Wednesday, 11 June 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 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: That the proposed Australian Bill of Rights Bill 1985 will endanger the Federal system in Australia, the State and Federal criminal justice systems, the State and Federal Police Force, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners therefore humbly pray: That your Honourable House defer debate on the Bill for twelve months and circulate the Bill for twelve months for the widest possible debate, scrutiny and discussion. And your petitioners as in duty bound will ever pray. by Senator Puplick (from 299 citizens). To the Honourable the President and members of the Senate in 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 Operation Standards for Superannuation schemes. Your petitioners therefore humbly pray that the Government: 1. Guarantees to every employee the right and freedom to select the superannuation scheme of his/her choice. 2. Protects the individual exercising that freedom of choice from any coercion, influence or other pressure which may be applied by any employer, association or trade union. 3. Will recognise only those schemes which provide genuine superannuation and reject those schemes which do not provide for- preservation of benefits to retirement vesting of employer contributions equal employer and employee Trusteeship control to ensure security of investments. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 58 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of certain citizens of Australia 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 and small business sector, which will severely affect its long-term viability. That the delay by the Government in introducing the legislation into Parliament, full details of which still had not been revealed after it had legally been in operation for more than six months, has caused confusion and hindered farmers and small business people 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 Senator Michael Baume (from 114 citizens). To the Honourable the President and the members of the Senate assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth that whereas: 1. The present Australian national flag is not distinctively and uniquely Australian and is confused with other national flags. 2. The people of Australia have never had an opportunity to express their views on an appropriate Australian national flag in a referendum. 3. The present Australian national flag does not properly represent Australia as a sovereign, independent nation. 4. The present Australian national flag falsely proclaims Australia as a colony, homeland, protectorate, dominion or government department of Great Britain. 5. The first condition in the flag competition of 1901 required that the design should show Australia's loyalty to the British Empire. The British Empire no longer exists. 6. A public opinion poll held in 1984 using the Gallup Method revealed that 52% of Australians surveyed wanted a competition for a new design for the Australian flag. 7. There is no inherent link between Australia proclaiming a unique and distinctive flag and the political issue of Australia moving to a republican form of government. 8. The adoption of a truly Australian national flag would serve as a focal point for Australia's bicentennial celebrations in 1988. Your petitioners therefore pray that your honourable house will: (a) Appoint a Committee of the Parliament with representatives from both Houses and all parties to invite and consider proposals for the design of a new Australian national flag, and (b) Require that Committee to make recommendations on the form of a minimum cost referendum at the time of the next general elections, in which the electors will be given the opportunity to vote for a flag from a selection of at least three designs which will include the present Australian national flag and the winner of the Ausflag-Bulletin-2MMM.FM competition of March 1985. And your petitioners as in duty bound will ever pray. by Senator Durack (from two citizens). To the Honourable members of the Senate in Parliament assembled. The petition of the undersigned in the State of Queensland respectfully showeth: That the film `Hail Mary' is pornographic and blasphemous and gravely offends our religious beliefs and those of the vast majority of Australian christians. Your petitioners therefore humbly pray that the Federal Parliament will respect the will of the undersigned and have the pornographic and blasphemous film `Hail Mary' banned in Australia. And your petitioners as in duty bound will ever pray. by Senator Bjelke-Petersen (from 35 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully shows: That we oppose utterly the proposed Australian Bill of Rights because the Bill will- limit rather than protect the rights and freedoms of Australians set up a coercive and powerful Human Rights and Equal Opportunities Commission that will operate contrary to the individuals' rights and freedoms endanger our Federal System by its improper intrusion into States rights. Your petitioners therefore pray: that the Senate rejects the Australian Bill of Rights Bill and all cognate Bills. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 17 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows: That the Bill of Rights and the Human Rights and Equal Opportunity Bill 1. Offer nothing more than is already available under Common Law, 2. Deny some Human rights and do not include others, 3. Give dangerously wide powers to an unelected body, and 4. Could cause far more damage than they could possibly cure. Your petitioners request that the Senate should: Completely reject both the Bill of Rights and the Human Rights and Equal Opportunity Bill. And your petitioners as in duty bound will ever pray. by Senator Harradine (from 396 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack-itself the creation of 3 Christian crosses represents the nation's historical origin and the source of its language and law. (b) The Southern Cross on an azure blue background signifying its place in space (c) The large star depicting the advent of Federation in 1901 and each point depicting a State and the Territories of the Commonwealth. 3. They know the flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to its form or to its acceptance as the sole Australian National Flag will produce division in the Australian community. Your petitioners most humbly pray that the Senate, in Parliament assembled, should ensure that the existing Australian national flag remains sacrosanct from change and remains the sole national flag. And your petitioners as in duty bound will ever pray. by Senator Walters (from 1,195 citizens). To the Honourable the President and members of the Senate in Parliament assembled: the petition of the undersigned respectfully showeth: that the humble petitioners respectfully believe that the representatives in Australia of the African National Congress and South West Africa Peoples Organisation should not have to suffer unending financial problems related to the cost of rent, food and clothing, and the maintenance of two small offices run on the most austere basis. Your petitioners therefore most humbly pray that the Senate in Parliament assembled should urge the provision of: 1. Official recognition of A.N.C. and S.W.A.P.O. as the legitimate representatives of the people of South Africa and Namibia. 2. Financial support to the offices and representatives of the African National Congress and the South West Africa Peoples Organisation to promote the anti-Apartheid cause. 3. Additional financial support for the official representatives of the A.N.C. and S.W.A.P.O. to assist the humanitarian needs of Namibian and South African refugees who are victims of Apartheid. 4. Scholarships for South African and Namibian refugees. These to be provided through the A.N.C. and S.W.A.P.O. education departments. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 15 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows: That human embryos deserve legal protection to enable the development of their full human potential. Your petitioners request that the Senate, in Parliament assembled should: Pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos created by in vitro fertilization. And your petitioners as in duty bound will ever pray. by Senator Archer (from 165 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 concern over Plant Variety Rights (PVR) legislation. We agree that: 1. PVR will inhibit the free exchange of genetic material for plant breeding. 2. PVR will not enhance Australia's access to plant varieties developed overseas but will encourage the dumping of unsuitable varieties on the Australian market. 3. PVR will restrict the public plant breeding program to basic research for exploitation by private enterprise and discourage breeding for disease and pest resistant varieties. 4. PVR will lead to the domination of the seed industry by foreign interests not responsible to the Australian people. 5. The proprietary rights granted by PVR will encourage the introduction of seed distribution and marketing monopolies and lead to seed price increases. Your petitioners therefore pray that parliament refrains from enacting any legislation on PVR. And your petitioners as in duty bound will ever pray. by Senator Childs (from 23 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, representing youth housing organizations, residents of housing services and interested people call on the Government to provide appropriate, adequate and ongoing funding for the National Youth Coalition for Housing. 1. In the first instance the provision of an additional $45,000 is needed by May 1986 to prevent the imminent closure of the Coalition due to inadequate funding for the 1985-86 year. And your petitioners as in duty bound will ever pray. by Senator Knowles (from 13 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That we strongly support ``The A.C.T. Smoking and Tobacco Products Advertisements Prohibition Bill'' introduced by Senator Evans, because it represents the first positive national step towards the eventual elimination of wide-spread serious ill health caused by smoking tobacco. by Senator Vigor (from 75 citizens). Senator VIGOR(South Australia) —by leave-I present a petition from citizens requesting that there be a public inquiry into the rights of Ion Chirita and family: To the Honourable the President and Members of the Senate in Parliament assembled. Your petitioners, as in duty bound, will humbly pray that a public inquiry be conducted for the migration of the Chirita family (father) Marin Chirita and (fiance) Marc Codruta to be allowed into Australia and that the rights of Ion Chirita be recognised in Queensland. Petitions received. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that a Federal Government publication `The Accord-the first two years' reveals that `wage indexation systems overseas have been recently interrupted or suspended with no one system escaping unscathed through the 1980's' and `In comparison with the overseas record, the gains achieved by Australian wage and salary earners under the Accord's wages policy are impressive'; (b) notes that as a result of Australia being out of step with the rest of the developed world in this way, our inflation rate relative to our trading partners is now at its highest for 25 years, we have a record current account deficit, a collapsing currency and the Australian economy is, according to the Treasurer (Mr Keating), in a `hole'; and (c) calls on the Prime Minister (Mr Hawke) in his 11 June 1986 speech to abandon the Accord with the Australian Council of Trade Unions which, by providing inappropriate benefits at a time when Australia has been living beyond its means, has played such a major role in creating the present economic crisis. Senator VALLENTINE(Western Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) condemns the Federal Government on undertaking a review of Australia's defence position and security needs; (b) welcomes the emphasis on self-reliance and abandonment of forward defence strategies as outlined in the Dibb report; (c) regrets that the Dibb Report still leaves Australia firmly entrenched within an offensive nuclear alliance; (d) calls upon the Government to initiate a community-based defence inquiry along the lines of the one being conducted in 1984 by the Government of New Zealand; (e) considers that really effective security can only be implemented through a defensive defence strategy, developing alternative models of conflict resolution at an international level, and promoting trust between nations; and (f) recognises that self-reliance is only the first step in a process of transarmament which will lead Australia to develop a defensive defence strategy and a non-aligned independent foreign policy based on our security needs in the region of which we form a part. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with concern the statement by Queensland Liberal Leader Sir William Knox that the State Government Cabinet Ministers were more interested in `lurks and perks' than in the people of Queensland; (b) supports the call by former Deputy-Leader and a former member of Cabinet of the Coalition Government of Queensland, Sir William Knox, for the introduction of a Ministerial code of conduct; (c) deplores the rejection of such a call by Queensland Premier, Sir Joh Bjelke-Petersen; and (d) calls on the people of Queensland to stamp out such practices as financial abuse within State Government Departments that lead to `cronyism' and other corrupt practices such as the `Hinze-Lyons TAB' and Lindeman Island affairs by the election of a Warburton Labor Government. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Recommendations of the Joint Select Committee on an Australia Card together with the Government's response to the report of the Joint Select Committee-a modified Australia Card program-text of statements by the Minister for Health. 2. Australian Tobacco Board-Annual Report 1985-together with the Auditor-General's Report-pursuant to sub-section 26 (3) of the Tobacco Marketing Act 1965. 3. Financial management improvement program-report. 4. Parole Board of the Australian Capital Territory-Annual Report 1984-85-pursuant to sub-section 27a (1) of the Australian Capital Territory Parole Ordinance 1976. 5. Review of Customs and Excise decisions: stage four: censorship-report to the Attorney-General by the Administrative Review Council. 6. Commonwealth Schools Commission-Annual Report 1985-pursuant to section 17a of the Commonwealth Schools Commission Act 1973. 7. Review of TAFE funding-report. 8. Commonwealth Tertiary Education Commission-Annual Report 1985-pursuant to sub-section 43a (2) of the Commonwealth Tertiary Education Commission Act 1977. 9. Operation of the Student Assistance Act-1985 report-pursuant to sub-section 35 (1) of the Student Assistance Act 1973. Senator CHANEY(Western Australia-Leader of the Opposition) —Mr President, I seek leave to make a brief statement about the papers which have just been presented. Leave granted. Senator CHANEY —I draw the Government's attention to the fact that the first paper in the list that has just been incorporated in Hansard by the Manager of Government Business, Senator Grimes, is `Recommendations of the Joint Select Committee on an Australia Card together with the Government's response to the report of the Joint Select Committee-a modified Australia Card program-text of statements by the Minister for Health'. I draw the Government's attention to the fact that major statements of this sort ought not to be tabled as papers but ought to be dealt with as statements which enables a totally different form of debate to take place. I have asked the Opposition Whip to take up this matter with the Government Whip. I just want to put on the public record the Opposition's concern that, on a major matter like this which is of very great public interest, it should not be subject to the limitations of debate which tabling as a paper involves and which enables only a five-minute contribution to be made by any honourable senator at this stage. I do not wish to delay the Senate now but I want to make public my concern that this matter should be brought into the Senate as a statement. It is undoubtedly so that the Senate will have a major influence on the final form of any Australia Card, or indeed on whether there will be an Australia Card. It would be highly desirable for the views of honourable senators to be canvassed in a sensible way prior to the Government's coming forward with its actual legislation. The PRESIDENT —Are there any ministerial statements? Senator Grimes-No. Senator Chipp-I take a point of order, Mr President. I do not want to enter a discordant note into the proceedings but the Manager of Government Business, Senator Grimes, just said that there are no ministerial statements when in fact there is a ministerial statement included in the presentation of papers. The first paper is `Recommendations of the Joint Select Committee on an Australia Card . . . a modified Australia Card program-text of statements by the Minister for Health'. I thought there had been an agreement between all parties in this chamber that ministerial statements, particularly ministerial statements of such importance as this one, should be laid down in the Senate as ministerial statements and debated in the proper way rather than just as part of presentation of papers. Senator Grimes-Mr President, on the point of order: I, like everyone else, do not want to delay the Senate in this matter. I have some sympathy for the remarks of Senator Chaney and Senator Chipp in this regard. It is not true that, as Senator Chipp says, all ministerial statements come forward in this place as ministerial statements; in fact, many of them come forward in the way in which this one has. Senator Sheil-This is an important one. Senator Grimes-This one is important. The honourable senator should be calm and patient. Several factors led to my taking this action. I apologise to those honourable senators who do not like it. The first factor was that one had to make the judgment that we had already had one debate on this matter when the Committee's report was brought down and we are obviously going to have a major debate at a later stage. A second factor was, quite frankly, that members of the Opposition and members of the Government-but, in particular, members of the Opposition-keep bailing me up in the corridors, at functions and in the dining room, saying: `Please, can we get up on Friday, please don't delay the place, please let us go on'. Senator Walters-Name them. Senator Grimes-Does Senator Walters want me to name them? Does she want me to name the honourable senators on her side? I will ask the permission of those people to be named. I will not name them without doing so. Senator Walters-Then you will tell us they didn't give you permission. Senator Grimes-Senator Walters knows that there have been people on her side-- Senator Walters-No, I don't. Senator Grimes-Senator Walters does not believe that people on the other side have been asking me to ensure that the Senate rises next Friday. Senator Crichton-Browne-Anyone on the front bench? Give us a hint. Senator Grimes-No, they are on the back bench. The simple fact is that that was certainly one of the reasons that I put the matter on the list of papers. Mr President, one can put up with a lot in this place. One can put up with nonsense that I and others have to put up with from Senator Walters in regard to both what she does in this place and the sorts of things she does in Tasmania to denigrate my name and other people's names. But I will not get up in this place-- The PRESIDENT —Order! I remind the Minister that he is speaking on a point of order. Senator Grimes-Indeed I am. I am responding to an interjection from that individual from Tasmania. I will not give people's names in this place without their permission under these circumstances. However, I will seek their permission to do so and I will ask them to speak to Senator Walters privately. I will not expose them to the sorts of pressures to which they are likely to be exposed by that woman in this place. I did what I did in an endeavour to get some co-operation in this place so that the Senate rises when people want it to rise. One of the reasons that we cannot do that is that the Leader of the Opposition and others cannot make arrangements with the Government because people such as Senator Walters will not be part of such arrangements. Senator Chipp knows it; I know it; and Senator Chaney knows it. As long as she is in this place, as long as she will not co-operate with her own leader and as long as she thinks that this place is a chamber in which to indulge her own prejudices, we will be here, like we are here now, trying to work out how the Senate can rise by Friday. That is the reason that this statement was put down in this way. I do not have to put up with the garbage that I put up with from that woman. Senator Chaney-Mr President, on the point of order: There is no basis for many of the remarks made by the Manager of Government Business. The reality is that the Government has a very heavy program. There has been no attempt by the Opposition either to obstruct that program or to reduce what it regards as proper consideration of the legislation which is before us. I would like to make it quite clear that, as far as the Opposition is concerned-- Senator Chipp-What about last night's health debate? What about yesterday's matter of urgency? What about that? Senator Chaney-I find the hysteria being generated around me rather strange, but I suppose it indicates that, whatever happens, we should certainly rise at the end of the week and if there is further business to deal with we should come back after a week's break. The simple position of the Opposition is that we will sit for as long as the Government requires us to sit to meet its program. We will debate whatever legislation is brought forward to debate. That is a matter which has been discussed in our party room and our position is very clear. I would like to make it quite clear to the Senate that we do not agree that we should sit for four weeks in a row. We think that that would be a severe impost on the health of honourable senators. We have seen in the past the damage done to individuals. We are, however, more than happy to come back after a one-week break, if that is what the Government wants. In terms of the legislative program, it appears to me that the program of essential legislation has been virtually met, apart from the Supply Bills. Obviously, the Opposition would not stand in the way of the passage of the Supply Bills. Whether we sit beyond Friday is completely within the discretion of the Government. The Government has indicated that certain Bills will not be proceeded with during this sitting period. That is the Government's business, not ours. I hope the Government will make clear its intentions so that we can all make orderly arrangements, both here and in our electorates. The PRESIDENT —Order! A point of order has been taken by Senator Chipp which is not really a point of order; it is a point of emphasis. Since the matter is related to the proceedings of the chamber I have allowed the debate to continue. I have allowed a response to be made by the Minister and I have allowed the Leader of the Opposition to express his point of view. So far as the point of order is concerned, the Chair rules that there is none. Senator WALTERS(Tasmania) —Mr President, I claim to have been misrepresented. The PRESIDENT —Order! The honourable senator has not spoken in the debate so I do not know how she could have been misrepresented. I suggest that the honourable senator seek leave to make a personal explanation or a statement. Senator WALTERS —I seek leave to make a statement. Leave granted. Senator WALTERS —I am quite used to Senator Grimes trying to intimidate me. He has done that on several occasions. He has attempted to make me keep quiet. It is time that Minister realised that there is no way that in this place or back home in my State he will ever be able to intimidate me in any way whatsoever. The more he carries on with his personal abuse the more the people back home realise what he is on about. At home I have never tried to denigrate his name in a personal way. The Minister knows that. He has made such accusations before. Mr President, I assure you that gross untruths have been reported to me-statements the Minister has made about meetings that he and I have attended. I will never sink to the depths to which that Minister sinks and have no intention of trying to meet him down in the depths in which he deals. Let the Minister clearly understand that it does not matter what he says about me back home; it does not matter what he tries on in this place. My reputation at home and here can easily cope with whatever he tries to throw at me. The PRESIDENT —It is a great old day today. I wonder what Question Time will be like. Senator GRIMES(Tasmania) —I seek leave to make a brief statement. Leave granted. Senator GRIMES —I merely wish to say that the last thing I would try to do is intimidate the good Senator Walters. I personally do not mind whether she gets up here and talks all day every day as long as I do not have to be here to listen to her. I have never attempted to stop her speaking, nor will I do so in the future. The point I made was that it is impossible to run this chamber in a sensible way without agreements being made between the Opposition and the Government. It is a simple fact that it is impossible for the Opposition to make agreements unless members of the Opposition parties take part in those agreements. It is perfectly clear, as Senator Chipp and others and I know, that Senator Walters will not be part of those agreements. As to the other business about things I have said about meetings Senator Walters and I have attended, I cannot remember attending a meeting with Senator Walters since we were both on the Senate Standing Committee on Social Welfare. There may have been one or two meetings. I do not know what terrible stories she has heard about what I have said about what she and I or anybody else in this place have got up to. What I do know-- Senator Walters —You are on yourself. Senator GRIMES —I certainly would be, in those circumstances-as long as I am not on to Senator Walters. All I know is that distinguished citizens of Tasmania-members and supporters of the Liberal Party-have made reference to certain things that have been said about me by the good lady. If they are all lying or if they have all been mistaken, so be it. All I ask from Senator Walters is what I would ask from anyone else in this place, which is a little co-operation in trying to run this place in a sensible way. I have no doubt in the world that a good reading of the Hansard would demonstrate that in a competition for personal abuse between Senator Walters and me, she would win hands down. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Community Services)(10.21) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. The PRESIDENT —Is leave granted? Senator Chaney —No. The PRESIDENT —Leave is not granted. Senator GRIMES —That is a perfect demonstration of the childishness that I referred to, Mr President. Senator Chaney —That is ridiculous. Senator GRIMES —I believe that people should have the right to say what they think and to vote the way they think. Senator Chaney and his family do not think so. The purpose of this Bill is to establish the Australian National Maritime Museum. This exciting museum will take its place alongside other collecting institutions operated by the Commonwealth such as the National Library of Australia, the National Gallery and the National Museum of Australia. Senator Michael Baume keeps interjecting. I ask him why he does not get up and say things out loud so that people can hear him. The PRESIDENT —Order! I ask Senator Michael Baume and other members of the Senate to come to order so that the Minister can continue with his second reading speech. Senator Chaney —On a point of order, Mr President: You called Opposition members to order when the Minister was being deliberately provocative during the course of his second reading speech. He again cast aspersions on my family. I took no point of order at that stage; we have canvassed that matter before. But this is typical of the behaviour of Senator Grimes. He is the master of the odious comment in this place. I think it is time he was called to order or thrown out. Senator Chipp —I take a point of order, Mr President. I apologise, but I could not hear what happened because of the conversations that were going on. May I ask of you, Mr President, why the Minister is reading this speech? Was leave denied him, and if so by whom? Senator Chaney —Yes. Senator Chipp —I am asking the President, if the honourable senator does not mind. The PRESIDENT —Order! Senator Grimes sought permission to have his second reading speech incorporated in Hansard. I asked whether leave was granted. I heard a voice say that leave was not granted. I did not pick up whose voice it was. Senator Grimes then continued to read his speech. There were interjections from the other side to which Senator Grimes responded. There was another interjection and I then asked the Senate to come to order. It is my responsibility, as President, to maintain order in the proceedings. I ask Senator Grimes to continue with his second reading speech. Senator GRIMES —Thank you, Mr President. That was a very accurate description of what happened. In November 1985 the Government agreed to provide $30m to enable the construction and fit-out of the building for the Australian National Maritime Museum on a site at Darling Harbour provided by the New South Wales Government. The Federal Government will own and operate the Museum which will be the first national collecting institution to be located outside Canberra. The Government is committed to the Museum opening its doors to the public in 1988. The need for an Australian National Maritime Museum, reflecting the significance of maritime activity in the history and cultural life of Australians, was recognised over a decade ago in the report of the Pigott Committee of Inquiry on Museums and National Collections. Possibly no other country has relied more on the sea and acknowledged this debt less. The present Government has affirmed the need for an institution to provide Australians with a central and comprehensive record of their past and present dependence on the sea. The Australian National Maritime Museum will provide a focus for our maritime history and an insight to its visitors of a major facet of our cultural tradition, until now little acknowledged. The Bill will establish the Museum as a body corporate and its functions will be to develop Australia's national maritime collection; to preserve, acquire, recover and maintain maritime historical material and exhibit that material which is in the national maritime collection or otherwise both in Australia and overseas. The Museum will also be able to conduct, and assist in research and to disseminate information relating to Australian maritime history. Maritime historical material is defined in the Bill to mean material relating to Australian maritime history. Australian maritime history is widely defined to include the natural history of Australia, the history of the interaction of human beings with the Australian marine environment, and the history of sea travel for every purpose. The reference to Australian marine environment includes the sea above the continental shelf and the sub-soil of the continental shelf adjacent to the Australian coast. It also includes the environment of the lakes, rivers and internal waters of Australia. This allows the Museum effectively to acquire any material of a maritime nature provided it has a connection with Australia. I hope there is enough room in the place. A Museum Council is established by this Bill. The Council will ensure the proper and efficient performance of the Museum and determine its policy, subject to ministerial direction. I will speak shortly about its constitution. The Bill empowers the Museum to develop a national collection of maritime historical material which shall be determined by its Council as being included in the national maritime collection. Any such determination by its Council shall be based upon criteria and made in accordance with guidelines approved by the Minister. The Bill provides for the Museum to purchase historical and other relevant material. It will accept gifts and bequests and it will acquire and operate vessels of historical interest and significance. It will collect maritime information in various forms, such as books, charts, manuscripts, log books, films, videotapes and sound recordings. The Museum will be subject to the law of copy right and to the laws relating to the preservation and use of archival resources, and to the rights of the public to have access to official documents of the Commonwealth Government and its agencies. Much of Australia's historical material reflecting the involvement of its people with the sea has never been exhibited on a large scale. The creation of this Museum will correct that. The Government intends that the displays for the Museum will be based on a series of exciting and dramatic themes dealing with particular aspects of our links with the sea and Australian waterways. It will not be a mere collection of inanimate objects. It will be a place of public education, participation and enjoyment for all who enter-a dynamic, living complex of activities and interests. The Bill is expressed to apply not only to the Australian mainland but also to its external territories, past and present. This is to ensure both the comprehensiveness of the national maritime collection and the respect accorded the heritage and culture of Australia's external territories. Material of significance from Australian external territories in the Pacific, Indian and Southern Oceans and Antarctica would be transferred to the national maritime collection only after consultation with the Minister for Territories or the Minister for Science, as the case may be, and the local governing body of the relevant Territory. Whilst the Museum as a Government institution will be funded through the annual budgetary processes the Bill also provides for the establishment of a National Maritime Museum Fund which will consist of money, or money from the disposal of gifts, bequests and the assignment of property-otherwise than on trust-to raise money for disbursement in accordance with the functions of the Museum. The Museum will be able to charge an admission fee and to operate a broad range of commercial activities. The Museum is required under the proposed legislation to prepare annual estimates of expenditure and shall not enter a contract for an acquisition exceeding $100,000 without the Minister's approval. The Museum will be subject to audit by the Auditor-General and will also be obliged to prepare an annual report by virtue of being subject to certain provisions of the Audit Act 1901. The Museum will not be subject to taxation under Commonwealth or State law. The Museum will be able to operate a restaurant and catering facilities on vessels or property which the Museum owns or controls, and for this reason the Bill provides for the Museum to supply liquor. The Council of the Museum which I referred to earlier shall consist of a chairperson, the director and other members, appointed by the Governor-General, to be no fewer than seven nor more than ten. An appointed member is to be a person having knowledge and experience with respect to matters relating to Australian maritime history or such other areas of know-ledge relevant to the affairs of the Museum. The day-to-day management of the Museum will be conducted by a director who shall also be appointed by the Governor-General for a period of up to seven years. The director shall have all the powers of a secretary of a department in relation to the staff of the Museum who will be employed under the Public Service Act. The management of the Museum by the director will be subject to directions given, and policies formulated by, the Council. The Museum will be encouraged by the Government to adopt an entrepreneurial outlook in organising its activities. For example, I would expect that the theatre proposed to be included in the Museum will be available for use by outside groups for film screenings, seminars and lectures. A publishing program will be developed and the Museum shop will sell books, toys and a whole range of quality goods and souvenirs. In addition to the Museum's attraction and effect on tourism it also will support a number of people in related professions, trades and ser-vices. Its establishment and work will help to revive traditional maritime crafts and provide opportunities to pass on skills which would other-wise be lost. It is the Government's intention that the Museum place special emphasis on the young. This will be reflected in the practical exhibits, educational and other facilities, in the focus of a section of the library on material for younger readers and on the goods for sale in the Museum shop. The Museum's curatorial and conservation laboratories will also be designed so that visitors can view the activities there, to see not only the skills required in preservation and in mounting displays, but also to appreciate the effort and expense incurred in preserving our maritime heritage. I would like to stress the national emphasis of the Maritime Museum; it will neither compete with existing institutions in the States or Territories nor duplicate their efforts; rather it will complement the collections of those institutions. The establishment of the Australian National Maritime Museum by this Bill is a further development in this Government's unequalled record of achievement in the preservation and display of Australia's heritage. This record reflects the aspirations and concerns of the Australian people and their enhanced pride in their history and development. The National Maritime Museum will take its place alongside our other national cultural institutions as a lasting, living, record of the richness and diversity of our past and present achievements as a maritime nation. I commend the Bill to the Senate. The PRESIDENT —Pursuant to order of the Senate of 14 April 1986, the resumption of the debate shall be an order of the day for the first day of sitting in August 1986. Motion (by Senator Reid) agreed to: That Business of the Senate, Notice of Motion No. 1, standing in my name relating to the disallowance of the Motor Traffic (Amendment) Ordinance 1986, be postponed till five sitting days from today. Debate resumed from 20 March, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator ARCHER(Tasmania)(10.34) —With due respect to the desire of the Senate for a speedy progress of the Protection of the Sea (Prevention of Pollution from Ships) Amendment Bill 1986 and with due regard to the significance of the legislation I advise that the Opposition supports the Bill. I will be brief. The purpose of the Bill is to extend the control of pollutant discharges from Australian ships on the high seas to include Australian ships in Australian territorial waters and, generally, to strengthen pollution control in our territorial sea and coastal waters. This Bill will enable early ratifications of the International Maritime Organisation Convention for the Prevention of Pollution from Ships, or the MARPOL Convention as it is more commonly known. The coalition parties support this legislation as they supported the 1983 Bill. In fact, the coalition Government introduced such high seas legislation in 1982, but it lapsed with the 1983 election. The present Government passed the legislation in 1983. Since then, the Minister for Arts, Heritage and Environment (Mr Cohen), has told us that he has been encouraging the States to pass the complementary legislation for the territorial seas. The Minister in his second reading speech said that he was not prepared to wait any longer for the States, that he warned the States of his intention to proceed with this legislation, and that there had been no adverse reaction from them. He also stated that there is a saving clause which will ensure that State legislation overrides the Federal legislation when a particular State passes its own. The Minister also stated that he wanted the MARPOL coverage completed, so that Australia could ratify the Convention to ensure the early and adequate protection of particular environmentally sensitive areas such as the Great Barrier Reef. I am pleased to say that my own State, Tasmania, has already indicated that appropriate legislation will be introduced this year. I am particularly pleased because Tasmania has rich and important fishing grounds which are expanding all the time and which need the type of protection provided by the MARPOL Convention. As an island Tasmania has a very active dependence on shipping. Tasmanian ports continue to show big increases in the numbers of ships and the amount of cargo being handled. It is, therefore, important that this growing number of ships does not threaten our marine resources. It is also satisfying to me, as it should be to all honourable senators, that the saving provisions have been included so that the States will retain their traditional control over coastal waters. While States rights have not always been respected by this Government, I must acknowledge that on this occasion the States have been looked after. The legislation continues the bipartisan concern for the preservation of Australia's marine and coastal environment which has been evident for years and to which the Minister referred in his speech. The Opposition supports the Bill but not the proposed Australian Democrats amendments. There are several good reasons why we cannot accept these amendments. First, the matter of radioactive waste is more properly the province of the sea dumping legislation which we have seen and which will be introduced into this chamber in the next session. Secondly, the Bill is the means of facilitating the ratification of the MARPOL Convention. Radioactive waste is not part of the MARPOL Convention. It is dealt with in a separate international convention known as the London Dumping Convention. If the Democrats had done their homework they would not have even considered these amendments in light of the above. I guess they will bring the amendments forward again when the next piece of legislation, the appropriate one, comes up in the next session. Thirdly, no Australian ships are nuclear powered, so the second amendment is irrelevant. Fourthly, by specifying areas of effect, the amendments will override the saving provisions of the Bill. This is a direct contravention of the integrity of the States. Significantly, the two areas referred to are Queensland and Tasmanian waters. The Democrats have shown that they regularly are prepared to override the States powers, so the Opposition will not support their amendments. Senator VIGOR(South Australia)(10.38) —I congratulate the Government on the Protection of the Sea (Prevention of Pollution from Ships) Amendment Bill 1986. The sea, for too long, has been used as a bottomless garbage dump. Radioactive, toxic and environmentally destructive waste has been willy-nilly dumped or spilled into the sea. The passage of this Bill will allow Australia to ratify the International Convention for the Prevention of Pollution from Ships 1973 as amended by the protocol related to the International Convention for the Prevention of Pollution from Ships 1978. The Australian Democrats are eagerly awaiting the sea-dumping Bill which will complement this legislation. This Convention and the protocol for preventing marine pollution are known as MARPOL. Ratifying these would extend the MARPOL Convention to Australian vessels world wide and to foreign vessels in Australian waters. By regulating the discharge of waste from ships, the Convention reduces pollution levels in coastal waters. By setting higher construction standards for oil tankers, the Convention also diminishes the probability of accidental waste discharges. MARPOL was ratified in 1983 by the necessary 15 countries, which incidentally represent more than 50 per cent of the world's gross shipping tonnage. These countries were Liberia, Colombia, Denmark, France, West Germany, Greece, Italy, Norway, Peru, Sweden, Tunisia, the United Kingdom, the United States of America, Uruguay and Yugoslavia. However, Australia so far has not ratified the Convention and this Protection of the Sea (Prevention of Pollution from Ships) Amendment Bill 1986 does this. It is deplorable that Australia should be so far behind other nations in ratifying this important international agreement. It has not been possible to ratify MARPOL because of the need for complementary legislation from the States, as Senator Archer mentioned. This legislation would cover territorial waters inside the three-mile limit. This Bill introduces Commonwealth legislation which will cover those State waters until State Acts of parliament override these provisions. The Bill is urgent because the penalties which can be imposed under the MARPOL Convention are very real deterrents against foreign ships dumping pollutant wastes in our coastal waters. Ratification of the MARPOL Convention is urgent so that we will have a real measure of protection for our marine environment. However, the MARPOL Convention currently fails to provide adequate protection to Australia's sensitive Great Barrier Reef and Bass Strait waters and this Bill also fails to extend its protection to these areas. The MARPOL Convention also fails to give adequate protection from the dumping of radioactive waste in the sea. This is because certain of the ratifying countries had an interest in excluding such provisions from the MARPOL Convention. Nuclear-powered ships of the United States of America in particular have been identified as causing considerable radioactive contamination in the ports they visit but they have refused to accept any responsibility for this contamination. The London convention on dumping waste at sea mentioned by Senator Archer does cover the subject of radioactivity. The accidental or deliberate discharge of operational radioactive waste is not covered under the MARPOL Convention. We believe that the Government should move to try to add this to the Convention. In the meantime, I propose to move amendments to this Bill to protect waters of the Great Barrier Reef and Bass Strait and to prohibit the discharging of radioactive waste in any of our coastal waters. Coastal waters are the most productive areas of the ocean. They are rich in minerals and nutrients and therefore support the basic organisms at the bottom of the food chain. These organisms, in turn, support a rich marine life in the coastal waters and support our fishing industry. Any pollutants in these coastal waters are thus concentrated in the fish we eat and poison the water so that the fish numbers are severely depleted in some cases. It is both economically and environmentally important to protect our coastal waters from all forms of damaging pollution, and particularly from cumulative poisons and long-lasting radioactive substances. The House of Representatives Standing Committee on Environment and Conservation described many of the hazards of oil pollution in its report `Oil spills-Prevention and Control of Oil Pollution in the Marine Environment' in 1978. It listed five main dangers from oil pollution: Firstly, the coating of birds, plants and fish larvae with oil, which causes suffocation and death of these particular things. Secondly, toxic components of oil are indeed lethal to a number of living things, even in very small quantities. Thirdly, oil pollution alters marine and coastal habitats, which causes disruption to the often fragile ecosystems, particularly in areas such as our Great Barrier Reef. Fourthly, hydrocarbons accumulate in the water and the soils in the seabed, placing sensitive marine species under stress. Fifthly, oil pollution alters behavioural responses to factors such as colour, smell or other environmental characteristics which are deleteriously changed, and can have a serious effect on the tourist industry, for example. All of these effects of oil pollution destroy marine life and are particularly damaging to protected waters. It is also true that other pollutants have these effects, and they are covered in separate schedules in the report. The Great Barrier Reef is especially protected by MARPOL but this protection does not extend sufficiently to cover the area which is at risk. The reef is the world's largest and most complex expanse of coral. Many unique forms of marine life make the reef their home. It is the most biologically diverse ecosystem known to man and is a product of millions of years of evolution. We are the custodians of that beautiful part of our coastline. There are 1500 species of fish and about 400 species of coral in the reef, as well as many other groups of animals and plants, including two endangered species of turtle and the threatened dugong. I seek leave to incorporate a succinct statement on the importance of the reef from the application to place it on the World Heritage list. Leave granted. The statement read as follows- Nomination of The Great Barrier Reef by the Commonwealth of Australia for inclusion in the World Heritage List. The Great Barrier Reef provides some of the most spectacular scenery on earth and is of exceptional natural beauty. The Great Barrier Reef provides major feeding grounds for large populations of the endangered species Dugong dugon and contains nesting grounds of world significance for the endangered turtle species green turtle (Chelonia mydas) and loggerhead turtle (Caretta caretta). The Great Barrier Reef thus meets all four criteria set out in Article 2 of the World Heritage Convention: (i) being an outstanding example representing a major stage of the earth's evolutionary history; (ii) being an outstanding example representing significant ongoing geological processes, biological evolution and man's interaction with his natural environment; (iii) containing unique, rare and superlative natural phenomena, formations and features and areas of exceptional natural beauty; and (iv) providing habitats where populations of rare and endangered species of plants and animals still survive. The area nominated is of outstanding universal value on the basis of its natural heritage and in recognition of this Governments have acted, and will continue to act, to preserve these features. The area nominated also meets the condition of integrity in that it includes the areas of the sea adjacent to the Reef. The area of this nomination contains many middens and other archaeological sites of Aboriginal or Torres Strait Islander origin. There are over 30 historic shipwrecks in the area, and on the islands there are ruins and operating lighthouses which are of cultural and historical significance. Senator VIGOR —I thank the Senate. The great diversity of life forms make the reef an area of great scientific importance and also of tourist appeal, and as such it deserves very special protection. The research station on Heron Island has already identified 38 species of starfish, 32 species of brittle starfish, 35 species of feather starfish, 107 species of coral, and 931 species of fish, and a number of these are threatened. There are also many examples of plant life and many different species of birds, all within an area of approximately 36 square kilometres of that island. The Great Barrier Reef is a major tourist attraction. In 1983-84 tourists spent around 660,000 visitor nights in the area. The millions of dollars spent in the area by tourists each year is indicative of the value of the reef to our country's financial success. It would be economically as well as environmentally disastrous to destroy this asset through pollution. Even the restricted levels of pollutants allowed under the MARPOL Convention could be deadly to the reef, according to scientific advice. The reef is listed on the World Heritage List, but additional steps must be taken to protect the reefs from threats caused by shipping. Following two recent groundings, the Government has finally agreed to insist that pilots be carried on all vessels over 100 tonnes which are within the reef area, and I commend this. The International Maritime Organisation's safety committee supports this measure. MARPOL and the principal Act being amended by this Bill, the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, already totally ban any discharge of waste within the reef itself and inside a line that runs down the outer edge of the reef as defined in the Convention and the Act. They prohibit discharge of pollutants within 12 nautical miles of this outer edge of the reef. Outside this area the pollutant concentration must be less than 100 parts per million and the waste must not be from an oil tanker. In fact, tankers have a broader berth and can discharge waste only beyond 50 nautical miles from the edge of the reef, and then only if the pollutant concentration is less than 33 parts per million and the flow is more than 60 litres per nautical mile. There are similar provisions for discharge of noxious bulk liquids from ships. The difficulty with existing limits is that winds, tides and currents carry discharges within 60 nautical miles of the reef along and towards the reef because of the particular patterns of the sea. While the rate of discharge of pollutants is controlled, there is no limit on the number of ships which may discharge waste within an area over a limited period. The combined discharges of several ships can multiply the damage caused. Jointly, they can cause considerable damage to the reef by discharging their waste within the 12 nautical mile limit and having those wastes carried on to the reef. Small spills or operational discharges can be devastating to the fragile ecosystem. Although oil pollution is generally perceived by ordinary people as massive oil slicks from super-tankers, the major source of pollution and damage comes from very small spills. However, the effects are cumulative. The accumulation of hydrocarbons over time is very damaging to marine life and a massive spill can coat thousands of birds. We hope that this will never happen. If it does we will have real problems. The House of Representatives Standing Committee on Environment and Conservation said in its report on oil spills that it was probable that most of the oil spilled in the sea originated from a large number of small spills rather than small numbers of large spills. The report said that it was evident that regular numbers of small spills caused more environmental damage than occasional large spills. I draw that to the attention of the Opposition. There is also a real risk of damage from large accidental spills which would aggravate the effects of the existing numbers of small planned spills. There is no justification for allowing preventable discharges so close to the Great Barrier Reef. For these reasons the Australian Democrats will move an amendment to the Bill to extend the protected area beyond the reef to 60 nautical miles from its outer edge. We propose to add new section 8a which moves the line defining the outer edge of the reef, defined in the principal Act as `nearest land', one degree east of its current position, which will correspond to adding approximately an extra 60 nautical miles of protection beyond the reef. This increased protection beyond the reef will considerably reduce the amount of pollution which can actually reach the reef through tides, winds and currents and through the carrying of polluted waters back on to the reef. Hence, the risk to the rich marine life in this area will be much reduced. In the case of Bass Strait the controlled dumping of oil from machinery spaces, bunkers and even tanks is allowed currently under the MARPOL Convention in regions away from land. However, there is very little escape of pollutants from Bass Strait which means that we can get high accumulations of hydrocarbons. Already in certain areas around the oil stations there is prohibition of dumping. Throughout the world all closed seas, such as the Mediterranean Sea, the Black Sea, the Baltic Sea, the Red Sea and the Arabian Gulf area, are declared areas of special consideration. Australia has not been strong enough in pushing for Bass Strait to be considered such a closed sea area. The shape of Bass Strait justifies it being so considered. The areas within have special oceanographical and ecological conditions plus certain sorts of traffic as described in schedule 1 of the Act. The Great Barrier Reef is protected to the same extent under the MARPOL Convention by extending the land limit out beyond the outer edge of the reef. We believe that it is extremely important that Bass Strait should be so protected because of the life forms along the Victorian and Tasmanian coasts. The Australian Democrats will move an amendment to prohibit the dumping of pollutants into Bass Strait. This narrow enclosed strait is Australia's busiest shipping lane and carries the largest concentration of vessels anywhere around Australia. The many oil platforms in the protected area further restrict passage through the strait while posing a considerable threat in themselves. Bass Strait is a rich fishing ground which is extremely vulnerable to pollution, especially pollution of its bottom sediments which would affect the bottom feeder fish and shellfish which are so highly prized and appreciated by Australia's export markets. The Bass Strait marine area is a prime tourist attraction. The devastation that could be caused by oil pollution to our fairy penguins and the Australian fur seal colonies as well as other Antarctic and temperate marine life would seriously affect tourism in the area. The long term damage of oil, even in small quantities, to the wetlands bordering Bass Strait must also be taken into account and acted upon. These wetlands are the major source of food, shelter and breeding sites for many of the young fish, birds and animals in the area. It is vital to protect this strait, which is both our busiest shipping lane and a unique sheltered area bordering the Southern Ocean. I now turn to radioactive substances. The Australian Democrats will move an amendment to prevent the dumping of radioactive waste in Australian coastal waters and to prevent Australian ships from dumping radioactive waste in coastal waters anywhere in the world. The Democrats' amendment defines a substance as radioactive if it emits radiation in excess of 350 becquerels per kilogram-that is, more than 350 emissions of radioactive counts per second per kilogram of the substance. Radioactivity is an insidious destroyer of the environment. Through genetic mutation it affects the inheritance of life for all future generations of affected organisms. The sea is a major source of food for humans as well as other animals. Radioactive pollution of our seas is a real potential hazard for thousands of years to come. The MARPOL Convention and the principal Act, which this Bill amends, already recognise the extreme threat of certain chemicals to the world's seas and seek to minimise these risks. The Australian Democrats are seeking to include radioactive materials amongst the dangerous chemicals which are controlled under our local Act. Basically, we are putting the criteria of the London Convention into our Act. There is no reason why the Prevention of Pollution from Ships Bill should not extend the provisions to include the London Convention for radioactive dumping. Why should we have to wait for that to happen? In conclusion, I commend the Government for at last biting the bullet and ratifying the MARPOL Convention on Protection of the Sea (Prevention of Pollution from Ships) and for providing interim cover for the States until they get their acts together. However, the Australian Democrats consider that Australian interests would be much better served by providing full protection for the Great Barrier Reef and the Bass Strait areas. The Australian Democrats also consider that this Bill should prevent the dumping of radioactive material in Australian coastal waters. If the Government is dinkum about wanting a nuclear-free zone in the Pacific, it must surely want to keep Australian shores clear of nuclear and radioactive waste. One thing which disturbed me was that the Government said originally that it would support these amendments but, because the House of Representatives is not coming back, the Government has withdrawn from this agreement. I believe that treating the legislation in this way is quite unreasonable. I note that the Opposition also will not support our amendments. If it is true that the Government will not support our amendments, I am appalled that such an event as the House of Representatives getting up earlier than the Senate should prevent us making reasonable and sensible amendments to the Bill, amendments which had been previously agreed on and which would have been passed had this situation not arisen. I bring this to the notice of the Senate. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(10.58) —The Government accepts its responsibility for protecting the seas from pollution and for maintaining a balance between the environment and other factors which from time to time put the environment at risk. Of course, maritime pollution has been with us for a long time and, in presenting the Protection of the Sea (Prevention of Pollution from Ships) Amendment Bill to the Senate, the Government has adopted a balanced position in meeting its obligations in this area. I can understand the concern expressed by Senator Vigor, but there is no discernible problem apart from projections that from time to time certain developments in respect of the movement of maritime vessels may create problems which would affect the environment. To that extent the Government has taken into consideration the issues that have been raised by Senator Vigor and has presented legislation which it conscientiously believes will protect the environment, fulfil our obligations to the maritime industry and protect our heritage. The amendments that are to be moved by the Australian Democrats present difficulties from the Government's point of view because they would impose at the national, Federal level principles which have not been negotiated with or agreed to by the States or the industry. Whilst we cannot take away the right of the Democrats to move the amendments as they will do, the Government is of the view that the legislation at least should be given the assent of the Senate. This would give us the opportunity to fulfil our obligation to consider and take into account the various interests with respect to maritime pollution. There has been no discussion with government authorities or the industry of the amendments to be moved by the Democrats. The Government accepts its obligations to protect the reef. The Great Barrier Reef is an important environmental area. It is common knowledge that both the Opposition and the Government accept our responsibilities in the area. The amendments moved by the Democrats would place extra responsibilities upon the Australian shipping industry and would have no effect upon other ships over whom we have little jurisdiction if they are outside our own waters. I am advised that there does not appear to be any justifiable scientific evidence of the nature to which Senator Vigor referred. In those circumstances the Government is quite justified in saying that the amendments are not acceptable and that they will not significantly change the level of environmental protection afforded in the areas Senator Vigor has referred to, largely Bass Strait and the Great Barrier Reef. Scientific study has shown that the 50-mile limit gives adequate protection to coastal resources and reefs from operational discharge from oil tankers. The existing regulations or agreements and the principal Act under which we operate with respect to our responsibilities in the area already contain all the protection provisions to which Senator Vigor referred. We do not believe that the amendments will have, therefore, any discernible effect on the environmental quality of the sea. We believe that the legislation will largely protect the environment. It is on that issue that we find ourselves at disagreement with the amendments put forward by the Australian Democrats. The effect of the first amendment would be to extend the area adjacent to the Great Barrier Reef by a further 60 nautical miles. I do not think Senator Vigor has produced any cogent, acceptable evidence that that will make any great difference to the region or to our responsibilities to the environment. After all, governments are obliged to accept international standards. Governments are obliged to accept scientific evidence, and Governments are obliged to find a balance between competing interests that express themselves from time to time in these matters and, in so doing, put into legislative form the means by which all those interests can be protected. It is a matter of opinion whether the legislation will meet those requirements. It is the Government's view that it will. If it is found by some practice, some event or some incident that there is a deficiency in the legislation, any government would be foolish not to take that evidence or those incidents into account. We have been regaled by Senator Vigor about the problems of radioactive waste. Neither I nor the Government resile from our responsibilities in these matters. I have been as active as any public figure or private citizen could be in the whole problem of radioactivity over many years. I am not a recent convert and I am not suggesting that others are, but I have been long concerned with that problem. In fact, the Government is on the public record as expressing concern about the dumping of radioactive waste. Whether it be the decision of governments, ship owners or captains of ships, we do not believe that that poses a major problem in respect of the issues that we are currently debating. After all, there is common ground in the Australian community, and indeed in this Parliament, about the Government taking whatever steps are available to it, in line with international conventions and decisions, to protect the Great Barrier Reef. It is one of the great ecological wonders of the world and nobody in this Parliament would resile from his responsibilities to protect that great area. Similarly, of course, we are having regard to the sea between the mainland and Tasmania. We have an obligation there because of the effect that any pollution would have on the beaches, the marine life and the protection of the environment in that region. The Government is of the view, having considered all the factors, having taken into account all the evidence and having taken into account the international position-the conventions which we are bound to follow-that, nevertheless, the legislation is a step forward. I am sure that Senator Vigor accepts that it is a step forward from where we were. All legislation should be progressive. All legislation should be based on past experience and we should learn from past experience. To that extent we have brought forward legislation that learns from past experience and takes into account the various interests which governments are obliged to consider when they present legislation to the Parliament. I thank the Opposition for its general support of the Government's position. In fact, I am sure that, in years past, when the previous Government presented legislation dealing with these matters, it enjoyed a measure of support from my Party in respect of its obligations as they were perceived at that time. I am sure that the Opposition would agree that we need to move further down the track of taking whatever steps are humanly possible to protect marine life, to protect the environment of the seas and to protect the Great Barrier Reef. To that extent, the Government has encompassed those objectives in the legislation. It has discussed the matter with the States and the Territories with whom we have not only government to government obligations but also obligations in respect of their approach to their environmental responsibilities and those that are accepted at the national level. I hope the Australian Democrats will appreciate that the Government, in voting against the amendments, has a genuine concern for the protection of the environment, a genuine concern about marine pollution and a genuine concern that we should take every step that is available to government and to the Parliament to enact legislation that protects those various interests. We believe that the legislation meets those requirements. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 5-by leave-taken together, and agreed to. Proposed new clause 5a. Senator VIGOR(South Australia)(11.11) —I move: (1) Page 2, after clause 5, insert the following new clause: `Interpretation `5a. The Principal Act is amended by adding after section 8 the following section: ``8a. This Part has effect as if- (a) that part of the line referred to in paragraph (9) of regulation 1 of Annex I to the Convention which is between the point latitude 9*00' South and the point latitude 21*00' South were 1*00' East of the position indicated in that paragraph; and (b) that part of the sea in Bass Strait which lies between 143*00' East longitude and 149*00' East longitude and which is more than 50 nautical miles from the nearest land were less than 50 nautical miles from the nearest land.''.'. This is the amendment to protect the Great Barrier Reef that I described in my speech during the second reading debate. I bring to the attention of the Committee that we have moved the line of land one degree east of the current boundary of the Barrier Reef. This one degree east does not correspond exactly to 60 nautical miles. It would be 60 nautical miles at the Equator but around the reef it is somewhere between 50 and 60 nautical miles further out from the edge of the Australian coast. We believe that this will be sufficient to disperse any pollution that would be caused by the dumping of waste from ships and it means that we will have a much bigger buffer zone to handle any spills that may occur. If one is right on the reef the major problem is that any measures taken to counter pollution may be too late. It is extremely important that this amendment to the boundary of the Barrier Reef be supported. The statements of the Minister for Veterans' Affairs (Senator Gietzelt) and the Opposition that we should follow the MARPOL Convention and bow to it are quite unsatisfactory in the sense that we are participants in negotiating conventions and we are able to put much more stringent conditions on our shipping than on foreign ships. If we have such stringent conditions on our shipping we have a much stronger bargaining position to negotiate better conditions for future conventions. I believe that the Government should have welcomed the Australian Democrats' amendment. If the Government did not consult with the major shipping companies, the shipping organisations, the unions and its own Department, I am appalled, because we did. In formulating these amendments I consulted with Australian National Line, with Mr Eccles from the Department of Transport, and with the various maritime unions, all of whom said either that they did not mind and the amendments would not economically affect their operations or that they were very much in favour of them. In fact, the unions said that the conditions that they would like to impose on shipping would be much more stringent than the ones that the Democrats have incorporated into this amendment. It is quite important to note that we have done our homework on these amendments. I will come to that again later when we get on to the amendment dealing with radioactive substances. It has been said in the past that we can continue to dump material into the sea and it will have no effect. We are now beginning to realise that the sea is just a very small pond in terms of dumping and that dumping has a number of deleterious effects on the biological life that exists in the sea. I believe that we are quite a distance ahead of the Australian Labor Party and miles and miles ahead of the Liberal Party of Australia in terms of trying to protect this very important resource that Australia has. I commend the amendment and I beg the Government and the Opposition to reconsider their position. With regard to Bass Strait, which is covered in the second part of our amendment, we have said that all of the Bass Strait area between longitude 143 degrees east and 149 degrees east shall be protected. This is the same type of protection as is afforded to the internal seas in all other parts of the world and I do not see why Australia should be disadvantaged by having Bass Strait treated differently from the Black Sea, the Mediterranean Sea, the Caspian Sea and other such areas. I urge the Committee to support this amendment. We will call for a division if it is not supported. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.17) —The issues have been well canvassed in the second reading debate. The proposed amendments seek an extension of the area within which operational discharges from ships are prohibited, largely to cover the Great Barrier Reef and Bass Strait areas. There has been adequate debate. Senator Vigor has not raised any new evidence to support his contention. I do not quarrel with his conviction on the issue but he fails to appreciate that, in the way in which politics and governments operate, the Government has to consult with other organisations and with other authorities. We have come up with amendments to the principal Act which accommodate the various views that have been expressed. I appreciate that they are not acceptable to the Australian Democrats, but they are acceptable to the Government. Question put: That proposed new clause 5a (Senator Vigor's amendment) be agreed to. The Committee divided. (The Temporary Chairman-Senator Townley) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 52 —— Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. Macklin, M. J. (Teller) Vigor, D. B. Alston, R. K. R. Hamer, D. J. Archer, B. R. Harradine, B. Aulich, T. Hill, R. Baume, Michael Jessop, D. S. Baume, Peter Jones, G. N. Bjelke-Petersen, F. I. Knowles, S. C. Black, J. R. Lewis, A. W. R. Bolkus, N. McIntosh, G. D. Boswell, R. L. D. McKiernan, J. P. Brownhill, D. G. C. Maguire, G. R. Carrick, Sir John Messner, A. J. Chaney, F. M. Morris, J. Childs, B. K. Newman, J. M. Coates, J. Puplick, C. J. G. Coleman, R. N. Ray, RobertCollard, S. J. Reid, M. E. (Teller)Colston, M. A. Reynolds, M. Cook, P. F. S. Robertson, E. A. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Gietzelt, A. T. Walters, M. S. Giles, P. J. Watson, J. O. W. Grimes, D. J. Withers, R. G. Guilfoyle, Dame Margaret Zakharov, A. O. Question so resolved in the negative. Clauses 6 to 10-by leave-taken together, and agreed to. Proposed new clause 10a. Senator VIGOR(South Australia)(11.27) —I move: (2) Page 4, after clause 10, insert the following clause: `10a. After Part III of the Principal Act the following Part is inserted: ``PART IIIa-PREVENTION OF POLLUTION BY RADIOACTIVE SUBSTANCE Prohibition of discharge of radioactive substances in sea ``26a. (1) Subject to sub-section (3), if any discharge of a radioactive substance, or of a mixture containing a radioactive substance, being a substance or mixture carried as cargo or part cargo in bulk, occurs from an Australian ship into the sea, the master and the owner of the ship are each guilty of an offence punishable, upon conviction, by a fine not exceeding- (a) if the offender is a natural person-$50,000; or (b) if the offender is a body corporate-$100,000. ``(2) For the purposes of sub-section (1), `radioactive substance' means a substance having a specific activity greater than 350 becquerels per kilogram. ``(3) Sub-section (1) does not apply to the discharge of a radioactive substance or a mixture from a ship- (a) into the coastal waters of a State as defined in the Coastal Waters (State Powers) Act 1980 or the coastal waters of the Northern Territory as defined in the Coastal Waters (Northern Territory Powers) Act 1980; (b) for the purposes of securing the safety of a ship or saving life at sea; (c) if the substance or the mixture, as the case may be, escaped from the ship in consequence of damage, other than intentional damage, to the ship or its equipment, and all reasonable precautions were taken after the occurrence of the damage or the discovery of the discharge for the purpose of preventing or minimising the escape of the substance or the mixture, as the case may be; or (d) if the discharge was for the purpose of combating specific pollution incidents in order to minimise the damage from pollution and was approved by a prescribed officer and, where the discharge occurred in the jurisdiction of the government of a country other than Australia, by that government. ``(4) For the purposes of sub-section (3), damage to a ship or to its equipment shall be taken to be intentional damage if, and only if, the damage arose in circumstances in which the master or owner of the ship- (a) acted with intent to cause the damage; or (b) acted recklessly and with knowledge that damage would probably result.''.'. This amendment seeks to insert proposed new clause 10A, which adds the provisions of the London Dumping Convention to the principal Act and ratifies that Convention. The provisions impose very high penalties on people dumping radioactive material into the sea. Admittedly, the provisions relate to operational radioactive substances and currently we do not have nuclear ships. The Australian Democrats are totally against our having nuclear-powered or nuclear-armed ships in Australian waters. There have been enormous problems with radioactivity from American ships in a Japanese port. It was found that the radioactivity levels next to an American submarine were 60 times the levels which should be allowed. The American submarine, which was the only vessel in that area, was nuclear powered, and its captain claimed that this radioactivity had nothing to do with the presence of a nuclear submarine. We believe that it is dangerous for these vessels to enter our waters. Currently we have absolutely no way of charging them for any of the damage which their radioactivity may cause. It is extremely important that we should make certain that ships in our waters-particularly in enclosed waters such as the waters of the Great Barrier Reef and Bass Strait, which by the action of the Government and the Opposition banding together have been left open to the ravages of people dumping material-should be protected, at least from radioactive material. The amendment we came up with resulted from considerable negotiations and discussions with the Government and was agreed to by both the Department and the Government as being acceptable. It seems very strange that the Government should suddenly change its view, simply, because the House of Representatives is not sitting or because of a change of heart. I believe that the Minister should justify his Government's change of heart, considering that a number of people in the Government's ranks, I believe, are highly supportive of this type of measure. I hope that the Government does see the light, and comes to the party and supports this amendment. If it does not, the Democrats again will be forced to ask for a division on this matter. It is extremely important for all people in Australia-both those who realise the importance of it and the silent majority who rely on the watch-dog role the Democrats are forced to play in this place-to try to protect the environment against the ravages that both the Government and the Opposition allow to happen. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(11.32) —The dumping of radioactive wastes, of course, is a very serious issue, but it is covered by the Environment Protection (Sea Dumping) Act 1981. The proposed amendment seeks to cover material carried as bulk cargo which has a radioactivity level of between 35 becquerels per gram, which is the level of activity of natural potassium, and 70 becquerels per gram. I am advised that in regard to substances which have a level of radioactivity above this level, the Dangerous Goods Code imposes standards of packaging, labelling, storage and handling, and that these substances cannot be carried in bulk form. So there are very few commodities which are carried, or are likely to be carried, in ships as bulk cargo which have radioactivity of the level contemplated by Senator Vigor's amendment. It should be remembered that if this amendment were carried-this is the reason why the Government has reservations about it-it would prevent the washing into the sea of the discharge from empty cargo holds which have held cargoes such as superphosphate, phosphate rock and zircon sands. If such waste products are not discharged into the sea outside the 50 nautical mile limit, where do we discharge such waste products? The Government, having taken all those matters into consideration and having expressed its view during the second reading debate, persists with its proposal and the amendment is not accepted. Question put: That the proposed new clause 10a (Senator Vigor's amendment) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 57 —— Majority . . . . . . . . . 51 —— Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. Macklin, M. J. (Teller) Vigor, D. B. Alston, R. K. R. Harradine, B. Archer, B. R. Hill, R. Aulich, T. Jessop, D. S. Baume, Michael Jones, G. N. Baume, Peter Knowles, S. C. Bjelke-Petersen, F. I. Lewis, A. W. R. Black, J. R. McIntosh, G. D. Bolkus, N. McKiernan, J. P. Boswell, R. L. D. Maguire, G. R. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Morris, J. Childs, B. K. Newman, J. M. Coates, J. Puplick, C. J. G. Coleman, R. N. Ray, RobertCollard, S. J. Reid, M. E. (Teller)Colston, M. A. Reynolds, M. Cook, P. F. S. Robertson, E. A. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Gietzelt, A. T. Walters, M. S. Giles, P. J. Watson, J. O. W. Grimes, D. J. Withers, R. G. Guilfoyle, Dame Margaret Zakharov, A. O. Hamer, D. J. Question so resolved in the negative. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Gietzelt) read a third time. Debate resumed from 29 May, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator DURACK(Western Australia)(11.42) —The Opposition supports the Copyright Amendment Bill, which will amend the Copyright Act. It is supported insofar as it goes, but I register our disappointment and criticism that the Government has not tackled the problem of audio-visual copying on a much greater scale than it has in the Bill. However, the Bill certainly tackles the immediate and critical problem of piracy or intentional infringement of copyright of audio-visual material for commercial purposes. That has been a growing problem for a number of years with increasing improvements in technology in the field. Several years ago amendments were made to the Copyright Act to increase penalties but in more recent years there has been an absolute explosion of piracy, as it is called, in this area. The Government, in this legislation, has sought to deal with the problem. The Opposition believes that the proposals are worthwhile and, hopefully, will be effective. Infringement of copyright in this area has been a criminal offence for a long time. However, because of the success of modern technology it has been much more possible to reproduce copies so that no difference can really be detected between the original and the copy, except by experts. This has been a heaven-sent opportunity for the video pirates and the video piracy industry which has developed as a result of these improved techniques. The existing penalties and the existing procedures available for prosecuting these offenders have proved to be inadequate. This legislation seeks by a series of amendments, which I do not need to detail, to improve the procedures to facilitate proof of infringements, which has been difficult; to introduce a new offence of being in possession of infringing material for the purpose of commercial gain; and to greatly increase penalties in the case of companies to $250,000 maximum and for imprisonment of individuals in certain cases. We believe that this is a worthwhile attempt at tackling this problem. There are some other matters included in the legislation which I do not propose to go into in any detail, except the problem of broadcasting by the use of satellites. A difficulty which has arisen under the existing Act is the extent to which a broadcast via a satellite comes within the definition of a broadcast within the Copyright Act. Clearly, amendments have to be made to deal with that matter. There is a problem, which I will deal with in the Committee stage, about the way in which those definitions have been adopted by the Government. Concerns have been expressed to the Opposition by the Australian Copyright Council in that respect. However, I will not deal with that matter during the second reading debate. The main concern of the Opposition is the inadequacy of the Government's response to the whole problem of audio-visual copy. I remind the Senate that in July 1981, when I was the Attorney-General in the Fraser Government, I established a review by the Attorney-General's Department of this particular matter. It was clear in 1981 that there was very widespread concern about the whole problem of copyright and audio-visual material. Home copying and copying for educational purposes were becoming a problem, as well as the piracy of such material for commercial purposes. There were very diverse interests-those of the copyright owners and their representatives on the one hand and those of the growing numbers in the community who want to make use of these new technologies for their own personal purposes, on the other. Home copying of material was a classic example, and still is. However, probably a more urgent problem was that of copying for educational purposes. I can remember it being put to me very strongly at that time that the existing section 202 of the Copyright Act, which permits the making of sound recordings of a radio or television broadcast for educational purposes if the recording was made on behalf of a non-profit educational institution, was a valuable educational tool but that it had become outmoded because of these technological developments and should immediately be extended to provide the same facility for video-copying of television broadcasts, not simply for sound recording. I thought that was an attractive proposition. I had established a general review of audio-visual copyright. I thought that, instead of making some amendment to that legislation ad hoc, so to speak, that would be a matter to be comprehended by this review generally. It came as a great surprise and certainly as a disappointment that this Bill, coming forward now virtually five years after the departmental review was established in the middle of 1981, does not address this problem at all, even in that narrow sphere. For that reason the Opposition has proposed an amendment, which we will move in the Committee stage, to tackle this problem, albeit admittedly in a very narrow sphere; namely, broadcasts for educational purposes of the Australian Broadcasting Corporation or the Special Broadcasting Service where those bodies actually have the copyright in the material and that material is then used for educational purposes. I would have thought this was a simple matter that could have been dealt with by the Government on that very narrow ground. However, the Opposition believes that it is a matter which should have been dealt with by the Government on a much broader ground. We hope that, if this amendment is favoured by the Senate, the Government will take that as an indication that this Parliament wants the Government to take a more effective and broader approach to this problem than even our amendment would contemplate. The departmental review which was established in the middle of 1981 provided a very valuable report which caused an issues paper in 1982. The Government has now had this material for four years and has also established a Copyright Law Review Committee under the chairmanship of a distinguished Federal Court judge, Mr Justice Sheppard. That Committee was established in September 1983, nearly three years ago. Armed as the Government has been for the three years it has been in office with this valuable issues paper on this subject and all the submissions that were made available to that departmental review, it is a very considerable failure on the part of this Government that it has not sought, in this legislation, to tackle the problems in any way at all. I think that is a major indictment of the Government's record in this area. The Attorney-General (Mr Lionel Bowen), in his second reading speech, made some rather pathetic references to the problem of home copying. He more or less just threw up his hands and said: `Oh well, we will wait and see how this develops in other countries'. He referred to some legislation in various European countries. Since then there has been a very major decision by the Supreme Court in the United States of America in relation to home copying which I do not think the Attorney-General referred to at all, if I recollect his speech. Whether he is aware of it or not, he has done nothing about it. He stands condemned for his failure to tackle this problem, particularly in light of the fact that his own Department did such a valuable and prompt piece of work back in 1981 and the early part of 1982, over four years ago. He has had the material, he has had the opportunities and he has had the assistance of the industry, which co-operated in a magnificent way. The industry was very anxious, of course, to have this matter tackled. It was very pleased when the Fraser Government announced that it was tackling the matter. It co-operated in a most fulsome way. However, industry efforts have been simply ignored and certainly have not had any reward at all. Even if there has been some positive step taken by the Government in regard to this legislation there may still be some justification for delay for further consideration because the subject is very difficult and complicated. I am very well aware of that. I think that for the Government virtually to have done nothing, achieved nothing and proposed nothing as a result of all these efforts by so many people is a disgraceful abdication of responsibility in this area. Therefore, as I have said, although the Opposition believes that the Bill contains some useful measures, the measures are totally inadequate. The legislation does not pretend even to tackle the broader problems of the new technology in the area of audio visual copyright. For these reasons the Opposition will be moving an amendment, which I have circulated, in the hope that the amendment, narrow and all as it is, will provoke the Government to take some positive steps in the direction of solving these major problems. Senator HAINES(South Australia)(11.57) —The Australian Democrats, of course, welcome this important piece of legislation, the Copyright Amendment Bill 1986, which is before us today. As Senator Durack quite rightly pointed out, the legislation not only is long overdue but also, of course, is based on the work of an internal review committee of the Attorney-General's Department which was established in 1981 when Senator Durack was Attorney-General. I agree too with Senator Durack's comments about the Bill not going far enough. I think that it was the decision of Beaumont J. in 1983 in regard to copying of computer programs that first raised some concerns in this place about that area of piracy. Of course, that has not in any real way been picked up under this legislation. The main purpose of the Bill of course is to amend the Copyright Act to address the appalling growth in piracy of audio visual materials in particular. That is an area which is causing considerable loss to government revenue because the pirates do not contribute in any way to Consolidated Revenue through taxes. Also it is causing considerable losses in the commercial area because people are having their profits cut back by the actions of the pirates. Specific provision is made in prosecution and civil proceedings for proof by affidavit of the subsistence and ownership of copyright. It introduces in prosecutions a more objective test of the defendant's knowledge that the copies dealt with were infringing copies and it creates new offences and substantially increases and provides additional penalties. On both those issues the Senate Standing Committee for the Scrutiny of Bills had something to say about the relevant clauses. I will be dealing with that in more detail in a moment. In other areas the Bill deals with increasing access to copyright materials for people with disabilities, for libraries and archives and their clients. It expressly extends the Act to satellite broadcasting. The Bill permits fair dealing in audio visual materials for the purpose of criticism, reviews and reporting news. There are other miscellaneous drafting amendments, of no particular consequence in the main. This area of the law dealing with the right to own and control the use of the product of one's mind has been severely affected by the impact of technological and scientific change. Indeed, as I said a moment ago, the decision a couple of years back in regard to not being able to copyright computer programs, for example, has caused considerable consternation in the computer area. It has always appeared a little strange to me why, if one's ideas that result in a play, a novel, a short story or poetry or one's ideas that result in a concerto or some other piece of music can be copyrighted, one's ideas that result in a computer program somehow cannot be copyrighted. That seems to be the situation at the moment. It is a situation of considerable concern. Readily available cheap equipment of course has made it easy to copy audio visual materials at high speed. This poses a threat to the rights of copyright owners. At the same time there has been a remarkable growth in the application of audio visual media material. I point out that it is much harder of course to copy a novel than it is to copy something that has appeared by way of film or documentary on television. The problem is therefore much more one in the audio visual area than it is with regard to the printed medium. At the same time there has been a remarkable growth, as I said, in the application of the audio visual media. This could well mean that schools could be disadvantaged in some ways as a result of this legislation. I refer in particular to the fact that schools are turning more and more to the use of video recorders to assist their students in learning in certain areas. The Opposition will be moving an amendment in regard to this area relating in particular to the Australian Broadcasting Corporation and the Special Broadcasting Service-the two areas to which schools turn most for educational material. Again, I will be talking about that at more length in a moment. Commercial industry sources estimate that the percentage of Australian homes with television sets that also had video recorders jumped from 11 per cent in 1983 to about 50 per cent in 1985. Wholesale sales of video cassettes for the Australian market rose from some $30m worth to over $100m worth per annum during the same period. The dramatic increase in the number of video outlets provides further evidence of this growth. Of course, that means that piracy is becoming even more lucrative, as well as increasingly possible. The dark side of this change, if I can call it that, and the failure of the law to keep pace, is seen in the spread of video piracy. The sophisticated nature of this industry and the undoubted involvement of organised crime represents an enormous loss to the legitimate industry. As I said earlier, it represents an equally significant loss to Consolidated Revenue. Such piracy is encouraged by the present inadequate penalties and the small outlay required to reap huge profits. As a result, large-scale highly-organised ventures have moved in to exploit the situation. I will give an example of that in a moment. The Australasian Film and Video Security Office contacted us to express some concerns about the profits inherent in piracy and the problems piracy was causing it. It estimated that film and video piracy in Australia represents a loss of something like 20 per cent to the legitimate industry. Not unexpectedly the industry resents that. The Film and Video Security Office gave as an example a case heard at the New South Wales Penrith Court of Petty Sessions on 22 July 1985 when one Peter Warren Consadine of Canberra pleaded guilty to charges relating to offences under the Copyright Act and the Trademarks Act. The offences concerned the selling and offering for sale of counterfeit video copies of the film Police Academy. Any honourable senator who has teenage children will know that that would have proven to have been an extremely lucrative film to pirate because it was one of the most popular for young people at the time. Of the 29 charges of infringing copyright the offender was fined $20 on each charge for a total of $580. On the seven charges relating to trademark breaches he was fined $100 on each count, totalling some $700. The grand total in fines was $1,280. The Australasian Film and Video Security Office made some extensive investigations into the matter and it was established that well in excess of one thousand counterfeit tapes were distributed. However, even if we just settle for a round thousand tapes being counterfeited for the purposes of this exercise, we come up with some extremely interesting costing. The pirate's cost for one thousand blank tapes at $5 a tape amounts to $5,000. The selling price of one thousand counterfeit tapes of the film Police Academy at $65 each brought in $65,000, leaving at that stage a profit of $60,000. The retailers and traders outlay was $65,000. Fifty rentals at $4.50 for a thousand tapes is another $225,000. The retailer's profits from rentals amounts to $160,000, plus the sale of the tapes to secondhand dealers or to wholesalers at 20c each, which is another $20,000 and gives a total profit for the exercise of something in the vicinity of $180,000. It was pointed out by the Security Office that the secondhand tapes could be rented out at another 30 times each at $2 a time bringing in an additional $60,000. It is an area in which considerable profit is to be made at a very small outlay. On top of this is the fact that there are losses to both the film and video industries through the illegal profit taking on their market, and since the pirates pay no tax or royalties there is considerable loss, as I have already mentioned, to other revenues, and in particular to the government coffers. It is no wonder, given those sorts of profit margins, for the outlays concerned, that the problem of video piracy has proliferated to the extent that it has. This amending Bill should go some way towards solving the problem. The problem of proof of ownership of copyright material has been addressed, whereby proof of subsistance or ownership may be given by affidavit. It remains to be seen whether this method works in cutting down on time and costs. The difficulty in establishing whether a defendant knew he had in his possession an infringing copy is also addressed. Currently, it is required that the offender knows absolutely that the copies in which he is dealing are infringing copies. Of course, they can open their baby blues wide, shrug their shoulders and assert that they had no knowledge at all and could not have been expected to have had any knowledge that the copies were infringing copies. The particular knowledge test is to be amended to `knows or ought reasonably to know' conditions. On this basis the court can have regard to the circumstances of the alleged criminal act. For example, it might reasonably be inferred that the accused ought reasonably to know if he had acquired the copy at a price considerably below commercial levels. Good fairies in this area do not normally abound. If somebody purchases something at a much lower than commercial price, it can be inferred, we would contend, that the accused ought reasonably to have known that he was dabbling in something which he should not have been involved in. The Senate Standing Committee for the Scrutiny of Bills has expressed some concern about clause 6 which establishes a new sub-section 47a (4) with regard to the reverse onus of proof that is placed in this area. The Committee, in its tenth report of 1986 of this month, argues: New sub-section 47a (4) would provide a defence in respect of the failure to retain records for a prescribed period if the defendant satisfies the court that he or she took all reasonable precautions, and exercised due diligence, to ensure the retention of the records. The Committee drew the new sub-section to the attention of the Senate under principle 1 (a) (i) in that by imposing the persuasive onus of proof on the defendant in criminal proceedings it might be considered to trespass unduly on personal rights and liberties. The Attorney-General (Mr Lionel Bowen) responded to this, pointing out that the Committee had taken into account the fact that the matters which the defence entails are peculiarly within the knowledge of the defendant, the regulatory nature of the offence created by sub-section 47a (3) and the comparatively low level of the fine, $500. So sub-section 47a (4) falls squarely within the policy enunciated in the Attorney's earlier correspondence to the Committee concerning circumstances in which reversal of the persuasive onus is permissible. It is nevertheless, notwithstanding that response from the Attorney, worth while drawing to the Senate's attention that this clause contains that particular reversal. Finally, the present ridiculously low penalties have been increased and they will be up to 33 times higher than those introduced in 1981. While the penalties at the lower end of the scale might still be inadequate, it is to be hoped that the overall increases will act as a deterrent to those engaged in this particularly nasty business. Again, the Scrutiny of Bills Committee has had some concern about the retrospective application of those penalties. It refers the Senate's attention to clause 17 which relates to new sub-section 133a (1) with regard to that retrospective element. The Committee states: Clause 17 would substitute a new sub-section 133a (1), sub-paragraph (c) (ii) of which specifies a new penalty if the offender against the sub-section is a body corporate. Paragraph (c) would appear to apply the new penalty to the sub-section as it was in force before the coming into operation of clause 17. Thus a body corporate which would have been liable to a penalty of $1,500 for a first offence- under the existing legislation- might now be liable to a fine of up to $7,500 even if the offence was committed before the commencement of the new section. The Committee drew the clause to the attention of the Senate under principle 1 (a) (i) in that by retrospectively increasing the penalty for an offence it might be considered to trespass unduly on personal rights and liberties. The Attorney-General responded with an argument that there had been some misunderstanding in relation to the new proposed sub-section, pointing out that sub-section 45a of the Acts Interpretation Act 1901 makes clear that where an amending Act increases the penalty for an offence, the increase applies only to offences committed after the commencement of the amending provision-sub-section 45a (1). The Committee reported that the Attorney said: There does not appear to be expressed in paragraph 133a (1) (c) any contrary intention to sub-section 45a (1) of the Acts Interpretation Act. Paragraph 133a(1) (c) is intended only to clarify `first conviction', so as to prevent a defendant, convicted of an offence under section 133a prior to the commencement of the amendment in section 17, from arguing that a subsequent conviction under section 133a after the commencement- I so love the prolixity of all of this- of section 17 was his or her `first' conviction. Paragraph 52 of the Explanatory Memorandum sets out- this is the shortest sentence in the whole thing- the intended meaning of the provision. I trust that the Minister for Resources and Energy (Senator Gareth Evans) understood all that. Senator Gareth Evans —Were you happy with that? Senator HAINES —Well, the Committee argued that it could not agree with the point of view put forward with regard to the provision on the grounds that while it may have been the intention only to give a particular meaning to the expression `first conviction' as set out in the explanatory memorandum, it does appear nevertheless that the words used are sufficiently clear to displace the effect of sub-section 45a (1) of the Acts Interpretation Act. In essence, to introduce a retrospective increase in the penalty imposed for a contravention of sub-section 133a (1), the Minister may want to give some more elaborate, perhaps less prolix response, for the first time in recorded history, to this. I look forward to hearing that; but at the moment, at least, the Committee is not satisfied with the Attorney-General's response. Leaving that, however, and returning to the major concerns expressed by industry, it has pressed for increased penalties for some time and it is satisfied with these increases, so presumably it believes, at least, that the offence of piracy is sufficiently dreadful for this legislation to go through even if the Scrutiny of Bills Committee interpretation of the effect of the new paragraph is correct. In passing, I think it is worth while complimenting the industry on the way in which it has sought to help itself in the face of the massive problem of video piracy. Its activities in anti-piracy investigation, legal action and public education are a credit to it even though, of course, they have been undertaken with some element, at least, of self-interest. In addition, the industry has been particularly co-operative in the way it has continued to seek legislative reform. Indeed, I would go so far as to say that it was beginning to feel not only co-operative but also somewhat frustrated in its attempts to get this going, considering that Australia is some years behind other countries in putting into place the sorts of penalties for video piracy that are necessary if it is to be stopped. For example, it is some two years since major penalties for video piracy were introduced in the United States of America and the United Kingdom. I understand that since then those penalties have proved to be overwhelmingly effective as a deterrent. I sincerely hope that the same sort of thing will happen here. Other aspects of the Bill which are also worthy of commendation include increased access to copyright material for the disabled and the establishment of a new statutory licence which will enable radio stations catering for print handicapped people to broadcast literary and dramatic works, subject to the copyright owners' right to claim equitable remuneration. This is a clear improvement on the present situation. Similarly, the establishment of a new statutory licence for institutions assisting intellectually disabled people will allow those institutions to reproduce and adapt specified published copyright material for the limited sole purpose of use in providing assistance to the intellectually disabled. These are valuable initiatives which, of course, will benefit those people enormously, and so they should. As the Attorney-General has pointed out, there are some major questions which are still the subject of review and consideration by the Government. In an area as important as this where advances are being made on an almost daily basis in the technology, I ask that the Government hurry up with that review or, as usual, the Government will be outstripped by it. These concerns relate to issues such as home taping, the use of copyright materials by educational institutions and the question of parallel importing. In all of these areas there is a need for urgent action and I hope that urgent action will be forthcoming. Other countries have managed to find a solution-for example, by putting a levy on blank tapes, which gets around some of the problems that still have to be resolved. One is forced to wonder why the Australian Government is taking so long to pick up these issues. It is not as if it has not been aware of them or been made aware of them because the Attorney-General referred to them during his second reading speech. Overall, however, as I said earlier, the Bill is very welcome. The extent to which the proposed solutions work needs to be monitored, although, if overseas indications are going to be followed here, it appears that the measures in the Bill will certainly be of some assistance. It is to be hoped that a similarly constructive approach to the one taken by industry representatives that resulted in this Bill will be taken to the other outstanding matters and that we will see those problems too resolved in the near future. One of those problems, of course, relates to the use by schools of information that is broadcast on television channels and, in particular, on the Australian Broadcasting Corporation and the Special Broadcasting Service. I do not think I am jumping the gun on Senator Puplick, but I understand that there is a proposed Opposition amendment with regard to making accessible publicly-funded information free of cost to publicly-funded institutions. As I said, that specifically relates to videotaping by schools and, in particular, I would have thought, State schools, of ABC or SBS programs on television. There are a number of problems associated with this and with the Opposition's bringing forward an amendment, which certainly we support in principle. The first problem is that, if it is passed, it is going to hold up the rest of the legislation until the Budget session begins and the House of Representatives can look at the amendment. Given the fact that the video industry has waited so long for this Bill, that would be an unfortunate result. Other problems are caused by the fact that the ABC and, I presume, the SBS do not necessarily own the copyright to everything they broadcast, and that could cause a few hiccups in the system. Of course, there is the wider issue of whether schools should make a contribution to these sorts of videos in the same way as they do, for example, with regard to the purchase of books. While I certainly support the aim that the Opposition has in the amendment it is going to put forward, given the problems, particularly with regard to the ownership of copyright, of some of the material used on the ABC and what impact that is likely to have on the schools that use video copies of that material-whether they are aware of the fact that copyright is or is not held by the ABC-it may be better to refer this amendment to the Senate Standing Committee on Education and the Arts for consideration of all its implications. Indeed, I will move in that direction by leave after the Committee stage. I think it is an amendment that deserves support. However, it does require looking into further, whether with regard to the problems it could cause or, more importantly, with regard to extending it so that it goes beyond simply looking at the ABC and the SBS in schools and perhaps can be widened so that all publicly-funded information is made available free to publicly-funded institutions, or at least inasmuch as that is feasible. We support the legislation. We would like to see it go beyond the areas it has already covered. We would simply encourage the Government to get on with covering those other areas. Senator PUPLICK(New South Wales)(12.23) —The Copyright Amendment Bill 1986 is an important piece of legislation which covers a number of areas relating to developments which have taken place in the field of audio-visual copyright and audio-visual technology in the last couple of years. I do not want to repeat the points made by my colleague the Deputy Leader, Senator Durack, in terms of the length of time the Government has delayed on this particular matter or indeed the adequacy of its general response to the whole question of audio-visual copyright. However, I do want to deal with a number of matters raised in the legislation and to say a few words about the amendment which the Opposition will be putting forward and something about the state of copyright law in general. The principal purpose of this amendment Bill is to combat the growth of video piracy, which to all intents and purposes is a form of theft. There is no doubt that this is a problem of quite massive dimensions. The Australian Film Commission, for instance, in its recent bulletin on copyright law proposals, estimates that conservatively piracy has cost the industry about 20 per cent of its returns-a figure calculated by the Film Commission to be about $32m a year. It is also true that the enforcement of a new, stricter regime with heavier penalties is likely to have some considerable impact in this matter. For instance, the Australian newspaper on 29 January this year contained a report about the introduction of tougher copyright legislation in Great Britain. The report said: When tough legislation was introduced to Britain last year the pirate video market share fell from 50 per cent to just under 10 per cent and the pirates moved into the Pacific. There is no doubt that this region of the world has been particularly affected by the growth of video piracy. Recently major amendments were made to the law of Singapore, which previously had relied simply on the 1911-12 Imperial Act. The Singapore authorities used the Australian legislation as something of a model for their own approach to the matter. It is interesting that Singapore-based companies are believed to have earned around $US200m through exports of illegally-produced music cassette tapes alone. So when one considers the extent to which one has to add to that the whole question of pirate videos, one can see that this is a mammoth industry in the extent to which revenue is lost both to governments and to legitimate owners of copyright. The Copyright Amendment Bill will have impact in Australia, one of the countries with the largest degree of home video penetration. In 1983 it was calculated that 11 per cent of Australian households which had television also had video recorders. By 1985 this figure had grown to around 50 per cent, and in some regional cities and country towns was as high as 80 per cent. The 1983 wholesale sales of video cassettes in the Australian market was approximately $30m, rising to $100m in 1985 and by the end of 1985 approximately 30,000 of a potential 100,000 hotel and motel rooms in this country were linked to videos to provide in-house movies. Copyright legislation dates back a considerable period. I think the first copyright statute was in 1709 in the rein of Queen Anne. Legislation in this country has been based on that statute, on the Engraving Copyright Act of 1734 and Copyright Acts of 1905 and 1912. Copyright matters always tend to move slowly. For instance, in 1980 the Copyright Act was amended to give educational institutions a certain degree of responsibility for monitoring and controlling the use of photocopying in their facilities. It is only in the course of the last couple of months that the Copyright Agency Limited, on behalf of Australia's registered copyright owners, has been in a position to start collecting fees for the owners of copyright in a situation that was created for this purpose for five or six years ago. The amendment Bill before us essentially seeks to do three things. First, it seeks to deal with the problems of proof of copyright ownership. Secondly, it deals with establishing in prosecutions that a defendant knew that he had in his possession an infringing copy. Thirdly, it addresses the question of penalties which, as Senator Haines has pointed out, have remained ridiculously inadequate for a prolonged period. As Senator Durack indicated, a number of matters have not been addressed or dealt with in this Bill. I want to mention a couple of them. The first is the problem of home taping. Senator Durack referred to a decision of the United States Supreme Court in which this matter was tested involving, if my memory serves me correctly, the Disney studios in an action against the producers of video machines. I think in that instance Sony was the principal defendant. It is disappointing that the issues raised and addressed by the United States Supreme Court have not now been picked up and dealt with in this Australian legislation that has been developed some years later. There has been lengthy debate about whether a tax should be applied on blank tape. I understand that in West Germany, France, Austria, Portugal, Finland, Norway, Iceland, Sweden, and even Hungary, there is a levy on blank tapes. Furthermore, the matter has been under consideration in the United Kingdom, where in April 1986 a White Paper was produced on the topic. The United Kingdom Government announced its intention to introduce a levy on blank audio tapes in relation to unrestricted home taping. Again, this is a matter which our Government could have addressed at this stage, but it has declined to do so. A major problem arises from what is called parallel importing, which means, in effect, the importation for commercial purposes of legitimate copies-for example, of books, records or tapes by somebody other than the Australian territory's exclusive licensee. The magazine Encore, the trade journal of the film and television industry, in its edition of 27 March 1986, sets out a detailed discussion of the question of parallel importing. It is true that the Copyright Tribunal under His Honour Mr Justice Sheppard is having a look at this matter and the Copyright Law Review Committee will also be examining it. But again, the question of parallel importing has been before the Government for a number of years and has not been addressed. It is unfortunate that, increasingly, a large number of important areas of copyright law presumably are piling up on the Attorney-General's desk, because he is not devoid of recommendations from the industry, tribunals and reviews by his Department and others going back a number of years. As Senator Durack said, the Australian Copyright Council has expressed some difficulties with parts of the Bill, and in particular the adequacy of the definition of the term `broadcast', which is contained in clause 3 (d) of the Bill. It has also expressed difficulty over certain questions which arise in regard to broadcasts being transmitted into Australia from a place outside Australia, and the way in which they might stand in relation to the copyright regime which is affected by this Bill. That is a matter to be taken up in the Committee stage of the Bill. The Opposition has foreshadowed an amendment to this legislation to allow access, without some of the copyright restrictions, to educational institutions for educational purposes where they make copies of broadcasts put out by the Australian Broadcasting Corporation or the Special Broadcasting Service in a restricted area. I refer to that area where the copyright of the program concerned subsists in the ABC or SBS. I know that the Australian Film Commission has raised some difficulties on this score, and has commented on how this would affect people who primarily make educational films. We believe that problem would be overcome by the fact that our amendment is drawn in such a way as to apply only to a broadcast or a sound broadcast in which the copyright clearly subsists in the ABC or SBS. We should be able to deal with that matter in a little more detail in the Committee stage. I conclude by making a more general point about copyright and copyright law in particular. I do so as a purely personal observation and do not attempt to ascribe my view as one that is necessarily widely held within the Opposition parties. The Berne Convention on which a great deal of our copyright law is based will, on 9 September this year, celebrate its 100th anniversary thus a great deal of the copyright law in Australia is tied to a document which is 100 years old, and which, in terms of copyright law generally, stretches back to the reign of Queen Anne. I do not know whether it is possible to continue to maintain a belief in copyright per se in the years ahead. We must seriously address the question of whether intellectual property laws are any longer compatible with the growth in technology. I do not believe that it is clear that both are sustainable. In her comments Senator Haines mentioned the difficulty that is posed by computer programs. A number of these matters, which were addressed in the High Court when it eventually had to settle the matter in Apple Computer Australia v. Computer Edge, exposed the difficulty in the law, slow moving as it is. But even with the best intentions to keep the law moving at a reasonable pace in this area, the technology simply makes it almost impossible. When Senator Gareth Evans was Attorney-General, he announced in June 1984 that there would be a review of copyright law as it related to computers and computer programs. I understand that this has subsequently been deferred in terms of the review which is being undertaken. For instance, I know that in a number of countries, such as the United States, the United Kingdom, France and Japan, they have endorsed copyright as a preferred method of software protection, but the case is by no means clear. If one looks at all the other bits and pieces that arise in relation to copyright law, one realises this. For example, there is the way in which the Europeans have established in copyright law access to what are called moral rights-rights of the disclosure, rights of recall on change of opinion, rights to claim authorship and rights relating to the integrity of a work-which are protected in article 6 bis of the Berne Convention. In 1979 the then Attorney-General, Mr Ellicott, announced that he was interested in some review of the status of moral rights within Australian copyright law. Support was given for the inclusion of moral rights in the United Kingdom copyright law by the Green Paper in that country in 1981. The whole question of what is called droit de suite was rejected in the United Kingdom by the Whitford Committee in 1977, and in Australia we have a problem with the Australasian Performing Right Association. The APRA case, which came before the Copyright Tribunal last year, resulted in major cost increases being imposed on the ABC and others to pay retrospective fees for the performance of certain live and sound recordings which currently might otherwise only have protection under sections 52 and 53 of the Trade Practices Act in relation to the passing off provisions. At the end of last year we had a debate about the establishment of a public lending rights scheme on a statutory basis and a number of issues were raised there. However, I believe that the increase in technology and in the pace of technology means that the traditional way in which we have understood copyright and the whole framework of intellectual property legislation in this country is doomed. In fact, we will have to look in the not too distant future at whether copyright law and the other attendant areas of designs, trademarks and patents and so on are not in need of a very substantial revision. I shall conclude my remarks at that point but I indicate that on some of the definitional matters and other matters relating to the Opposition amendment, we will take the opportunity to speak briefly in the Committee stage. Nevertheless the areas which the Bill addresses it addresses adequately and the Opposition is happy to support it. However, we hope that the Minister representing the Attorney-General will be in a position to indicate that matters such as home taping, parallel importing and other areas of audio-visual copyright which have been with the Government for some time will be addressed in the not too distant future. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(12.41) —in reply-I am grateful to honourable senators for their support for the Copyright Amendment Bill 1986 and in particular its centrepiece-upgrading the piracy provisions and making them more effectively enforceable. A number of matters have been raised, particularly by Senator Puplick, with his usual conspicuous erudition. He raised some issues that are not dealt with by the Bill but which he thinks should be addressed by the Government. I will ensure that his remarks and those of other honourable senators are drawn to the attention of the Attorney-General (Mr Lionel Bowen) so that he can take account of them in identifying further work priorities. On the particular subject of audio-visual copyright, both in the home and in educational institutions, it should be said that continuing activity is taking place within the Government to try to determine appropriate ways of dealing with these matters. The blank tape levy idea which I, as Attorney-General, was concerned to see implemented if at all possible, foundered initially on the basis of strong legal advice that such a levy would in law be a tax. That has not been called into question by competing opinion from Sir Maurice Byers, QC, this time acting for copyright owners. Accordingly, this is an issue which the Government is prepared to reconsider. Certainly there are ample precedents for this elsewhere and it is the simplest way from many points of view of dealing with this issue. Certainly I, for one, remain attracted to it. On the point about educational copying, there is an active program of discussions proceeding at present between the Government, the copyright owners, tertiary and schools representatives and the Australian Broadcasting Corporation. Commercial interests have been invited to participate in these discussions but to date they have expressed little interest in doing so. What is in issue is a statutory licence scheme of the kind which has been-for the most part successfully-implemented for written material in educational institutions. I hope that some progress can be made on that. Further aspects of this will be raised in the Committee stage and we can deal with the detail of it there. The point should also be made that the Copyright Law Review Committee is actively looking at a number of other matters, particularly parallel importation, which was raised by Senator Puplick. However, part of that issue is addressed in the Bill before us today insofar as the question of knowledge is addressed. I do not think it should be said that the progress of the audio-visual review has in any way been delayed by the establishment of the Copyright Law Review Committee. It is operating on parallel paths but not in such a way that it has caused any of the delay that has so far occurred in implementing effective audio-visual regimes. As is always the case with copyright, the problem is very complex and difficult. I acknowledge that the law has tended to move at a pretty glacial pace in this area and it is a function of the complexity of the matters involved as well as the will, or lack of it, of governments to come to grips with these issues. The other points that have been raised can be better dealt with in the Committee stage except, perhaps, for a couple of issues from the Scrutiny of Bills Committee with which Senator Haines demonstrated a preoccupation. The point about the reversal of the persuasive onus of proof is well made by that Committee. Personally I have never had any affection at all for reversal of the persuasive onus and I believe that there are very few instances where such provisions cannot be reduced at least to a mere reversal of an evidentiary burden, keeping the persuasive onus where, in criminal law, it generally should be-on the prosecution. The difficulty in this instance is that the clause had been drafted, as far as print handicapped radio licences were concerned, to mirror exactly the provisions elsewhere in the parent legislation governing the statutory licences for schools. It would have created obvious anomalies had the rules been different in each of those two environments. Therefore it remains to be attended to another day, as does most of the statute book. If change is to be made in this particular matter, it would have been odd and inappropriate, so the argument goes, to have made the amendment on this occasion. Sitting suspended from 12.45 to 2 p.m. Senator CHANEY —My question is addressed to the Leader of the Government in the Senate. Has a private company been involved in producing tonight's television address to the nation by the Prime Minister? What is the production cost of the address and is the Government meeting that cost? Further, as the Leader of the Opposition has sought equal time to reply on national television, will any such reply be on the same cost basis as applies to the Prime Minister? Senator BUTTON —I am not able to help Senator Chaney entirely with an answer to this question. As I understand it, largely from the newspapers I suspect, a private company has been engaged in connection with part of the televising of the address. In so far as the cost of the address is concerned, the final costs are yet to be collated and I assume that when that is done they can be made available. With regard to the reply by the Leader of the Opposition, I understand that a request was made and, in conformity with practice, was refused. However, I am not absolutely certain in respect of the facts of that matter. Senator CHANEY —Mr President, I ask a supplementary question. I refer to a couple of elements of the question to which I asked the Minister to address himself. Is the Government, or the taxpayer, meeting the cost of the private company involvement and, if the Leader of the Opposition does make a reply on national television, will he be afforded the same consideration? Senator BUTTON —I thought I indicated that I was not able to answer the second part of that question. I will try to get an answer to Senator Chaney by tomorrow, at least. I would assume that, if the rules were all fair in love and war, as they usually are, the same costs would be made available to the Leader of the Opposition. But I will have to obtain an answer. Senator McKIERNAN —Has the attention of the Minister for Industry, Technology and Commerce been drawn to a series of reports on the Australian dredging industry in recent editions of the Daily Commercial News newspaper? In particular, has the Minister seen the report in the 13 May edition of the newspaper headlined `Belgium denies dredging subsidy' which points out that a representative of the Belgian Government denied that his Government had subsidised the successful tenderer, two Belgian dredge owners, for a contract to dredge a four kilometre long, 250 metre wide channel in Mermaid Sound off Dampier in Western Australia? Can the Minister confirm that the price of the successful contract was approximately $30m, some $10m lower than the other seven tenders? What action can the Government take to ensure that foreign companies are not advantaged and Australian companies are not disadvantaged by this type of activity? Has the Minister seen a further report in the same paper on 21 May which asserts that the Government is acting in a manner not in the best interests of the Australian dredging industry? Will the Minister comment on the accusations contained in the articles and will he outline what policies the Government has in place to ensure that Australian dredging companies can compete on at least equal terms with foreign companies for dredging contracts in Australia? Senator BUTTON —I have seen some information on Senator McKiernan's detailed question but I do not have all that information with me. Perhaps I can provide the honourable senator with an answer at the end of Question Time. I apologise for not having the information here. Senator LEWIS —My question, which I also address to the Leader of the Government in the Senate, is not dissimilar to the last question. I refer to a recent statement that Sunbeam Australia designed the cheapest in-line toaster on the market, but after an international comparison of production costs the company ordered manufacture in Hong Kong for 42 per cent less than would have been the cost in Sydney. The production cost comparisons were: Australia, $18.08; New Zealand, $15.42; United States of America, $14.23; and Hong Kong, $10.56. Has the Minister made any analysis of the reasons for the differences in costs between each country? Can he tell the Senate how much of the cost difference is due to tax, overregulation, high interest rates and unrealistic wage on-costs? Senator BUTTON —I think I had heard the story about a Sunbeam product which, I think, is being manufactured in New Zealand as well as Hong Kong. However, I do not know that the detail of whether it was a toaster, a microwave oven or whatever is terribly important because that is not the point of the question, as I understand it. Senator Chipp —It is if you want to make some toast. Senator BUTTON —If I can offer the honourable senator some advice, I think, having regard to the state that he is in, he had best stick to muesli; so he can tune out of the rest of the answer. The point of Senator Lewis's question is clearly the differences in costs between various countries and that, of course, will vary from product to product and will depend very much on what sort of natural advantage a particular country may have in respect of the production of a particular commodity. For example, Hong Kong clearly has an immense advantage over other economies in respect of labour costs. Australia has advantages over other countries in respect of a range of matters which go to the cost of production. Senator Townley —What about the tax rates? Senator BUTTON —The honourable senator makes a good point. However, perhaps I can simply explain the point to the honourable senator in this way: If the worthy citizens of Hobart enjoyed the same wages as the people of Hong Kong, the honourable senator's chemist shop would not be such a profitable business as it is now because they would not by buying the sorts of products that he undoubtedly sells in that pharmacy. As I say, the point about wage costs comparison is that costs differ from product to product. I just make the point in this way: There are now really only two major centres of production in the world for consumer electronics-that is, Japan and, to a certain extent, other economies of the Pacific basin; and the very large international company, Phillips Industries, based in Holland. That contraction has taken place because of the high labour costs involved, the labour intensivity of manufacturing commercial electronic appliances and so on. The point I make is that in terms of developing products and marketing products in Australia we have to be conscious of the advantages and disadvantages which we have. Senator Lewis is trying to suggest that labour costs in areas of high labour intensivity are a disadvantage for Australia. Of course they are. They will become more so, not only for Australia but also for other Western countries, the traditional Organisation for Economic Co-operation and Development members and so on, as Chinese industry develops and becomes more sophisticated. But there is a range of issues involved in the costs of production which goes way beyond simply the question of labour costs. I think it is bad for the issue of international competitiveness to be dealt with solely on the criterion of labour costs. If that were the case, we would find that some of the greatest manufacturing economies of the world, which have labour costs comparable with and sometimes higher than Australia, would go out of business. They have concentrated on a range of other activities, in terms of international competitiveness, which make all the difference. The classic example, of course, is Japan, which has very little by way of raw materials and comparable labour costs with Australia, but a whole range of other mechanisms and attitudes which are important and which have made it a highly productive and innovative economy. A lot of those issues go to good management and things of that kind. I take the point of Senator Lewis's question which, if I might say without being derogatory on this occasion, is fairly simple in its thrust; I say that the issue is more complex than that. I go back to the toaster example; I have no doubt that happened. It has happened with a lot of products in Australia. There are many other products, which of course we can make very well, to which that would not apply. Senator LEWIS —Mr President, I ask a supplementary question. I thank the Minister for his answer and I understand the point that he is trying to make, but I point out that he fails to realise that the manufacturers of Australia want to know what the Government is going to do about this matter. It is very interesting to hear the Minister talk about these things, but what on earth is this Government going to do about them? Senator BUTTON —I suppose Senator Lewis is hoping for some dramatic statement that the Government will-- Senator Lewis —The manufacturers would like one. Senator BUTTON —I am not sure that the honourable senator speaks on behalf of the manufacturers, although he is not bad when speaking on behalf of Canberra bus proprietors. Let me say that if he is hoping for some dramatic statement that this Government will set about the task of reducing wages in this country to the levels pertaining in Hong Kong, he will not be satisfied because he will not get that statement. I want to make that point quite clear. Because of the second part of the honourable senator's question, I really have to make the point that the basic problems of manufacturing in this country occurred in the 1960s and the 1970s. They occurred because of high protection and high wages which were allowed to grow by governments in the total absence of a wages policy and, of course, a total lack of attention to some of the other things to which I referred in the earlier part of my answer; namely, attention to good products, quality, design, marketing and those sorts of things. The Government is concerned about these issues, which are not just related to wage costs; they are related to a whole range of other things. Since senators other than Senator Lewis want to ask questions, I will save some of my comments for another day. Senator CROWLEY —Has the Minister representing the Minister for Health seen the release by the Australian Medical Association announcing the abandonment of the long-standing policy of not charging pensioners and disadvantaged any more than the patient benefit rebate? In the light of the recent announcement by the Government of increases in benefits of up to 23 per cent in some States, does the Minister see this announcement as justified in any way or does it signal that the AMA is putting financial gain and greed before patient care? Senator GRIMES —Yes, I did see the announcement that the AMA has decided to ask its members to cease bulk billing pensioners and the disadvantaged. I find this an extraordinary decision of the AMA. I think it is very hard to justify. It is very hard to get away from the fact that it is putting self interest and greed ahead of compassion and care. I am interested in two statements that the AMA has made. It has said: No other group in the community is expected to subsidise the disadvantaged to this extent. I am particularly concerned about statements which were made in my State by Dr Peter Beaumont, who is State Secretary of the AMA. He said that doctors were being forced to subsidise the Federal Government's promise of free health care to pensioners. I think it is important that we look at who is subsidising who. No other profession has an average income as high as that of the medical profession. Almost every medical practitioner in this country has been educated at public expense, and in the future every medical practitioner in this country will have been educated largely if not entirely in the same way. The decision to treat pensioners as subsidised patients by introducing bulk billing was made not by governments by themselves but by coalition governments and the Australian Medical Association some 15 to 20 years ago. Before that, it was a tradition amongst the medical profession that it should subsidise pensioners in this way. Dr Beaumont claimed that there has been a great increase in the number of people receiving pensioner health benefit cards. That is not so. He said that the percentage of people receiving pensioner health benefit cards is currently about 23 per cent of the population. It is currently 19.6 per cent of the population, even when the dependants of pensioners are included. In fact, that has been the figure for many years. The most significant figure-the figure which explains the AMA's attitude-is that in the past 15 years the number of medical practitioners in this country has doubled from 16,000 to 32,000. As I have said in the past, this has had some beneficial effects, particularly in New South Wales, where one can actually find surgeries open on Saturdays and Sundays, with their red lights on, so that people can go to see doctors when they want to see them. The increase in the number of doctors has also had the effect of having the medical profession look for other means of income maintenance. Obviously, the AMA has seen this means-the proposal that its members no longer subsidise pensions-as a means of income maintenance for an ever increasing number of doctors. In fact, it has put this ahead of patient care. I think the reasons given by Dr Beaumont and the Australian Medical Association are patently wrong. The decision is a heartless one. It goes against the traditions of the medical profession and, in fact, against the traditions of all governments in this country from either side of the Parliament in the last 20 or 30 years. I think it should be deplored. I know that the decision will be ignored by the vast majority of general practitioners in this country. Senator CHIPP —Is the Leader of the Government in the Senate aware that from July 1985 to April 1986 the biggest drain on our total balance of payments current account of $12,000m was repayments of interest on private overseas borrowings and dividends to foreign owners of Australian companies, which represented $5 1/2 billion-almost 50 per cent-whereas imports exceeded exports by a comparatively meagre $2 billion? Does the Government acknowledge that this is a most serious problem and that it is getting worse each month? Does the Government realise that our export industries cannot be expected now or in the immediate future to pay for both our imports and the ever growing balance of debt repayments and dividends to foreign owners? Will the Government include legislation to stop foreign money being used for takeovers and for tax avoidance purposes as part of its solution to the problem of reducing Australia's foreign debt repayments? Senator BUTTON —There are two major parts to the honourable senator's question, and they are not entirely related except in one very substantial respect. Let me say, in answer to the first part of the question, that it is normal to have a current account deficit largely on account of the invisibles. In fact, in the last 20 years of Australia's trading relationships there has been only one financial year of surplus. The current account deficit over that period has averaged some 2.5 per cent to 3 per cent of gross domestic product. What is abnormal is the size of the recent deficit, not the fact that it exists. Throughout this period and, I emphasise, throughout the 1980s, the deficit has been in the 4 per cent to 6 per cent range, which is far too high. For example, in 1981-82 the deficit was 6 per cent of GDP-slightly higher than it is now. The large build-up in debts is primarily a consequence of this string of deficits throughout the 1980s which has now been converted into the sizable servicing obligation to which Senator Chipp referred in his question. It is a very serious problem, and it is one which, basically, will not be overcome until Australian industry is fully regenerated. As I have said on several occasions in the Senate at Question Time and elsewhere, the process of restructuring cannot be expected to occur overnight, particularly after a decade of previous governments telling industry that it was dispensable. Nonetheless, industry for the most part is internationally competitive once again in terms of price. Provided we can achieve continued wage restraint of the sort to be outlined by the Prime Minister later today-if speculation in the newspapers is correct-it will stay that way. Over the year to the March quarter, there were some encouraging signs in respect of trade volumes, with export volumes up by 14.1 per cent and import volumes up by only 0.9 per cent. Unfortunately, export prices were another story altogether. They were down across the board. Dramatic price reductions have occurred in major items of exports such as coal, in spite of the very high volumes of exports. Because of the poor terms of trade and the poor debt position left to us by the previous Government, both actual debt and prospective debt to be crystallised by our inheritance of the serious current account deficit I mentioned earlier, the task of turning around that position will remain long, hard and difficult. Nevertheless, I believe that the Government is fully aware of these issues and is on the right track. As to the last part of the question raised by Senator Chipp, he will be aware that the issue of corporate takeovers occupies the minds not only of the Australian Democrats but also of many commentators and the Government. The Department of the Treasury has released a paper on takeovers and their effects in order to stimulate public discussion on the issue. It is a very substantial document which will be considered by the Government after further community discussion. The Government is certainly concerned to stop any tax avoidance in the areas of takeovers and foreign borrowings. It has already taken steps to close off the tax advantages of short term, redeemable preference shares, interest withholding tax avoidance in relation to discounted securities and further important measures which will limit or remove the tax advantages of foreign borrowing and takeovers generally. This will be achieved by the foreign tax credit system in part. The imputation system for company dividends and the capital gains tax, which have been the subject of much debate in the Senate, will also have beneficial effects in the same way. These general and specific measures will all have their impact on gearing and takeover decisions. Whether more needs to be done or ought to be done, as was implied in Senator Chipp's question, is a matter for consideration. By saying that, I do not want to let Senator Chipp go away with the idea or the assumption that all takeovers or foreign borrowings are bad. I am not sure for a moment whether he is implying that in his question. Matters of this kind require careful judgment and competing considerations have to be carefully balanced. Senator CHIPP —Mr President, I ask a supplementary question. I thank the Minister for his answer. While I am impressed that the Government and Treasury have been responsible for `stimulating public discussion', I ask the Minister: Is the Government not deeply concerned that the drain on our total balance of payments current account has been $12 billion in something like 10 months and that half of that drain can be attributed to paying dividends to foreign owners and interest on foreign debts? On the basis of that, has it not reached the stage where public discussion is of secondary importance to immediate and drastic action by the Government to stop this outflow which is bleeding Australia dry? Senator BUTTON —I tried to indicate in my answer to Senator Chipp's earlier question that this matter is of considerable concern to the Government, but I do not think one can rush out and say that we will deal with the question of foreign ownership and the repatriation of dividends by foreign-owned companies overnight. That is an enormously difficult question when one considers that enormous segments of our industry are foreign-owned. Senator Chipp —I am not asking you to do it overnight. Take a couple of days to think about it. Senator BUTTON —Take a couple of days? It is a very real problem. Senator Peter Baume —I think he wants you to do a Jack Lang. Senator BUTTON —I do not know what he wants me or the Government to do. It is part of the problem, I agree. But it is something we have to live with as a result of 30 years developments in this area. Insofar as interest on foreign debts is concerned, I guess our tax structure and foreign ownership rules have been very much responsible for debt accrual as distinct from equity investment by foreign companies. Some of the changes which have now been made go some of the way towards addressing that question. I do not pretend, by giving Senator Chipp a sort of flat answer like this, to say that this is not a matter to which the Government gives a lot of concern and attention. We do. Senator HARRADINE —Has the attention of the Leader of the Government in the Senate been drawn to the statement by a respected economist of the University of Tasmania, Dr Bruce Felmingham, that Federal Government cuts to Tasmania would pose a real threat to the existence of Tasmania as we know it? Is it a fact that Tasmanians contribute, as Dr Felmingham said, some $162m per annum to compensate secondary industry in Victoria alone for Commonwealth Government tariff protection on manufactured goods obtained from that State? Is it unfair for the Government or any of its Ministers, when commenting on the Commonwealth-Tasmanian financial arrangements, to ignore the hidden subsidies paid to States with a broad manufacturing base and the contributions which Tasmania's primary and resource industries make to export revenue? Is it also unfair to ignore the fact that Tasmania has a small and decentralised population, a low revenue base and other disabilities, for example, Bass Strait? Senator BUTTON —I am not sure that I am the most appropriate person to answer this question. I am not aware of the work of Dr Bruce Felmingham, a distinguished Tasmanian economist. But no doubt if he is as distinguished as that, his views will be made known to the Prime Minister and Treasurer by the Premier of Tasmania at the Premiers Conference later this week. I am horrified by the suggestion that he makes that something might occur which might `pose a real threat to the existence of Tasmania as we know it' because I like Tasmania as we know it. I hope that, in any radio or Press release the honourable senator makes as a result of the answer to this question, he will mention that I like Tasmanians. I think they are splendid people and I like Tasmania as we know it. I cannot comment on the specific figures Senator Harradine mentioned. He referred, however, to a study by the Economic Planning Advisory Council of the relative effects of protection for various industries and particularly the effects in, I think, New South Wales and Victoria, being the most intensely concentrated manufacturing States. That study was released the other day. Some of the findings have to be, if I might say so, taken with a grain of salt. I am not in a position to analyse that study in any detail at present, but I am sure that this Government, which has been characterised by munificence over the years, will be very mindful of these matters in the attention Tasmania is given at the forthcoming Premiers Conference. Senator REID —I refer the Minister representing the Minister for Territories to the article in the Canberra Times on 29 May in which it was reported that a Brigade district officer, Mr Raymond Jones, said that discipline `had declined in the Australian Capital Territory Fire Brigade to such an extent' that its senior officers had `no power to prevent drunken fire-fighters reporting for work, drinking on duty or not wearing uniforms'. Will the Minister advise what investigations have been made into this allegation made some 13 days ago? If the allegations are correct, what steps has the Government taken to ensure that the people of the Australian Capital Territory have a fire brigade which is a reliable fire-fighting force? Senator GIETZELT —The Senate and, indeed, Senator Reid would be aware that there have been difficulties with the Australian Capital Territory Fire Brigade over a long period and that the Government has endeavoured to use its good offices to resolve some of those difficulties in the interests of fire protection for the residents of the Australian Capital Territory. The specific question Senator Reid raises obviously would be best handled by the Minister for Territories. It would probably be imprudent of me to make too many comments when a conflict exists in the administration of the Fire Brigade. I will certainly bring the matter to the attention of the Minister, Mr Scholes, whom I represent in this place, with a view to resolving what has been, as acknowledged a longstanding difficulty. I suppose the only thing I can say about it is that there seems to be an element on both sides that requires some good will if we are to resolve it in the interests of everybody concerned. I only represent the Minister. Fortunately, I do not have the problem to contend with in my portfolio that Mr Scholes has. I certainly will be delighted to refer the problem back to him. Senator GILES —Has the attention of the Minister for Education been drawn to a Press report in today's Australian which quoted the Director of the Western Australian Institute of Technology as calling for the introduction of elements of free enterprise, including tertiary fees, as a method of avoiding what he describes as `anomalies in the binary system'? Can the Minister inform the Senate whether the Government has plans to reintroduce tertiary fees? Is the Minister aware of Opposition plans to reintroduce tertiary fees? Senator RYAN —I am aware that Dr Watts seems to think that his program of expanding his institution would benefit by charging students fees, but that is not a view that the Government agrees with. Senator Peter Baume —He is right. Senator RYAN —On the other hand, of course, as Senator Peter Baume has just indicated, the Opposition obviously intends to impose fees on tertiary students. Senator Peter Baume —You are wrong, he is right. Senator RYAN —As I was saying, Senator Baume obviously agrees with Dr Watts, who wants to re-introduce tertiary fees, but neither Senator Baume nor Dr Watts will be determining these policies; the Government will. This call for fees from Dr Watts, Senator Baume and various other spokespersons for the Liberal Party has to be viewed in the context of their whole approach to privatisation of education. Not only do they want to re-impose fees on students but also they want to sell off government schools to the private sector-I think that was their coalition partner's remedy for schools in the Australian Capital Territory-they want to establish private universities, even though all responsible spokespersons from the present university system agree that that would lead to a lowering of standards, a loss of control over standards, and, in general, they want to impose totally inappropriate free market concepts on the business of developing high standard education in Australia. As honourable senators know, last year the Government gave serious consideration to the question of participation in higher education and the role that the abolition of fees had played in that participation and, in the context of our determination to increase participation in higher education, we decided to do a number of things. One was to maintain the present policy of no tuition fees. Another was to ensure a stable and steady growth of places in tertiary institutions and yet another was to ensure that more young people had the opportunity to finish secondary education and thus qualify for tertiary education. To do that we have rationalised and improved education allowances, giving particular increases to students from poorer families who wish to complete years 11 and 12. We have also, through various programs of the Commonwealth Tertiary Education Commission, taken a number of steps to ensure that students from disadvantaged groups, such as Aboriginal families or families where secondary education opportunities are very poor, are given, through equity programs, the opportunity to get to a level of competence that will enable them to undertake successfully tertiary studies. In contrast to our very comprehensive, worked out policy of improving participation at all levels of education and of ensuring that higher education is available on the basis of merit and not on the basis of ability to pay-I believe that we are delivering to the community what the community has clearly indicated that it wants in terms of education policy-the Opposition, whose approach to this subject is as threadbare as it is to anything else, can think only of privatisation of fees and selling off government schools in the fond hope that it will attract some sort of support for its cause. Members of the Opposition and any other people who argue these propositions would be absolutely thrown out by the electorate if ever they got the chance to put them into practice. Senator NEWMAN —I refer the Minister for Finance to the wilful and extravagant answer he gave to the Senate yesterday concerning the Tasmanian Premier's concern at the prospect of cuts to Tasmanian funding-fears which are shared by the State Labor Opposition. Is the Minister not aware of the fact that the Commonwealth Grants Commission, even after its exercising of the principle of fiscal equalisation between the States, argued that Tasmania should receive financial assistance grants 37.6 per cent per capita more than the six-State average, having already taken into account the burdens on some of the other States of their business undertakings? As the figures produced by the Grants Commission and the principle of fiscal equalisation are obviously not to the liking of the Minister, will he inform the Senate whether his Government intends to disregard them, change the Grants Commission methodology or, alternatively, abolish the Commonwealth Grants Commission on the ground of its incapacity? Senator WALSH —I have noted Senator Newman's figure. As far as I can remember it is correct-that is, the Grants Commission recommended that Tasmania should get 36 per cent more per capita. But the figures I quoted yesterday showed that Tasmania was getting nearly 50 per cent more per capita than the six-State average. Senator Archer —And contributing more, too. Senator WALSH —In other words, using Senator Newman's own information, one cannot do other than arrive at the conclusion that Tasmania has been treated too generously in the past. Of course, that is the case. That was the very clear finding of the Grants Commission during its last review of relativities. It recommended that Tasmania should have its payments reduced by, I think, $60m in one hit. This Government, being very reasonable-indeed, in this case I believe it was probably much too reasonable in dealing with someone like Mr Gray-decided that, instead of imposing that Grants Commission recommendation on Tasmania in the one year, it would allow a phasing-in period. It is precisely that sort of phasing-in, bringing Tasmania back to its proper entitlement as assessed by the Grants Commission, which Mr Gray's present squeals are about. I heard an interjection from Senator Archer, I think it was, that Tasmania pays a lot more than the other States. I also noted Senator Harradine's question concerning an alleged finding by some obscure economist about the hidden subsidy which Tasmania paid to the rest of Australia. Taking that figure at its face value, I point out to all the Tasmanians who may be interested that Western Australia makes a much larger per capita contribution in that way and it does not get the per capita Commonwealth payments that Tasmania gets, nor does it have a State government public sector of the relative size of Tasmania. I would like to know what contribution the highest per capita State government public sector work force in Australia makes to producing the export income which seems to so fascinate several Tasmanians. I can tell Senator Newman that I am sick and tired of having to sit in this Senate, as I did last week, and listen to her colleagues Senator Walters and Senator Townley whingeing and demanding that Commonwealth Government expenditure be reduced while Senator Newman and the rest of her cronies insist that the feather-bedding of Tasmania, which the Grants Commission has identified as feather-bedding, be continued in perpetuity. Senator TATE —The Acting Minister for Foreign Affairs will be aware of the content of the South Pacific Nuclear Free Zone Treaty Bill which is currently before the House of Representatives. Can the Minister inform the Senate of the impact which the renunciation of the nuclear weapons option by Australia, as embodied in the Bill, will have on the prospects for peace in our region? Will the Minister indicate whether the Bill will be readily obtainable at a low price and in sufficient numbers to allow the widest possible community discussion over the winter recess? Will the Foreign Minister's speech on the Bill also be widely available so that those in the community with a keen interest in the debate may have the benefit of his remarks on the content of that Bill? Senator GARETH EVANS —The South Pacific Nuclear Free Zone Treaty Bill is intended to give effect to obligations that Australia will have as a party to the South Pacific Nuclear Free Zone Treaty, the Treaty of Rarotonga. That Treaty contains important and substantive provisions regarding the acquisition, testing and stationing of nuclear explosive devices and the dumping at sea of nuclear waste. It also contains provisions concerning safeguards on peaceful nuclear activities and a control system to provide confidence in compliance with the provisions of the Treaty. The renunciation of nuclear weapons by Australia, within the context of that Treaty and the Treaty on the Non-Proliferation of Nuclear Weapons, can only strengthen the security of this country and of the South Pacific region. As the Minister for Foreign Affairs, Mr Hayden, said when introducing the Bill, the Treaty is widely recognised around the world as a significant measure. It has been welcomed by the international community, especially at a time when the world has little to point to by way of progress on arms control and disarmament. At the same time the Treaty does not seek to undermine the factors that have created and sustained the very favourable security environment which the South Pacific enjoys. It does not in any way conflict with Australia's defence arrangements, notably ANZUS. It does not impede in any way our ability to co-operate militarily with our allies. On the contrary, it seeks to build on those factors by, for example, the provisions against nuclear weapons, which will help to ensure that the South Pacific, unlike other parts of the world, does not in the future become a theatre for nuclear confrontation. The Bill is available to the public through normal parliamentary and government outlets, especially the Australian Government Publishing Service bookshops in the capital cities. I am advised that the treaty Bill is available for $2.50 and the explanatory memorandum accompanying it for $1. I hope that many interested Australians will take advantage of this opportunity to inform themselves of its content. I certainly commend it to the widest possible community discussion. Similarly, I commend to people the Foreign Minister's speech on the SPNFZ Bill for the illumination it provides on the objectives of the Treaty and on the Government's implementing legislation for it. If honourable senators encounter difficulty in obtaining sufficient copies of the Bill and the speech for distribution, I suggest that they contact parliamentary officers. Senator DURACK —My question is directed to the Minister representing the Attorney- General. In view of the fact that the Government has postponed further consideration of the Australian Bill of Rights Bill in the current sittings of the Senate, does the Government intend to persist with this Bill during the present Parliament or will it give the people an opportunity, which was denied them at the last election, to express their attitude to the Bill of Rights Bill at the next election? Senator GARETH EVANS —The Attorney-General advises me that he has every intention of proceeding with the Bill, and so he should. It is an admirable piece of legislation which, despite the campaign of idiot harassment to which it has been subjected by the forces of darkness around the place, in particular those opposite, will contribute a great deal to guaranteeing values which all Australians hold democratically dear. If the Opposition had not engaged in what has been clearly the most extravagant, self- indulgent and destructive filibuster in the history of this Parliament, in a debate that has so far occupied some 36 hours of parliamentary time-the longest debate in our history since Federation, or at least since records have been kept-it would have been possible for the Bill to have passed this House by now. It is the Attorney's intention to take up the matter again-hopefully with a slightly greater sense of realism on the part of others in this chamber as to the appropriate time for debate-in the hope that we can get it through early in the next session. Senator MORRIS —I refer the Minister for Veterans' Affairs to an item in today's Australian Financial Review which is critical of the cost of processing freedom of information requests by his Department. What is his response to the claim that his Department has been extravagant or wasteful in its handling of FOI information? Senator GIETZELT —The Freedom of Information Act approved by the Parliament provides an opportunity for many people to get access to information. When one considers that, for example, in World War II almost one million persons served in the armed forces and that currently we have 700,000 veterans receiving pension entitlements, it stands to reason that considerable numbers of them will take advantage of the Freedom of Information Act to get access to their service records. In fact that is what has happened. Some 10,000 persons have taken advantage of the legislation in order to examine their service records. I imagine that in the overwhelming majority of those cases that was for the purpose of evaluating whether the records are true in every respect and also whether they provide information that might assist veterans in their pension applications or in their assessment for an increase in benefit. It is true that the consequence of that is that the Department of Veterans' Affairs has the largest number of applicants of all government departments for access to records. Neither I nor the Government make any apology for that. However, of the total of $19.2m, which I am informed is the cost of providing information generally to all those people who have applied for it under the legislation, only 7.7 per cent is attributable to the Department of Veterans' Affairs. That means that in any comparable sense the cost to taxpayers of applications through my Department compares very favourably with that of many other government agencies. We are in that position because our costs have been very considerably reduced owing to the fact that service records are kept in such a fashion as to make them readily accessible to those people who wish to look at them. The report in the Australian Financial Review has taken a one-sided view and makes the charge appear excessive, whereas, in comparison with others who have taken advantage of the freedom of information legislation, my Department comes out very favourably indeed. Senator HAINES —My question is directed to the Minister representing the Minister for Social Security. Is the Minister aware that a number of people in the community regard as an anomaly the different application of income and assets testing to blind people receiving a pension and to people receiving other categories of pensions and benefits? Does the Minister acknowledge that other severe disabilities, such as total deafness, can be as devastating and restrictive as blindness? If he does, can the Minister say whether the Government will consider examining the problems facing the deaf in particular, with a view to according to totally deaf people seriously disadvantaged by their disability the same status as is granted to totally blind persons as far as access to pensions and benefits is concerned? Senator GRIMES —Yes, I am obviously aware of the difference in the treatment of blind people and of other disabled people. I am also well aware, having been Minister for Social Security, of the strong feelings that some people with disabilities have about this. In this case Senator Haines mentions totally deaf people who also have considerable difficulties. At various times other disabled members of the community have drawn attention to what is apparently an anomaly in that favoured treatment is given to blind people. My attitude to this has not changed since my days in opposition or the days when I was Minister for Social Security. Although there is no logic or reason for the treatment of blind people in the way they are treated-it was obviously a decision made many years ago, for I dare say, as much political reasons as for social or economic reasons-I do not think we should remove the advantages that blind people have. I know that Senator Haines is not suggesting this. What we should do is to improve our assistance to those people with other disabilities so that their privileges are at least equal to those given to blind people at the moment. We then run into budgetary problems and problems of definition. There are some, I dare say, who would argue vigorously that the problems of the profoundly deaf are not the same as the problems of the profoundly blind. As some people have not experienced either of those disabilities, I can understand there being discussions about that. In regard to my attitude and the Government's attitude, we have been endeavouring, and will continue to endeavour, to improve the lot of those with disabilities. Part of that aim would be to bring the rest of the disabled community up to at least the level of those who are blind, as far as income support is concerned. However, I am the first to admit that that is very much a budgetary decision at the moment, as well as a definitional decision, in dealing with the disabled. We will continue to have it under consideration-as, I am sure, all previous governments have had it under consideration. I will seek further information on the income support aspects from the Minister for Social Security. Senator CHILDS —Has the Minister representing the Treasurer seen an advertisement in this morning's Australian headed `Capital Gains Tax and Investment' and attributed to Mr L. Ian Roach, Chairman of the Stock Exchange of Melbourne Ltd? If so, can the Minister provide a Government response to Mr Roach's claims about the effect of the capital gains tax on investment? Senator WALSH —I have seen the advertisement. I am surprised that an institution such as the Stock Exchange of Melbourne would indulge in such an opportunistic attack on a critical element of the Government's tax reform package. I also note that the advertisement, amongst other things, states: `A capital gains tax which inevitably discourages investment', and so on, leading to the general conclusion, of course-as did the same sort of nonsense we heard last week from most of the people on the other side of this chamber-that a capital gains tax would destroy the economy. The estimated level of revenue is $25m by the fifth year of operation, which is hardly a serious tax imposition. Of course, it probably will not raise much money directly, but it will put an effective net under the income tax system. It is that, primarily, which it was designed to do; at least, in my view, that is the primary justification for it. The advertisement also makes the same sorts of claims which were falsely made by assorted members of the Opposition last week about the high and allegedly punitive rates of the capital gains tax. No specifics are given-for the very good reason, of course, that if the specifics were given, the claim would collapse. The basic assertion is made, without any empirical verification from the real world, that a capital gains tax will be in some way damaging to the economy. The fact is that for decades every country in the Organisation for Economic Co-operation and Development with an economic record which has shamed Australia's record in recent decades, has had a capital gains tax. The overwhelming majority of them have a more severe capital gains tax than has Australia, because they make no allowance for indexation or inflation. In other words, they tax nominal gains, whereas the capital gains tax which was passed here last week will tax only real gains. In clarifying the point, I quote a short piece of a text which I think will be of great interest to assorted members of the Senate. The following statement appeared at page 590 of the Senate Hansard, dated 9 September 1981: It- `it' being Australia's taxation system- taxes income to the extent that it increases wealth but not capital gains or windfall gains and results in a heavy bias towards the taxation of income. In 1978, 43.7 per cent of our total tax revenue was raised through personal income tax compared with an Organisation for Economic Co-operation and Development average of 38.5 per cent. Thus those whose wealth is increased by capital gains rather than by income do not share in the taxation burden. No other highly developed country has our almost complete absence from some form of taxation of capital gains, net wealth taxes or death duties. The taxation system is inequitable in that a taxation of income has largely become a taxation of wages and salaries. Those whose income has been derived from property or business have been afforded opportunities for avoidance through income splitting and the like not available to the recipients of wages and salaries. It was also stated: It can be argued that our taxation system is inequitable, complex and inefficient and does not have sufficient flexibility. That was part of the maiden speech of Senator Robert Hill, and a very good speech it was. In closing, I observe what a tragedy it is that the ruthless discipline of the Liberal Party has forced an honourable senator who, in 1981, displayed such intellectual clarity and moral integrity, to vote against his convictions in 1986 when he voted against the fringe benefits tax and the capital gains tax legislation last week. Senator CHANEY —My question-if I can contain my amusement at the previous answer concerning people voting against their convictions, having regard to the treatment of Senator Georges by the Australian Labor Party-is addressed to the Minister representing the Minister for Social Security. Does he endorse the view put in the House of Representatives by the Minister for Social Security on 2 May this year that any move to require either work or entry into training programs as a condition of receiving the unemployment benefit would amount to conscription in relation to the payment of the unemployment benefit? Senator GRIMES —I remember when Mr Howe made that statement. What he said at the time-and I remember it well; he said it both inside and outside the Parliament-was that any effort to prevent people in receipt of the unemployment benefit from receiving that benefit by forcing them into work which was artificial work, work which was not of use or work in the community which was not satisfying to them, would be akin to conscription. That is a view which I share. There have been many proposals to ask young people to do this. Some were fair; some-such as the one which Mr Howe was talking about at the time-were unfair. I dare say it is possible to introduce such programs which are fair and which do not involve, as he pointed out at the time, making people work for less than award wages or taking the jobs of others. I think any such system must be judged on that basis, not just by having carte blanche dismissals of proposals and taking words of that type as though they mean a complete dismissal of such a proposal under any circumstances. Senator COATES —I ask the Minister for Veterans' Affairs: Is he aware that staff at the Repatriation General Hospital in Hobart are worried about their future because of rumours that the hospital may be disposed of, either to the Tasmanian State Government or, since that Government apparently is not interested in taking it over, to a private profit-making hospital chain? Will the Minister give assurances to those concerned staff and to veteran and community patients, that the Repatriation General Hospital will not be disposed of in this way, that the public resources involved will be protected, and that jobs are not under threat? Senator GIETZELT —There is no proposal to dispose of the repatriation hospitals administered by the Repatriation Commission. I give the assurance for which Senator Coates asks-that staff employed in the repatriation hospitals have nothing to fear from the decision of the Government to begin a process of consultation with the States about the future-and I stress `the future'-of the repatriation hospitals. Two months ago, in response to a question, I pointed out that there had been unanimous agreement at the Commonwealth-State Health Ministers Conference that there should be established an inter-departmental committee which would involve the Commonwealth and the States, with a view to rationalising the services provided by the Commonwealth to repatriation beneficiaries and community patients, on the basis of providing an option for repatriation beneficiaries to be admitted to public hospitals in the area of their choice. The Government has accepted the recommendation of the Brand Review of the Repatriation Hospital System. There have been two such reviews of the future of repatriation hospitals, one in 1979 by the previous Government and one by this Government in 1983-84. The Government has accepted the recommendations of the Brand committee to begin the process of rationalising the services but in no way will that affect the operation of the hospitals in the foreseeable future. Many years down the track some changes to repatriation hospitals will obviously need to be planned for, but the hospitals currently are in their busiest period ever as the majority of veterans are now approaching 70 years of age and, therefore, having a preference to go to repatriation hospitals, will do so. But the Government is interested in providing the option for veterans who live far away from repatriation hospitals-and there is only one such general hospital in each State-to go into a hospital nearer their own home, for the convenience of not only the patient but also the spouse, who often is of the same age as the patient. On agreeing to that process, the repatriation hospitals will take additional community patients on a quid pro quo basis with the State hospitals. For example, if 100 patients go into the Hobart or Launceston public hospitals an additional 100 community patients will be taken into the Hobart Repatriation General Hospital on an equity basis in terms of charges. That is what is proposed so that this side of the turn of the century there will be a clear future for those involved in repatriation hospitals. If we lose repatriation patients we will take more community patients. There is no possibility of the hospitals losing staff or their career positions being affected by the proposed changes. Because of the way that Commonwealth-State relations are conducted it will probably be several years before an equitable system will be worked out. The objectives have been set by the adoption of the Brand committee's recommendations. They will be in the interests of everybody concerned, including staff. Senator BUTTON —Earlier today in Question Time Senator McKiernan asked me a question about the dredging industry in Australia and Government assistance for it. I undertook to try to provide him with a more detailed reply than I was then able to give. The article in the Daily Commercial News about the dredging industry contains an allegation that the Belgian Government has subsidised the successful tenderer for the Woodside project. That tender has been awarded to a joint venture of the Australian company John Holland Constructions Pty Ltd and two Belgian companies for a contract price of some $30m. The Government has no evidence that such a subsidy has been paid to these companies. The Belgian Trade Commissioner has given assurances that that is not the case. Regarding the various other matters raised, I offer the general observation that the dredging industry and other maritime service industries, such as oil drilling, are suffering because of a fall-off in development projects world-wide and excess capacity in supply. One can sympathise with the problems of local contractors. I can also understand that the cost savings from the large and technologically advanced vessels brought in from overseas, such as the one in question, can offset the costs of transportation and make the vessels very price competitive. That is an advantage to Australia in one way in that resource development projects are more likely to get off the ground or be expanded, thereby creating exports and jobs which might otherwise be lost. The production process of dredging employs Australians irrespective of whether a locally-based or foreign dredge is operating. The second part of the honourable senator's question deals with other accusations against foreign dredging companies in the newspaper articles and the issue of Government policy on protective measures for locally-based companies. It is very difficult for me to comment on the allegations of delays and cost overruns on dredging contracts by foreign companies. I point out that such allegations are made frequently, whether foreign or locally-based companies are performing a contract. The point is that the managers of the development projects involved should have the responsibility for assessing tenders and letting contracts. This should not be subject to intervention by government. On preferences, it has not been this Government's policy to interfere with commercial projects. To do so would be inconsistent with the Government's industry policy objectives. The thrust of those objectives is to reduce or eliminate the reliance of individual industries on protective measures and to apply general and positive programs aimed at enabling industries to become more internationally competitive. It is my view that major resource development projects must be free to acquire the supply of dredging services which are optimally suited to the project at hand. To sum up, I consider that locally-based dredging contractors are not being treated unfairly and should continue to be subject to open competition for efficient operations and technical capability. Senator SIDDONS(Victoria) —by leave-Yesterday, Senator Puplick gave notice of motion condemning me for being absent from the Senate on Thursday, 5 June. I wish to make it clear to the Senate that I was absent that day due to pressing personal commitments and have been absent on only two other occasions this year. The amendment to which Senator Puplick referred had been left with staff of the Australian Democrats to be circulated at the appropriate time. I find it difficult to understand how Senator Puplick can condemn me for being absent for one day when his Victorian colleague, Senator Short, has been absent for 10 days this year, Senator Walters for 10 days and Senator Kilgariff for 11 days. I could go on. As far as I am concerned, Senator Puplick's attack on me is the worst kind of mud-slinging and brings no credit to this Parliament. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I want to say very briefly that Senator Puplick only quoted Senator Haines's notice of motion. The point which was made in quoting Senator Haines was that the honourable senator was absent on commercial business. There is a very considerable difference between that and being absent on parliamentary business and on matters which are of general public concern. It was not the Opposition which raised this matter. It was brought into the Senate by way of explanation. All that the notice of motion did was draw attention to it. It is rather extraordinary that Senator Siddons should wish to draw further attention to the matter by making another statement today. The PRESIDENT —I have received a letter from Senator Puplick proposing that a matter of public importance be submitted to the Senate for discussion, namely: The Government's failure to protect the interests and guarantee the future of regional television in Australia. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator PUPLICK(New South Wales)(3.09) —I submit the following matter for discussion in the Senate: The Government's failure to protect the interests and guarantee the future of regional television in Australia. Throughout its history the Hawke Government has faced the dilemma of whether to look after the interests of the nation or the interests of its mates-great and small, little or powerful. In every instance the Government has preferred its mates to the nation, whether the mates happen to be the Australian Council of Trade Unions or, as in this case, the media magnates of Australia. This discussion deals with the future of regional television and the push by the Prime Minister (Mr Hawke) over the wishes of his Minister for Communications (Mr Duffy) to increase the power of the networks and to destroy the viability of regional television. The great media magnates in this country-Kerry Packer, recently appointed by this Government to the board of the Australian Sports Foundation, and Rupert Murdoch-are closely allied with the Prime Minister and his factional bosses. The National Times report of 16 May 1986 states: Graham Richardson, numbers man and senator from NSW, in a neo-punk slickback hairdo, lunched a few days ago in the boardroom of Channel 9, Sydney, with current affairs executives of the Packer network. He asked: `If Laurie Brereton seeks to become Premier of New South Wales, have you forgotten Botany?'. The article continues: Richardson's question was far from reassuring for Neville, but the answer was no comfort to Laurie. He was told: Botany is not forgotten. In the race to succeed Neville Wran as Premier of New South Wales the original favourite, Mr Brereton, has found himself with his wings pulled off just like one of Barry Unsworth's butterflies. If one looks at the National Times report of 6 to 12 June 1986 dealing with the way in which media policies are made in this Government one reads in relation to Mr Peter Barron, one of the Prime Minister's favourite minders: Sources say that all Cabinet submissions from Duffy are subject to Barron's scrutiny and that Cabinet consideration of at least one policy decision was held up while Barron examined the submission. We know that there is now a ministerial council, a gang of four, who are in charge of television policy in Australia. The article continues: At one meeting the Industry Minister, Senator John Button, reportedly asked Hawke, `Just tell us precisely how you want us to help your mates?' Hawke is reported to have replied, `Remember they're the only mates we've got.' The mates referred to are Kerry Packer and Rupert Murdoch, owners of the Nine and Ten networks. Barron has close links with Channel 9 executives, including the president, Sam Chisholm . . . I venture to suggest that Mr Chisholm is shortly to be paid off with an appointment to the Australian Film Commission and that Channel 9 in the meantime is being looked after in terms of the expenses for tonight's broadcast by the Prime Minister. Not content with giving his mates jobs, not content with the Labor Party giving them jobs, lotteries, football pool arrangements and the like, the Labor Party now wants to give them regional television. To his credit, the Minister for Communications, Mr Duffy, wanted to allow regional television to grow and develop and to take advantage of the new methods of broadcasting throughout Australia, particularly those which arise from the launch of Aussat. But unfortunately for regional television, and unfortunately for the Minister for Communications, this would have meant ever-growing power of regional television at the expense of the increasing power of the media magnates upon whom this Government is becoming increasingly dependent. Since the Minister for Communications could not prevail in Cabinet against the Prime Minister, a gang of four Ministers was established-Mr Hawke, Mr Keating, Mr Duffy and Senator Button. They are the ones responsible for bringing into the Parliament a statement on 20 May in which the Minister for Communications announced Labor's new policy for the future of regional commercial television services. That policy spells the potential death knell of regional television in Australia. It seeks, first, to bring about what is called equalisation of services. Nobody has any objection to equalisation of services; that is to say that people who live in regional Australia should be entitled to access to the same level of television broadcasting and the same number of channels as those who are fortunate enough to live in the major metropolitan markets. There are a number of ways in which equalisation of television services could have been provided. However, the Government has adopted a particular method called aggregation, and indeed aggregation by a particular method. It will work on this basis: The Minister for Communications will unilaterally decide which areas of regional Australia are to be aggregated for the purposes of broadcasting law. There will be no reference to the Parliament on this matter; it will be done by fiat by the Minister. Those areas will include at least three television stations. Those stations will be forced to aggregate their market to blend and aggregate their programs, not by the choice of the majority of them or, indeed, even the unanimous choice, but by the choice of any one of them. Any one of the three may force all three into an aggregation. Let me indicate to honourable senators one of the consequences that will flow. The plan to allow aggregation is vividly exposed if one looks at the position of Sunraysia's STV-8 in Mildura, a market for that station which covers 14,100 homes according to the Department of Communications report. The two adjoining markets most likely to be joined by Mildura are Associated Broadcasting Services BTV-6 in Ballarat with 176,000 homes, Southern Cross television's GLV-8 in Traralgon and BCV-8 in Bendigo with 119,600 homes. According to one broadcaster, all regional viewing markets would be split on the basis of a 40 per cent share for the indigenous broadcaster with 30 per cent for each new entrant. Based on these assumptions, Associated Broadcasting Services would show a 66,000 fall in the number of homes covered; Southern Cross would be down 14,000 homes, while Sunraysia would gain 84,400 homes in the market-not by the consent of the people concerned, not by the consent of those who are having markets taken away from them, not by the consent of the boards of those who are adversely affected, but simply by the decision of the smallest operator in the market to use the Minister's fiat to gain for himself a larger share of the market, a larger degree of revenue and to do it at the expense of existing broadcasters. If one looks at the way in which this will operate, one can see numerous examples around Australia of companies and stations which will be adversely affected. My colleague Senator Parer has drawn my attention to the considerable difficulty that will be faced by Telecasters North Queensland Ltd in Townsville and Cairns. It will be unable to protect its regional market from penetration by programming from Brisbane; it will be unable to protect its uniquely regional services. My colleague Senator Michael Baume has drawn my attention to the position of TVW WIN-4 which broadcasts from Wollongong. It will, in fact, be forced to abandon a large part of its regional and local market to the penetration of the Sydney metropolitan market. Honourable senators from Tasmania should be aware that they are likely to find themselves aggregated in a service which includes Melbourne broadcasting; in other words, decisions about television broadcasting in Tasmania, particularly on the north coast of Tasmania, will be made subject to the dictates and to the whims of people supplying programming and services, not from within Tasmania but, indeed, from Melbourne. There are two other major losers in the statement of 20 May to which I wish to refer briefly. The first is that country radio has been told that the Department of Communications will be so tied up with this aggregation arrangement for the next two years that there will be no extension of country radio services and there will be no dealing with the problems of country radio. Country radio will now have to wait for at least two years until the Department of Communications is ready to deal with it. Secondly, there has been an abandonment of the system of supplementary licences. People who have invested millions of dollars throughout Australia in preparing applications for supplementary licences, people who have invested time, effort, research and expensive legal fees in putting forward their case for supplementary licences have been told by the Minister: `I am now cancelling the entire process'. It is no wonder, therefore, that there is a threat that the Government will be sued by Canberra Telecasters Ltd for a sum of up to $500,000 to recoup the money that that individual operator alone has lost by the abandonment of the supplementary licence system, with no indication that this was likely to happen and with no compensation offered for what amounts to one of the largest retrospective rip-offs of the economic position of any private operator of any business in Australia. Mr Macphee, the shadow Minister for Communications, has indicated his strong opposition to the way in which the Government is proceeding in this fashion. He has drawn attention to the increasing concentration of media ownership and the reduction of localism in regional television. He made the point which I made earlier that the Government does not need to proceed in a legislative fashion to introduce the aggregation of existing service areas because service areas under legislation which this Parliament passed a year or so ago may be determined unilaterally by the Minister. In other words, the process of aggregation, the process of changing the whole basis upon which television policy and broadcasting policy in Australia is to be dealt with has been changed not by the Parliament deciding that it wanted a new system, but by the Minister deciding that he will impose a new system and not by the Minister who actually wants to protect regional television, but by the Prime Minister who wants to make sure that his powerful mates, the network operators, are allowed penetration into regional markets which previously have served a distinct and unique community and who, under the policy this Government is now pursuing, are absolutely doomed. Just to make sure that the whip is cracked, that people know who the boss is, that they know what the potential cost of defiance is, we read in the statement of 20 May that the Government is reviewing the ownership and control provisions of the Broadcasting and Television Act. It has been reviewing these for a considerable time. The review was announced some years ago. Breaking up media concentration of ownership has been a matter about which the Labor Party traditionally said it was going to do something. We now read that it is looking to provide a system where there will be greater concentration of media ownership. But just so that everybody knows that the review will not simply be one which is ongoing, the Minister promises in his statement that the ownership and control issue will be addressed publicly and resolved by 31 October of this year. In other words, all of those who have an interest, particularly in the major media networks, are on clear notice. After tonight's speech to the nation by the Prime Minister and after the Budget which is to be brought down in August, the Prime Minister and his colleagues the Treasurer (Mr Keating) and the Minister for Industry, Technology and Commerce (Senator Button)-three of the four members of the gang of four who are laying down their strategy, whether it happens to be for an early election or whether it is for some political stunt-should be on notice that, although they may criticise us in that period, they may well find that the ownership and control rules which we are currently reviewing and intend to have reviewed by 31 October may well come down in an entirely unsatisfactory fashion from their point of view. But I say: `Behave yourselves and not only will you get access to regional television markets and accessing to networking which you have sought for years and which has been denied to you by previous governments of both persuasions, but also the Labor Party's traditional policy of limiting ownership and control in broadcasting will be overturned'. One has to feel sympathy for the Minister for Communications. He was desperate to avoid this. As a result, there are a wonderful couple of throw-away lines in his statement in which he said to regional broadcasters: `Do not come to Cabinet for protection, but please let me draw your attention to the sections of the Trade Practices Act under which you may be able to protect yourselves from networking, and you may be able to protect yourselves from the media magnates and from the friends of the Prime Minister. I cannot do anything for you, but please look carefully at the provisions of the Trade Practices Act because you may be able to get some protection there. I cannot give it to you as the Minister because I am on the short end of the gang of four'. Three of the four members have decided that looking after their great and powerful mates and sacrificing regional television in the process is the way in which they intend to go. If ever there were a sellout of people living in regional Australia, if ever there were a sellout of the local communities and of local broadcasters, this statement of 20 May 1986 proves once and for all that the Hawke Government, given a decision between protecting its mates and serving the nation, will opt for its big mates on every single occasion. Senator VIGOR(South Australia)(3.25) —I commend Senator Puplick for bringing on this matter of public importance in this neglected field of broadcasting. If the track records of the Department of Communications and the Government are any indication, there are many unfulfilled expectations ahead of us in this area and many more disappointments. What has emerged after years of bureaucratic manipulation and in-fighting is certainly a most disappointing result for regional Australia. Essentially, we have an election gimmick designed to secure marginal seats next time round. But will it? It is also a gimmick to offer, as Senator Puplick has said, patronage to the big and powerful friends of the Labor Cabinet. These things have a habit of backfiring and I am sure that this one will because none of us in this Senate will be silent and let it happen unchallenged. Clearly, the people of regional Australia have not been considered at all in this exercise. Nobody has really been asked what he wants. Three metropolitan networks will be thrust upon those people in some way or other. Maybe this is just another trilogy example. It seems that the Prime Minister (Mr Hawke) can only count up to three. Nothing will be done about the Sydney-Melbourne imbalance within the networks, despite the excellent arguments which have been put by the Australian Broadcasting Tribunal in its 1984 satellite program services report. I remind the Senate that the Tribunal raised the continuing process of centralising Australian media output. It said in its report: The Sydney and Melbourne stations hold a position of dominant economic strength and influence within the system, quite out of proportion to the populations of Sydney and Melbourne. There is a lack of opportunities for new television enterprises and for new companies to enter television. There is a lack of opportunities for expansion and growth in television by companies based in such places as Brisbane, Adelaide, Perth, Newcastle, Wollongong, Canberra, Hobart and in regional areas. The Tribunal suggested that the fundamental imbalance of economic power be addressed; that certainly has not been done. In fact, we are being moved in exactly the reverse direction. The regional areas are being handed over, holus-bolus, to the large networks in this area which will have complete control over the information in this country to use as they please. One of the reasons this is happening is that communications has been an area where there has been very little parliamentary scrutiny. There has been very little scrutiny of the broadcasting and information service. I hope that this matter of public importance marks a turning point. We will certainly be co-operating with the Opposition in scrutinising that area. The parliamentary scrutiny is a point which the Tribunal adverted to in its 1984 report. What is the upshot of the Government's announcement in relation to regional television? Basically, the upshot is the aggregation of services in the regional areas at all costs. We are supposed to have a draft indicative plan for a carve-up of regional Australia into larger more viable markets by the end of July. It remains to be seen whether that can be done within the time. Certainly, the Department of Communications has had problems attracting and retaining the necessary engineering staff in the past, and apparently it has a shortfall now. The Government probably will have to look at the conditions of employment which are available in the frequency planning branch. The Government proposes that there be three months for public and industry comment before a final indicative plan of approved markets is published. If any licensee within an approved market chooses the path of aggregation, all licensees in that area have to make the adjustment to serve a broader region. They would, of course, be completely at the mercy of the three large commercial networks unless they start a rapid program of tapping alternative film sources within Australia and getting their own representatives to buy from overseas. The Government intends to allow one licensee to make the decision for the whole region and that is to be regarded as prima facie evidence that aggregation is viable. This is the sort of nonsense that could only be dreamt up in Canberra and the sort of nonsense that brings this place into disrepute. The Australian Democrats have certainly had feedback on this proposition from various regional licensees. My colleague in the South Australian Legislative Council, Ian Gilfillan, has been approached by very concerned operators of the commercial television station in the Riverland area. Senator Chipp has forwarded to me a copy of a letter sent to him by the General Manager of WIN-TV, which is known throughout the country for its strong involvement in community matters in the Illawarra area. As Senator Puplick has said, WIN-TV faces the risk of being aggregated with a much larger and more powerful urban area to its north. I seek leave to incorporate in Hansard the letter written from WIN-TV, which I think is illustrative of the problems. Leave granted. The letter read as follows- 3 June 1986 Senator The Hon. D. L. Chipp MP Leader of the Australian Democrats Parliament House Canberra, A.C.T. 2600 Dear Senator Chipp, The Minister for Communications' (The Hon. Michael Duffy) policy statement on the future of regional commercial television has been considered by our board and by our industry body-Regional Television Australia. I feel it is important that you be made aware of our feelings on this policy statement. We strongly oppose the method by which the Government proposes to equalise commercial television services in regional Australia. Our principal objection to the Government's plan is in regard to the intention to force all licensees in an approved market to aggregate if just one licensee chooses the aggregation path to equalisation-i.e. the ``one in, all in'' rule. We totally reject the notion (and I quote from paragraph 20 of the Minister's statement) that there is ``prima facie evidence that the aggregation involved is viable''. This is an absurd notion that is unprecedented in the free enterprise business environment. The Government claims that its policy announced on 20 May, 1986 will give regional licensees a choice between MCS and aggregation. For the majority of regional licensees no such choice exists. The future of our companies will be determined not by our boards or management, but by a decision to be taken by another licensee. This decision making process, not by majority, but by minority, is undemocratic and against all principles of natural justice. We find totally abhorrent a situation whereby a corporate policy decision by one business enterprise automatically at law imposes the same policy on other enterprises irrespective of whether it is commercially viable for those other enterprises to operate under that policy arrangement. The Government's policy encourages this to happen. We recognise that some small stations, that might struggle to survive under the burden of providing additional services, may see long term strategic advantages in aggregating immediately because it will give them a substantial share of larger licensees' revenue. This would have the effect of either forcing the other licensees into a loss situation if they were to attempt to maintain their current standards of service or alternatively force the larger stations to scale down their television operations and lower the standard of their services to that proposed by the smaller station. Either way the result will be the abandonment or very significant reduction of localism, reduction in production and employment and a general lowering of the standards of regional television. It appears to us that the two key Government broadcasting objectives, namely the encouragement of production and employment, together with localism in regional areas, have been ignored in this policy statement. We oppose the concept of an Indicative Plan which, when finalised, will dictate how regional markets may or may not be aggregated. This is a matter that should be left to the commercial judgment of those licensees involved in negotiating to move from operating services under the MCS scheme to operating competitive services. These are our principal objections to the Government's policy. We, through Regional Television Australia, intend to meet with the Government at the earliest opportunity to assert our opposition to those parts of the policy that we believe prejudice the prompt but orderly growth of additional services in regional areas. WIN TV has for many years supported additional choice for regional viewers, first under the supplementary licence scheme and subsequently through the multi-channel service concept. We intend to reaffirm our commitment to the provision of additional services through MCS. This will meet the Government's objective of three services in the majority of regional areas by 1990 and competition by 1996. TWT Limited has developed positively over the past twenty years to become a significant employer and a respected corporate citizen serving the Illawarra, South Coast and Southern Tablelands. This policy of forced aggregation, coming on top of the possibility of being forcibly transferred from VHF to UHF is a catastrophic blow to WIN TV. Yours faithfully JOHN I. RUSHTON General Manager Senator VIGOR —Mr Rushton, the General Manager, pointed out how abhorrent it is that corporate policy made by one business enterprise automatically at law becomes policy for other enterprises. He pointed out that stations will go into a loss situation if they attempt to maintain their current standards of service or they will no longer be able to maintain those standards-they will have to lower their standards to a lower common denominator. Either way, Mr Rushton said, the result will be the abandonment or very significant reduction of localism, a reduction in local production and employment, and a general lowering of the standards of regional television. He is saying that additional advertising revenue will not cover the additional expenditure required of the stations under this new regime. The Government acknowledges that, though the tax carrots it is offering in its equalisation exercises do look quite attractive, it is forcing the issue. All UHF television transmitters purchased specifically for equalisation purposes are to be exempt from sales tax. That is useful. For those licensees who opt for aggregation, all of the television licence fees are to be rebated in the 1986-87 year. For the next three years the rebate level drops 25 per cent each year. The Government estimates that the total subsidy in this area will be $10m on the equipment and $22m on the fees forgone. In return, we will get infrastructure which will be more or less superseded technologically. Indeed, it will be completely superseded by the time it comes into use. The alternative to aggregation will be the issuing of one or two supplementary television permits to the current licensee in a particular area. These permits are to be issued for one year and to be renewed annually for a maximum of 10 years. No real indication is available of the procedures for renewal. This leads to possible instability in the area. I do not believe it will improve the quality of services. It just means that these are ripe plums to be gradually picked by the large networks as the ownership requirements are relaxed more and more in the course of time. The Australian Broadcasting Tribunal will need extra resources to implement these procedures. One of the things I will come to a bit later is what is happening with the current level of resources. The Tribunal should have been given these extra resources some time ago. I am pleased to see that at last it has approval to move all of its operations to Sydney. That should make it a more efficient organisation. There is certainly a need to improve the attitude of the Department of Communications in relation to providing services to people. The supplementary licence scheme, with all of its deficiencies, certainly was not given a fair go. The Department could have moved to undo some of the log-jams of which it has complained. It has not faced up to its responsibilities in this matter. For instance, it could have easily examined the New Zealand approach of setting population levels as prima facie evidence of the necessity for at least one new licence. It could have sought to truncate hearings into a single process instead of the two processes that are necessary in considering whether a supplementary licence or a new licence is to be introduced. None of this streamlining has been provided. As well as this, we have the problems that have been raised in the Canberra and Mildura areas, where the introduction of this new policy has resulted in severe commercial disadvantage to particular firms that were offering to provide a good service in those areas. These firms had taken very seriously previous offers by the Government within the framework of the existing legislation. Suddenly, many applicants for licences were completely devoid of any future. Their future was denied them. I believe that this is typical of the ad hockery we have been getting from this Government in this area of communications. Another relevant matter arises from Estimates Committee hearings. The answers relate to the statement on equalisation. They relate both to the Department's failure to deliver the expectations that it creates and to the Department's inability to deal with some of the issues surrounding the licence-hearing process. In 1981 and 1982 Senator Teague probed representatives from the Department of Communications about delays in licence application processing. The Committee was given a very rosy picture of what the streamlined procedures would mean in relation to expressions of interest in a licence. In those days, the Department was able to fill all the engineering positions available to it, which apparently is not the case now. On 19 April 1982 Mr Westerway of the Department made these comments: At the last Senate Estimates Committee, I did talk about the new planning procedures which we are introducing and those are well underway. Everyone who is on our list of people who are interested in new licences has been contacted in the last few weeks or will be contacted in the next couple of weeks. We hope as a result of the working party which I mentioned last time to increase our productivity in that area from 70 a year to 100. By that he meant an increase in the number of licences being processed in a year from 70 to 100 licences. He continued: But that is not as a result of the increased resources; that is as a result of introducing streamlined planning procedures. Senator Teague immediately established that the 70 new licences applied only to 1981 and included national stations-the Australian Broadcasting Corporation and such like-which were expected in that year. I now wish to look at that answer in the light of the Department's actual performance. I obtained answers last year about the 800-odd expressions of interest which the Department had outstanding on 20 August 1985. At that stage, the Department was working on 25 proposals for new radio licences, 12 proposals under the self-help television reception scheme, 65 supplementary radio proposals and 31 supplementary television proposals. There were 33 proposals for translators or variations to operating conditions for stations and 20 other matters relating to self-help television. Last August there were 27 proposals and 800-odd expressions of interest with the Australian Broadcasting Tribunal. I did not seek updated figures at the recent Estimates Committee hearings because I am aware of the policy vacuum that has existed in that area and of the problems the Department has had in attracting and keeping first-rate engineering staff. The rewards of commercial industry and Telecom Australia are very much more lucrative than those which are offered within the Department, and there is not the constant drain of a lot of work to be done with seemingly very little progress in the sense that only a few new licences are being granted on a yearly basis. I repeat that there have been 800 expressions of interest, and only 27 cases were before the Tribunal. In fact, very few notices are going up to the Tribunal even now. It is not at all clear just how the Government expects all of its indicative planning in this area and in response to its new policy to be carried out. How will this aggregation actually work? How are things to be in place by the end of the year, let alone by the end of July, as claimed? I would like to know what the Government will do to increase the number of planning staff on deck to at least the current ceilings or whether it intends to recruit people over and above that figure to try to meet the deadlines. Will the Government be improving the terms and conditions in an attempt to recruit more experienced and technical staff? One could go on with this. I do not believe that the Department is in a position currently to fulfil the Government's needs in this area. It may just be an election offer. It will be very useful to know what delays are expected in implementing any of these policy items, and whether proper thought has been given to the program quality implications of this policy. We need to think about new proposals for the restructuring of the medium. We need to take an intelligent look at these areas. We need new proposals, not just this type of aggregation and the handing over of our regional areas to the city operators. Senator REYNOLDS(Queensland)(3.42) —I am pleased to have the opportunity to speak in this debate, because I consider that I am much more representative of regional Australia than is either Senator Puplick or Senator Vigor. Despite the doom and gloom, fear and smear tactics we have heard as usual in the Opposition's attack this afternoon, I am not aware of many of the dire predictions they have made. Certainly, to acknowledge the concern of the regional television operators, I would say that a great deal more consultation can take place. From the general community I have heard nothing but congratulations to the Government for giving the community, at long last, a choice. It is that kind of direct contact that I have had with people in regional areas, who want to know only whether they will have equal services with the people in city areas. Senator Puplick, as usual, took this debate as an occasion on which to be negative, to criticise the Government, and to indicate that there was no merit whatever in the Government's proposal. I consider that his regional interest-a new-found regional interest, I might add-is somewhat suspect, given his Party's absolute commitment to privatisation. I also find it somewhat suspect when it is considered that in 1982 the then Minister for Communications was Neil Brown, who was about to hand over the satellite without strings to the networks. Yet in this debate Senator Puplick and Opposition spokesmen on other occasions have spoken out as if they have never had such a close relationship with the networks. It was only after a delegation representing broader broadcasting and television interests went to Mr Brown in 1982 that certain modifications started to be thought about by the then Opposition, which were then taken up completely when the present Government had to consider Aussat and other matters we are debating today. Furthermore, I remind honourable senators to look at the original membership of the board of Aussat, which indicates that the Opposition was very close to the networks in choosing appointees to the Aussat Board at that time. I turn to some other points made by Senator Puplick. First, he made no acknowledgement of any positive factors associated with the Government's-and particularly the Minister's- patience in the extensive consultations and negotiations to try to bring forward what is acceptable to all interests. I pay tribute to the Minister for Communications (Mr Duffy) for the extensive consultation that has gone on, and is still going on. Senator Vigor talked about maps being drawn and everything being in place in July. I do not know where he gets that idea from because consultation is an ongoing process. Judging by Senator Puplick's remarks, there is no indication that the Opposition is interested in what the people think. Do Opposition members have any evidence of what people in regional areas feel about this matter? Have they conducted surveys? Have they any evidence that the people of regional Australia do not want a choice? If they have such evidence, I would be interested to see it. I suggest that it might be a good idea for some of these city-based Opposition senators to get out into regional Australia and ask people whether they want a choice of three channels. I think they will find that the overwhelming answer is yes. Further, if those honourable senators can bear to leave the comforts of the capital cities, perhaps they would like to go into more remote areas and ask people there how they view this Government's initiatives in planning for remote areas. Neither Senator Puplick nor Senator Vigor recognised the considerable employment benefits that will follow the Minister's announcement. I refer to jobs in supplying and installing new equipment, jobs in new studios, jobs in production, and so on and so forth, which are considerable. I would have thought the Opposition would have shown some interest in the job creation aspects of this proposal. Finally, and probably most importantly, I point out that neither of the Opposition spokespeople has any understanding of the process that is leading up to the indicative plan, which will be going to Cabinet at the end of July and will be available for broad industry and community discussion, comment and input. Nothing has been finalised. The Minister has made a statement of broad principle but the indicative plan has yet to be brought down. I fail to comprehend how Opposition senators can come into this place and grandstand about the ending of choice for people in the regional areas when the indicative plan has not yet even been brought down. Senator Puplick talked about penetration into regional markets and concern in regional areas, and Senator Vigor said that three channels will be imposed on regional areas. Again, I would make the point that already regional channels currently rely on their programming from those same three channels. It sounds as if Senator Puplick and Senator Vigor fondly imagine that everything to be seen on regional television is of local content. I must admit that on occasion I wish that it were. Regional commercial television does a magnificent job in pursuing localism in news, sport, weather, and the occasional local production-very occasional because the necessary resources are not available in regional areas. For the greater part of the time regional television channels have to rely on selecting their programs from the existing three major networks. While I am talking about the three major networks, I take the opportunity to say that I wish the commercial channels would place greater priority on Australian programming, particularly leading up to our Bicentenary. The Australian Broadcasting Corporation has set a very high standard for local productions and, frankly, if I must watch a crime television series I would much prefer to watch one with Australian content rather than the usual diet of American crime movies that we so often get. I return to the issue we are debating today. It is interesting that Senator Puplick should have brought on this matter of public importance today because quite coincidentally, I am sure, Mr Peter Westerway and senior Department of Communications officials are in Sydney at the moment as part of the process of consultation with the regional television interests. They are attending the Regional Television Association conference where they will give further details on just what is involved and what the regional television networks can expect in the indicative plan. I wish to answer some of the ill-informed criticisms that have come forth today. One of the criticisms was that the Minister's announcement in some way pandered to the networks. Three commercial television services could be provided cheaply and efficiently throughout Australia using program feeds from the Sydney and Melbourne networks. The reason the Government has not opted for this is precisely that it does not want a few big companies completely controlling commercial television. Had it wanted that, it would not be going through this extensive process of consultation and negotiation with the regional networks. That is going on this very day. The equalisation policy gives the regional stations an opportunity to demonstrate that they can provide diversity of choice in commercial television. The second argument that has been put forward is the so-called destruction of localism and local employment. Again, it is precisely because the Government values local news, sport, weather and so on that it has developed an approach whereby regional licensees can continue to play this independent role. I note that the legislation last year allowing for local origination from any transmitter is important in this regard and the amount of local programs and advertising shown by any particular station will be determined by how much support the licensee gets from that community. The multi-channel option has been called a non-option. The choice is free. If the three regional licensees in a designated area believe that only multi-channelled services will work, they have only to say so and the Government will accept that view. This afternoon we have heard gloom and doom from the Opposition, yet the Government has made that commitment and the Minister has announced it in the other place. Finally, there has been a claim that the minority would dictate to others. There has already been nearly three years' debate on this matter. I do not know where Senator Vigor has been in the past three years, but we have already had three years' discussion on the concept of aggregation; there have been innumerable industry meetings, seminars, public conferences, articles in the Press and parliamentary debates. We have now invited both the licensees and the public to comment on the draft indicative plan. I suggest to both Senator Puplick and Senator Vigor that they watch closely for that indicative plan, travel into regional areas and get the views of the people in those areas as well as those of the regional television stations and then they can come back and see what they have to say on this matter then. Senator PUPLICK(New South Wales)(3.56) —I move: That the Senate take note of the paper. This statement has been brought forward in indecent haste and indeed it is, in all respects, an indecent statement. In the past couple of days the Government, in turning around on the question of the Australia Card, has attempted to put forward a series of false statements to the people of Australia. For instance, it is indicated that the use of the Australia Card in its revised form would be confined to public presentation in only three departments-the Australian Taxation Office, the Department of Social Security and the Health Insurance Commission. These would be the only departments to have access to the card. However, if honourable senators read the Minister's statement more closely, they will see that the Department of Immigration and Ethnic Affairs, the Australian Institute of Health and the Australian Bureau of Statistics are quietly tucked into the statement already at this stage. Therefore the three have already become six. A whole series of very false assumptions have been made by the Government about the revenue to be raised. Despite the fact that the Minister for Health (Dr Blewett) in his statement clearly indicated on page 3 that he placed little reliance on the figures of the Department for savings from Immigration and Ethnic Affairs-otherwise he would not have agreed with the recommendations and the comments of the Committee-he nevertheless uses the Department's bogus figures in order to substantially boost the alleged revenue from the card and he claims that there will be greater revenue obtained from tracking down social service fraud. This is despite the fact that in the Australian on 7 June 1986, the Special Minister of State, Mr Young, said in relation to high levels of estimates of social security fraud: These assessments could be exaggerated. Yesterday in this very place Senator Grimes said: It is only too easy, in the atmosphere that exists in the community now, in which people are willing to exaggerate wildly the extent of social security fraud, to look for scapegoats. Therefore two of the Ministers in Dr Blewett's own Government have clearly indicated in the course of the last few days that the Minister for Health is misleading people in attempting to say that there will be larger revenues from eliminating social security fraud. The Minister has admitted that he has no idea what the cost will be to the private sector. However, the Director of the Government's own Business Regulation Review Unit, Dr Alan Moran, is reported as saying that the rule of thumb used by the unit was that all new regulations would cost the private sector twice the costs incurred by the Government. The Government itself is planning to spend more than $1 billion on the process; thus, the Government's own Business Regulation Review Unit calculates that the cost to the private sector will be in excess of $2 billion. Mr Alan Cullen of the Australian Bankers' Association has indicated that his Association regards the implications for the private sector as being `extremely costly'. In its report the Joint Select Committee referred to evidence from the Australian Taxation Office when it said in paragraph 4.16: In response to questions by the Committee, the ATO agreed that a tax file number with a level of integrity similar to that proposed for the Australia Card would produce similar revenue gains to those estimated under the Australia Card without photo option, with similar staff and equipment costs. That statement was made in a letter to the Committee from the Second Commissioner of Taxation. The Joint Select Committee has recommended a tax file number of improved integrity which would yield, at the same cost to the Government, the same amount of revenue as the Australia Card without a photograph. This was based on figures that the Government and the Taxation Office had supplied. As people have become more and more aware of the Government's proposal, public opinion is changing. Polls have been cited claiming that there is overwhelming support for the card, but I read in the Melbourne Herald of 5 June 1986: Polls reveal a majority of Australians are now opposed to the introduction of a national identity card. I also look at a report in the Daily Mirror of 6 June in which the Real Estate Institute of New South Wales has said it is prepared to fight the introduction of a national identity card. Senator Tate will undoubtedly be very interested in an article in the Australian on 10 June headed `Anglicans get ready to fight the card' referring to the diocese of Perth. The whole proposal is being put forward in a dishonest and disrepu- table fashion by the Minister for Health. He is exaggerating the gain to revenue and minimising the cost to the private sector and to State and local governments. He is deliberately obscuring the number of departments which will have access to the card and he is deliberately misrepresenting the claims and recommendations made by the majority of committee members, including a member of the Australian Labor Party, in their report that use of the tax file number system with improved integrity will yield the same amount in revenue as the Australia Card option without the photograph. He is deliberately misrepresenting the claims and the recommendations in the report by the majority, including a member of the Australian Labor Party, that the tax file number system with improved integrity, which is what the Joint Select Committee actually recommends, will yield the same amount in revenue as the Australia Card option without the photograph. Under these circumstances, I believe that the Minister stands condemned for having tried to rush into this Parliament in record time a response to a major joint select committee report in order to prevent the required degree of public debate taking place on this subject. Senator Tate —I take a point of order. On at least five or six occasions in the last long breathless paragraph of his speech, Senator Puplick accused a Minister, a member of another place, of deliberately misleading the Australian public. I regard that as quite different from merely misleading, which could be done in good faith from a lack of sufficient comprehension of the subject matter. To `deliberately mislead' is the equivalent of lying to the public. I therefore ask that that be withdrawn. The ACTING DEPUTY PRESIDENT(Senator Townley) —I am sorry, there is no point of order. Senator Robertson —What a lot of nonsense. The ACTING DEPUTY PRESIDENT —Does the honourable senator wish to dissent from the Chair's ruling? Senator Robertson —I would be very tempted to. The ACTING DEPUTY PRESIDENT —Well, the honourable senator can do so in writing, if he wants. I have been given advice that there is no point of order. I do not like the attitude. I call Senator Haines. Senator HAINES(South Australia)(4.02) —I certainly have to agree with Senator Puplick to the extent that the misinformation that has been allowed to make its way into the community about this proposal is probably second only to the misinformation put forward by Holinshed and Shakespeare that allows the blame for the murder of the princes in the tower to be laid in the hands of Richard III. Certainly the Minister for Health (Dr Blewett) has allowed the general public to believe that this card will be able to be used to stop a number of things which have absolutely nothing at all to do with social security and tax fraud. For example, large numbers of people in the community believe that it is going to be used legitimately to put an end to things like under-age drinking. Of course, the Minister indicated recently that that is not going to be the case, that there are going to be very specific uses for the card and that the use by hoteliers to check on the age of someone who asks for a drink is certainly not going to be one of them. In fact, nobody in this place, or anywhere else I would have thought, objects to the Government's attempt to put an end to the sort of tax and social security fraud which is, in essence, ripping off the general public and depleting Government coffers to a quite unacceptable level. Neither does anyone in here or anywhere else reject the idea that something has to be done to stop it. However, when the Minister rejects suggestions from people like Mr Frank Costigan, who ought to have some expertise in these areas, he has to give more of a reason for doing so than the rather flip comments he makes in the paper that he has brought down as a response to the majority report of the Joint Select Committee on an Australian Card. He acknowledges at the beginning of his statement that the Committee has put in a lot of work, that it has heard large numbers of witnesses-it heard evidence from something like 168 witnesses representing 83 organisations and 18 individuals-and that it has been engaged in a large number of public hearings, and still argues that the considered majority report, which was signed by a member of each political party represented in this place, is wrong. One can only suggest that in that stance he is being nothing short of obdurate, that he is acting like a child who is not getting his own way when playing cricket and is simply being rude to the umpire. That essentially is what is happening in this case. His rejection of the majority report's findings with regard to the use of the tax file number is trite, to say the very least. There is no doubt at all-and Senator Puplick has just mentioned this-that the Australian Taxation Office did say to the Committee that the use of a tax file number, if given sufficient integrity, would bring in the same amount of revenue as would be raised by the proposal that the Government put to the Committee last year. That the Taxation Office did it under duress does not, of course, do anything at all to the validity of its comment except, perhaps, to make it more believable since it did not want to make that sort of statement at all. One is forced to ask why the Minister is persisting in going ahead with a system, starting from scratch, which in the first instance will require, of course, the upgrading of birth, death and marriage record systems; which is then going to cost something like $600m to establish; which will involve another $100m to $110m a year in running costs; and which does not even look like making a profit for at least five years. The proposal put forward by the Australian Taxation Office, under questioning from the Committee, was that a fiscal identification system can be established quite adequately by using as a base the current tax file system; that documentation concerning proof of identity that needs to be brought forward by people who are applying for a new tax file number be upgraded; that people who have had a tax file number for less than five years would be expected to go through the same process; and that those who have had tax file numbers for more than five years be gradually caught up with. That at least would avoid the expenditure of large amounts of money by the Government. It would be used in the same manner that the current Government is expecting the Australia Card to be used; that is, for bank account applications, for applying for jobs and social security benefits and for engaging in other financial transactions. If the Government, in essence, wants to operate in this country a personal identification system which can be used either now or in the future as an internal passport system, it ought to come out and say so. If it simply wants everybody who is engaging in financial transactions to be part of a fiscal identification system, it can do that quite adequately by building on a system which is already in existence, which already covers large numbers of people and which will not turn into the compulsory universal system that the Australia Card has every likelihood of turning into. Senator ROBERT RAY(Victoria)(4.07) —If anything, the last 10 minutes have proved that this issue is far too complex to try to fit into a five-minute speed. Senator Puplick's contribution reminded me more of a race broadcast than anything else. I must say that I was finding it fairly hard to find a full stop in the last two minutes of his speech. Senator Puplick —You just don't like backing a loser. Senator ROBERT RAY —The honourable senator talks about backing a loser. I would have said that the race was rigged from the start in terms of the inquiry to which the Minister for Health, Dr Blewett, was responding. Indeed, the only thing that Senator Puplick would have in common with the late Premier of New South Wales, Sir Robert Askin, is that this was a rigged race; he was very good at backing the winner of the last race after the result had come out. Senator Macklin —Who had the majority on the Committee? Senator ROBERT RAY —When four out of eight is a majority, Senator Macklin might become deputy leader of the Australian Democrats. Senator Macklin —And the casting vote. Senator ROBERT RAY —There was no casting vote. The honourable senator should do his research. While I am on the question of research, Senator Puplick brought up an amazing tale of an opinion poll that has shown a big swing in public opinion against the Australia Card. I ask him to name the opinion poll, because when I read the article I thought: `That is funny; I have missed that opinion poll'. But as Senator Puplick knows and I know, the journalist made a mistake; no such opinion poll has shown that. It was just a piece of poor journalism that Senator Puplick reiterated in this chamber. Senator Haines made reference to the fact that the Minister for Health will not accept the umpire's verdict. Normally where I come from one would want the umpire to have some impartiality and no preconceived ideas as to who is to win and who is to lose. Honourable senators opposite nominating as umpires Senator Haines, Senator Puplick, Mr Porter and the absent Mr Blunt. Mr Blunt is such a good umpire that he did not even turn up to the game and then gave a decision from the score-board. Honourable senators opposite know that. Neither Senator Haines nor Senator Puplick will deny that he hardly ever turned up. Mr Blunt has such a brilliant mind that he is able to read all the evidence taken in his absence and come to these startling conclusions. Why do people come to their conclusions? Maybe we do have predetermined ideas; maybe we are not evaluating the evidence on its merits. If we are not doing that, I would suggest that honourable senators opposite also are not. I wonder why Senator Haines opposes the Australia Card? She does so because a poll revealed that members of the Australian Democrats, and not the people who vote for them, are opposed to the Australia Card. If I were in Senator Haines's position I would do exactly as she has done. If I were thinking about taking over the leadership of the Democrats in the next week or in the next year, of course I would obey the instructions of my Party, as Senator Haines has in this chamber today and on previous occasions. If I were a dilettante civil libertarian like Senator Puplick, of course I would vote in a particular way. If I were a cynical Liberal back bencher, I would also oppose the Australia Card, because the last thing in the world that the Liberal Party wants is this Government to have an increased and enhanced revenue base. I conclude on this point: This debate will be a lot more sensible during the second reading stages of the Australia Card legislation, because I will be able to develop points at large. I will be able to develop them without Senator Haines continuing to bark away in the background. I know that she has been humiliated in having to come into this chamber to do the work of the apparatchiks in the Democrats. I know how disappointing that must be for her. Really, deep down, her giving support for the tax file number proposal indicates to me that she is a closet supporter of the Australian Card, and I look forward to her support when the debate is brought back on. Question resolved in the affirmative. Senator ARCHER(Tasmania) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator WALTERS(Tasmania) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TEAGUE(South Australia)(4.13) —I move: That the Senate take note of the paper. The 1985 annual report of the Commonwealth Schools Commission gives considerable emphasis to the quite radical changes that have been brought about as a result of legislation passed in this Parliament involving the transfer of administrative functions of the Schools Commission to the Department of Education and the incorporation under the umbrella of the Schools Commission of the Curriculum Development Centre. On a quick reading of the report, which has only just been made available to us, proper weight has been given to these quite major changes to the activities of the Schools Commission. As is well known, the State governments are responsible for the curriculum in government schools-as independent schools are responsible for their curriculum-and, indeed, for most of the resources and most of the moneys that are available within the schools system. But the Commonwealth has supplemented the programs. It has been the role of the Commonwealth Schools Commission to be the advisory body dealing with the distribution of resources among programs and with each program in each State. This report demonstrates that, under the present Government, the Schools Commission has become a much more directly an advisory body, giving directions as to how the special programs that supplement what is happening in the States should be acted upon by the Commonwealth. In this respect, it is still too early to come to a final decision about the effect of these new roles for the Schools Commission. This report will be important in evaluating that effect once we have had more time to read it. Senator MACKLIN(Queensland)(4.15) —The 1985 annual report of the Commonwealth Schools Commission is interesting for those people in the community who believe that government should restrain and cut back its expenditure and yet who rarely have any idea of the types of functions that a variety of commissions and boards are expected to carry out and do carry out. They should take the trouble to read a number of the reports that are released each day. When one talks to individuals in the community, it is interesting that there is very little dispute as to whether or not governments should be involved in this or that activity. If one asks, `should governments be doing this or should governments be doing that?', by and large one gets an affirmative answer from members of the community. They say: `Yes, it should. That is excellent expenditure of taxpayers' money'. I draw the attention of the Senate to a couple of items in this report. In their case only a small amount of money is involved. I refer to enrichment programs which are vitally necessary to the people they affect. The two items in the report are on page 21 and page 22. I refer to the $3.75m which is expended on severely disabled children. This money goes out to government and non-government organisations and to individual parents to provide opportunities for severely disabled children who might otherwise receive little or no formal schooling. The amount involved is very small; yet the way it is currently administered by the Schools Commission gives a great deal of help and assistance to many parents-I know that because I have met many of those parents who have received money under this program-and to many organisations who are able to provide enrichment to those severely disabled children around Australia. I believe this activity has the support of all members of the Senate and it would have the support of the majority of people in the community if they were able and willing to voice an opinion on this issue. Likewise, the item on page 22, which relates to children in residential institutions, receives a very small amount-$2.34m. This money is provided to children in Australia who are still living in institutions, although the numbers of such children are not very high. In fact, the bulk of those children are now living in institutions of a penal variety of one kind or another. I do not necessarily mean that they are living in prisons, but they are in institutions operating under some type of order from a court. Those institutions now house the vast bulk of the children. There are still some institutions which look after children in a care situation, although, with the movements in foster-parenting in this country, that number is decreasing. I think we are all thankful that that is the case. However, I draw to the minds of those listening and to honourable senators the fact that this is taxpayers' money which is being expended to assist in giving those children in residential institutions and under other types of institutional care some type of family background inasmuch as it can be provided by money-of course, very little can be provided-or additional resources to give them the kinds of experiences which are enjoyed by children who live at home and go to normal schools and operate in the ordinary wider community. Again, a small amount of money is involved in providing for a very enriching experience. I hope that, as the community debate extends as to whether or not government should expend money and whether we should have smaller government, at some stage people will get down to the nitty-gritty and start to say why they believe those types of programs should be cut. If we do not do that, I am fearful that disabled children and children in institutions are likely to be the first victims of the ideological approach. Question resolved in the affirmative. Senator TEAGUE(South Australia)(4.20) —I move: That the Senate take note of the paper. The Commonwealth Tertiary Education Commission's review of technical and further education funding is the first major examination of technical and further education funding for 12 years. In the last 12 years there has been a massive increase in TAFE resources. Additional Commonwealth moneys, in particular, have helped students in many TAFE colleges undertake courses of technical and further education. I say rather partisanly as a Liberal senator from South Australia that this expansion occurred during the period of the Fraser Government. This report spells out very carefully, looking back on those 12 years, the 6 per cent growth in real terms in the moneys that have been made available to TAFE and the similar increase in enrolments for each year as an average over the last decade. The task given to the committee of review, which was chaired by Mr Hugh Hudson, the Chairman of the Commonwealth Tertiary Education Commission, was to consider the most appropriate role for the Commonwealth to play in giving such supplementary grants to TAFE. Broadly speaking, the report urges that the present variety of flexible funding mechanisms continue and that the Commonwealth continues to supplement the States, but on precise grounds. The first principle of funding that the Committee has resolved upon is that the framework of financial arrangements for TAFE be maintained in terms of the existing Commonwealth-State partnership. This partnership is based on the States continuing to be responsible for ongoing recurrent and equipment costs and the Commonwealth continuing to be responsible for supplementary recurrent and equipment programs designed to meet specific Commonwealth objectives and a shared Commonwealth-State responsibility for capital development. As anyone in Australia who has been involved with the TAFE sector of education will know, over the last decade many new buildings have been established to provide facilities to technical and further education students more comparable with those which have been available for a much longer period to students of universities and colleges of advanced education. And why not? I was proud of being associated in the last Government with the priority given to technical and further education because, in our economic and social development, we have much to gain from ensuring that our technicians are as well trained as our doctors, engineers and teachers. The tasks that have been given to TAFE have now been made more achievable because of the quite enormous capital that has been newly injected into TAFE. This report, which reviews a period of more than a decade, confirms that there is still an important role for the Commonwealth to play in supplementing the States in a similar way to that of recent years. The report contains a profile of 15-year-olds to 19-year-olds as they will be at the end of this decade and in 1992. At the end of the next six years there will be approximately the same number of 15-year-olds to 19-year-olds as there are now-1.3 million. During the coming six years, unemployment is projected to decline massively as a result of increased enrolments in TAFE, higher education, secondary schools and apprenticeship and trainee programs. This is a welcome profile. It reinforces the view of the Opposition which is that the worst activity for 15-year-olds to 19-year-olds is to be unemployed. I welcome the profile and hope that it can be achieved. The DEPUTY PRESIDENT —Order! The time allotted for consideration of Government papers has expired. Senator TEAGUE(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TEAGUE(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Consideration resumed for 10 June, on motion by Senator Tate: That the Senate take note of the report. Question resolved in the affirmative. Consideration resumed from 4 June, on motion by Senator Jones: That the Senate take note of the report. Question resolved in the affirmative. Debate resumed. (Quorum formed) Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.27) —in reply-I was concluding my speech in reply on the Copyright Amendment Bill 1986 before the suspension of the sitting for lunch. The final point I wanted to make was about the second objection of the Senate Standing Committee for the Scrutiny of Bills which raised the question as to whether or not there was some element of retrospectivity in a provision exposing people to liability for a first conviction after the coming into force of this Act. It is my unquestioned belief that the proper interpretation of the clauses in question is that the new increased penalty scale is applicable only to a first conviction which occurs after the date of the coming into effect of the new provision. The particular clause that has provoked the concern is clause 133a (1) (c) which, in relation to a person being guilty of an offence punishable upon conviction, states: Where it is the first conviction of the person of an offence against this sub-section (including this sub-section as in force before the commencement of section 17 of the Copyright Amendment Act 1986) . . . Then it sets out the fine, which represents a substantial increase on the present levels. The point is simply that it is written in this way to ensure that someone who has been convicted under the previous law and is convicted again after the present law comes into effect cannot claim that his most recent conviction is his first conviction. It is written in such a way to ensure that, if he is being convicted for the second time, it will be acknowledged to be a conviction for the second time and, accordingly, one in respect of which higher penalties apply. It will not be a situation where he will be exposed to the higher penalty for a genuine first conviction. That is not the way it can be read on any reasonable interpretation of the clause. If there is any further argument about this, no doubt we can have it in the Committee stage. I simply wanted to respond to Senator Haines's suggestion that the Attorney-General (Mr Lionel Bowen) had in some way not fully appreciated the point of the Scrutiny of Bills Committee in his reply which Senator Haines read into the record. I simply say that I have had a careful look at it. I believe that the Attorney-General's reply very accurately stated what is the law and what it would be interpreted to be by the court. There is no question of someone being inflicted with a higher penalty based on an offence committed before the coming into effect of this law. It is simply not a possible interpretation and, to the extent that the Committee believes that it is, it is on the wrong horse. With those remarks, I commend the Bill to the Senate and look forward to an interesting debate in the Committee stage. Question resolved in the affirmative. Bill read a second time. The Bill. Senator DURACK(Western Australia)(4.32) —I have distributed two amendments to the Copyright Amendment Bill but before I proceed to move those amendments, I would like to raise a matter with the Minister for Resources and Energy (Senator Gareth Evans), representing the Attorney-General (Mr Lionel Bowen), concerning the provisions in clauses 3 and 5 which deal with the new definitions relating to broadcasting from satellites. I think I will have to deal with those two clauses together because the concern that has been expressed seems to cover both areas. The Minister seems to be unassisted at the moment and I do not know whether he will get very far with those clauses. Senator Gareth Evans —They are on their way; try your luck. Senator DURACK —Would the Minister rather that I moved my amendments first? Senator Gareth Evans —I would prefer you to go on with the amendments because I am in a position to respond to them. I may not be able to help you at this stage with the other matter. Senator DURACK —I think that might be better in the circumstances, but I want to come back to those clauses, of course. I shall now move the first amendment. I move: (1) Page 9, after clause 13, insert the following new clause: ``13a. After section 112 of the Principal Act, the following section is inserted in Division 6 of Part IV: `Use of certain broadcasts by educational institutions `112a. (1) This section applies to a television broadcast and a sound broadcast in which copyright subsists in the Australian Broadcasting Corporation or in the Special Broadcasting Service or in both of those bodies jointly. `(2) The copyright in a television broadcast or a sound broadcast to which this section applies is not infringed by- (a) the making of a cinematograph film or a sound recording of the whole or part of the broadcast; or (b) the rebroadcast of the whole or a part of the broadcast, where the making of the film or recording or the rebroadcast is undertaken by or on behalf of an educational institution and is reasonably required for the teaching purposes of that institution or of any other educational institution. `(3) For the purposes of sub-section (2), and without limiting the generality of that sub-section, the making of a film or recording or a rebroadcast shall be taken to have been undertaken for the teaching purposes of an educational institution where- (a) it is undertaken in connection with a course of instruction provided by the institution; or (b) it is undertaken for the purpose of including an item in a library of the institution. `(4) Where a cinematograph film, a sound recording or a rebroadcast is made in the circumstances referred to in sub-section (2), copyright in that film, sound recording or rebroadcast subsists in the body, or the bodies jointly, in which the copyright subsisted in the television or sound broadcast of which the film, recording or rebroadcast was made. `(5) At the commencement of each television broadcast and each sound broadcast to which this section applies, and in any announcement or advertisement relating to such a broadcast, a statement shall be made, and, in the case of a television broadcast, sub-titles shall be displayed, in the form set out in sub-section (6). `(6) A statement and sub-titles referred to in paragraph (5) shall be in the following form- ``Copyright in this broadcast subsists in the Australian Broadcasting Corporation [or the Special Broadcasting Service or the Australian Broadcasting Corporation and the Special Broadcasting Service, as the case requires]. ``Copyright is not infringed if this broadcast is copied or rebroadcast by or on behalf of an educational institution for the teaching purposes of that or any other educational institution. Only such copies or rebroadcasts can be made as are reasonably required for those teaching purposes and copyright in those copies or rebroadcasts subsists in the Australian Broadcasting Corporation [or the Special Broadcasting Service or the Australian Broadcasting Corporation and the Special Broadcasting Service, as the case requires]. ``This is not a complete statement of the copyright position in respect of the material just described. Refer to the Copyright Act 1968. Definitions of `educational institution' and `teaching purposes' may also be found in that Act.''.'.''. As I foreshadowed in my speech in the second reading debate, this amendment relates to the use of certain broadcasts by educational institutions. I indicated that the Opposition was very disappointed with the fact that, despite the time available to the Government and despite the very useful issues paper dealing with audio-visual copying which was prepared by the Attorney- General's Department in 1981 and 1982, this Bill does not provide anything at all to cope with the very strong demand for audio-visual copying for educational purposes by educational institutions. The Minister mentioned in his second reading speech and again in reply to the second reading debate that quite a number of negotiations have been taking place with educational institutions in relation to this matter. I am aware, from my own experience, of the complexities of copyright law and attempts to amend it, having been through the process which led to the provisions about photocopying in 1980. Nevertheless, it seems extraordinary that, four years after the departmental issues paper was prepared, these matters have not been able to be resolved. It seems to me from what has been said by the Minister in his second reading speech that the Government is seeking to develop a statutory licence for educational institutions in relation to audio-visual copying along the lines of the statutory licence for photocopying by educational institutions. I wish those negotiations well although, as I have said, I express my disappointment that they have not yet been completed. But that is a pretty ambitious sort of exercise to undertake. As I have said, I have some personal experience of the magnitude of those sorts of negotiations, following the insertion into the Act of the photocopying provisions in 1980. It may well be that educational institutions are still pretty wary of statutory licence provisions of this sort in the light of the difficulties that they were having in bringing into operation the statutory licence for photocopying. I think there is something to be said for moving somewhat more cautiously. The Opposition's amendment, which is on a very much reduced scale, hopefully will make some progress in this direction. The scheme of the Opposition's amendment is that it will apply in the first place only to a television or sound broadcast in which copyright subsists in the Australian Broadcasting Corporation or the Special Broadcasting Service. In those cases where copyright subsists in the ABC or the SBS and something is copied for the purpose of teaching in an educational institution, that will be permitted despite it being a technical breach of copyright. That is clearly set out in the proposed new clause of the Bill, which confines it to: . . . where the making of the film or recording or the rebroadcast is undertaken by or on behalf of an educational institution and is reasonably required for the teaching purposes of that institution . . . Of course, it means that this would apply to any television or sound broadcast in which the ABC or SBS has copyright regardless of whether that broadcast was created for educational purposes or was what one might call a strictly educational film in a technical and narrow sense. However, it is clear that, largely because there are such specially created ABC and SBS educational programs, in effect this will have a pretty narrow application. There is a great deal of demand in educational institutions for those sorts of broadcasts, whether visual or sound. They are not always shown at a convenient time for a particular class so it is sensible that they should be able to be taped and then re-used at convenient times. This proposal does not create for copyright owners the great problems that a statutory licence would create with the need for proper remuneration and the means of recording, assessment and all the rest of it involved in such an ambitious scheme. That is one of the attractions we see for this amendment; it is on a pretty limited scale. It seems to be even more limited than the existing provision for educational broadcasts in section 200 except that that applies only to sound and not to television broadcasts. That provision applies to a broadcast intended to be used for educational purposes. The copying can be done only by an educational institution and the recording is to be used for the instruction of that institution. So we have picked up those two aspects of the existing provision and widened them to include visual copying-in other words, for television-but, of course, it does not apply generally. It applies only to broadcasts in which the ABC or the SBS have copyright. So it does not apply by any means to all broadcasts of the ABC or the SBS, no matter how desirable they may be for educational purposes. We are confining it to the ABC and the SBS because, as I have said, although they no doubt will express an interest in being remunerated for their copyright, they are wholly government sponsored and owned bodies and do not operate commercially. We believe that they will not in any way be as sensitive to or affected by provisions of this kind as they would be by a very simple alternative provision which would simply extend the existing section 200 (2) to include television broadcasting. It is for those reasons that the Opposition has moved this amendment. It is not that we think it would be valuable in itself but we hope that it might set the ball rolling in favour of broader provisions for copying for educational purposes. Senator HAINES(South Australia)(4.45) —The Australian Democrats support in principle and in content the amendment just moved by Senator Durack for all the reasons that I put during my speech in the second reading debate. It certainly is appropriate that publicly funded information should be provided readily to publicly funded institutions. Most schools-in particular state schools, but I think it applies across the board-have a very real need to have access to some of the excellent programs that are broadcast by the Australian Broadcasting Corporation and the Special Broadcasting Service, and in particular to videos of the television programs, documentaries and films that are broadcast on those two channels. However, as I also indicated in my speech on the second reading, I am not sure that it is appropriate to proceed with the amendment at this time. I indicated that we would prefer to refer these two amendments to the Standing Committee on Education and the Arts since that Committee seems to be the appropriate committee to which to refer something that applies both to the school system and to ABC and SBS television. Senator Colston —We look after broadcasting as well as education and arts. Senator HAINES —Certainly. The Chairman of the Committee, to whom I did refer this matter before I mentioned it in this place, informs me that the Committee does also cover broadcasting. In referring this matter to Senator Colston's Committee, I hope it will lead in due course to that Committee seeking a wider term of reference to cover the sorts of issues that Senator Puplick, Senator Durack and I mentioned in our speeches earlier today. The issue of levies on blank tapes, for example, could well be looked at by the Committee as a solution to some of the problems that remain and that the Government has not picked up for inclusion in the Copyright Amendment Bill before us. I indicate our support in principle for what the Opposition is trying to do. However, I say, that there are wider issues that could be picked up and a referral of these amendments to Senator Colston's Standing Committee on Education and the Arts would be the appropriate way to deal with them. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.47) —The Government opposes this amendment but would not resist reference of the issue to a Senate committee, as has been proposed by Senator Haines, in order for the matter to be looked at more closely and perhaps to be debated further by the Parliament in the Budget session. Despite the superficial attractions it may appear to have, the reasons we oppose it are, firstly, because it is opposed by the Australian Broadcasting Corporation and the Special Broadcasting Service, for good reasons that I will come to in a moment; secondly, because it is at odds with the acknowledgment we have received from the educational institutions that they are prepared to pay for the property rights that are here involved, just as they have been prepared to pay for copyright use of written material. We also oppose it because it is at best only a piecemeal solution, as has been acknowledged by Senator Durack, to the perceived problems of educational institutions. Far from assisting the resolution of the overall problem of educational audio-visual copying, it is likely to make the ultimate solution, which we hope will be in terms of a statutory licensing scheme, more difficult in so far as it just adds one element in the total picture that will subsequently have to be unwound if a more comprehensive regime that deals with all aspects of the problem involving commercial channels as well as the subsidised ones is to be established. Let me explain in a little more detail why it is that on quite rational grounds the ABC and SBS have strongly opposed this provision. It is best approached by taking the situation, which I acknowledge the amendment does not advocate, of all programs broadcast by the ABC and SBS being subject to this exemption from copyright infringement liability so far as educational institutions are concerned. If it were the case that all programs were thus exempt, the likely immediate result would be that fewer programs would be made available by external suppliers to the ABC and the SBS. Why, for example, would the British Broadcasting Corporation license the ABC to broadcast something which it-the BBC-also wanted to sell in video form? Why would it do that when it knows that the schools can copy the broadcast program with absolute impunity, so there is an immediate loss of a market potential? Alternatively, those programs which suppliers are prepared to make available could be expected to become very much more expensive insofar as copyright owners would want compensation for the lost market; in other words, either they would not supply them at all or they would supply them only on the basis that there was an increased price tag to compensate them for the loss of the video market in question, which would have the same result, of course, in practice, so far as the ABC or the SBS were concerned, with regard to their capacity to provide a diversity of programs. I acknowledge that the amendment is not cast in those terms. But it is helpful as a lead-in, I think, to understanding the next layer of the problem, which is that the amendment does not seem to rule out-it is a matter for interpretation as to what it does mean-programs which are made by the ABC or the SBS but which employ, in the making of the program, material which is itself copyright, such as film clips, musical recordings and script material. The price of those components of the program, which are themselves subject to copyright retention to someone else, could, for exactly the same reasons, using the same logic as that which I have endeavoured to describe earlier, be expected to increase. The owners of the copyright in the component materials would know that they would be subject to compulsory copyright; that is, they would have no right to say no to the use of the material and they would have no right to recoup royalties in relation to it. So in an indirect way one would have evident much of that very same phenomenon which is more obviously perceivable with regard to programs as a whole acquired from outside sources. The associated problem is that some scriptwriters-and perhaps music composers, although the most obvious problem is likely to concern scriptwriters-could refuse to write for the ABC or the SBS, given that they are forced in effect, in writing for those particular outlets, to give away their reproduction right. Again, one could have the denial of supply as well as the making of the components more expensive. To the extent that what the amendment is dealing with is direct production material which does not have copyright component problems of that kind but is just a program which is wholly copyrighted in the ABC-that is, it employs wholly internal resources in respect of which the organisation retains the copyright-that is still not the end of the problem, even if the amendment is narrowly construed in those terms. A further financial problem is involved, because the ABC and the SBS would immediately lose, if this amendment were in force, any post-broadcast educational sale market for their programs and would not be able to recoup any of their production costs through those sales. That is a significant source of financial return, particularly in regard to the ABC. The ABC has a very thriving and substantial marketing arm which it is trying hard to increase, not least because of the budgetary pressures that have been placed upon it by the Government. Given that so much of that marketing is directed to educational institutions, it would be cut to pieces. For that combination of reasons, which I and the Government believe are good reasons, there is very great resistance to what, on the face of it, is an entirely well intentioned and perhaps even thoughtful proposal in this amendment. The Government believes that the statutory licence route is the one which we should follow. It is disappointing that progress on this matter has not been faster. Certainly, it is something that I was anxious to try to kick into life a couple of years ago. But there are enormous difficulties- Senator Durack —It was alive when you became responsible for it. Senator GARETH EVANS —We did our best, Senator. There was not much that survived the honourable senator's dead hand in the administration of the portfolio. This was one thing, at least, that has continued to be looked at. Copyright seems to bring out the worst instincts in most of those people who deal with it. There is the anxiety to dot every `i' and cross every `t' before anything gets into the statute book. Infinitely complex procedures are then devised, and a lot of sound and fury, but not much action. I acknowledge all of those things. I simply say that it is important to try to generate some momentum on this issue. While the Government thinks that if it is referred to a Senate committee, for the sort of reasons I have indicated the committee is likely to come down solidly against this measure, nonetheless at least that forum will enable some of these issues to be canvassed and thought through, and perhaps that exercise will serve to give some necessary momentum to all the various interests that must come together for us to get a sensible statutory licensing scheme. Senator PUPLICK(New South Wales)(4.56) —I welcome the opportunity to support Senator Durack's amendment, although I understand from what Senator Haines and Senator Gareth Evans have said that the effect of this amendment will be for the matter to be referred to a Senate committee for investigation. I am also grateful for the indication from Senator Colston that his Committee is prepared to look at this matter. I hope that if that is the decision of this place, it will also enable the Standing Committee on Education and the Arts to explore some of the wider issues involved in audio-visual copyright problems as they affect educational institutions. It seems to me that they are in a very special position. The whole purpose, one suspects, of the video industry has been to encourage the practice called time shifting; that is, essentially to allow people to see programs at a time which is of maximum convenience to them. We certainly know that most of the programs that we would be concerned about in this amendment are programs which will be shown outside of school hours. The Australian Broadcasting Corporation in recent years has been very diligent in developing programs, particularly science programs, which are extraordinarily valuable as educational tools but which clearly are not broadcast at a time of day which would be convenient for educational institutions. I wish to comment very briefly on a couple of points that arise from what Senator Gareth Evans said. I refer first to the preparedness of educational institutions to pay. That is all very well until one starts to define the method by which payment will be made or the rate at which payment will be made. Anybody who is familiar with the exercise which was involved between the ABC and the Australasian Performing Right Association will know that that was a matter of enormous dispute in terms of what the ABC was prepared to pay and what APRA was prepared to receive. By the time that had gone backwards and forwards, and eventually came before the Tribunal for judicial determination, the ABC had to appear before a Senate Estimates committee a few weeks ago to seek funds in excess of a million dollars to pay for the back payments of royalties which were awarded by the Tribunal as far as payments to APRA were concerned. While I am sure that educational institutions are happy to pay on the basis that they think a small amount will be involved and the process will be simple, I suspect that when they get to the nitty-gritty of the matter, they will find their willingness to pay diminishes both with time and in regard to exponential cost. The statutory licensing scheme, which is clearly the Government's preferred option, nevertheless could be assisted by the sort of committee investigation which it appears this reference may well stimulate. Although Senator Gareth Evans characterised the problems that would arise if all programs broadcast on the ABC and the Special Broadcasting Service were subject to this amendment, that is not the intention of the amendment. He acknowledged that point. Our proposed clause 112a (1) states: This section applies to a television broadcast and a sound broadcast in which copyright subsists in the Australian Broadcasting Corporation or in the Special Broadcasting Service or in both of those bodies jointly. It therefore limits it to that extent. I appreciate the point Senator Evans made about the attempt of the ABC to increase its marketing arm and revenue. In this instance I believe that it amounts to a Government transfer from revenue gained by the ABC to a subsidy, as it were, of the educational system. Therefore, in terms of net cost to revenue, one suspects that one is looking either at the ABC forgoing revenue and receiving less and the schools not having to outlay as much in order to pay the ABC or at the ABC retaining the copyright, the schools having to pay the ABC and the schools having to come to the Government for increased funds in order to meet their financial commitments. I think it really is a bit of a merry-go-round within the Government's financial arrangements, which means that at some stage in fact we will be dealing with a purchase by one government-funded organisation from another government-funded organisation. Senator Gareth Evans —I'd back the schools ahead of the ABC in getting the dole. Senator PUPLICK —We had an earlier debate about relative merits of Ministers for Communications and other Ministers. I do not think I want to re-enter that particular debate. It is certainly true that the component issue is an important one. It is also true that people who actually produce educational material for broadcasting have expressed a degree of concern about the matter. Nevertheless, I believe that, even if the amendment moved by Senator Durack is not to succeed at this stage, it will have served an extremely valuable purpose in raising the issue and in providing the Senate Standing Committee on Education and the Arts with a matter for it to look at-I understand, hopefully by the end of August or some time-table of that sort-and also will allow the Education and the Arts Committee and, through it, the Senate to obtain some further information about the problems of audio-visual copyright as they appertain to educational institutions and educational broadcasting. To that extent I think that the Opposition will be well pleased to have got the matter further advanced. Nevertheless, I believe that the more useful way to have proceeded would have been to have supported the amendment and to have dealt with the arising problems at a later stage. Nevertheless, I think that we understand what is likely to happen to the amendment. I hope that, if it is referred to the Education and the Arts Committee, that Committee will be able to produce something which will be of guidance and assistance to the Senate in future debates. Senator DURACK(Western Australia)(5.03) —I would like to say two things. Firstly, I am happy for the matter to be referred, for report, to the Senate Standing Committee on Education and the Arts. Secondly, however, I hope that that Committee in considering this matter will not simply confine itself to this particular proposed amendment. I have conceded all along that it is a rather narrow solution to the problem and that obviously it would be desirable if a wider scheme could be agreed on, bearing in mind the concerns of so many educational institutions about the costs to be incurred by them with any form of statutory licensing arrangement, as they are still digesting the photocopying scheme which was imposed on them by this Parliament in 1980. I wonder whether the point made by Senator Evans about the problems the Australian Broadcasting Corporation and the Special Broadcasting Service would have might be due in part to the fact that this particular proposal is not confined simply to broadcasts of material strictly for educational purposes, which, of course, is the way in which the exemption in section 202 (2) of the Act is confined, and whether the objections made by the ABC would apply also to sound broadcasts or television broadcasts of any particular dramatic material which it may have created for ordinary commercial viewing. I would be interested to know whether the ABC would be more amenable if the particular exception were confined to material which was in fact created purely for educational purposes. Nevertheless, it is clear that there is a wider demand by educational institutions for material which might be broadcast on commercial stations and for which institutions or people other than the commercial stations or the ABC themselves have copyright. That then very clearly and directly raises the problem of payment. I agree that in the end the desirable solution is some form of statutory licence scheme. I think that, even within the ambit of a statutory licence scheme, it would perhaps be in the interests of educational bodies, in respect of educational material created solely for that purpose-at least in the case of the ABC and the SBS-that such material be made available without fee, or at least a very moderate fee indeed. That seems to be a completely different case from that applying under some statutory licence in regard to unlimited copying of quite general material which may be thought to be useful-no doubt, would be very useful-for educational purposes, but which in itself is not strictly an educational film. I would like the Minister for Resources and Energy (Senator Gareth Evans) to respond to that point before we complete this matter. I will not press the amendment in light of the undertakings that have been given by Senator Haines to move for reference of the matter to a committee, which I understand cannot be done at this stage but will be done later in the debate. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.08) —I am advised that the Australian Broadcasting Corporation would still be opposed to the proposal on the narrower basis but would be less strenuously opposed because of its significantly narrower scope in the way in which Senator Durack has expressed it, in other words, as broadcasts specifically put together for educational purposes. I do not think we ought to try to make a judgment on the merits of that argument here and now. I think that is a matter which ought to be considered along with others in the committee exercise. I respond to Senator Durack's first point by saying that, while I think that the terms of this amendment ought to be the primary subject of the reference to the Senate Standing Committee on Education and the Arts, I see no difficulty, from the Government's point of view, in expressing the reference as being `and matters incidental thereto' or `matters arising out of the issues raised by the amendment' or words to that effect. I think that the idea was not to place too great a burden on the Senate committee by having it wrestle with the whole of the complex problem but to have it focus specifically on the narrow issues raised by the amendment, with the capacity to do anything that it wanted to do in regard to matters associated with that. Amendment negatived. Proposed new clause 13b. Senator DURACK(Western Australia)(5.10) —I have a second amendment which will insert an additional clause in the Copyright Amendment Bill. I had suggested that it would be clause 13b on the assumption that the previous amendment would be passed. The amendment will improve the armoury against video piracy with which the Bill is primarily concerned. We have already debated and supported that matter. The Bill will increase penalties, facilitate proof and so on. One of the modern proposals to combat crime which has been given effect in some Federal legislation is to be able to strip the successful criminal of the profits of crime. The existing section 115 of the Copyright Act which enables damages or an account of profits to be obtained assumes that the person who has been guilty of the infringement has retained those profits or has the capacity to pay damages. As I said, that is a fairly old-fashioned approach to such matters. For argument's sake, such a person could simply be a straw company and thus not able to meet the payment of damages, or if there has been an account of profits, they may have been divested. Our proposal is that inserted into these remedies should be a provision to enable the pursuit of a person who has received the proceeds and may hold them on a constructive trust. This matter has been discussed recently by the High Court of Australia in a well-known case Hospital Products Ltd v. US Surgical Co-op. The suggestion was made, at least by Mr Justice Deane in that case, that this would be a suitable remedy. This certainly is an old remedy, long known to the law but not used to any extent in the commercial arena. It is the way we must proceed. In the Customs Act the notion has been introduced of stripping those who have been engaged in drug trafficking of property acquired as a result of their nefarious activities. We make the suggestion that that precedent could be used for the profits obtained by video pirates. I move: (2) Page 9, after new clause 13a, insert the following new clause: `13b. Section 115 of the Principal Act is amended by omitting from sub-section (2) ``and either damages or an account of profits'' and substituting ``and damages, an account of profits or a constructive trust, or any combination of them, as the court thinks fit''.'. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.13) — The Government does not believe that this amendment is necessary. We would be prepared to consider something along these lines later if it proved necessary. The civil sanctions in the legislation are already very wide. On the Government's view, they are adequate to cover even the serious problem of getting at the assets of large-scale pirates-which is clearly the preoccupation of Senator Durack. Let us look, for example, at section 115 (4) of the Copyright Act which states: Where, in an action under this section- (a) an infringement of copyright is established; and (b) the court is satisfied that it is proper to do so, having regard to- (i) the flagrancy of the infringement; (ii) any benefit shown to have accrued to the defendant by reason of the infringement; and (iii) all other relevant matters, the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances. That gives an open-ended capacity to apply penal damages in the circumstances there outlined. In addition, there is the capacity to award damages for conversion by virtue of section 116 of the existing Act. The account of profits is already in the legislation in section 115 (2). It would not appear to be necessary that that be specifically mentioned again in the way here provided for. Whether reference to a constructive trust adds anything substantial other than as a supplementary enforcement mechanism, I am not sure, but by and large it would appear that the where- withall is there to inflict the kind of genuine pain on infringers that it is everyone's desire should be the case on the civil side. There does not seem to be any argument on the criminal side that the capacity is there. The argument is only that civil sanctions need beefing up. The Government does not think that that is the case. The Copyright Law Review Committee is examining the importation provisions of the Act which enable civil actions for breach of copyright to be brought against a person importing material into Australia without licence of the copyright owner. That subject was mentioned by a couple of speakers in the second reading debate. That area may need a bit more attention in the future. If so, the Government unquestionably will give it. Without there being an opportunity for the kind of sensible consultation and consideration that is desirably involved in these legislative exercises we do not think that any compelling need has been shown for a clause of this kind. We suggest that accordingly it be rejected. Senator DURACK(Western Australia)(5.16) —The Opposition has put this amendment forward in a constructive way. I appreciate the difficulties of actually passing the amendment in the present atmosphere when the House of Representatives is not sitting; perhaps the Government does not have enough time in the circumstances to fully process it. However, I do not think that the answer given by Senator Gareth Evans is adequate. There may be better ways of achieving the result. Perhaps the amendment could be drafted in a more detailed way but the existing provisions of the Act, in the opinion of the Opposition, do not satisfactorily enable the recovery of ill-gotten, ill-gained profits of commercial piracy particularly in the instance which I gave where the profits had been passed on to somebody else who could well and properly be regarded as holding them on a constructive trust. It may be difficult to establish that under existing law. It needs some legislative assistance. I would be satisfied if the Minister for Resources and Energy (Senator Gareth Evans) indicated that the Government will look at this matter further and if, on reflection, it considers that the idea is worthwhile it will either give it to the Copyright Review Tribunal if required or it will bring forward amendments of its own. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.18) —I have no difficulty in giving that assurance. This matter has not been raised by the industry, but we will have another look at it and, particularly if the industry takes the view that it ought to be further pursued, we will be happy to do that. Amendment negatived. Senator DURACK(Western Australia)(5.19) —I would like to go back to the matter which I was about to raise at the beginning of the Committee stage debate. This is not an amendment which the Opposition has prepared or which we want to move but I want to raise the matter because it is of very great concern to the Australian Copyright Council. It concerns the problem that arises with the growing use of satellites and the extent to which the operation of satellites fits into the concept of broadcasting within the Copyright Act. It may well be that the use of satellites for broadcasting-we all know that this is growing-will defeat the provisions of the Copyright Act. Copyright owners will be unable to adequately recover their remuneration if the material in which they have copyright is broadcast in this way. I think the particular concern arises under clause 5 which inserts an additional sub-section to section 22 of the Act. The sub-section reads: Where a television broadcast or sound broadcast made by a person from a satellite, wherever located, consists of material transmitted from the earth to the satellite . . . the broadcast shall . . . be deemed to have been made by the person at the time when, and from the place from which, the material was so transmitted from the earth. The concern of the Copyright Council, as I understand it, is that if this broadcast is being transmitted from Australia to the satellite and back to Australia there is, as the Government has indicated, a problem as to whether or not copyright would apply because the broadcast must be from Australia and the satellite would not be part of Australia. On the other hand, as this section applies, it would mean that if there was a broadcast from outside Australia, that broadcast would be deemed to have been made from a country outside Australia. In the absence of any similar reciprocal legislation with other countries there may be a problem of the Australian copyright owner being able to obtain remuneration from that person in another country. I understand that to be the worry of the Copyright Council. Despite the fact that the Minister has said that he has widely consulted with the industry, I understand that the Copyright Council apparently had not had this legislation very long after it was introduced and before it was passed in the House of Representatives. That is why it has taken the matter up with the Opposition in the Senate. I presume it has taken the matter up with the Government as well. I would like to have some explanation from the Government as to how it intends this particular provision in clause 5 to operate. It is related to other definitions of broadcast contained in clause 3. I would like the Minister to deal with the particular concern of the Copyright Council. If the Government does believe there is some ambiguity in this matter and that the rights of Australians and copyright owners in Australia would be affected by this provision, the Opposition would seek to have an assurance from the Government that it will in fact try to reach some agreement with the Copyright Council so that its concerns can be met-if necessary even by a subsequent amendment to this Act. These particular provisions do not need to come into force immediately. The purpose of this Act is to deal with piracy. The clauses dealing with that matter are quite separate and could be proclaimed without this particular area being proclaimed. It can await further consideration by the Government if that is really necessary. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.25) — The question in issue here is a technical one as to whether what is a universally agreed intention has been successfully translated into legislative language. The general agreement is, as Senator Durack says, that the Copyright Act not apply to what are described as a point to point transmissions; that is to say, those not intended by the transmitting person to be received by the public, but just rather a direct point to point transmission. That is the intention. But in translating that some questions have arisen, in particular so far as satellite broadcasts are concerned, the particular concern being that unintentionally some forms of satellite transmission may be construed as point to point in character or in some other way excluded from the protections given by the Copyright Act, which is not something any of us would want to see. I will not stop now to try to wend my way through the arguments about the particular language that is involved. I think it is enough to say that one of the points of concern by the Copyright Council is acknowledged by the Attorney-General's Department to have some possible substance. The other point is thought, at this stage anyway, not to have substance and not to be likely to give rise to any problems at all with interpretation. But to the extent that there is anything which might give rise to these problems, it is clearly an area that ought to be looked at further before these provisions are proclaimed into effect. I am happy, on behalf of the Attorney-General (Mr Lionel Bowen) and the Government, to give that undertaking that these particular provisions will not be proclaimed into effect, unlike the piracy provisions which it is desired universally be proclaimed as soon as possible. The broadcasting provisions, including the matters presently in issue, will not be proclaimed into effect for some months. It was the intention anyway that regulations be drafted before that occurred which will enable us to look very carefully at the drafting points that are involved and to make any necessary corrections in the Budget session, the vehicle for that being most likely to be, I suppose, the Statute Law (Miscellaneous Amendments) Bill, if indeed we are not ready to go by then with a full scale audio-visual statutory licensing scheme. So one way and another the points will be addressed. I thank Senator Durack for raising them. That is the Government's response. Bill agreed to. Bill reported without amendment; report adopted. Bill on motion (by Senator Gareth Evans) read a third time. Senator HAINES(South Australia)(5.27) —by leave-I move: That the amendment relating to the use of certain broadcasts by educational institutions, moved by Senator Durack to the Copyright Amendment Bill 1986 on 11 June 1986, be referred to the Senate Standing Committee on Education and the Arts, and that the Committee report on the amendment and any other related issue arising out of its deliberations on or before 28 August 1986. I do not think I need to add anything more to the debate on this issue than was put forward both during the Committee stage and during the second reading debate, except to reiterate and to acknowledge the comments made by the Minister for Resources and Energy (Senator Gareth Evans) during the Committee stage that moving this amendment to the Committee does give some scope for wider terms of reference to be picked up by the Committee should it see fit. If necessary, any application for an extension of the time limit I would have thought would have been regarded sympathetically by the Committee if the other related issues to this amendment that come out of the Committee's deliberations prove to be interesting rabbits to chase down an assortment of holes. Question resolved in the affirmative. Senator TATE(Tasmania) —by leave-I present the tenth report of 1986 of the Senate Standing Committee for the Scrutiny of Bills concerning the Bounties Bill 1986, the Copyright Amendment Bill 1986, the Departure Tax Collection Amendment Bill 1986, the Hazardous Goods Bill 1986, the Income Tax Assessment Amendment (Research and Development) Bill 1986 and the Inspector-General of Intelligence and Security Bill 1986. I also lay on the table the Scrutiny of Bills Alert Digest No. 11 dated 11 June 1986. Ordered that the report be printed. Senator Dame MARGARET GUILFOYLE(Victoria) —by leave-I present the 253rd report of the Joint Committee of Public Accounts, entitled `Proposed Computer Acquisition by the Australian Audit Office'. Ordered that the report be printed. Senator Dame MARGARET GUILFOYLE(Victoria) —by leave-The 253rd report of the Joint Committee of Public Accounts is the first to be tabled by the Committee under the terms of its standing reference to investigate and report on proposed acquisitions of automatic data processing facilities by Commonwealth departments or authorities staffed under the Public Service Act 1922. The Committee received this proposal in January 1986 when Senator Walsh, the Minister Assisting the Prime Minister for Public Service Matters, advised the Committee that the Government had given in principle approval for the Australian Audit Office to acquire computing and communications facilities, conditional on the proposal being reviewed by the Public Accounts Committee. The Australian Audit Office's computer acquisition proposal involves three levels of data processing: first, a central computing facility and associated software. The Audit Office suggests that the central computer be an IBM compatible computer, equivalent to an IBM 4381. Secondly, a network to provide processing capacity, office automation and printing facilities for each State and to provide access to the central applications. Thirdly, a micro-computer facility to provide further office automation and other tools to Audit staff. This proposal was estimated to involve additional expenditure over the period 1986-87 to 1989-90 of $13m, including $6m of capital equipment. The expected benefits of the proposed computer system are in the nature of improved management information and decisions, better priority determination for audits and, most importantly, an improvement in the quality of audits. The Australian Audit Office has argued that the benefits to the public sector generally in terms of the greater administrative efficiency which would result from the Office's increased productive capacity are real but immeasurable. The Committee supported the basic motivation of the Audit Office's proposed computer acquisition. If the Audit Office is to be able to conduct rigorous analyses of the performance of other departments and agencies, it must have modern management and auditing tools at its disposal. The Committee was concerned that the Audit Office currently appears to be poorly equipped, at least in terms of the information technology and related expertise at its disposal, to undertake audits in some of the large and technologically sophisticated departments and agencies of the Commonwealth. The Committee has reached the following specific conclusions: There is some doubt whether the level of additional staff support which is to be provided for this project is sufficient to secure its successful implementation; the level of absorption of the staff resources proposed for this project must be considered a measure of the Auditor-General's and his organisation's commitment to cost containment in the successful implementation of this project; and the Australian Audit Office has not made an adequate effort to define and quantify the benefits resulting from the proposed ADP acquisition and the information systems it will support. The Committee also considered that it was doubtful whether co-ordinating departments and agencies, including the Department of Finance and the Public Service Board, had seriously challenged or attempted to verify the benefits asserted for the Australian Audit Office's proposed ADP acquisition. The Committee examined the Australian Audit Office's case for restricting tenders for its mainframe computer facility to computers compatible with IBM software and has concluded that the technical benefits to the Australian Audit Office in specifying that its mainframe must be IBM compatible are not persuasive; but there are non-technical advantages in acquiring an IBM compatible mainframe facility which would be of strategic benefit to the development of the Office's ADP capability. The main benefit appears to be the experience that its staff will acquire in the IBM compatible environment common to approximately two-thirds of its major auditees. In addition to these and other specific conclusions, the inquiry has raised some other concerns about computer acquisitions generally. These concerns related to the apparent difficulties of some departments in identifying and presenting a comprehensive and comprehensible statement of all costs associated with their proposals; the apparent reluctance of some departments to define and quantify the benefits which will result from the acquisition of ADP facilities; and the absence of satisfactory provisions in these proposals for the performance monitoring systems and output indicators necessary to demonstrate subsequently that these benefits are achieved. The Committee also recommended that the Department of Local Government and Administrative Services expedite its current review of the `Guidelines for ADP Acquisition' with a commitment to issue a revised set of guidelines by the end of 1986; and that all departments and other organisations with an interest submit their comments and recommendations on the contents and operation of the guidelines to the Department of Local Government and Administrative Services and to this Committee as soon as possible. In brief, the conclusions of this report reinforced the need for greater scrutiny of ADP acquisition proposals by both senior management of the acquiring department and by co-ordinating departments involved in the approval and acquisition process. The Committee's findings also emphasise the responsibilities of heads of organisations and of the Department of Finance to ensure that the performance and benefits of these ADP facilities are monitored and periodically reviewed. I commend the report to honourable senators. Senator COLSTON(Queensland) —I seek leave to make a statement as Chairman of the Senate Standing Committee on Education and the Arts on the Government's response to the fourth report on the examination of annual reports by the Committee. Leave granted. Senator COLSTON —On 8 May 1986, the Government's response to the fourth report of the Senate Standing Committee on Education and the Arts on its examination of annual reports was tabled in the Senate. The Committee's report dealt with the 1983-84 annual report of the Australian Capital Territory Schools Authority. It focused particularly on the assessment procedures used in secondary colleges in the Australian Capital Territory. In the report, the Committee made some suggestions about possible refinements to the methods of continuous assessment currently used in the Australian Capital Territory. The Committee also suggested that the Australian Capital Territory Schools Authority should review the possibility of using external examinations as part of its assessment procedures in future. The Government rejected the latter suggestion. In an overview of its lengthy technical response, the Government stated that it: . . . shares the Committee's concern for the maintenance of standards and the credibility of the system; however, its views on the most appropriate methods for achieving these ends differ from those of the Committee. On 8 May, I made some preliminary observations about the response. I indicated then that after I had studied the response in more depth, I might wish to add to those observations. The Committee has now had the opportunity to study the response and has decided that a reply is warranted. What I shall say today has been endorsed by the Committee. The Government's response is in seven sections. The first brief section deals with the Committee's comments about the Australian Capital Territory Schools Authority annual report for 1983-84. There are a further five sections on assessment procedures and an overview, which summarises these sections. There are some general observations which can be made about the Government's response. The response is a more thorough and sophisticated defence of the current system of assessment than was made in evidence given by the Schools Authority during the Committee's inquiry. It is a great pity that the Authority was not as forthcoming when the Committee was taking evidence. It almost appears that the Authority kept its powder dry during the inquiry so that it could fire a broadside at the final report. I am not sure whether I should describe the tone of the response as defensive or aggressive. In my preliminary observations, I said that the main thrust of the response appeared to be the denigration of external examinations, and further study has confirmed that observation. In this respect, the response was a defensive document, but it was written in an aggressive style. The response is also selective. It addresses some of the observations made in the Committee's report, but not others. The response does not mention the `learn and forget' attributes of continuous assessment. It does not address the Committee's concerns about the possible deleterious effects of continuous assessment on relationships between students and teachers and between students. It does acknowledge that a system of external examinations may identify poor teachers, but it concludes: If teaching standards should be monitored, then measures more valid and reliable than external examinations could be devised. This may be true, but this conclusion is remarkable. It seems to indicate that the Australian Capital Territory Schools Authority pays scant regard to teaching standards. In relation to the Committee's comments about the effects of continuous assessment on standards of learning, the Schools Authority chose to draw attention to the statistical methodology used in one of the tables the Committee produced for its report. Table 3.2 provided data which attempts to demonstrate whether students in the Australian Capital Territory undertake significant studies in the major subjects of English, mathematics and the physical sciences. The Committee's interest in this area was sparked by the Schools Authority's claim that almost 100 per cent of students in Australian Capital Territory secondary colleges study English; 98 per cent study mathematics and 81 per cent study science. The figures supplied by the Authority purported to show that the Australian Capital Territory system encourages more studies in these basic subjects than the higher school certificate systems in the two major States. The Authority compared its enrolment figures with figures available for students in Victoria and New South Wales who completed courses in English, mathematics and science in years 11 and 12. These figures were not comparable with the enrolment figures supplied by the Australian Capital Territory Schools Authority. This spurious use of statistics attracted the Committee's attention. Because directly comparable figures between systems are not available, the Committee used data from two different tables contained in the Australian Capital Territory's year 12 report. It was aware that the figures in the tables were not strictly comparable. Nevertheless, the Committee considers that, despite this technical shortcoming, the figures produced in its report give a more accurate impression of the effects of the current assessment procedures on learning than the figures quoted by the Schools Authority. As indicated earlier, the Authority defended the present continuous assessment system, mainly by attacking external examinations. In effect, it set up a straw man to knock down. For example, referring to the external examination, the response quoted the Campbell report on external examinations as follows: In its traditional form it is neither effective, nor reliable, nor predictive. The Committee's investigations of the current continuous assessment procedures indicate that they may be even less effective, reliable and predictive than the system they replaced. I should also comment that, in my preliminary observations about the response, I indicated that the Committee was not necessarily advocating a return to external examinations as they were in the early 1970s. Let me put it this way: If it became necessary to return to steam engines to power motor vehicles, I expect we could do better now than to use the Stanley Steamer. Modern technology would allow us to build a much more efficient model. Similarly, I expect that we would be able to improve on the old form of external examinations. Despite the many shortcomings of the response, the Committee has observed that it includes brief comment on reference examinations for tertiary selection procedures. It also indicates that some form of external oversight of assessment instruments used within the colleges might be possible. I suppose the Committee should be grateful that the Australian Capital Territory Schools Authority has given some attention, however slight, to the concerns raised in the report. The Committee affirms its recommendation that the Australian Capital Territory Schools Authority should give consideration to including an element of external assessment in its assessment procedures for secondary colleges. Given the myopic attitude adopted by the Australian Capital Territory Schools Authority, both in its evidence and in the Government's response, however, the Committee does not intend to pursue the matter further at this time. In making its report to the Senate, the Committee has fulfilled its primary responsibility. I cannot leave this issue without saying that the Committee is concerned about certain remarks made by the Chairman of the Australian Capital Territory Schools Authority, Dr Anderson. Here I do not refer to Dr Anderson's comment that Australian Capital Territory employers who do not understand the present assessment procedures are lazy. I am sure that the people of the Australian Capital Territory will be able to make their own judgments on that, and on the level of professional competence exhibited by people who make such allegations. The Committee takes issue with some other statements. Dr Anderson was quoted in the Canberra Times of 9 May 1986 as saying that the Committee's report was deficient because it had recommended external examinations but had not considered their shortcomings. If Dr Anderson has been quoted correctly, this comment shows that he had not read the report. More alarmingly, from the Australian Capital Territory community's viewpoint, it shows that he had not even read the response prepared by his own Schools Authority. Referring to external examinations, the response clearly states: Some problems were expressed by the Committee, but the Report did not provide any data for assessing the magnitude of these problems. Dr Anderson went on to say that it would have been difficult for the Senate Committee, given its limited resources, to come out with a balanced response. A balanced response would no doubt be one agreeing with Dr Anderson's views. The Chairman of the Australian Capital Territory Schools Authority also accused the Committee of not doing its homework. That accusation is flatly rejected. The Committee relied heavily on the evidence presented to it during its inquiry. It is highly likely, in view of the evidence presented to this Committee, that Dr Anderson did not do his homework. He obviously does not understand or accept the depth of feeling on this issue throughout the community; nor does he acknowledge that people who have opposing views to his may be right. Senator GRIMES(Tasmania-Manager of Government Business)(5.49) —I move: That the Order of the Senate of 14 April 1986, relating to the introduction of Bills into the Senate after 30 May 1986, not apply to the following Bills: The Inspector-General of Intelligence and Security Bill 1986; the Australian Security Intelligence Organisation Amendment Bill 1986; the Intelligence and Security (Consequential Amendments) Bill 1986; and the Fertilizers (Subsidy) Amendment Bill 1986. I understand that some discussions have been held over this matter, so I will not delay the Senate by debating the motion. Senator CHANEY(Western Australia-Leader of the Opposition)(5.50) —I do not wish to delay the Senate, as we wish to debate the extraordinary statement that is currently being make by the Prime Minister (Mr Hawke). I shall move an amendment to the motion moved by the Manager of Government Business to remove reference to all Bills other than the Fertilizers (Subsidy) Amendment Bill. I propose that that motion should be dealt with on the voices, according to where the Australian Democrats indicate their stance. I move: Leave out all words after `Bills' (second occurring), except `Fertilizers (Subsidy) Amendment Bill 1986.' Amendment negatived. Original question resolved in the affirmative. Senator BUTTON(Victoria-Leader of the Government in the Senate)(5.52) —I table the Address to the Nation on the Economic Situation and Supporting Statement delivered by the Prime Minister, Mr Hawke, and seek leave to incorporate them in Hansard. Leave granted. The address and statement read as follows- Good evening, As a nation we now have to do some tough and challenging things together, I want to tell you- why we must do them, what some of those things are, why we will overcome the challenge facing us as a nation. Let me first put the position as concisely as possible: Our exports of commodities such as wool, wheat, coal and iron ore have, for a long time, been a major source of out national income. While the prices we pay for our imports have continued to rise, the prices we get for these exports have for a considerable period been gradually, and now dramatically, declining. This most recent turnaround in the terms of trade has slashed three per cent off our capacity to maintain existing living standards. The plight of the farmers and other exporters is not something for them alone to bear-it must mean restraint for all of us. The reality is that the outside world is paying us less-our standards must adjust accordingly. As a consequence; we have, for the time being, to accept reduced standards of living and, permanently, increased standards of effort, we have, in the past three years, shown that we could, by working together, meet and overcome the economic crisis that confronted our country. A different crisis-the same people-we can do it again. I now go to more detail. What is Required We must obtain a lower wage outcome than anticipated when the Accord was renegotiated last September. The delay in the present case will, to some extent, produce this result. More is required. The 2.3 per cent which should flow from this case should be the only national wage increase in 1986. We believe now it will be necessary to argue for a further discount in the following case. And under the processes of the Accord we will be conveying that position to the ACTU. In these circumstances we believe that the Conciliation and Arbitration Commission should make a positive finding on the productivity/superannuation case. It should, however, under its control, prolong the implementation of the decision over a period of some two years. Other non-wage remuneration-executive salaries, directors' fees and professional incomes-must be correspondingly restrained. I have been given such assurances by the relevant national business and professional organisations. We will be monitoring such compliance and will expect the States to do the same. The community will rightly expect the business sector to keep price increases to a minimum. We will meet any requests from the Prices Surveillance Authority that improve the effectiveness of its operation. While we have reduced our inherited inflation rate we must get closer to those of our major trading partners. The Governments of Australia must themselves exercise more restraint. It's your money that we use for your collective purposes and welfare-and we will all have to set our sights a little lower. This will mean some tough decisions in the Budget. We have, in the Budget process so far, identified savings of more than $1 billion. It will mean some tough decisions at the Premiers' Conference later this week. These decisions will be taken. The tax cuts we have promised will be delivered as close as possible to September and certainly by 1st December 1986. In this context, I wish to report on two other decisions we have now taken. First, while society has a responsibility to the unemployed, this is a two-way process. The time has come, we believe, when this two-way responsibility will best be served by providing as far as possible the opportunity, particularly for the younger recipients of unemployment benefit, to undertake some community work in return for that benefit. I know from my experience with Priority One that this is the overwhelming view of our young people themselves. Accordingly, we will be seeking, in co-operation with the States, local governments, community organisations and trade unions, to create the framework for progressively achieving this objective. Second, under successive Governments, including my own, the federal public service has continued, inexorably, to grow in numbers. While a good public service is essential to the well-being of our society, an increasingly efficient public service does not mean an increasingly large public service. Among the steps we will take will be a streamlining and rationalisation of some existing functions and agencies. Because of entrenched practices that have grown up over generations these steps cannot produce overall dramatic, immediate results. But they begin to reverse the trend-and to produce a leaner, more efficient public service. The measures I mention, and indeed the indications of the broader approach in the detailed Government statement released tonight, are to be seen as part of our recognition that the problems with which we are dealing are more than immediate-they are long term and need long term solutions. We must strive to broaden and deepen our export and import-competing base. To this end, there are things the Government, industry and you can do. In the statement there are details of particular new decisions by government calculated to assist industry towards this objective. Australian management, with the co-operation of the workforce, must by increased investment and other initiatives pick up this challenge. And we, the Australian public, must support Australian industry. We will be launching a campaign urging all Australians to buy Australian products whenever they can. As Australians we take enormous delight in the achievements of international excellence by our fellow countrymen and women. Just think of Robert de Castella, Joan Sutherland, Ben Lexcen and John Bertrand. I want us to get the same sense of shared pride when an Australian manufacturing or services firm wins a contract against the best international competition-and let me assure you they can do it, they are doing it. It requires the same elements as have brought Deek, Joan, Ben and John to the top- confidence in yourselves, your product and those around you, readiness to work with great application and dedication, eagerness to use the best available advice and technology, preparedness to forgo present satisfaction for greater long term reward, total commitment. We have hundreds of potential de Castellas, Sutherlands, Lexcens and Bertrands out there in our manufacturing and service industries-applying the same principles we can get the same results. Finally, I want to tell you why we can, why we will together meet and overcome this challenge. In 1983, when I first spoke to you as Prime Minister about the economy, we were in the midst of our most serious economic crisis for 50 years. Three years later the picture has changed dramatically. We've had high economic growth, record employment growth-almost 700,000 jobs, profits are up, industrial disputes are down. The challenge now confronting us is no less daunting then the one we faced successfully together in 1983. We have the same elements for success-great resources, a Government prepared to make the hard decisions and a great people with guts and a preparedness by all sectors to pull together to make present sacrifices for future, substantial and sustainable rewards. I give you my pledge-my Government, your Government-will again make the decisions necessary to meet this challenge. I will not shirk the hard decisions that are necessary to ensure a bright future for us and for our children. I would rather risk electoral defeat than take the soft options now that would mean we mortgage that great future. My faith in you to take up this challenge is undiminished-it is unqualified. Together Australia-Australians together-will meet and overcome the challenge before us. Supporting Statement My Address to the Nation sets out the responses needed from all sections of the community to the new economic situation we are in. This statement provides further elaboration of the problem and further details of Government decisions. Our terms of trade-that is, the relationship between changes in the prices of our exports and our imports-has tended to decline at an average rate of up to 1 per cent per annum. For a long period, the economy has accommodated this without exceptional stress, assisted by transient factors such as the ``resources boom'' in the early 1980's, which allowed governments to avoid facing up to the need for structural change. However, as Chart A in Attachment 1 illustrates, recent developments in our terms of trade have been dramatically adverse. Since the December quarter 1984 they have fallen by almost 14 per cent, with more than two-thirds of that fall coming since the June quarter last year. And there are few signs of an early reversal. In the immediate sense, this is a development completely outside the control of the Government or the community generally. International prices for the things we export have fallen, in some cases catastrophically. Despite the large depreciation of the Australian dollar, which in more normal circumstances would have the effect of raising returns to our exporters, prices for many of our exports in domestic currency terms have risen little if at all. In some cases, such as alumina, domestic returns have fallen. Chart A and Table 1 in Attachment 1 provide further details. One consequence is that, even though the volume of imports grew by only 1 per cent over the last year, while export volumes grew by 14 per cent (see Chart F), the improvement in the current account deficit has been much slower in coming than first expected. In a nutshell, the economy has moved decidedly into a position where it is living beyond its means and is increasing its reliance on overseas savings to finance current living standards. Such a situation is not sustainable. In this situation, it becomes necessary to export a significantly greater volume of goods and services and to import less. That means that we as a country must consume relatively fewer goods and services ourselves. In other words, our standard of living must, for a time at least, be lower. I will come shortly to the things we can do to meet this unsatisfactory development over the medium term. In the meantime, the community must accept-in one way or another-lower real incomes. As Chart B shows, the loss over the past year has amounted to 3 per cent of GDP after a prolonged period in which only negligible losses were incurred. Adjustment is made more difficult because the process involves, through a lower exchange rate, an initial inflationary impetus which can threaten domestic price stability. There are three broad ways in which the Government and the community can respond to our new situation. The first option would be to do nothing, to allow matters to drift. In practical terms, this involves a recurring sequence of poor balance of payments results and exchange rate declines, leading to inflationary price movements which then feed into wages. This causes increasing damage to our international competitiveness, expectations, investment, growth and, in particular, jobs. It would also increasingly give rise to diminishing consensus, strains on income shares and further pressure on prices and costs. The second broad option would be, through a combination of contradictory fiscal and monetary policy, to slow economic activity abruptly so as to lower inflation and reduce imports through stalling economic growth-leading to higher unemployment. This would mark a return to the crude policies of contraction pursued before the Government came to office in 1983. The Government's preferred option is to address the matter directly through prices and incomes policy, accompanied by complementary restraint in the setting of fiscal policy. This would be clearly within the policy framework we have adopted since coming to office. In conjunction with measures to address the longer term structural issues, it would permit the necessary economic adjustment within Australia on an equitable basis-a basis that preserves output and jobs, and opens the way for further growth in the future. It is an option available only because of our prices and incomes policy based on the centralised wages system. Before proceeding to elaborate what the Government has in mind, it is necessary to recall briefly the trend of economic events in the middle part of 1985, and the degree of adjustment already achieved. Maintenance of an artificially high dollar as a crude anti-inflationary weapon markedly eroded competitiveness in the early 1980's. This placed added pressure on the balance of payments, characterised for years by persistently large deficits on goods and services, and growing external debt. (Chart C in Attachment 1 provides further details.) Under the floating exchange rate introduced by the Government, however, a major correction in the form of substantial depreciation took place in early 1985. In successive steps the dollar depreciated sharply, losing in all around 30 per cent of its value against the weighted index of trading partner currencies. This depreciation restored the competitiveness of our traded goods industries to levels of a decade or more earlier. (Chart E in Attachment 1 provides further details.) External adjustment, however, placed pressure on internal economic balance. Our inflation rate had declined to about 5 per cent by the December quarter of 1984, which was close to the average of our major trading partners. But depreciation unavoidably gave a new impetus to inflation, which, in view also of the strength of economic activity, required firmer macro-economic policy. Monetary policy was tightened in successive stages through 1985 and the Government achieved a substantial degree of expenditure restraint in framing the 1985-86 Budget. In addition, in September 1985 the Government obtained the agreement of the ACTU to support adjustments under the centralised wage fixation system sufficient to neutralise the expected secondary inflationary effects arising from the higher costs of imports in 1985. This agreement was a flexible response by the union movement to the emerging needs of economic policy. It is fully consistent with the responsible attitude shown by workers over the past three years. In recent years nominal wage increases have remained largely in line with those of our major trading partners. In 1985 Australian average earnings rose by around 6 per cent, against 5 1/2 for our eight major trading partners. This stands in sharp contrast with the very large increases in wages and costs recorded under the confrontationist policy regime of the previous Government when, in 1982, average earnings rose by almost 16 per cent. The Government considers that a wage fixing system capable of supporting further adjustment to the new economic situation must, in the interests of the community as a whole, provide for predictable and equitable wage movements and must be set on a secure footing acceptable to major industrial parties. It is the firm view of the Government, consistent with its earlier submissions to the current National Wage Case, that it would be appropriate for the Australian Conciliation and Arbitration Commission to have regard to such considerations in its deliberations in the current National Wage Case. For its part, bearing in mind the now long period since there has been any adjustment to nominal wages, the Government is not seeking to re-open the current National Wage Case. It reaffirms the need for discounting of the indexation increase by 2 percentage points, and its support for the principle of a 3 per cent productivity award to fund extensions and improvements to occupational superannuation over time. In particular, the Government considers there are substantial benefits to the community from extending the coverage of occupational superannuation, through including obligations in awards on employers to pay contributions on behalf of their employees into appropriate superannuation funds. As is explained below the timing of this historic step must now be temporarily deferred. Policy Settings On the basis of the information available to the Government last August/September-and indeed for much of the intervening period-the adjustments to fiscal monetary and incomes policy were assessed to be appropriate to the economic situation at that time. However, in the light of the sharp decline in our terms of trade now apparent, the widening of the inflation differential with trading partners and the further 12 per cent depreciation of the exchange rate since the September 1985 agreement with the ACTU, it has now become evident that some additional modification in policy is necessary. The adjustments must be borne by the community as a whole and must involve employees, business and governments. In order to achieve a necessarily constrained but eligible budgetary outcome in 1986/87, as discussed later in this document, the Government will have great difficulty in delivering the personal income tax cuts scheduled for 1 September 1986 on time. Nevertheless, the Government will endeavour to introduce the cuts on the scheduled date or as close to that date as is possible, and certainly by 1 December 1986. The Government now considers it would be more appropriate if the implementation of improvements to occupational superannuation are as limited as possible in 1986. This would apply to all occupational super- annuation schemes that are not in a position to proceed forthwith by agreement with employers in accordance with supervisory principles determined by the Australian Conciliation and Arbitration Commission. These principles, in particular, should ensure the orderly and gradual implementation of superannuation arrangements within awards phased in over a two year period. To assist the Commission, the Treasurer is announcing separately details of supervisory arrangements to apply to occupational superannuation schemes and the timing of the various operational standards. These details will be communicated to the Commission and to parties to the current National Wage Case, together with this Statement. But there is a need for a further response on the part of wage and salary earners who, collectively, account for much the largest portion of our-for the time being reduced-real national income. There is a brutal choice here-an equitable sharing of the income loss between job holders and the rest of the community, or the loss of jobs by some. The Government's central objective is to achieve an equitable sharing of the burden, in the interests of all who work and seek to work. While the Government understands that the position of the trade union movement cannot be determined until after the Arbitration Commission has made its decision in the current National Wage Case, it is the Government's view that the current situation-which amounts to a significant change in economic circumstances as referred to in the September 1985 agreement with the ACTU-demands a degree of restraint beyond that envisaged nine months ago. While the delay in the determination of the present case will help to some extent, more is required. We believe the 2.3 per cent which should flow from this case should be the only national wage increase in 1986. We believe it will now be necessary to argue for a further discount in the following case, the outcome of which should not apply before 1 January 1987. The Government will, of course, have further discussions with the ACTU on these matters within the framework of the Accord. A Shared Community Response To achieve successful economic adjustment, it is essential that the business community also make a significant contribution. First, there is a need for business to accept a commensurate measure of income discipline. It is the Government's strong view that the restraint exercised by wage and salary earners should also apply to other incomes. The Government notes that such an undertaking would be consistent with the previous support given by the business community at the National Economic Summit. On this score, initial reactions from the Business Council of Australia, the Confederation of Australian Industry and the Australian Council of Professions have been positive. I will be writing to the heads of major corporations to obtain their personal support for an equivalent degree of restraint on directors' fees and executive remuneration. We will be monitoring developments in this area and will expect States to do the same. I will be writing in similar terms to the Australian Council of Professions and other professional bodies in respect of fee setting. Secondly, particularly within the framework of the currency depreciation, business has the responsibility to exploit more fully its entrepreneurial abilities to seek out new export and import replacement opportunities, to take the risks necessary to put in place new investment, to undertake greater research and development and to improve workforce training. The levels of training and research and development by the private sector are low by international standards and there is a clear need to boost efforts in these areas. For its part the Government has given the lead through its commitment to training programs and the 150 per cent tax deduction for expenditure on research and development. Finally, business has a major role in setting prices which are a crucial factor in future competitiveness. The Government understands the complexity of price setting as applied to the vast range of products sold in Australia. For that reason it has not and does not favour blanket price controls. In many parts of the economy, competition itself provides an effective discipline on prices. Moreover, in reviewing past trends, it must be recognised that some prices needed to increase to contribute to the essential restoration of profit margins in the recovery period. But it is now time for business to demonstrate that it is looking keenly at its pricing performance. In 1984 the Government established the Prices Surveillance Authority with a responsibility to promote pricing restraint in business enterprises. The PSA activities are an integral part of the Accord which provides for overall income restraint to assist economic recovery. As well as undertaking surveillance and specific reviews of price changes, the PSA has issued a set of voluntary guidelines to assist business in observing the spirit of restraint. The PSA legislation and guidelines recognise the need for business to allow for maintaining investment and employment in making their pricing decisions. On the other hand the PSA seeks to prevent the exploitation by corporations of substantial market power and to discourage cost increases arising from actions that are inconsistent with the wage fixing principles. Now is the appropriate time for major business groups to give greater endorsement to the voluntary pricing code developed by the PSA. In my letters to business organisations and major corporations I will urge maximum support for these guidelines. In addition, in view of commonly expressed public concerns regarding price increases and the need for restraint to receive broad acceptance, the Government will undertake in the context of this total approach the following initiatives: To enhance the profile and operation of the PSA the Minister Assisting the Treasurer, Mr Chris Hurford, will take special and direct responsibility for prices surveillance matters; The Government will discuss with the PSA at an early date the establishment of a mechanism for advising complaints to the PSA to assist its work in identifying areas for further activity, including further categories of strategic goods possibly appropriate for PSA surveillance; The PSA will also be asked to examine ways of improving communication with the public on its pricing guidelines, its surveillance activities and the basis of its pricing recommendations; The responsibility for surveillance of steel industry prices will be transferred to the PSA from the Steel Industry Authority. Governments have the responsibility to take the lead in their own affairs in meeting the new challenges posed by the changed economic situation. In this respect there is a fundamental consideration that I should draw out. We all want to see investment growing. But if we are to reduce our resource to overseas savings by bringing down our net imports of goods and services, we must save more ourselves to fund investment. Government spending is directly relevant here because it is financed in part by drawing on the community's savings. One of the reasons why our external deficit has remained stubbornly wide is because insufficient progress has been made by our governments generally in reducing the collective public sector borrowing requirement. For its part, my Government has already imposed upon itself the tightest fiscal discipline of any Commonwealth Government in the form of the Trilogy of budgetary commitments. Within that framework, the Government is working to achieve a constrained budgetary outcome for 1986-87 fully consistent with the new economic situation, and an outcome consistent with a further easing of the demands of the public sector on resources and credit. At this stage, savings of more than $1 billion have been identified. At the same time, the Government will be attaching priority, as it has in past budgets, to sustaining its social welfare policies and to policies for restructuring the economy. It should also be noted that, however firmly outlays are held down, further moderation in wages will tend initially to increase the Budget deficit-especially, through lower PAYE collections. This is a direct result of reducing inflation, and has to be set against the advantages to the economy of such a reduction. The necessary degree of fiscal discipline needs to be accepted by all levels of Government-Commonwealth, State and local. The relatively high level of the net PSBR in the 1980's has had an important influence on the increase in the current account deficit. While the Commonwealth has successfully brought down its contribution to the PSBR, decidedly less progress has been made by the States. Chart G in Attachment 1 provides further details. State and local government spending now represents 51 per cent of total government sector spending and this sector's borrowing requirement is approaching that of the Commonwealth's. At the forthcoming Premiers' Conference it is the intention of the Commonwealth to seek a commitment from the State governments further to restrain their own spending and borrowing requirements. Let me at this point turn to two important initiatives the Government will pursue. As I said in my Address to the Nation, under successive governments, including my own, the federal public service has continued, inexorably, to grow in numbers. While a good public service is essential to the well-being of our society, an increasingly efficient public service does not mean an increasingly large public service. We will take steps to halt this expansion, to produce a leaner, more efficient service. There will be a streamlining and rationalisation of some existing functions and agencies. The States will be approached to consider means of rationalising overlapping activities at different levels of government. Because of entrenched practices that have grown up over generations, these steps cannot produce dramatic, immediate results. But they will begin what is necessary to reverse the trend. The other initiative, to which I personally attach particular importance, concerns the availability of community work to our young people. Despite the improvements we have made to educational opportunity, our developing traineeship scheme, and the large increase in employment growth now achieved, too many young people have so far been unable to find jobs. While society has a responsibility to the unemployed, this is a two-way process. We believe the time has come when this two-way responsibility will best be served by providing as far as possible the opportunity, particularly for the younger recipients of unemployment benefit, to undertake some community work in return for that benefit. I know from my experience with Priority One that this is the overwhelming view of our young people themselves. Accordingly, we will be seeking, to create the framework for progressively achieving this objective in co-operation with the States, local governments, community organisations, and trade unions. From the consideration we have been giving to this matter for some time, we well recognise the range of important issues that need to be taken into account in giving effect to this initiative. It is acknowledged that there are many practical difficulties involved, including probably limited community work places compared with the number of younger unemployed and the relatively short periods for which most younger unemployed tend to be without work. Therefore its detailed elaboration will very much involve appropriate consultations with the groups I have mentioned. However, the broad aim is to generate community-based work opportunities which can be offered, as they become available, to unemployed benefit recipients through the CES. Certainly no-one otherwise eligible will be prejudiced in his or her receipt of unemployment benefit if a community work opportunity is not readily available for that person. These work opportunities will be in areas not normally involving paid work and will be additional to existing paid employment activities. Since positions will be offered on a part-time basis, those participating will still have the capacity to look for paid employment in the open labour market. I believe that both the community and the unemployed who participate will benefit substantially from this initiative. The effort to adjust to our changed economic circumstances must engage the whole community. What is needed are changes in the intangible but fundamentally important area of community perceptions and attitudes. The commitment of government, unions, business and the professions needs to be supported by all of us as Australians. Looking further ahead, the scope for higher and sustained productivity growth, so basic to our longer term prospects as a nation, will be enhanced by greater emphasis on the development and encouragement of our human resources. Too much in the past we have tended to exploit our non-renewable wealth (particularly in the minerals and energy sectors). In concrete terms that involves a more positive attitude towards the work of each person day by day-an attitude that must be sustained if we are to continue to prosper. What we earn and enjoy in our living standards is directly linked to the thought and effort we put into the production of goods and services. Such a change in attitudes can be reflected in greater willingness to innovate, to do away with inefficient and outdated work practices and to show more creativity and enterprise at all levels of industry. The other side of the coin is a willingness to moderate our claims for increased income or entitlements, in order to limit the net claims by the household and public sectors together. In this way we will be able to generate a greater level of savings from domestic sources to provide funds for investing in our future. The development of more adequate and comprehensive superannuation is, of course, relevant to this need. Longer Term Adjustment The process of economic adjustment is being greatly facilitated by the depreciation of the Australian dollar. The price changes implied by the depreciation in the $A work to benefit the export and import-competing sectors relative to other sectors; this makes these sectors a more attractive investment prospect than was previously the case. Clearly, to the extent the output of these sectors increases, it will work to reduce the current account deficit. There is clear evidence that the depreciation is working to turnaround export and import volumes, despite an initial (but welcome) increase in the import of investment goods. As I have indicated, the effort to be undertaken in coming months to re-establish the capacity of the economy to continue to grow and provide job opportunities has also to be seen in a longer term context. These issues are already being addressed by the Government, including a Cabinet Sub-Committee concerned with longer term growth issues. The now accelerated decline in the terms of trade is a dramatic manifestation of a problem that has been developing for decades. Such long term problems require long term solutions. The economy needs to diversify, on a competitive basis, to supplement traditional export activities. This would allow a wider range of products to compete on export markets, making us less susceptible to adverse world price movements in a few commodities. Since coming to office the Government has implemented reform of the financial sector, undertaken extensive tax reform and initiated a review of business regulation, all designed to increase the adaptability of the Australian economy over the longer term. The Government inherited a debilitated and uncompetitive manufacturing sector. Over the last three years it has put in place a range of general programs to improve the international competitiveness of industry. A range of sectoral plans for particular industries has also been implemented to improve the international competitiveness of those industries on the basis of tripartite commitments by Government, unions and employers (see Attachment 2 for details). Our problems in this sector have been long in the making, and have been aggravated by the absurd combination of an over-valued exchange rate and excessive levels of protection. As in other areas of economic policy there are no simple solutions or quick fixes available. What is needed is careful and pragmatic assessment of the possibilities relevant to particular industries or particular characteristics of the export and import-replacement sectors. As a general point, it must be added that what will be achievable will also depend on how well we manage the process of shorter term adjustment discussed above. It is essential that the Australian economy be seen as an interconnected system. In particular, I should refer to the interconnection between our education system and our capacity to produce efficiently. Just as our industry needs to adapt to structural change, so does our education system, something that needs to be more widely accepted by all. As with industry, when my Government came to office it found a run-down education sector. The Government has taken major steps to rectify this-including by long-term guarantees of funding, by additional places in higher educational institutions, through our traineeship programs and by an emphasis on the quality of educational outputs through progressive application of relevant recommendations of the Karmel Committee on the quality of education. Education is but one illustration of the more general point: improvements in the efficiency in the traded goods and services sector should not be diminished or offset by inadequacies in other sectors of the economy, particularly areas on which the traded goods and services sector relies. Against that background, a range of additional measures is being introduced, and others are listed for further discussion and possible development, designed to improve further investment in the export-related industries, and to facilitate and encourage exporting and the purchase of quality Australian products. The cost involved in budgetary terms would, deliberately, be small. Individually, a number of the measures would be limited in overall impact, as they go to particular impediments to exporting in particular areas. But as a package, taken in addition to the policies already in place, they represent a significant further immediate response to our growing need to deal with our medium term structural problems. Further work on these problems will be proceeding within Government in a coordinated fashion and will be announced in coming months. As an important further element in our approach to resuscitate our most debilitated manufacturing industries, the Government has now finalised measures to assist the heavy engineering industry. In particular, the Government will be providing a limited subsidy on loans to facilitate investment in situations where managements and unions are acting jointly to improve the efficiency of their operations. The Government will seek discussions with business and labour whether this or similar concepts could usefully be extended to manufacturing industries operating in the export sector. `Buy Australian' Campaign In remedying the structural weakness in our economy we must not only promote exports of Australian goods. We as Australians must demonstrate our faith in our products wherever we have a choice between local and imported consumer goods. Often Australians do not take the trouble to check whether an item has been made in Australia or abroad. And where the distinction is made, Australians sometimes attach greater prestige to the imported variety, irrespective of whether it is of higher quality. If Australians were to choose the local product where it was competitive in price and quality they would make a contribution to the development of industry and assist in reducing our overseas deficit. To this end the Government has decided to launch a Buy Australian promotional campaign. The scheme will be a voluntary one whereby Australian manufacturers will be entitled to apply a green and gold logo to their products. The campaign is currently being developed and is expected to commence within the next few months. Government Purchasing Arrangements The Government will appoint an independent Committee to review Government purchasing arrangements and practices. It will be required to report to the Government within six months. The Committee will be charged with recommending action to overcome barriers affecting the ability of local industry to compete on an equitable basis with overseas suppliers as well as identifying means of utilising the forward purchasing requirements of Government agencies to identify industrial development opportunities. The review will include consideration of extending the concept of Industrial Supplies Offices, now operating in some States to the National level. Export Drive A National Export Drive will be conducted over the next two years. The Drive will aim to increase the practical commitment of both the shopfloor and management to exporting and achieve improvements in export investment, production and marketing. Export strategies will be developed for each industry with significant export potential. To develop these the Australian Trade Commission (Austrade) will work with business, unions and Government Departments to examine export capability, identify potential export products, survey overseas markets and develop export plans. Other Measures to Enhance our Export Capabilities Export Management Education Secondary and tertiary education can better equip Australian management for export by better addressing the need for export awareness and the development of international marketing skills. Austrade, the Department of Trade and the Trade Development Council will liaise with tertiary and secondary educational institutions, industry organisations and specialist management training bodies to develop possible initiatives in this area including short-term industry specific training courses, exerting an influence on curriculum content in secondary and tertiary institutions, and upgrading export management education provided by the Institute of Export. New Small Exporters Scheme A scheme is to be developed whereby new small exporters will be able to obtain from Austrade, free of charge for two years, expert assistance to develop export plans, survey export markets and make contact with potential foreign customers, as well as to participate in trade fairs, trade displays and trade missions. High Technology Exporters Scheme This new scheme will provide grants to help firms producing high technology products develop export markets. The grants will be available to firms with new high technology products with potential for export sales. Funds will be available for all aspects of new technology export projects, including market surveys, trade displays and trade missions, and will enable the development of aggressive market development and promotion campaigns. Insurance At present, State and Territory stamp duties on the specialised area of marine insurance on merchandise trade can cost up to 25 per cent of premiums. No other country appears to have comparable charges, and traders can largely avoid our charges by insuring overseas-to the extent of about $100 million a year going directly overseas to buy marine insurance cover. We will be approaching the State and Territory Governments with a view to examining the scope to remove the stamp duties payable on international classes of insurance. Transport and Handling Costs We must ensure that our exporters are not disadvantaged by inefficiencies and impediments to trade in these areas. The Government has moved to address this issue in part by establishing a Royal Commission into grain handling operations. This inquiry will establish where improvements can be made. More broadly, the Government has in hand a number of other studies on transport handling and related infrastructure costs. These reports cover liner shipping services, international air freight policy, shore based shipping costs and the shipping repair program. We will be examining these studies in an integrated way to determine whether any additional action can be taken to remove impediments to trade. Pricing of Agricultural Inputs The marketing of many of our agricultural commodities is conducted under a variety of State and Commonwealth arrangements. We need to ensure that these arrangements are not constraining the development of internationally competitive processing industries. The Department of Primary Industry will identify those agricultural pricing and marketing arrangements that are impeding the competitiveness of domestic processing, to assist the Government to decide what action may be appropriate, including approaches to the responsible States where the arrangements fall within their jurisdiction. Export Inspection Services The Government has had considerable success in streamlining export inspection services to minimise the cost to industry and to the taxpayer. To date these changes have reduced in real terms the cost of inspection and inspection-related activities by some $17 million a year. The process of rationalisation will continue in consultation with industry. Foreign Investment Under existing foreign investment review procedures, foreign investment proposals are assessed against national interest and other criteria. These include development of, or access to export markets, technology transfer arrangements, and the presence of export franchise limitations which can impede export potential. While foreign investors do not have to satisfy or meet all the criteria, foreign investors will be given expeditious consideration in instances where proposals, particularly for the manufacturing and services sectors, demonstrate positive trade benefits. As useful as these specific initiatives will be in addressing particular problems bearing on Australia's trading performance, it is the wages and budgetary policy adjustments which will have the dominant impact on, and do most to improve, the environment for investment and international competitiveness. Conclusion The measures which I have announced tonight-both short term and those which further our existing policies to promote longer term structural adjustment-will provide Australia with a firm basis on which to sustain the improvement in our competitiveness which has occurred over the past year and to begin again to pay our way in the world. There are no easy choices in this area. Either we take the hard decisions required-in which case we exercise some control over the kind of future which we have for ourselves and our children-or we just passively accept those adjustments forced on us by external conditions no matter what their consequences. The choice which I have put to you is the one which will maximise our job prospects-both short term and long term. The alternatives are unacceptable to this Government and I believe to the people of Australia. CANBERRA 11 JUNE 1986 Senator BUTTON —I move: That the Senate take note of the Paper. Senator CHANEY(Western Australia-Leader of the Opposition)(5.53) —The Senate has just had incorporated into its Hansard the statement to the people of Australia which is being made on the public media by the Prime Minister (Mr Hawke). One is not surprised that he is making it to the media and before a television camera and not in the House of Representatives. It is a statement that he would be too embarrassed to make in the presence of his colleagues. This statement, coming at a time when the Government has told us that the economy is in a crisis, is a bitter disappointment to the Opposition. It is a clear failure of leadership on the part of the Prime Minister in particular, and the Government in general. We are told that the Treasurer (Mr Keating) is at home sick in bed. In that sense, there is a very good parallel between Mr Keating and the economy. I can only say that there is no sign that Mr Hawke shows any ability as a doctor. There is no sign that what Mr Hawke has said today will do anything to bring the Australian economy back to recovery or to assist the people of Australia who face an ailing economy and declining living standards, as was made clear by the Minister for Finance (Senator Walsh) in Senate Question Time only yesterday. The statement concedes that the effect of three years of Labor rule has been a passage from what the Government describes as a crisis in 1983 to an equally bad crisis here in 1986. The Prime Minister says in the statement: . . . when I first spoke to you as Prime Minister about the economy, we were in the midst of our most serious economic crisis for 50 years. That is Mr Hawke's assessment of where we were three years ago, and he now says that three years later: The challenge now confronting us is no less daunting than the one we faced successfully together in 1983. The Hawke Government has managed to take us from our worst crisis in 50 years to our worst crisis in 50 years. It is a pathetic demonstration of the ineptitude of this Government and of its failure to face up to its responsibility that it has been prepared to put down this statement as something that warrants delivery to the whole of the Australian people. There is no action coming from this Government on the fundamental issue of the costs that afflict Australian industry. We have present in this chamber one Labor Senator, Senator Button, who is here because he is responsible, I suppose, for tabling these papers, and he is responsible for Australian industry. He has talked incessantly of the burdens that face Australian industry and there is in this statement no action on the costs that afflict Australian industry. There is no real action on wages. Nothing is being done by the Government to do anything about the wage burden which is part of the problem for Australian industry. There is no real action predicated in this statement-it is talk. The Prime Minister summons up enough courage to say that he might communicate a view to the Australian Council of Trade Unions that at some future wage hearing case there should be discounting. There is no action on the tax problems that afflict Australian industry and investment, no action has been taken to ease the tax burdens which have been imposed, and there is no action on the size and burdens of government. It is a simple fact that Mr Hawke has blown the opportunity to show leadership, and the big winners in this statement are the trade unions because the attempts that were hinted at by Ministers to do something about the position of the trade union movement have been totally given away in this statement. There is no action of substance at all laid down in it. We can only express the hope that this statement will not be too damaging to Australia. We can only hope that it will not do more damage to our already gloomy prospects-the gloomy prospects that have been described in this place, as they have been described elsewhere, by Mr Keating as leading us towards the status of a banana republic. There is no repair to our situation undertaken by the Government in what it describes in the statement. It is just more of what we have at present, when the Government itself has admitted that that is not good enough. There are laughable elements in this statement. For example, the Government has suddenly produced the idea that there should be some provision for work for the dole. It is very hard to find in the statement anything definite at all as to what is intended. That is a very preliminary statement. The Government is feeling its way towards a general objective. The Minister for Industry, Technology and Commerce (Senator Button) has been talking about this matter for some years, but I would draw his attention and that of the Senate to the fact that in 1982 the Fraser Government announced the very same initiative. We started that initiative in 1982 and early in 1983, and it was discontinued by the present Government. The fact is that we have lost three years in trying to do something about providing work for the dole, in giving dignity to the unemployed. This Government has held off acting for three years. It stopped the Fraser Government's initiative in that area, and now we are starting again. It is a sorry admission on the part of the Government that in 1983 it let its doctrinaire approach to these matters get the better of it. We are in a situation where the policies that have been pursued by this Government since the election in 1983 contained the seeds of the Government's destruction. We had under this Government the continued stimulus of the government sector through government spending, and we saw no effective attack on the cost structure in Australia. We had the accord locking us in as being steadily more uncompetitive on the international scene. The Government has now achieved the position where we are thoroughly uncompetitive with respect to our inflation rate, to our interest rates and to any other aspects of the economy. What this Government had going for it was the Fraser Government's wage pause, and it had the stimulus of the Fraser Budget of 1982-a Budget that was right in the world's recessionary conditions of 1982 but which should not have been followed by the stimulatory Budgets of 1983 and 1984. The Government should have done more on wages policy and certainly should have done a lot more to restrain government spending. There is nothing new in the criticism that we make of this Government. It is criticism that we have been making consistently over the last three years, and criticism that is now being borne out in the perilous situation in which the Government and Australian economy find themselves. This Government is becoming more and more clearly a totally dishonest Government. It adopts a veneer of economic responsibility, but even in the interview which Treasurer Keating gave to the Australian Financial Review a few weeks ago, the interview that blew the lid off the Government's economic policy and indicated that even the Government had to acknowledge the perilous circumstances of Australia, we find even in that honest interview that the Treasurer claimed: This is our fourth Budget. We have had to cut Government outlays. Yet the fact is that Government outlays have grown each year under this Government at twice the rate they grew under the Fraser Government. The Treasurer is claiming that this responsible Government, in its fourth Budget, is yet again cutting outlays. In fact, under this Government there has been an increase in real terms of nearly 5 per cent per annum in Government Budget outlays. It is a falsehood to suggest that this Government has been serious in the business of restraining outlays. There is no honest analysis of our problems, no honest attack on them in this statement. There is one honest line, the first line of the statement, which reads: As a nation we now have to do some tough and challenging things together. The Opposition would agree with that. It is a time when the Government should be doing some tough and challenging things. Instead, we have this wimpish statement, this statement of no action on the part of the Government, a statement which accepts the status quo, leaves the trade unions in their premier position and leaves the people of Australia floundering as they have been floundering in recent months under this pathetic Government. In this statement we find a constant blaming of a decline in the terms of trade. That has become the great excuse of this Government for what is wrong-that it has a decline in the terms of trade. Any examination of the statistics will show that there has been a massive decline in the terms of trade going back to 1950. Since 1950 successive Australian governments have had to put up with the fact that what Australia sells abroad is worth less and less compared with what we buy abroad. Other governments have been able to cope with that fact but this Government simply announces that because of that change in the terms of trade every Australian will have to put up with a reduced standard of living. We do not come to this debate as people who have been totally negative; we come to this debate having constantly urged the Government to do something about the basic problems that afflict our economy. Those basic problems are that our inflation rate is three times that of the average of our major trading partners, that our unemployment at the beginning of this recession stands at 8 per cent and youth unemployment at 22 per cent, that our external balance is in total disarray and that we have a current account deficit which is running at an annual rate of 6.2 per cent-a figure which Senator Walsh said we would not reach and about which he was so abusive when it occurred during the international recession in 1982. The reality is we are running an annual current account deficit at the rate of 6.2 per cent of gross domestic product in this financial year and that is the clearest sign of the peril that we face. Economic growth has relied heavily on government spending but private business investment has remained depressed during the recovery period. We in the Opposition have not been simply carping critics; we have told the Government very clearly what we believe it needs to do. When one looks at the recommendations that we have made to the Government and compare them with this weak, watery statement which says absolutely nothing, one sees why the Opposition is so bitterly disappointed with the failure of this Government. What we have said repeatedly-and we said it as recently as last Friday but it has been persistently put forward by the Leader of the Opposition (Mr Howard), by me and other Opposition spokesmen-is that for a start there must be an immediate assault on the Federal Government's spending through a mini-Budget in June. Yet this Government makes a weak statement saying that it will try to achieve some cuts in the next Budget. Is that not a wonderful advance on the position in which we found ourselves before this statement was made? Senator Walsh, who is sitting in the chamber, told us weeks ago, indeed months ago, that the Government would cut $1.4 billion off the Forward Estimates, yet in this statement we get absolutely no further down the track. The Opposition has been saying that the current productivity claim before the Conciliation and Arbitration Commission must be abandoned. In present circumstances it is absurd to be talking about a 3 per cent across the board productivity claim and we believe that the Australian public understands the need for those increases in remuneration to be delayed, postponed or, indeed, withdrawn. What is this Government doing? It is doing nothing about the current national wage case. It is making no move to disturb it. With respect to the next wage case the Government simply says now what it said in the last Budget-and remember it broke its word in the last Budget-that it will argue for discounting in the next national wage case. We have seen the Government make promises like that before; we know now as a result of this statement that the Government will communicate that wonderful bold initiative to the Australian Council of Trade Unions; we know that Mr Crean said last weekend that the trade union movement would not have a bar of further discounting. All we get in this statement is a reiteration of where we were yesterday. What do we find about the 3 per cent productivity rise at a time when industry in Australia is in crisis? This Government has been supporting a 3 per cent productivity rise. Do we find any relief in this statement? No, we do not. We find dressed up what was already in the Government's policy on the 3 per cent productivity rise-that it should be delivered over a period of two years. That is the precise position that was achieved under the accord mark 2 and this statement does not advance the position one iota. This statement is the most pathetic failure on the part of the Government to come to grips with the changes that need to be made. The Opposition has also claimed that the current national wage case should be postponed, at least until September 1986 and preferably for 12 months. We have seen the weak-kneed failure of the Government to respond to that; once again we have seen nothing but a weak reiteration of the status quo. We have called upon the Government to do something about the demand for investment. It must do something about the anti-investment elements in the Keating tax package. Of course in this statement no action is taken on the Keating anti-business tax package. We are stuck with all those elements which are discouraging business in Australia today. This statement offers no change. What we do find of course is a mild flirtation-and I emphasis a very mild one-with the idea that some interest subsidies will be provided to industry. My reading of the statement shows that the only industry that is actually being offered anything is the heavy engineering industry. In this statement there is still no definition of what assistance will be given to that industry. All we get is a reaffirmation of an announcement made by the Minister for Industry, Technology and Commerce, Senator Button, a month or more ago. There is nothing new in that assistance to industry. In any event, we all know that industry came here and talked to the Government last week and that it was not interested in obtaining interest subsidies. What the industries of Australia want are more competitive trading conditions-a reduction of costs and an overall reduction in interest rates. Yet none of those things were produced in this economic statement. It is a complete fizzer and it promises nothing to those who will have to make the investment decisions, except, of course, new terms of price surveillance. In the interests of apparent even-handedness the Government has made some rather weak suggestions that it will do something to increase price surveillance. This is clearly tokenism; it is clearly meant to dress up the package to entice the trade union movement into a more co-operative attitude. The reality is that there is nothing in this statement which reflects all the proud words of Senator Button. He has been talking for three years about how to restore industry in Australia. For three years he has been making the broadest generalisations about what needs to be done. Honourable senators will find all those broad generalisations repeated in this statement. We were told that the Government would do something about education. But there is as much about education in this statement as there was in Senator Button's Playboy interview. He has not advanced the issue any further and he is still saddled with a Minister for Education, Senator Ryan, who does not believe in any of the things that he says about industry and education. There is nothing here about reducing costs of industry, about the broad industry approach, which has been put down by Senator Button and which we have endeavoured to support in order to encourage him to get into the constructive field where he does something. Nothing is being done in this statement. We are not only seeing the failure of the Government's general economic policy in this document, we are also seeing the failure of the industry policies that have been put forward by Senator Button, because the framework that he sketched out as being necessary for the revival of Australia's manufacturing industry will not be delivered by this Government. There is absolutely no prospect of the sort of relief that is needed from the over-regulation, cost burdens and ridiculous work practices which afflict so many Australian manufacturers. None of that is dealt with in this weak statement which has been made by the Prime Minister. One can only feel sick at heart that the Prime Minister's vanity caused him to take this matter out of the hands of the Treasurer. One can only feel sick at heart that a few weeks ago, when Treasurer Keating started to admit the real problems of the Australian economy, he was cut off at the pass by a Prime Minister whose vanity was wounded and who insisted on taking over and who today has produced nothing. The Prime Minister has produced nothing which will do anything to restore Australia's economic fortunes. We have a situation in which the Opposition has made a positive suggestion over and over again that there should be a relaxation of foreign investment controls. That is a way in which we might do something to encourage greater capital investment in Australia, a way in which we might do something about the outflow of capital and the excessive borrowings that have been so much the concern of Opposition senators and Democrats senators in recent weeks. What do we find about foreign investment? Again, a weak as water statement which basically boils down to saying that the Government will speed up some of the processes. There is absolutely no hard edge to any of the reforms or changes which are put forward in this document. What we have is a statement full of examples of the very high level of intellect that has gone into its preparation. On page 14 of the supporting papers, the Government says: The process of economic adjustment is being greatly facilitated by the depreciation of the Australian dollar. One gets the feeling that when the Australian dollar is worth US1c, the Government will regard our economic problems as having been solved. I just wonder how in the world Senator Walsh and Senator Button, who are in the chamber at the moment and who have lectured us on the economics of improving Australia's situation, could be associated with this pathetic document, with this pathetic example of prime ministerial failure. I really wonder how in the world Ministers with the attitudes that they have expressed in this place can stay in the Ministry and be a party to what we have here. I suppose that Senator Walsh contributed the following words on page 2 of the statement: we have, for the time being, to accept reduced standards of living and permanently, increased standards of effort I will always think of Senator Walsh when I think of the reducing standards of living of the people of Australia because he is the Minister who sees the terms of trade as requiring us simply to accept that there will be reduced standards of living for the people of Australia. What the Opposition believes, what the Liberal and National parties believe, is that if we had wise government, if the Government followed the five points that have been put forward by the Opposition for the improvement of our economy, if we got the tax man off the back of those who want to make an effort in the community, if we restored incentive in this community, if we reduced the costs of production in this community, Australia might have a chance. But, no, what we have is a government which remains in the thrall of the Australian Council of Trade Unions. We have a government which is so greedy for taxes that it continues to impose new and ever heavier tax burdens on the Australian people and on Australian business. We have a government with a penchant for regulation which will be further increased in the prices surveillance arrangements set out in this document. We have a government which has shown that it has lost its nerve and its sense of direction. Today we have seen the beginning of the end of the Hawke Government. Senator CHIPP(Victoria-Leader of the Australian Democrats)(6.12) —Like the Opposition, the Australian Democrats take a similarly disappointing view of the statement made by the Prime Minister (Mr Hawke) although I must say that the Democrats find little agreement with the suggestions that the Opposition says should have been in the statement. However, we would be in total agreement with its condem- nation or criticism of the statement. At a time like this of national crisis-and that is what we are talking about-I believe that one should not be uncharitable or unnecessarily unkind; one would want to be bi-partisan. I am indebted to my friend Senator David Vigor who, by way of overall comment, said that this statement means that from this day forth, things will be as they were in the past. In other words, this statement unhappily contributes little, if anything, to rectify the ills of the country. In fact, my friend Senator Vigor put forward the imagery of the economy now being a runaway car rolling down a hill with the driver fiddling around with the cigarette lighter rather than doing the fundamental things to stop the car. So, overall, we are disappointed with the statement. However, at the beginning, we give credit to the Government for its courage in attempting to carry out further wage discounting. We believe that is crucial. We give the Government credit for signalling its intention to try to negotiate with the trade unions to do that. However, this statement does not regard that as an achievement. It just says that that is a statement of intention. One wonders why there has been all the hullabaloo of making a statement to the nation when all the Government has to report on is its intent to do something. One would have thought that in a matter of this kind the nation would be much more interested in achievements rather than intent. Credit must also be given for the decision to counsel the Australian Conciliation and Arbitration Commission to delay the implementation of the productivity increase over two years. This will be welcomed by employers, particularly those employers in the export oriented industries. We welcome the indication that the Government will carefully monitor prices and that a $1 billion saving will be made in the Budget. However, we must say that the means of achieving both of these aims is cleverly concealed in the statement by the Prime Minister and in the accompanying documents. We believe it would be tremendous if prices in the market-place and the professional area could be monitored. However, the means of achieving that are very vague. In the quick look that I have had, I cannot find anything to show how $1 billion can be shaved off the deficit. However, that is what the statement says. They remain vague statements of intent rather than spelling out the definitive mechanisms as to how to bring them about. We also commend the proposed Buy Australian campaign, which again is relatively vague. But we are very disappointed with the lack of definite instructions to government departments to buy Australian. A committee will be required to inquire into this proposal and report within six months. One wonders why a committee is needed to report within six months on how and why government departments should be directed to buy Australian goods. That decision could have been made tonight and could apply as from tomorrow. This particular part of the statement led my friend Senator Janine Haines to make the rather unkind remark that obviously the Government is looking for an inquiry-led recovery. One would have thought that that is one decision that could have been made tonight. For goodness sake, we do not need an inquiry over a period of six months to look into a Buy Australia campaign. However, we deeply regret that no action has been taken to discourage unproductive economic activity which is funded by foreign borrowings. It is here that we depart diametrically from Senator Chaney and the Liberal Party of Australia. I notice that Senator Chaney advocated in his speech the inflow of more overseas capital. This would lead to more foreign takeovers. We would say the opposite. From tonight, because of this statement, foreign capital will still be warmly welcomed into Australia by the Liberal Party and the Australian Labor Party. This will result in further takeovers of Australian industry by foreign firms. It will increase the already massive burden of repaying the interest and dividend payments. One of the chronic problems of the Australian economy surely is the increasing overseas debt. I pointed out today that, in the last 10 months, Australia has had an adverse balance of payments of $12 billion. Repayments of interest and dividends now represent half of that amount and exports are being asked more and more to fund the debt in interest repayments and dividends. The other chronic problem facing the economy is the burgeoning domestic deficit. Those two chronic problems have not been apprehended or even regarded in this statement. The Democrats have advocated low interest loans to industries with high export potential. Nothing has been done in this statement to assist these industries. Perhaps the Government has been caught up in its own deregulatory rhetoric, which it has copied off the Liberal Party, to interfere with the market-place. The Democrats say that those industries that have the capacity and capability to export are in desperate need of being assisted by the Government with low interest loans. There was no mention in the statement of the need to negotiate with trade unions in export oriented industries in respect of writing no-strike clauses into their agreements in return for a guarantee of investment in those industries. We understand that the responsible sections of the trade union movement would be happy to agree to no-strike conditions, provided that future investment is guaranteed. The Democrats would like to see a direction to superannuation funds to invest in these export capable Australian industries. This much heralded address to the nation will raise to a dangerous level expectations for Australia to lift its game both here and abroad. These expectations having been raised, the Democrats are quite apprehensive that, because of the vagueness of this statement, they will be dashed to the ground, with resulting damage to our economy and to our dollar. Senator SIDDONS(Victoria)(6.20) —The Democrats are disappointed in the statement by the Prime Minister (Mr Hawke) in which very few hard policy decisions have been taken. The Government is to be commended for its stated objective to hold down wages, but unfortunately, it has looked at only one side of the equation-wages. I ask what will the Government do positively? The real problem, as we see it, has not been addressed. To remedy our balance of payments we must develop both our service industries and our manufacturing industries. There is very little direction from the Government in this statement as to how this should be done. To develop our export industries we must divert resources into those areas. Concentrating on wages alone will not solve this problem. The first thing that we believe the Government should have done was to give positive direction on a Buy Australian campaign. It has said that it will move in this direction-it will set up a committee. The fact is that last year State and Federal governments spent $22 billion-$2,200m. If the Government had directed the Federal and State purchasing agencies to divert only 5 per cent of that $22 billion expenditure into buying Australian products instead of overseas products, it could have saved at least $1.2 billion worth of foreign exchange. Setting up a committee and allowing that committee to report in seven or eight months time is not tackling the fundamental problem and is not giving hard direction. The second thing that we believe the Government should have done in this policy statement is to set out ways in which it intends to encourage investment into productive areas. It is no good relying on the newly deregulated financial markets to channel investment productively. They will not do that, and that has been shown already. It is very much easier for financial institutions to make windfall profits from dealings on the stock exchange. We only have to look at this simple fact: Over the last six months no less than $7.7 billion-$770 million-has gone into takeover bids and defences involving Broken Hill Proprietary Co. Ltd. Not one cent of that enormous expenditure has gone into increasing the productive capacity of our largest company. All of that money-the $7.7 billion-has gone purely into stock market speculation and it is sloshing around in the stock markets of this country. We can contrast that amount of money with what was supposed to be spent by the Whitlam Government. Let us remember that back in 1973-74 the Khemlani affair was at its height. In those days Mr Whitlam wanted to spend $4 billion-$4,000m. What did he want to do? He wanted to spend it in a productive area. He wanted to develop the North West Shelf and build a pipeline across Australia. At least, that $4 billion would have gone into productive areas. That $4 billion when converted to current dollars is worth about $8 billion. We are talking about the amount of money that would have gone into productive investments back in 1974 being spent in 1986 in no productive capacity whatsoever but being spent purely in stock market speculation. It is a great pity that the Government has not taken the opportunity to announce hard policies. We have to do something about our balance of payments. We have a deficit representing 5 per cent of our gross domestic product. We have one of the highest deficits in the Western world. We can contrast Australia with Canada, which has a very similar economy. It is essentially a trading economy. It is essentially an economy that relies on commodity exports. Canada, in spite of the drop in commodity prices, has a trading surplus of one per cent of gross domestic product, compared with Australia's deficit of 5 per cent of gross domestic product. That is a critical situation that calls for hard policy directions by the Government. Unfortunately, these are notably missing from this document. One hopes that the directions that the Government has outlined and that its promises to move in certain directions will result very quickly in hard policies being formed by the Government. Unfortunately, on reading this document one sees that committees will be set up and that the Government will do something about trying to make the Public Service more efficient, but it has no hard policy on how this is to be done. The Government talks about the need to buy Australian goods, but it is relying mainly on the Australian people being encouraged to buy Australian. There is no hard option showing how the Government proposes that this be done. In summary, we believe that the ball is still in the Government's corner. It has to do something positive. It has to give firm directions so that Australia can take a new direction. In a word, the Government must produce goods that can be sold on international markets. If we cannot do that quickly, Australia will certainly perish. Senator HARRADINE(Tasmania)(6.27) —The address to the nation by the Prime Minister (Mr Hawke) makes an appeal to all people in Australia to face the challenge and together do something about it. The Prime Minister has an undoubted capacity to appeal to people to work together to meet and to face challenges. My concern about this document is that it will raise expectations which will not be fulfilled, because it fails to address a most crucial economic and social question facing this country today, and that is youth unemployment. The Government accepts that youth unemployment will remain high, but in order to obtain unemployment benefits youth will somehow be put to work. How will this be done? It is not stated in the document. Presumably, the type of work that is envisaged is not the type of work which will give dignity to the youth of our country. It will probably be a type of conscriptive work which will be simply boring for young people. That this document does not address the real problem-that is, there are more people in or seeking paid work than there are jobs available-is a disgrace. Appendix H, which deals with the employment statistics, states that the participation rate in the work force has risen, but what it does not say is that youth unemployment stands at the unacceptable rate of 22 per cent. What it does not say is that, whereas 20 years ago, the rate of youth employment in the Commonwealth Public Service was 22.6 per cent, now it is down to an all time low of less than 5 per cent. The Government has the answer to that problem within its power; it can reverse that situation. Its Ministers are in control of their departments. Why do they not start there? This is a document which really does not come to grips with another problem, that is the forcing of families on one income to go out and get another income because they cannot make ends meet. This is one of the problems facing the Government when it thinks about discounting wages because those persons on lower incomes will be forced to go out to try to get two incomes, thus closing off jobs for young people. I seek leave to continue my remarks later. Leave granted; debate adjourned. Sitting suspended from 6.30 to 8 p.m. Bills received from the House of Representatives. Motion (by Senator Button) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate, of all or several of the Bills being put in one motion at each stage and the consideration of all or several of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Button) read a first time. Second Readings Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.00) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY BILL 1986 In May last year the Minister representing the Prime Minister presented to the Senate the final reports of the Royal Commission on Australia's Security and Intelligence Agencies-RCASIA-and stated the Government's initial reaction to them. Since then, considerable effort has been devoted to implementing most of the reforms proposed by Mr Justice Hope and to developing the three Bills the Acting Prime Minister and Attorney-General introduced in the House of Representatives. Of necessity, much of the work of the intelligence and security community is conducted confidentially and goes unnoticed. This community rarely receives public commendation, but its errors, and speculation about its activities, have a way of generating lurid headlines. Much of this speculation cannot be officially debated. It is an irony that the very confidentiality of the agencies' work seems to inspire demands to expose and publicise their activities and that the trust placed in them to conduct their work in confidence creates, in some, a want of trust. Speculation and ill-advised criticism can negatively affect public perceptions of the agencies. In recognition of this, and in an attempt to counter it, we have seen over the last decade two major reviews of the intelligence and security community pointing to the need for clearer public statements of purpose, more visibility, greater oversight and accountability-all aimed at demystifying and increasing public confidence in the agencies. In response to the Royal Commission on Intelligence and Security in the mid-1970s, the Fraser Government took some necessary steps towards making the intelligence and security community more accountable and meshing it with the wider processes of government. For example, the charter of the Australian Security Intelligence Organization-ASIO-was clarified in legislation and a Security Appeals Tribunal was created; the existence of the Australian Secret Intelligence Service-ASIS-and the Defence Signals Directorate-DSD-was formally acknowledged; and bipartisan arrangements were put in place to keep the Opposition informed of significant intelligence and security issues. A change in Government has not altered the character of these arrangements, although we strongly believe that further steps are needed to hold the agencies more accountable and to increase public trust in their activities. This Government has already announced some reforms, in response to the second of the royal commissions by Mr Justice Hope. These, together with the draft legislation now before the Senate, will more clearly delineate the functions of the agencies and make them more accountable. I shall not repeat here all the measures announced in the tabling statement by the Minister representing the Prime Minister on 22 May 1985. Since then action has been taken to implement a number of the other recommendations. For example: we have revised ASIS's Directive to exclude preparation of training for covert action in the form of special operations or special political action. This will prevent the type of training that led to the Sheraton Hotel incident. on 27 November 1985 my colleague, the Minister for Defence, announced details of action taken in response to the Royal Commission's recommendation to improve consultation between the Joint Intelligence Organization-JIO-and its major customers. the Office of Security and Intelligence Co-ordination has been established within the Department of the Prime Minister and Cabinet to provide an independent secretariat to the Security Committee of Cabinet and the Secretaries Committee on Intelligence and Security. we have also established a National Intelligence Committee, chaired by the Office of National Assessments-ONA-and including senior representatives of policy departments and JIO. The Committee advises ONA on the development of its work program, monitors ONA's product and advises it on intelligence needs and priorities. Additionally, the Government recognises that, under existing arrangements, responsibility for protective security is dispersed among a number of departments and agencies, and none has responsibility for co-ordinating policy in this area. In response to specific RCASIA recommendations the Prime Minister has therefore decided to allocate this responsibility to the Department of the Special Minister of State, which will convene a new high level committee to co-ordinate protective security policy and physical and administrative security measures. There are other measures which, for security reasons, we will not be announcing. A significant number of the key recommendations of the Royal Commission require legislation. The three Bills before the Senate today will allow considerably increased scrutiny of the intelligence and security agencies. But the Government has also ensured that their effectiveness is in no way diminished. Indeed, we are satisfied that, as a result of these measures, public confidence in the agencies will be increased and as a consequence they will become more effective. The measures set out in the Bills are based on the Government's firm belief that the agencies should be accountable. Following close examination, they have been accepted by the agencies. Before moving to the details of the proposals, I would like again to express the Government's appreciation to Mr Justice Hope. The Government has now considered, and in large part acted upon, all of the recommendations in the Royal Commission's reports. As we have looked more closely at his reports, which deal with some particularly sensitive issues, our appreciation of his contribution has grown. On behalf of the Attorney-General I shall address shortly a Bill incorporating a number of major reforms relating to ASIO. These include more careful definition and limitation of ASIO's functions and activities, and the establishment of a Joint Parliamentary Committee on ASIO. I now turn to the proposal for an independent watchdog over all the agencies, which stems from the Australian Labor Party submission to the Royal Commission, and which was further developed by Mr Justice Hope. The Government's aims in establishing an Office of Inspector-General of Intelligence and Security include assisting Ministers with the oversight and review of: firstly, the compliance with the law by Australian intelligence and security agencies; secondly, the propriety of their particular activities; thirdly, the effectiveness and appropriateness of certain procedures; and finally, certain other aspects of the activities and procedures of some of those agencies, for example concerning employee grievances. Our aims also include assisting Ministers in ensuring that the activities of the agencies are consistent with human rights and allowing for review of certain directions given to ASIO by the Attorney-General. While the emphasis is on the Inspector-General's assistance to Ministers, elements of the Inspector- General's work will be available for parliamentary and public scrutiny. Provision is made for an annual report to be furnished to the Prime Minister, with a copy to the Leader of the Opposition. Edited as necessary on grounds of security, defence, international relations and privacy, the report will be laid before each House of the Parliament. A person of exceptional skills and particular qualities will be required for the Office. Being a new position, having a pivotal role in Australia's security and intelligence machinery, its occupant will deal with highly sensitive issues and respond to a range of ministerial and public requests. In recognition of the importance of this appointment, the Bill requires that before a recommendation on appointment is made to the Governor-General, the Prime Minister shall consult with the Leader of the Opposition. As the Prime Minister mentioned in May last year, the Office will be within his portfolio. Initially, it will comprise a small staff, but the Government will closely monitor its workload to ensure that staffing remains adequate. Turning to the functions of the Inspector-General, honourable senators will note that the Bill distinguishes between the agencies, both in terms of the Inspector-General's functions and the mechanisms by which inquiries can be instigated. The distinctions are consistent with the functions ascribed to the Inspector-General in the various RCASIA reports, and reflect the different purposes of ASIO as our domestic security intelligence organisation, ASIS and DSD as collectors of external intelligence, and JIO and ONA as assessors of intelligence. These differing purposes are reflected in the mechanisms for initiating inquiries. For example, the Inspector-General may initiate his own inquiries into the legality or propriety of activities of ASIO, ASIS or DSD, but only the responsible Minister may initiate such an inquiry with respect to the activities of JIO or ONA. As Mr Justice Hope points out, questions of legality and propriety rarely arise with respect to ONA and JIO, which do not collect intelligence themselves but simply assess intelligence collected by others. Similarly the Inspector-General may initiate an inquiry into ASIO's procedures for ensuring legality and propriety, but not into those of the other agencies whose operations rarely have a direct impact on individual Australians. Despite these differences, the Bill confers a number of important functions on the Inspector-General with respect to all of the agencies. Specifically, the Inspector-General will inquire into: The propriety of the agencies' activities; their compliance with Australian law, Ministerial directions or guidelines; human rights; and their procedures relating to grievances of employees. In recognition of his overall responsibility for intelligence and security matters the Prime Minister, in addition to the responsible Ministers, will be able to request the Inspector-General to inquire into any one or more of the agencies. There are two additional functions that relate to ASIO alone, in recognition of its potential impact on individual Australians. Honourable senators will recollect that, in his report on the Combe-Ivanov affair in December 1983, Mr Justice Hope pointed out that circumstances can arise where ASIO produces a report adverse to the interests of an individual Australian and there is no existing right of review unless he or she is a public servant. His Honour recommended a statutory procedure whereby an independent body decides whether and, if so, how such a person should be provided with an opportunity to be heard. On tabling that report, the Prime Minister welcomed the recommendation; this Bill includes provision for the Inspector-General to make such inquiries. The second additional function relates to directions given to ASIO by the Attorney-General concerning the collection or communication of intelligence about a particular individual. In the ASIO Amendment Bill which I shall address shortly, a number of changes are proposed to section 8 of the ASIO Act to clarify the nature and extent of ministerial control of the Organization. One element of those changes will provide that the Attorney cannot override the opinion of the Director-General on the question of whether the collection or communication of intelligence concerning a particular individual is justified on security grounds, except by a direction in writing which sets out the Attorney's reasons. The Inspector-General Bill gives the Inspector-General the function of inquiring into such directions, specifically into whether collection is justified by reason of its relevance to security or whether communication would be for a purpose relevant to security. The Government agrees with Mr Justice Hope that the combination of these measures gives recognition to the paramountcy of ministerial control, whilst providing a safeguard to inhibit and bring to light any misuse of that control. I mention that in respect of each of the agencies the Inspector-General is given the function of inquiring into matters relating to human rights. Under the provisions of the Bill, the Inspector-General is to perform the functions that would otherwise be the responsibility of the Human Rights Commission in relation to possible human rights breaches by the agencies-including privacy, and discrimination on grounds of race, sex and so on. This was not directly addressed by the Royal Commission, but the Government believes it to be an appropriate corollary to inquiry into the propriety of the agencies' activities. We intend to propose similar provisions in respect of the Human Rights and Equal Opportunity Commission once it is established. By referring possible violations of human rights by the agencies to the Inspector-General, the Bill seeks to avoid duplication and meet the need for such matters to be examined by an independent authority with unrestricted access to classified information. With the approval of the responsible Minister the Inspector-General will be able to inquire into a matter that occurred outside Australia or before the commencement of the Act. In deciding that ministerial approval will be required to do so, the Government has taken account of the prospective workload of the Inspector-General and the fact that Mr Justice Hope has conducted two major royal commissions over recent years, both of which invited public submissions. It is a fundamental tradition of our system of government that Ministers themselves are, and should remain, accountable to Parliament. Bearing in mind also that the Office of the Inspector-General is being created to assist Ministers in their oversight of the agencies, the Inspector-General is not to inquire into actions taken by Ministers except in relation to the specific ministerial directions to ASIO I have already addressed. The Government also wishes to avoid establishing the Inspector-General as a further avenue of appeal on matters that can already be taken to the Security Appeals Tribunal. The Inspector-General shall therefore not inquire into a matter that can be reviewed by that Tribunal. The clauses of the Bill dealing with complaints are in the main comparable with those in other administrative review legislation. Amongst other things, the Bill enables a complaint to be made orally or in writing; gives the Inspector-General customary discretions not to proceed with inquiries into complaints under specified circumstances; and provides special arrangements for persons in custody. Similarly, the clauses dealing with inquiries also draw on the models provided by other administrative review legislation, subject to the constraints of national security. I do not intend to elaborate on these provisions. An important stipulation, given the sensitive national interests to be covered in this jurisdiction, is that the Inspector-General shall inform the responsible Minister and agency head before commencing an inquiry. During the course of inquiries the Inspector-General may also discuss relevant matters with the responsible Minister or the Prime Minister. We believe the maintenance of trust and good communications between all parties involved will be essential to the effective operation of the Office of Inspector-General. The consultative process built into the conduct of inquiries carries over into the preparation of reports. Draft reports are to be provided to the head of an agency and provision is made for relevant comments by the agency head to be included in the final report. Final reports are to be provided to the responsible Minister, to the agency head, and, if commissioned by the Prime Minister, to the Prime Minister. The Inspector-General is required to include in a report the reasons for conclusions and recommendations. In addition, where a report concludes that a person has been adversely affected by action taken by an agency, the Inspector-General may recommend compensation. Whenever an inquiry has been undertaken in response to a complaint, the complainant is to be given a written response by the Inspector-General, subject to agreement with the responsible Minister that the terms of the response will not jeopardise security, defence or international relations. The Inspector-General will be able to monitor action-or inaction-arising from reports. Where an agency head proposes taking action as a result of a report, the Inspector-General is to be given details. If the Inspector-General believes this action to be inadequate, he or she may discuss the matter with the responsible Minister and provide a report to the Prime Minister. Finally, the Bill contains a number of standard miscellaneous and administrative provisions. The Bill provides for the Inspector-General's terms and conditions of appointment, remuneration, leave, resignation, termination of appointment, disclosure of interests and staff. It goes without saying that heavy emphasis is also placed on the need for the Inspector-General and staff to appropriately safeguard and maintain the secrets entrusted to them. The creation of an Inspector-General of Intelligence and Security is a key recommendation of Mr Justice Hope and constitutes a vital component of the Government's reform package developed for the intelligence and security area. The Government embraced the concept and, having now translated it into draft legislation, is more than ever convinced that the creation of the Office is a highly beneficial addition to the machinery of Government. We believe that the legislation establishes an Office which will, to paraphrase the Royal Commissioner, provide an independent oversight of the agencies' activities, give the public a greater assurance that those activities are proper ones, and clear the agencies, or bring them to task-as the case may be-if allegations of improper conduct are made against them. I commend the Bill to the Senate and present the revised explanatory memorandum. AUSTRALIAN SECURITY INTELLIGENCE ORGANIZATION AMENDMENT BILL 1986 This Bill, and the related Inspector-General and Intelligence and Security (Consequential Amendments) Bills, stem from the Government's consideration of the report of the Royal Commission on Australia's Security and Intelligence Agencies. It is designed to clarify and define the role and powers of the Australian Security Intelligence Organization and to strengthen the arrangements for its control and accountability. In particular, the Bill provides, very much along the lines recommended by Mr Justice Hope, for: significant changes to clarify ASIO's jurisdiction, and an additional function in regard to the obtaining of foreign intelligence in Australia; a strengthening of ministerial control over ASIO; and changes in the provisions concerning the Security Appeals Tribunal. As foreshadowed by the Prime Minister in his statement on 22 May 1985 on the tabling of the report of the Royal Commission, provision is also made for the establishment of a parliamentary joint committee to oversight certain of ASIO's activities. The opportunity has been taken to deal with a number of other matters that have come to light as a result of experience in the operation of the ASIO Act. I turn now to the details of the Bill. ASIO Jurisdiction and Powers The Government has given close consideration, in the light of the report of the Royal Commission, to the statutory definition of ASIO's role and powers. It is of great importance, to ASIO itself as well as to those charged with oversighting its activities and to the community at large, that ASIO's statutory charter should be defined appropriately and as clearly as possible. The Bill provides for a number of changes to the ASIO Act which are designed to clarify ASIO's jurisdiction, and to define more closely and precisely matters of legitimate security interest. Clause 3 proposes the following significant changes to the key definition of `security' in s. 4 of the Act: the term `subversion' is deleted from the definition of `security' and relevant activities are more tightly defined and comprehended within the concept of `politically motivated violence'. Without detracting from ASIO's effectiveness, the definition will concentrate ASIO's attention more clearly on those violent activities, going beyond the scope of lawful advocacy and dissent, directed at undermining Australia's system of Government. The new definition of politically motivated violence also covers terrorism and related activities, of the kind covered by the present definition of `terrorism', and makes it clear that threats of or acts causing unlawful harm to achieve a political end, are included. the term `active measures of foreign intervention' is deleted from the definition of `security' and replaced by a more tightly constructed definition of `act of foreign interference' along the lines suggested by Mr Justice Hope. The new definition spells out more clearly the kind of activity which, because it is of foreign origin, is a legitimate matter of security concern. Clause 9 provides for the inclusion in the legislation of a new provision-section 17A-which declares that the ASIO Act shall not limit the right of person to engage in lawful advocacy, protest or dissent, and that the exercise of that right shall not, by itself, be regarded as prejudicial to security. The functions of ASIO are to be construed accordingly. The Government regards this as an important statement of principle to guide ASIO in the often difficult exercise of its discretions under the Act. Another change flows from the acceptance by the Government of Mr Justice Hope's recommendation that ASIO should be empowered to collect foreign intelligence in Australia: that is, intelligence relating to the capabilities, intentions or activities of foreign powers. Mr Justice Hope noted that there was no provision in Australian legislation providing for the collection of such intelligence, which it is in the national interest for Australia to acquire, and recommended that the legal authority to do so be given to ASIO. Such intelligence will only be obtained, pursuant to the new function which clause 8 will add to the statement of ASIO's functions in s. 17, under the written warrant of the Attorney-General, following a request by the Minister for Foreign Affairs or the Minister for Defence. Specific provision is made to prevent the use of the relevant powers for the purpose of collecting information concerning an Australian citizen, permanent resident or company. Strict controls will be placed on the communication of foreign intelligence under the new powers and provision is made for conditions minimising the obtaining and retention of information not publicly available concerning Australian citizens or permanent residents. Clause 9 also proposes amendment of s. 17 to put beyond doubt ASIO's power to provide advice on matters of protective security, that is, on administrative or physical measures for the protection of people, information or property. Mention should also be made in this context to the proposed provision, to which I shall refer again, empowering the Minister to lay down guidelines to be observed by ASIO. There will be clear scope for such guidelines to be given in regard to the exercise of its functions under aspects of the definition of `security' which necessarily are expressed in fairly broad terms. In regard to one aspect of security, that of `politically motivated violence', the Bill goes further and requires such guidelines to be laid down by the Minister. Ministerial Control Ministerial control is a fundamental element of the arrangements for the control and accountability of ASIO. The Organization is accountable through the Director-General of Security to the Attorney-General and through him to the Parliament. Mr Justice Hope noted in his report the importance, for the oversight of ASIO's activities in the public interest and ASIO's accountability through the Parliament to the public, of the effectiveness of its ministerial control. He also noted the need for an appropriate balance to be struck between the ability of a government to exercise control over ASIO and the highly important principle that ASIO should be politically impartial. The Bill contains in clause 5 provisions, along the lines proposed by Mr Justice Hope, which are designed to strengthen ministerial control over ASIO and to achieve this necessary balance. An amendment to s. 8 makes it clear that in the performance of his functions under the Act, the Director-General is subject to the directions of the Minister. Any such direction shall, if requested, be put in writing. The amendment ensures that the Minister's authority over the Organization is ultimately paramount. As stated by Mr Justice Hope, the Minister, as the elected office holder accountable for ASIO and its activities to Parliament and the public, is placed in a position where he or she is able in the end to determine, and assume responsibility for, activities pertaining to the security of Australia. There are two necessary qualifications to this provision. The first is that the Minister is not empowered to override the opinion of the Director-General concerning the nature of the advice which should be given by the Organisation. The second is that the Minister is not empowered to override the opinion of the Director-General as to whether the collection or communication of intelligence concerning a particular individual is or is not justified, except by a written direction to the Director-General setting out his reasons. This extends the area of ministerial control but, in order to guard against the possibility of mis-use for political purposes, there are appropriate safeguards. The Minister is required in such a case to give a copy of his direction, including his reasons, to both the Prime Minister and the Inspector-General. The Inspector-General is to be required by his legislation to address the appropriateness of any such direction in his report. As already mentioned, the Act will also be amended to insert a new provision authorising the Minister to give written guidelines to the Director-General in respect of the performance by ASIO of any of its statutory functions and powers. The Minister will thus be able to play a positive role in regulating ASIO's conduct. In particular, in areas of the legislation involving broad discretion and judgment the Minister will be able to set appropriate standards. As the Prime Minister observed when tabling Mr Justice Hope's report, the areas to be covered by guidelines will include intelligence collection, targeting, review of file holdings and the extent to which ASIO should, from time to time, be involved in investigating activities relating to the hindering of Defence Force functions. The Bill provides that the Minister is to table guidelines in Parliament, subject to the deletion of sensitive material. Where appropriate, guidelines not tabled in Parliament will be referred to the Parliamentary Joint Committee. A copy of the guidelines, without deletion, will be made available to the Leader of the Opposition. Security Appeals Tribunal The Security Appeals Tribunal plays an important role in the oversight of ASIO, by reviewing security assessments made by ASIO about individuals. Clauses 18 to 31 of the Bill propose a number of changes to the provisions concerning the review of adverse or qualified ASIO security assessments. Principally, they support and strengthen the present position that ASIO security assessments are advisory only, and should form only part of the information on which a security related decision is based. The amendments also include- more precise definitions of adverse and qualified security assessments a discretion in the Tribunal to make an order against the Commonwealth for costs reasonably incurred by an applicant who is successful, or substantially successful, in his application for review. I mention that the Intelligence and Security (Consequential Amendments) Bill also provides for an extension of the Tribunal's jurisdiction in respect of security assessments for deportation purposes. Parliamentary Joint Committee on ASIO The Government believes that existing oversight and accountability measures for ASIO will be improved by involving the Parliament to a greater extent in those measures. The Bill therefore proposes the establishment of a Parliamentary Joint Committee on ASIO. Because the Committee will be required to deal on a regular basis with various kinds of sensitive information, and because of the special considerations which must apply whenever information of that sort is made available, the Government believes it appropriate for the Committee to be set up by legislation and for that legislation to specifically delineate the powers, functions and obligations of the Committee. The Committee will comprise seven members, and will have a majority of government members and a majority of members from the House of Representatives. To achieve this result, the Bill provides that Committee members will be appointed as follows: For the House of Representatives, four members will be appointed by resolution of the House on the nomination of the Prime Minister. For the Senate, three members will be appointed by resolution of the Senate on the nomination of the Leader of the Government in the Senate. Before nominations are made, the Prime Minister and the Leader of the Government in the Senate are required to consult with the leader of each recognised political party represented in the House or the Senate; and they are required in making nominations to have regard to the desirability of ensuring that the composition of the Committee takes into account the representation of recognised political parties in the Parliament. Ministers are not eligible for appointment. Broadly speaking, the functions of the Committee are to review aspects of the activities of ASIO that are referred to it either by the Minister or by either House of the Parliament, and to report to Parliament thereon. The Bill also enables the Committee to ask the Minister to refer a particular matter to it. It is not the function of the Committee to operate as a grievance mechanism. That is a function of the Inspector-General, whose Annual Report will, however, be available to the Parliament. Nor will it be a function of the Committee to review operationally sensitive matters, or certain other matters set out in the Bill. The Bill makes provision for the protection of intelligence and security information. The Bill also makes provision empowering the Committee to obtain information and documents, including from ASIO. The Government believes that the provisions provide a proper balance between greater parliamentary involvement in the oversight of ASIO and the limits, of the Executive's ability, having in mind its responsibilities in regard to security matters, to make sensitive information more widely accessible. The Government believes that the creation of the proposed Parliamentary Joint Committee, independent as it is of the Executive Government, will, in conjunction with the other measures outlined, provide an effective and appropriate scheme of public accountability for ASIO. Other Matters The Bill also makes provision for- Extension of the offence, in s. 92, of making public the identity of an ASIO officer, to cover, subject to appropriate exceptions, disclosure of the identity of former officers. Changes to the provisions governing employment of staff by ASIO. Terms and conditions of employment will be put on a statutory basis, instead of the present unsatisfactory contractual arrangements. A statutory requirement for the tabling in Parliament of an annual report. The Government has adopted the practice of making a report to Parliament each year on ASIO's activities. That practice will now be given a legislative base. The Director-General to be given the power to delegate his powers relating to staff or financial management, placing him in a similar position to Secretaries of Commonwealth Departments, and assisting in the management of the Organization. Financial Impact Statement The creation of a Parliamentary Joint Committee on ASIO will have a minor impact on expenditure in providing a small staff, and secure premises, for the Committee. Giving the Security Appeals Tribunal a discretion to make an order against the Commonwealth for costs reasonably incurred by a successful applicant will have a minimal impact on expenditure. This may, however, be offset by savings which will result from requiring an applicant to indicate what matters are in dispute. This is likely to result in shorter hearings. Conclusion This Bill results from a thorough review by the Government of ASIO's role and powers. The Government has been greatly assisted in this review by the relevant findings and recommendations of Mr Justice Hope in the Report of the Royal Commission on Australia's Intelligence and Security Agencies. The Government believes that its legislative proposals, by clarifying and stating ASIO's functions in appropriate terms, and by providing for more effective control and oversight, will facilitate the effective discharge by ASIO of its functions and will provide significant assurance to the community as to the way in which ASIO carries out its functions. The new review mechanisms do not in any way detract from the responsibilities of the Director-General of Security, and the Minister, for ensuring that ASIO is well managed and in its activities preserves a proper balance between the security of the nation and the individual rights of its citizens. I commend the Bill to the Senate. I present the explanatory memorandum to the Bill. INTELLIGENCE AND SECURITY (CONSEQUENTIAL AMENDMENTS) BILL 1986 This Bill provides for an amendment to the Crimes Act 1914, and for the amendment of other Acts as a consequence of the provisions of the ASIO Amendment Bill and the Inspector-General of Intelligence and Security Bill. Principal features of the Bill are as follows: The Audit Act 1901 is to be amended to provide for the addition of further details to the certificate supplied by the Minister each year to the Auditor-General dealing with the Organization's exempt account. That certificate will be required to state that the exempt accounts have been subject to internal inspection and examination, and whether any irregularity has been disclosed, and resolved or rectified. Amendment of the offence of sedition in the Crimes Act 1914 to remove anachronistic provisions and to provide that the writing etc. of seditious words is not an offence unless done with an intent to create violence or public disturbance or disorder. This implements a recommendation by Mr Justice Hope. The exemption of documents in the possession of, or received from, the Inspector General of Intelligence and Security from the provisions of the Freedom of Information Act 1982. Amendment of the Human Rights Commission Act 1981 to provide that a complaint about an act or practice of a security or intelligence agency is to be investigated by the Inspector-General instead of the Commission Amendment of the Migration Act 1958 to provide that the Minister can only order the deportation of a person from Australia on security grounds when he has been furnished with an adverse security assessment from ASIO. Where, in accordance with the provisions of the Act, the person has been informed of the adverse assessment, the security assessment will be reviewable by the Security Appeals Tribunal. Where the Tribunal does not confirm the adverse assessment the Minister will not be able to order deportation. This amendment will enable the security grounds on which a deportation decision is based to be fully reviewed by an independent Tribunal. Finally there are a number of amendments to the Telecommunications (Interception) Act 1979, corresponding to changes made to the special powers provisions of the ASIO Act, to take account of the new ASIO function of collecting foreign intelligence in Australia. Financial Impact Statement The addition to the jurisdiction of the Security Appeals Tribunal may lead to a slight increase in the cost of that Tribunal. I commend the Bill to the Senate. I present the explanatory memorandum to the Bill. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.03) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to extend the operation of the nitrogenous fertiliser subsidy and the phosphate fertiliser subsidy schemes at current rates for a further three years until 30 June 1989. The two fertiliser assistance schemes are due to expire on 30 June this year following several extensions. The current proposal for a further extension follows a review initiated by the Government in January this year of both the production and consumption of fertilisers. In deciding to continue the consumption subsidies the Government is fulfilling the commitment given in the economic and rural policy statement, released on 15 April, that the overall cost of fertilisers to farmers would not rise as a result of the Government's decisions on the review of the fertiliser industry and the review of anti-dumping legislation. The fertiliser subsidies are the largest single item of Commonwealth Government assistance to rural industries. In 1985-86 they are expected to cost the Commonwealth some $55m. The continuation of this assistance to the rural sector is a central element in the recent package of measures announced in the economic and rural policy statement. As recognised in the statement, this sector is currently experiencing particularly difficult conditions. While these are primarily due to international factors which are beyond the Government's control, the Government has undertaken to take steps domestically to relieve the economic pressures on the sector and to assist rural industries to improve their competitiveness in world markets. The extension of the fertiliser subsidies is an important step in that process. While some have questioned the effectiveness of the subsidies they remain an important measure in providing support for the purchase of a fundamental input into rural production. In saying that, let me emphasise the importance of the rural sector as an employer and contributor to our domestic economy and, perhaps more importantly, as a generator of export income. Rural industries continue to contribute about 40 per cent of our export income and, particularly in current circumstances, we need to ensure the continued health or our rural industries. As previously stated, the subsidy rates to apply will be the same as those currently applying. That is, a subsidy of $20 per tonne of contained nitrogen and $12 per tonne of single strength superphosphate or $138 per tonne on the available phosphorous content of other phosphatic fertilisers. This measure is expected to cost the Government about $55m in each of the three years. In relation to the production of fertilisers, the Government still has under consideration the question of short-term assistance to local manufacturers. I commend the Bill to honourable senators. Debate (on motion by Senator Reid) adjourned. Debate resumed from 29 April, on motion by Senator Grimes: That the Bills be now read a second time. Senator JESSOP(South Australia)(8.05) —We are debating cognately five Bills-the Australian Wine and Brandy Corporation Amendment Bill, the Grape Research Levy Bill, the Grape Research Levy Collection Bill, the Wine Grapes Levy Amendment Bill and the Wine Research Repeal Bill. At the outset I want to say that the Opposition does not oppose these Bills. However, we have some reservations about the Australian Wine and Brandy Corporation, as have some elements of the industry. There has been a suggestion by the industry that a sunset clause should be inserted with respect to the Wine and Brandy Corporation to indicate that it should persist for five years and that there should be an examination of that body's operations at the end of that period. However, the Opposition has decided that, although there may be some merit in that, in government-hopefully that will be after the next election-the Opposition will monitor the operations of the Corporation and review its purpose and the need for its existence after those observations. A cross-section of views has been expressed by the three industries affected by the legislation. I refer, of course, to the grape growers, who are the basis of the industry, the wine makers and brandy distillers, and those who import brandies and wines. The Australian-based industries are united, however, in the view that the Government's actions have put these industries at risk and have caused a serious contraction both in grape growing and wine and brandy making in Australia. The industries are also concerned about the potential for a larger and more debilitating tax on wine and brandy in the emergency facing Australia today due to this Government's mismanagement of the economy. I intend to spend a few minutes during the debate examining the history of tax on wines in Australia. It is interesting that a Labor Prime Minister, Mr Scullin, first taxed Australian wines in 1930. Subsequently, the tax was scrapped in 1931 as being self-defeating. When the Whitlam Labor Government came to power in 1972, whisky, for example, carried a sales tax 60 per cent greater that that on Australian brandy, but by the time that Government vacated the Treasury bench in 1975, sales tax on whisky was only 5 per cent greater than that on Australian brandy. As a result, brandy production fell from 4,484 kilolitres of alcohol to 1,784 kilolitres of alcohol in 1974-75-a reduction of some 2,700 kilolitres of alcohol, or a drop in the Australian brandy production of 60 per cent. As a result of the action taken by the Whitlam Labor Administration, brandy dropped from a 35.1 per cent share of the whisky-brandy market to 26.9 per cent-in other words, a drop of 8.2 per cent. In the lead up to the 1983 election, the Prime Minister, Mr Hawke, promised that there would be no tax on wines. However, in his first Budget he introduced a tax on fortified wines which he was forced to abandon in the 1984 Budget. Then the Government saw fit to introduce in its place a sales tax on table wine. As a result of this interference in the market-place, there was a marked increase in the importation of wine, especially from the European Economic Community, whose primary industry policies are causing havoc among the primary industries in Australia and, consequently, are having a disastrous effect on our economy. In addition, the share of the brandy-whisky market now enjoyed by imported whisky is 74.6 per cent and the Australian brandy share has fallen to a mere 17.2 per cent. In other words, in the decade in which Labor governments have had an influence on the wine and brandy industry, they have succeeded in stimulating the importation of wines, mainly from the EEC, and they have halved the share of Australian brandy in the brandy-whisky market from 35.1 per cent to 17.2 per cent. Senator Button —If that is a serious statement, you seem to have been using too much of the product yourself, Senator. Senator JESSOP —I do not drink brandy at all, as a matter of fact, except for medicinal purposes. In other words, in the decade that the Minister for Industry, Technology and Commerce (Senator Button), who is at the table, has been in control of the destiny of Australia, damage has been done to the wine and brandy industry and this, of course, has had wide ramifications for the grape growing sector of the industry which, after all, is the basis for the whole wine and brandy industry in this country. Of course, the Government is aware of the difficulties facing the grape and wine industries because it accepted the first recommendation of the McKay Report of the Inquiry into the Grape and Wine Industries and provided $1.6m adjustment assistance to the wine grape industry. As a result of that, it introduced a vine pull scheme. Such is the state of the grape growing industry that 600 grape growers from throughout South Australia-an area which produces a significant proportion of the wines of Australia; about 67 per cent at the moment, I think-have applied for funds to pull out some 4,000 hectares of vines, which is the equivalent of 15 per cent of the vines in South Australia and 6 per cent of the total Australian wine grape plantings. I commend the Government for extending the closing date of the scheme and allocating a further $1.7m provided that the States provide $1 for every $2 provided by the Commonwealth. I recall that, when this scheme was introduced last year, I made representations to the Government and raised the matter in the Senate. I said that it seemed quite inappropriate for the Government to force grape growers to make a decision, I think by the end of June this year, as to whether to pull out their vines. The Government wisely took note of that because, as the Minister will know, once one pulls out the vines under the scheme, one is not allowed to replant for five years. So I think it was fair and generous of the Government to recognise the plight of the grape growers. They really needed to experience the results of the last vintage before they could properly make a judgment on that. So I believe the Government has acted wisely in that respect. I am glad to note that it took notice of my representations and no doubt those of other members and senators from South Australia, Victoria and the rest of Australia who have an interest in this subject. Let us examine the effect on the wine industry of the sales tax introduced by the Hawke Government. Despite this tax of 10 per cent, the retail price of wine has risen by only 6.5 per cent, which should be compared with the total increase in the consumer price index of 12.3 per cent since the tax was introduced. The retail price has declined in real terms by 5.2 per cent since the sales tax was introduced. The sales tax has been absorbed not by the consumer but by the production and distribution chain, with the weakest links in that chain suffering the most. Of course, the weakest links are the growers and the small wine makers in a market that remains almost static. In the 12 months to March 1986 sales of Australian wine have risen in volume by on 2.7 per cent over the sales in the 12 months to March 1985. Without the phenomenal sales growth in the cooler wines-I have not tried them but I am told that they are popular amongst younger people in Australia; it is a wine-based drink-there would have been an even more marked decline in the sales of wine in Australia. The industry has appealed to the Government to follow the other recommendation of the McKay Committee, namely: There should be no increase in the sales tax until sufficient time has gone by to measure the impact of the present tax . . . The Committee suggests that this should persist for at least two or three years in order to make a proper assessment of the effects of that tax. What is abundantly clear is that the existing sales tax has been paid not by the consumer but by the grape grower and the wine maker. The consumers of alcoholic beverages have, of course, paid a great amount of money to the Government. Of course, this is a matter of history. In 1984-85 the money collected by the Commonwealth in excise on domestically produced beverages was $1,299.6m. A further $200m was collected as Customs duty on imported alcoholic beverages. It is estimated that a further $200m was collected that year as sales tax on wines and spirits. On top of that, liquor franchise fees collected by the States and the Territory in the same year amounted to $321.4m. Therefore, the tax revenue of Commonwealth, State and Territory governments raised directly from the production and sale of alcoholic beverages for the year 1984-85 was in excess of $2 billion. Overall, this represents 33 1/3 per cent of the total consumption costs of such beverages, which amounted that year to about $6,196m. Since the repeal in 1973 by the Whitlam Government of section 31a of the Income Tax Assessment Act, Australian wine makers have paid heavy tax penalties if they have kept wines in stock for more than a year. This, of course, is an essential step, particularly in the maturation of red wine, to obtain the maximum quality-the type of quality needed to obtain export orders. I was interested today to read in the Adelaide Advertiser an article from Jill Rivers in London. The heading of the article is: `Australian wines woo the British critics and merchants'. I think one or two sentences of that article bear reading into Hansard. The article begins: Australian wines are not only the UK's flavour of the month, but of the decade, judging by the response at the prestigious London Wine Trade Fair last month . . . Manned by a group of 19 producers and their representatives from Down Under, plus good-looking girls in smart suits, it was run under the auspices of the Australian Wine and Brandy Corporation. So this article is giving the Wine and Brandy Corporation a plug. Senator Macklin —They wouldn't have suits on in Queensland. Senator JESSOP —No, they have meter maids there. Perhaps they ought to be sent to help the Wine and Brandy Corporation at the next London Wine Trade Fair. The article continues: In the same area were the independent stands belonging to Rosemount, Lindemans, Consolidated Wineries (Berri)-- from South Australia, of course- and agents for various other wineries such as a trio from Margaret River-- in Western Australia- of Moss Wood, Cape Mentelle and Redgate. Represented on the Wine and Brandy Corporation stand were McWilliams, Orlando, Wyndham Estate, Stanley, Krondorf, Mildara, Tisdall, Brown Brothers, Taltarni, Waterwheel, Campbells, Delatite, Hardys, Houghtons, De Bortoli, Wynns, Penfolds, . . . Hill Smith Estate and other agents. . . . Merchants and critics are now tipping Australian wine to represent better value than the French. A major drawcard is the consistent quality. That is what we are talking about. The consistent quality of Australian wines is well known. The article continued: A major drawcard is the consistent quality. According to the editor of leading wine journal Decanter, Tony Lord (himself an Australian)-- Senator Macklin —Ah, privilege. Senator JESSOP —It is a good name. It goes on: `European bottles are frequently iffy'. He is forced into always ordering two bottles for tastings to compensate for those that are bad. I was also interested in the reference that was made in the article to the South Australian Film Corporation. The article stated: There was much interest in a new video made by the South Australian Film Corporation, but not many questions due to the lack of knowledge of Australian wines. But they are winning over all who try them, according to Australian Trade Commissioner in London, Jonathon Scott. It is a matter, he says, of their being less pretentious than the French with that consistent quality. There has been a 100 p.c. increase in the UK market in the past year which proves that they have moved from curio to a permanent place on British shelves. I would like honourable senators to note that point. The article continued: However, credit must be given to Rosemount and Brown Brothers who have been trailblazers in the UK market. Both companies have been conducting independent operations here for the past few years and gained a wide following. Both those companies have acted independently of the Australian Wine and Brandy Corporation anyway. I guess that those firms, having taken that initiative, are the elements within the industry which suggest that perhaps the Wine and Brandy Corporation ought to be confining its operations to the smaller and medium wine producers in Australia. I thought that that was an interesting newspaper article. I thought that it indicated quite clearly that Australian wines are on the up and up as far as the export area is concerned and that the Government ought to give proper regard to that. Certainly, the Government ought to resist any temptation to impose further imposts on the industry in Australia because, after all, at the moment we have to encourage exports. I believe that the export of Australian wines could contribute significantly to our balance of payments in the future. I referred to liquor franchise fees collected by the States and Territories in the year 1984-85 being worth $321.4m. The tax revenue of Commonwealth, State and Territory governments raised directly from the production and sale of alcoholic beverages for the year 1984-85 was in excess of $2 billion. Since the repeal in 1973 by the Whitlam Government of section 31a of the Income Tax Assessment Act, Australian wine makers have paid heavy tax penalties. I want to emphasise this because of the point I made in respect of the recent London wine show. Australian winemakers are forced to hold their red wines, in particular, on their shelves for a couple of years in order to maintain the quality which of course is needed to obtain export orders. Senator Button —There is a lot of spirit in your speech, Senator. Senator JESSOP —I am glad that Senator Button recognises that. The draft White Paper entitled `Reform of the Australian Tax System' published in June 1985 proposed an inflation adjustment for trading stocks. That paper stated that it: . . . would comprise an additional income tax deduction equal to the general inflation rate for the year times the opening value of stock for that year. I trust that the Government will act on that recommendation which would address an important problem facing the makers of quality wines in Australia. At the same time I believe that the Government should keep in mind the effects of the Hawke Government's policies on the increase in imported wines. In the period 1975-76 to 1984-85 imports fluctuated between seven and 13 million litres and accounted for 2.4 to 4.2 per cent of the Australian wine market. After a significant drop in 1982-83 imports increased by 32 per cent in 1983-84 and by another 34 per cent in the 1984-85 year. More significantly, imports represented 11.3 per cent in 1983-84 and 15.6 per cent of the bottled wines market. As a result of the 1984 Budget the competitive position of imported wine improved by 10 per cent compared with the local product. Since this change the rate of growth in wine imports has increased from 27.9 per cent in the 12 months to August 1984 to 39.7 per cent in the 12 months to May last year. Finally, it should be remembered that European Economic Community wine production and exports are supported through guaranteed minimum prices. Senator Button —Is that a good idea? Senator JESSOP —The Minister for Industry, Technology and Commerce might think so but I do not think that the wine industry would. It is also supported by exports subsidies and protection against imports. For these reasons the Opposition believes that wines imported from the EEC should be made to conform with Australian standards and all imported wines should be accompanied by certificates attesting to the same requirements currently demanded by the EEC for imports from Australia. The Minister ought to have regard to that point. Let us now look at the Australian Wine and Brandy Corporation as amended by this Bill. It can be said that the Government has removed many objectionable aspects of the original Corporation. The larger wineries which provide the majority of funds for the Corporation have had their levy reduced. They in turn bear the expense of promoting their wine and brandy overseas. I have demonstrated two companies which have achieved results because of their own initiative. I have said previously that the Opposition as a government would look very carefully at the record of the Wine and Brandy Corporation. I understand that the Australian Democrats will move amendments to both the Grape Research Levy Bill and the Grape Research Levy Collection Bill. However, the Opposition will not support those amendments. We believe that the delegation of authority to exempt certain goods from levy is more practicable than taking up the time of Parliament in attempting to legislate for unforseen contingencies in the future. It is very important for the Government to recognise the significance of the wine and brandy industries to Australia and, more particularly, to the grape-growing industry which after all is the basis of those important industries. I suggest that very careful consideration be given to the fragility and viability of these industries and that in future further imposts not be imposed because of the effects they could have on the industry which can contribute significantly to our export income. Senator MACKLIN(Queensland)(8.28) —First, through you, Mr Acting Deputy President, I would like to thank the President for supplying me with a tie to replace the one destroyed by an errant staff member. In the President's normal, kind and considerate manner he was able to do that in the twinkling of an eye. The Australian Wine and Brandy Corporation Amendment Bill, the Grape Research Levy Bill, the Grape Research Levy Collection Bill, the Wine Grapes Levy Amendment Bill and the Wine Research Repeal Bill will introduce wide-ranging changes to the Australian wine and brandy industry, changes which not surprisingly have been the cause of a fair amount of controversy within the industry. The functions of the Australian Wine and Brandy Corporation will be changed in a variety of ways. Membership will be cut from 14 to eight. Part time members will now be appointed by a selection panel. This method is in keeping with the types of propositions that the Government put forward for a whole range of corporations and committees. The eight members will be a chairman, a government member and six others drawn from one or more of the fields of wine making, grape growing, marketing, finance, administration or business management. Changes to the method of operation and the funding of the Corporation are designed to make it more cost efficient to provide for a more even distribution of funding across levy payers. Other changes are consistent with the Government's January 1986 White Paper on the reform of statutory marketing corporations. The Chairman of the Wine and Brandy Corporation noted in the 1984-85 annual report that there was a need to define the future role of the Corporation as uncertainties had affected its performance to date. The Chairman particularly noted that differing opinions regarding the role of the Corporation from large wine makers, co-operatives and small wineries had severely limited the Corporation's ability to perform its functions. These differences of opinion have emerged again in industry responses to the Bills which are before us tonight. Some of the largest wine makers in Australia have expressed reservations about the legislation. They argue that the proposed restructuring will impose a financial burden on them by requiring them to fund a bureaucracy to undertake co-ordination of export promotion, regulation of exports, industry statistics collection and public relations. These larger wine makers assert that these functions are best performed by the industry itself and have pressed for the inclusion of a sunset clause in the main piece of legislation we are dealing with tonight; that is, the Australian Wine and Brandy Corporation Bill. However, a contrasting view is put by the Australian Winemakers Forum, which represents 210 of the small and medium independent wine companies of Australia. The AWF opposes any further amendment to the legislation and the Australian Democrats find its arguments persuasive. In brief, the AWF's arguments are as follows: Smaller wine makers lack the resources and expertise necessary to undertake export promotion and other functions performed by the Australian Wine and Brandy Corporation and support the continued existence of the Corporation to fulfil these particular roles. Furthermore, they are prepared to put their money where their mouth is. Given the peculiar disadvantages of these smaller wine makers and the problems to which they would be put and given the importance of the wine industry in export terms, its seems clear that the continued existence of the Corporation in its revamped form is essential. The new arrangements must be monitored carefully, and if any problems reveal themselves, speedy action must and should be taken. The pair of Bills covering the grape research levy impose a levy on grapes and grape juice delivered to wineries and other processing establishments. Currently most grape research is carried out by State agricultural departments and by the Commonwealth Scientific and Industrial Research Organisation. This research has been fragmented and basically the funding has been ad hoc. The April 1984 report of the inquiry into grape and wine industries noted the need for a co-ordinated research program and for a secure funding environment. The Government has responded to this inquiry and the legislation before us is obviously designed to bring grape research and funding into line with other rural industries by imposing a levy on grapes and grape juice. That has basically been welcomed by the industry with the types of reservations that I have already mentioned. Whilst supporting the intention of the two Bills, the Australian Democrats are concerned about certain aspects of each of them arising from the report of the Senate Standing Committee for the Scrutiny of Bills. Clause 9 of the Grape Research Levy Bill provides exemptions from the levy. The Scrutiny of Bills Committee has drawn attention to sub-clause 9 (3) which, by permitting the regulation to exempt certain goods from the levy, might be considered an inappropriate delegation of legislative power. Although the Minister for Primary Industry (Mr Kerin) provided a response to the Committee's concern, the Committee continued to express the view that Parliament should not lightly delegate its power to exempt people from the payment of a tax. Accordingly, we will be moving an amendment with regard to this provision. We believe that, while the Opposition will not support it, it is long overdue that provisions such as this, which appear time and again, should, in response to the Scrutiny of Bills Committee report, cease to appear in legislation before this chamber. We hope that when amendments are moved to remove such provisions there will be support from all parties so that the Scrutiny of Bills Committee no longer sees a need constantly to raise this point. Similarly, the Committee has expressed concern about sub-clause 12 (2) of the Grape Research Levy Collection Bill. Although this clause is standard for such legislation, it abrogates the privilege against self-incrimination. This matter has long been of concern to this chamber in terms of reports by committees, particularly the Scrutiny of Bills Committee, on an untold amount of legislation. The Democrats again will move an amendment to resolve this problem, and again, although not supported by the Opposition, we hope that the Government might finally take heed of the points raised by the Scrutiny of Bills Committee about the way it draws up its legislation so that these issues do not have to be raised constantly in this chamber. The fourth Bill in the package, the Wine Grapes Levy Amendment Bill, revises the levy arrangements for funding the Australian Wine and Brandy Corporation by imposing a levy on wine makers for the financing of wine research. At present, proceeds from a wine grape levy, imposed by the Wine Grapes Levy Act 1979, are used to finance those functions of the Corporation. The Corporation then contributes funds to the Australian Wine Research Institute. The proposed amendments will provide for a levy to consist of two separate components-a marketing amount, which I think is particularly important, to finance the activities of the Corporation, and a research amount, which will provide the industry's contribution for wine research, the funding of which will be placed on a more secure, long term basis, as a result of these Bills, under the provisions of the Rural Industries Research Act. The final Bill in the package, the Wine Research Repeal Bill, repeals the Wine Research Act 1955 and provides for a disbursement of some $300,000 which remains to the credit of the Wine Research Trust Fund. That will now go into the new Grape and Wine Research Trust Fund and the balance will go to the Australian Wine Research Institute. Overall, this legislative package is an important and significant step, particularly as in last year's Budget a tax was imposed on the wine industry. As honourable senators will remember, the Opposition parties supported the Government in bringing in that tax. The Australian Democrats' amendment, which would have ameliorated the tax at that point and spread it over a much longer period to allow the industry time to adjust, was not acceptable to the Opposition parties. Hence we have found the wine industry in some considerable difficulty in attempting to adjust all at once to a fairly large impost. The problems are still reverberating throughout the industry as a result of that tax. It is a pity that the Opposition parties would not support our amendment because it would have enabled a much more sensible and realistic adjustment to the imposition of that tax. It would have spread it over time and cushioned the blow, enabling the industry to adjust at a steadier and more predictable pace. However, that was not to be. For whatever reasons, that imposition of the tax in one hit was supported by the Opposition parties. The Government has now moved in a significant way, as I have said, to reorganise that part of the industry which is dependent upon government legislation. As the previous speaker said, it is absolutely vital that the Australian industry maintains its current high standards. To enable it to do this, the Government has sought, through these Bills, to provide that predictability and stability of funding. That will be an enormous boost in the short and longer terms to the industry. In hindsight, I think it is probably a pity that particular move was not made before. The Government is to be congratulated on making that move now and on putting the industry on that firmer basis in terms of its research capacities. As always, research will lead to greater rewards, and future developments will improve the quality of the product and the efficiency of the industry. As Senator Jessop has already told us tonight, market opportunities overseas are currently excellent for our wines. Those markets remain to be exploited by better promotion, better advertising and wider distribution. This is particularly important at a time when there is uncertainty within the world wine market, and I think there are openings for Australian wines in a number of markets in which we have not yet had any reasonable penetration. The unpredictability in the market will remain, without a doubt, but I think that with a good product and with rigorous promotion our industry certainly can compete with any in the world. I think it is worth mentioning in this debate the contribution to the Australian economy by the wine industry because its contribution is quite significant for what most people in Australia, and I think outside Australia, consider is a relatively small industry. It employs directly over 6,000 people, mostly in regional areas where it is vitally important to the health of those regions that this industry remains healthy. It is directly responsible for the creation of additional thousands of downstream jobs in supporting industries. It contributes to the economy $18.8m in foreign exchange earnings alone, and the statement by the Prime Minister (Mr Hawke) earlier tonight drew attention to the vital importance to our economy of those industries which are earning overseas exchange. It also pays in direct Commonwealth taxes and charges in excess of $105m a year and it pays over $74.4m annually in wages and salaries. Senator Crichton-Browne —What does alcohol abuse cost Australia each year? Senator MACKLIN —Wine exports have increased by 70 per cent in the years from 1978-79 to 1983-84 and our wineries attract significant numbers of overseas visitors, thus boosting tourism. Senator Crichton-Browne has just raised the other side-alcohol abuse. That must be fairly faced when discussing any of these industries. Later this week we will be debating the tobacco industry, where again we have to look at the detrimental costs. There are costs to the community in these types of industries in terms of alcohol and tobacco abuse. As senators and as parents, we are aware of the significant problems that many young people have in these areas. I admit that I have had some misgivings in terms of some of the types of advertising I have seen in this area which promote and encourage young people to consume alcohol as if it were a normal part of the enjoyment of their lives and a normal part of other types of activities they may wish to enjoy. Wine is probably one area in which there has been significantly less alcoholic abuse than has been caused by the consumption of beer and spirits. That is part of the image that wine has in the way in which it has been treated in general within the community. I thank Senator Crichton-Browne for his intervention, because it is an important point to remember when we are talking about the good aspects of the industry. There are, as in a whole range of industries that assist the economy, some detrimental effects, and we must always be on our guard to try to lessen such effects in any industry in our economy. Quite clearly, policies in this area must support the domestic market and improve our international competitiveness. In general this policy package brought forward by the Government has those aims, and I congratulate the Government yet again in this area. It is tackling difficult problems and, in consultation with the industry, is coming up with what might not necessarily be a consensus package, but one which can generally be accepted by the industry, with some significant groups still standing outside and voicing a dissenting opinion. The general wine industry's approval for these provisions is reasonably well known to those senators who have had an interest in this group of Bills as they have progressed through the Parliament. With the exception of the amendments which I will be moving and which arise from the Scrutiny of Bills Committee process, the Australian Democrats applaud this package, support it, and hope that its intended objectives will be achieved. Senator MICHAEL BAUME(New South Wales)(8.47) —It is particularly pleasant to follow two thoughtful contributions to this debate on the Australian Wine and Brandy Corporation Amendment Bill and allied Bills, even though there are some elements in Senator Macklin's speech I do not entirely support. It is proper that an industry as important as the Australian wine and brandy producing industry should receive this kind of thorough attention. Although I support the Opposition's view that the Bills should not be opposed, what concerns me is the general question of industries running the risk of losing influence or control over their own affairs because of the intervention of government- sponsored, government-controlled, or government-regulated bodies. Before any industry is subjected to this kind of control, the costs and benefits have to be closely weighed. Senator Macklin in particular took the strong view, following his examination of the industry, that the interests of the small producers who make up the Australian Wine Makers Forum should be paramount. That raises a serious dilemma for those who might be concerned about the welfare of the Australian wine industry and its economic impact as a whole. Although I very much support the activities of the Forum under its very able chairman Mr Brian Croser of Petaluma-and he and his company are renowned in the wine industry, particularly on the basis of quality-and endorse the Forum's efforts, what is of major concern is that there is a real risk that, by looking after the small producers, one damages the larger ones and the industry as a whole. This is the balance that has to be reached in looking at this kind of legislation. I have a letter that has been sent to me by Lindeman (Holdings) Limited, a major producer, a company that is particularly hostile about this whole matter. Senator Macklin —Unfortunately, they are diametrically opposed, and you can only support one. Senator MICHAEL BAUME —As the honourable senator says, they have diametrically opposed interests, and the big question in examining legislation of this kind is what is in Australia's best interests. I am inclined to the view that Australia's best interests tend to coincide with those of the bulk of the industry. Now one must decide what is the bulk of the industry-and perhaps one should not use the word `bulk' when talking about wine. Lindeman (Holdings) Ltd wrote to me saying: The restructuring of the Australian Wine and Brandy Corporation will involve no cost to the Commonwealth. It will however perpetuate an iniquitous financial burden on Australia's wine industry. The AWBC is funded solely by a compulsory levy on Australian wine producers. The levy is calculated on the tonnes of grapes crushed. The letter quite properly points out that there is significant opposition among wine producers to the Corporation. It also shows that a recent survey conducted by an independent firm of chartered accountants found that wine producers who accounted for 58 per cent of domestic Australian wine sales and 74 per cent of wine exports opposed the continuation of the Corporation. Clearly that is the majority in terms of production. Producers who accounted for only 6 1/2 per cent of domestic wine sales and 9 per cent of exports supported the continuation of the Corporation. So here we have a very small minority in terms of output who want this Corporation to proceed. The representatives of Lindemans claim that the Corporation has proved to be ineffective in achieving its objectives and is simply not wanted by those producers who, through the levy, supply the bulk of its funds. The Bill before us means that the wine industry will be forced to continue to fund an expensive bureaucracy to undertake the following four tasks-- Senator Macklin —But Lindemans does not supply the bulk of funds unfortunately. I know the letter says that it does but it does not. Senator MICHAEL BAUME —Well, certainly Lindemans claims that it does, and I have another letter here which I will produce later which supports that. I find it hard to believe that Lindemans would deliberately set out to mislead me or the Senate. The industry will have to fund the co-ordination of export promotion, intelligence and strategy. Clearly there is a real need for sensible support of exports, but the big question is how one goes about it. One certainly should not have the sort of system which allows ridiculous abuses that occurred under previous arrangements. On the other hand, one must have something that is related to performance. I am not convinced that the way in which we are going about it is the right way in this case. Lindemans suggests that it would best be undertaken by companies acting individually or as a voluntary group. The Corporation is not empowered to fund overseas export drives; these must be paid for by individual companies on a user-pays basis. The cost of this would be on top of the levy that has to be paid to the Corporation. As Lindemans points out, the export of wine is a purely commercial activity and therefore it is unjust to expect a compulsory levy of one company to support the commercial activities of another. I must say that I find that a fairly persuasive argument. The second function of the corporation is the regulation of exports. Lindemans says that decisions on whether a wine is sound and merchantable are best taken by the overseas buyer. Thus there is no need for an expensive bureaucracy to intercede. Specific regulations required by the European Economic Community can be met by the Export Control Act. That is an acceptable position from Lindemans. Thirdly, there is the function of industry statistics collection. Well-established and accepted data is already collected by the Australian Bureau of Statistics, the Department of Primary Industry and the Bureau of Agricultural Economics and, according to Lindemans, additional data is not needed. My view is that there is some information that could be usefully collected in addition. The fourth point is the question of public relations and media servicing. Lindemans says that comments on industry matters are best undertaken by industry associations, not by bureaucracies. For example, it is inappropriate for a statutory authority to comment on government policy. Despite all this, the Corporation will be perpetuated by the Australian Wine and Brandy Corporation Amendment Bill. What Lindemans has sought is what the great bulk of the industry has supported-that is, the insertion of a sunset clause into the Bill to ensure an independent and thorough review of the Corporation's effectiveness within five years. Lindemans demonstrates this question of who is benefiting and who is paying the bill by pointing out that something like 30 per cent of wineries in Australia produce about 0.2 per cent of the total grape crush or less. I remind Senator Macklin that that means that 119 wineries-or 30 per cent-pay no levy whatsoever. The great bulk of those people in 119 wineries would in fact be in the Forum which Brian Croser leads. Another 220 wineries, making up about 10 per cent of the crush and representing about two-thirds of the wineries in Australia, will end up paying about 10 per cent of the levy. This leaves only 41 wineries, which have about 90 per cent of the crush, to pay about 90 per cent of the levy. Despite Senator Macklin's earlier intervention, it is clear from that that the great bulk of the levy-90 per cent of the levy-is to be paid by 11 per cent of the wineries. I would be interested to know whether Senator Macklin could at some later stage outline why in fact the points that Lindemans has made and which are set out in the documents to which I have been referring, are in fact inaccurate. On top of what Lindemans complained about, the Australian Wine and Brandy Producers Association, which encompasses a great range of producers both large and small, as well as requesting a sunset clause-I must say that I join with my fellow Opposition senators, such as Senator Jessop of South Australia, in expressing interest in that suggestion, and I am glad he mentioned it is also seeking support for the self-help, user pay principle in relation to export activities, export promotion and promotions at the national level. The Association fears that the word `control' used in relation to the export of grape products from Australia is not an acceptable one. It proposes that the word `control' should be replaced by the word `regulated' and I think there is something to be said for that. The Association also says that the increased costs of the proposed statutory levy plus the wine research levy and the proposed grape research levy is a matter of great concern to the industry, and I find that an acceptable proposition. In a letter to the Minister for Primary Industry (Mr Kerin), the Association said: The proposal to exclude Presidents and members of the executive of nationally represented winemaker organisations to which the Corporation is to be directly accountable to be ineligible for appointment as Corporation members, is discriminatory and restrictive and such prohibition should be removed to allow for an open, democratic choice for the most suitable and qualified persons. Unfortunately, the Minister has chosen not to take any notice of the points that were made. The Association also wants increased industry representation on statutory authorities and government committees. The Association says that the fact that persons within the Australian wine and brandy producing industry will not have the majority representation on these bodies is a question of deep concern to the industry, as the simplistic interpretation of that intent is that persons from within the industry may no longer be in the position to determine the destiny of their industry. The Association stated: It is therefore earnestly requested that our industry representation on the above committees be reviewed and increased. It also stated: You would well realise and understand, that within our Australian wine and brandy producing industry, it is difficult and at times impossible to arrive at a consensus of opinion which pleases all industry members, or in fact has the support of all those industry members, not unlike the function and operation of governments. Our Australian wine and brandy producing industry is complex, made up of numerous corporate structures and as time progresses, trading becomes more difficult and with that comes additional pressures. It is not an easy task of a national industry organisation to please all industry members all the time. Nevertheless, this body in fact seeks, and has properly sought, things from this Minister which the Government has failed to provide. So this is certainly a reservation that I have about accepting and supporting this proposal. The last point I want to make about this matter is that Mr Bob Hardy, the President of the Australian Wine and Brandy Producers Association, sent a telex to Mr Kerin in which he made some other points which I think are quite worth while. He said: Firstly we would like to make it clear that despite the impression conveyed in your second reading of the AWBC Amendment Bill, not just large producers, but small and medium sized wine producers have expressed concern regarding the continuation of the Corporation and its involvement in export activities as confirmed in a recent confidential industry survey conducted by KMG Hungerfords. I have given the outline of that report. He also said: We welcome the inclusion of an annual general meeting of the Corporation but point out that attendance at the AGM is restricted and the industry views expressed at the meeting need not be acted upon by the Corporation. One wonders why such a meeting is held if the Corporation does not have to take any notice of its constituent bodies. Senator Jessop —I did mention that when in government the Opposition would be carefully monitoring the Corporation with the object of reviewing that legislation. Senator MICHAEL BAUME —The point is well made that in government we would clearly take the view that it would be essential to monitor the legislation. I think even Senator Macklin agreed that there was a need to monitor it. It does not necessarily appear to be the best legislation that we could have. We will certainly be monitoring it, and in government we would make certain that it operated properly. With all those reservations and concerns expressed by the industry, I have to concede that at this stage the only thing that we can effectively do is to undertake to monitor this legislation. I mention in passing that I thought it was a little unreasonable of Senator Macklin to castigate the Opposition for having failed to support his amendment relating to the wine tax. I remind the honourable senator that the Opposition opposed the wine tax. We were never in support of it, and the fact that we did not support his amendment does not diminish in any way the reality that we opposed that tax on wine. Having raised the question of tax, I wish to mention in conclusion that every year the Australian Brewers Association mounts an elaborate and costly campaign during the pre-Budget period in which it urges that taxes on wine be increased in the interest of equity. However, imposts on wine will not turn drinkers to beer. Wine and beer are consumed under entirely different circumstances, with wine principally accompanying meals. It is in terms of equity, however, that the brewers' case loses its validity. I ask honourable senators to consider the following differences: Wine, by law, is made from 100 per cent grape juice. It is a primary product, but beer is 96 per cent water. Beer stocks are turned over about 24 times a year. The average turnover for wine stocks is once every 1.2 years. There would be even fewer stock turns if wine makers were not forced to pay a tax penalty on aging wines. Wine can be made only once a year, immediately after a brief vintage period when the maker must determine his precise requirements. Similarly, his costly plant is used only for a short period each year; the brewer, on the other hand, can buy his raw materials at any time of the year and can regulate his production according to seasonal demand. The beer industry is dominated by two major companies, located in urban areas, but there are some 400 wineries, large and small, scattered throughout Australia, mainly in country districts. The semi-monopolistic brewing industry can impose strict trading terms on purchasers, and seven-day payment is standard; the wine maker, on the other hand, is rarely paid in less than 60 days. The brewers' cash flow benefits are immense. They include the handling by two major companies of an estimated $1.2 billion in excise revenue for the Government-that is almost $24m a week. The interest the brewers earn in the money market would be substantially more than the total turnover of the Australian wine industry. I have mentioned those points because it seems to me that at times the wine industry is regarded by governments as a bit of a fall guy and is certainly subjected to unfair pressure. I restate the point that, while I have reservations about the manner in which this legislation will work, the Opposition will not oppose it, but it will certainly monitor it very closely. In my view, it does not necessarily serve the interests of the industry as a whole. Senator MESSNER(South Australia)(9.04) —I take the opportunity of the debate on the Australian Wine and Brandy Corporation Amendment Bill 1986, the Grape Research Levy Bill 1986, the Grape Research Levy Collection Bill 1986, the Wine Grapes Levy Amendment Bill 1986 and the Wine Research Repeal Bill 1986 to draw attention to the state of the industry in Australia and, in particular, to highlight some of the real problems that are emerging in the industry. I think it is salutary to note that this year the actual crush of grapes in the wine industry amounted to some 495,000 tonnes. This compares with the figure for the previous year of some 590,000 tonnes. So there has been a fall of some 95,000 tonnes in the crush of grapes this year. Obviously, there will still be some draw-down from surplus stocks to meet sales obligations, but the trend is becoming very evident that the grape growing industries are under a great deal of pressure as the demand for wine falls. Clearly, employment in the industry is well down compared with the situation a year ago. The latest figures provided to me show that, compared with the situation a year ago, when some 6,000 people were directly employed by the wine and brandy industries, today there are just over 5,000 employees. So on some calculations there has been a drop of nearly 15 per cent in employment in the industry. We have to consider why this is occurring. Certainly members of the Opposition, including my colleague Senator Jessop from South Australia, and other South Australian senators, have been drawing the Government's attention to the problems and dangers involved in the introduction of its tax on wine back in 1984, and there have been other changes in the industry. It becomes clearer every day that both employment and the crush of grapes are falling as a result of the Government's measures. We recall, in South Australia, the way in which the Government broke another election promise and introduced a wine tax in the 1984 Budget. The statistics for the period from September 1984 until March 1986 show that the average retail price of wine has risen by only 6.5 per cent. That compared with an increase in the consumer price index figure for the same period of some 12.3 per cent. So the price of wine has been increasing at only about half the rate of the normal cost of living increase for all other products and services. The industry has been forced to absorb the cost of the 10 per cent sales tax imposed at the wholesale level in 1984. An obvious profitability problem and a lack of investment in the industry have followed the absorption of the sales tax, which means that the industry has become less viable. That has been demonstrated very clearly by the initiation of the Government's vine pull scheme. So many growers have wanted to get involved in the vine pull scheme that the Government has had to provide extra money to fund the scheme. I understand that the total cost of the scheme is now $5.25m in assistance to grape growers. This compares to the figure of about $2.4m approved only last December. So unprepared was the Federal Government for the reception of its vine pull scheme that apparently it had to top up the scheme by pulling $2.85m out of the Victorian dried fruits industry vine pull scheme to fund grape growers in the wine industry. Clearly there is a tremendous surge of demand by growers to enter into this scheme whereby they can pull out their vines, replant with other trees or whatever, and get themselves out of the wine industry. That surely does not sound like an industry that is progressing. The wine industry and the brandy industry, which are integrally related, and the grape growing industry are under a great deal of threat as a result of this Government's wine tax, which was introduced in 1984. The chickens are now coming home to roost in the wine industry, and, to mix a metaphor, the fact is that this Government will have to pay the piper. It seems absolutely incredible that the Government should encourage the demise of an industry such as the wine industry by the imposition of new taxes, such as those that were imposed in 1984, and then turn around and subsidise people to get out of the industry at further costs to the Commonwealth and to the taxpayer. That is precisely what is happening as a result of the Government's introduction of this tax measure. That, clearly, has a grain of stupidity in it, and we on this side of the chamber have been raising those issues on behalf of the wine growers; and the grape growers of South Australia, and the whole Commonwealth, in recent times. Having brought that to the attention of the Government, we just hope that the Government, in its straitened circumstances at the moment, will not turn around and impose a tax increase on the wine industry as a result of what it has perceived to be only very minimal effects on the industry. Clearly, the effects on the industry so far have been very great. If the Government proceeds with increased taxes, such as a doubling of the present sales tax rate, it can expect vast and greater problems of a social nature, as well as economic ones, to visit it in the future. Clearly, these new taxes will have uneven effects insofar as those industries which are forced to suffer as a result are concerned, and this will mean that regional areas will be affected. We know, of course, of the Riverland area of South Australia and its heavy dependence on the grape growing industry. We know of the Barossa Valley, the McLaren Vale districts and other districts in the south-east of South Australia that are all dependent on grape growing. Those districts will all be affected as a result of any increased tax that might be applied by this Government. The Government has spent a great deal of time, in this chamber in particular, telling us how the industry has absorbed these taxes. Sure, it has absorbed them, but it has also shed 1,000 jobs in doing so. It is also taking far fewer grapes from grape growers than it did last year as a result, and, of course, we now face the imposition of a further tax that can only reduce the capacity of the industry to survive, remain viable, employ people and keep towns and regional areas going. Senator WALSH(Western Australia-Minister for Finance)(9.13) —No arguments of substance have been raised in the second reading debate which have any real relevance to the legislation. A couple of amendments are to be moved by the Australian Democrats later, about which I will speak in the Committee stage; but I want to make some brief comments on some of the nonsense that has been pouring out of the mouths of Senator Messner and Senator Michael Baume. Senator Baume put forward yet again the spurious argument that wine is an innately high cost product compared to its competing products, principally beer; therefore, the Government should design and apply a tax system which compensates the wine industry for its innate cost disadvantages. That, of course, is further confirmation of the fact that the Tories do not understand and never have understood the ethos or logic of the market economy in which they profess to believe. I should offer to make some arrangements, if I can, to get their former colleague, John Hyde, to give them some tutorials on the ethos and logic of a market economy since, very clearly, they conspicuously fail to understand either of them. Senator Michael Baume, who presents himself as a sometime economic rationalist and a supporter of deregulation, put forward this spurious argument tonight in which, far from being an economic rationalist and an advocate of deregulation, he sees himself as a social and economic engineer who will insist that government policies be applied in a way that compensates particular industries for their innate cost disadvantages. I wonder why he does not extend that a bit and say that we should being back the hansom-cabs because they are innately cost disadvantaged vis-a-vis the motor car for hire transport within urban areas. Of course, the trouble with members of the Opposition is that they are lobbyists and have always been lobbyists for every vested interest group that wants to sponge on the community in general. The fatal flaw that they displayed in government was the combination of intellectual mediocrity and political cowardice which precluded them from ever implementing policies compatible with their free enterprise rhetoric. Finally, Opposition members are also wrong about the facts. On the issue of the taxation of wine, which is still taxed at a very highly concessional rate, when this Government grasped the nettle that assorted cowardly and mediocre Tory governments over several decades had failed to grasp, and made a movement towards restoring something closer to neutrality in the taxing of alcoholic beverages by imposing a sales tax on wine in 1984, the Opposition-Senator Jessop, Senator Messner, and various others whom I do not specifically recall-asserted that, as a result of that tax, there would be a 14 per cent decline in wine sales. Of course, that has not happened. In fact, wine sales have increased since then, so their analyses of market consequences are as flawed and as incompetent as their attempts to analyse and understand the underlying philosophy of the policy that they advocated. I do not propose to speak any further. The Government will not accept the requests and the amendment of which the Australian Democrats have given notice, for reasons which I will explain at the Committee stage. Question resolved in the affirmative. Bills read a second time. The Bills. Senator MACKLIN(Queensland)(9.18) —by leave-I move: GRAPE RESEARCH LEVY BILL 1986 That the House of Representatives be requested to make the following amendments: (1) Page 2, clause 9, leave out sub-clause (3). (2) Page 3, sub-clause 10 (1), leave out `sub-sections 7 (2) and 9 (3)', insert: `sub-section 7 (2)'. GRAPE RESEARCH LEVY COLLECTION BILL 1986 Page 6, clause 12, leave out sub-clause (2), insert the following sub-clause: `(2) For the purposes of sub-section (1), it is a reasonable excuse for a person to refuse or fail to submit a return or information that the return or information might tend to incriminate that person.'. I do not propose to speak to the requests and the amendment since I gave the reasons for them in my speech at the second reading stage. Senator WALSH(Western Australia-Minister for Finance)(9.18) —I did not deal with these matters at the second reading stage so, very briefly, I just want to put the Government's view on the record. The requested amendments to the Grape Research Levy Bill that Senator Macklin has moved would have the effect of removing the power of the Minister for Primary Industry by regulation to exempt certain growers from a research levy if the product they were producing derived no advantages from the research. The Government believes that this provision should stay in the legislation. It is one which in the first instance would be activated by the Minister but in respect of which either House of the Parliament would have the power to disallow a regulation. The alternative would be the more cumbersome, time-consuming and resources-consuming alternative of amending the legislation itself if at some future time the present Minister for Primary Industry (Mr Kerin) or some future Minister saw a valid reason for exempting certain producers from the levy. So the Parliament retains control to disallow regulations which this Minister or some future Minister may issue. The Bill as originally presented facilitates that course of action being taken, should any Minister believe it to be justified. The amendment to the Grape Research Levy Collection Bill relates to the self-incrimination provisions. I am advised that equivalent provisions to those which are contained in this Bill, and which the Australian Democrats seek to remove, already appear in a wide range of Commonwealth laws. The Minister, Mr Kerin, is aware that the Chairman of the Senate Standing Committee for the Scrutiny of Bills has asked the Attorney-General (Mr Lionel Bowen) to consider revising the customary form of the provision with a view to strengthening the protection against self-incrimination; thus that matter is in a general sense already under consideration and will be looked at in the broader context. Senator JESSOP(South Australia)(9.21) —I noted that the Minister, during his summary of the second reading debate, suggested that the Opposition displayed intellectual mediocrity and political cowardice with respect to these measures. I thought he could have been referring to the economic statement to the nation by the Prime Minister (Mr Hawke) earlier this evening. I say to the Minister that we on this side were very anxious that the Government should monitor the activities of the Australian Wine and Brandy Corporation. We suggested that there was some merit in inserting a sunset clause to re-examine the operation of that Corporation after five years and that in government we would very carefully monitor the operation of the Wine and Brandy Corporation, in view of the comments that have been made by the industry. I thought the reference by the Minister to the Opposition was inappropriate and could well be applied to Mr Hawke who, I am sure, rolled the Minister and Senator Button in the Cabinet recently. Question put: That the amendment and requests (Senator Macklin's) be agreed to. The Committee divided. (The Temporary Chairman-Senator Townley) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 52 —— Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. Macklin, M. J. (Teller) Vigor, D. B. Alston. R. K. R. Jessop, D. S. Archer, B. R. Jones, G. N. Baume, Michael Knowles, S. C. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. McIntosh, G. D. Black, J. R. McKiernan, J. P. Bolkus, N. Maguire, G. R. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Newman, J. M. Childs, B. K. Parer, W. R. Coleman, R. N. Puplick, C. J. G. Collard, S. J. Ray, RobertColston, M. A. Reid, M. E. (Teller)Cook, P. F. S. Reynolds, M. Cooney, B. Robertson, E. A. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walsh, P. A. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Harradine, B. Withers, R. G. Hill, R. Zakharov, A. O. Question so resolved in the negative. Bills agreed to. Bills reported without amendment or requests; report adopted. Bills (on motion by Senator Walsh) read a third time. Debate resumed from 28 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator ARCHER(Tasmania)(9.31) —I would like to speak to the Departure Tax Collection Amendment Bill 1986 and the Air Navigation Amendment Bill 1986. Considering the clock, the calendar and one thing and another, I will be as brief as I can. The coalition introduced the departure tax in 1978 and charged a fee of $10. This was increased in 1981 to $20. I have always believed that it is inappropriate for the responsibility for the departure tax to be under the Department of Immigration and Ethnic Affairs. The transfer to the Department of Aviation is very sensible. I certainly concur with the treatment of funds coming from it as part of the cost recovery program under the Department of Aviation. There is no doubt that the airlines are in the best position to collect the fee. I fully understand the desirability of having an off-airport collection system. I see the problems that go with this. As we progress we will find that it will become virtually universal for people to pay either when they purchase their ticket or at the point of departure. There really will not be much room for payment at other places, although this has been canvassed by the industry and has been given some consideration by the Minister for Aviation (Mr Peter Morris). Fifty-four per cent of all tickets are actually sold outside Australia. Of those sold in Australia the majority are sold by the airlines, not agents. The move to have an exit tax payable by the purchase of stamps at post offices has some attraction but I cannot see it becoming a very large business. The airlines accept the fact that it is logical that they should collect the money. They accept that for an amount of about $1m which Consolidated Revenue would gather extra to the present $48.5m it is worthwhile-as I do. Between 2 million and 2.5 million passengers leave Australia annually. Hopefully the figure will increase. I hope that it will not increase just because Australia becomes the cheapest destination in the world due to its plunging currency. I do believe that we still should be a very attractive destination for tourists for a long time to come. I made reference to the fact that there had been communication with the Minister over the alternatives, and I have copies of correspondence to that effect. I raise this matter now because the Minister made certain statements that I think are important. The communication was between the Secretary of the Airline Operators Committee and the Minister and it started with a letter dated 30 April. The Committee put to the Minister that in view of unplanned lightning stoppages and so on there were various difficulties that could be overcome, and it mentioned the degree of those difficulties. A total of 17 flights and 4,385 passengers were delayed, 13 of the passengers actually missing their planes. The letter then pressed the point about providing departure stamps at all post offices. The Minister responded in a letter dated 27 May: You may not be aware that I recently advised BAR that I was agreeable to the airline using the existing tax booths at airports from 1 July to 30 September . . . Included in the BAR's proposal is the suggestion that departure tax stamps be made available at a wide range of off-airport outlets, and consideration is currently being given by the Government to the BAR proposals, with a view to speedy settlement of these questions. As of today, there had been no indication from the Minister that he was giving this matter speedy consideration. I hope that the Minister tonight will be able to indicate to us how speedy this consideration is or whether the decision in the negative is likely to come down about a day after the Bill is passed. I hope that, if there is bad news, we get it and, if it is good news, we might be prepared to wait for it. The second Bill, the Air Navigation Amendment Bill, enables Australia to ratify a 1984 amendment to the Convention on International Civil Aviation. It will allow the provisions of this new aviation protocol to be given effect in Australian law by proclamation. The impetus for the Bill arose from the shooting down of a Korean Airlines Boeing airliner in September 1983. The famous flight, the KAL-007, as honourable senators will recall, strayed off course, was in Russian air space, and was shot down intentionally. Senator Sanders —It was intentionally off course. Senator ARCHER —I hear my colleague Senator Sanders say that it was intentionally off course, as it was intentionally shot down. It was probably one of the most cold-blooded acts of murder that the world has seen in recent times. In all, 269 innocent people lost their lives as a result, five of whom were Australian citizens. That probably does not worry Senator Sanders either, but it worries me. The Russians claimed that they were not to blame, that the Korean jet should not have been there and various things like that, but it did not change the problem and it did not change the end result. The world unanimously rejected the Russian statements and Australia, for its part, announced sanctions against Aeroflot. The sanctions were possibly a little empty in that Aeroflot does not operate in Australia, but we announced sanctions just the same. However, of far more value was the action taken by the International Civil Aviation Organisation. It convened in May 1984 in an extraordinary assembly in Montreal to discuss ways of preventing any recurrence. Australia was involved in these discussions, which resulted in a unanimous decision of 107 nations to amend the original Chicago Convention on Civil Aviation. Basically, the amendment requires the signatory states to refrain from the use of weapons against civil aircraft. At this stage, it is a little disappointing that only 22 countries, I think, have so far demonstrated their goodwill by ratifying the amendment. The amendment to the Convention is embodied in this Bill, making Australia one of those nations leading the way in this important international initiative. Also included in the Bill are provisions relating to the rights and obligations of pilots of civilian aircraft. The Bill has the full support of the Opposition. We recognise that captains of civilian aircraft have a duty not to stray into unauthorised air space, but, like the Government, we recognise that the use of weapons in such cases is not a reasonable nor a civilised reaction. Qantas Airways Ltd would especially be interested in seeing the amended Convention rigorously enforced around the World. Our international flag carrier regularly flies through the Middle East, which is undoubtedly one of the more hostile parts of the world, with the Iran-Iraq war, with the Libyan Gaddafi lunatic, and the Palestinian terror groups, all of which add to the risk of the area. It is, therefore, gratifying that Australia is taking a lead in these matters and it is hoped that all Convention signatories will join it. Senator SANDERS(Tasmania)(9.42) —The Australian Democrats support both the Departure Tax Collection Amendment Bill 1986 and the Air Navigation Amendment Bill 1986. The first Bill provides for a method of shifting the responsibility for the collection of the departure tax from the Department of Immigration and Ethnic Affairs to the airlines. It also makes funds available as attributable revenue. According to the figures we have, there is a $170m shortfall per year on the costs attributable to aviation over the income. The departure tax, which will now be part of the attributed revenue, will bring in $48m a year, thus decreasing somewhat the pressure on the airlines and on general aviation to maintain our very expensive Department of Aviation system. The airlines are geared for the collection of this money and can do it with very little added inconvenience. I believe that this will also benefit the traveller. No longer will he have to stand around with a $20 bill in his hand-or retain a $20 bill in Australian currency-when going overseas to pay to the tax man. This will be taken out of the ticket receipts by the airlines. The issue of cost recovery in the aviation industry is quite contentious. A number of people are concerned about the way in which the Federal Government is intent on raising revenue by attributing costs to aviation. I have here a letter from the municipality of King Island, which is quite concerned about cost recovery programs. This is a letter to the Minister for Transport and Minister for Aviation (Mr Peter Morris) from the Council at King Island. It reads: Dear Sir, The King Island Council wish to strongly object to the introduction of the new Aviation Cost Recovery system that is due to start from July 1st, 1986. As the Minister should be well aware the imposition of a further charge on our airfares and freight charges, which the airlines have no choice but to increase, would further disadvantage residents of this Island. No doubt the philosophy behind the Government's Total Cost Recovery Scheme is that air is a luxury form of travel, not to be subsidised by the taxpayer's dollar and those who cannot afford it could travel by cheaper means i.e. by road or rail transport which are subsidised. Surely this is not applicable in a community such as ours where we have no alternative means of transport. King Islanders are totally dependent on air transport for passengers and consumer perishables (foodstuffs etc.) and are already greatly disadvantaged by this. The proposed increases in aviation costs would initially force return passenger air services, to and from King Island, upwards of between $6 and $7, nowhere near the 50 cents per passenger as stated in the press on Saturday 31st May, 1986. Airlines of Tasmania were subsidised by the State Government two years ago for $300,000 and the imposition of further costs must put the future of our Island's air services further at risk. The Council implores the Federal Government not to go ahead with this, and concludes: Council therefore request that the Minister exempt the Bass Strait Islands from Total Aviation Cost Recovery for reasons already outlined, in order that our island residents, whose only means of travel, already very expensive, should not be disadvantaged further. All air travellers in Australia are disadvantaged by the cost recovery program pursued by this Government. Aviation in this country benefits all society and I think that all society should share in the cost. After all, the cost of railways is borne by the taxpayers, as are the costs of roads, hospitals and police, which are all services which benefit us. Aviation is an essential service as well, but, as the people on King Island have noted, aviation seems to be considered the province of the rich-a luxury. It is not; it is a necessity, especially in a country like Australia. The Department of Aviation has been asked, in return for attributing costs, to reduce its staff. It has taken a step in this direction, but much more needs to be done. The bureaucracy is huge in the Department of Aviation. Even though there have been some cuts, there are still six times as many bureaucrats or employees per aircraft in the Department of Aviation as there are in the United States of America Federal Aviation Administration. Higher numbers of employees have been generated, but this is not a reasonable number because there are far too many bureaucrats per aeroplane. How can we save money? Certainly we do not want to decrease safety, but in the United States, where they have far higher aircraft densities, the Administration has worked out systems for controlling aircraft which are not unsafe but which are far cheaper and far less labour and equipment intensive than are the systems in this country. I have here a chart from the Los Angeles area where I used to fly. This is a visual flight rules terminal area chart which shows a number of very important things. The control zones, even for Los Angeles International Airport, are only 10 miles in diameter. That means that, when one is outside that control zone, one does not need to be controlled by a control tower operator. All that equipment is not needed. A pilot does not need to be under radar control. This is a direct saving. In Hobart, an airport which has some 8,000 movements a year, the control zone is 50 miles in diameter, whereas it is 10 miles in diameter in Los Angeles International Airport. Of course, this drives up the costs. Another point is the way in Australia that the Department of Aviation grabs all airspace in a control zone and controls it as if all aircraft are flying under instrument conditions, even in visual conditions. In the United States the Department there does grab great masses of airspace, but only in instrument conditions. In VFR conditions it is not controlled airspace. Another interesting point that I think would move traffic around our more densely populated areas is that there are corridors where general aviation aircraft can fly directly over the middle of Los Angeles International Airport, with no radio contact with anybody. This is not unsafe because at that airport all the jet traffic is on the ground; therefore, one can fly overhead in perfect safety. In fact, it is necessary to have these corridors because otherwise the authorities simply could not move the aircraft that they do. I can hear mutterings that this is unsafe and that there will be air collisions. True, there was a collision between a light plane and an airliner at San Diego some years ago. However, that is the only accident that I know of on the West Coast of the United States. Certainly at Santa Barbara, where I used to fly, there was a mix of aircraft from DC-10s down to J3 Cubs, all in a 10-mile radius control zone, and there was never any kind of problem with collisions. So this is one of the areas we can look at. I think it is a highly technical area, but I think people can see the logic in it and I hope that the Department of Aviation will not just reject this suggestion out of hand as the complaints of an irate pilot, but look at it as a method of helping us all to use the system more cheaply. I turn to another item. I have in my hand my flight crew licence in Australia. Let me suggest another way we could save money. The licence is contained in a beautifully bound, hard-cover book. Every two years I ship this book to Melbourne and there is a rubber stamp put in it. I do not know how many people there are involved in opening that envelope, opening the book and putting the rubber stamp in it and returning it to me, but I suspect that it is a considerable number. On the other hand, this pasteboard card I have in my hand, a piece of paper measuring some two by one and a half inches, is my United States commercial licence. It was issued in 1958 and it is good for life. It has on it my ratings, land, sea, glider privileges, and this is all I have to have. No bookwork is involved at all. To renew this licence I take a medical, the doctor sends a copy of that medical to the FAA and the Administration files it some place but sends me nothing. The validated medical certificate is the other half of the validation for this licence, and then I go through my flight checks which are recorded in my log book. The FAA keeps its nose out of these things and thus it is far cheaper. I turn to another item. The general aviation area, especially recreational general aviation, is constantly being pinched in the pocket by higher prices for fuel, maintenance and air navigation charges. We are constantly being asked to pay for services we do not need but are required to use by the Department of Aviation. Many of us are quite happy with dirt strips, unpaved airstrips, minimal terminal facilities and very primitive, in airline standards, nav-aids. There should be an opportunity for people who do not want to use the full airline system to opt out of it and regulate themselves in the manner of the Gliding Federation of Australia. That Federation flies not hang-gliders but highly developed sophisticated sail planes. I am a member of the GFA, a gliding instructor, and that body regulates itself completely. The Government has no look in, and the safety record of the GFA flying those sail planes, even in controlled air space, is as good as the safety record of general aviation. One would be well justified in asking what is the value to the recreational pilot of the Department of Aviation, when a voluntary organisation like the Gliding Federation of Australia can give the same services and furnish the same safety. I see little value to the recreational pilot in the present system operated by the Department of Aviation. The Departure Tax Collection Amendment Bill is a major step in the right direction. It brings back revenue where it is needed to fund the aviation industry. The Bill probably goes as far as it can, but there is still plenty to be done in restructuring the Department of Aviation so that all aviation users and potential users in Australia will be encouraged to use the airways rather than discouraged as they are now. The second Bill before the Senate is the Air Navigation Amendment Bill 1986 which, as Senator Archer said, results from the shooting down of the KAL-007 airliner in September 1983. At the time I was quite perplexed about that incident because I had a good acquaintance who used to fly the United States Air Force equivalent of 707s at Russia in electronic countermeasure exercises. They would fly across the Siberian border and fly in as far as they could until the Russians turned on their radar. Then when the Russians turned on their gun radar and missile radar, the United States Air Force would plot the positions. It sounded very much like what the KAL airliner may have been doing-I had that feeling in my bones. Over the last three years I have learned a lot more about it. One of the complete analyses of the situation is contained in a book called Shoot Down written by R. W. Johnson. This book was not written by a Russian supporter at all costs or even a regular journalist. The writer, who is a fellow in politics at Magdalen College, Oxford, spent two years researching this tragedy. As honourable senators will recall, KAL-007 was on a flight from Anchorage, Alaska, to Seoul when it was shot down by a Soviet Su-15 fighter as it was leaving Soviet airspace over Sakhalin Island in the North Pacific. The standard explanation was that the aircraft was simply off course. Well, the odds against that are about the same as being hit by a meteorite, especially when one considers what actually happened. Using records of human and mechanical error on other 747s equipped with 007's navigational devices, Mr Johnson found that there was a one in 20,000 chance of any error. This was compounded by the 22:1 odds of 007 being as far off course as it was-it set a new world record in being off course. This made the odds against the aircraft merely being off course 431,200:1 against. Those are pretty high odds. I would not know anyone who would want to take on odds like that. If one adds to that the eight individual occasions on which KAL-007's crew of three experienced pilots each failed unaccountably to make normal checking procedures, one finds that long before one has finished calculating one has arrived at the sorts of odds which make even astronomers blanch-literally billions or trillions to one against. This in itself would be enough, but there are other observations which, incredible as it now seems, have somehow managed to escape attention. For example, 007's captain made covert and highly irregular adjustments to the aircraft's weight and fuel loads before leaving Anchorage. This was consistent with taking a longer flight path than the one originally planned. Most damning of all, he left behind in Anchorage his copy of the aircraft's computerised flight plan, in the margin of which were a series of handwritten calculations corresponding almost exactly to the route over Russian air space which KAL-007 eventually accidentally took. It is well known that as KAL-007 penetrated Russian air space, the Soviets were forced to activate virtually all their radar systems between the Pacific coast and Moscow, giving the United States an unprecedented intelligence gathering bonanza. In Johnson's hypothesis, the need for such information had become urgent in the United States as a new round of SALT talks approached. Mr Johnson suggested that what might have happened, based on 007's movements, was that when Soviet fighters eventually caught up with the jumbo at the edge of Soviet air space, 007's captain, a former top fighter pilot in the Korean Air Force, ignored their repeated radio messages and warning tracer shots. Instead he made several evasive manoeuvres in the hope of outstripping his pursuers. The Russians, recognising these as military tactics, and unable to get close enough to see that 007 was an airliner, shot it down, accordingly-less than a minute from international air space. At the time President Reagan called the Soviet action `a crime against humanity which must never be forgotten'. He went on: What can we think of a regime that so broadly trumpets its visions of peace and global disarmament and yet so callously commits a terrorist act? Secretary of State George Shultz declared: The world is waiting for the Soviets to tell the truth. Mrs Jeane Kirkpatrick staged a famous performance at a United Nations Security Council meeting with inaccurately transcribed tapes of conversations between the Soviet fighter pilots. She said: Violence and lies are regular instruments of Soviet policy. They may or may not be. But the evidence indicates that this airliner was intentionally off course and was off course for military purposes. In fact, the people who programmed that airliner to do that were putting innocent people's lives at risk. With the wisdom of three years hindsight it appears that both Korea and the United States were intentionally violating Soviet air space. The Russians overreacted violently-there is no doubt about that-with the resulting tragic loss of innocent passengers' lives. This legislation may not, in itself, completely prevent such tragedies. What we need is greater understanding. We need to make it unnecessary for countries to be so suspicious of one another that they will violate each other's air space and subsequently shoot down aircraft. This legislation, however, is a statement of awareness of the problem and as such it deserves our support. The Australian Democrats support both Bills. Senator RYAN(Australian Capital Territory-Minister for Education)(10.00) —I thank Senators Archer and Sanders for their contributions, which ranged a little more widely than the provisions of the legislation. However, their remarks were interesting and the Government thanks them for participating in this debate. I would simply point out that comparisons with other countries can be misleading. Of course, if one wants to make comparisons, our Government has an unparalleled record in respect of aviation cost recovery. During the last two years, the Department of Aviation has reduced its staff by 700. It will have reduced its staff by 1,000 by July 1987. I remind honourable senators that the provisions set out in the Departure Tax Collection Amendment Bill will improve passenger convenience, improve airport passenger flows and pass responsibility for the collection of the tax to the airlines. The Air Navigation Amendment Bill involves the ratification of a protocol of an international treaty. I commend the Bills to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed from 20 March, on motion by Senator Walsh: That the Bill be now read a second time. Question so resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 27 May, on motion by Senator Grimes: That the Bills be now read a second time. Senator TEAGUE(South Australia)(10.04) —The three Bills before the Senate-the States Grants (Education Assistance-Participation and Equity) Amendment Bill 1986, the States Grants (Schools Assistance) Amendment Bill 1986 and the States Grants (Tertiary Education Assistance) Amendment Bill 1986-contain cost supplementation provisions for programs in schools and tertiary education institutions that have already had determined for them by the Parliament the basic financial provisions not only for this year but also, in most cases, for 1987 and 1988 as well. Each year legislation such as the Bills before us is presented to this Parliament for the purpose of providing additional moneys for programs that are already in place to take account of inflation. In the case of these three States grants Bills-one dealing with tertiary education assistance, the second dealing with the participation and equity scheme, and the third with schools assistance-the total amount of money provided for is $144m. This involves an additional $44m for schools, $98.43m for tertiary education institutions, and some $1.6m for participation and equity programs. Those amounts are calculated on formulae about which there is little controversy. Debate on education matters in the Senate often relates to what financial resources are being made available to schools, to higher education, to technical and further education, to particular Commonwealth Schools Commission programs, or to participation and equity programs. Debate does not directly concern curriculum because the responsibility for curriculum is in the hands of State governments or independent schools and is determined at the State level. Similarly, the terms of employment of teachers are determined at the State level. Even the tertiary education curriculum is in the hands of independent institutions. Universities and colleges have long had autonomy in determining curricula. So tonight in the Senate we are not debating the curricula in our education institutions or the terms of employment of their staff, we are debating what public resources ought to be made available to those institutions on a continuing basis. The principal legislation that governs the Commonwealth's provision of financial resources provides for more than annual increments. A four-year program is determined for our schools, and the legislation to cover that program has already been enacted. We determine a triennium program for higher education, and the primary legislation for that triennium has already been enacted. So we have before us three Bills which have no new policy elements and which purely and simply set out the schedules of retrospective cost supplementation. The Opposition supports the three Bills, as they are in the normal format. However, their introduction in the Senate gives us the opportunity for a general review of the financial resources that are made available to education. I want to make some general remarks on that topic as briefly and as succinctly as I can. At the time of the August Budget education received an increase in funding of 9.4 per cent, with the appropriation of $4,943m. With the additional appropriation of $144m proposed in these Bills before us tonight, for the first time in Australian Commonwealth education outlays will exceed $5 billion. Of that $5 billion, about $2.5 billion, or half of the Commonwealth's education spending, is provided to universities and advanced education institutions. That is because 98 per cent of our universities and colleges are now provided for almost totally from the revenue of the Commonwealth Government. Another $1.75 billion is provided in the Budget for schools and pre-schools. Nearly $600m is provided for student assistance and $70m for the administration of various education schemes-$55m to the Department of Education, $10m to the Commonwealth Schools Commission, and $5m to the Commonwealth Tertiary Education Commission. When these various amounts are added up, the total exceeds, for the first time in Australia, $5 billion. However, the ranking of education compared with other areas of government expenditure remains the same. Education is the sixth biggest item in government outlays after social security and welfare, which represents 27.6 per cent of the financial year's Budget; payments to the States represent 19.6 per cent; servicing of the public debt interest is a scandalous and extraordinarily high 9.7 per cent; health also represents 9.7 per cent; and defence represents 9.5 per cent. Education comes sixth, representing 7.2 per cent of government outlays. All other areas of government expenditure represent less than two per cent of total outlays, which is a rather small percentage and may involve hundreds of thousands of dollars for the administration of some important government department. The six big Budget areas, which have been in much the same order for the last 10 years in terms of Commonwealth government expenditure, are social security and welfare, payments to the States, the public debt interest, health, defence, and education. I draw particular attention to the fact that during the last decade education spending as a proportion of government outlays has fallen from 9 per cent to 7.2 per cent. In the last three years of the Fraser Liberal Government, education spending as a percentage of government outlays was respectively 7.9, 7.9 and 7.6 per cent. For the first three years of the Hawke Labor Government, the comparative figures are 7.2 per cent, 7.1 per cent and 7.2 per cent. Overall, the percentage is on roughly the same plateau. The plateau has been a little lower under the Labor Government than it was under the Liberal Government, but there has been a plateau for at least the last six years and, in general, for the last 10 or 12 years. Education as a proportion of Commonwealth Government spending has remained about the same. I want to concentrate some remarks on this plateau for a few minutes. There has been no radical change. The plateau continues in regard to the Commonwealth's provision for higher education, technical and further education, schools, pre-schools and student assistance programs. The exaggerated rhetoric of the Australian Labor Party when it was in opposition about devoting a much higher proportion of public resources to education has not been fulfilled. We have seen more than three years of the Hawke Labor Government. When we consider the three Bills before us tonight, which involve cost supplementation for assistance programs, we are reminded that the present Government has not lived up to anything approaching the rhetoric of its promises for education. All sorts of expectations were given to universities, colleges and schools that the election of a Labor government would lead to a radical change in the level of financial resources for education. This has not happened. The present plateau is, as I have said, a little lower than the plateau which persisted during the period of the Fraser Government. Faced with this plateau, the question arises as to how we are to provide for increasing demands on the education system. When I read the debate in both Houses of Parliament I do not see the Prime Minister (Mr Hawke) projecting getting us off this plateau, a little lower than in the period of the Liberal Government, that he is seeing his own Government locked into. The Minister for Education (Senator Ryan) does not project any change to the general level of funding in any years that may be left to the Hawke Labor Government. Even the Minister for Finance, Senator Walsh, the one Minister who has raised provocative proposals for reducing education provision, has not been able to convince his colleagues in Caucus or in Cabinet to go ahead with his proposals. So we do not see even a razor gang being successful against the resistance of those many members and senators who do not wish to see cuts in education. I noticed that recent publications and journals in advanced education and university circles and amongst education unions are already starting to warn and threaten the present Government that, should there not be a real increase in the coming Budget, there will be a breaking-off of relations by those who had looked, at least prior to this Government being elected, to some better financial deal from the Government. Their rhetoric in these various newsletters and magazines is that there should not be cuts. I have not heard any expression of view in Canberra, except from a few members of parliament, towards substantial, real increases in education. I must admit that my own assessment about the plateau persisting in the public provision for education is based on the grounds of realism; it is not my personal position. In the eight years that I have been in the Senate I have continually urged in my Party and in the Senate greater real provision for education programs. Senator Sir John Carrick, a former Minister for Education, is another who has certainly urged greater spending on education matters. Senator Macklin, who is in the chamber, has looked for increased funding. A number of us have drawn attention to the relatively lower level of provision, especially for 15- to 25-year-olds, in Australia compared with, say, Japan, the United States of America or many advanced European countries and we have made the point that investment in education at that level is an investment in human resources and an investment for the future development of Australia, and is important. So whilst I urge on my colleagues as much as on the Government a real increase in education provision, my realistic assessment is that it will take a considerable argument to move away from this $5 billion plateau of the Commonwealth Government's provision. I point out that I have urged an increase in provision on account of a number of programs in Senate reports that I have spoken about at various educational meetings around the country, which would include projects such as increased teaching resources at the years 1 and 2 levels in primary schools. Obviously, it is an important foundation area for young children to find their feet in schools and I believe that we ought to see a more concentrated resource in those two levels of primary school. The adapting of some year 10 and 11 school programs to be vocational colleges, to meet the needs of those students aged 14, 15 and 16 who so often lose their motivation, become dispirited and even lose out in basic skills, would be of assistance. There is a cost requirement in some of the transitions of curriculum that would meet those needs. There should be some programs for in-service teacher professional development especially in specialised areas such as remedial English and mathematics. Also, for example, there should be facilities and flexible programs for gifted children. I also urge the Government to implement a national language policy such as is set out in the recommendations of the report of the Standing Committee on Education and the Arts with which a number of honourable senators, including me, have been associated. I would like to see increased support for the isolated children's educational programs, including direct assistance for tertiary students from remote areas so that they can have genuine access to our universities and colleges. I would also like to see greater access for all Australians, particularly adults, who wish to take up part time tertiary education, to external courses facilitated by television, radio and videotex systems linked to the Aussat satellite. I would like to see an expansion of both pure and applied research resources, including an extension of the centres of excellence research scheme that was set up by the Fraser Liberal Government, and additional resources for the Australian research grants scheme. My list does go on but as time is short I will mention just two more priorities. One is an increase in the level of the tertiary education assistance scheme allowance so that at least it has the same value as the unemployment benefit. This increase in the TEAS allowance is an Opposition commitment which I notice that the Government has also now professed to support. We have yet to see whether in the coming Budget there is any move towards achieving any gain in that direction. Another, and my last, example of a priority for some additional resources is a continuing real increase in funds for technical and further education, especially in terms of the capital provision of buildings, equipment and facilities for our technical and apprentice trainees. They ought to have, and be enabled to have, the same training as we enable our university professional people to have, and more recently our teachers through our teacher training programs. Why should we give a very high level of support to our doctors, engineers and teachers but not give similar enabling support to our technical trainees and apprentices? The emphasis on TAFE over the last 10 years, principally from the Fraser Liberal Government, should continue. I note that this has been taken up in the report tabled in the Senate today, the `Review of TAFE funding' by Hugh Hudson and his committee of review which looked into the future development of TAFE. He urges a continuing of the 6 per cent real increase in provisions for TAFE especially in terms of upgrading through capital for buildings and other facilities. So in summary, whilst we seem to be locked into this plateau which has now reached $5 billion in total Commonwealth spending on education, we have a substantial list of additional programs that are still not being met. What is the way through this frustration? What is the answer to the need for these additional programs when we have, I realistically assess, a plateau in the provision of Commonwealth support. The answer to this is in three parts. The first is that I continue to urge some real increase in educational provisions in the way that I have indicated earlier. Secondly, we can change our priorities within the budget that is already established, both qualitatively and by rearrangements, to meet higher priorities. Thirdly, we can free up the constraints on our present primary, secondary and tertiary education institutions to enable resources, in addition to those from the public purse, to be applied to education. When I look at this three-part solution, I believe that we will only see those three parts put into effect when there is a change of government. I say that because I do not see any prospect, on the first count, of there being any real increase to get us away from the plateau that the Hawke Government seems locked into. Secondly, I do not see any track record for rearranging the policies and programs that have been established. The Minister seems to spend more time trying to deny that there are any problems at any level of our education system rather than facing up to them and trying to find solutions to them. The Minister, I believe, has locked herself in to this plateau mentality as if all she can do is tack bits around the edges-a margin here, an increment there-but the system itself, in her mind, seems to be set in concrete. It is in regard to this third part of the solution, in terms of freeing constraints, that I believe there is the most need for a complete change to our approach to tertiary, secondary and primary education. Let me give an example. Senator Gareth Evans —Spare us, for God's sake. Senator TEAGUE —I have three examples, Minister. The first concerns higher education. In Australia we have some 45 colleges of advanced education and about 19 universities. But the advanced education and university sectors have about the same number of equivalent full-time students; that is, about 140,000 each. Universities receive half as much again per student as do colleges of advanced education. This situation, whatever its partial merit, does seem to be set in concrete. There does not seem to be any prospect for change. Whatever a college of advanced education may argue as being its public merit for a course or a department, it seems banished from ever being involved in research, from ever having post-graduate students, from ever being a centre of excellence, from ever being able to acquire from the public purse an increased proportion that would meet its aspiration. The bureaucracy stifles accreditation of new courses or the expansion of a department, even to meet a real need that is demonstrated by students who would enrol in a course. Any of our higher education institutions are tied hand and foot, and all of this is done on the ground that we are locked into a plateau of government provision. When we add the general state of the economy, the $5 billion deficit, the pressures to restrain government expenditure, we find that we have a government that, through its Minister for Education, Senator Ryan, all the time wants to deny that there are problems and wants to say that we cannot have additional real increases in financial provision. Therefore, we must be content with the structure as it is-with higher education divided into its binary sectors, as they are, and not allow them to be enterprising, to take initiative, to be creative, or to develop research and teaching programs that are of real benefit. Another example concerns the pressure for enrolment in higher education institutions. However many applications there may be, however many qualified persons there may be to go to our universities and colleges, the bureaucratic constraints that are on the system and the plateau of funding that is available do not allow more than a certain level of enrolments to be successful, so that many applicants are turned away from our educational institutions. The Opposition is not happy with this state of affairs and with these constraints. We are looking at options for a new freedom for our educational institutions. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator BOSWELL(Queensland)(10.31) —On Wednesday, 28 May, I made a speech in the adjournment debate concerning the Queensland economy. In the course of that debate I used some Australian Bureau of Statistics figures. While citing those figures I added an interpretation as to those figures and put that down as a statement in the ABS figures. In the case in point this was incorrect as the interpretation was someone else's and I now wish to put the Hansard record straight. Senator REID(Australian Capital Territory)(10.32) —I wish to refer to a letter which I have received from the Master Plumbers and Sanitary Engineers Association of the Australian Capital Territory-the Association also sent this letter to other senators, to Ministers and to members of the House of Representatives-drawing attention to the deplorable situation which exists in relation to the training of plumbers in the Australian Capital Territory. In that letter the Association stated: It has been brought to our attention that the proposed new facilities at Fyshwick may be deferred indefinitely. The building at Fyshwick, which is to be an adjunct of the Canberra College of Technical and Further Education at Reid, has been completed. That building is in place. It is the building where these courses are to be taught. The letter points to the severe shortage of qualified tradesmen which exists in the Australian Capital Territory and to the possibility that a ballot system will have to be adopted to enable people to gain entry to the plumbing trade course. The Association believes that as many as 20 to 36 students may have to be turned away. The Association refers to the fact that contractors in the Australian Capital Territory are permanently forced to recruit tradesmen in New Zealand, fly them here and return them to New Zealand for holidays while there are young people in the Australian Capital Territory on the dole who would welcome the opportunity to gain apprenticeships and learn the trade and so have jobs and careers for the future. The letter is somewhat lengthy and deals with all aspects of the problem as the Association sees it. Let us face it, the members of the Association are the people who are likely to know exactly what is going on and the exact difficulties that are being faced. They canvass the fact that the present facility was built in the early 1960s when the population of the Australian Capital Territory was less than a third of what it is today. As I said, a building is available to enable the facility to expand but somehow there do not seem to be funds to enable it to be established and start training students. Honourable senators will be surprised to learn that when the 1986 first year apprentices reach second year the teaching program will be forced to revert to the 1954 syllabus, involving bench work only, due to safety and overcrowding concerns. Honourable senators might think, of course, that the year 1954 mentioned in the letter is a misprint, but that is not the case; it is because the present facility is so crowded that young people cannot be trained. It is incomprehensible that use of a facility available to train young people as plumbers may be deferred indefinitely. Young people in the Australian Capital Territory need opportunities to train, especially in areas in which jobs are available for them. It is hypocrisy when a Government that concentrates its efforts on make work schemes and artificial job schemes ignores the real opportunities that are available for training young people as master plumbers, gas fitters and sanitary engineers who could obtain jobs in the Australian Capital Territory. I seek leave to incorporate in Hansard the letter to which I have referred from the Master Plumbers and Sanitary Engineers Association of the Australian Capital Territory. Leave granted. The letter read as follows- 13 May 1986 Senator Margaret Reid, Parliament House, Canberra, A.C.T. 2600 Dear Senator Reid, It is with serious concern we write to you to summarise the unacceptable situation with regard to the plumbing trade facilities at Canberra Technical And Further Education College, Reid, ACT. It has been bought to our attention that the proposed new facilities at Fyshwick may be deferred indefinitely. This we believe would be an unfortunate step in the advancement of this industry in the ACT. Currently there is a severe shortage of qualified tradesmen and with the possibility of a Ballot system being adopted to gain entry to Plumbing Trade Course will only exacerbate the present circumstances. It is estimated that 20-36 students maybe turned away in the coming year. This fact is of considerable concern when you realise that contractors are permanently being forced to recruit tradesmen in New Zealand, fly them in then return them for holidays, while Australian young people are going to be denied places to gain equivalent trade training. It makes one wonder where the Government priorities lie. The trend to recruit overseas tradesmen is likely to continue while we cannot provide well trained journeymen graduates from our own training system. Unfortunately, there is no easy way around the situation. Short courses and other expedients are not possible as it is a statutory requirement of all Plumbers, Drainers and Gasfitters licensing authorities that journeymen plumbers must have completed an acceptable course of study i.e., a plumbing trade course. In recent years a National Common Core Curriculum has been developed to provide a basic uniformity of training standards across the nation. Australian Capital Territory Apprentices cannot be trained to the standard required of this Curriculum due to the complete inadequacy of the present facilities at Canberra Technical And Further Education College. The progressive decline in standards of training will only achieve a disadvantage for Australian Capital Apprentices when competing against their peers in the states. The situation has reached the stage where block release students have to be taught in normal college stand down periods because of the severe overcrowding. Furthermore, when the 1986 first year apprentices reach second year the teaching programme will be forced to revert to the 1954 syllabus involving bench work only due to safety and overcrowding concerns. This has to be totally unacceptable to a government that purports to support young people and supposedly encourages the development of local industry. In an attempt to meet the curriculum and licensing conditions students are being forced to work on training models that are within 2 feet of live electrical bus bars and light fittings. They are actually standing on platforms amongst these ceiling fillings. This is an extremely dangerous situation that cannot continue yet if they are to gain their licensing requirements these projects have to be completed. It is a classic Catch 22 situation that will be abruptly resolved when a major accident occurs. If it is necessary to have a serious accident to have action to alleviate a hazardous situation then this Association would not wish to be party to any such policy. It is quite unacceptable. The facility was built in the early 1960's when the population was less than a third of what it is today. It has had one minor extension since then. Much of the equipment also dated from that era and the numbers of students have more than trebled. Working space around machines is virtually non-existent, stores must be left on the workshop floor, power cables across the floor and some 24 students are required to work in a space that would only accommodate 12 tradesmen in industry and the numbers next year are set to increase! The situation would be condemned in industry. How the provisions of the Occupational Health and Safety Act will affect this area are a matter for some speculation. The industry in the Australian Capital Territory Region is more than deeply concerned at a rapidly accelerating cost structure being forced upon it by the shortage of trained personnel while the potential apprentices to the trade are going to be turned away. If it was not so serious it would be truely laughable when young people cannot get jobs because they cannot get the training. Present estimates are that between 20 and 36 students will be turned away in the coming year in this one trade. We as an Association are willing and able to make our contribution. Surely in these times of accelerating labour costs, high unemployment among the young and the governments stated policy of encouraging industrial self-sufficiency it is reasonable to expect support for those who are prepared to help. These facts combined with the present unsatisfactory nature of the present facilities at Canberra Technical and Further Education College make an irrefutable case for the provision of at least reasonable facilities for the necessary apprentices training. This Association believes it is imperative the facilities be commenced immediately. Any delay will only exacerbate an already unsatisfactory situation. It is with the unanimous endorsement of this Association I seek your active and earnest support to have the funds made available to meet the reasonable requirement for training of plumbers, gasfitters and sanitary engineers in the Australian Capital Territory. I would be pleased to discuss this most important matter with you at any time to provide further briefing. Yours faithfully A. MAYBURY President Senator COLSTON(Queensland)(10.35) —I refer tonight to an advertisement which appeared in Queensland Country Life. The advertisement is headed `Oppose the Fringe Benefits Tax'. After some mischievous words it states: Farmers will pay the tax themselves if they, for example, provide wood to heat employees' homes give employees' families a bucket of milk or a side of mutton allow employees to service their cars in the farm workshop and Farmers who run their properties as a private family company will be taxed for living in their own farmhouse eating their homegrown vegetables, meat and milk driving their children to catch the school bus in the farm ute running their own generators to provide electricity for the house. It then has the advice: Don't fill in the form you've just received from the Taxation Department. An example is given, which states: An employee living on the property with his family in a home and provided with a side of mutton per week- $ per week Assessed value of cottage at say... 40.00 Electricity... 7.00 Gas... 7.00 Meat... 10.00 Value of fringe benefits for tax purposes... $64.00 The employer will pay $31.36 per week in fringe benefits tax, the equivalent of about 13% of the award rate for a station hand in addition to employment costs. Worse still the $31.36 is not a tax deductible cost of employment. That seems strange to me. I have never heard of tax being tax deductible. The advertisement goes on: It will be paid out of the employer's after-tax income. If the employer's average tax rate is 25 per cent, this will amount to $10.45, a total cost of $41.81 per week. I would like to ask the Minister for Finance (Senator Walsh) to comment on these points in the advertisement, to say whether they are correct or whether they are misleading. Perhaps he might be able to comment on the example given, assessing certain aspects at so many dollars per week. It would be helpful if the Minister could provide some information. Senator WALSH(Western Australia-Minister for Finance)(10.38) —I have seen the advertisement in Queensland Country Life to which Senator Colston refers. It has also appeared in a number of other publications. The advertisement is not only dishonest in its presentation of the implications of the fringe benefits tax-and much of it is inaccurate-but it is also based on an assumption by Mr McLachlan, the President of the National Farmers Federation, that most farmers already deal dishonestly with the Australian Taxation Office. Perhaps he was speaking for himself on that matter-he usually does speak for himself. It is scandalous that the NFF should take farmers' money on the pretence of representing them, and in the process of purporting to represent them, actually to represent the interests of a wealthy group of rorters who have for so long avoided paying their fair share of the tax burden or, in some cases, probably pay no tax at all. Mr McLachlan is behaving like a member of the old Country Party, pretending to represent the general rural interests while practising a form of politics which shows no recognition of the realities of the world in which most family farmers must do business, exploiting them for their votes but leaving them to their fate, while pursuing matters which affect the Parties in a constituency. McLachlan bases his case in the advertisement on the assumption that most farmers at this moment are cheating on their tax. His fundamental premise is that private expenses are being claimed by family companies when he knows that under the law they should not be treated for tax purposes in that way. Mr McLachlan seems to think that all farmers are tax cheats and that their minds work the way his does. He seems to think that the family company is the tax haven. He wants to claim a deduction against taxable income for a house, a vehicle or a generator against the family company's income, but then he wants to provide those benefits to the family member who has an employee. He believes that the family member who is also an employee should escape tax but argues that the non-family employee should pay it. On this question as to who Mr McLachlan speaks for, he probably speaks for himself and a wealthy coterie of very large farmers. He certainly does not speak in this instance for the 80 per cent of Australia's farmers who do not employ permanent labour at all. In arguing that the tax should be levied on the employee, he ignores the fact that the administrative burden would still fall substantially on the employer, who would be required to provide the Taxation Office with the information and to deduct taxation at source as employers are already obliged to deduct pay as you earn taxation. McLachlan is unperturbed by the fundamental injustice between the way he wants to treat the employee who s a member of the family and the employee who is not. He has also sought to greatly exaggerate the cost of the fringe benefits tax, in particular in respect of the employee who is not a member of the family, or the family company. First, he has tried to attribute a liability for fringe benefits tax to items which have no economic value, such as wood to heat the employee's home and the use of farm workshops to service the employee's car. Secondly, he has greatly exaggerated the value of produce, in particular meat, which might be made available to some employees in lieu of income, and he has completely ignored the $200 threshold which applies to the minimum value of goods and services before a fringe benefits tax becomes payable by anybody. Thirdly, he has exaggerated the rental value of a cottage on a property and ignored the fact that in a remote area a concession of 40 per cent of the real rental value would be allowable on the fringe benefits tax. Fourthly, he has ignored a similar 40 per cent concession on the cost of gas and electricity in a remote area for determining the fringe benefits tax. Fifthly, he has dealt less than even-handedly with the question of driving children to catch the school bus in a farm vehicle. Fringe benefits tax in respect of private use of company vehicles will be assessed according to a formula which may, in some cases, allow a generous concession for private use. If it does not, the option is there to keep a log book and pay the fringe benefits tax only for that proportion of the number of kilometres covered for private purposes. Using these distorted figures, McLachlan has then gone back to his original corrupt thesis and suggested that the family company is being taxed twice on the fringe benefit because it has to pay the fringe benefits tax and it cannot claim it as a deduction. That ignores the deductions available to the family company for the expenses it incurs in making available the fringe benefits tax. It also ignores, of course, the principle to which Senator Colston drew attention-that is, that income tax is not deductible for income tax purposes. McLachlan says that it is a new tax on employment and a further tax on farm production costs when it is actually only replacing the existing tax regime and is not adding to the production costs of those who had not chosen under the old system to ignore this element of their tax liabilities, nor will it affect the 80 per cent of farmers who do not have full time employees at all. Finally, McLachlan has exhorted the family company farmer not to fill in the form sent out by the Australian Taxation Office. What did that form ask for? It asked for the company's name, address and whether it provided fringe benefits and would therefore be subject to the tax. Why did the Taxation Office want that information? It wanted it so that it could keep the relevant people clearly informed about the tax. From what I have said, that is the last thing McLachlan and, by implication, the National Farmers Federation would want. I regret to say that McLachlan in recent times has degenerated into a right wing ratbag who is calling for mass defiance of the law of the land. It would not be going too far to describe him as a proto-fascist. He is also weak on reasoning. I recall his specious argument at the Tax Summit last year when he said that if a capital gains tax were introduced it would be very difficult to attract new capital into long term low yield investments such as agriculture, which begs the fact: Why would any rational and responsible government want to attract new capital into long term low yield investments? As Senator Chaney said of the people who are calling for mass defiance of the law, as McLachlan is, they are emulating the most lawless elements of the trade union movement, by which I presume Senator Chaney meant the Builders Labourers Federation, which this Government and the Labor governments of New South Wales and Victoria have moved to deregister. McLachlan is Normie Gallagher in moleskins and R. M. Williams boots. Finally, given his cheap jibe at public servants in Canberra last year, I remind McLachlan and all the others that I had calluses on my hands as a farmer when he was learning to play cricket on St Peter's oval. Senator PETER BAUME(New South Wales)(10.45) —It is not possible to let that last diatribe pass without some comment. The Opposition has no objection to Senator Walsh raising, by way of rebuttal, matters of fact. If he believes he is right on the facts and if he comes in with force and vigour to demolish an argument, that is all right. I agree with Senator Walsh when he decries anyone who calls for mass disobedience of the law. However much I might dislike a law, or however much we might have fought to prevent something going through the Parliament, once it is the law of the land we expect it to be observed by all citizens. Having done those things, having responded on a matter of fact, Senator Walsh cannot resist going back to the form of behaviour which has characterised him over the years; that is, within the Parliament, using the privilege of the Parliament free from any possibility of actions for defamation, and under the coward's castle privilege available to him to say about a citizen who has no redress, who has no way of responding and who has no rights in this place, things which are personally denigrating, which have nothing to do with the facts of the matter he raised and which are just the manifestations of a particularly unpleasant and warped personality. Whatever the facts of the argument Senator Walsh wanted to demolish there is no reason at all for this Minister to have called McLachlan-I missed the exact words-some kind of fascist. If Senator Walsh did that outside this place there would be a defamation writ on him as quick as he wants. If he is any kind of man, if he wants to get up and parade his credentials, he should repeat outside this place the words which he is so ready to utter inside while protected by the privilege of Parliament. If he wants to call him a Normie Gallagher, let him say it outside. If he wants to call him a fascist, let him say it outside and give him the opportunity to take from the Minister some of the thousands of dollars which he would collect. It is not for nothing that we on this side of the chamber have put down contingent notices of motion which relate to Senator Walsh's continued abuse, if not of the Standing Orders of the Parliament, at least of the canons of good taste. He is an embarrassment to this Parliament and tonight he has given one more example of why most of us hold him in contempt. The PRESIDENT —I wish to inform honourable senators that, due to an industrial stoppage at the Government Printing Office, the Journals of the Senate and the Senate Hansard relating to today's sitting will not be printed overnight and, therefore, will not be available at the normal times tomorrow. I will keep honourable senators informed of developments. Question resolved in the affirmative. Senate adjourned at 10.49 p.m. The following paper was tabled: Public Service Act- Determinations 1986 Nos 33, 38. Regulations-Statutory Rules 1986 Nos 130, 131, 132, 133, 134, 135. GOVERNOR-GENERAL'S PROCLAMATIONS-COMMENCEMENT OF AN ACT: A Proclamation by His Excellency the Governor-General was tabled, notifying that His Excellency had proclaimed the following Act to come into operation on the date specified: Federal Airports Corporation Act 1986-13 June 1986 (Gazette No. S 269, 10 June 1986). The following answers to questions were circulated: (Question No. 913) Senator Jones asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 18 February 1986: (1) Did the Department of Employment and Industrial Relations offer funding to the States during 1984 for nurse refresher training courses under the Skills in Demand program. (2) What has been the individual reaction of each of the 6 States to the Commonwealth offer. (3) How much was offered to Queensland in financial terms, and under what conditions. (4) Is there a shortage of trained nurses in several areas of Queensland. (5) Are negotiations on the offer to Queensland still continuing between the Department and the Queensland Government; if so, what is the current state of progress. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) Yes. (2) All States, except Queensland, have entered into agreements with the Commonwealth and undertaken nurse refresher training courses under the Skills in Demand (SID) program. From 1 January 1986 SID was subsumed under the National Skills Shortage component of the new Adult Training Program. (3) The offer of nurse refresher training assistance to the States, including Queensland, was not made in financial terms. The offer of SID assistance was based on the States developing, in consultation with the relevant nursing unions, integrated State-wide training arrangements, involving each State making a significant contribution and guaranteeing jobs for successful graduates. The costing of the Commonwealth's financial contribution to the training is negotiated according to the training arrangements developed in each State. (4) While there may not be a generalised nursing shortage in Queensland, there is evidence that shortages may be emerging in particular local areas and in certain specialist nursing occupations, such as intensive care. (5) The Queensland Minister for Health has been invited to reconsider his attitude to Queensland's participation in nurse refresher training arrangements with the Commonwealth. (Question No. 920) Senator Short asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 18 February 1986: (1) Have Community Employment Program (CEP) grants been made to the Trust for Conservation Volunteers; if so, what is the total amount of these grants. (2) Was the Trust for Conservation Volunteers the sponsoring body in each instance. (3) Was the funding to the Trust for Conservation Volunteers paid to individuals or to groups. (4) Were the CEP employment guidelines followed in each instance. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) Yes. The total amount of CEP funds provided is $1.4 million. (2) Yes. (3) Funds were provided to the Trust. (4) Yes. (Question No. 924) Senator Short asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 18 February 1986: (1) Have any projects involving revenue raising activities been sponsored under the Community Employment Program (CEP); if so, which projects. (2) What was the total revenue raised in 1984-85 and what is the forecast revenue raising in 1985-86. (3) What has happened to any revenue raised under CEP sponsored activities. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) As at 21 April 1986, some 732 Community Employment Program (CEP) projects, or 4% of the total of nearly 18,300 approved projects, had indicated a `revenue raising' component. Such an indication by project sponsors has normally been on the basis that it was to be of a secondary nature and incidental to the projects' primary objectives. Precise information on revenue raised by projects is not available, and to collect it would require a substantial investment of resources by State and Territory Government officials, who are responsible for monitoring and financial control of individual projects. The following broad types of `revenue raising' activity can, however, be identified: (a) Enhancements or extensions to existing facilities, for example, local information centres or community halls which, either through increased tourist spending or payment for use of public facilities, increased or caused the raising of revenue. (b) Expanded community services, for example, child minding, youth co-ordinator, counselling services, involving a set or nominal fee for service. (c) Development of community services or special interest training courses or workshops, for example, technology, theatre production, catering services, possibly involving `enrolment fees' but generally aimed at enhancing participants' subsequent employment and hence income earning capacity. (d) Promotional activities involving fund raising for non-profit community organisations, for example, family planning, paraplegic and surf lifesaving associations. It is not possible to more clearly identify specific direct revenue raising projects, distinct from the general project types listed above, given the information available. (2) and (3) The State and Territory Government partners in the joint administration of the CEP, rather than the Department of Employment and Industrial Relations, are responsible for the financial monitoring of approved projects. I am therefore not in a position to answer these parts of the honourable senator's question. It should be noted, however, that the CEP guidelines only allow funding of projects involving revenue raising activities on the condition that no private appropriation of revenue or assets occurs at either the level of individual CEP participants or members of sponsoring organisations. (Question No. 1081) Senator Morris asked the Minister representing the Minister for Science, upon notice, on 27 May 1986: (1) What is the basis for complaint by Colonial Sugar Refinery Limited about the film ``Too Much of a Good Thing'' made by the Commonwealth Scientific and Industrial Research Organization (CSIRO). (2) What led the CSIRO to make that film. (3) What is the attitude of the Government to domestic levels of sugar consumption in the light of the present difficulties facing sugar cane farmers. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) The National Marketing Manager of CSR complained about the use made in the film of an excerpt from a sugar industry television advertisement. He also questioned certain matters of fact contained in the film. CSIRO is of the view that the use of the excerpt was a fair dealing within the meaning of the Copyright Act. CSIRO believes the information given in the film is correct and is in the best interests of the Australian community. (2) The film was produced by CSIRO as part of its public awareness activities. CSIRO has a duty to bring important facts based on research to the attention of the public. The intention of the film was to show how a balanced diet can contribute significantly to community well-being and the reduction of chronic disease. The film has had strong support from professional nutritionists and the endorsement of the Australian Nutrition Foundation and the Chairman of the Diet and Heart Disease Committee of the National Heart Foundation. (3) The Government is sympathetic to the present difficulties facing the sugar industry and the Minister for Primary Industry announced on 15 April 1986 a range of measures to assist the industry. The Government does not have an official view on levels of consumption of sugar by individuals in the domestic market. Senator Walsh —On 19 March 1986, Senator Watson asked me, as Minister representing the Minister for Employment and Industrial Relations, a question without notice concerning the participation of women in community employment program projects, particularly on labouring work normally carried out by men. I undertook to seek further information from the Minister for Employment and Industrial Relations. The Minister has provided the following response: The Community Employment Program (CEP) has been implemented as an equity program in which equal access to jobs for both males and females is an objective, specified in the guidelines. As women have historically been restricted to a narrow range of jobs, it was clear that the CEP's equity objective would not be realised, and women would be under-represented on the Program, if CEP were to be conducted without consideration being given to overcoming this imbalance. Consequently, it was determined that females would be given the opportunity to be selected for a broader range of jobs, including those considered to be non-traditional work. This is not a matter of compulsion, but rather one of presenting females with a conscious choice of wider job opportunities. The CEP's aim of promoting equal access for men and women to the full range of occupations is being realised, in part through developing women's interest in work outside the traditional female areas. To this end a 25% female target was instituted in the Jobs on Local Roads component of CEP in 1984. During 1984-85, around 34% of jobs in major construction, kerbing/road/drainage, water supply and storage, forestry, agriculture, and conservation were filled by females. During that period females accounted for approximately 46% of all CEP jobs. Government policy on affirmative action and the affirmative action legislation introduced into Parliament this year have, as a main objective, the increase of women's occupational mobility into a broader range of jobs. The CEP may be seen to be directly in line with the principles of affirmative action. Further, recognition of the importance of encouraging women to take on non-traditional work has been accorded by State Governments through the granting of special provisions and exemptions under their anti-discrimination legislation.