it seeks to change the oath and affirmation of allegiance. Finally, it seeks to make numerous other changes in relation to administrative matters. The Bill seeks to remove automatic citizenship for children born in Australia of visitors, temporary entrants and prohibited non-citizens. It will thus close the loopholes which have allowed infants to sponsor their own parents. The Government also considers the situation of stateless individuals in this legislation. The Bill will allow appeals to the Administrative Appeals Tribunal where citizenship is denied or not granted by reason of some administrative oversight or error. The Bill proposes a number of technical amendments relating to the replacement of sexist language and the waiver of fees. The legislation, as we read it, appears to meet most of those aims. The Opposition supports these proposals, with the exception of the amendment in clause 7. Clause 7 of the Bill relates to people who have inadvertently lost their citizenship, and the Opposition will be moving amendments in respect of that clause. We hope that we will have the support of the Australian Democrats on that matter. Turning to the matter of the oath or affirmation, we oppose the changes outright. Senator Colston —Why? Senator MESSNER —I will tell Senator Colston why in a moment. The Government's proposed amendment relating to non-automatic granting of Australian citizenship to children born in Australia will close the back-door entry of people, particularly prohibited non-citizens, who would not normally meet the requirements for Australian immigration. Investigations of the House of Representatives Standing Committee on Expenditure have resulted in a recommendation for an alteration to this aspect of the citizenship law, which has been in effect since 1948. The Committee confirmed that parents who were illegal immigrants would acquire residential status and resist deportation on grounds that the child who had gained automatic Australian citizenship needed the parents' constant attention. This is just another instance of those with no real claim on Australia receiving considerable benefit ahead of those seeking immigrant entry through the proper channels. The Expenditure Committee revealed that up to 25 per cent of illegal immigrants receive health care, social welfare, unemployment benefit and legal aid, the cost of which could amount to over $25m a year. The Human Rights Commission has expressed concern about automatic child citizenship and concluded that better supervision by the Department of Immigration and Ethnic Affairs would remove or substantially reduce those problems. The Human Rights Commission seemed to have more compassion for illegal immigrants than commitment to the best interest of Australia. The Human Rights Commission has used the issue to propagate its own vested interests. It is the stalking horse of the proposed Bill of Rights. Clause 7 of the Bill is the area of most concern. It arises from the amendment to the Australian Citizenship Act in 1984 which gave the Minister for Immigration and Ethnic Affairs the power to restore Australian citizenship which was lost inadvertently. Those amendments caused some Australians actually to lose their citizenship. Up to 2,000 citizens living in Israel as permanent residents at that date lost their Australian citizenship. Under Israeli law, every person of Jewish descent is automatically conferred with Israeli citizenship on arrival as a permanent resident, unless those people realise that they need to reject the offer of citizenship within three months. The principal intention of Australians going to reside in Israel is not to acquire Israeli citizenship, or to deny their Australian citizenship. The people concerned either had no knowledge of, or had received poor advice on, the implications of the law on their return. The Bill allows former citizens to make a statement to the Minister and there is a consequential ministerial discretion to reinstate that citizenship. While in general terms we believe that that is a good thing, the Government's proposals are not entirely satisfactory. For instance, the Opposition does not believe that permanent residency within three years is required. That was an unconscious action which deprived Australians of their nationality, and their distress and sense of alienation have been completely justified. All that is necessary, surely, is a statement of their intention ultimately to reside within Australia. The Bill contains an inconsistency. The statement to be furnished to the Minister is based upon the person having suffered significant hardship or detriment. On the other hand, the Minister's discretion is exercised on the basis that the person suffered hardship or detriment of an economic nature. We will be moving amendments to clarify that clause. Turning to the matter of the oath or affirmation of allegiance, the oath which is administered to people at the time of accepting Australian citizenship is being significantly changed by this Bill. The main change is that no person now, if this Bill passes, will be required to renounce his or her allegiance to the sovereign of any other state, nor will a person be required to state his or her name when taking the oath or affirmation. The Minister in the House of Representatives has said that the renunciation of allegiance is ambiguous and unnecessary. The Minister contends that some candidates for citizenship think that they are renouncing not merely formal ties with their former country but also their cultural heritage and tradition. On that point the Minister is most confused and certainly incorrect. Renunciation of a former allegiance surely is a positive step in recognition of the legal requirement and the individualism and status of the Australian identity. Allegiance is acquired through birthright. Naturalisation brings with it a feeling and a declaration of identity. We believe there is a clear principle here. While any person should retain his or her private, personal, cultural and individual character, there is a higher and stronger national character, a public identity, in which the allegiance to one's chosen country is absolutely paramount. Such an allegiance implies both the benefits and the responsibilities of national duty. Australia is not alone in requiring a renunciation. A number of countries that have a similar background and status also require renunciation. I instance Italy, Malta, Yugoslavia, West Germany, the United States of America and Cyprus. Even the Soviet Union requires renunciation in the oath, on the application for citizenship or in its law. In one form or another, that renunciation is required. Back in 1982 a report was commissioned by the former Minister for Immigration, Mr Macphee, entitled `National Consultations on Multiculturalism and Citizenship'. In that report it was stated that there was less unanimity in the proposals compared with other proposals about what should be substituted as the object of allegiance. The report noted that the discussion on renunciation tended to lack clarity and that views were wide-ranging. Some suggested that a renunciation was not legally binding while on the other hand the report stated that it was thought highly repugnant that a person granted Australian citizenship should retain allegiance to any other country or power. The general conclusion was that it is probable that clearer wording would resolve some of the apparent disagreement. The report declared that Australian citizenship should be clearly Australian in character. The Minister has chosen, unfortunately, to reject that conclusion in that earlier report. Instead, the Government has chosen to follow the proposal of the Human Rights Commission. I would have thought that the process of bipartisanship would have been followed, but there has been no consultation with the Liberal Party of Australia or the National Party of Australia on this matter. I am sure that, over a period, an acceptable form of words for the oath, based on the suggestions in that report, could have been achieved. But that is not the case. Senator Button —I thought you referred to consultation with community groups. Senator MESSNER —No, consultation with both the community and the Opposition, which represents a very sizable part of the community. Even in some countries which allow dual nationality, such as Switzerland, the applicant is required to refrain from any act which may acknowledge former citizenship, and renunciation is demanded. If the Minister is using this amendment to send out a signal that Australia is moving towards dual citizenship, it is a poor and inappropriate method by which the Government is commencing that discussion. Such important changes should, and certainly do, command consultation with all interested groups. As far as it is known to the Opposition, there has been no consultation on any of those matters, other than those consultations that were held in 1982 under the regime of the then Minister, Mr Macphee. Those consultations, as I mentioned earlier, were inconclusive and wide-ranging and suggested changes to retain renunciation as part of the oath. Obviously, the Minister has not consulted widely, nor has he opened debate on the question of wider public scrutiny or the accountability that he has to the public at large. The Opposition clearly understands the continuing private bonds that some of our citizens feel for their country of origin. Even though traditions and external pressures on our citizens may be significant to those people, as a nation we cannot diminish our national identity by accommodating a wide variety of individual and sometimes conflicting obligations. The Opposition believes that a renunciation of other allegiance in the oath does not deny a person's private cultural heritage. However, it is an important step towards recognising one's Australian identity. The age of a resident and the length of residency are major factors in the decision to become as Australian citizen. Personal, social and financial investments made by people over a period influence the probability or the lack of probability of a return to their former country. In 1983 the `Australian Values Study' found that 86 per cent of the population was proud of its country. Regardless of any country of origin, commitment to Australia is alive and well amongst our people. The study found that the two largest migrant groups were even more committed to Australia than the average Australian, those two groups being southern Europeans and the British. It does seem to the Opposition that the Minister wants to devalue the allegiance. This Bill also refers to the deletion of one's name when a person takes the oath. Surely this merely decreases the personal value of his or her pledge at the time of taking the oath. The oath cannot be applied to anyone else but the individual who makes that commitment. Although the Minister dismisses this requirement as confusing, surely that is not the case. It depends on the competence of the local officers conducting the citizenship ceremony and the practices and traditions of all local authorities which undertake those ceremonies. A solemn oath or pledge demands a legal and personal identification with the commitment being undertaken. Indeterminate commitments lack compulsion and complete acceptance of the serious contract that follows. The Opposition is opposed to the removal of an individual's name when he or she is making the pledge or affirmation or taking the oath. We reject any depersonalisation of that process. We do not believe that any attempt at making it less significant for a new citizen to realise his or her rights, privileges and responsibilities as an Australian can be tolerated. As I mentioned earlier, during the Committee stage of the debate we will move amendments to clause 7 to cover that point. I turn to the Migration Amendment Bill 1986, which is being dealt with cognately. This Bill is to be amended as a direct consequence of provisions in the Australian Citizenship Amendment Bill. The Migration Amendment Bill relates to clause 4 of the Australian Citizenship Bill. This Bill makes changes to the Australian Citizenship Amendment Bill to provide for the Government to define more carefully exactly who is an Australian citizen. Clause 4 of the amending Bill changes section 10 of the principal Act. These changes, which have been passed by the House of Representatives, remove the right of automatic citizenship for children born in Australia whose parents are prohibited non-citizens, temporary entrants or visitors. There is an obligation to determine what status under migration laws should be given to these children. If they cannot be citizens, what should they be? Infants are dependent upon their parents, especially upon their mothers, and if their parents are prohibited non-citizens, temporary entrants or visitors, what should be the status of those children in the Australian community? Before the changes, these children would have been Australian citizens because of the fact that they were actually born in this country. The amendments to the Migration Act confer the immigration status of parents on their children. If the status varies between parents, the status more favourable to the child will be given-that is, the longer time left to remain in Australia. If the parents' status is equal, the child takes the status of both. During debate in the House of Representatives the Opposition gave its support to the proposed change to the Australian Citizenship Act. It accepted that an amendment to the Migration Act was necessary to carry through the intent of the citizenship changes. However, it must be understood that changes to citizenship law are significant and very important. We need more debate in this area in the community generally. The fundamental right of citizenship has previously been based on the common law principle of jus soli-that is, the attribution of nationality on the basis of place of birth, irrespective of parentage or race. The principle of jus soli contrasts with another principle, that of jus sanguinis, where a person's citizenship is determined by the citizenship of the parents-a principle that has not been previously applied in Australia. From now on, for children born of prohibited non-citizens, temporary entrants and visitors, citizenship will be based on blood ties-that is, citizenship as determined by the citizenship of the parents. Also, children who would otherwise become stateless will be protected and will acquire Australian citizenship. The legal principle of citizenship by place of birth is not entirely abandoned by these changes but it is severely restricted. The tradition of citizenship is incorporated in the laws of the United States of America, Canada, Argentina, Brazil, New Zealand and Fiji. The United Kingdom, which gave Australia its common law tradition, recently revoked the right of jus soli for children of illegal immigrants. The procedure, as it stood, was open to exploitation by those seeking to achieve residency. Factors that we believe need to be considered from a national point of view cover the following points: First, the traditional principle developed in the United Kingdom and Europe that people move from one country to another for reason of permanent settlement; secondly, fast and easy international travel today does not denote a degree of permanency in any one country; thirdly, in recognition of that fact, the United Kingdom has recently removed the birthright citizenship and few countries in the world now confer automatic citizenship on birth. The main reason for changing the citizenship law was that problems arose when prohibited non-citizens abused the citizenship law in order to obtain permanent residency in Australia, based on the citizenship of their children. We believe that we should adopt an alternative approach, based on the principle that there is a traditional right of citizenship dependent upon birth. The Government appears to be taking the opposite view. It is denying citizenship to children so that it can take action against parents who may be illegal immigrants. Surely this has very little to recommend it. Australia is one of the few remaining countries that accept large scale immigration. Obviously immigrants are of great value to this country because we need citizens. The Government's objective in removing abuse of citizenship could have been achieved by restricting citizenship and changing the Migration Act to prevent any claim by parents or children to permanent residency. The Opposition has decided that the complete removal of traditional rights cannot be supported. It accepts that the Government's approach of denial of citizenship solves one particular problem. However, we will move an amendment to the relevant clause. This amendment will allow compensation for the removal of automatic citizenship rights. That will be done by permitting those people born in Australia of non-citizens or non-residents to take up permanent residency between the ages of 18 and 40 years. Where such a person applies for citizenship between those two ages, that person would be subject only to minimal character, security and health checks. He or she would not be required to meet all the normal immigration criteria. There is provision for these people to become Australian citizens in due course. We think that that is a sound decision which will allow an element of retention of the recognition of one's place of birth and prevent the abuse of our national rights at the same time. At the age of 18 persons born in Australia of non-citizens or non-residents will have the right to return to the place of their birth and join the Australian community. Conditions would be light and certainly not obstructive. Under our amendment a young adult would be given a chance to make a decision, almost an automatic decision, to join the Australian community. The amendment includes an upper limit of 40 years. Whilst that is arbitrary, it allows that person to migrate with his family when generally he would be in a stable position and could still make a substantial contribution to Australia before reaching retiring age. The Opposition is confident that it has found a more reasonable and sensible answer to the problems than the Government's. The messy approach that the Government has adopted has been taken apparently without consultation and in a desire to ram through this legislation at the close of a very long sitting. Merely changing the citizenship law and the Migration Act will not stop the tide of illegal immigrants. That requires concerted administrative action with clear directives from the Government. Those who should be given incentives to come to Australia are being neglected; those who should not come seem to be encouraged by the present regime. The Opposition has strong views on a program that is balanced between economically sound migrants and those who come as a result of family reunions. We all know that there are so many heartbreaking cases. The Opposition wants to see an increase in immigration, supported by domestic policies of smaller government and employment training opportunities, particularly for young people. The purpose of the Opposition amendment is to give an opportunity to children who have been born in Australia to adopt Australia as their permanent home. We call on the Australian Democrats to join with us on this matter and successfully amend this legislation. If accepted, the amendment will not only achieve the Government's objective but also achieve it with far greater equity than was intended in the Government's legislative approach. As I mentioned earlier, at the later stages of these two Bills we will move amendments to relevant clauses. Senator CHIPP(Victoria-Leader of the Australian Democrats)(12.13) —The Australian Democrats support the Government in its proposals in the Australian Citizenship Amendment Bill 1986 and the Migration Amendment Bill 1986. Try as we might, we cannot find any equity or even common sense in the proposals put forward by the Opposition to amend these Bills. In fact, we regard some of the proposed Opposition amendments as positively silly. We also wish to commend the Minister for Immigration and Ethnic Affairs (Mr Hurford) for the progressive look he has taken at the problems posed by the current legislation and we warmly support his proposals. The Bills represent a rationalisation of the laws relating to the acquisition, loss renunciation, deprivation and resumption of Australian citizenship. The most significant amendment means that automatic Australian citizenship will no longer be conferred on children born in Australia. That is a significant move in this field and it is one which the Democrats support. The conferring of citizenship by birth under the present Australian Citizenship Act has been mercilessly exploited by illegal immigrants and visitors who have deliberately had a child in Australia so that those children may become permanent residents and the parents can therefore become automatic citizens of this country. This loophole in our law-and this is what it is-allows contemptible queue jumping to the detriment of not only those who are waiting all over the world to be processed for entry into Australia but also the hundreds of thousands of people living in Australia who are desperately seeking to bring their loved ones to this country. Some have argued: What difference does it make-I think this is the Liberal argument-if several thousand extra people per annum stay in Australia using the back door, jumping the queue method? Senator Messner —No, that is not the point at all. Senator CHIPP —That is what the Liberals are saying. The Democrats say that there are about one million people in the world who want to come to Australia. Nine out of ten who apply properly will be rejected because we can accept only 100,000 people per annum. The several thousand who abuse the system take the places of those who want to come here and who apply under our immigration laws. If we want to take more migrants-an idea the Democrats are not opposed to-we should increase the intake but we should not allow people to stay who are here illegally and who contrive and conspire to have a child for the simple purpose of allowing them to jump the queue. We will not have a bar of that. Senator Messner —But our amendment will not bring that about. Senator CHIPP —It will bring exactly that about. This Bill now before the Senate has raised the question in some quarters as to whether there is a fundamental or natural right for a child to acquire the nationality of the country in which it is born. As I understand it, that is the argument put by Senator Messner. One can easily have sympathy with that argument. It has logic and some morality on its side. The question is an important one and one about which we have thought long and hard. It is our belief that it is a general rule of international law that it is up to `municipal' law to determine who is and who is not a subject of any state or country. Article I of the International Convention Relating to the Conflict of Nationality Laws ratified by Australia in 1937 provides: It is for each State to determine under its own law who are its nationals. This law shall be recognised by other States insofar as it is consistent with international conventions, international customs and the principles of law generally recognized with regard to nationality. None of the other major international conventions are phrased in terms of the fundamental right to acquire nationality by birth. The Universal Declaration of Human Rights 1948 does not mention the right to nationality by birth. The American Declaration of Rights and Duties of Man 1948 does not mention it, nor does the American Convention of Human Rights. Proposed new section 23d of the Australian Citizenship Act does comply with Australia's international obligations on nationality. While the right to nationality by birth is a fiction, every child has the right not be be stateless. I think we have to make the distinction between the two. Article 24 (3) of the International Covenant on Civil and Political Rights states that every child has the right to acquire nationality. It does not state that this nationality must be that of the country in which a child is born. In 1973 Australia ratified the Convention on the Reduction of Statelessness. The amending Bill before the Senate today is in line with this Convention. The effect of proposed new section 23d-clause 8 of this Bill-will be that stateless children would acquire Australian nationality by birth. I refer to my use of the term `stateless children'. I use the phrase reluctantly. I do not use the term `illegitimate children', as that is an unnecessary and unjust reflection on the child instead of reflecting on the parents, who are in fact illegitimate. Essentially a stateless child is either a child of stateless parents or a child of parents who, for some reason or another, cannot or should not return to their country of origin. Under this legislation, no child will be allowed to be stateless. The Australian Government has been forced to act by people exploiting the system. The Human Rights Commission has recommended that the law be changed and hopefully the string of claims from parents that they cannot be deported because their children are Australian citizens because they were born here and therefore they cannot be deported will cease. The other Bill being debated cognately with the Australian Citizenship Amendment Bill, the Migration Amendment Bill, simply amends the Migration Act to bring it in line with the new provisions of the Australian Citizenship Amendment Bill. The second purpose of this Bill is to amend the oath and affirmation of allegiance to remove the requirement that in order to become an Australian citizen one has to renounce all other allegiances. I fully concur with what the Minister said in his second reading speech and disagree with the Liberal Party's view. The Minister said that the renunciation is ambiguous and unnecessary and that some candidates actually believe that they are renouncing not only their former nationality but also their cultural background and all other ties with their country of origin. Countless people whom I have had the pleasure of joining at the naturalisation ceremonies have recounted that belief to me. The Government is to be commended for its sensitivity on this issue. It has consulted at length with the State governments and multicultural groups as well as the Human Rights Commission. It has considered the possible alternatives and come up with a simple oath or affirmation. I accept Senator Messner's criticism. If the Minister did not consult with the Liberal Party he was remiss. I accept Senator Messner's word that the Minister did not. That is certainly a point of criticism of the Minister. This matter should be as bipartisan as possible. The renunciation of all other allegiances is essentially symbolic. As far as I can discover, it has no legal meaning whatsoever. This is not a party political issue because, as I understand it, Senator Crichton-Browne has questioned in this chamber the need for renunciations, as have Senator Harradine and I. From now on those people who will be Australian citizens will say at ceremonies that they will be faithful and loyal to Her Majesty, that they will observe the laws of Australia and fulfil their duties as Australian citizens. I ask Senator Messner what else he wants. Surely to goodness that is enough. They will swear loyalty to Her Majesty, swear that they will observe the laws of Australia and swear that they will fulfil their duties as Australian citizens. Do we want to penalise them for becoming Australian citizens by putting them through the extra agony of saying to them `You will have to renounce all former allegiances', which is quite confusing and ambiguous for a candidate seeking naturalisation? The third aspect of this Bill is that it will allow the resumption of Australian citizenship for persons who lost their citizenship under section 17 of the Act, as amended in 1984, if they have a continuing commitment to Australia. It appears that thousands of Australian citizens lost their Australian citizenship when they acquired the citizenship of another country. Some lost it because they were unaware of the consequences of taking another nationality; others lost citizenship because they were given incorrect information from officers of the Department of Immigration and Ethnic Affairs; still others, under the laws of foreign countries, were compelled to lose their Australian citizenship. One large group of people caught in the citizenship anomalies were members of the Australian Jewish community, many of whom, having lived in Australia for decades, returned from Israel to discover that they were no longer Australian citizens. The Minister has the power under existing legislation to reinstate Australian citizenship under certain circumstances. The Minister has already agreed to exercise his discretion in these cases. The Democrats agree with the Minister, but for some extraordinary reason the Liberal Party proposes to move an amendment to this proposal. The main group affected is the Jewish community. I have a letter from Mr Mark Leibler, President of the Zionist Federation of Australia, which clearly indicates that those who are affected-namely, the Jewish citizens who lost their citizenship-are completely satisfied with the Minister's stated intention to exercise his discretion and reinstate Australian citizenship to those who lost it through no fault of their own but because incorrect information was given to them by officers of the Department. Apart from this group of people, the Minister has indicated that he will broadly exercise and interpret his discretion. I seek leave to incorporate in Hansard a letter and a Press release from Mr Leibler. I apologise for not having got Senator Messner's authority for this but he was talking at the time. Leave granted. The documents read as follows- 18th March, 1986 Senator Don Chipp, Leader, The Australian Democrats, Parliament House, Canberra, A.C.T. 2600 Dear Don, Once again, I would like on behalf of the Zionist Federation of Australia, to thank you and the Democrats as a whole for the co-operation which we received in endeavouring to find a satisfactory solution for dealing with the legitimate grievances of those Australians who were unwittingly deprived of their Australian citizenship when they became citizens of Israel. The problem areas have now been satisfactorily resolved and I enclose for your information a copy of the Media release issued by the Zionist Federation on 18th March, 1986, together with the relevant attachments. Thanking you once again for your co-operation. With kind regards, MARK LEIBLER 18th March, 1986. CITIZENSHIP PROBLEMS RESOLVED The Zionist Federation of Australia has welcomed amendments to the Australian Citizenship Act which have resolved problems about the citizenship status of Australian Jews in Israel. The Australian Citizenship Amendment Bill, passed in the House of Representatives on 13th March 1986, was finalised following lengthy consultations between Z.F.A. President Mark Leibler, the Minister for Immigration and Ethnic Affairs, Chris Hurford, and Immigration Department Staff. Furthermore, the procedures outlined in a letter from Mr Hurford to Mr Leibler dated 13th March 1986, and incorporated in Hansard, will enable Australian Jews, and their children, to have their Australian citizenship confirmed in cases where they were advised or understood prior to 29th July 1981 that they had not lost their Australian citizenship when they acquired an Israeli resident visa. Mr Leibler has written to Mr Hurford thanking him on behalf of the Z.F.A. and all Australians who are also citizens of Israel, for giving sympathetic consideration to the situation of Australian Jews living in Israel. Mr Leibler has also written to the Prime Minister, Mr Robert Hawke, the Shadow Minister for Immigration and Ethnic Affairs, Mr Alan Cadman, and the Leader of the Democrats, Mr Don Chipp, thanking them for adopting a unified tripartisan position on this matter. Mr Leibler said the effect of the amendments to the Citizenship Act and the associated administrative arrangements is such that virtually all those who lost their Australian citizenship will be able to have it restored. Mr Leibler also stated that, following on representations made by the Zionist Federation, administrative guidelines had now been adopted whereby those who acquired Israeli citizenship under the Law of Return since 22nd November 1984, will not lose their Australian citizenship. Mr Leibler noted with satisfaction the assurances provided by the Minister for Immigration and Ethnic Affairs that anomalous individual cases will be given sympathetic consideration. The Zionist Federation of Australia has consulted extensively with the Government on every aspect of the legislation and administrative arrangements affecting Australian Jews in Israel, and is satisfied that doubts and misunderstandings about the legal status of Olim have been resolved. Attachments: Letter from Mr Chris Hurford, Minister for Immigration and Ethnic Affairs to Mr Mark Leibler, President of Zionist Federation of Australia, dated 13th March 1986 and incorporated in Hansard. Letter from Mr Mark Leibler to Mr Chris Hurford dated 17th March 1986. Circular headed ``Loss of Australian Citizenship under Section 17 of Australian Citizenship Act-Interpretation of the words ``Sole or Dominant Purpose'' to be incorporated in the Annex of the forthcoming Handbook of Australian Citizenship Instructions. Press Release from the Minister for Immigration and Ethnic Affairs dated 17th March 1986. For further information contact: Mark Leibler 03-602 1233 (office) 03-527 1777 (home) Senator CHIPP —I thank the Senate. Australian citizenship will be restored to those who have been in Australia for not less than two years and have an intention to return to Australia within three years. That is, those who have a continuing contact with Australia or those who lost their Australian nationality through no fault of their own-that is to say, they did not intend to lose it-will have it restored. This is a perfectly reasonable attempt by the Government to ensure that justice is done and is also seen to be done. The last aspect covered by this Bill is a schedule which removes sex specific language from the Act and for this the Government is also to be commended. Finally, in the debate when this Bill was first introduced, the Opposition moved an amendment to alter the clauses dealing with the reinstatement of Australian citizenship. The Opposition spokesperson, in moving the amendment, claimed that he was doing so on behalf of members of the Australian Jewish community. I do not, and cannot, accept that this is the case. The letter and the Press release I have incorporated in Hansard clearly indicate that the Bill as it stands, together with the Minister's undertaking to exercise his discretion in these cases, meets with the complete and total approval of those people affected. For that reason it is beyond my comprehension why the Liberal Party of Australia persists in moving this amendment to a clause in the Bill which is designed specifically to help members of the Australian Jewish community when the Australian Jewish community says that it is satisfied with the Bill and the Minister's undertakings. We commend the Bill to the Senate. Senator COATES(Tasmania)(12.28) —The Australian Citizenship Amendment Bill fulfils four main intentions of the Government. Firstly, it will exclude children born in Australia to visitors, temporary entrants and prohibited non-citizens from automatically acquiring Australian citizenship by birth. Secondly, it will amend the oath and affirmation of allegiance to remove the requirement to announce one's name and the requirement to renounce all other allegiances. Thirdly, it will allow resumption of citizenship to persons who lost it under section 17 at any time, subject to a continuing commitment to Australia. Fourthly, it will effect other minor and formal amendments to the Act, such as removing sexist language and anomalies and to make the legislation more specific. We are also debating the Migration Amendment Bill which makes consequential changes to the Migration Act. I will be concentrating on the first two issues I mentioned. There seems to be general agreement on the first point about no longer conferring automatic citizenship by birth. As previous speakers have mentioned, a number of prohibited non-citizens, commonly called illegal migrants, have sought residence on the basis of having had a child born while they were in Australia illegally. I guess that the main purpose of this change in the law is to get around that situation, as was recommended by the Human Rights Commission, which has had to deal with some of these very difficult cases. It has been said that people have contrived to obtain Australian residence by virtue of having a child here. I suppose that there are really three categories of people involved. There are those who deliberately have a child while illegally in Australia in order to argue that, because they have had a child who is an Australian citizen by birth, they ought to have the right to remain with it. I suppose that that is contriving a situation where a new-born baby sponsors its parents for permanent entry to Australia. The second category is where a pregnancy occurs in Australia and the parents think that that might be an excuse to argue for remaining in Australia themselves. The occurrence was not necessarily deliberately contrived in the first place but they seek to obtain Australian residence because of it. Senator Chipp —Does that still happen these days? Senator COATES —I think it does in some cases. Thirdly, there is the category of temporary visitors who are temporarily visiting Australia who do not intend that a birth should occur in Australia but because of prematurity it accidentally occurs. We argue, and I think it is now generally agreed, that in none of those cases ought a child automatically obtain Australian citizenship. Only a few countries allow automatic citizenship on the basis of birth. Apart from Australia, which is soon to be changed by this Bill, those countries are New Zealand, the United States of America, Argentina, Fiji, Brazil and Canada. I understand that those are the only countries that retain this rule. Of course, in countries such as Britain and many other European countries birth does not automatically result in citizenship. I wish to quote from a letter written by the Minister for Immigration and Ethnic Affairs, Mr Hurford, on 27 May in response to the Australian section of the International Commission of Jurists, which has been writing to the Minister saying that it disagrees with the removal of what it has described, wrongly, as a fundamental human right. Mr Hurford pointed out: The Government believes that, when neither of a child's parents is an Australian citizen or permanent resident, the Australian community should have the opportunity to select who should become one of its citizens. To argue to the contrary means that anyone can select his or her child's citizenship irrespective of whether the community agrees. The Government cannot accept this and is obliged to protect the community's interest. Mr Hurford also pointed out: The Government takes the view that citizenship should not derive from the location at birth but through the child's parents. If one were to accept your proposition- that is, the proposition of the International Commission of Jurists-- that place of birth is the determinant factor one would be forced to accept that birth overseas to Australian citizen parents should not entitle the child to Australian citizenship. Such a proposition is contrary to the existing provisions of the Australian Citizenship Act which automatically confers citizenship upon the registration of children born overseas to Australian citizen parents. The right which is being curtailed is not a fundamental human right but a legal right conferred by the Australian Citizenship Act. Mr Hurford goes on to point out, as has already been said: This right is being abused today by persons who seek to use the birth of a child and its Australian citizenship as a reason for remaining here. If people think about it they will realise that the argument is perfectly reasonable. That is, if an Australian tourist happens to have a child born in another country, whether we are talking about North America, South America, Africa, Europe or whatever, that child automatically obtains citizenship of that country and not Australian citizenship. I think most of us would object to that. We are trying to bring Australian law into line with that in respect of children born in Australia. It needs to be pointed out that we are not talking about a child who has grown up in Australia seeking Australian citizenship; we are talking about new-born babies whom we cannot argue have acquired any cultural link with Australia. Because of the recognition that the child has grown up in Australia and perhaps ought to have Australian citizenship, it will be allowed if a child has been in Australia for 10 years. In that situation the child can obtain Australian citizenship, but in the case of a newborn baby, definitely not. I do not think there is any argument for it. The other exception that will be allowed is to ensure that a child born in Australia who would otherwise be stateless-I notice Senator Chipp objected to the use of that term-can then be granted Australian citizenship. We are ensuring that we do not add to the problems of that child by insisting that it remain stateless. We have an obligation to provide some citizenship to such a child. The other aspect of the Act that is being changed-the Opposition is opposing this change outright-is in relation to the oath or affirmation of allegiance at a citizenship ceremony. I hope that we can continue to use the term `citizenship ceremony' rather than the old term `naturalisation ceremony' which unfortunately still falls from some people's lips. It is an outdated term which we ought to make sure is removed from our language. It implies that a person was somehow or other not natural before expressing allegiance to Australia. The main reason why the Opposition is opposing this change in the law is its jingoism. The Government believes that if new citizens who have been resident in Australia for some time and who have taken what I think is a big step to decide to become Australian citizens, affirm their allegiance to Australia, it is unnecessary to renounce former allegiances. The one implies the other. Many new citizens are confused by the renunciation clause and think that it refers to cultural, religious or other such heritage. I have attended many citizenship ceremonies. A number of times I have actually distinctly seen people's lips not moving for that particular phrase. I can understand their taking that attitude. People are bothered about it. I think it is time that we removed it because people have their heritage and the strong term `renounce' should not be used. In the case of new citizens from other Commonwealth countries, it is ambiguous. They are asked to renounce their allegiance to the Queen so that they can affirm their allegiance to the Queen. The renunciation that presently exists assumes that new citizens do not really understand what they are doing by becoming Australians when in fact because of the thought that they have, in most cases, given to this, they probably have a better understanding of their rights and obligations as citizens. Most citizens who are Australian by birth do not make this conscious decision. I thought I understood Senator Messner to say that we must have this renunciation clause because it brings a feeling of identity. I would have thought that a negative term such as `renunciation' does not bring a feeling of identity at all; the positive claim of allegiance brings identity. If we are talking about cultural identity that is not and ought not to be changed by asking people to renounce allegiance. The other aspect of the change in the statement of allegiance is that we are no longer going to require people to state their name in the middle of this oath or affirmation. I think that is a sensible move, again, from my observation of citizenship ceremonies over the years. When a group of people are trying to say the same words in unison, it makes it very difficult if that is interrupted so that they can say their own name, which can take a different length of time. It ends up being very messy because they are not in unison and some of them decide not to continue to speak at all and it reduces the effectiveness of the ceremony. The situation is that people are called up to the front by name; they have a certificate in their name and they know what they are saying when they state: `I swear' or `I affirm allegiance to Australia and agree to obey Australian law'. The Opposition seems to want big, showy citizenship ceremonies. It wants to put people under its thumb and say: `You renounce your former allegiance and have allegiance only to Australia'. I think we ought to encourage much more the attitude of people being citizens of the world rather than having merely sole allegiance to one country. To force them to renounce everything in their past is an insult and is unnecessary. It is not required under any international law. I make the point that we can argue that the granting of Australian citizenship is a great privilege. We ought to also acknowledge that Australia is privileged that so many people from all parts of the world, from many different cultures, apply for Australian citizenship. When I speak at citizenship ceremonies I try to avoid saying `Congratulations' to the new citizens because in some ways I see that as a bit paternalistic. I try to remember to say: `Thank you for joining us. It is you, as new citizens, who are honouring Australia rather than Australia doing you a good turn'. The Opposition has foreshadowed an amendment to the Migration Amendment Bill which is being debated with the Australian Citizenship Amendment Bill with the intention, apparently, of confusing the fairly simple change in the Citizenship Bill limiting Australian citizenship by birth. It seems that the Opposition wants to create a new category of person. Instead of having the simple situation on the one hand of an Australian citizen and, on the other hand, those who are not citizens, it wants to have another category of what might be called `potential Australian citizens'; that is, to allow people who were born here accidentally by being born to a tourist or deliberately to an illegal non-citizen to be defined as potential Australian citizens or contingent non-citizens. These people are non-citizens until they actually ask to come back at some later point in their life. The Opposition is suggesting that once they turn 18, even if they were here for only a week after their birth, they should have some right of entry into Australia. The confusion that the Opposition wants to introduce ought to be rejected. I am pleased to hear that this is the Australian Democrats' intention. Senator Messner suggested that the purpose behind the amendment was somehow to compensate those who would now be denied citizenship by birth. The Opposition is suggesting that such people should be entitled to return to Australia some 18 to 40 years later and be subjected to minimal procedures about their health or character. It really does confuse the simple change that is proposed to be made to the Citizenship Bill. The Opposition is claiming some supposedly traditional right that it did not acknowledge at the time of the debate when the Citizenship Bill was first dealt with in the House of Representatives. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator CHANEY —Is the Leader of the Government aware that the value of the Australian currency has continued to deteriorate in the past 24 hours, that about an hour ago the dollar was trading at around 68c American, and that when the trade weighted index is calculated later today it will almost certainly be below the previous record low of 59.1 recorded on the day the Treasurer described us as having banana republic potential? Does the Minister appreciate that the currency is now 11 per cent lower, on the TWI basis, than when accord mark 2 was negotiated last September? Does he agree that the prospect of a continuing slide in the currency strengthens the case for further wage discounting, including in the current wage case? Senator BUTTON —I was not aware of the currency movements today, though I am not entirely surprised by what Senator Chaney said. I like the connection in the question between the negotiation of accord mark 2 and the previous TWI low figure. Senator Chaney —No; it is 11 per cent lower than it was then. Senator BUTTON —I said `the connection made in the question between the previous lower figure and negotiation of accord mark 2'; that is how Senator Chaney put the question. Senator Chaney —No; the previous lowest figure was when the Treasurer said that we would become a banana republic. Senator BUTTON —That is not the way Senator Chaney put the question, with respect. Senator Chaney —Would you like me to repeat it? Senator BUTTON —Don't get fussed about it, Senator. I think the point that the honourable senator is trying to make is obvious to everybody. The value of the currency at the moment is of concern to the Government and it will be taken into account in respect of wages policy and other matters. The Government will take decisions appropriate to the state of the economy, and particularly in the light of what we intend the economy to look like in 1987 as far as that is possible. On the question of rates of pay, I make the point that the argument is often overlooked as to increases in award rates, and perhaps insufficient attention is given to the question of the base on which those increases occur. I thought it might be helpful to the Senate, because this has been a question of some discussion here in the last few days, to refer to the average increases in award rates of pay for the last six years. Those increases are as follows: 1980, a Fraser Government year, 11 per cent; 1981, Fraser Government, 11.3 per cent; 1982, Fraser Government, 14 per cent. Senator Crichton-Browne —What about the rest of the world? Senator BUTTON —That is a good point. In 1983, the figure was 5.6 per cent; 1984, 6.9 per cent; 1985, 3.7 per cent; 1986, 2.3 per cent. When we are discussing what should be done about wage increases at present in a severe situation for the Australian economy, I think that it is important to bear in mind what happened in previous years, in respect of not only wages but also general issues affecting the Australian trade balance. In any event, in answer to the final part of Senator Chaney's question, I would reply that the Government will, in respect of wages policy and other matters, take what steps it believes to be appropriate in the light of the figures to which Senator Chaney has referred. Senator CHANEY —I thank the Leader of the Government for the information he has chosen to give the Senate. As a supplementary question, I ask him whether he is suggesting that the current difficulties we face can be handled without further discounting of wages in light of the slide of the dollar? Senator BUTTON —I am not suggesting anything. Senator TATE —My question is directed to the Minister representing the Minister for Foreign Affairs. Is the Government aware of the arrest by Zimbabwe authorities of the Chairman of the Catholic Commission for Justice and Peace in Zimbabwe? If so, what action has the Government taken on this issue? Senator GARETH EVANS —Our High Commission in Harare has reported that Mr Mike Auret, Chairman of the Catholic Commission for Justice and Peace in Zimbabwe, was detained yesterday, 5 June. Our High Commission currently is making inquiries to clarify the exact details of the situation, including the reasons for Mr Auret's detention. Mr Auret is well known in the human rights area and is considered to be a person of the highest integrity. Both he and the Commission have worked for many years in the interests of the people of Zimbabwe and, in particular, to further the respect for human rights in that country. The Australian Government is concerned that a leading human rights activist such as Mr Auret has been detained. The High Commissioner already has expressed Australian concern to the Minister of State (Security) and the Permanent Secretary of Home Affairs Ministry and will be making further representations to other appropriate Ministers and officials. Senator LEWIS —I ask the Leader of the Government in the Senate whether, in view of the beneficial effect of the Fraser Government wage freeze and the support earlier this week from the Business Council of Australia for another freeze to make industry more competitive, the Government has given consideration to such action as a response to the serious problems confronting the Australian economy. Does the Minister agree that, apart from its direct economic benefit, a freeze could make a desirable impact in bringing home to the public the seriousness of the current situation and in bringing home to people around the world the fundamental strengths of this nation? Senator BUTTON —I do not know what Senator Lewis is referring to when he talks about the fundamental strengths of this nation. I assume he must be talking about something psychic or volkgeist. I take it that is what he is referring to. I am more concerned about fundamental economic strengths. I think that that is much more important to us as a government at the moment. The answer to his question is no. Senator DEVLIN —Has the Minister for Community Services seen the statement by the Queensland Minister for Health and Environment, Mr Brian Austin, that there was a crisis in aged care in Queensland? Is it true that most areas of Queensland will not qualify for new nursing home beds until well into the next century, as Mr Austin alleges? Is it true that Canberra has not said anything about expanding its hostel program? Finally, is it true that families will find it very difficult to find nursing home accommodation for their elderly relatives? Senator GRIMES —I saw the statement put out by Mr Austin. I assume that Mr Austin either has put out a statement off his own bat in ignorance of the facts or has chosen to ignore the facts-facts that I know his public servants in Queensland are well aware of. There is not, as Mr Austin has claimed, a freeze on nursing home beds in Queensland. It is true that the Federal Government has recently changed the principles on which it will grant approvals in principle for nursing home beds in Queensland. However, the changes that we have made to those principles-I made this clear to Mr Austin and in the statement I made at the time-will apply only until the Budget next August. In fact, the new principles will last two and a half months, not 16 years, as Mr Austin claimed. Certainly, no government would have any intention of changing the principles in the way we have for that length of time. In fact, we will need more nursing home beds in this country from now until after the turn of the century. We have stated that we will need more nursing home beds. In fact, we have continued to approve new nursing home beds. We will continue to do so in the future. What we have said is that there is an imbalance in this country between nursing home beds, less dependent types of accommodation such as hostel accommodation and even less dependent types of care such as providing community services to enable people to stay in their homes. We certainly intend to reverse the balance whereby the more dependent types of accommodation are dominated by the most expensive and last appropriate, in most cases, form of accommodation, and that is nursing homes. We will announce a program for the next three years in the next Budget. The changes to the principles that Mr Austin seems so worried about last only until the Budget is brought down. If that measure had not been introduced unscrupulous people would have taken advantage of it and tried to get nursing home bed approvals before the new changes, of which almost everyone in the community who has knowledge of this area approves, were introduced. I wish Mr Austin were more concerned about the welfare of the aged people in his State, more concerned about the fact that the Queensland Government provides less than any other State in Australia provides in assistance for those who are aged and disadvantaged, than he is about making cheap political points on matters such as this. Senator SANDERS —Is the Minister representing the Minister for Defence aware of the bombing and partial destruction by military aircraft of the significant scenic feature called `The Drum and Drumstick' on the Beecroft Peninsula on 27 and 29 May? If so, what are the details? Will he close the range to further bombing or bombardment? If not, what steps will he take to ensure the safety of local residents and the preservation of significant land marks in the future? Senator GARETH EVANS —I have sought a brief on this matter from the Minister for Defence but it is not yet to hand. As soon as it is I will be happy to advise Senator Sanders. Senator ROBERT RAY —Has the attention of the Minister for Finance been drawn to statements by the Federal President of the Liberal Party of Australia, Mr Valder, in which he advocates the establishment of a tribunal for economic crimes? Has the Government any plans to adopt his proposals? How much would such a tribunal cost? Finally, would Mr Valder's duplicity over the fringe benefits tax make him an ideal witness before such a tribunal? Senator WALSH —I have seen the Press report to which Senator Ray refers. As far as I know the Government certainly has no proposals to set up an economic crimes tribunal, although I guess it is tempting. It is too late to get Menzies, McEwen or Lynch, but Fraser and Howard are still around. Mr Valder's duplicity in saying that he was looking forward to the Labor Government introducing all the tax reforms that the country needed and then, so he thought, a subsequent Liberal government reaping the benefits of those tax reforms would, I suppose, make him a perfect witness for such a tribunal. In Mr Valder's favour, I remember that in 1979, I think, as President of the Sydney Stock Exchange, he issued a Press statement indicating that he had refused applications for renewing or regranting dealers licences from some defrocked former Patrick Partners members. It is a pity that Mr Valder as President of the Liberal Party could not enforce the same standards as he did in the Sydney Stock Exchange. Senator MESSNER —My question is addressed to the Leader of the Government in the Senate. Is the Government seriously considering, under pressure from the Australian Council of Trade Unions of course, offering interest rate subsidies to business and industry in an attempt to encourage investment? If so, does the Minister agree that this represents for him, and for the Government as a whole, a significant change in the direction of industry policy? Senator BUTTON —The Government has been considering a number of matters in relation to the trade balance and that issue has certainly been considered. However, no decision has been made about it or any other matter related to it at this time. Senator MESSNER —Mr President, I ask a supplementary question. Does not the fact that the matter has been considered, even if that consideration has not been finalised, and the fact that the Government is thinking along that line represent a soft option for the Government? Does it not really mean that the Government has given up hope of taking other, admittedly more difficult, action to bring down interest rates which would produce durable results? Senator BUTTON —It is not a soft option; the honourable senator's original question was about a soft loan. That is a matter which, as I said before, has been considered. In respect of any of these matters, it depends on whether they are of universal application or not. For example, in answering the second part of the honourable senator's question, the investment allowance which was provided by the previous Government and the depreciation allowance which was suggested by the previous Government are similar types of schemes. The research and development allowance is a similar type of scheme. Whether those things are necessarily in conflict with economic rationality is a matter for judgment in respect of which universality or otherwise is an important issue. Senator COATES —Does the Minister representing the Minister for Aviation recognise that, while it is welcome that most seats in aeroplanes are in non-smoking zones, there is a continuing health and comfort problem for non-smokers in airport terminals? In respect of those areas of airport terminals which the Minister for Aviation controls and which Trans Australia Airlines and Qantas Airways Ltd control, such as departure lounges and ticketing, baggage and seat allocation queues, will he ask the Minister for Aviation to undertake to ensure that non-smoking areas are introduced in lounges and waiting areas and that smoking is banned in queues so that those who choose not to smoke can avoid the offensive and health threatening pollution from those who choose to smoke in public areas? Senator GIETZELT —In response to Senator Coates's question regarding smoking and non-smoking areas, he will probably recall that the Minister for Aviation gave the airlines the option of extending non-smoking facilities on aircraft several months ago and did not receive a very positive response. The airlines said that the non-smoking areas currently zoned on aircraft were meeting the current need. The Minister's view on the question of protecting the interests of the non-smokers is well on the public record. However, Senator Coates has asked whether the Minister will be prepared to set aside specific areas, I presume zoned areas, in the lounges which come within the jurisdiction of the Minister for Aviation for the purpose of protecting the health of non-smokers. That is a very interesting development which obviously would receive the consideration of the Minister so that the interests of both the smokers and the non-smokers could be protected. As far as I am aware, it is free for all at the moment in smoking lounges. No special areas are set aside for the growing non-smoking component of the population. Therefore, there would be some validity in having such steps taken by the Government through the Minister. I will certainly refer the request to the Minister for his consideration. Senator Dame MARGARET GUILFOYLE — I refer my question to the Leader of the Government in the Senate and it follows the remarks that he just made to Senator Messner with regard to the introduction of schemes which would assist private investment, such as the investment allowance and research and development schemes, as well as other things which were mentioned by him. I noted the remarks he made in that connection and I was interested that the investment allowance was mentioned because, amid all the speculation of the last few days, I do not think it had been mentioned. Are the investment allowance and the other schemes which were mentioned by the Leader of the Government in the Senate part of the submission which has been made by the Australian Council of Trade Unions with regard to encouraging investment, which I noted the Leader of the ACTU has stressed is vital to the recovery of employment prospects and the economy generally? If the investment allowance is not within the recommendations of the ACTU, what items were regarded as important by the ACTU to encourage investment? Senator BUTTON —I do not recall whether there was a reference to an investment allowance in the document which the Australian Council of Trade Unions gave to the Government. There were some 20 items which were very varied. I am not yet in a position to have made an assessment of the relative merit of the number of items but they are on a very wide scale of assessment in terms of merit. I do not have the document in front of me and I have not studied it in detail but I believe several items were directed towards investment matters-but not a universal investment allowance as such, as I recall. Senator COLSTON —My question is directed to the Minister for Veterans' Affairs. It relates to the home insurance scheme administered by the Defence Service Homes Corporation. Is the Minister aware of large premium increases being quoted by a number of private insurance companies as a result of recent flood and cyclone damage and the increased costs of building materials? Is the Minister able to outline any policy changes that may have been initiated by the defence service homes insurance scheme to help contain ever-rising costs? Senator GIETZELT —The Senate would be aware that the Defence Service Homes Corporation runs its own insurance scheme, which is available for veterans who are buying their home or those who have been able subsequently to pay off their homes. These arrangements are very satisfactory from the point of view of the participants. As a result of very good management by the Corporation it will not increase its premiums this year for those covered by its operation. That represents not only good management but also the restraint which has been suggested by the Government in all matters affecting price. The premiums which are paid to this publicly owned instrumentality on houses in the various States show a very marked concession against those offered in the private sector. For example, in Senator Colston's State of Queensland, for a weather-board home whose cost approximates $60,000 the current premium, which will be the same in the next financial year, is $43.50. However, if a person insured with Suncorp Insurance, one of the big insurers, the cost would be $171 which, the honourable senator will appreciate, is a very big difference. It would appear from the figures that have been provided by the Corporation that in every State it is about $100 cheaper, in round figures, to insure with the publicly owned insurance Corporation than it is to use the services offered by the private insurers, or even the State government insurance offices. There is no doubt that the home insurance scheme run by the Defence Service Homes Corporation is very profitable and efficient and can provide services at considerably reduced costs. Senator CHANEY —My question is addressed to the Leader of the Government in the Senate. It follows the rather confused answer that he gave to a question by Senator Messner. Is the Minister saying that the Government is considering granting selective concessions on interest rates rather than a general concession? If so, does the Minister agree that this represents both for him and for the Government a significant change in the direction of industry policy? I ask further: Is that not a confession on the part of the Government of failure to be able to do anything about interest rates generally, which the Minister a couple of days ago told us were the first cause of the drop in investment in this country? Senator BUTTON —It is not a confession of failure. Throughout the history of this country, and indeed in many countries, both general and selective instruments of industry policy support are made available by governments. I think in almost every country other than Australia which has a large manufacturing base, selective measures of support are made available to industry sectors through the taxation system. I have already answered that the Government is considering a wide range of measures, amongst which the provision of soft loans is one. No decision has been made. Senator McINTOSH —Has the attention of the Minister representing the Minister for Foreign Affairs been drawn to the article in today's Australian Financial Review reporting on Caspar Weinberger's comments in relation to Australian participation in the strategic defence initiative? Does the Government consider it appropriate for an alliance to encourage Australian industry to participate in such activities in view of the Government's express wishes? Senator GARETH EVANS —I have seen the remarks attributed to Mr Weinberger in the article to which Senator McIntosh refers. The Government's position remains as set out by the Minister for Defence on 8 April. The Australian Government does not endorse the SDI concept and, as a result, will not be entering into negotiations of any sort to establish an umbrella agreement of this kind for SDI research. This will preclude Australian participation in research funded under the SDI program. The United States Government is aware of the Australian Government's position, both on SDI as a whole and on Mr Weinberger's invitation to enter negotiations on an umbrella agreement. Cabinet will consider how best to handle any remaining areas of uncertainty which may arise, but that consideration will strictly conform to the basic policies outlined by the Minister for Defence on that occasion. Senator PARER —My question, which I direct to the Leader of the Government in the Senate, concerns the announcement a month ago of agreement on the basic elements of the assistance package for the heavy engineering industry. Given that the program is due to start operating in about three weeks time, when will the Government be announcing details of the labour and capital adjustment aspects? Is the Minister having difficulty persuading Cabinet about the level of interest rate assistance? Senator BUTTON —The answer to the first part of the question is, very soon. The answer to the second part of the question, as to whether I am having difficulties, is no. Senator ELSTOB —Has the Minister representing the Treasurer seen an article in yesterday morning's Age by Claude Forell titled: `PM starts to pay for tax cowardice'? If so, is the article accurate in terms of the Government's tax strategy? Perhaps the Minister will explain to the Senate and to Mr Forell the Government's tax strategy. Senator WALSH —Yes, I have seen the article to which Senator Elstob refers. It begins with this sentence: The public outcry against the fringe benefits tax is a timely reminder to the Hawke Government of the high cost of political cowardice. The article goes on to say that the Government made a huge mistake in not accepting a broad based consumption tax of the kind put forward last year in the C option. That is a judgment. Leaving aside whether that should have become policy or not, I want to make the point that Mr Forell, like many other journalists, seems to have completely forgotten that the fringe benefits tax, the capital gains tax, the ending of deductibility for entertainment expenses and the Australia Card, which are all now controversial and which were in option A presented to the National Taxation Summit, were also in option C. Leaving aside any value judgment or economic judgment, just as a question of fact, anybody who is saying that the controversy over the ending of a series of rorts and ramps and rip-offs which have been practised for a long time by the people whom the Liberal and National parties represent, would not have happened if last year the Government had adopted and enacted as policy option C is simply wrong. It just is not so because all those things and more were in the option C package. I am disappointed that a journalist of Mr Forell's calibre has so quickly forgotten just what was in option C. Senator HAMER —My question is to the Minister for Finance. Is it a fact that State and Federal governments will have to accept cuts in their expenditure plans if the country is to get out of the economic crisis it is now in? Does the Minister accept the claim made by the Victorian Treasurer that the Victorian Government has been more successful in restraining expenditure than has the Federal Labor Government? If so, will this success be reflected in the financial treatment Victoria receives? Senator WALSH —I do not think I could off the top of my head give a valid assessment of whether the Victorian Government has been more successful than the Commonwealth Government in restraining expenditure. Indeed, I do not know the time period to which Mr Jolly referred. In 1983-I refer to calendar year 1983 rather than the financial year, although it did flow over into the 1983-84 financial year-there was a significant increase in Commonwealth outlays solely because of rising unemployment benefits, a cyclical factor with which State governments do not have to contend to nearly the same extent. There was also in calendar year 1984 a significant increase in what were recorded as Commonwealth outlays because of the introduction of Medicare, whereas previously a good deal of Commonwealth expenditure on health had been hidden as a tax expenditure. So there are those complications in the first place. I do not have enough information to pass a valid opinion, but I will mention one way in which the Victorian Government has made it hard for the Commonwealth. This is a condition which pre-dates the present Victorian Government. Victoria is very much a pacesetter when it comes to wages and conditions for government employees. The general enrichment in both numbers and salaries which prevails in Victoria, and has done for a very long time, makes it difficult for other governments throughout Australia to resist pressures for the same sorts of conditions. Senator MAGUIRE —My question is directed to the Minister representing the Treasurer. It concerns the vital manufacturing sector of the economy. Has the Government noted new information both on costs faced by Australian manufacturers and on prices paid for products sold by manufacturing industry? If so, can the Minister indicate the Government's response to these price indexes for manufacturing industry purchases and production? Senator WALSH —I have seen the series to which Senator Maguire refers. The most notable thing it shows is that the cost of all materials used in manufacturing fell by 8.4 per cent in the month of March, which is the largest monthly price fall ever recorded. Of course, the implications of that for manufacturing industry are very favourable. It means that the costs of manufacturing in Australia have been reduced substantially. It is true that the largest part of the fall was due to the falling price of oil, whether imported or purchased in Australia. To be balanced about this, one should concede that manufacturers in other countries generally receive the same sorts of cost advantages, that is, cost reductions, because of the falling oil price, and in some countries probably receive a somewhat greater reduction in cost because of that factor in isolation. The all imported materials index fell by 4.2 per cent in the same month. Similarly, about 90 per cent of that was due to lower prices for imported crude petroleum. The monthly figures are significant when one realises that the costs of materials used in manufacturing have fallen by 2.2 per cent over the 12 months from March 1985 to March 1986, notwithstanding the fact that, because of the devaluation of the dollar, the cost in Australian dollar terms for some imported inputs to manufacturing industry would have gone up. Materials, of course, are not the only input to manufacturing, so the effects on the prices of articles produced by manufacturing were somewhat less. The all manufacturing index of prices fell by 0.6 per cent in March, which was the first decrease in that index since November 1970. Senator Maguire —Which year was that? Senator WALSH —November 1970, almost 16 years ago. It is the first time that that index of articles produced by manufacturing has actually fallen in a month. While the effects of increases in excises on certain petroleum products are excluded from this index, the figures demonstrate the beneficial effects of reductions in the cost of oil on other sectors of the economy. Senator SHEIL —My question is directed to the Minister Assisting the Prime Minister on the Status of Women. In view of the decision by the Greater London Regional Labour Party to ban family snapshots of political candidates because of the offence they create in discriminating against homosexuals and lesbians, can the Minister indicate which sections of the Human Rights Commission Act and the Sex Discrimination Act will be used to provide similar protection in Australia? Senator RYAN —The decisions of a particular ratty branch of the British Labour Party have no relevance to any policies or legislation supported by our Government. Senator CHILDS —Has the Minister representing the Special Minister of State seen the article in today's Sydney Daily Telegraph entitled `White terrorism down under'? The article states: Ultra right wing reactionaries, who champion the extreme elements of South African white rule, are slowly but surely gathering influence in Australia's political underground. The article links the South African Defence Campaign of Australia-SADCA-with two recent violent attacks on an African restaurant in Glebe, Sydney, and mentions four other incidents of racist violence with which this group may be linked. Can the Minister detail any information he has on the activities of members of SADCA? Is there any evidence of a link between the Sydney based group SADCA and the rise of neo-nazi groups in South Africa? Are any of the members of SADCA newly arrived from South Africa, Australian citizens, or citizens of other countries? What is the Government able to do to control the activities of these neo-nazi groups? Senator GARETH EVANS —I am not in a position to give any specific information on SADCA. I will see what the Minister is able to offer in due course about that group. But I do have a brief which I think is relevant on the action being taken to ensure that Australians are protected from all forms of terrorism and politically motivated violence. The situation is this: Although Australia has so far been relatively free from international terrorism, it has in recent years made extensive preparations to counter terrorist threats. For example, a national counter- terrorist capability has been developed through co-operation between the Federal and State governments. This has included the provision of special equipment and training-at a cost of $8.2m to the Commonwealth since 1980-for all police forces. These forces now have elements with a special counter-terrorist capability. A national anti-terrorist plan has been prepared to ensure a co-ordinated response to an incident and to provide for effective crisis management. These arrangements are regularly tested in exercise programs. The Australian Defence Force has detailed plans for the provision of aid to the civil power. Australia has a well developed intelligence exchange system with many other countries on the subject of terrorism. The Commonwealth is co-ordinating a program for the protection from terrorism of installations of national economic importance, including off-shore oil rigs and matters of that kind. Finally, Australia has ratified several international conventions on terrorism, including aircraft hijacking, and has expressed support for various other international proposals. Recently the Government decided to undertake a review of all counter-terrorism capabilities to ensure their continuing efficacy and effectiveness. That review will develop options for an appropriate division of responsibilities between the Commonwealth, the States and the Northern Territory, as well as options for funding the continuing development of the national counter-terrorism capability. The review is taking into account the relatively unpredictable nature of terrorist activity, the legal responsibilities and international obligations of the Commonwealth in countering terrorism and the responsibilities of the Australian States for the maintenance of order and for breaches of criminal law within their boundaries. The review will embrace aviation security in general, including the adequacy of anti-terrorism measures at airports. I repeat that I am not in a position to respond specifically to the allegation about potential scope for white terrorism in Australia. That allegation would be alarming should it be well founded. I will seek such further information as can be put on the public record about that. Senator WATSON —Is the Minister for Industry, Technology and Commerce embarking on a campaign of softening up the textile, foot- wear and clothing industries with his references to the desirability of removing quota protection? Is he aware that 50,000 jobs are at risk with a tariff-only regime? Do not the sophisticated and diversified economies of the United States of America and the European Economic Community rely on quota protection to prevent destabilisation of their domestic industries? Is it not true that the textile, clothing and footwear industries have invested almost $600m in new buildings and state of the art plants and have done all that is required by the Government, in conformity with the plan? Is not the Government satisfied with overseas penetration, with a 28 per cent increase, 1987 over 1985, based on maximum of quotas? Senator BUTTON —The first part of the question asks whether I have been embarking on a program of softening up the textile, clothing and footwear industries. The answer to that question is yes. Secondly, I am asked about the desirability of quota regimes-- Senator Watson —With reference to the second part? Softening up with reference to removing quota? Senator BUTTON —I am not in a position to comment about that. All I am saying is that the textile, clothing and footwear area is an enormously protected area of the Australian manufacturing economy. Those industries have to understand that the Government's response to the Industries Assistance Commission report, when we get it, will reduce levels of protection for those industries. If that is what the honourable senator means by softening up, the answer is yes, as I said. The mechanism to reduce the level of protection for the textile, clothing and footwear industries remains to be determined and will be announced by the Government in due course. The honourable senator asks whether the textile, clothing and footwear industries have done everything in accordance with the expressed wishes of the 1982 textile, clothing and footwear plan-whatever they were; I was not in government at the time. Whatever the expressed wishes of that plan were, I think the answer is that one cannot generalise about this matter. Some parts of the industry have complied with the plan; some have not. As Senator Watson knows, massive structural changes have been taking place within those industries in any event. Those structural changes represent, in a sense, a reduction in the number of less efficient companies in the industry. That has been going on for the duration of the plan. With respect to the honourable senator, I do not think anybody would say of an industry such as this that all parts of it had been terrific, that they had all conformed, and therefore we will give them all another great slab of protection into the next decade. If that is the implication of the question, my answer is that that will not happen. Senator MORRIS —Will the Minister for Education advise what initiatives have been or are to be taken to implement the recommendations of the Quality of Education Review Committee? Senator RYAN —A number of the initiatives have already been implemented insofar as the resource agreements with the States have been completed and the four national priorities identified in the Karmel report of the Quality of Education Review Committee have been incorporated into those resource agreements. In other words, the extra recurrent funding that the Government has made available to the State systems and the non-government systems has been directed to the four areas of national priority, which are basic learning in primary schools; increased participation in years 11 and 12, especially by disadvantaged groups; the encouragement of girls to take subjects right across the curriculum; and the professional development of teachers to assist them to accept these new challenges. In respect of some of the other recommendations of the Karmel Committee report-for example, the changes it has recommended to some of the special purpose programs of the Commonwealth Schools Commission-the Government has available to it a report from the Schools Commission following consultations held with all relevant parties on that and also is seeking the views of our own Caucus committees on that matter. Towards the end of the year further decisions will be made based on the responses to that report, the responses to the Schools Commission report on the special purpose programs-that is, the Quality and Equality Report-and the follow-up to the resource agreements with the States. Senator Sir JOHN CARRICK —My question is directed to the Minister representing the Minister for Foreign Affairs and relates to the efforts of the Conference on Disarmament in Geneva to achieve a draft treaty to ban chemical and biological warfare-a concept and a treaty fully supported by the coalition parties. I refer also to the draft treaty banning chemical warfare submitted to the Conference by the Vice-President of the United States of America, Mr Bush-a draft which, in my understanding, is acceptable to both the coalition and the Government. Is it a fact that there is proven evidence that the Union of Soviet Socialist Republics over many years has been building and deploying huge stocks of chemical and biological weapons and equipping and training Warsaw Pact troops in their use? Is it also a fact that the United States of America since 1970 had refrained from manufacturing such weapons and had sought earnestly to get agreement to their banning? Does not this Soviet action create a major threat and imbalance in the field of so-called conventional warfare? Will the Government make known to the Australian public the nature and fearful threat of the Soviet stockpile, training and deployment? Will the Government, while increasing its efforts to achieve a draft treaty, communicate to the Soviet Government this country's abhorrence of its action in this field? Senator GARETH EVANS —I will take that question on notice and seek an early reply. Senator REYNOLDS —Has the Minister representing the Minister for Transport seen a letter from the Queensland Main Roads Department threatening to cut pensioners' concessional motor vehicle registrations because of a shortage of funds in the Department's roads program? How much increase has there been in Commonwealth roads funding to Queensland over the past three years? Why is the Queensland Main Roads Department short of funds? Why should Queensland pensioners lose one of their few concessions just because the Queensland Government cannot manage its economy? Senator GIETZELT —The Senate and, indeed, the Australian public have been discussing the fringe benefits tax quite considerably over the past week or so. Of course, fringe benefits available to pensioners throughout Australia are dependent upon the generosity or otherwise of the particular States. Queensland happens to be the one State that does not extend that generosity in the area of electricity charges. Therefore, pensioners in Queensland are considerably disadvantaged compared with pensioners in other States. I have seen the letter to which Senator Reynolds referred, which indicates a tightening up by the Queensland Government, through the Main Roads Department, in respect of the eligibility of pensioners for motor vehicle registration concessions. That, of course, would put Queensland in a bad comparative position with other States. One finds it difficult to understand how the Queensland Government could possibly justify that particular tightening up of the regulations, because tremendous funding arrangements exist so far as Queensland and the Commonwealth are concerned. For example, by 1988 the Commonwealth intends to spend in Queensland, on the Bruce Highway alone, some $355m. In the current financial year the Commonwealth Government has allocated $70m to that particular project. That means that, since this Government came to office, Federal funding for Queensland's main roads system has increased by 53 per cent. The State's contributions are down 15 per cent, so one can only say that there are some deficiencies in the economic management by the Queensland Government. One can, therefore, appreciate why the Liberal Party in Queensland is as outspoken as it is in its criticism of the Queensland Government and also why the Labor Party in Queensland is on the way back in respect of the elections that will take place this year. An analysis would show that in Queensland there is a certain degree of cronyism or paternalism about the way in which road funds are allocated within the State's main roads system. I thank the Queensland senator for drawing attention to the letter which has been sent to Queensland pensioners, which certainly indicates that not only do Queenslanders miss out on electricity concessions but also they are going to have an important concession withdrawn from them unless they meet tightened up criteria, which would certainly place them at a disadvantage as far as fringe benefits are concerned in that State. Senator CHANEY —My question is addressed to you, Mr President. I ask: Have you received a letter from Mr David Barnett of the Bulletin contesting Senator Walsh's claim about his level of earnings in 1975-76 as the previous Prime Minister's Press Secretary and seeking protection from incorrect allegations made under privilege? Will you examine the matter and report to the Senate on the accuracy or otherwise of Senator Walsh's claim? I note, incidentally, that Senator Walsh claimed that Mr Barnett had received an income of about $102,000 and that Mr Barnett claims his income was a little over $41,000. Since it is a public salary, no doubt the facts are very simply verifiable. What remedy is available to any citizen who is subject in this place to allegations which are wrong or inaccurate? If there is no current remedy, will you consider the matter, either alone or in association with the Standing Orders Committee, and report to the Senate on how corrections might be made in appropriate cases? The PRESIDENT —Shortly prior to Question Time commencing I received a letter from Mr Barnett relating to recent comments made in the Senate by the Minister for Finance with respect to salary and allowances paid to Mr Barnett when he was in the employ of a former Prime Minister. Mr Barnett, in his letter, asserted that the claims made public by Senator Walsh were not accurate and asserted that he had a right to have them corrected in the Parliament. That, as I understand it, is not a matter for the President to comment on. I understand that, according to Mr Barnett, copies of the letter were sent to the Leader of the Government in the Senate and to the Leader of the Opposition. In his letter Mr Barnett referred to the rights of private citizens to be protected from incorrect allegations made under privilege, but with respect to that aspect I again state that I have no comment to make. That suggestion has been made on many occasions before this but no proposal on that aspect has come forward from the Joint Standing Committee on Parliamentary Privilege or from anyone else to alter parliamentary law on the subject. Senator Chaney, of course, is a member of the Standing Orders Committee, and should he like to raise the matter at a meeting of the Standing Orders Committee, he is quite entitled so to do. I also mention that during Question Time, about half an hour ago, Senator Walsh came to me and stated that at the end of Question Time he would seek leave to make a personal explanation on that subject. Senator CHANEY —Mr President, I seek leave to table the letter that I referred to in my question. Leave granted. Senator ZAKHAROV —My question, which is addressed to the Minister for Community Services, concerns the statement by Katharine West, broadcast on the Australian Broadcasting Corporation's AM program this morning, in which she said, with reference to unemployment benefit: Nobody should be paid from the public or private purse for work not done. What would be the economic and social effects if such a policy were implemented by government? Senator GRIMES —Yes, I heard Katharine West make that statement on AM this morning. I have heard her make that statement on other broadcasts and I have read that statement by her in the endless series of articles she writes for the Australian newspaper, all of which seem the same although the words are slightly different occasionally. I suppose if one took the words just as Ms West said them-that nobody should be paid from the public or private purse for work not done-most of us would agree with them. However, what she is suggesting is that no one should receive any money from the public purse for such things as unemployment benefit, single parent benefit and so on. Therefore, what Ms West is suggesting is that we introduce into this country a system whereby those who are unfortunate enough to be out of work or who are unable to support themselves for other reasons should receive nothing. That would make Australia unique in the Western World. It would put us on a par with some very poor and underdeveloped countries and it would also put us on a par, incidentally, with some of the totalitarian countries of the Right and the Left. Senator Walters —Like banana republics. Senator GRIMES —I have not heard even Senator Walters advocating a policy like Ms West's in this place and one would have to be pretty far to the right to get to the right of Senator Walters. The result of such a policy would simply be that people would starve in the streets, children would suffer from malnutrition and die and there would be people who could not afford medical treatment or many of the basic things that we believe are necessary in this society. I suppose Ms West wants us to return to the economic and social law of the jungle. I do not think that any thinking citizen of this country would want that situation to arise. In fact, Ms West wanders around this country getting cheap applause for points that she makes to selected audiences which are willing to pay money to hear her speak and I understand that she receives considerable amounts of money to speak at these gatherings. I suppose her long term aim is to do what she suggests should be done in some of her earlier articles-to set up another political party, one that will find a place in it for Ms West. I think Ms West should do what the rest of us have done-put herself and her loony ideas up for judgment by the people at the next election. We will see how she goes. I suggest that she should accept the judgment of the people at that time. Senator Sir John Carrick —Are you going to do that? Senator GRIMES —If Senator Sir John Carrick wishes to join Ms West in that loony party, let him do so. Senator Walsh —He is not that bad. Senator GRIMES —I did not think he was that bad either; but if he wants to interject in that way, let him do so. Senator BOSWELL —I address my question to the Minister representing the Prime Minister. Is he aware of the correspondence to the Prime Minister from the President of the Tax Institute of Australia in which he said that the Institute was concerned that unnecessary hardship might be occasioned by the provisions in the tax Bills which were passed recently by the Parliament? Will the Minister undertake that the Government will give serious consideration to the matters contained in that letter, report to the Senate and detail the comments of the Prime Minister on the matters raised? Will he also guarantee that, where the criticisms of the legislation are found to be justified, the Government will promptly introduce the necessary amending legislation? Senator BUTTON —I am not aware of the letter to the Prime Minister from the President or Secretary of the Tax Institute. I am not aware of the matters in that letter about which Senator Boswell says I should make commitments in respect of, firstly, serious consideration, secondly, reporting to the Senate and, thirdly, changing the legislation. There is nothing I can do, I am afraid. Perhaps he will have to redraft his question and bring it up again next week. Senator WALSH(Western Australia-Minister for Finance) —by leave-I wish to make a personal explanation concerning a letter which Senator Chaney has now tabled. On Wednesday morning in the Senate I gave figures which showed that Mr David Barnett, in his first year as Press Secretary to Malcolm Fraser, had drawn a salary and overtime which in present values equalled $102,000. At Question Time I was giving the same figures when Senator Chaney took a typical spurious point of order, after which I continued giving the figures, and I neglected to say that they were in present values. Taking Barnett's figure of $41,171 from the letter which has been tabled and applying the consumer price index increase between the 1975-76 fiscal year and the March quarter of 1986 gives a figure updating Barnett's figures of $101,000. I had used the figure of $102,000. Senator Messner —You are a big fraud. The PRESIDENT —Order! Senator Messner will withdraw that remark. Senator Messner —In deference to you, Mr President, I withdraw. The PRESIDENT —Order! The honourable senator will withdraw categorically and unreservedly. Senator Messner —I withdraw categorically. Senator WALSH —The letter also shows that between the financial years 1975-76 and 1977-78 Barnett's real income, according to his own figures, fell by almost 40 per cent. With that clarification, which was already on the public record and in the Hansard of the same day, I stand by what I said. Barnett's article contained a sequence of factual errors and unsubstantiated assertions, which is typical of his journalism, against which private citizens-- Senator Chaney —Mr President, I take a point of order. The Minister has moved from giving a personal explanation to a renewal of matters that have been canvassed, incidental to which were the allegations about Mr Barnett's salary. I ask you to call the Minister to order and restrict him to making a personal explanation. As I understand his personal explanation, he admits that he was in error in what he said because he omitted to mention the fact that these figures were, as he is now saying, in real terms. The PRESIDENT —Order! I uphold the point of order. The Minister, having been given leave to make a personal explanation, is entitled to do so, but he is not entitled to enter into debate. If he wishes to enter into debate, I suggest that he seek leave to make a statement. I ask him to restrict his remarks to his personal explanation. Senator WALSH —With that clarification, I stand by everything I said about that article, including that the Fraser Government was forced to change the rules because Barnett stuck his snout so far into the public trough. The DEPUTY PRESIDENT(Senator Hamer) —Order! The President has received a letter from the Leader of the Australian Democrats, Senator Chipp, requesting a change in the membership of the Standing Committee on Finance and Government Operations. Motion (by Senator Button)-by leave-agreed to: That Senator Vigor, having been duly nominated in accordance with Standing Order 36aa, be appointed a member of the Standing Committee on Finance and Government Operations. Senator GARETH EVANS —At Question Time today Senator Sanders asked me a question about bombing on the Beecroft Peninsula. I am now able to respond to him. Mirage aircraft of 77 Squadron did conduct training on the range on both days in question. On each day 24 MK82 HE/HES bombs were dropped. Each bomb has an explosive charge of about 20 lbs. Initial investigations reveal that, as far as can be observed from the shore, there does not appear to be any obvious damage to the island. As to the other questions, the Department of Defence needs to retain the use of the Beecroft range to enable vital defence capabilities to be maintained. The use of the Beecroft range by Defence has been on-going since 1941. Steps taken to ensure personnel safety include the publication of regular warning notices in the local Press and the issue of warning notices to airmen and local mariners. Beecroft is a designated weapons practice range managed by the Royal Australian Navy for the Department of Defence. Mobile range clearance is given by range staff prior to the commencement of the bombardment serials. The eastern half of Beecroft Peninsula is closed to public access during bombardment serials and red warning flags are hoisted at appropriate access positions adjacent to the bombardment impact area. There is manning of the naval ranger's station by the naval ranger or a substitute during bombardments. He is available to provide advice to members of the public and to control vehicular access onto the range. There is constant and close monitoring of the impact area by the ranger safety officer and positive control of each bombardment. Preservation of significant landmarks is addressed by the Beecroft draft land management plan which has been recently reviewed and is being given detailed consideration at this moment. A naval ranger has been seconded from the Department of Territories to implement and manage the Beecroft land management plan. The provision of the naval ranger on weekends ensures that the Beecroft Peninsula remains open to the public for enjoyment when Defence is not using it. Senator ZAKHAROV(Victoria) —by leave-On 9 May 1985 the following matter was referred to the Standing Committee on National Resources: The question of whether an urgent investigation should be undertaken into the crown-of-thorns starfish threat to the Great Barrier Reef. This reference arose as a result of debate on 28 March and 9 May 1985 on a motion by the late Senator Missen relating to the preservation of the Great Barrier Reef. On 30 April 1985, Mr Peter Milton, Chairman of the House of Representatives Standing Committee on Environment and Conservation, wrote to the then Chairman of the National Resources Committee, Senator Cyril Primmer, informing him that the House of Representatives Committee had decided to investigate the impact of the crown of thorns starfish and the impact on the reef of erosion from the Daintree Road. Mr Milton indicated that the areas outlined in Senator Missen's motion would be included in the investigation. The National Resources Committee decided that it would take no action in this matter as it was being investigated by the House of Representatives Environment and Conservation Committee. That Committee tabled its report entitled `Protection of the Great Barrier Reef' in November 1985, and I understand it is now being considered by the Government. The National Resources Committee believes that, as this matter has now been investigated and reported on by the House of Representatives Environment and Conservation Committee, it should no longer continue as a reference. Debate resumed. Senator COATES(Tasmania)(3.09) —When the debate was interrupted earlier today I had nearly concluded the remarks that I wanted to make about the Australian Citizenship Amendment Bill and the Migration Amendment Bill. I was commenting on the Opposition's attitude to the Government's amendments to the legislation, in particular, the amendment to the Australian Citizenship Act which would prevent people who had a child in Australia, while here as visitors or illegal immigrants, from having that child gain Australian citizenship automatically. The Opposition was proposing that, as some sort of compensation to those people, such a person who was born in Australia who was not an Australian citizen should automatically be entitled to an entry permit if he or she wanted to come back at any stage between the ages of 18 and 40. I suggested that the Oppositions's amendment is nonsensical. It is obviously confused about the whole situation. Opposition senators speak about the infringement of traditional rights, but that is not the attitude they have taken to the Australian Citizenship Amendment Bill. They have certainly not stated where this supposedly traditional right is enshrined. One would have thought that if they felt so strongly about this right they would not be agreeing to the principle of the main amendment at all. I should point out that there is sufficient compensation built into the Australian Citizenship Amendment Bill, which provides that a child born to even one parent who is an Australian citizen or permanent resident will automatically acquire Australian citizenship by birth; or if the child would otherwise be stateless, it would acquire Australian citizenship; or if the child's parents are visitors or illegally in Australia but that child has been here for 10 years, it would acquire Australian citizenship automatically. So if it has grown up for that period in Australia it will be treated as an Australian. The amendment the Opposition proposes to the Migration Amendment Bill cannot be accepted by the Government because it negates the whole purpose of the amendment to the Citizenship Act, which is to ensure that attempted queue jumping in the immigration system is deterred. Australia is an immigrant country and has to deal with over one million applicants every year. Our program entails entry of about 100,000 applicants each year-that is, only one in 10 people who seek to come to Australia are allowed entry-so we have to ensure that attempted queue jumping, whether contrived from the start or accidental, is deterred. There is nothing in the International Covenant on Civil and Political Rights or in the United Nations Declaration of the Rights of the Child which requires that children born in Australia of non-citizens should become citizens merely because they were born here. The Government is trying to ensure that the immigration program is not distorted in this way. I re-emphasise that the amendment to the Act has the support of the Human Rights Commission, which had to deal with some of these difficult cases in the past. It will make the system simpler and easier all round. I support the Bill. Senator KNOWLES(Western Australia)(3.13) —I rise to speak on the Australian Citizenship Amendment Bill because it really does threaten to devalue Australian citizenship by altering the oath and affirmation of allegiance without proper consultation and perhaps without proper forethought. Much of this Bill deals with objectives that are sensible and which the Liberal Party of Australia supports. I do not wish to take up the Senate's time to debate those matters in detail, but I think we should look at some of them. Clause 4 stops a loophole for illegal immigration by removing automatic citizenship for all children born in Australia, ensuring that only those born to a parent who is a permanent resident or a citizen will become citizens. It is also appropriate that clause 7 of this Bill redresses loss of citizenship by those Australians who particularly through residing in Israel have inadvertently lost their citizenship. As many as 2,000 Australians have had Israeli citizenship conferred upon them under the Israeli law of return without realising that since the Australian Citizenship Act was amended in 1984 it has deprived them of Australian citizenship. We support any amendments to assist Australians to regain a citizenship they never intended to renounce and would, in fact, argue that this process should simply require a statement of intention to return to Australia without insisting, as the Government does, that they should return within three years. These measures display a proper regard for the importance of Australian citizenship, that should no longer be acquired by simple accident of the location of a birth. Yet in the same Bill clause 11 deletes from the oath and the affirmation of allegiance both the need for the applicant to say his name at the beginning of the pledge, and the opening reference to `renouncing all other allegiance'. As a nation, then, our Government does not think it worth while to ask for an individualised and personal commitment to Australia, nor is it thought necessary for Australia to have the undivided allegiance and loyalty of its new citizens. We are told that the requirement for each applicant to state his name causes confusion. What a pathetic reason in anyone's words for watering down a pledge. Our common sense would tell us that if a citizenship ceremony is conducted with due care and dignity, confusion over such a basic matter would simply not occur. It is just not good enough for the Minister for Immigration and Ethnic Affairs (Mr Hurford) to claim, as he did on 13 March, that applicants for citizenship are sufficiently identified by being ticked off a list at the beginning of the ceremony and receiving a form. Citizenship acquisition is a solemn and deep event for any man or woman. Rather than try to depersonalise the ceremony, the Government should be looking at ways of enhancing its significance. I fully support the shadow Minister for Immigration and Ethnic Affairs in his proposal that an attractive, personalised certificate should replace the computerised documents currently used. So, too, stating one's own name before taking an oath or affirmation gives an added and special force to that oath, entirely appropriate when a person acquires Australian citizenship. In deleting the renunciation of all other allegiances, the Hawke Australian Labor Party Government claims that this has been taken to imply a forced denial of an applicant's culture and of all original ties. While we would all agree that no such sweeping demand should be made of our new citizens, basic common sense once again dictates that the proper course is for renunciation to be clarified rather than abolished. There is all the difference in the world between a person's private, cultural traditions and their identification with the national aspirations of Australia. Citizens of Australia must have this country, and no other, as the sole focus for their political allegiance, whether or not their original country is an ally and friend of our nation. When consultation on a national basis was held in 1982 over this question, there was no clear recommendation that the renunciation clause be deleted. Instead, alternative forms of the oath of allegiance were proposed. What objection can there be to asking applicants to `renounce all other national legal obligations' or to `renounce and abandon all allegiances (if any) to any foreign state'. One does not need to be an expert legal draftsman to come up with a form of words that makes it clear that political and not cultural or family loyalties are being renounced. To make no mention of renunciation of other political allegiances, however, is to admit that Australia is not worth the undivided loyalty of old or new citizens, and it devalues the citizenship of us all. On such a simple but basic matter, surely a Government that preached consensus might have seen fit either to consult the people of Australia generally, or even the Opposition. It is true that the United Kingdom has a very simple oath of allegiance without any mention of renunciation. It is equally true, however, that Britain receives comparatively few new citizens, as the great majority of those settling there have been citizens of Commonwealth countries who could assume citizenship rights. A far more relevant example to us in Australia is the United States, with its tradition of extensive immigration, and of cultural diversity. People wishing to become American citizens are left in no doubt as to where their political loyalties must now belong. The United States oath of allegiance begins: I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty of whom or which I have heretofore been a subject or citizen. An applicant for United States citizenship must also promise to defend his new country either as a member of the armed forces or under civilian direction, should the need arise. Moreover, the oath specifies that it is taken freely without any mental reservation or purpose of evasion. Quite frankly, that is what we would call a binding, iron-clad commitment. While I am not suggesting that we should adopt a similar oath of allegiance, we should note well that the United States regards its citizenship as a solemn privilege that commands undivided loyalty. There is no reason or excuse for us to take a different attitude towards Australian citizenship. We should be aware that in 1983 the Australian values study found that 86 per cent of our citizens and 96 per cent of those people originating from Britain and southern Europe were proud to be Australian. That same pride should be affirmed by the Parliament of Australia by its insisting that the oath and affirmation of allegiance are not diluted in any way by this Bill. We should all appreciate the type of open patriotism that characterises the United States today. It is not jingoism but a simple pride in and love of America that its citizens and government are not ashamed to display. It is pervasive and bipartisan. Ronald Reagan may capture its mood but it goes a long way beyond his political supporters. Australians are ready to respond as patriots in their own way if only the Hawke Government seeks to foster simple and unaffected patriotism instead of engaging in expansive and spurious quests to create and discover some national identity allied to an artificial and heavy-handed multiculturalism. While most members and supporters of the Australian Labor Party are proud Australians, like the rest of us, it is disturbing to see that through this and other actions they are pandering to the minorities for whom, quite frankly, `patriotism' is a dirty word. One such person, associated with the Australian studies Bicentennial project, is Craig McGregor, who wrote last October that Australia has no identity but is merely a collection of minorities. Furthermore, in McGregor's view, being a patriot involves racism, greed, insularity, sexism and a sort of pointless pride. Most Australians would repudiate this nihilistic garbage and so should their elected government. Instead, we get a devalued oath of allegiance and such dubious gestures as a grant of $3,000 to Ausflag so that it can undermine the most basic symbol of our nationhood. Unless genuine patriotism and true Australian nationalism are promoted, we will indeed face the threat of becoming nothing more than a collection of self-regarding minorities. Identification with a traditional culture is a matter of individual preference that should not require extensive policies of government intervention. Australia has always had its own forms of multiculturalism. The cultural differences between those of English and Irish origin in earlier generations were just as sharp as, and more bitter than, contemporary differences stemming from post-war migration. What I object to is when a government is so concerned to sponsor multiculturalism as a policy rather than a natural development that it devalues Australian citizenship-as the Government does in this Bill-lest any prospective citizens and prospective voters object to proclaiming their undivided allegiance to a common Australian nation. We are moving from the welcome acceptance of diversity to its promotion at the public expense. In so doing, this Government runs the risk of weakening our sense of nationhood. Again, we should remember that few countries could be as racially or culturally diverse as the United States. Nonetheless, it is bound together by a simple and common patriotism. It should have disturbed all thoughtful Australians last year when a delegation of left wing members of the Greek community threatened to put political pressure on the Prime Minister (Mr Hawke) to ensure that United States communications facilities in this country were not used to aid surveillance over Greece. This is a prime example of a minority group, unrepresentative of Australians of Greek origin, owing a continued allegiance to a foreign government that could inspire political action within Australia. The culture and family loyalties of those who choose to become Australians are their own, just as much as their religion. However, Australia can and should demand that its citizens give their full and unstinting allegiance to Australia to the exclusion of other political loyalties. Governments have a duty to encourage citizenship but at the same time must uphold the intrinsic value of Australian citizenship as a partnership in our nation. The Hawke Government can only weaken Australian patriotism by both depersonalising the oath of allegiance and failing to insist on a renunciation of allegiances to other states. Clause 11 of this Bill should not be passed. In 1941 John Curtin, in a broadcast to the people of the Unites States of America, said: I give you the pledge of my country. There will always be an Australian Government and there will always be an Australian people. We are too strong in our hearts, our spirit is too high, the justice of our cause throbs too deeply in our being, for that high purpose to be overcome. One might ask: What price this kind of basic patriotism in the Australia of 1986? Senator SHEIL(Queensland)(3.26) —The Opposition cannot agree with the Australian Democrats and the Government that the Australian Citizenship Amendment Bill 1986 and the Migration Amendment Bill 1986 are innocuous. They are like the curate's egg; they are good in parts. We see the bad parts as part of a continued and progressive denigration of the status of Australian citizenship. If the Government continues in the way it is going it will virtually reduce Australia to the status of a bus stop for migrants as they pass through without any feeling of love of country and patriotism, just referred to by Senator Knowles. When I was picking up time before being elected to this place in 1984 the Government watered down the citizenship legislation. To put in perspective just what is happening to citizenship in Australia I would like to mention three or four of the actions the Government took then to water down the status of citizenship. The first thing it did was to reduce the qualifying period from three years to two years. It then relaxed the continuous residence requirement from 12 months immediately preceding the application to 12 months residence in the previous two years. It amended the requirement that an applicant for citizenship demonstrate an adequate knowledge of the English language. The requirement was then set that an applicant demonstrate a basic knowledge of English and applicants over 50 years of age were exempt altogether. The Government, consistent with its reform of the Migration Act, repealed the definition of the `British subject' status. The Government is now saying that migrants do not have to give their name when they attend their citizenship ceremony and they do not have to make a renunciation of previous allegiance. The Bills have four main objectives, three of which are reasonably innocuous. The first one ends the automatic granting of citizenship to children born in Australia to visitors, to temporary entrants and to illegal immigrants and is quite satisfactory. The Migration Amendment Bill 1986 also provides for the legal status of such children. The second objective is to allow lines of appeal for those who have lost their citizenship under special circumstances or who have not been granted citizenship due to error. Removing the so-called sexist language from the principal Act is relatively innocuous. The measure which significantly changes the oath or affirmation of allegiance which is taken by citizenship applicants is the one that we object to and hope will be amended. The Australian Citizenship Amendment Bill 1986 amends the Australian Citizenship Act 1948 to do two main things: First, to remove the requirement of citizenship applicants to state their name when swearing their allegiance to Australia; and secondly, to remove the need for renunciation of any former allegiance from our oath or affirmation. The change apparently follows the recommendation of the now infamous Human Rights Commission, which seems to be acquiring almost Australian Council of Trade Union-like powers over the Government in its policy making. I am on the Opposition immigration and ethnic affairs committee. I agree that the Opposition was not consulted on the introduction of this Bill. As I have listened to the debate this afternoon I have come to realise that there has been even less consultation with many groups in the community. It is no wonder the introduction of this Bill has caused such consternation. It is common for the Government not to consult on things; for example, the establishment of the Australian Sports Commission and the abolition of our national anthem. In lots of areas the Government rides rough-shod over the community; it has done so even with the Australian Bill of Rights Bill. It was mentioned earlier that the previous Government had commissioned a report called the `National Consultations on Multiculturalism and Citizenship' report. The general thrust of that report was specifically against changes of the kind which are being brought about by this legislation. The reasons given for introducing this legislation include an absurd claim that renouncing allegiance is offensive to prospective citizens, that it is inconsistent with multicultural objectives-whatever that is. It might well be inconsistent with the more sinister objectives of multiculturalism, but anyone who, as a prospective Australian citizen, finds renouncing his allegiance to a foreign power offensive does not really deserve to be an Australian citizen. The claim that renouncing former allegiance must be interpreted as a renunciation of cultural heritage and traditions is straightout rubbish and ranks with the wisdom seen in the former Greater London Council which banned black garbage bags because it thought that they were racist. The logical corollary to the claim that recognising former ties is offensive is that Australian citizenship itself is offensive, so why have Australian citizenship at all? I do not suppose the Government would think that there is any logic in that statement, but if citizenship of another country is found to be offensive, why is not Australian citizenship itself offensive? The Human Rights Commission, which inspired this change to the oath, is clearly part of Australia's loony Left, as was mentioned in today's Question Time-an equivalent to the Greater London Council mentioned. While I was in Melbourne I visited the Australian Institute of Multicultural Affairs. It has offices in each State but its headquarters are in Melbourne. It meets and has conferences. It is tackling an almost mission impossible with a will and a zeal. It is trying a new concept of multiculturalism in Australia which has not been tried anywhere else in the world. It has many models to work from. Europe has had about 2,000 years of multiculturalism and still it is not settled. The United States of America has a policy of enforced integration. South Africa has enforced segregation. Canada has multinational and multi- racial problems, with Eskimos, Indians, French people, Europeans and black people. The United Kingdom has a system of voluntary segregation. It has Welsh, Scottish, English, Irish and Manx people. It has another imported problem, with people from the Commonwealth living in no-go ghetto areas. I have been to Jamaica and the motto of the country is `out of many, one people'. The Australian Institute of Multicultural Affairs is trying to tie all these sorts of matters together to create a new society. But it would be wrong to import a problem that has not been solved around the world and think that we can do it. As yet it is only a minor problem. We have a few indigestible minorities, as they have been called, at the moment. I press that we should not follow policies which will aggravate this minor problem. Senator GRIMES(Tasmania-Minister for Community Services)(3.36) —in reply-I thank honourable senators for their contribution to the debate and their general support for the Australian Citizenship Amendment Bill and the Migration Amendment Bill. I do not, of course, thank Opposition senators who, as they do so frequently because of their lack of ideas, grasp a couple of small matters and try to make big issues of them. I disagree with Senator Knowles's jingoistic concept of what Australia is and Australian citizenship should be. I remind Senator Knowles, who quoted John Curtin-a man who was perhaps the greatest Australian Prime Minister-whom incidentally one of her colleagues in a debate only two days ago called a failed Prime Minister-in talking about Australians, that he was talking about British subjects because in those days in 1941 there was no Australian citizenship. When Australian citizenship was introduced in 1948 the Party of which she is such a proud member and for which she waves the flag so much opposed it. That Party wanted us still to be British subjects and not Australian citizens. Australian citizenship is a relatively recent concept and it is not strengthened by jingoistic, pseudo-patriotic nonsense of the type we have heard from Senator Knowles this afternoon. Senator Knowles —It is all too difficult for people to say their names, is it? Senator GRIMES —It is not too difficult at all. I will come to that quite definitely in a minute. I would like to quote someone whom I think is a very patriotic Australian, who has been a very distinguished Australian politician and who was a distinguished representative of his Party in ethnic affairs. He said that renouncing all other allegiances was often regarded as meaning abandoning one's own cultural heritage when in fact this was not the case. He said that this was a considerable problem to a lot of people and if it was unnecessary to ask people to do this, they should not be asked to do so. The man who said this is still in the Parliament. His name is Mr Macphee. I understand that in Western Australia he is considered to be a bit of a red. But when he represented the Opposition Parties in ethnic affairs there were not the stupid divisions that we have had in recent times, divisions which have arisen out of the concepts of people such as Senator Knowles who believe that the only way to prove that one is a loyal Australian citizen is to mouth empty, jingoistic words of the type she mouthed this afternoon and to suggest, as she did this afternoon, that some group of people who may say that it might be a good idea to look at our flag as we might want to change it in 1988 have no right to do that and should not do that. Senator Messner —Do you want to do that? Senator GRIMES —No, it is way down on my agenda. I am suggesting that one thing about being Australian is to have the right to suggest that such change can be made without being abused by people such as Senator Knowles, to put one's case in a reasonable way without its being suggested by Senator Knowles that in fact one is a traitor to one's country. Senator Puplick —Was the point not that you have given money for that project? Senator GRIMES —No, Senator Knowles made the point that one had no right to do so. That is the point she continues to make. As I suggested, Senator Knowles and her predecessors in fact opposed the introduction of Australian citizenship. They did not want it. They wanted us to remain British subjects. They wanted us to continue our obeisance to that nation. They wanted nothing to do with Australian citizenship. Senator Knowles objects to the removal of the words of renunciation from the oath. If anyone asked me my personal view, independent of government or anything else, I would say that it would not worry me either way. I do not think it should worry anyone either way. I am sure that the fact that the new citizens of Canada do not have to renounce their previous allegiances does not make them less loyal or worse citizens. I do not think it makes the new citizens of New Zealand any worse because they do not have to renounce previous allegiances. It does not make the new citizens of Great Britain any worse because they do not have to; nor does it make the new citizens of the United States of America any better because they have to. This is a nonsensical argument. I can stand up here and read out a list of countries that have this requirement; I can also read out a list of countries that do not. The simple fact of the matter is that I think there are two reasons why it is perhaps unnecessary. The first reason was put forward by the Federation of Ethnic Communities Councils of Australia and contained in the report, to which Senator Knowles referred, that was compiled under the previous Government in 1982-that is, that renouncing all other allegiances discourages some immigrants from taking out Australian citizenship, creates confusion and suggests that they might be renouncing their cultural heritage and other ties. These immigrants want to become loyal Australian citizens, fully contributing their skills and cultures to Australia's developing nationhood. They can do so in the multicultural society that Senator Sheil does not like. In fact, the Institute of Multicultural Studies was set up by the previous Government. Senator Sheil does not like it, but he did not say much about it when the coalition parties were in government. The other reason that the words are not required is in fact that the words themselves have no legal effect at all. As Senator Knowles quite rightly said, they are included in the legislation as a symbolic act of adopting Australian citizenship. But they do not strengthen that act of adopting Australian citizenship. Some people consider that they are an impediment. In fact, they have no legal effect at all in those countries that require people to remain citizens even though they become citizens of other countries. They have no legal effect in countries such as Greece, Italy and Yugoslavia that have dual citizenship arrangements and recognise their citizens as still retaining their original citizenship. The present system creates difficulties for large groups of our new settlers. We do not believe that the removal of this requirement makes people any less worthy citizens or less worthy contributors. That is why the change is in fact being introduced. Another matter is whether people should state their names when they take the oath or affirmation of allegiance. Since I have been a member of parliament I have noticed when attending citizenship ceremonies-and Senator Knowles also pointed this out-that our new citizens are taking a very large step about which they have thought seriously. Sometimes the preparation involved in taking this step obviously creates considerable emotional turmoil, considerable personal thought and considerable difficulties. I think that the ceremony should be dignified. It should be meaningful to the people involved and meaningful to everyone who attends. What happens at the moment is that people are called by name and they answer with their name. When they get their certificates they sign for them. Again they are identified by their name. But, when they stand up to take the oath of allegiance en masse, one thing that always stands out is the great confusion at the time when they have to say their names. There is a whole series of names of different lengths and in different languages. I cannot believe that anyone who has watched one of those ceremonies could believe that the ceremony is enhanced by that strange gaggle of sounds that comes out at that time. Senator McIntosh —They could be saying anything. Senator GRIMES —As Senator McIntosh has said, they could be saying Ned Kelly, Joseph Stalin, Christopher Puplick or any name they like and no one would have a clue or would know what was going on. Senator Puplick —I was quite happy to do so when I was naturalised. Senator GRIMES —I am sure the honourable senator was happy to do so. Anyone with a distinctive name like his would want to do so. But it does not add much to the ceremony. It does not add to the dignity of the occasion. It does not add anything like that. In fact it does not make one bit of difference to the quality of the person's commitment or future citizenship. I will agree with Senator Knowles, if she will not faint, that we ought to do something about the citizenship certificate. It is not the sort of quality that we should give to people. Sure, we should do something about that. I understand that the Minister for Immigration and Ethnic Affairs (Mr Hurford) has that in mind. But to suggest that anything is gained from the strange ritual that happens now at citizenship ceremonies is stretching things a bit. I know that a party that is bereft of ideas with which to stimulate the electorate of this country has to go to pretty desperate lengths to sound good and to sound as though it is being patriotic. We have to put up with speeches like the one from Senator Knowles. Senator Knowles —You're about as colourful as a black and white movie. Get on with it. Senator GRIMES —I do not try to be colourful. She is the one who tries to be colourful, but the trouble is that she ends up being jingoistic and chauvinistic. The changes that have been introduced have not been introduced in a hurry. This legislation has been on the Notice Paper for months. I see that Senator Messner wants to get out of the place; he keeps pointing to his watch whereas Senator Knowles tells me that we have not given this legislation sufficient seriousness. Senator Messner —You won't get your Bills then. Senator GRIMES —I do not mind; the honourable senator need not worry about it. I thank honourable senators for their assistance with this legislation. I wish that the Opposition would take the legislation more seriously and not try to score cheap political points from it. The legislation was introduced for a serious purpose. It has been introduced after consultation with the community since 1981. It has the support of the migrant community generally. I suggest that it has the support of all thinking Australians, and I urge the Senate to give it a rapid passage despite Senator Messner's disturbed state of mind. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MESSNER(South Australia)(3.49) —by leave-I move: (1) Page 4, sub-clause 7 (1), proposed sub-sub-paragraph 23aa (1) (b) (iv) (b), lines 27 to 29, leave out ``and before the expiration of the period of 3 years commencing on the day on which the statement is made''. (2) Page 4, sub-clause 7 (1), proposed paragraph 23aa (1) (e), lines 39 and 40, leave out ``hardship or detriment of an economic nature'', insert ``significant hardship or detriment''. The point of the first amendment is to correct the situation whereby the Government has imposed a limit upon the time in which people need to have resided in Australia to reinstate their citizenship after a period of absence from Australia. The Opposition's amendment seeks to widen that so that the residence period becomes unlimited. This will assist those individuals who, for various reasons which were discussed during the second reading debate, find themselves caught outside Australia. The Opposition is not making any cheap shots, as the Minister for Community Services (Senator Grimes) sought to do in his last few remarks. In fact, on a question of principle, which we will deal with a little later, we are very firmly in favour of maintaining the present wording of the oath and the affirmation. We believe that people ought to have the maximum opportunity to seek reinstatement of their citizenship in cases of hardship of various kinds because of their having to accept foreign citizenship in certain circumstances. In the Government's amending legislation there appears to be an inconsistency. Proposed new section 23aa (b) (i) contains a reference to the Minister having received a statement from the applicant in which the applicant sets out the fact that he or she has suffered significant hardship or detriment, yet under paragraph (d), when the Minister is required to exercise his discretion, he needs to satisfy himself that the person would have suffered hardship or detriment of an economic nature. Apparently the applicant in the first place can offer reasons for his hardship on a wide basis, but when the Minister is required to make a decision about that and exercise his discretion, he is limited to making decisions only on economic hardship grounds. I do not understand the reason for the difference, but assuming that the Government did intend that, it seems unreasonable that it should be limited to reasons of economic hardship and detriment only. For that reason, I believe our amendment is quite reasonable. It will make the two points quite consistent. If the applicant does seek to have his position considered by the Minister, he will put down those reasons and they will be considered by the Minister on the same basis and on the same grounds when he comes to exercise his discretion. Perhaps the Minister can offer some reason why that wording is used in the Bill, but we are at a loss to understand it. That is why I have moved the amendments which have been circulated in my name. Senator GRIMES(Tasmania-Minister for Community Services)(3.53) —I accept that the points Senator Messner has made are serious, but we do not accept the amendments, for reasons I will make clear. The period of three years was chosen as a reasonable period and it coincides with the three-year period within which a permanent resident who leaves Australia with a return endorsement on his or her passport must return to Australia. We think it is a reasonable period. We do not believe that the Opposition's proposal for people to make a commitment to return in an unlimited time or in 20 years, or whatever, is any commitment at all. Why ask people to make a commitment if they do not ever have to fulfil that commitment? There are two tests which the Bill requires. Where the applicant is in Australia, the applicant must say that that residence will continue. If the applicant is outside Australia, under the amendment the Opposition has moved he or she need not return at all. We do not see much point in including that in the Bill; we see a very good point in retaining the existing wording of the legislation. We do not see much point at all in the sort of amendment that Senator Messner is putting forward. Senator Knowles and others talked earlier about commitment, yet the amendment the Opposition has put up makes no commitment at all. I do not understand the reason for the second amendment and I do not understand the inconsistency that Senator Messner refers to, any more than the draftsman, Mr Hurford or anyone else understood the inconsistency raised in another place in similar circumstances. The provision requires applicants who have lost citizenship as a result of acquiring another for economic reasons to especially satisfy the Minister, when seeking to resume citizenship, that they were compelled to take the foreign citizenship. If the hardship they would have faced by not taking that foreign citizenship was non-economic, they need not demonstrate such compulsion. I do not see any inconsistency in that; I see good sense in it. I do not see what the Opposition's hangup is about this clause. For reasons I have stated, and for reasons that were amply stated in debate in the other place, we do not accept that it is necessary to amend the legislation in this way. Question put: That the amendments (Senator Messner's) be agreed to. The Committee divided. (The Temporary Chairman-Senator M. Townley) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 6 —— Alston, R. K. R. MacGibbon, D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Baume, Peter Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Carrick, Sir John Reid, M. E. (Teller)Chaney, F. M. Sheil, G. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Knowles, S. C. Withers, R. G. Lewis, A. W. R. Aulich, T. Jones, G. N. Black, J. R. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Chipp, D. L. McKiernan, J. P. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Ray, RobertCook, P. F. S. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Tate, M. C. Gietzelt, A. T. Vigor, D. B. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Haines, J. Kilgariff, B. F. Cooney, B. Short, J. R. Foreman, D. J. Vanstone, A. E. Sibraa, K. W. Brownhill, D. G. C. Morris, J. Bjelke-Petersen, F. I. Robertson, E. A. Hill, R. Siddons, J. R. Collard, S. J. Button, J. N. Macklin, M. J. Jessop, D. S. Question so resolved in the negative. Senator MESSNER(South Australia)(4.03) —I refer to clause 11 of the Australian Citizenship Amendment Bill, which implements the change to the oath. We debated this matter at quite some length during the second reading debate, but I restate the Opposition's position in regard to this clause. Two major changes to the oath are proposed to this legislation by the Hawke Government. Firstly, a person adopting the new form of the oath will not be required to state his or her name. We have taken objection to that point because we believe that the act of accepting Australian citizenship is a most personal and individual act. Consequently, the elimination of the simple thing of a person not being able to state his or her name appears to us to be absolutely incongruous and certainly is not consistent with the general principles of what is intended when people accept citizenship. The second point relates more significantly to the question of renunciation of all other allegiance. The Government's amendment deletes reference to that renunciation. The point the Opposition makes quite clearly here is that it is surely fundamental to the acceptance of Australian citizenship that a person accepting that citizenship should renounce all intention, mental, physical or whatever, of retaining any former allegiance, and that it is a positive part of taking the oath in favour of Australian allegiance that one should, at the same time, renounce all connection with any other foreign power. It is not as though this is some new thing. It is certainly part of other countries' oaths or affirmations of allegiance. We heard from Senator Knowles, for instance, of the situation in the United States of America, where the requirement is even more stringent than the requirement in our oath which the Government is proposing to amend. I think the point needs to be strongly reiterated by the Opposition that we believe that that renunciation act is a positive statement of acceptance of Australian citizenship and, as such, means that people are identifying thereafter clearly with Australian citizenship. The Government, of course, argued the opposite point-that people confused that acceptance of Australian citizenship and the renunciation of their former citizenship as being a renunciation of their cultural heritage, background and so on. That is simply not true because Australia is a multicultural society where people do maintain their private and personal cultural habits, no matter what background they come from-whether they were born in this country or born outside this country. The two issues are entirely separate. We see no reason why the Government should delete this reference to the renunciation of other allegiances because of that. I understand, too, that the shadow Minister for Immigration and Ethnic Affairs, Mr Alan Cadman, has had responses from no less than 354 local government authorities all over Australia in support of the coalition's position on this particular matter. On the other hand, only four people have written to him supporting the Government's position on these amendments. Quite clearly then from right on the ground where these citizenship ceremonies are held there is vast support from local government authorities for the position of the coalition on this matter. They support the inclusion of that positive statement that there should be renunciation of all former allegiance as part of acceptance of Australian citizenship. I believe that the arguments put forward by my colleagues, particularly by Senator Knowles and Senator Sheil, quite clearly demonstrate that we in this country should be standing up and valuing our citizenship, perhaps to an extent greater than we have in the past. For the Government to move in precisely the opposite direction obviously will lead to the devaluation of Australian citizenship. I move: Page 6, clause 11, lines 22 to 26, leave out the clause. Senator CHIPP(Victoria-Leader of the Australian Democrats)(4.09) —The Australian Democrats cannot support the Liberal Party of Australia on this matter for the reasons I stated in the second reading debate. Presently the Government proposes to leave in an oath that candidates for naturalisation will be loyal to Her Majesty and that they will swear that they will observe the laws of Australia and will fulfil their duties as Australian citizens. What more do honourable senators want? If we demand that they now renounce all former allegiances, I know, having been to many of these ceremonies, that these people will get confused. They believe that using those words means that they cannot wear their former national costumes or engage in their folk dances or whatever. For that and other reasons, we support the Government in this matter. We do not support the amendment moved by the Opposition. Senator GRIMES(Tasmania-Minister for Community Services)(4.10) —The Government rejects the amendment moved by Senator Messner for the reasons outlined by Senator Chipp. I resent the implication that what we are doing is degrading Australian citizenship or that we, or anyone else, are less effective and loyal Australian citizens as a result of this. We could go on all day on this matter, but I simply point out that the citizens of Canada, New Zealand and the United Kingdom are not required to give their names when they become new citizens and they are no lesser citizens for it. I do not think that citizens of the United States or other countries who have to give their names are any the better for it, nor are their countries any the better for it. I hope we do not get to a situation in which this provision goes in and out of the legislation with every change of government. Judging from history, I do not think that will happen. Once the change is made, it will stay there and I think that is for the good of us all. Question put: That the words proposed to be left out (Senator Messner's motion) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 24 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. Lewis, A. W. R. Archer, B. R. MacGibbon, D. J. Baume, Michael Messner, A. J. Baume, Peter Newman, J. M. Boswell, R. L. D. Parer, W. R. Carrick, Sir John Puplick, C. J. G. Chaney, F. M. Reid, M. E. (Teller)Crichton-Browne, N. A. Sheil, G. Durack, P. D. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Watson, J. O. W. Knowles, S. C. Withers, R. G. Aulich, T. Jones, G. N. Black, J. R. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Chipp, D. L. McKiernan, J. P. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Ray, RobertCook, P. F. S. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Tate, M. C. Gietzelt, A. T. Vigor, D. B. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Haines, J. Kilgariff, B. E. Cooney, B. Short, J. R. Foreman, D. J. Vanstone, A. E. Sibraa, K. W. Brownhill, D. G. C. Morris, J. Bjelke-Petersen, F. I. Robertson, E. A. Hill, R. Button, J. N. Collard, S. J. Macklin, M. J. Jessop, D. S. Siddons, J. R. Question so resolved in the negative. Consideration interrupted. The CHAIRMAN —Order! It being 4.15 p.m., pursuant to sessional order, I put the question: That the Chairman do now leave the Chair and report to the Senate. Question resolved in the negative. Consideration resumed. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Consideration resumed from 29 May, on motion by Senator Gareth Evans: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MESSNER(South Australia)(4.18) —I move: Page 2, clause 3, at the end of proposed new section 6aaa, add the following new sub-sections: ``(2) Where a person to whom sub-section (1) applies- (a) is not an Australian citizen; and (b) is of an age not less than 18 years and not more than 40 years, and that person applies for an entry permit, an entry permit shall be granted to that person. ``(3) Notwithstanding any other provision of this Act, an entry permit granted under sub-section (2) may be granted subject to conditions. ``(4) Sub-section (2) does not affect- (a) any requirement, other than the grant of an entry permit, relating to entry into Australia; or (b) any right relating to entry into Australia or Australian citizenship existing apart from that sub-section.''. All the reasons that I mentioned during the second reading debate apply to this matter. Senator CHIPP(Victoria-Leader of the Australian Democrats)(4.19) —For the reasons I stated in the second reading debate, the Australian Democrats cannot support the Opposition's amendment. Senator GRIMES(Tasmania-Minister for Community Services)(4.19) —Ditto. Question put: That the words proposed to be added (Senator Messner's amendment) be added. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 6 —— Alston, R. K. R. MacGibbon, D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Baume, Peter Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Carrick, Sir John Reid, M. E. (Teller)Chaney, F. M. Sheil, G. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Knowles, S. C. Withers, R. G. Lewis, A. W. R. Aulich, T. Jones, G. N. Black, J. R. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Chipp, D. L. McKiernan, J. P. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Ray, RobertCook, P. F. S. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Tate, M. C. Gietzelt, A. T. Vigor, D. B. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Haines, J. Kilgariff, B. F. Cooney, B. Short, J. R. Foreman, D. J. Vanstone, A. E. Sibraa, K. W. Brownhill, D. G. C. Morris, J. Bjelke-Petersen, F. I. Robertson, E. A. Hill, R. Button, J. N. Collard, S. J. Macklin, M. JJessop, D. S. Siddons, J. R. Question so resolved in the negative. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Senate adjourned at 4.25 p.m. The following answers to questions were circulated: (Question No. 206) Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 16 April 1985: (1) Is the Minister for Defence aware of the Report of the Joint Committee on Foreign Affairs and Defence, tabled on 24 November 1981, entitled Threats to Australia's Security: Their Nature and Probability, which concluded, inter alia, that: ``it would be prudent for Australian defence planners to assume that the joint facilities at North West Cape, Pine Gap and Nurrungar are on the Soviet target list and might be attacked in the course of a nuclear conflict between the two superpowers. In other words, there is a finite risk that one or all of the facilities would be attacked during a Soviet-United States war that involved their nuclear strategic forces'' (p. 19). (2) Is the Minister aware of studies which suggest that under some circumstances (e.g. a one megaton ground burst at a time of south easterly winds) a nuclear attack on Pine Gap could kill most of the people in the Alice Springs area in the absence of civil defence preparations; if so, what civil defence measures (such as evacuation plans or fallout shelter plans): (a) have been prepared; or (b) are in the process of being prepared in order to protect the people of Alice Springs and surrounding areas from this eventuality. (3) Is the Minister aware of studies which suggest that under some circumstances (e.g. a one megaton ground burst at a time of north-westerly winds) a nuclear attack on Nurrungar could kill perhaps more than 10,000 people in the Port Augusta, Whyalla and Port Pirie area and cause perhaps another 100,000 people to suffer various forms of radiation illness and damage; if so, what civil defence measures (such as evacuation plans or fallout shelter plans): (a) have been prepared; or (b) are in the process of being prepared in order to protect the people of Port Augusta, Whyalla, Port Pirie and surrounding areas from this eventuality. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) Yes. However, our intelligence and defence authorities have for many years assessed the risk of nuclear war as remote and improbable, provided that effective deterrence is maintained. As the Prime Minister said in his statement on the joint facilities on 6 June 1984, Australia's hosting of the joint defence facilities at Nurrungar and Pine Gap contributes to the effectiveness of deterrence. (2) and (3) I am not aware of any detailed studies which support the conclusions mentioned in these questions, although I am aware that certain broad judgments have been made to that effect. Those judgments, and the scenarios mentioned in the honourable member's question, do not provide an adequate basis for civil defence planning against the risk of nuclear attack on the joint defence facilities. For example, I would note that because the Joint Defence Space Research Facility at Pine Gap lies some 18km to the south-west of Alice Springs, the fallout from a one megaton ground burst at Pine Gap at a time of south easterly winds would not be carried towards that community; the consequences postulated would not therefore appear credible. Furthermore, the suggested scale of fatalities in the Port Augusta, Whyalla and Port Pirie area could only occur if people chose to stay in contaminated areas there for several days; this is not a realistic assumption to make. The Department of Defence is reviewing the need for civil defence measures to protect the communities situated near the joint defence facilities. This work is intended to provide a basis for discussions which the Natural Disasters Organisation might hold with State and Territory emergency services organizations, aimed at establishing the need for further precautionary civil defence planning work to be carried out in this area. (Question No. 926) Senator Short asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 18 February 1986: (1) How many Area Project Officers have been appointed in Victoria to help with the Community Employment Program. (2) What are their names and salary received. (3) How many field officers are employed in Victoria on secondment from the Victorian Government. (4) What are their names and their salary levels. (5) Who are the members of the Consultative Committee for the State of Victoria. (6) What is the total cost of the Consultative Committee since 1 August 1983. (7) Who are the members of the Joint Secretariat for the State of Victoria. (8) What is the cost of the Joint Secretariat since 1 August 1983. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) 7. (2) Mr B. Gould, Mr J. O'Loughlin, Mr G. Fraumano, Mr G. Sayer, Mr R. Kenyon, Mr A. Dalton, Mr R. Edwards. All Area Project Officers (APOs) in Victoria are employed at the Clerical Administrative Class 7 level, with a salary range of $28,602 to $30,206. (3) None. All State field officers are employed by the Department of Labour. (4) See (3) above. (5) Mr P. Bentley, Department of Labour; Mr R. Doran, Department of Employment and Industrial Relations; Mr D. Cochrane, Trades Hall Council; Mr K. Dowling, Municipal Association of Victoria; Mr D. Storer, Ethnic Affairs Commission; Ms F. Strahan, Victorian Council of Social Service; Ms M. Sussex, Department of Community Welfare Services; Ms M. Burrows, Youth Affairs Council of Victoria. (6) Consultative Committee members do not receive any remuneration from the Commonwealth for their work on the Committee. The cost of servicing the Victorian Committee comes within normal Departmental expenditure and is not counted as a separate item. Therefore there is no figure available. (7) The Commonwealth Government officers are: Mr J. Tingiri, Ms D. Chidley, Mr P. Branch, Ms A. White, Ms V. Louis, Ms C. Langdon, Ms M. Dyball, Mr M. Martin, Ms B. Rusmonis. The State Government officers are: Mr D. Wood, Ms G. Smith, Mr D. Barrett, Ms J. Fenton, Mr R. Copeman, Mr G. Gradowski, Ms D. Martin, Ms L. Martin, Ms D. Cluning. (8) Costs associated with the Joint Secretariat come within normal Departmental expenditure and are not counted as a separate item. Therefore there is no figure available. Senator Walsh —On 14 April 1986 (Hansard, page 1650), Senator Puplick asked me a question, without notice, regarding the employment of Builders Labourers Federation members at the Darling Harbour bicentennial project. Senator Puplick asked: Has the Government agreed to allocate $30m, including $8m in supplementary estimates currently before the Senate, to the Government of New South Wales for work on a bicentennial project at Sydney's Darling Harbour? Is the Government aware that the New South Wales Labor Government has entered into what is claimed by the union to be a water tight arrangement with the Builders Labourers Federation which guarantees the continued employment of BLF members at Darling Harbour, regardless of the deregistration of the union and its exclusion from the conciliation and arbitration system? Does the Government believe that it is proper to pay taxpayer's money to the New South Wales Government which can only spend it on a project which exclusively employs members of the BLF as part of some covert sweetheart deal? The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: I am advised that the Commonwealth under the Bicentennial Program has allocated $30m for the building of a National Maritime Museum at the Darling Harbour Project. This amount will be paid through the National Maritime College to the Darling Harbour Authority. A further $8m is being sought to cover fit out, salaries and acquisitions for the Museum. Regarding an alleged agreement with the Builders Labourers Federation at the site, I took this matter up with the New South Wales Minister for Public Works, Ports and Roads, the Honourable L. J. Brereton MLA, who has advised me as follows: `The commitment of the New South Wales Government to the code of conduct adopted in relation to the Builders Labourers Federation remains unchanged. The article you quote suggested that some special arrangements existed which would circumvent the intention of that code. No such arrangement has been reached with the Builders Labourers Federation, or with any other Union working on the Darling Harbour redevelopment. The terms and conditions of the Site Agreement reached with the Unions apply to all Unions without variation. One of the fundamental principles of the Darling Harbour Site Agreement is that this is a union site and only paid up union members are allowed to work on the site. The Darling Harbour redevelopment is in exactly the same position, viz. the Builders Labourers Federation, as any other major construction site in New South Wales, Victoria and the A.C.T. I have already refuted the suggestions of a ``Special Arrangement'' with the Builders Labourers Federation in the State Parliament.' Following the coming into force of Regulations made under the Builders Labourers Federation (Cancellation of Registration-Consequential Provisions) Act on 15 April 1986 all the former members of the BLF working on this project were enrolled by the other unions concerned.