Tuesday, 7 October 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The PRESIDENT —I inform the Senate that I have received, through His Excellency the Governor-General, from the Governor of the State of Victoria a certificate of the choice by the Parliament of Victoria of Janet Frances Powell as a senator to fill the vacancy in the representation of that State caused by the resignation of Senator Donald Leslie Chipp. The certificate was laid on the table and read by the Clerk. The PRESIDENT —Order! It is with deep regret that I inform the Senate of the death, on 28 September 1986, of Sir Robert Murray Helpmann, CBE. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I move: That the Senate expresses its deep regret at the death, on 28 September 1986, of Sir Robert Murray Helpmann, CBE, dancer, actor, choreographer, director and producer, places on record its appreciation of his long and meritorious service to the Australian Ballet and tenders its profound sympathy to the members of his family in their bereavement. It is only in exceptional circumstances that motions of condolence are moved for distinguished Australians who have not sat in the Parliament. I think that the last occasion was on the death of Sir Macfarlane Burnet. It is appropriate today that we commemorate the outstanding career of Sir Robert Helpmann. Sir Robert was a distinguished Australian. His career as a dancer, choreographer, stage, film and theatre actor and director was one of the richest, liveliest and most productive in Australia's cultural life. Sir Robert Helpmann was born at Mount Gambier on 9 April 1909. He started ballet classes at a young age and went on to achieve fame in Europe and America. His singular talent was recognised and applauded not only by his audiences but also by his peers. There is not sufficient time here to list his achievements individually. There were many successes, particularly in his efforts to produce new and exciting dance work. I remind honourable senators that Sir Robert Helpmann left Australia in 1932 at a time when opportunities to develop his art and his craft were limited. In 1955 he returned to Australia as an actor to appear in three Shakespearean plays with the American actress, Katharine Hepburn. With Peggy van Praagh he became joint artistic director of the Australian Ballet Company in 1964. While his associations with ballet in Australia were not without controversy and disappointment, his was a major influence in the development of ballet and theatre in this country. He made significant creative contributions also to our film, television, and, on one occasion, even our pop music industries. In 1964 he received the honour of Commander of the British Empire, and other honours were bestowed on him at later stages of his life. Sir Robert had an extraordinary theatrical career. He leaves to Australians the richness of his imagination and strong sense of the dramatic, as demonstrated in his choreography. Australia's cultural life has broadened and we have produced more playwrights, painters and directors of international standing and repute, but no one can underestimate Sir Robert Helpmann's role in the development of the growing maturity of Australia's art and culture. Sir Robert Helpmann brought great joy and satisfaction to the millions who saw his work. His great talent will live on in his films and his choreography. It will also live on through the inspiration such a brilliant career offers to those Australian artists who will follow him. On behalf of the Government and all Australians I extend to his family our condolences in their bereavement. Senator CHANEY(Western Australia-Leader of the Opposition) —On behalf of the Opposition I wish to support the motion of condolence moved by the Leader of the Government in the Senate (Senator Button) and the comments he has made in support of that motion. I do not wish to say very much; Senator Collard, the spokesman for the Opposition on matters to do with the arts, will speak on this motion on its behalf and on behalf of the National Party of Australia. However, I do want to pay personal tribute to the career of an Australian which managed to span a number of different art forms. Sir Robert Helpmann was distinguished as a dancer, a choreographer, an actor and a producer. I think he was distinguished also in his confidence in the worth of his own contribution to those various fields and in the courage he showed in being himself. Of the many things which have been written since he died and which I have read, I think the point which struck me most was something written in the following terms in the Sydney Morning Herald: Unlike most of his adversaries, his weapons were a rapier wit and a refusal to be subsumed by conventional thinking and its hidden inhibitions and fears. His nose-thumbing and courage was a priceless beacon for any boy or girl with an inkling that there might be more to life than plodding conformity. I think they were very appropriate words to say of an Australian who made a very distinctive as well as distinguished contribution. I join with the Leader of the Government in the Senate in deeply regretting Sir Robert's death but in being very grateful for the contribution he made both to Australia and to the rest of the world. Senator COLLARD(Queensland-Leader of the National Party of Australia) —I support the motion moved by the Leader of the Government in the Senate (Senator Button). It was in an era when macho men did not pursue careers on the stage that the late Sir Robert Helpmann was born. He was often referred to as Bobby in his earlier years. He showed a natural talent for dance and took to the stage as early as eight years of age. His mother, as he said on many occasions, fostered and encouraged him while his father, a stock and station agent, regarded the stage and all its trappings as a waste of time. He was most outspoken in his views on this, although I understand that later on he did not stand in Sir Robert's way or criticise him. None of this deterred Sir Robert. He persevered. His mother encouraged his interest in areas other than dance with Shakespeare and the theatre. His interest was always the theatre, with ballet as a top priority. It must be acknowledged that he showed a lot of courage and determination in those years. It would have been far easier for a young man in the 1920s and 1930s to become a miner, a shearer or a jackaroo than to aspire to the stage, let alone to be a ballet dancer. His great opportunity came when he was invited to go to England. His grandfather agreed to pay the fare, so in 1933 he sailed from Australia to England. There he came under the influence of Ninette de Valois, who in her memoirs wrote of Sir Robert Helpmann: On the credit side: Talented, enthusiastic, extremely intelligent, great facility and vitality, witty, cute as a monkey, quick as a squirrel, a sense of the theatre and his own possible achievements therein. On the debit side: Academically technically weak, lacking in concentration; too fond of having a good time and too busy doing it. In London he went on to the Sadler's Wells School where he was accepted immediately. It was not long before he became the Sadler's Wells leading male dancer. It was in this time that he met the great lady of the dance of the twentieth century, Dame Margot Fonteyn. He starred in many ballets with her, forming a dancing partnership which probably has not been exceeded in this century. His coaching under Anna Pavlova had paid off. It is said that Pavlova launched his career-and what a career it has been. One of my first introductions to ballet was one that Sir Robert Helpmann has become famous for, the Display, which is all about the lyre bird in the bush. Interestingly, his interest in the lyre bird was regenerated when he came back to Australia on a trip with Katharine Hepburn, which was mentioned by Senator Button. They went into the bush with some of the cast and saw some of our native birds and wildlife. As an article in John Bull put it in 1946: Ballet was invented in France, perfected in Russia, adopted in England and transformed by Helpmann. Sir Robert Helpmann's stage performances could be likened to that of an all-round sportsman. He was successful in many spheres. As Senator Button said, he was a dancer, choreographer, actor, and director. He was a great artist. He even sang at Covent Garden in a ballet. At 71 he recorded four surfing songs which startled the theatrical world. In an art form characterised by short careers, Sir Robert's was unique, although he recognised that any dancer has a reasonably short career. After he switched to the Old Vic and became an actor he said that in his youth he remembered everybody saying: `Oh, Pavlova is finished, and she is only 42'. It had quite a salutary effect on him, and so he did branch out. Nevertheless, he was still dancing at 77, weeks before he went into hospital. He was still on the stage. That was in a role that had been created for him 50 years before. He was playing the Red King in Checkmate. This was half a century after he had thrilled European audiences with his performance. His recreated role, the Red King, was more an acting role than a dancing role. The drama side of dance always interested him more. It would not be right to pay tribute to this great master without mentioning his outrageous style. A tale often told about him was when he was dunked in the Bondi surf by a group of lifesavers who objected to his painted nails, plucked eyebrows, pink shirt and purple tie. Nonetheless, he revelled in the controversy he created. His trademark was his style of dress, adorned with heavy gold jewellery. Sir Robert never forsook his country. His 20 years plus absences in England where the English took him as their own did not weaken his ties with his birthplace. He always regarded himself as an Australian, although much of his life was spent away from these shores. Earlier this year he cut his ties with England for all time when he sold his flat. During a sojourn overseas Sir Robert not only learned but also started putting his own touches to ballets and performances. His contribution to the advancement and development of dance both overseas and here was unparalleled, particularly the encouragement he gave to younger dancers and actors in Australia. This has become legend. His love of the theatre and his ability to use it as a medium of communication and expression knew no bounds. He put this country on the map in the cultural arena. He was truly Australia's greatest ambassador for the arts. His loss will be felt in the theatre world in Australia. He was always looking for new challenges and was never content to rely on past successes. Most importantly, he had fulfilled his mother's dream. I suppose his attitude to the theatre could be well summed up by what he told his authorised biographer: Theatre remains the only thing I understand . . . It is in the community of the theatre that I have my being. In spite of jealousies and fears, emotional conflicts and human tensions; in spite of the penalty of success and the dread of failure; in spite of tears and feverish gaiety, this is the only life I know. It is a life of love. That sums up his attitude to the theatre. Today, here in the Senate, we pay a compliment to a man who put Australia on the world stage. He was one of our great ambassadors. Senator MACKLIN(Queensland) —I would like to associate the Australian Democrats with this motion of condolence regarding Sir Robert Helpmann. His death brings to an end a career remarkable in many ways. The stories which have been published about him are numerous. It can be said safely that very few people have been so successful over such a long period. His theatrical flair brought a unique, indefinable quality to the type of work that he did in so many areas of the arts. Despite his genius and his characteristic flamboyance, Sir Robert was renowned for not being too haughty to talk to even his humblest fan. His numerous successes in the theatre showed that his very astute judgment of what the public were looking for at any particular time did not fail him. Even at the age of 77 he still had what it took to get up on stage before a full house, give his all and create the theatrical magic that was so important to the economic success of what he managed to do throughout life. During a period when Australia suffered from its perennial cultural cringe Sir Robert did as much as he could to reverse that. Unfortunately, the cultural cringe lives on. Sir Robert gave inspiration to many others to see Australia as a place from where one could start, and astound the world. We have a lot to offer in this country. Not all good things necessarily come from overseas. It was particularly pleasing to Sir Robert's many fans that he finally came home and that on his death he was still actively participating in his beloved theatre. He said on many occasions that the principal purpose of the theatre was to entertain-and that he did remarkably well. He will be deeply missed by many, but his long life does not leave one so much with regret, but with admiration for so much that he did and for the enormous contribution he made, which will certainly live on after him. Question resolved in the affirmative, honourable senators standing in their places. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that: 1. The Watsonia Army Barracks contains electronic communication facilities, operated by Australian and American personnel, that gives the United States the ability to pin-point Soviet nuclear submarines, hidden in the oceans. 2. This would make it possible for U.S. killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `joint Australian-U.S.' electronic communication facilities in the Watsonia Army Barracks. by Senators Vallentine (from 24 citizens) and Zakharov (from 90 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the Australian Bill of Rights Bill is a harmful, dangerous and divisive proposal, the provisions of which are authoritarian and anti-democratic. Your petitioners therefore pray: That the Senate rejects this Bill. And your petitioners as in duty bound will ever pray. by Senator Durack (from 14 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That we urge you to oppose the Australian Bill of Rights Bill because: We get no legally enforceable rights under the Bill. The Bill does not guarantee vital rights such as the right not to belong to a trade union, the right to own private property and not be deprived of it without just compensation and the right of choice between government and non-government schools. The Bill gives Canberra extra powers to change our Federal system by the back door without a constitutional referendum. The Bill gives dangerous new powers to a Federal Government Commission. Your petitioners ask that the Senate, in Parliament assembled, should vote against the Bill of Rights, support Opposition amendments and seek a genuine public debate and a referendum on the Bill. And your petitioners as in duty bound will ever pray. by Senator Walsh (from 10 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: 1. That over 67,000 men, women and students enjoy the pursuit of their sport and recreation every year at the Anzac Rifle Range at Malabar and have done so since 1967. 2. The people of Sydney through their membership of 41 clubs headquartered at the Anzac Rifle Range together with a number of other community, school and commercial groups, the police and armed forces will lose this community facility if the Federal Government proceeds to sell the Range to private developers. 3. The Australian Bicentenary Fullbore Rifle Championships are to be conducted at the Anzac Rifle Range in April 1988 as part of the celebration of Australia's Bicentenary. Your petitioners most humbly pray that the Senate in Parliament assembled should ask the Federal Government to retain the Anzac Rifle Range for the continued use and enjoyment of the people of Australia. And your petitioners as in duty bound will ever pray. by Senators Puplick (from 505 citizens), Ryan (from eight citizens) and Sibraa (from three citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of we the undersigned citizens of Australia respectfully showeth that- The ever expanding exorbitant interest rates are casting farmers and city dwellers along with their wives and toddlers into dust and mud stricken roads, as they plod along without success, for alternative accommodation. Your petitioners therefore pray that your House eliminates this outrageous and unjust castigation of our population which is leading to the downfall of this country. And your petitioners as in duty bound will ever pray. by Senator Haines (from 315 citizens). Petitions received. Senator PUPLICK(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with great satisfaction the wonderful supportive reception given to the fleets of the Allied Nations by the people of Sydney during the recent celebration of the Royal Australian Navy's 75th Anniversary, and the great public support given to the related air-shows at Nowra and Amberley; and (b) is of the opinion that this genuine expression of the view of the people of Australia confirms the belief that Australians support our system of defensive alliances (in particular the alliance with the United States) and totally reject the anti-American, isolationist policies of the Australian Labor Party left wing and its allies the Australian Democrats and the Nuclear Disarmament Party. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) congratulates the Royal Australian Navy (RAN) on its 75th Anniversary; (b) commends the officers and men and women of the RAN for their outstanding achievements over 3/4 of a century of gallant and honourable service; (c) acknowledges with gratitude the sacrifices, including the supreme sacrifice, made by members of our naval forces in our defence; (d) applauds the RAN for the success of the celebrations it organised for its Anniversary, particularly in Sydney Harbour and at the Fleet Air Arm Base HMAS Albatross; and (e) wishes the RAN a successful future in its key role as a deterrent in maintaining the peace and, in the event of war, in defending Australia and our allies. Senator RYAN(Australian Capital Territory-Minister for Education) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to amend the Student Assistance Act 1973, and for related purposes. Senator COONEY(Victoria) —I give notice that, 11 sitting days after today, I shall move: That the Children's Services Ordinance 1986, as contained in Australian Capital Territory Ordinance No. 13 of 1986 and made under the Seat of Government (Administration) Act 1910, be disallowed. Senator COONEY(Victoria) —I give notice that, 11 sitting days after today, I shall move: That the Crimes (Amendment) Ordinance 1986, as contained in Australian Capital Territory Ordinance No. 15 of 1986 and made under the Seat of Government (Administration) Act 1910, be disallowed. Senator COONEY(Victoria) —I give notice that, 11 sitting days after today, I shall move: That the Public Service Regulations (Amendment), as contained in Statutory Rules 1986 No. 130 and made under the Public Service Act 1922, be disallowed. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate thanks the naval forces of our allies for their participation in the Royal Australian Navy's 75th anniversary celebrations, and offers all personnel involved the warmest welcome to Australia. Senator VALLENTINE(Western Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) commends the Royal Australian Navy (RAN) on 75 years of nuclear-free service to the Nation; and (b) regrets that the RAN chose to invite representatives of nuclear navies, especially warships carrying nuclear weapons, to join in its 75th anniversary celebrations. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Annual report by the Attorney-General on the operation of the Bankruptcy Act 1966 for the period 1 July 1984 to 30 June 1985-pursuant to section 314 of the Bankruptcy Act 1966. 2. Australian Statistics Advisory Council-annual report 1985-86-pursuant to section 24 of the Australian Bureau of Statistics Act 1975. 3. Office of the Official Secretary to the Governor-General-annual report 1985-86. 4. Film Censorship Board-report on activities for 1985. 5. Australian Science and Technology Council-annual report 1985-86-pursuant to section 27 of the Australian Science and Technology Council Act 1978. 6. Replacement Government response to the report of the Joint Select Committee on Electoral Reform-determining the entitlement of Federal Territories and new States to representation in the Commonwealth Parliament. This Government response replaces the one tabled in the Senate on 22 September 1986 which contained an error. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Treasurer, Mr Keating, left for the United States and Europe on official duty on 26 September. He will return on 13 October. In his absence, the Minister for Immigration and Ethnic Affairs, Mr Hurford, is the Acting Treasurer. The Minister for Resources and Energy, Senator Evans, also left on 26 September for the Middle East and Europe. He will be returning on 9 October. In his absence, Senator Walsh is the Acting Minister for Resources and Energy. Any questions normally directed to Senator Evans or those portfolios that he represents should be addressed to Senator Walsh. Senator CHANEY —My question is addressed to the Leader of the Government in the Senate. I refer to his comments last week about the horrifying paper work associated with the Government's package of taxation measures-paper work which is too difficult for the Minister to understand-and similar concerns expressed by the Prime Minister, three Labor State Premiers, the Federal Secretary of the Australian Labor Party and the Leader and Deputy Leader of the Opposition in Queensland, as well as the Opposition and hundreds of thousands of individual Australians. I ask: What has the Minister done and, if he has done nothing, what will he do to reduce the crazy paper work burden imposed on business by the fringe benefits tax? Senator BUTTON —Certainly there have been representations made to the Government in respect of the fringe benefits tax by various people to whom Senator Chaney referred. Some of those representations have been made by people who do not want a fringe benefits tax at all and some have been made by people who express concern about alleged complexities in the tax. I was lucky enough to have advance notice of this question because the Leader of the Opposition put out a Press release about it last week in which he said this: But this time, Senator Button will not be allowed to go to water. By the end of next week, he must be called on to answer three questions: Has he talked to the Treasurer? Has he forced the Government to get rid of the administrative nightmare? or Has he again let down small business people? The answer to each of those questions is no. I have not talked to the Treasurer, who is overseas. I recently announced that. There have been no changes to the administrative arrangements for the fringe benefits tax and we have not let down small business people. I want to make this point in general regarding the fringe benefits tax: There have been some quite deliberate efforts to confuse the principle of the fringe benefits tax and some issues associated with the complexities of the administration of that tax. I will try to speak in words of one syllable so that Senator Boswell, who is trying to interject, can understand me, but words of one syllable may not be available to me because I want to try to identify the distinction between those two things. The principle of the fringe benefits tax was very clearly stated on 11 July 1980 in these words: Fairness demands that employees who are paid solely in cash-and most Australians are-should not be asked to pay more tax and thus effectively subsidise those whose income is obtained partly in cash and partly in the form of valuable benefits of other kinds. That principle was established by Mr John Howard when he was the Treasurer of this country and in a unique position to do something about the taxation system, including reducing marginal rates for ordinary taxpayers-something he never did. The principle enunciated by Mr Howard in 1980 was firmly supported last week by the Deputy Leader of the National Party, Mr Ralph Hunt, when, apparently in some confusion, he said that Mr Howard had made it clear that he was not going to allow the fringe benefits issue as such to be a tax avoid- ance device. Mr Hunt continued: In other words, he is not going to allow company executives to have half their salary paid by kind without tax, such as providing a house, interest-free loans and a Mercedes-Benz car and free education for their children . . . That is obviously a tax-avoidance scheme. Mr Hunt understands the principle of a fringe benefits tax, as did Mr Howard in 1980, but at lunch time today the Leader of the sansculotte Opposition we have here, this rag and bobtail Opposition, had this to say-- Senator Puplick —Bring out the tumbrels. Senator BUTTON —No, I will not bring out the tumbrels for Mr Howard; members of the Opposition will in time, not me. Just let me say that on this issue today, the man who established the principle in 1980, which was confirmed by the Deputy Leader of the National Party last week, had this to say: `The principle of the tax is wrong and so is the administration'. That is what John Howard, Leader of the Opposition, said at ten past twelve today. That is what he has had to say. It is very important to distinguish between the principles of the fringe benefits tax, widely accepted as it is in the Australian community, and some administrative complexities which may exist. The Government has made it quite clear that it is prepared to examine some of those issues associated with the administration of the tax. But, of course, the principle of the tax has to be supported because it is part of an integral tax package, a tax reform, which will give the biggest tax cuts in the last two generations in Australian politics. Amounts of $1.5 billion on 1 December this year and $4.5 billion on 1 July 1987 will be given back to the taxpayers of this country in tax cuts. There will be tax relief of $12 a week for the average workers and a cut in marginal rates of tax, including a drop in the top tax rate, from 60 per cent to 49 per cent-something that the former Treasurer-- Senator Chaney —I take a point of order. Mr President, I am enjoying the debate, but this is Question Time. I really would suggest, Mr President, that you should remind the Minister that he is not to debate the question. I am also a bit sick of him answering questions that I have not asked him. He seems to be devoting himself to questions that were asked in a Press release last week as against the question I asked him. I ask you to call him to order. The PRESIDENT —Order! Perhaps Senator Button is anticipating the supplementary question. I ask Senator Button to restrict his answer as much as possible. Senator BUTTON —Mr President, I am just making the point that the fringe benefits tax is important in terms of the principles which have been established for some time and carried into effect by this Government. The administrative problems allegedly associated with that tax, the degree of complexity allegedly associated with that tax and the additional paper work burden allegedly associated with that tax are certainly matters which I, as a Minister, will want to discuss with the Treasurer. I am sure that the Government will consider those issues and representations about those matters which are made to it. Senator CHANEY —I thank the Minister for the last couple of sentences to his answer which addressed the question asked. Is he saying that he has taken no action so far to do anything about the paper work burden and that the only action he proposes is to have some discussion with the Treasurer when he returns to Australia? Senator BUTTON —Mr President, I do not wish to be rude to my friend but that question seems to be bordering on the imbecile. I do not know what Senator Chaney expected me to do between last Thursday and today about the paper work burden, as he puts it. Senator Chaney —Is your Department doing any work on it? You have a department with hundreds of people in it. What are they doing? Senator BUTTON —The administrator of the fringe benefits tax is the Australian Taxation Office, and the Treasurer is the Minister who is responsible for the Tax Office. As I said in the earlier answer to the question, I will talk to the Treasurer about some of these issues on his return. As Senator Chaney ought to know, it would not be appropriate for any Minister in this Government to interfere in the affairs of another portfolio in the way in which the question implies. Senator DEVLIN —Has the Minister for Community Services seen the claims made in the Tasmanian Press by Senator Walters that $33m has been used so far on advertising in the national drug offensive? Is this true? Are any other claims made by Senator Walters about the national drug offensive true? Senator GRIMES —I thank Senator Devlin for his question. I did see the articles in both the Hobart Mercury and the Launceston Examiner quoting Senator Walters as a member of the coalition's drugs task force committee. She did say apparently, according to the journalists in both newspapers, that the Government appropriated $100m to use over three years of the campaign and the $30m used so far this year has been largely spent on advertising. Senator Walters is wrong as usual. She could not be more wrong. The public information advertising allocation for the drugs campaign over the next three years totals $5m in each of the 3 years out of a budget of $100m, not the $30m that Senator Walters claims has been spent this year. The thing that fascinates me is that Senator Walters and the Opposition should know that this is a national campaign. It is a campaign run in co-operation with the State governments-a Liberal Government in Tasmania, a National Party Government in Queensland, a Country Liberal Party strange Government in the Northern Territory and the Labor governments of the other States. They are working in the program in co-operation. Senator Walters, in attacking the program in the way she does, is clearly attacking all those governments and particularly her beloved Mr Gray, and Mr Roger Groom, who is the Minister for Health in Tasmania. Senator Walters —You obviously haven't read the statement. Senator GRIMES —I have read the statement and the newspaper articles. I suppose Senator Walters will tell us that both journalists who wrote the articles in Tasmania have misquoted what she obviously said. No one believes that that is not so. But Senator Walters said other things that are not true. For instance, she claimed that only six of the 71 agencies and projects surveyed-I remind honourable senators that the survey was done in New South Wales only-have received funds from the campaign. In fact, 55 of the 71 agencies named in the survey quoted by Senator Walters have received funds. The Opposition's task force claimed, in its survey, that Pallister received nothing from the joint funding arrangements. In fact, Pallister, the primary prevention and health education agency, received $393,000. Senator Walters claimed that We Help Ourselves received nothing when, in fact, it received $104,000. She claimed that GROW received nothing. In fact, it claimed $33,000. The task force claimed that only the New South Wales Government contributed to the cost of life education mobile vans, whereas both the State and Federal governments provided $782,000 under the campaign. The list continues. I suppose that Senator Walters would say that some of the organisations would not know that they receive Federal funds. All members of the committee of which Senator Walters is a member should know that. The national campaign is based on a strategy agreed to by the States and the Commonwealth. It is based on a strategy which was largely put forward in a report called `Drug Problems in Australia-An Intoxicated Society' written by a committee of which Senator Peter Baume, Senator Walters and I were members. I wish that she and members of her committee would go away and read the report. She is denigrating a campaign in which all State governments and the Federal Government are co-operating. They are trying to do something about a problem which we all accept is a difficult problem in Australia. We will do much better-Liberal, National Party and Labor State and Federal governments-without the carping nitpicking of people such as Senator Walters. Senator NEWMAN —Is the Minister for Industry, Technology and Commerce concerned about the serious slump in the car industry, with an expected drop of at least 150,000 sales this year compared with last year? What action, if any, has the Minister taken or will he take to alleviate the economic and social impact of the slump? Does he agree that the most obvious helpful single action the Government could take would be to remove the fringe benefits tax, action which, based on industry estimates, would boost sales by at least 50,000 units? Senator BUTTON —Of course I am concerned about the downturn in production in the motor vehicle industry or, I should say, registration and sales in the motor vehicle industry, because the downturn in production is not as marked as the registration and sales figures suggest. We have had discussions about that matter in the Senate before. As I have pointed out, 1985 was a record year. It was anticipated, for a variety of reasons, that there would be a reduction in motor vehicle sales and registrations in 1986. That has been exacerbated by a downturn in the economy which has been apparent in the first two quarters of this year. It is not surprising that that effect followed. I am happy to be able to tell the honourable senator that, as far as I understand it, the August sales and registration figures for motor vehicles in industry terms suggest a bottoming out of the decline in motor vehicle sales. That is what the industry has said. It has also been reported to me that the figures for September show some slight improvement on what was anticipated. So while one cannot attach too much importance to that I think it is now the general industry view that the situation is a little better than it was and what it was anticipated to be. The point of the question is whether the fringe benefits tax has had an effect on the downturn in the motor vehicle industry. If it has, it has not demonstrated itself in the way one might have expected in view of the debate which took place about the fringe benefits tax on motor vehicles last year and early this year. The decline in sales of fleet motor vehicles-that is, fleets bought by companies and other organisations-has been less marked than the general reduction in sales of private cars. That certainly suggests that the fringe benefits tax, which it was argued would be the cause of a dramatic drop in fleet sales of motor cars, would have that effect and that it would be the principal effect on any decline in activity in the industry. The figures do not confirm that suggestion, which was made last year. I think it is very difficult to identify any one of a number of factors as being responsible for the general decline in motor vehicle industry sales and registrations. I think it is sufficient to say that a number of factors have been at work. Senator COOK —Is the Minister representing the Minister for Communications aware that Mr John Stone, formerly the Secretary to the Treasury and currently a relatively unread newspaper columnist, is reported as being a speaker at last Tuesday's meeting of the New Right H. R. Nicholls Society and that he accused the Australian Broadcasting Corporation of being a party to `a public misinformation campaign'? Is it the intention of the Government to take any action in response to this accusation? Senator WALSH —I am not only aware of this accusation but I personally heard Mr Stone on, I think, AM last Wednesday making this complaint, which was directed at the ABC and at Gillies Republic in particular. I will not read all of what he said, but he referred to the public misinformation campaign and complained that members of the H. R. Nicholls Society had been likened by Gillies to the South African bruderbond. I can only assume that Mr Stone has not seen the film Cabaret or he would have known that Gillies Republic was likening members of the H. R. Nicholls Society-or the ratbag Right rather than the H. R. Nicholls Society-not to the bruderbond but to the National Socialist Workers Party of the Weimar Republic. In fact, Tomorrow Belongs to Me, which was sung in parody by the assorted members of the ratbag Right at the end of the show, was virtually a nazi hymn. I understand that there is some legal action by one of the members of the ratbag Right. He is one of the trio who sponsors advertisements soliciting donations to run a political campaign against the fringe benefits tax. If people are going to pose as fascists they should not be surprised if they are described as fascists. I think Oscar Wilde found out about 100 years ago about posing as someone and then not being surprised that he was regarded as such. Finally, the extreme sensitivity of the members of the ratbag Right on this issue, I note for the record, is not-- Senator Chaney —I take a point of order. The Minister has drawn attention to the fact that an individual has commenced proceedings alleging defamation very much on the basis of the sorts of comments which are being made in this place by the Minister, who, of course, is secure from similar writs because of privilege which does not provide any protection for the citizen. Since a writ has been issued, it seems to me that the matter clearly will come before the courts. I regard it as being very improper of the Minister to put the view which he is putting. In a sense, it buttresses the claim of slander and defamation which has been made. In other words, having drawn attention to the fact that legal proceedings have been commenced on the basis of the points that the Minister is making, it seems to me to be highly improper for him to go on dealing with the matter in the way that he is. The PRESIDENT —At this stage there is no point of order. As I understand it, it has been the common practice over many years on the rule of sub judice for the rule not to apply until proceedings have commenced in any court. Therefore, in that respect the rule does not apply. However, I ask the Minister to bear in mind when making comments that, I understand from what the Minister has said, a writ has been issued. I also ask the Minister to answer the question specifically and not engage in any debate on the subject. Senator WALSH —Certainly, Mr President. I was just about to conclude. I was asked what the Government will do about this matter. I do not think that the Government will do anything about it but I will pass the question on to Mr Duffy, who is the Minister primarily responsible in this area. I believe that the extreme sensitivity of the ratbag Right when subject to satirical sending-up is not at all consistent with the language used by prominent members of the ratbag Right. I draw particular attention to the reference to declarations of civil war and storm-troopers at work destroying the economic and moral fabric of the nation, which was the language used by Charles Copeman in his speech to the Western Australian branch of the Liberal Party on 1 September. Senator SIDDONS —My question is directed to the Minister representing the Treasurer. When the Government announced the liberalisation of coal export regulations the Prime Minister explained the move as one designed to speed up the process of `internationalising the Australian economy'. Given Press speculation that coal exporters are now looking at price reductions of the order of $4 per tonne, would the Australian people be right in concluding that by `internationalising our economy' the Prime Minister means allowing us to be dominated by foreign interests? Senator WALSH —I am not sure of the point of the question. Nor am I aware-although I do not say that it is not necessarily so-of reports that Australian coal exporters are facing price reductions of $4 a tonne. Even if there are such reports and even if they are true that does not necessarily establish any particular cause of that outcome. Principally, I am astounded by the question-or mystified by it-and the apparently derogatory reference to internationalisation. I do not know what Senator Siddons wants-whether he wants an autarky and wants Australia to quarantine itself from the rest of the world. If that is his policy and that of the Australian Democrats, I can say only that it is certainly not the policy of the Government. Senator JONES —Has the attention of the Minister for Education been drawn to a campaign of letters to the editor, these letters being used as a means of attack on the policy of having an administration charge for tertiary students? Further, these letters claim that the fee of $250 where it is reimbursed to needy students on Austudy or students on postgraduate awards will be the subject of tax resulting in a net cost to the student. Could the Minister outline the true position on the administration charge for tertiary students and provide any other details on the application of a tax to these fees? Senator RYAN —I have noticed the campaign of letter writing to various newspapers complaining about the administration charge. Unfortunately it is the case that many of those letters have contained errors of fact. In particular there have been letters from representatives of the Council of Australian Postgraduate Associations claiming that where the $250 is payable by post-graduate students and is subsequently reimbursed, along with payments from the Department of Education, that $250 will be counted as taxable income. I would like to state very clearly that that is not the case but that the $250 will be tax neutral because it is a reimbursement to the student for the charge. I think it is unfortunate that student associations or other alleged representatives of students make these errors of fact when making public statements. Senator Peter Baume —Did you have a good day at Sydney University last week? Senator RYAN —I would like to make it quite clear that the $250 will not be subjected to tax. Senator Peter Baume has interjected some reference to Sydney University. Again there is another example where some representatives of students, complaining about the administration charge, put to me the view that it would fall on the poorest students. When I pointed out to them that the charge would not affect anyone in receipt of any tertiary education assistance scheme payments, that it would not affect single parent beneficiaries, similar pensioner beneficiaries or Aboriginal students, they were quite surprised and subsequently had to change their line. So I think it is very important that all honourable senators in this place do not encourage any of these students in their misapprehensions about the charge. The $250, when reimbursed to students, will be tax free. Senator MESSNER —My question is addressed to the Leader of the Government in the Senate. Is he aware that no calculations as to the cost impact on the private sector of administering the fringe benefits tax were done before the details of the fringe benefits tax were worked out, nor were such calculations done in respect of the public sector? Given the Minister's recent expression of concern about the crazy new burden on business caused by the tax, why was it brought in without proper consideration of the costs of administration? Senator BUTTON —I will address that question to the Treasurer and seek to obtain an early answer. Let me say, by way of speculation, that the measuring of the cost impact on the private sector I suspect would be an enormously difficult exercise. That there is a cost impact there I do not think would be disputed by anybody, but the measuring of it would be an enormous exercise. Senator ZAKHAROV —Is the Minister for Veterans' Affairs aware of a report in today's Sydney Daily Telegraph that a war widow cannot be paid $20,500 awarded by the Veterans' Review Board? Is the report correct in stating that this stems from a defect in the new Veterans' Entitlements Act 1986? If so, what is being done to rectify the situation? Senator GIETZELT —Yes, I am aware of the article in today's Sydney Daily Telegraph. I apologise to Mrs Doyle for the distress and delay that she has been caused as a result of changes made in the Veterans' Entitlements Act. When that Act was passed by the Parliament a number of sections in the old repatriation Acts dealing with payments which are now legally available to Mrs Doyle were repealed. A new section was inserted. The Veterans' Entitlements Act unfortunately has not realised the objectives of the legislation. Consequently there is a need for the Parliament to have a legislative basis for the payment of $20,000. It is not available to the Department of Veterans' Affairs at this time despite the fact that the award has been made by the Veterans' Review Board. However, I can assure Senator Zakharov that we are aware of the difficulty, which was brought to our attention by the Attorney-General's Department on 6 August. An amendment has been prepared. My colleague Mr Howe will be proposing changes to the Social Security Act and the Veterans' Entitlements Act in the House of Representatives tomorrow. It will be debated in that House the following week and will then come to the Senate. We are anticipating the passage of the legislation in the Senate before this three-week sitting is finalised. Consequently we hope to make the payment, belated as it will be, to Mrs Doyle and overcome any embarrassment she has met in the circumstances. Senator PARER —My question is directed to the Leader of the Government in the Senate. Does he recall talking to Playboy magazine last year about young people getting the dole or any other payment and saying: `In my view, if they want the allowance, they should work for it'? What has the Minister done, is he doing or will he do to implement that view? Senator BUTTON —The interview was not last year; it was well before that. It must have been long in the gestation. The Government has examined a number of the issues associated with employment and unemployment benefit for young people. In the last Budget a new scheme was announced in respect of voluntary work by young unemployed people. That scheme is in the process of being implemented. It arose from a long series of discussions amongst relevant Ministers. We are very hopeful that that scheme will be of considerable benefit to those who take advantage of it, but that remains to be seen in the light of the working out of the scheme. Senator PARER —I ask a supplementary question. Does the Minister still subscribe to the view that young people should be engaged in study, training or some kind of work to receive the dole? Senator BUTTON —Personally, I think that is desirable but there are enormous difficulties in arranging a society in which that takes place. I doubt whether there are any such societies. Senator FOREMAN —My question is directed to the Minister representing the Minister for Employment and Industrial Relations. Has his attention been drawn to an article on the front page of this morning's Canberra Times entitled `Opposition criticises two-tier wages plan'? If so, can the Minister indicate whether the Opposition's spokesperson on industrial relations, Mr Neil Brown, is correct in suggesting that indexation can only give more impetus to the wages tail chasing the prices dog and that a two-tier wage fixing process is completely inadequate? Senator WALSH —I have had my attention drawn to that article and to the reference to the wages tail chasing the prices dog. I thought Mr Brown would know more about cats than dogs. Leaving that aside, essentially what Mr Brown seems to be arguing against is the containment of wages outcomes, particularly the record that the accord has actually delivered. I gather that he wants to go back to the 1981-82 era when the Opposition had its last disastrous flirtation with a deregulated labour market and a wages explosion of 13 per cent in 1981 and 14 per cent in 1982 was produced. One would have thought that the Opposition would be reluctant to repeat that disastrous experiment or to argue that it should be repeated, not only because of its experience within Australia but also because of the experience of other countries which have not had the sort of wages agreement or consensus on wages outcomes which Australia has had since this Government has been in office or which a number of western and northern European democracies have had for a long time. For example, let us look at the British situation. In spite of having a stridently anti-union Government and unemployment rates rising from above 10 per cent to above 13 per cent, British unions were able to win for their members real wage increases of 4.6 per cent, 3.6 per cent and 2.9 per cent in the calendar years 1983, 1984 and 1985 respectively. Over the same period, by the same measure, real wages in Australia fell by about 4 per cent. There is no precedent in Australian economic history for a decline in real wages during a period of high and sustained economic growth and falling unemployment. That is what the accord has delivered, a wages outcome which has never been delivered in Australia previously, a wages outcome which was necessary because of the wages explosion of 1981 and 1982 and also because of the recent deterioration in Australia's terms of trade, which has wiped about $6 billion off national income. Some people might take the view that the outcome delivered by the accord is undesirable. That appears to be the view of Mr Crawford and the Plumbers and Gasfitters Employees Union of Australia. I find it ironic, to say the least, that the policy of that union, which normally would be regarded by the Opposition as being of the extreme Left, is precisely the same as the policy that Mr Brown is trying to have adopted by the Opposition. Senator MASON —My question is addressed to the Minister representing the Minister for Defence and follows the sinking of a Soviet nuclear-powered and nuclear-armed submarine in the Atlantic Ocean following a fire on the ship. Is the Minister aware that nuclear submar- ines are in a different class from other nuclear-powered ships because of their size in that the reactor shielding is generally lighter and the entire installation more subject to faults because of the size and weight consideration? Is the Minister also aware that the uranium used in submar- ine reactors is generally more highly enriched-often virtually to bomb grade enrichment? In view of these factors and the fact that future sinkings of nuclear submarines might not necessarily be in remote parts of the Atlantic, will the Government now actively consider altering its policy to forbid entirely the entry of nuclear-powered submarines into Australian ports? Senator WALSH —I was asked whether I was aware of a number of alleged technical details about nuclear submarines. I am not aware whether the statements Senator Mason has made are correct and I will refer them to the Minister for Defence or somebody else who is competent to answer them; nor am I aware that the uranium used in submarine reactors is close to a weapons grade level of enrichment, and I would be surprised if that were so. I will have the matter checked out. As to the final part of the question, I think it unlikely that the Government's policy will be reconsidered. However, I will ask the Minister for Defence for his comment on that matter as well. Senator ELSTOB —Can the Minister for Education say whether Aboriginal bridging courses exist to help fill the gap for Aboriginal school leavers between current education and further study or opportunities in the work force? Are such courses available in all States? Do Aboriginals in rural areas have access to these resources? Senator RYAN —The Government funds a number of programs to assist Aboriginals who leave school prior to year 12 or who are in other ways unprepared for further education and study. A number of courses funded through the technical and further education system are designed to prepare Aboriginal students to undertake trade courses or similar traineeships in the TAFE area. In higher education, that is, universities and colleges, there are courses known as enclave courses, specially funded by the Commonwealth, where Aboriginal students whose preparation for higher education is not adequate are given bridging and other sorts of tutorial and counselling assistance. As well as that, some new programs will be funded as a result of the Government's response to the report of the Miller Committee of Review of Aboriginal Employment and Training Programs. Details of those new projects were announced in the Budget. As to whether the courses are available in all States, I believe that there are bridging courses available in TAFE colleges and enclave courses in colleges of advanced education and universities in all States. Although they are not available in every institution in all States, each State would have some institutions which offer those courses. In regard to whether those courses are available specifically in rural areas, again, I would think that most TAFE colleges which operate in rural areas where there is an Aboriginal population would have courses of these kinds, as would most CAEs. I will look further into this question and give Senator Elstob the details of actual institutions offering these courses. I say in conclusion that although the Government does assist Aboriginals who leave school unprepared for further education or training in the ways I have set out, it is still of great concern to us that so few Aboriginal students are completing a full secondary education. Although the national figure for students who complete year 12 has moved up to 46 per cent of all students, the figure for Aboriginal students is only about 12 per cent-that is, only about 12 per cent of Aboriginal students finish a full secondary education. In terms of absolute numbers, that is very small. The Government, in consultation with the National Aboriginal Education Committee and other Aboriginal advisory bodies, is working on a strategy for improving participation rates by Aboriginal students. I hope that those strategies will have the full co-operation of honourable senators on both sides of the chamber. Senator SHEIL —I refer the Minister for Industry, Technology and Commerce to an article in Computing Australia of 29 September which quotes an Assistant Secretary of his Department as saying that there were white hats and black hats among computer companies tendering for an Australia Post contract, and, immediately following that statement, the naming of two black hat companies by so-called `sources'. Is it true that companies have been classified by the Department on the basis of their commitment to the offsets program? Does the Minister agree with the comments attributed to his Department, and does he support the making of such statements by public servants in his Department? Senator BUTTON —I think I saw some oblique reference in a newspaper to the subject matter of Senator Sheil's question, but I am not in a position to answer the question in any detail. I will obtain an answer from the Department as soon as possible and provide it to him. Senator CROWLEY —Has the Minister representing the Minister for Defence seen Press reports in the Australian of Monday, 6 October, which stated that women may now apply for pilot training in the Royal Australian Air Force, and that up to four women will be selected in November, as announced by the Minister, Kim Beazley? In light of other comments in that article that women in the armed forces are creating problems, particularly in meeting combat readiness requirements, can the Minister say what percentage of workers in the armed forces are women and how that percentage has increased? Does he agree with Mr Sinclair, who is concerned `about the increasing use of women in the forces'? Does the Minister see the increase in the number of women as jeopardising the combat readiness of our armed forces, or is the increase being readily accepted by the forces? Senator WALSH —Senator Crowley asked what percentage of service personnel are female and what changes there have been in that percentage in recent years. I am afraid I cannot supply those details, but I am sure I can soon find them out from the Minister for Defence and let her know. I have seen the reports to which Senator Crowley referred. Indeed, I heard something about it on the wireless this morning. She asked whether I agreed with Mr Sinclair's view. I cannot imagine that I could agree with Mr Sinclair on anything, and I do not agree with him on this point, either. Senator WATSON —My question is directed to Senator Button in his capacity both as Leader of the Government in the Senate and as the Minister for Industry, Technology and Commerce. The Minister would be aware that at least one month has now elapsed since he admitted that the Budget decision to reduce bounties by 20 per cent was not consistent with his industry policy decision. At the time I think he agreed to examine the matter. Do manufacturers who have lost this bounty have any prospects for relief? Senator BUTTON —Which bounty? Senator Watson —The 20 per cent. Senator BUTTON —I am not clear on what the question is about, but I will answer it as best as I can and Senator Watson can work it out from there. First of all, let us be quite clear: I did say that the bounty cuts were made on fiscal policy grounds. We went through this at the Senate Estimates Committee and we have been through it at Question Time in the Senate. The Budget cuts were made on fiscal policy grounds, not on industry policy grounds, just the same as in the course of the administration of the Fraser Government over a number of years it made a lot of decisions on fiscal policy grounds-decisions which have been to the vast detriment of Australian industries since that time. Let us be clear about that. Senator Watson —So is this one. Senator BUTTON —Senator Watson begged the question. I do not have to answer the question if he knows that it is a detriment to all Australian industries that these bounty cuts were made. There is no prospect of the bounties-if he is referring to the textile bounties-being reviewed. There is no prospect of that, so he would be unwise to encourage the view that there is any prospect of that. Senator Watson —Is there any relief? Senator BUTTON —There is no prospect of review of that decision. Senator SHORT —My question is directed to the Minister representing the Minister for Defence. Is it a fact that the Government- owned Government Clothing Factory in the Prime Minister's electorate of Wills has recently been awarded a three-year contract to produce 148,500 disposable overalls for the Department of Defence? Is it also a fact that this contract was awarded to the Government Clothing Factory despite the fact that the factory has never made these garments previously and did not tender for the contract and that a private sector company which has been supplying the requirements of the Department of Defence in this area for many years did tender, and at prices considerably below those of the Government Clothing Factory? I ask the Minister: Who directed that this contract should go to the Government Clothing Factory, and what were the reasons for this direction? Senator WALSH —A lot of assertions were made in the question. I am not able either to confirm or refute those assertions. I was asked who directed that the contract go to the Government Clothing Factory. I do not know that at this stage. I will see whether I can find out. I do not know whether it was a ministerial decision or a departmental decision, but as I recall it has been the custom for a number of years and a principle accepted by a number of governments that there is a non-commercial reason for maintaining the Government Clothing Factory; that is, the policy is based on the assumption that should there be a war there would be substantial advantages in having that factory operating at the beginning of the war rather than at some time later. I believe that has been the case for a considerable period. If the facts are as Senator Short asserts them to be, that may well have been a factor in awarding this particular contract. Senator COLEMAN —My question is directed to the Minister representing the Minister for Aviation. The Minister will be aware of recent publicity in Western Australia given to the level of international air services to the State and also the potential for extra traffic generated because of the America's Cup challenge over the next few months. I ask: Will the Minister outline the Government's current view regarding the level of air services and any developments in the pipeline, particularly insofar as the America's Cup challenge is concerned? I ask that question mainly in relation to domestic air services rather than international air services. Senator GIETZELT —The Minister for Aviation has provided me with a very adequate brief in respect of the way in which Western Australia is being served by international airlines. My brief indicates that currently 10 carriers operate scheduled services to Perth. In addition to that, Port Hedland is linked to Bali by a weekly flight. I understand further that Qantas Airways Ltd has reached agreement with several airlines in respect of new services from Perth. For example, Qantas and Japan Air Lines introduced from April this year a direct Perth-Tokyo once-weekly service. I recall that another question was asked a couple of weeks ago about the America's Cup. The Government, of course, is well aware of the tourism likely to be generated by the defence of the America's Cup. It is giving sympathetic consideration to requests by airlines to operate additional capacity to cater for this extra demand which undoubtedly will create the need for extra services during the period of the America's Cup competition. Qantas, for its part, has already developed advanced capacity plans for that defence period, including two extra United States services via the Australian east coast and a weekly Perth-New Zealand service which, if it proves viable, could possibly continue after the challenge. I suppose one could say in response to Senator Coleman's question that the Aviation Minister is well aware of the demand that is likely to be generated as a result of the America's Cup event and that every step is being taken by the international airlines, including Qantas, to meet whatever demand is generated. Senator ARCHER —Has the Minister representing the Minister for Science seen the Budget briefing of the Bureau of Meteorology which states that in the financial year 1986-87 the Bureau will be forced to reduce its staff by 60? Is the Minister aware that earlier this year weather forecasters took the unprecedented step of issuing disclaimers with their forecasts because of staff shortages? Is the Minister aware that the Meteorology Policy Committee warned that without an injection of resources `a major breakdown in the Bureau's fragile warning infrastructure, with serious implications for life and limb, is a real possibility'? In view of these worrying developments and in view of the comments of the Director of the Bureau that the Bureau faced `major problems with staff shortages' and `serious workload difficulties', why did the Government, at ministerial direction, transfer four staff from the Bureau to the Commission for the Future? Senator BUTTON —I am aware of many of the criticisms which were recited in Senator Archer's question. I am also aware of the fact that the Director of the Bureau of Meteorology somewhat qualified those criticisms at an Estimates committee meeting at which I was present and at which Senator Archer asked questions. The honourable senator might agree about that. His nod indicates that he does or, alternatively, that a degree of sleepiness may have come over him. I will direct to the Minister for Science the specific question of the transfer of staff from the Bureau of Meteorology to the Commission for the Future and obtain an early answer. Senator COOK —Has the attention of the Minister for Finance been drawn to a front page article in the Sunday Territorian of 21 September 1986 titled `Shock Rail Plan Goes to Cabinet'? If so, can the Minister advise whether the proposals reportedly discussed by the Northern Territory Cabinet on Tuesday to fund a $160m start to the railway-specifically, a one-off grant from the Federal Government and the sale of mortgages on State housing commission homes to a bank-would be acceptable to the Commonwealth? Senator WALSH —I have seen the report published a couple of weeks ago to which Senator Cook refers. That report is the only information I have on this matter and that caveat should be lodged over the conclusion that one draws from it. It would appear that the proposal which has been put, or will be put, to the Territory Government is that the Government flog off about $160m worth of government owned housing to a private institution-in other words, capitalise or liquidate its asset by flogging off capital in order to provide a $160m interest free capital injection for this railway that it has been proposing for some time-or, alternatively, get a $160m grant from the Commonwealth to do it. It has no chance of doing that. I can tell the Northern Territory Government in advance that this Government will not waste $160m of taxpayers' money on that white elephant. The very fact that even the Territory Government admits that a $160m free capital grant is required establishes that the proposed investment, so-called, is not rational and is not responsible. I must say I am surprised that Canadian Pacific Railway was willing to put its name to an analysis as shonky as the so-called analysis which was done for the territorial Government on a Darwin-Alice Springs railway. The analysis conducted by Canadian Pacific was shonky in a number of respects. Firstly, it assumed that all the traffic would be carried throughout the entire length of the railway, that nothing would be dropped off at Katherine or any other intermediate point. Secondly, it assumed that all the freight that moved from north to south would be carried on the railway and that none would be carried on the road. Thirdly, it took into account the alleged benefit to the rest of the railway system in Australia of the increased traffic that would be carried on the railway as far as Alice Springs and on the rest of the rail system to other parts. Those external benefits, to the degree that they exist at all, apply whether the traffic is moved from Darwin to Alice Springs by rail, road or any other means. Those other external benefits are there in any case. In other words, there are three quite specific points in which the analysis done by Canadian Pacific Railway was quite shonky. There is a fourth one I cannot remember off the top of my head. It does not surprise me that the territorial Government would promote a shonky analysis, but I am surprised that Canadian Pacific was willing to put its name to it. Senator Cook asked whether the Commonwealth Government would be happy if the Northern Territory Government were to find the capital for this white elephant by flogging off its assets. I do not think the Commonwealth Government would be altogether happy about it, but the Commonwealth Government is not happy about many of the fiscally irresponsible actions which the Northern Territory Government has taken over a number of years, in particular in the period when the present Federal member for the Northern Territory was Chief Minister. We have been unhappy about many things that that Government has done. I and probably other members of the Commonwealth Government are concerned about the degree to which the territorial Government has underwritten private sector borrowings, or given government guarantees on private sector borrowings, for proposals the viability of which is yet to be demonstrated, to say the least, and ought to be seriously called into question. Senator CHANEY —My question, which is addressed to the Minister for Finance, follows his last answer and his continued interest in the financial affairs of the Northern Territory and Queensland governments. I ask: Will he take the same approach to the Burke Government in Western Australia? In particular is he completely satisfied with the purchase of Fremantle Gas and Coke Co. Ltd and the involvement and role of the State Minister for Minerals and Energy, Mr Parker, in the approval of a bonus share issue in May prior to the sale of that company? Senator WALSH —I do not believe there is any need to take the same degree of interest in the financial affairs of the Western Australian Government as there is in those of the Queensland and Northern Territory governments. Whatever record previous Western Australian governments may have had, the present Western Australian Government does not have a record of fiscal irresponsibility, let alone of corruption. As far as I know, the Premier of Western Australia has not received a $400,000 out-of-court bogus libel settlement, as the Premier of Queensland has. Nor has the son of the Premier of Western Australia had a $5m dam built adjacent to his farm with taxpayers' money and fortuitously, just before this announcement was made, granted an 18-inch pumping licence from the billabong which was to be filled by that dam. To further emphasise the point which is being made, this proposition has never been on the Queensland State application list sent to the Commonwealth Government for funding. Nothing like that has happened in Western Australia and I do not believe anything like it ever will. Senator CHANEY —Mr President, I ask a supplementary question. I remind the Minister of the great trouble he has obviously taken to examine particular financial transactions by State and Territory governments, and I ask: Has he examined the transactions relating to the sale of the Fremantle Gas and Coke Co. Ltd and the role of the State Government in those transactions? If he has not examined them, will he do so and advise the Senate on his views on the role of the State Government and Mr Parker in particular? Senator WALSH —There are not one but numerous prima facie cases of corruption concerning the Government of Queensland. There is no such prima facie case concerning the Government of Western Australia. Senator GRIMES —On 25 September, Senator Puplick asked me a question in my capacity as Minister representing the Minister for Health about the resignation of Mr Jan Freese, the head of the Swedish Data Protection Agency. I have sought information on the matter in particular to clarify some of the statements made by Senator Puplick. Mr Freese has resigned as Director-General of the Swedish Data Inspection Board after 13 years in that position. The reason for his resignation was to take up an offer of employment with the Swedish private sector as Vice-Managing Director of the Federation of Swedish Industries. Mr Freese has specifically denied that his resignation was in any way to be interpreted as a protest against or an indication of any incapacity of the Swedish Data Inspection Board to undertake its functions in respect of the protection of the privacy and civil liberties of Swedish citizens. He and his colleagues have been arguing for some time that the Swedish Parliament should rewrite Swedish law and reorganise administrative systems to make them more easy to understand and to deal with, a matter which many of us would agree with. Over the years he has asked Cabinet and the Parliament to put more effort into rewriting laws and reorganising systems to make them easier to manage. However, in no way, to use Mr Freese's words, does he doubt the Data Inspection Board's ability to do its work. He has stressed that he is not at all concerned by the capacity of the Data Inspection Board to undertake its task. There are important differences in the way that Board operates and the way an Australian data protection agency would operate which need to be pointed out to honourable senators. The proposed data protection agency decisions in Australia are not appealable to Cabinet or to the Minister; they are appealable only on points of law to the Federal Court. In Sweden in fact they are appealable to the Cabinet and in some 0.25 per cent of cases the appeals are successful. One of the primary functions of the data protection agency in Australia is to address the issue of establishing appropriate controls over data matching and data linkage in the interests of achieving an appropriate balance between individual privacy and effective administration. There is a movement in Australia towards simplification of law and government procedure. This movement is endorsed by the Federal and many State governments and is an issue completely separate from both the data protection agency and the Australia Card program. The degree to which the Swedish national identification number intrudes into every aspect of life of the Swedish citizen and the public access given to what in Australia would be considered personal and private information is totally dissimilar to the situation which now exists in Australia or would exist under the restricted, modified Australia Card program. Mr Freese's remarks were apparently reported in a publication called the `Transnational Data and Communications Report'. He has denied absolutely that the remarks attributed to him in that report are accurate. He has denied that that is the reason for his resignation after such a long period as Head of the Data Protection Agency in Sweden. It is important that this be placed on the record as this matter has been cited in documents in Australia, such as `ID Card Update' which appeared in Civil Liberty No. 122 for May-June 1986, which document Senator Puplick apparently was quoting from third-hand. Senator TATE(Tasmania) —by leave-I draw the attention of the Senate to a matter affecting one of its committees. I refer to an article which appeared on the front page of yesterday's Age, written by Mr Michael Pirrie, which could gravely affect the operation of the Senate Select Committee on the Human Embryo Experimentation Bill 1985. The article purports to anticipate the report of the Senate Select Committee which I hope to table tomorrow. One is always at a disadvantage in such a situation. Suffice it to say, the so-called inside story is obviously the work of an informant intent on propaganda rather than a fair presentation of the report. At this stage, I cannot and will not either confirm purported extracts from the report or, of course, catalogue the sins of omission, which I nevertheless assure the Senate are there and which provide such a biased account of the matters which purport to anticipate the report which I will table tomorrow morning. It has to be said that three or four sentences indicate that the informant or reporter definitely had access to a draft at least, if not the final report, of the Committee. I remind honourable senators that according to the Committee of Privileges report of 1971 it is no defence to have extracts prefaced with words indicating the anticipation of committee recommendations, which is the guise under which the article was written. I intend to convene a meeting of the Select Committee before we exhaust our mandate tomorrow on the tabling of the report. At that meeting the Committee may consider whether I might move a substantive motion relating to this matter insofar as privilege may have been breached. In the meantime, I ask infertile couples, their clinical advisers and scientists in the field of reproductive technology to await the publication of the report and a fair reading of it. Senator MASON(New South Wales)(3.34) —I move: That the Senate take note of the paper. I enter into debate on this matter to raise a point which I feel is urgent and plainly in need of discussion; that is, the need for a separate classification of motion pictures for public exhibition. That classification appropriately could be V for violence. It is essential that there be a classification which is not necessarily associated with the sexual aspects of motion pictures, important though they may be, but with the degree and nature of violence which a movie exhibits. It is a notorious fact that the extent of violence in movies is increasing in both quantity and quality. There is progressively more violence in movies shown for public exhibition and it becomes increasingly gruesome and unpleasant. Moreover, violence is often presented in ways which seem to condone it, as when a popular hero figure initiates violent action. I am thinking at the moment of that highly courageous character, Sylvester Stallone. The facts of Stallone's own life show how phoney is the image he presents in movies in that he hides behind bodyguards and so on rather than place himself in even the most imaginary area of danger. That is quite insignificant but worth mentioning. The really important point is the intrinsic damage that that kind of image can cause. It is a fact that children and young people are impressionable and are impressed by violence and some want to emulate it. That is not just a fact off the top of my head. It has been confirmed by survey after survey in country after country. It does not necessarily mean that all young people and children will be influenced. Some will merely laugh at violence; some may well find in it a form of sublimation-I do not know. But a significant number of young people and even adults, perhaps of not great maturity, are influenced to emulate violence in their own lives. Where there is violence, as well as an instigator there is a victim. I bring this point to those people who quite properly and reasonably say to us and to others that there should be no kind of censorship whatsoever, that people should see what they want to see. I agree with that provided it does not cause injury to innocent people in the community. There is evidence that this is happening. Many parents and adults would like to know when a movie uses scenes with sadistic or unusual violence so that they can ensure that their children avoid it or they can avoid it themselves. It is reasonable and proper that the community should offer that kind of facility. It can be done with that simple V classification for such movies. My private view is that there should be stricter censorship of that type of material for the reasons I mentioned a few minutes ago-that there are victims. Where innocent people are involved or injured, often in quite explicit copies of what has been depicted in a film, the Government has a great responsibility to take some kind of action. The whole area needs to be addressed as a matter of considerable importance to the community because of the increasing numbers of people who are injured-we cannot assess the numbers of such people; there may be more than we think-because some person who is not mature or some youthful person has seen on television or in a film some violent action which appears to be something of which a section of society would approve and which the movie connotes in some way to be a claim to community acceptance. Before this can be addressed, which is a difficult matter as I know, as a start could the Government please get together legislation or whatever regulation is necessary to introduce this new classification. Senator HARRADINE(Tasmania)(3.38) —I rise so that this report is not taken off the Notice Paper. It is somewhat difficult for a member of a committee which has as one of its functions the consideration of the operation of legislation part of which is administered by the Film Censorship Board. I refer to the Joint Select Committee on Video Material. Senator Puplick —When will it report? Senator HARRADINE —I would not have a clue. The honourable senator had better ask the Chairman. As honourable senators would have observed, a substantial number of petitions relating to the Film Censorship Board have been presented. Because I am a member of the Committee it would not be appropriate for me to comment on that matter in this forum. I hope that in response to Senator Puplick's remarks the Committee will report soon, but I cannot say that it will. It is a matter which those honourable senators who are members of the Committee should perhaps discuss with the Chairman. It is not for me to say when the Committee is going to report; it is for the Chairman. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator ARCHER(Tasmania)(3.41) —I move: That the Senate take note of the paper. I think this is a good opportunity to reflect on the Australian Science and Technology Council, its function and the results of its work. The Australian Science and Technology Council was set up in 1979 as one of those creatures that was to respond directly to the Prime Minister. Its place is very important and very influential as a result. But before it can fulfil its functions adequately it needs to realise its own strength and to maintain its complete independence. If it is going to do any good, the jobs it is asked to do should at least be taken some notice of. In that respect I refer to the question I asked in Question Time concerning the Bureau of Meteorology. Having carried out an inquiry into the capital re-equipment program I note that on page 13 of the report it is stated: The main recommendation by ASTEC was that the Bureau be provided with a capital appropriation of $5 million in 1986-87, and that a capital planning level of $7.2 million (with a forward obligation level of $4 million) be approved for the period 1987-88 to 1990-91 (all at June 1985 prices). If we want ASTEC to produce reports of this nature and to do a job thoroughly it is of little use if those reports just get filed away and nothing is done about them. Similarly, the report it did on the reorganisation of the Commonwealth Scientific and Industrial Research Organisation has been taken up only in part. The legislation that is shortly to come before the House mentions that it is drafted on the basis of the ASTEC report, but it is a very tiny base if that is considered to be the case. There are so many things in the report that have not been attended to. Things have been added to the report that were not in the recommendations; for instance, the question of the duties of the Chief Executive of the CSIRO. From now on he will have to be like Superman. I believe we are asking a lot if we expect him to operate when the advice that was formerly coming to him from State advisory bodies is received from a board comprising a chairman and seven part time members. If we are to get value from the CSIRO I think it is very necessary that we have a much stronger system at the top than is laid down in the legislation. I think it is highly desirable that ASTEC be represented on the various scientific committees and that those committees provide comments and are consulted by people in various organisations. We need to have this collection of people of great knowledge and experience to see that Australia gets the best scientific advice that it possibly can. ASTEC is the hot line between science and the Prime Minister. It is the conscience for research and technology, even though at times we may take little notice of that conscience. I was interested to read the list of the 46 inquiries carried out by ASTEC since it commenced in 1979 and to see the wide range of subjects inquired into. Earlier this year I expressed a little disappointment that a couple of the recent reports seemed to lack substance, but perhaps because those subjects lacked substance in the first place they are less valuable than others. I commend ASTEC as an organisation. I hope that it will carry on, maintaining its independence, and produce good, strong, solid material for the scientific community and for Australia in general. Senator PUPLICK(New South Wales)(3.46) —The 1986 report of the Organisation for Economic Co-operation and Development science examiners addresses in some detail the role of the Australian Science and Technology Council. The OECD examiners in fact recommended that ASTEC should be changed somewhat in that it should report directly to the Minister for Science rather than to the Prime Minister. That is one of the recommendations which I hope that Government, in its consideration of the OECD report, will not adopt. I believe there is great merit in having a system in which the premier advisory body to government on questions of science and technology reports directly to the Prime Minister rather than to a Minister who is usually fairly low in the Government's pecking order and rarely, if ever, represented in Cabinet. It is perhaps interesting that in Sweden the Minister responsible for science and technology matters has always been the Deputy Prime Minister. However, when the previous Deputy Prime Minister, Mr Carlsson, became Prime Minister on the death of Mr Palme, he elected to retain responsibility for science matters himself. I think that is a proper appreciation of the role which scientific advice should be accorded in the formulation of government policies. However, the ASTEC annual report for 1985-86 gives us a chance to look at a number of matters which have come before ASTEC. I will very briefly advert to one or two of them. First, I believe that the report undertaken on public investment in research and development in Australia is one of the most important and significant reports prepared by ASTEC. It is one which I hope will have a profound effect in shaping the Government's future policies in that area. I note that a report is expected in late 1986 on the role of private sector research and development and I certainly hope that it will be a worthwhile report. Similarly, a report will be forthcoming on higher education research funding. I believe that this is a matter which the Government will have to address with some degree of urgency. I understand it is intended to complete the review by late September so that any necessary modifications in research funding can be planned for the 1988-90 triennium. As Senator Archer has said, it is a pity that the ASTEC report on the future directions for CSIRO was not picked up more fully than is the stated intention of the Government, and that the legislation which has been forthcoming as a result of this review reflects only some of the recommendations of ASTEC and indeed does not represent a proper reflection of some of the critical areas of its recommendations. The report on nuclear science and technology in Australia is a very important one. It complements the earlier report of the Slatyer inquiry on Australia's role in the nuclear fuel cycle, which once again I think was useful in indicating some of the furphies which are around about the nature of nuclear research undertaken in Australia. I must say I have found the reports from the technological change committee, with the exception of parts of the report on mechanisms for technology transfer into Australia, to be rather disappointing. In particular, the report which was issued on new office technology, in my judgment, is nowhere up to the standard we are entitled to expect from a body as expert as ASTEC. Nevertheless, this report, with its recommendations on the stellar interferometer, which I hope the Government will find itself in a position to take up, I believe is a valuable overview report from the Science and Technology Council. I hope that, in terms of its further reports on research funding in higher education and on research and development funding in the private sector, it will make a substantial input to decision-making in government. As I said, I hope that the recommendations of the OECD examiners in their 1986 report about their reporting activities will not be acted upon. Senator VIGOR(South Australia)(3.51) —I support Senator Archer and Senator Puplick in some of the remarks they have made. I commend to the Senate the 1985-86 report of the Australian Science and Technology Council. I commend ASTEC on the contribution it has made to Australian science and technology through its reports on key issues affecting Australian research and development and industrial innovation. The Australian Democrats have long been concerned about the failure of Australian industry to compete effectively on world markets. We regard our failure to invest adequately in industrial research and development and in the overall management of risk as a prime cause of our lack of competitiveness on world markets. For this reason I applauded the recommendations of ASTEC which led to the Government setting up management and investment companies and various other venture capital ideas, and more recently the introduction of the allowance of a 150 per cent deduction from income tax of expenditure on approved research and development. These initiatives have already revolutionised high technology in Australia and they have bred a new entrepreneurial spirit which has been suppressed for far too long. However, I do not support all ASTEC recommendations. I welcome the new ideas and support some of the old ones which have been brought out in a more effective way. This has revitalised government and industry in their promotion of individual and group enterprise in Australia. One of the recommendations which I do not wholeheartedly support is the proposal to direct the Commonwealth Scientific and Industrial Research Organisation's research and development capacity as a national research organisation towards compensating for our total lack of industrial research and development capability. Only some of the ASTEC recommendations on CSIRO have been taken up in the new legislation the Government has placed before us. I hope that through amendments the Opposition and the Democrats will be able to introduce some more of these recommendations. Australia currently has an effective research and development capacity working in the national interest in the public sector, but as yet the private sector has not caught up with this. ASTEC has pointed out that technology transfer is very difficult if an organisation does not have its own research and development capacity. In fact, the 150 per cent tax concession is aimed at redressing this lack. It will not profit our industry to be encouraged to continue to lean on our national research organisation for its investment in research and development. We need to have in-house research. The 150 per cent tax concession may be an effective way of doing this when linked with the grant for the industry research and development system which will help the smaller organisations. While I congratulate ASTEC and the Government on their initiatives in promoting private industrial research and development, I have distinct reservations about their short term redirection of Australia's national interest investment in research and development through CSIRO, and also the directions in which they are pushing the private sector by going through a type of choosing winners system. Another major concern of the Australian Democrats is the fact that we have no sensible system for the management of intellectual property. The international patent treaty system does not adequately protect Australian inventors. We have only to look at the history of Australian patents to realise that we lose almost half our inventions to overseas exploitation. ASTEC needs to inquire into this and to do something about it pretty quickly if it is to be effective. I was disappointed when I questioned officers from the Patents Office during the Estimates Committee hearings on what plans they had in this area. I draw the Senate's attention to page 803 of the Estimates Committee A Hansard of 25 September 1986, where it is said that the Patents Office has no long term plans for changing our intellectual property handling system. It is very important that this area be investigated by ASTEC. The Australian Democrats call upon the Government to introduce urgent reforms in this area of intellectual property. Without such reforms all our investment in research and development, in both the national and the private sectors, may well be to no avail. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator COATES(Tasmania) —On behalf of the Standing Committee on Finance and Government Operations, I present a report on non-statutory bodies. Ordered that the report be printed. Senator COATES —by leave-I move: That the Senate take note of the report. Since 1977 the Senate Standing Committee on Finance and Government Operations has tabled a number of reports on the activities of Commonwealth statutory authorities and certain Commonwealth corporations. While undertaking inquiries into the activities of these bodies, the Committee was aware that the Parliament knew little of the activities of another large group of government bodies, the so-called non-statutory bodies, or NSBs. In late 1983, the Committee sought and received from the Senate a reference to investigate and report on the activities of NSBs. The Committee tabled an interim report in October 1984, based on information gained from a preliminary survey of all Commonwealth portfolios. The report identified some 300 NSBs and contained data on the method of formation of NSBs, date of formation, membership of NSBs and general information on the costs associated with the operation of NSBs. In its conclusion to the interim report, the Committee recommended that each Commonwealth department include in its annual report a list of the NSBs that fell within its portfolio. The Senate will be interested to note that in the 1984-85 departmental annual reports, 11 departments did not include a list of NSBs, 13 departments did provide a list, and three departments provided a list which included some of their NSBs but did not identify them separately under this title. The remaining department, the Department of Finance, had no NSBs to list. At the time of tabling the interim report, I informed the Senate that the Committee intended to undertake further investigation into the activities of these bodies. The report I table today is the major part of that further investigation. This report is based on a second, and more extensive, survey of NSBs. The Committee asked that every Minister arrange for the completion of a questionnaire prepared by the Committee by each NSB within his or her portfolio. The Committee found that the response by portfolios to this request ranged from excellent to poor. Some of the departmental officers responsible for ensuring completion of the questionnaire failed to recognise that the questionnaire was a formal request by a parliamentary committee to the Minister for information of NSBs. Other departments failed to check the accuracy of responses and even to keep copies of information they had supplied to the Committee. A number of portfolios still had questionnaires outstanding at the time of the printing of this report, some nine months after the initial request for information. Despite the difficulties encountered in collecting data, the Committee was able to gain considerable detail and insight on NSB activities for the year 1984-85. A total of 598 NSBs provided completed questionnaires, including some 300 additional NSBs identified by portfolios since the Committee's interim report. The Committee found that all portfolios except Finance had NSBs, with three portfolios each having in excess of 40 NSBs. The Committee was particularly interested in gaining more information on the financial arrangements of NSBs, including the cost of staff, remuneration of members, sources of funding and accountability of NSBs. Unfortunately, the Committee found that it was difficult, if not impossible, for many NSBs to identify their costs. Little detailed information was received by the Committee on the cost of secretariat services, payments to members, including travel allowances and sitting fees, and, surprisingly for some NSBs, how much money they distributed on behalf of the Commonwealth. The Committee also found that only 54 of the 598 NSBs surveyed had published or tabled in the Parliament an annual report in the 1984-85 financial year. Some 144 NSBs had produced a report other than an annual report during that time. The Committee has made a number of recommendations in this report. Some of the recommendations are an outcome of the difficulties it experienced in collecting information on NSB activities. Others are aimed at increasing NSB accountability to the Parliament and the public. The Committee's principal recommendation is that a central NSB register be created and maintained by a co-ordinating department and that the register be established by 30 June 1987. The Committee strongly believes that such a register should contain, for each NSB, information such as date of establishment, the objectives of the NSB, guidelines for selection of members of the NSB, financial arrangements, and reporting requirements. The Committee also recommends that in future no NSBs be established without ministerial approval. This will ensure full ministerial knowledge and responsibility even when the establishment of an NSB is not a ministerial initiative. In relation to NSBs already in existence, the Committee recommends that Ministers initiate reviews of their operations with a view to rationalising their work and numbers. The Committee has made a specific recommendation in relation to the accounting standards and procedures of NSBs. The Committee expects this recommendation will be considered by the Minister for Finance as a matter of priority. I come now to a number of matters which involve not only this inquiry, but also the Committee's work on other Commonwealth bodies. The Committee experienced difficulties in classifying whether particular bodies are NSBs, whether bodies are statutory authorities or parts of departments. After considering the matter at length, the Committee has decided that a number of changes should be made to the way in which the Committee defines and categorises Commonwealth bodies. It is the Committee's intention that these changes will enable the Committee, the Parliament and all other interested groups to distinguish NSBs from statutory authorities. The changes the Committee intends to adopt are: First, where the enabling legislation of a statutory authority allows the authority to establish a sub-body, then the sub-body has a statutory basis and should be classified as a statutory authority; secondly, government-owned companies, subsidiary companies established by statutory authorities, and associated companies in which statutory authorities have a shareholding of more than 20 per cent, will not be categorised as either NSBs or statutory authorities but will be treated separately along with incorporated associations; and, thirdly, parts of departments, such as the Bureau of Mineral Resources, Geology and Geophysics, will not be regarded as NSBs. As a result of the changes I have outlined, the Committee intends to revise and update its lists of Commonwealth bodies. In future, the Committee intends to publish a list of Commonwealth bodies in the following categories: Statutory authorities; NSBs; and companies and incorporated associations. The Committee hopes to table its revised list of statutory authorities before the end of the year. In order to reflect the three categories of bodies the Committee now wishes to be treated separately and to allow the Committee effectively to pursue its continuing scrutiny of Commonwealth bodies, the Committee proposes that its current terms of reference on statutory authorities and NSBs be amended. In addition, the Committee seeks a new reference on government companies and incorporated associations. On behalf of the Committee I thank Andrew Snedden, the Secretary to the Committee, Christine McDonald, the research officer to the Committee, and Louise Paton, our steno-secretary, for all their help with the report and their particularly hard work at some crucial points of the report's preparation. In particular, the Committee expresses its thanks to Meg Crooks, who was until recently research officer of the Committee Secretariat. It was she who had the prime carriage of this project from its start and who performed the task of preparing for publication the results of the survey and the first draft of this report. Her ability and dedication in the performance of this onerous and often tedious work are much appreciated. I commend the report to the Senate. Senator VIGOR(South Australia)(4.05) —I rise to support Senator Coates and seek leave to continue my remarks later. Leave granted; debate adjourned. Senator COATES(Tasmania) —by leave-I give notice that, on the next day of sitting, I shall move: That the following matter, referred to the Standing Committee on Finance and Government Operations on 6 October 1977, be amended to read as follows: The continuing oversight of the establishment, operation, administration and accountability of bodies established pursuant to Commonwealth statute. Senator COATES(Tasmania) —by leave-I give notice that, on the next day of sitting, I shall move: That the following matter, referred to the Standing Committee on Finance and Government Operations on 17 November 1983, be amended to read as follows: The continuing oversight of the establishment, operation, administration and accountability of bodies for which the Commonwealth is wholly or partly responsible, being bodies which are not departments (or parts of departments) nor statutory authorities (or sub-bodies of statutory authorities) nor incorporated companies nor incorporated associations. Senator COATES(Tasmania) —by leave-I give notice that, on the next day of sitting, I shall move: That the following matter be referred to the Standing Committee on Finance and Government Operations: The continuing oversight of the establishment, operation, administration and accountability of incorporated companies and incorporated associations owned by the Commonwealth and of those in which the Commonwealth holds a major or substantial interest. Motion (by The President) agreed to: That leave be given to introduce a Bill for an Act to declare the powers, privileges and immunities of each House of the Parliament and of the members and committees of each House, and for related purposes. Bill presented by The President, and read a first time. The PRESIDENT —by leave-I move: That the Bill be now read a second time. The main purpose of this Bill is to avoid the consequences of the very narrow interpretation and reading down of article 9 of the Bill of Rights 1688 in its application to the Australian Parliament in the judgments of Mr Justice Cantor and Mr Justice Hunt of the Supreme Court of New South Wales in each trial in R v Murphy. I have had this Bill prepared and I am submitting it to the Senate in response to requests and suggestions by honourable senators to the effect that a Bill for this purpose should be introduced as soon as possible for consideration by both Houses of the Parliament, and that it would be appropriate, as it is a parliamentary matter, for the President to introduce such a Bill. In so doing I have discussed the matter with the Speaker of the House of Representatives and she concurs with this course of action. I have also included in the Bill, at the request of honourable senators, provisions designed to put into effect the legislative recommendations of the Joint Select Committee on Parliamentary Privilege. It was put to me that I should give the Senate the opportunity to consider those recommendations in conjunction with the provisions relating to freedom of speech in Parliament. It is an unprecedented step for a Presiding Officer of a House of the Parliament to introduce a Bill-indeed, it is unusual for a President to speak to any matter before the Senate at all- but I have decided to take such a step because of the fundamental importance of freedom of speech to the operations of both Houses, and because of the very serious threat to that freedom of speech posed by the judgments to which I have referred. I want to stress once again that the privilege of freedom of speech does not exist for the benefit of members of parliament, but is designed to allow them to speak fearlessly on behalf of the people they represent and to pursue without hindrance matters in the public interest. In order to assist the Senate in its consideration of the Bill and the matters raised by the judgments in the courts, on 4 June 1986 I presented to the Senate a draft of the Bill, an explanatory memorandum explaining the provisions of the Bill, and a commentary on the judgment of Mr Justice Hunt prepared in the Senate Department. In a statement at that time I invited honourable senators and members to comment on the draft Bill. Some minor refinements have been made to the Bill since the draft was presented. I now present to the Senate an updated explanatory memorandum, and a set of the papers relating to the matter, including the submission which was made to the Court on my behalf and the two judgments. In this second reading speech I will not deal with the provisions which give effect to the recommendations of the Joint Select Committee, as these are fully explained in the explanatory memorandum. I will concentrate on the issue of freedom of speech. Article 9 of the Bill of Rights, which is a statutory provision applying to the Houses of the Australian Parliament by virtue of section 49 of the Constitution, provides: That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament. It has long been accepted, virtually since this provision was enacted, that this prevents parliamentary proceedings from being called into question in the broadest sense in proceedings before any court or tribunal. This interpretation was supported and applied in a number of judgments in British and Australian courts which are referred to in the documents I have presented to the Senate. These judgments and the long- established interpretation of article 9 which they embodied, however, have been repudiated by the recent judgments given in the Supreme Court of New South Wales. Mr Justice Cantor's judgment, given on 5 June 1985, was to the effect that the test of a breach of article 9 is any adverse effect on parliamentary proceedings, and that the protection provided by article 9 must be balanced against the requirement of court proceedings. It was not clear what this judgment meant in practice until, in the course of the trial, witnesses and the accused were rigorously cross-examined on the evidence which they gave to the Senate committees-including evidence given during in camera committee proceedings-the truth of that evidence was questioned, and submissions were made to the jury as to the credibility of witnesses and the accused based on that questioning. In his judgment, Mr Justice Hunt ruled that this use of parliamentary proceedings is not in breach of article 9 because the latter is restricted to preventing the prosecution or suit of a person for what that person has said or done in the actual course of the parliamentary proceedings. According to this judgment, it is not a breach of article 9 to use parliamentary proceedings as evidence of an offence or of a civil liability, to establish the motive or intention of a person for the purpose of proving an offence or a civil liability, or to attack the credibility of a person. This judgment may not necessarily be followed by other courts, and, indeed, a contradictory judgment has already been given. In Australian Broadcasting Commission and Another v Chatterton and Chapman v Chatterton, on 12 August 1986, the Acting Chief Justice of the Supreme Court of South Australia, Mr Justice Zelling, adhered to the traditional interpretation of article 9, notwithstanding that the judgment and reasons of Hunt, J were submitted to him. He held that what was said in Parliament by a defendant in a defamation action could not be used to support the cause of action by adding to or explaining what was said outside Parliament. His Honour stated: What was said in Parliament cannot be used to extend the meaning of what was said outside Parliament . . . the `untruth' relied on by the Judge [in the trial the subject of appeal] could only be proved by using the appellant Chapman's words in Parliament. His Honour also rejected a submission that the member of parliament in question had waived his privilege, stating that such a waiver is not possible. The questions involved in the interpretation of article 9 have also been raised in the trial in the New South Wales Supreme Court in R v Jackson and Others, in which the Crown proposed to use statements by one of the defendants in Parliament as evidence of conspiracy on the part of the defendant. I am advised that the judge in that case, Mr Justice Carruthers, would not allow such use of the defendant's statements in Parliament, but has not yet given his reasons. Apart from these contradictory court judgments, there are many arguments in favour of the view that the interpretation by Hunt, J of article 9 is not correct. In particular, Hunt, J relies upon an historical analysis of the reasons behind the enactment of article 9 which is not complete and ignores some of the history. I will not go into these arguments here, as they are more fully set out in the documents which I have presented. Instead, I will concentrate on the effects of the judgment. The narrow reading down of article 9 contained in the judgments of Hunt, J would, if followed, pose a serious threat to the freedom of speech of members of parliament, to whom it applies, as well as to witnesses before parliamentary committees. According to the judgment, while a member may not be sued or prosecuted for something the member has said or done in the actual course of parliamentary proceedings, the member's participation in those parliamentary proceedings can be used against the member to establish the member's motive or intention in relation to words said or acts done outside Parliament and to support an action, civil or criminal, in relation to such words or acts. Thus, in a defamation suit taken against a member for something the member said outside Parliament, the necessary element of malice for success of the suit can be proved by evidence as to something the member said or did in Parliament. To prove a criminal offence against a member in respect of something the member said or did outside Parliament, the member's words or actions in Parliament can be used to establish guilty motive or intention or as evidence of the offence. If a member were called as a witness in a civil or criminal action it would be open to counsel to cross-examine the member on the member's contribution to parliamentary proceedings for the purpose of discrediting the member's evidence. It is clear, therefore, that the judgment of Hunt, J would allow a member's participation in parliamentary proceedings to be used against the member in court proceedings in a way not thought possible hitherto. Such a situation is clearly a serious inroad on the freedom of speech in Parliament and ought not to be countenanced. The judgment would allow similar use to be made of evidence given by witnesses before parliamentary committees. Senators who have participated in inquiries by the Senate will know that the protection afforded to witnesses by article 9 is often vital in ensuring that witnesses give full and frank evidence. In particular, witnesses have often given evidence which is necessary for the purposes of an inquiry and which could, if given elsewhere, expose them to the risk of civil or criminal action, or be used as evidence of an offence or a civil liability. The judgment of Hunt, J obviously drastically reduces the protection afforded to witnesses by parliamentary inquiries, and would make the securing of full evidence more difficult in the future. Indeed, it may well create a situation where witnesses, with what they would see as justification, are reluctant to accept the invitation to attend and give evidence. As honourable senators who have worked on committees will immediately recognise, this would lead to grave problems in continuing the present committee system, perhaps forcing the use of compulsive measures, which many would see as undesirable, and, in many cases, unproductive. If the Senate were forced to use its powers-which it has not used to a large extent in the past-of compelling witnesses to give evidence under threat of punishment, it obviously would be unfair to leave those witnesses exposed to the use of that evidence against them in future court proceedings. The Bill would prevent such use of parliamentary proceedings and would uphold the long-established interpretation of article 9. The Bill proceeds from the starting point that article 9 is part of the law of Australia under section 49 of the Constitution, and then indicates that it is to be given the broad and previously-established interpretation. There are two reasons for framing the Bill in this fashion: First, because the Bill must start with a general declaration of the immunity of parliamentary proceedings from question or examination, and the language of article 9 is difficult to improve upon; and, secondly, to make clear the Parliament's belief that article 9 should properly be interpreted, as the Bill provides, and always should have been interpreted that way. Article 9 is part of the law in many jurisdictions around the world, including the Australian States, and it might well create difficulties for the various parliaments in those jurisdictions if the Commonwealth Parliament is seen to be accepting that article 9 has the narrow meaning attributed to it by the recent judgments, and that it is necessary to add to that meaning to establish the broader immunity of parliamentary proceedings from question in the courts. In relation to this point, there is included in the papers I have presented a letter from the Speaker of the New Zealand House of Representatives. The Bill would also prohibit the unauthorised use of evidence taken in camera and not released by a committee or the House concerned. Such unauthorised use of in camera evidence occurred in both trials in R v Murphy. In commending the Bill to the Senate, I would again draw the attention of honourable senators to the documents which I have presented, and indicate that I look forward to the deliberations of honourable senators on the Bill. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Assent reported. Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill. Motion (by Senator Walsh) proposed: That Government Business, Orders of the Day, be considered in the following order- No. 2. Trade Union Training Authority Amendment Bill 1986; No. 3. Customs Tariff Amendment Bill (No. 2) 1986; No. 5. Sales Tax (Exemptions and Classifications) Amendment Bill 1986; Sales Tax Laws Amendment Bill 1986 and Sales Tax Acts Amendment Bill 1986; and No. 4. Australian Institute of Sport Bill 1986 and Australian Institute of Sport (Consequential Provisions) Bill 1986. Senator HARRADINE(Tasmania)(4.21) —I understand that the Minister for Finance (Senator Walsh) may have to take what I say on notice because he is not in charge of Government Business, but I note there is a move to deal with Orders of the Day on the Notice Paper in the order of Nos 2, 3, 5 and 4, and not to deal with Order of the Day No. 1. Order of the Day No. 1 is the Remuneration and Allowances Alteration Bill 1986-consideration in Committee of the Whole of message No. 387 of the House of Representatives. That message came to the Senate on 22 August-nearly a month and a half ago-and as yet it has not been discussed. I am just wondering why the matter has not been discussed. I would have thought it was somewhat of an embarrassment that, because this particular measure is being held up and not being discussed, members of parliament are being overpaid to the extent of $440 a month. The reason for that is that the Remuneration and Allowances Alteration Bill sought to amend the recommended increases of the Remuneration Tribunal's determination of 1986. Honourable senators will recall that I also moved an amendment which sought to delete paragraph 7 (1), which paragraph dealt with entitlement to overseas travel for de factos. As honourable senators will recall, an amendment was moved to that proposition. That amendment was carried. It went to the House of Representatives. It was rejected there and it came back to us with a message from the House of Representatives on 22 August. The fact is that because every member and senator is being overpaid at the rate of $440 a month, with 74 senators and 148 members of the House of Representatives-222 members of parliament altogether-approximately $295,704 has already been overpaid to members and senators. In addition to that, a small extra amount will have been overpaid to office holders. It can be said that we are talking about an overpayment to members of parliament of $300,000 already because this matter has not been resolved between the Houses. I ask frankly why Government Business Order of the Day No. 1 has not been dealt with since 22 August. I think it would be appreciated by all concerned if we found out why that is so and when the matter is likely to be dealt with. Some people will obviously need to make substantial arrangements for repayment. I would have thought that it was a matter of some interest to the whole of the Senate and, indeed, to members of the House of Representatives. Senator WALSH(Western Australia-Minister for Finance)(4.25) —in reply-I do not know the background of this matter. I will see whether Senator Grimes has any information on it or wants to comment on it. Question resolved in the affirmative. Debate resumed from 13 March, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator REID(Australian Capital Territory)(4.26) —The Trade Union Training Authority Amendment Bill 1986 is essentially a Bill designed to iron out the consequences of the Government bulldozing through Parliament in May 1985, in the dying stages of the autumn session, an omnibus Bill which, contrary to accepted practice, made some very significant amendments to the law. This Bill should not be necessary, because the accepted practice is that governments regularly correct technical amendments to a whole series of enactments in one Bill in an administrative procedure, through what have come to be known as Statute Law (Miscellaneous Provisions) Bills. I suggest that basically such Bills are inappropriate, but if they only correct minor matters, perhaps they are acceptable. But the risk is, of course, that by doing things in that manner we create a very cumbersome system of law which turns out in addition to be expensive, rather than aiming for what should be the goal-the law being both simple and inexpensive. As I said, in May 1985, in the dying stages of the parliamentary session, when few senators had time to examine the Bill in detail, we were presented with the Statute Law (Miscellaneous Provisions) Bill (No. 1) 1985 which included very significant changes to the Trade Union Training Authority Act. It passed through the Senate at the time. It was pointed out by Opposition spokesmen that it was not appropriate in an omnibus Bill to make wholesale amendments to a piece of legislation, which it sought to do, especially when it sought to change the structure of a semi-government organisation. The Government cannot say that it was not warned that this was not the way to go about things. It cannot say that it was not warned that if it wanted to change the governing body and its structure, it should do so by a substantive Bill so that we all knew what we were debating and had had time to read and comprehend it. But the Government deliberately pressed on and now, a year later, we are going through the time-wasting and expensive procedure of rectifying the mistake. The second reading speech is Hawkespeak at its best and is an attempt to hide what occurred. Of course, this cannot be done. The explanatory memorandum sets out quite clearly what is required, and that is an amendment to the Trade Union Training Authority Act to ensure that the staff representative on each State regional council established by the Act is elected from the officers within that State who are relevant to the regional council and not by others who may be in the State but attached to the national level. This was not what was achieved in the amendment rushed through last year. We recognise that the mistake needs to be rectified and we do not oppose this being done, but we hope that it will be a lesson to the Government to reflect on what we said in 1985 and not to seek to legislate in this manner. The Government must not introduce substantive changes in the law by means of omnibus legislation. It must not proceed in a way that precludes senators having an opportunity to study such a Bill and to consider the changes that are being made by means of that Bill. As I said, the Opposition does not oppose the Bill, but we hope that this sort of procedure will not be repeated in the future. Senator Sir JOHN CARRICK(New South Wales)(4.30) —The Senate is debating the Trade Union Training Authority Amendment Bill 1986. As the previous speaker, Senator Reid, said, the Government is seeking to make certain amendments because of errors it has made. The Minister for Resources and Energy (Senator Gareth Evans) made the following point in his second reading speech: The Bill relates to the participation of officers and employees of the Trade Union Training Authority in the election of staff representatives to the regional councils for trade union training established in each State under the Trade Union Training Authority Act 1975. This Bill comes before the Senate against the background of a severe economic crisis in Australia, a crisis which is likely to continue and even be aggravated over many months ahead. It also comes before us at a time when the Australian community has shown a growing and heightened criticism of the trade union movement. I rise primarily because of that background. In Australia, as in many countries, there is a tendency for public opinion to be expressed in violence. I believe, and I have said this in the Senate many times, that the extreme actions of certain sections of the trade union movement have deserved very severe criticism and censure by the Parliament and by the people of Australia. I equally believe that it would be utterly wrong for the public of Australia in its criticisms literally to throw out the baby with the bath water. Essentially, what we need to do in looking at this Bill and at those matters which relate to trade unionism in Australia, is ask ourselves what role should be played by trade unionism in the future. We ought to face up to the need to eliminate the extremes. However, we should fundamentally preserve that role which was designed in the past for trade unionism. That role, of course, was an industrial one; it was not political. It was not a role of interference with management. It was a role which was designed to help union officials ensure that members of a union should have good working conditions in terms of monetary reward, amenities and, of course, the environment in which they work. In fact, over decades trade unionism has brought a considerable benefit to the people of this country. I have reminded the Senate that trade unionism has emerged from a background of guilds. It is well to remind ourselves of that now because the guilds themselves had a role in preserving the quality of excellence. The guilds were the training grounds for skilled craftsmen. Some of the words in our own language are based on French words. From the French word `aprendre' we derived the word `apprentice'-the taking in of the young. After the apprentice had been trained we then had the journee man, or journeyman, and then onwards to describe the demonstration of skill, the master. That in itself was inherent in the true nature of the trade union. However, the people of Australia have come to realise that some trade unions, and particularly some trade union officials, have well exceeded those powers by using both industrial and political intervention in areas beyond what was deemed to be their true role. One of the basic reasons I have risen is to say that we should not broadcast criticism or damnation of all trade unions but that we should have an understanding of where the damage has been done and get some idea of how it can be rectified. The fact is that a great majority of the 300-odd trade unions in Australia go about their business in a proper fashion and do not cause trouble. Of course, because of the State and Federal industrial arbitration systems in Australia there have been difficulties in determining jurisdiction and in determining demarcation between particular skills. We have now reached a situation where a series of concepts have grown which Australia can no longer afford. Not only persons such as myself but also leaders and former leaders of the trade union movement such as Mr Charles Fitzgibbon are realising the great dangers in this country due to confrontation. If Australia is to emerge from its present situation, we have to change from a confrontationist society to a co-operative society. That is fundamental. Not only must the trade unions themselves look to their responsibilities; all elements within society must equally do so. Management must look to its responsibilities to see that the work force has decent conditions and that workers share the benefits of their labour in terms of the contribution they make. Governments must play their part in getting off the back of industry, in getting off the back of both management and workers, in creating a particular environment. I think perhaps the best evidence of what ought to change now has come from a variety of statements made by Mr Charles Fitzgibbon. Senator Robert Ray —What has this to do with the Bill? You would never have let us get away with this. You would never have let us get away with being so irrelevant to the Bill when you were Leader. Senator Sir JOHN CARRICK —Mr Deputy President, I am perfectly happy to relate my remarks to the Bill. It is quite clear that this Bill seeks to amend the Trade Union Training Authority Act. The Authority gets to the heart of training trade unionists in the responsibilities of carrying out the duties of unions. That is specifically what I am talking about and I invite you, Mr Deputy President, to take note of that. I can understand Senator Ray's sensitivity in not wanting to hear what I have to say. His Government and his Party have pursued confrontation as their very reason for existence. The Australian Labor Party has always taught that class conflict exists. Indeed, it has fed on that belief. I am grateful for Senator Ray's interjection. The Labor Party has talked consensus but has practised confrontation. Lest anyone should have any doubts about this, I take it that the Labor Party will not object to what was said by Mr Charles Fitzgibbon. In a submission earlier this year to a government body, Mr Fitzgibbon said: The current Australian example of a social accord is only an agreement between an organised trade union movement and one political party which holds government at this point of time. In other words, it is not a consensus at all; it is simply an agreement between the Australian Council of Trade Unions and a Labor Party government-indeed, an agreement no doubt reached by the duress of the ACTU. I quote Mr Charles Fitzgibbon against the background that we have had confrontation over the years and that we need now to move towards co-operation. Indeed, every major country which is out-competing us at the moment in terms of exports and which is flooding this country with its imports has a co-operative government as distinct from the confrontation that has been built up here. The present Hawke Government has always had a background of confrontation. For example, the present Prime Minister (Mr Hawke) in his role as President of the ACTU was always confrontationist. Let me just quote what was said by Mr Hawke in August 1974 at a time when there was rising inflation and people were being shed from manufacturing industry. This is what Mr Hawke, as President of the ACTU, said: We know inflation is at 16 per cent and we believe it's quite likely to reach 20 per cent in the next two quarters. But we will not indulge in a trade-off in wages for some conjectural reduction in inflation. As everyone knows, as a result of Mr Hawke's confrontationist leadership, the rate of inflation at that time ran up beyond 17 1/2 per cent on the way to 20 per cent and the Whitlam Government was thrown out. It has been that kind of confrontation, combined with his leadership in 1981, that has caused the disaster that the trade union movement faces today. The trade union movement has responsibilities not only to its members but also to the 600,000 unemployed in Australia. Fundamentally, the job of government and unions is to ensure that people have the opportunity to work in the job of their choice and to receive fair remuneration. In looking at the role of co-operation of trade unionism in Australia Mr Fitzgibbon, in his paper to the Economic Planning Advisory Council, said: A grab by trade unions now for a bigger slice of the economic cake could destroy opportunities for growth because this would result in self-defeating inflation and lost competitiveness in our traded goods and service industries. He said that 20 or 30 times in his paper, and then he went on to say something of great importance. He said that it is no longer possible for us to argue that in Australia we are competing against countries that have lower wages. He continued: It should be understood that an Australian worker does not get greater pay than his German/Japanese or American counterpart, in most cases he gets less and total labour costs per employee are generally less, but it is in the bottom line figure at the end of the day as to the productive cost that shows the difference in result per dollar. He said: In other words it is necessary to keep educating portions of the community to an understanding of the advantages of the material gains inherent in a more cooperative productive society. If there is to be a basis for the future in the training of trade unions, in terms of the understanding of the community and what the role of unionism is to be inside the community, in a co-operative way, it must be based on the premises outlined by Mr Fitzgibbon. Surely, it must be based on the fact that, in Australia, there is no vital difference between the interests of management and worker-their interests are the same. Every other country, especially Japan, knows that both the worker and the management have a vested interest in the prosperity of the enterprise itself. They understand that to have efficiency, delays and strikes is to punish the enterprise. But they understand something that Australia must come to understand, and that is this: No one section of the community-government, management, worker or trade union-can benefit for any length of time by scoring off the other. No one section of the community can hold the rest of the community to ransom without in the long run punishing itself and the rest of the community. Sadly, that is what we have found. Sadly, in the early 1970s with the disastrous loss of working days in the Whitlam years, there was the shedding of 110,000 people manufacturing, a real fall in our ability to create jobs and the loss of our competitiveness with the rest of the world. As Mr Fitzgibbon has said, we cannot chase wages upwards unless the community can pay. He said: It is accepted by realists that unless movements in labour costs are in line with economic capacity and growth in productivity the result will be to the detriment of organised labour and Australians generally. What he is saying is that the minimum wage must be fixed on the capacity of industry, the community, to pay, and if we fix it above that, as has been done over the years, sadly, all we do is create an illusion for the Australian worker. All we do is cost him out of his living standards and jobs for his children. We must ensure that our system is based on the capacity of industry to pay and that, inside that capacity, proper margins for skill and incentives are given to individual employees. For far too long, we have failed to give proper incentives to Australian workers. For far too long-management is as much to blame for this as anybody-the most highly skilled craftsmen have been paid the same as the most poorly skilled craftsmen. That has created an institutionalised mediocrity in Australia. That is a tragedy for Australia because the Australian worker is a good worker. The Australian worker wants to be skilled and he wants to show his abilities and productivity. We have created a position which makes us uncompetitive with the world outside. The Hawke Government continues to say that the reason for our decline is based on the fact that export prices have fallen in terms of our minerals and agricultural industries. It fails to say the fundamentally important thing that, on the other side of the ledger, Australia is swamped with imports flooding into this country at a cost with which our industries cannot compete. The effect of that is very simple. Because our industries are not competitive, our people do not have jobs. What a strange thing it is that the Hawke Government does not talk about the real side of the balance sheet-that is, jobs and people's living standards. Unless we can get our competitiveness and productivity up, and our costs down, those imports will flood in or, alternatively, what will happen in prolonged point will be what is happening now. The Government will continue to lower the capacity of purchasing power to stop people buying the flood of imports. That is a disastrous policy in the long term. Fancy a policy being sustained by any responsible government to cut down on the volume of money to stop people being able to buy. The job of the Government, in the end, is to lift up the capacity to pay. At this stage, it is necessary to put confrontation aside, whichever side of the work force or the factory floor it occurs. We must leave the word `confrontation' out of our language. We must show the people of Australia that the way back can be taken in one of two ways: The constructive way, which will create jobs and preserve living standards, or the destructive way-that is the course we are on now-which lowers living standards and which will, on the Government's own statement, create more unemployment. As the Budget said, there will be more unemployment in the months ahead. The constructive way is to get increased productivity-that is, to get to the heart of the factory floor, to get to the relationship of good managerial procedures, good technological skills and good co-operation. There should be an understanding that the worker deserves incentive rewards, be they bonuses, profit sharing, shares in the company, or whatever. Fundamentally, that is the key to Australia's future. If we do not get our productivity up, if we go downhill in the way we are doing now, we will have fewer jobs and lower living standards. I repeat Mr Fitzgibbon's words: In other words it is necessary to keep educating portions of the community to an understanding of the advantages of the material gains inherent in a more co-operative productive society. I could not agree more. He continued: It doesn't take too much imagination in respect of any undertaking to work out that if you could improve productivity by any percentage then that almost certainly equates a reduction in the cost of the article by a similar amount and in most industries or enterprises it would not be difficult to produce significant results. The Trade Union Training Authority is an institution designed to train trade unionists, to train people in a proper industrial understanding of their responsibilities. We should look to where we are in terms of the community and its understanding of unions; we should look to the role of the unionist; we should set aside any kind of desire, however emotional and wrongly directed, simply to do a broadcast attack on unionists as a whole; and we should ask: What do we want? We want a co-operative system of management, worker and government. We want an understanding that the interests of worker and management are identical, that the role of government is to get off the back of both in terms of lower taxes and charges and fewer unnecessary regulations and to get right to the heart of the situation. What we should be saying to the people of Australia is fundamental: The main countries that are competing with and defeating us throughout the world-countries such as Japan, Singapore and Germany-lack fundamentally the physical resources that we have in Australia but they have the fire in their belly and the understanding of co-operation to co-operate and get on with the job. We in Australia basically have all the fundamental physical resources and, with our huge deposits of coal, the ability to generate virtually unlimited electrical energy. All we need is the application and the team-work to combine the two to produce a result which must out-compete the rest of the world. I have said in the Senate many times that it is an outrage to our common sense that we cart iron ore to Japan-50 per cent of it dirt-in one ship and coal to Japan in another, have the material smelted and rolled into flat steel and buy the product back at a cheaper price than what we could produce it for here. Yet some 20 or 25 years ago we could boast that we produced the cheapest flat steel in the world. It is all tied up with the fundamental approach not only to how we train trade unionists but also to how the community sees trade unions, how trade unionism sees itself in relation to management and how governments see themselves in relation to the various elements-be they trade unions, management or the rest of the community. If we are to have a consensus in this community it must not be simply a behind-the-door arrangement between the ACTU and the government of the day. That is simply not good enough. Indeed, it is not good enough to bring in some elements of management and seek to do something there. The community consists of a wide range of people. It consists of many self-employed people who have no such voice, many people on fixed incomes who suffer enormously if things go wrong and people on pensions. To pull this argument together, I say this: If we in Australia are to get our community back on the road, to get jobs for our young, to get our living standard secure, to make Australia a go-ahead nation, we have to be competitive with the rest of the world. Fundamentally, the only sensible way to do that is to get increased productivity by co-operation. We cannot do that if there is still inherent in this country some nineteenth century beliefs of class warfare and class conflict. We cannot do that if the extremes in any part of industry are such that all we do is abuse each other. What we have to do is understand that we are as one, that no one can score off the other and that no one can gain in the long run if the other is losing. We cannot envisage a situation in which management can in some way benefit and prosper in the long term by grinding down the work force. That is an eighteenth or nineteenth century illusion anyhow. Some 80 per cent or more of the people who buy the goods and services that management produces are the ordinary workers on the factory floor or in offices. Unless they are prosperous, unless they have real purchasing power, management cannot be prosperous, except in the short term, and it knows that. Equally the work force must come to understand that unless its firm is prosperous the work force cannot prosper. In Japan most social service benefits come from industry, so there is a direct understanding between management and worker. I am told that when a Japanese goes on strike he puts on a black armband and works twice as hard. In Australia what we have to do to turn the ship around is to turn around attitudes. We have to put aside the shibboleths and the confrontational nature of the past. It is no good simply saying to one section: `You must take cuts'. We have to say to everybody: `The way ahead is co-operation. You all have to share in it. None can succeed at the expense of the other. Let us get our act together in full co-operation'. Senator WALSH(Western Australia-Minister for Finance)(4.56) —I wish the Trade Union Training Authority Amendment Bill 1986 a speedy passage. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 24 September, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator CHANEY(Western Australia-Leader of the Opposition)(4.58) —The Senate has before it the Customs Tariff Amendment Bill (No. 2) 1986, which is a step forward for the gold mining industry in Australia. The Bill is supported by the Opposition. The concern of the Opposition would be to ensure that the Government, in taking this useful step forward, does not follow it up with 10 steps backward through the imposition of a new tax on gold. I will mention that a little later. The Bill removes the 2 per cent revenue duty which is applicable to imports of virtually every kind and which at the moment applies to gold. The Government intends to remove that duty because-I quote the second reading speech-it accepts: . . . that the duty is impeding the development of the Australian gold market by restricting imports and preventing the necessary liquidity in periods of peak demand. The speech continues: The gold market could become an important source of foreign exchange earnings as an export oriented service industry. The Bill and the Government's reason for removing this 2 per cent revenue duty underline the unusual role which gold plays as a store of value. Whilst it has lost its special role as a backer of a currency, it still has some peculiar attributes which are important to Australia in our present economic circumstances. It is perhaps the most tradable commodity produced. It is possible without any difficulty to export all gold which can be produced. This area has seen important growth in production over recent years, growth which is particularly welcome in an economy which is seeing a decline in investment and the Government's predictions in the Budget of a decline over this financial year in the rate of growth in this country, a growth in unemployment and a continuation of the serious balance of payments problems of the recent past. The Opposition is very supportive of the idea that Australia should be looking for opportunities to find new ways of making use of its geographic assets, its physical as well as its human assets. The idea that we should encourage the storage of gold in Australia and its free trade in and out of Australia has our complete support. It is a useful, if small, step at a time of very great economic difficulty for Australia. This Government has something of a split personality in much of its approach to industry and the economy. On the one hand, it makes useful changes, such as the removal of this revenue duty, and adopts some useful industry policies, such as those adopted with respect to steel and the automobile industry. On the other hand, largely through the agency of the Treasury, it seems to undertake actions which are quite inconsistent with the thrust of industry policy and the general objectives of the Government. We have seen that in the taxation field with the fringe benefits tax-on the admission of the Minister for Industry, Technology and Commerce, Senator Button, who is responsible for this Bill but who is not in the chamber-being introduced in a way which adds to the very great pressures on the motor industry. Because of a range of factors a difficult situation has been made worse by the Government's taxation initiatives. The goals of stability in industry policy are being flouted purely for financial reasons with the reduction of bounties by 20 per cent. The gold mining industry faces the prospect of the introduction of new taxes at a time-- Senator Walsh —The dollar was devalued, as you know. Senator CHANEY —I welcome the contributions of Senator Walsh, who is no doubt anxiously pursuing this new tax measure. I put the view on behalf of the Opposition that this is not the time to be introducing new taxes on productive industry. Senator Walsh —What did Howard say in 1984? Senator CHANEY —Whatever has been said in the past, this Government has led the country into a crisis. That crisis now has to be dealt with. The simple point that I make is that it is not in the interests of Australia to contemplate new taxes on this or any other industry. Rather, we should be looking to a reduction of the tax burden which will encourage further investment and activity in this country. Senator Walsh —Seek refuge in magic; that is your formula. Senator CHANEY —As I said, I welcome the interjections from Senator Walsh because whilst at times he makes extremely valuable contributions to the economic debate at other times he allows his unbridled prejudices to run away with him. This is another area in which we can expect the exercise of his prejudice to be allowed full rein. It will be interesting to see whether the views of the Minister for Finance, Senator Walsh, triumph in the halls of the Australian Labor Party or whether the views of members of the Party, particularly back bench members who are alive to the electoral risks involved in a new gold tax, triumph. I make it quite clear that it is the view of the Opposition that the Government is moving in the correct direction in removing the 2 per cent revenue duty. It is not moving in the correct direction when it foreshadows a new tax on the gold mining industry, an industry which at the moment is serving Australia particularly well. Last year, the Australian gold mining industry earned over $600m in export income. Over 90 per cent of gold production is exported. It is our fourth largest mineral export. In 1984-85 gold production totalled 49 tonnes, the highest level since 1940, and production has been growing at a phenomenal rate-by around 50 per cent per annum. The industry employs around 5,000 people directly and another 8,500 are estimated to be employed indirectly in related activities. Investment and exploration expenditure in the industry is high. There was expenditure of about $483m in 1984-85. That is expected to increase markedly in the current year and beyond. The Australian Goldmining Industry Council estimates that annual investment and exploration expenditure in the industry could grow to $1 billion per year. This is encouraging in a Budget year in which the Government is predicting, as I said before, a one per cent reduction in private investment. Here is an industry which is substantially expanding its investment and in which production has been growing at a rate of about 50 per cent per annum. The Opposition is concerned to try to maintain the expansion of activity in this industry which industry sources confidently expect to continue. I want to use the occasion of debate on this Bill, which takes a step in the right direction-it encourages the gold mining industry and the possibility of further international trade in gold involving storage in Australia and so on to Australia's economic benefit-to urge the Government to put aside the possibility of a new tax on gold that it has been canvassing over the last year or more. I have given figures which indicate to what extent the gold mining industry is contributing to the economic health of this country at a time when there are far too few positive indications. The Australia-wide contribution is quite clear. Obviously a very great regional contribution is being made in a number of States, not least in my State of Western Australia. One has only to visit Kalgoorlie to see the enormous change which has been wrought in that community by the revival of the gold mining industry. What has happened in the recent past is confidently predicted to continue. We have great hopes of continued high levels of domestic activity. Concerning export income, we have great hopes and very reasonable expectations that there will be further expansion, to Australia's great advantage. The Australian Goldmining Industry Council said that the projected production suggests the export value of gold in 1986, if it is at an average value of $A400 an ounce, will be worth around $780m, rising to over $800m in 1987. Senator Button —What increase does that represent on last year? Senator CHANEY —It was around $600m last year. So this area has had a very worthwhile increase. The attitude which might have prevailed in easier times was that rationally one should seek simply to apply the same level of taxation at the lowest possible level but spread as evenly as possible over all industries. Given the qualities of gold, which include its salability under any circumstances, its potential to remain a very valuable export and its potential to remain a growth area in an economy which is struggling to find growth areas, this is simply not the time to impose new cost burdens and, particularly, it is not the time to impose new taxes on gold. There is a great deal of uncertainty at the moment in the community about a possible gold tax. The Government has already moved to affect the gold mining industry and other industries by the imposition of a capital gains tax and a fringe benefits tax. They impose additional costs on this industry. Gold exploration and production, by its very nature, is undertaken because of the possibility of very high rewards. But the corollary is that many investments are likely to attract very little reward. In those circumstances a capital gains tax is an important disincentive to new investment. The fringe benefits tax is particularly relevant because gold is often mined in the remoter parts of Australia. Industries which operate in remote parts of Australia tend to have to rely on fringe benefits, not so much as a method of tax reduction and not as some tax rort, which is what the Government talks about, but as a means of obtaining labour under conditions which are roughly equal to the more temperate and easier to live in parts of Australia. I suggest to the Minister for Industry, Technology and Commerce that there is a very great difference between providing housing assistance, power assistance and some transport assistance to people who are working in regions such as the Pilbara, the eastern goldfields of Western Australia or the remote areas of the Northern Territory, and providing such assistance to people who are living in Vaucluse or Peppermint Grove. There really are substantial reasons for undertaking the differential treatment and the provision of support for staff through what are now defined as taxable fringe benefits. I suggest to the Government that the fringe benefits tax therefore represents a particularly heavy burden on industries such as the gold mining industry. Up to this point I have been very surprised at the relatively modest assessments of cost that have been put out by the mining industry generally about the impact of the fringe benefits tax. I note that over recent days the Australian Mining Industry Council has indicated that it expects mining companies to have to pay between $70m and $80m per annum in fringe benefits tax. The point I make is that very few mining companies are making a substantial return on the capital which is utilised by those companies and many of them are operating in a fiercely competitive environment. The situation is one where new tax burdens should be undertaken with very great care, if at all. I must say also that it is rather horrifying to realise, from Question Time today and from earlier questioning, that there has been very little attempt by the Government to relate this new tax impost to the particular position of different industry segments and to the overall costs which will be incurred by industry in an administrative sense as well as a taxation sense. I believe there has been a tremendous sloppiness in this part of the Government's approach to industry, a lack of concern about the way these tax changes will impact on individual enterprises and the impact they are likely to have on the investment decisions and the general business decisions of those individual enterprises. It was my experience in government that tax proposals were sometimes produced by the bureaucracy without much regard for the microeconomic effects. There seemed to me to be little tradition of undertaking an analysis of the actual impact of the tax on any particular industry or indeed on a company where it might have a major share of a particular industry output. It was my experience on one occasion to see a proposed levy on a mineral being brought forward for consideration by Cabinet for which, on questioning, there was simply no evidence available as to how that would impact on the profitability of the companies involved in that industry. I refer to that piece of history because I think it is clear from the history of the present Government that a number of significant tax decisions which impact quite severely on the industries which the Minister at the table, Senator Button, is trying to encourage, have been imposed by the Government without any detailed consideration of how they will affect industries either at the general level or at the enterprise level. I suggest that there is a drastic need for the procedures of Treasury and the Department of Finance to be improved so that governments are given a better analysis of what the impact of tax changes is likely to be than has been given in the past. I do not want to go back at great length over the history of these matters, but I would like to refer again to Question Time today. It seems clear from the answers Senator Button gave that in the present case the Government had no real figures before it on the impact of the fringe benefits tax, on important industry sectors or on the administrative costs that would be borne by private industry. I suggest that that sort of contemptuous approach is the product not of a government that does not care about these matters but of a bureaucracy that is simply not in any way trained to be concerned about the essential bottom line considerations of business, which are so irrelevant to the operation of bureaucracies that are themselves funded by the taxpayer. The Australian Goldmining Industry Council, which of course is an industry group that represents the interests of gold producers, predicts that the taxing of the gold industry at the full corporate rate will dramatically undermine investment exploration, employment and output in the industry itself as well as in the economy overall. I venture to suggest to the Minister that he should ask his Department to examine the importance of the gold mining industry to the heavy engineering sector, which he is currently trying to put on a better basis by offering incentives and changes. He would find that that is a quite important source of work. It would not, of course, rival the North West Shelf, with its massive single investment which is affecting industry in Western Australia and other States. As part of the Government's consideration of the gold mining tax issue, I ask the Minister to ask his Department to pursue the hard evidence that I think the Government should have before it on the impact of tax changes and reduced activity in the gold mining sector on the heavy engineering industry, which at the moment he is offering $60m of taxpayers' money to try to get into better shape. The fundamental problem for the heavy engineering industry, which I am sure the Minister would concede, is lack of demand. I think we should be very cautious in making changes which will further reduce the demand for those heavy engineering services in the present state of the Australian economy. Returning to the predictions of the Goldmin- ing Industry Council, it warned of a reduction in national income of half a billion dollars, a reduction in direct and indirect taxes of $100m, and 13,000 jobs lost. Imposition of the tax would seriously reduce gold exports and foreign exchange earnings when we are experiencing a balance of payments crisis. These predictions of job losses and reduced activity are the common staff of debate when we are looking at industry issues, whether they are tariff issues or issues of tax change. I again appeal to the Minister not to deal with this matter on the basis of generalisations but actually to seek, either from the co-ordinating departments of Finance and/or Treasury or from his own Department, the hardest possible evidence of the impact which can be expected. The reality is that when we look at our hard pressed mining industry overall we see that it has in fact performed magnificently in the face of very difficult international competition. If we look at the state of the world mining industry in the late 1960s and early 1970s and at the companies which were the leading international companies in base metals, for example, at that time, and if we turn our attention to the state of the world mining industry in the mid-1980s, we will see an extraordinary and creditable record of survival in the Australian industry which I believe the American majors of the late 1960s and early 1970s would envy. In part that survival is based on some very good natural resources in Australia, but in part it is based on a very fine effort by the mining industry at the management and labour force levels. I note that Senator Sheil, who I think comes from a mining family, is in the chamber. I think our mining industry is in world class. It is an area of Australian industry of which we are entitled to be very proud. I suggest to the Government that it is operating in an international environment in which the virtual collapse of major international companies should warn the Government that it should not be putting on new imposts under almost any circumstances. My concern in debating a Bill which the Opposition supports, because it is in fact removing a burden from the gold industry and we believe it is a step in the right direction, is that in making this relatively minor step forward the Government might at the same time be moving in ways which are quite destructive of the long term interests of this country. This is an issue which needs to be looked at without the prejudice that I think is often attached to these matters. I do not believe that the Government can any longer believe that the mining industry is a milch cow for the rest of the economy. In the interests of trying to be as bipartisan as possible in this debate, I point to some of the things we felt able to do in government in terms of putting levies on the coal mining industry, which were then partially removed and which I think have been partly lifted by this Government, but the remnants of which still remain. I think those days are over and in all our approaches to industry, whether it is the gold mining industry, the mining industry generally or other sectors, our every effort should be turned towards removing costs and burdens, and the important part of the costs and burdens of industry are the taxes which are imposed by government. I welcome the opportunity to say something about an industry which is of vital importance to my State, of vital importance to the Northern Territory, and of importance, if less vital importance, to a number of other regions in Australia. I commend the Government for taking a step in favour of freeing up the trade involved, a step, I believe which is likely to be of value to this country. I close by referring to an article I wrote about a tax on gold mining in February 1984, some of which has been quoted as a suggestion that I am arguing in favour of the taxation of gold. I refer to the end of that article and say that if we look at the way the gold mining industry has prospered over recent years perhaps logic should lead us not to say that we should tax that industry more; perhaps logic should lead us to say that we might see similar benefits in the rest of the Australian mining industry if we reduce tax burdens on it. I do not think that there is any doubt that our great coal mining industry which is a producer of so much wealth for this country would be able to do much more if it were subjected to less onerous burdens by both State and Federal governments. I do not think that there is any doubt that the whole mining sector would benefit if we were able to reduce many of the costs which afflict it generally and many of the complexities of government administration which make the opening of a new mine in Australia so difficult and so complex. I commend the legislation and I simply ask the Government to make this legislation, which removes a burden from the gold industry, a pattern for the future rather than the exception to the general approach of the Government. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce) —I thank the Leader of the Opposition (Senator Chaney) and the Opposition for their support of this legislation. I remind the Senate that the purpose of the legislation is to remove the 2 per cent duty which was introduced in 1979 as a revenue measure. The removal of that 2 per cent duty from gold bullion-as one would hope in time the purpose of the removal of other aspects of that revenue duty-is the recognition that the payment of the duty impedes the development of the Australian gold market by restricting imports and preventing the necessary liquidity in periods of peak demand. It is believed that the gold market could become an important source of foreign exchange earnings as an export oriented service industry. Time alone will tell whether that belief is justified; one would hope that it is. I touch very briefly on some of the comments made by Senator Chaney. There is a danger of being misconstrued in saying that I agree with many of the things he said in his speech. I do not wish that agreement, with many of the things he said in his speech, to be construed as my acceptance of his views about the gold tax and any commitment on my part about the gold tax. But let me say that the Government in the course of examining that issue will undoubtedly be adverting to a number of matters raised by Senator Chaney in the course of his comments, including for example the question of the benefits which the gold industry would undoubtedly bestow, if unburdened by additional imposts, on other sectors of the economy such as heavy engineering. Having said that, I can say no more, except that the issue of the gold tax is currently the subject of review by the Government. The point which Senator Chaney made about heavy engineering in particular has previously been drawn to my attention. That may well be an additional consideration in the Government's deliberations on this matter. I thank the Senate for the support of this legislation and for its speedy passage. Question resolved in the affirmative. Bill read a second time. The Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(5.25) —The Customs Tariff Amendment Bill (No. 2) 1986 reduces the burden of taxation on one sector of the industry. The Utah Development Co. Ltd annual review which has just come to hand summarises the point which I am anxious for the Government to consider. Mr Charles McArthur, the Chairman of that major mining company, after talking about the ongoing upgrading and improvement of its operations, said in that review: . . . this is, at best, a defensive strategy. Simply stated, existing Federal and State taxes and levies make it impossible to consider new mines at this time. It should be obvious to all that without planned growth today there is little hope for strong performance in the future. If today's fiscal and legislative conditions had prevailed in the 1960s and 1970s, the Utah-managed mines in the Bowen Basin would not have been commenced. The pressing need for a swift easing of these conditions is apparent after even the most cursory study of the global marketplace in which our company trades. At a time when the Federal Government has moved to tax so-called fringe benefits-such as the housing provided for some mining industry workers by their employers-Utah, in common with other exporters, is competing for sales in an environment where some overseas coal industries are being subsidised and supported by their respective governments. A little later he said: Looking to the future, we see two areas of greatest challenge: Over-regulation and excessive taxation by State and Federal governments The need for greater understanding and co-operation between union leaders and company officials to achieve the productivity and reliability needed for Australia to compete effectively in world markets. Where the Government moves to reduce over-regulation and excessive taxation, and where it moves to promote greater understanding and co-operation between union leaders and company officials, it will have the co-operation of the Opposition because we believe that action in those two areas is absolutely vital if we are to get over our present difficulties. Bill agreed to. Bill reported without requests; report adopted. Bill (on motion by Senator Button) read a third time. Debate resumed from 24 September, on motion by Senator Gareth Evans: That the Bills be now read a second time. (Quorum formed) Senator MESSNER(South Australia)(5.30) —The Sales Tax (Exemptions and Classifications) Amendment Bill 1986, the Sales Tax Laws Amendment Bill 1986 and the Sales Tax Acts Amendment Bill 1986 seek to impose a range of new taxes on some goods and services which are presently subject to sales tax and some which are not. This legislation stems from two failures of the Treasurer (Mr Keating) over the last year or so. The first failure was when he failed at the National Taxation Summit in July last year to convince the union lobby, the leader of his Party-the Prime Minister (Mr Hawke)-and the welfare lobby that there was an honourable case for moving the balance of taxation away from income tax in favour of indirect taxes such as a broad-based consumption tax. He failed dismally. He failed in the back rooms of the Australian Labor Party when the unions put the pressure on the Prime Minister and forced him to withdraw his support for the Treasurer's proposed introduction of a broad-based consumption tax. The benefits that would have flowed from the introduction of such a tax were spelt out by the Government in its White Paper on taxation and had the in-principle support of the Opposition at that time, notwithstanding that we believed that the particular measure the Government had in mind seemed to go too far at the time and in too much of a hurry. The Treasurer's second failure stems from the fact that when the Government scrambled to put its Budget together at the end of July it had no alternative but to raise taxes to reduce the Budget deficit to $3 1/2 billion. That necessity was imposed upon it by the dramatic fall in the value of the dollar which resulted directly from the Government's economic policies. Instead of taking the knife to government expenditure, the Government decided to raise an extra $1 1/2 billion by way of taxation to get the deficit down. There was a failure by the Government to address the real issue required to be addressed by it, that is, the cutting of its own expenditure to ensure that the deficit was credible so that the financial markets would see the measure as being a step in the right direction. Again the Treasurer failed. The Government, in its attempt to reduce the Budget deficit by $2.2 billion, raised $1.5 billion extra from the people of Australia by way of heavy taxation. It failed to meet the very real test of being able to take the knife to government expenditure. This legislation is of particular concern to South Australia and to my constituents. Again the Government has blundered, seeking to impose taxes on two critical agricultural and horticultural products of South Australia-wine and citrus fruit. Senator Siddons —Are you going to do something about it, Senator? Senator MESSNER —I will come to that a little later. Mr Acting Deputy President, you know, as a South Australian, that those two industries come together in a rather unique part of the State along the Murray River, comprising the great irrigation settlements that were laid out in the earlier part of the century. The main products of this area are grapes for wine and dried fruit production and fruit such as oranges and lemons for the fresh and processed fruit industry. We have seen the Government blunder into imposing an increased tax on the wine industry, raising the tax from the rate of 10 per cent imposed in 1984 to 20 per cent. That flies in the face of a recommendation by the McKay report into the grape growing industry last year which was that we must wait to see what happened to the wine and grape growing industries as a result of the imposition of the first round of taxes imposed in 1984 before we imposed any further taxes. That is the first thing that has been ignored by the Government in its scramble for revenue to reduce the Budget deficit-the independent advice of experts in this area. Secondly, we have been treated in this place for a long period to tirades from the Minister for Finance (Senator Walsh) about how well the wine and grape industries have been doing in the last few years since the imposition of the 10 per cent tax on wine. The Minister sought, by one distortion or another, to make it seem as though somehow prosperity had been brought to the industry through high taxation of its products. Nothing could be further from the truth. We have seen throughout Australia a decline in the direct employment of those in the wine industry under the first round of tax increases from 6,000 to 5,000. We have also seen the crush of grapes reduced from some 600,000 tonnes last year to some 495,000 tonnes this year. Yet this Government tries to tell us that somehow the industry is prosperous and going ahead as a result of the taxes the Government has imposed. Nothing could be further from the truth. It is utterly ludicrous for this Government to keep pressing that point. It is a point which certainly cannot be accepted by the industry or by South Australians, as you, Mr Acting Deputy President, know only too well. The industry's situation is even worse when one measures sales in dollar terms. Whereas in the 1984-85 financial year there was a sales increase in dollar terms of some 5 per cent, the increase in sales in the year just ended, 1985-86, even though there had been an increase in the price of wine, was only 1.5 per cent. So the industry is in decline. Let me take the Minister for Industry, Technology and Commerce (Senator Button), who is at the table, Senator Walsh, the Treasurer and the Prime Minister for a drive through the Clare Valley to let them see what is happening to grape growers in that area. The Minister would be ashamed to think that it is the actions of the Hawke Labor Government which have produced such utter devastation in the area. It is a shocking sight to see this season's grapes still hanging on the vines right throughout that area, to see that virtually every block has a `for sale' sign on it and that no grapes have been taken from the Clare Valley into the co-operative wineries this year, which means that there will be no income for farmers this year. It is a devastating sight. The area looks as though it has been hit by a bomb. The Riverland area is rapidly developing the same kind of appearance, brought about by this Government's unfeeling policies in its scramble to meet an illusory Budget deficit. It strikes me as rather strange that this Government is prepared to put $8m into a vine pull scheme which is designed to get farmers out of grape production at a time when it is imposing a further tax on the industry which will yield some $60m. That is only the start. Other payments will be required by way of social security for the farmers who are now unable to look after themselves as a result of what is happening. Quite clearly, this industry is in crisis and it deserves the attention of this Government. It does not deserve the imposition of further taxes, such as those that have been imposed by this Government in the Budget. It is interesting to note that, in regard to sales at the wholesale level for the whole wine industry, totalling about $600m, the net profit is only $30m. That represents a return on sales of about 5 per cent. The point that must be made, though, is that government-I include State governments-in imposing taxes on the wine industry takes $240m from the wine industry. That figure includes this latest sales tax impost. It is eight times the after tax net profit of the wine industry. Governments take $240m from wholesale sales worth $600m. This has a devastating effect. It represents a ratio of 8:1 in terms of the profitability of this industry. While other industries, such as the brewing industry, complain about the level of taxes imposed on them, they do not bear anything like the ratio of tax to net income that the wine industry bears. This has a devastating impact on the industry and, quite clearly, will have regional impacts that this Government will be forced to cope with by way of social security payments and other adjustment means. It is interesting to note that the huge devaluation of the Australian dollar might have been expected to lead to an improvement in export sales of wine. We now find, of course, that that is becoming extraordinarily difficult because the Government has chopped out the export market development grants scheme. It has also, through the devaluation, made it more and more costly for the industry to undertake promotional development of wine products overseas. Of course, because of the imposition of the fringe benefits tax, the industry cannot promote as much of the product overseas without paying tax. The disallowance of entertainment expenses for tax purposes means that it is more difficult for the industry to promote wine in overseas markets. The Government could have offered the wine industry opportunities to help itself out of its troubles. But it is now imposing taxes, such as the fringe benefits tax, and there is the disallowance of entertainment expenses, which together with these sales taxes that are now to be imposed have caused enormous imposts on the industry. The industry's objective of extricating itself from its difficulties has been defeated. The Government is prepared, apparently, to put $8.5m into restructuring the industry through the vine pull scheme. But why would it not-and should it not-consider how it could better use that $8.5m to develop export markets to encourage the wine industry to help itself out of its troubles. The effect of this taxation is devastating. It will have huge regional effects, particularly when one combines the effect on the wine industry with that which will now occur in the citrus industry. Because of the fall in the price of imported orange juice on world markets, we will no doubt see more and more of that product being used in Australian production. Even though the differential in the rate of tax that is applicable favours the local product, because of the cheapness of the overseas product people will tend to buy that product. Clearly, that will have an effect on regional areas such as the Riverland. This Government, in its typical, unfeeling way, has nothing to say about the regional impact of the taxes. The wine industry and the citrus industry come together in one regional area in South Australia, and, of course, in other parts of Australia as well, such as in Mildura and the Murrumbidgee Irrigation Area. These measures will have a devastating impact in those areas. This will, of course, undermine the other industrial infrastructure which has already been established. I refer, of course, to tourism. Tourism is a vital element in the survival and development of the Riverland in South Australia. That potential will be undermined if the wine and citrus industries are forced to decline. These measures are on top of increases in State charges, such as irrigation and electricity charges, which will cause more difficulties for industry. A very severe change is about to occur in the whole Riverland area as a result of the introduction of these taxes. The devaluation of the Australian dollar is also having a very significant impact on the cost structure of the wine industry. The value of the dollar, in United States dollar terms, has fallen by 40 per cent in the last year. A very significant part of the cost of the manufacturing of wine is tied up with imported products. I refer, for instance, to the French oak which is used to make wine barrels, which is imported and, consequently, the price of which has risen enormously in recent times; in fact, it has doubled. There has been an increase in the price of corks. The price has gone up by 60 per cent in the last year. The cost of chemicals such as tartaric acid has risen by about 100 per cent in recent times. All these imposts are on top of the ill-considered tax measures which this Government has introduced. The effect in the Riverland, of course, will be enormous. The one thing that is needed in the whole wine industry-from a regional standpoint, it affects the citrus industry as well-is a stable policy of development. What we need is a considered policy development by this Government on all the issues that I have just mentioned. There is a need for the Minister's Department-the Department of Industry, Technology and Commerce-to get together with the Department of the Treasury, the Australian Taxation Office and the Department of Primary Industry to work out a stable system so that people in the wine and grape industries and the citrus industry can plan their futures. I think those considerations are absolutely important. To that end, the Liberal and National parties have set up a wine industry study group to look at the regional impact of policy changes in the Riverland and in other parts of Australia, together with the impact on the wine industry of changes in taxation. What this industry needs, above all, is stability, and that is what the Liberal and National parties will give it. That is what the present Government has taken away from it. This Government introduced a wine tax of 10 per cent in 1984. Of course, the present Minister for Primary Industry (Mr Kerin) had already promised that there would be no wine tax under the Hawke Labor Government. There has been also an attempt to tax fortified spirit in the brandy industry. That, of course, had to be modified after considerable pressure had been applied by senators in this place. We now see this increase in the sales tax from 10 to 20 per cent. That is totally beyond the pale in terms of where the industry is heading and in terms of the future development of the whole Riverland region. One or two other measures in this legislation are of concern to the Opposition. A tax will be applied for the first time to computer software, which will rake in $100m in a full year. That comes about through a change in the way in which software will be taxed in the future, and the Government has chosen to go down that path. Quite clearly, it is something which is going to have an impact upon business costs as more and more businesses in Australia adopt advanced techniques and technology in their information collection systems and so on. Obviously it will have a very significant impact. Firms that are in the area of employing computers for their manufacturing processes will find enormous increases in the cost of software as a result of this tax and there will be very significant impacts upon their cost structures as a result. It is rather ironic that at a time when we are seeking to develop more and more techniques for increasing production and productivity in this country the Government is failing to recognise that by imposing taxes in this fashion it is working against that objective which I thought was its main objective at this time. The other taxes that are imposed on milk products are causing considerable concern in the community and have raised very significant questions. Those taxes are affecting dairying industry areas in Australia generally as well as in that part of my State which is concerned with the production of that material. Clearly one has to doubt that the Government thought through the effects of these changes in the tax structure on various products of this kind. Consequently one has to doubt that it really understands what effects, both in employment terms and in production terms, these taxes will have. Certainly the story in South Australia is very clear in that respect. There are going to be some devastating effects in the Riverland area as a result of the introduction of these measures. I would like to return quickly to the wine industry. It is important to recognise that not only is the wine industry going to be affected by the introduction of this further tax on its products but also that the other matters I mentioned earlier are very significant to the future of the industry. Those matters are the introduction by this Government of the fringe benefits tax and eventually, of course, the capital gains tax. All those farmers who are in the situation where eventually they will have to sell their properties and perhaps reinvest the funds they receive from such sales as they are forced out of the industry will find that the moneys from the sale of those properties will be put into investments that will eventually be the subject of capital gains tax. In this way the Government is contributing to forcing people into a situation where the capital gains tax will apply to their life-long investment in their properties. This assumes, of course, that people are able to sell those many properties that are now on the market and for which clearly there are not a lot of buyers. That is something which will be recognised in the future and which will have a devastating impact for those people and their families. The fringe benefits tax has caused farmers in this area to have very major concerns about its impact on their cost structures. There are employees who, because of the remoteness of their location and the special circumstances of the industry, are provided with housing. Because of their jobs they are required to and are entitled to use motor cars and so on and consequently their employers will find themselves subject to the fringe benefits tax. There is also the very devastating impact of the entertainment tax, which has had the effect of lowering demand for wine generally in the community and through the hotel and restaurant trades. Clearly that is occurring at a time when all costs are rising in the way in which we have outlined and again it will contribute to the decline of the industry. Surely it is time for the Government to wake up to its mistake in this area. I think it is also important that the Australian Democrats recognise that, while the industry is in a state of decline, as it is, and has enormous difficulties, the problems do not all stem from the wine tax increase. That is not the only evil. The bigger evil has been the change in the market-place brought about by the entertainment tax, the fringe benefits tax and the capital gains tax, which is yet to affect it. That has hurt incentive in this nation and I think that consequently the people of the Riverland in South Australia and in others areas would like to know why it is that they have had those taxes foisted on them by the Australian Democrats. Indeed, had the Democrats voted with us a year ago to oppose those devastating taxes we would not have this incredibly stupid piece of fringe benefits tax legislation before us now, which is creating havoc not only in the wine industry but in other industries as well. It is those factors, which have already been acknowledged by the Minister for Industry, Technology and Commerce, that will have such a great impact on those people who are struggling to make a living in the wine industry in South Australia. Finally, the point has to be again acknowledged that the Government has introduced this legislation because of two very significant failures on the part of the Treasurer, Mr Keating. The situation was, as we acknowledged, that, firstly, he failed to get into place a broad-based consumption tax at his ill-starred Taxation Summit in 1985 and, secondly, that he has failed to get a knife into the heart of government expenditure and has been forced to raise more and more taxes in order to meet the Budget deficit forecast announced in the Budget. In fact, his failure in that regard has led to further taxes of $1.5 billion on the Australian people in order to meet that obligation. That has led to the very significant point that this Government has the highest proportion of gross domestic product going to taxes of any government since Federation-some 25.5 per cent. Senator Button —How does it stand up internationally? Senator MESSNER —The Government has broken its very solemn commitment given to the people in the 1984 election campaign that it would not increase, in overall percentage terms of GDP, the amount of money going to taxes. Of course, in the 1986 Budget the Government has exceeded that and it has sought to make some kind of virtue out of the fact, as Senator Button has now just demonstrated by his interjection that he seems to support, that it is a good idea to break promises in circumstances that suit the Government. That is fine. We are getting used to these breaches of promise that continually occur. We saw it happen with the lump sum superannuation tax following the 1983 election. We saw it with the assets test on pensions after the 1983 election when we were told there would be no such assets test. We now have it. This Government cannot be trusted with its promises and consequently we cannot be sure where it will strike next. One thing that is clear is that it will strike where it is most politically advantageous to do so, which is why the people of the Riverland of South Australia, who this Government knows do not vote for its Party, have been hit to leg by this tax on the production of wine. I am sure that the Government will reap the effects of this in other ways and certainly the exchequer will suffer as a result of the introduction of this crazy tax on wine. Senator SIDDONS(Victoria)(5.59) —I have listened very carefully to Senator Messner for half an hour. He waxed eloquent on the problems of the Murray Valley. He waxed eloquent on the fact that this Government is the highest taxing government since Federation; but I still do not know what the Opposition is going to do about it. After hearing this rhetoric about how bad these taxes are, is the Opposition going to go to water and, weak kneed, support the Government in passing the very thing that Senator Messner spent so much time talking about? The Australian Democrats are concerned with three parts of this sales tax legislation. We will very shortly be circulating amendments which we will move at the Committee stage to attack the very abuses about which Senator Messner spoke so eloquently. The Democrats also are concerned about the new wine tax-the increase of the tax on wine and cider from 10 to 20 per cent. There is to be a sudden 10 per cent sales tax increase on a young and vibrant industry. We are also very concerned about the imposition of a 10 per cent tax on milk, fruit juices and non-alcoholic wines. The Democrats have defined these products as basic necessities of life. In 1982 we opposed taxing the basic necessities of life. Although at that time all Democrat senators had a six-year term in front of them, we were prepared to go to the barricades and oppose the taxing of the necessities of life. Certainly we are going to do so again this time. We will be moving amendments that will have the effect of opposing the 10 per cent impost on the necessities of life. The third aspect of this sales tax legislation that we are very concerned about is the 20 per cent tax on the computer software industry which, again, is another developing and thriving industry in this country. As soon as this industry begins to get somewhere we suddenly find that a 20 per cent sales tax is imposed on it. This tax will have a disastrous effect on the computer industry. If the Opposition is genuine in what it says, it will support the Democrats' amendments which will oppose these three aspects of the sales tax legislation. I have heard members of the Opposition comment that they are a little uncertain about what they should do because they do not want to oppose a money Bill. We are not opposing the Bills outright. We are opposing only three aspects of them. What credibility can the Opposition possibly have if it is not prepared to join with us in supporting our amendments on these three aspects of the legislation, particularly when two of the taxes attack directly growers in the Murray Valley? In this case I refer to the wine tax, which is a tax on the grape growers of the Murray Valley, and to the tax on citrus growers. I note that Senator Messner is back in the chamber and I hope that he heard what I said a minute ago. I hope that the Opposition will retain some credibility and support the Democrats' amendments which will oppose only three aspects of the wholesale tax legislation. We are not opposing a money Bill; we are opposing three aspects of a new tax on three vitally important industries in this country-the wine industry, the citrus industry and the computer software industry. I had occasion to visit the Murray Valley some few weeks ago where I addressed a meeting of some 600 citrus growers whose situation is absolutely desperate. Documented submissions carefully presented to the meeting of orange and citrus growers showed beyond any doubt that if citrus growers picked their fruit next year they would lose on a most conservative estimate $16,000 a grower. The Government is about to impose another 10 per cent tax on this industry which is facing a problem next year because of the depressed prices for orange juice on world markets and particularly on Australian markets. What sense does it make for the Government to impose another tax on an industry which is on its knees and hit it even harder? Senator Messner, who is well aware of that, instanced the situation of citrus growers and wine growers of South Australia. The growers in Victoria and New South Wales are equally in trouble. Surely the Opposition will do something to support this vital industry. I believe it would be absolutely irresponsible for this Senate to allow the Government to get away with imposing an additional 10 per cent tax on an industry that is going bankrupt, that is on its knees and that will, on the most conservative estimate, lose $16,000 a grower next year. I have said that the 20 per cent tax on computer software will have a disastrous effect on the computer industry. This tax is in effect a tax on the transfer of information and is analogous to a tax on books. The Democrats opposed a tax on information in 1982 and we will certainly oppose this aspect of the sales tax legislation. Apart from anything else, one does not have to be very clever to see that it would be quite simple to get around the imposition of this tax by using various prices. In particular, it will be simple for multinational companies to get around the 20 per cent sales tax on computer software. However, we are concerned that this ineffective tax will apply to the local computer software industry. Senator Messner mentioned at some length the fact that the wholesale tax is scheduled to raise $1.5 billion. This tax is a substitute for a broad-based consumption tax which the Democrats supported at the National Taxation Summit provided that it was not applied to the necessities of life. The Government chose not to go that way but rather to impose a revamped wholesale tax. We are opposed to that, and always have been, in principle. We are opposed because it is a cost on industry in this country. It is a very unpopular tax which presents difficulties in terms of equity. For all of those reasons we think it is a very bad second choice to a broad-based consumption tax. Nevertheless, that is the way the Government decided to go. The Democrats do not consider that we have the right to oppose outright the Government's taxing strategy. But we do have the right to attack the worst aspects of those taxation policies and that is what we have done in the case of the capital gains tax and the fringe benefits tax. This is what we are proposing to do right now in the case of this tax which will hit industries in a devastating way and will cause enormous hardships throughout Australia to say nothing of the inequity of the situation. We are importing tanker loads of orange juice from Brazil at subsidised prices. Australian growers cannot pick their oranges because if they do they will each lose $16,000 in the current year. At a time when this country is supposed to have a balance of payments problem and an enormous imbalance in its current account we are still financing the importation of tanker loads of Brazilian orange juice which is being subsidised to an enormous degree by the Brazilian Government and, I might add, indirectly by the United States Government. How unfair and how ridiculous this is. Surely something should be done about this situation. I challenge the Opposition to do something about this legislation. It is all very well for members of the Opposition to say that they opposed the capital gains tax and the fringe benefits tax but that they will not do anything about this tax. At least they should be consistent. In this case we are talking about a rural industry which is as depressed as an industry can possibly be. Farmers who from 1945 to the present time, have spent a lifetime developing their blocks, who have spent days and night working up their farms, are now forced by the banks to sell. They are going bankrupt by the thousands, yet this Government is about to impose another tax. How can the Opposition do other than support measures to stop the new tax being applied to such vital industries? I shall be very interested to hear what Senator Messner, and particularly the National Party, have to say in Committee about the tax imposts on the rural industry. Senator Bjelke-Petersen is to follow me in the debate. I shall be very interested to hear what she has to say. I hope that reason will prevail. I hope that the Opposition will take up the challenge. I do not know how a member of the Liberal Party or a member of the National Party can ever again visit the Murray Valley if he does nothing to oppose these imposts. I can assure honourable senators that there was a long debate at the meeting which I addressed. The Opposition representatives were not prepared to commit themselves one way or another at that meeting. Senator Messner has not committed himself one way or another. Does he intend to support the Democrats in opposing the 10 per cent tax on fruit juice? Senator Messner —What do you say? Senator SIDDONS —I said that representatives of the Opposition, including members of the National Party, were not prepared to commit themselves, in front of the growers in the Murray Valley, as to whether they would join with the Democrats in opposing the 10 per cent tax on fruit juice and the increased tax on wine. Senator Messner —I will give my reasons later. Senator SIDDONS —Is the honourable senator going to allow the Government to get away with this? Is that what he is telling us? I can predict now that, if the Opposition supports the Government in imposing these taxes, it will be wasting its time going near the Murray Valley again. Feelings are running at white heat in that area of the world. If the Opposition thinks that it can talk its way out of supporting a new tax, when it could very easily join with the Demo- crats and block it-it could have circulated amendments of its own which we would have been happy to support-if it is going to sit back, do nothing and let the Government get away with it, what credibility can it possibly have? The Opposition talks about the present Government being the highest taxing government in our history. It talks about the way taxes have escalated. Yet it intends to sit back and let the Government get away with it. Where is the logic and the sense in that? How on earth members of the Opposition can hold up their heads and do that is beyond my comprehension. There is no consistency and concern for the very real problems of the people in the industries about which we are talking. Two other Democrat senators wish to talk about the proposed tax measure, so I do not want to prolong my comments any longer than is absolutely necessary. However, it is a vital matter to the industry. It has always been a vital matter to the Democrats. We were not prepared to support a tax on the necessities of life in 1982 when that was used as an excuse to call a double dissolution. We will certainly not support a tax on the necessities of life in 1986. That is our basic and fundamental position. It is beyond comprehension that the Opposition can talk about the Government's taxing initiatives and let it get away with this measure. Senator BJELKE-PETERSEN(Queensland)(6.14) —The Sales Tax (Exemptions and Classifications) Amendment Bill 1986 was introduced as part of the 1986-87 Budget, among other things, to increase the tax on alcoholic wine and cider and other similar fermented alcoholic beverages from 10 to 20 per cent, and to tax the previously exempt non-alcoholic beverages of flavoured milk and citrus juices, non-alcoholic wine and cider. The Opposition considers that this Bill, the Sales Tax Laws Amendment Bill and the Sales Tax Acts Amendment Bill are part of the Government's Budget Bills and, as such, the Opposition does not oppose them. However, that does not mean that the measures have our full support. Senator Siddons talked about how wicked it would be if we did not support the Australian Democrats' amendments to these Bills. I realise that the Democrats are very hypocritical in the way they talk about these Bills, because they did not support the Opposition when it wanted to vote against the fringe benefits tax and the capital gains tax. The Democrats now say, in a very pious way, that we should support their amendments against the sales tax. The Opposition parties have indicated their position on the passage of the Bills. However, I wish to make some personal remarks about them. We are all quite used to the Prime Minister (Mr Hawke) making promises and pledges about what he `categorically and let me make this perfectly clear, unequivocally' will not do. We have seen many of those promises broken. It is nothing new. Of course, the same applies to this package of sales tax measures. The Prime Minister said that there would be no sales tax on wine, yet in last year's Budget a sales tax was introduced and, behold, in this year's Budget the tax has been raised from 10 per cent to 20 per cent. Now we have a tax on good health. Yes, it finally had to happen. In this Labor Government's quest to tax just about everything that moves, we now have a tax on good health in the form of a 10 per cent tax on fruit juice and flavoured milk, both of which are enjoyed by people of all ages, but are particularly important for the health of our young children. I speak as a mother and particularly as a grandmother. This is an important matter. I wonder why any government would want to tax our children's good health. Citrus juices are a very convenient form of obtaining some extremely important vitamins. I realise that many citrus growers are having problems with imported orange juice. People have been in touch with me in that respect. However, we must realise, as must the Democrats, that the people of Australia voted the Australian Labor Party into office. The Labor Party has decided to impose a sales tax on such commodities as part of its Budget Bills and, unfortunately, I think that people will have to learn to live with that. Senator Siddons —Well, why don't you join us in opposing it? Senator BJELKE-PETERSEN —Senator Siddons says that, in a very pious way, about the sales tax Bills, but he was quite happy to go along with introducing a fringe benefits tax. He was happy to go along with a capital gains tax. I feel that, in many ways, he is being very hypocritical. Flavoured milk is very often the only way that some children can be persuaded to drink milk at all. It certainly makes it a lot more palatable for children. I feel that it is ludicrous to tax something which is so good for young children. The human body needs protein, carbohydrate, calcium and a range of other minerals and vitamins. Milk is a valuable source of those. Last year the Government decided to bring in a sales tax on ice cream. This year flavoured milk is the flavour of the month for the tax gatherers of Canberra. Next year, I suppose, it will be Vegemite sandwiches and Iced Vovos-some of the foods which children always enjoy. It is quite obvious that the Government is slowly but surely moving towards introducing indirect taxes on basic food items. Flavoured milk is a beverage which competes directly in the market-place with soft drinks. Whilst I do not wish to get myself into an argument, I think it is accepted that milk is the more nutritional food. These Bills are also a blow to the dairy industry, which is experiencing some real problems. As a result of the dumping of surplus production by Northern Hemisphere producers, and in particular the European Community, Australian dairy producers are having difficulties in export markets. In recent months Parliament has been dealing with legislation affecting the dairy industry and the industry is still trying to sort itself out as a result. Why would this Government want to create further difficulties for dairy producers by taxing one of their most popular and most beneficial products? I have received correspondence-I am sure other senators have also-from ITC (Australia), industry and trade consultants, on behalf of its client, Tetra Pak (Australia) Pty Ltd. ITC has advised me of a pilot program which has been framed to assess the viability of reintroducing milk to Australian primary schools, something I wholeheartedly support. I remind honourable senators that it was the very distinguished National Party Prime Minister, Sir Earle Page, who as Minister for Health in 1938 introduced free milk to primary school children. As a medical man Sir Earle realised the value of such a nutritionally sound food as milk and implemented a policy that all Australian school children should have a daily dose, as it were, to ensure that they had good bones and teeth. It was Mr Whitlam, I regret to say, who decided that free milk to school children was a waste of taxpayers' money. Now another Labor Government is deciding to impose a tax on flavoured milk. This 10 per cent tax on flavoured milk poses a serious threat to the introduction of a national program. In January 1986 Tetra Pak commenced the development of a pilot school milk program for children of primary school age. The rationale for this program was the perceived need to promote actively milk consumption in primary schools, keeping in mind that many children do not drink enough milk. I want to quote some information I received from Mr Graeme Day, the Director of ITC, who maintains: Milk is essential as a source of nutrition during a child's growth. Without milk, children do not receive an adequate supply of calcium which is necessary for strong bones and teeth. Mr Graeme Day gave a lot of information about the program, and I feel very sad that the proposed sales tax on milk may harm the program he is bringing forward. The sales tax imposed on fruit juices, drinks and cordials will have a similarly serious effect on the citrus industry. It will hinder not only citrus beverage producers but also fruit growers. It is not difficult to imagine the multiplier effect this will precipitate. Growers, packers, processors, freighters and juice manufacturers will all be affected, in the same way as they have been affected by the fringe benefits tax, the capital gains tax and the entertainment tax-- Senator Macklin —Did you vote against them? Senator BJELKE-PETERSEN —We voted against them and we wanted the Democrats to vote against them too. If they had voted against those taxes the producers of citrus fruits would not be experiencing the problems they are at the present time. The increased freight and petrol costs are already harming the citrus industry, and this sales tax will harm even more not only the citrus industry but also our rural industries. The Government is anticipating about $50m to $60m will be collected through this new tax, but at what cost to the community associated with citrus growing? Mr Peter Wood, the General Manager of Berrivale Orchards Ltd, has told me that he is very upset about the proposed 10 per cent sales tax on juice beverages. In a letter to me-he probably sent it to all senators-he stated: Surely an estimated tax revenue of $37.9m on the `citrus' beverages cannot begin to cover the economic or social injustice that the cost of $245m will have on rural economies. The tax imposition on flavoured milk and citrus juices in particular is very misguided. Besides the fact that the Government wants to raise additional revenue, the effects on local communities also have to be considered. I can see unemployment resulting from this decision, and once again it will be the non-metropolitan areas which will be hardest hit. The Government may have been advised that the imposts will have little or no effect on the industries concerned but I would have to disagree. Understanding the rural sector as I do, it is obvious that the tax will have a disastrous effect on the local communities involved with dairying and citrus growing. The Democrats say that they will oppose sales tax on milk, citrus juices and wine despite the fact that it is part of the Budget Bills. I draw honourable senators attention to the fact that the Democrats did not hesitate to support the Government when it introduced the capital gains tax and the iniquitous fringe benefits tax. We all saw what happened in New South Wales where in the seat of Bass Hill there was a swing of 22 per cent against the Labor Party and in the seat of Rockdale there was a 17 per cent swing against Mr Barrie Unsworth, who had already been elected Premier of New South Wales. Mr Unsworth got in by only 57 votes. We know what will happen to the Labor Party and the Democrats in the Queensland election when voters realise that the Democrats were responsible, together with the Labor Party, for the introduction of these taxes. Dairy people, citrus growers and wine producers will remember this. The entertainment tax has already hit the wine industry in Queensland. The assets test and many other taxes have been imposed which could not have been introduced by the Government without the support of the Democrats. The Democrats are grandstanding when they talk about sales taxes on basic foodstuffs because they certainly let through many more infinitely worse taxes, as I have already outlined. The fact that the Government has allowed the economy to get in such a bad way that it has to tax children's food, such as milk and fruit juices, which provide vitamins, is appalling. I am not very happy about the way the Government has gone about the collection of these taxes. I certainly agree- Senator Macklin —To vote for them, yes. Senator BJELKE-PETERSEN —I have no intention of supporting the Democrats' amendments, which they have foreshadowed. I am very sorry indeed that the Government has decided to include taxes such as this as part of its money Bills. Sitting suspended from 6.28 to 8 p.m. Senator POWELL(Victoria)(8.00) —As the Australian Democrats' spokesperson on both primary industry and social security, I have a particular interest in speaking on the Sales Tax (Exemptions and Classifications) Amendment Bill, which imposes a 10 per cent tax on a range of presently exempt products, including flavoured milk, non-alcoholic wine and cider and Australian fruit juice, and which increases the tax on wine from 10 to 20 per cent. It appeared that the Government decided to abandon the option of broadening the sales tax base at the end of the tax summit in July 1985. In the Government's paper on tax reform last year option C, the broad-based consumption tax, was to be introduced in conjunction with increased payments to social security beneficiaries and low income earners who would be disadvantaged if they had to spend more on the necessities of life-food, clothing, footwear and building materials-as a result of the imposition of a tax on those necessities. In the 1986-87 Budget the Government decided to tax food-fruit juices and milk. In the same Budget it postponed the cost of living adjustments for those dependent on a whole range of social security payments and postponed measures designed to alleviate the poverty traps which are locking so many pensioners and beneficiaries into their situation below the poverty line. The Government has imposed a tax on food, yet there has been no compensatory income for low income earners. On the contrary, the Australian Labor Party has decided to reduce the disposable incomes of many Australians who are already living in poverty, by postponing the consumer price index adjustments and the implementation of the poverty traps legislation. So low income households get hit both ways-less income and more tax. I wonder whether this is really what the Prime Minister (Mr Hawke) meant when he spoke of equitable distribution and of the sacrifices needed to get Australia out of its economic problems. The Liberal Party and the National Party are no better. They want to cut expenditure further. Those living in poverty are unlikely to get any comfort from the privatising Liberals who will slash billions of dollars from somewhere, but they will not say from where. The Liberals are not likely to reduce government assistance to the big business sector, banks, petrol companies and those who borrow billions of dollars overseas to reduce their tax liability in Australia. The Liberal Party and its coalition partner, the Nationals, will attack the Government for imposing these taxes on fruit juices, milk and wine. They have done so in this chamber today. If they meant what they said they could join us in opposing these measures and support our amendments. I understand that Senator Vanstone is on record as being prepared to break ranks on one issue, the tax on wine, but that is not a significant act in terms of what is necessary in this area. This chamber can reject these taxes. It will not do so because the Liberals and Nationals who say that they oppose these measures are not prepared to oppose them by voting against them and preventing them becoming law. What is more, we really do not know why. Senator Messner, in responding to Senator Siddons's questions earlier, simply raised this evening's edition of the Melbourne Herald, which has a fairly prominent headline about an election before Christmas. Perhaps that is the reason of the Liberals and Nationals. Are they afraid of having an election before Christmas? Do they not want to be party to the blocking of legislation which might provide some sort of reason for the Government to call an election? Or is it just, as we have seen before, that they seem to be confused about the difference between a Budget Bill and a Supply Bill. Perhaps we should make it clear to them, as we have done before: Budget Bills are about raising money; Supply Bills are about spending money. There is a difference between raising money and spending money. If the Liberals and Nationals cannot tell the difference, we should all be afraid about an election before Christmas-considering the polls. There may be a token floor-crossing in this exercise but it appears that the Liberals and Nationals will not join us in preventing these taxes from being implemented. They are prepared to privatise almost everything and to cut social security payments to those living in poverty. Yet they do not have the courage to vote against a tax on milk and orange juice. So much for their courage. So much for the farmer politicians who say that they really understand the problems of rural producers. Just two days ago in a rural provincial city in Victoria I was told by a journalist that she had been told by some of her local members of parliament, most of whom are farmer politicians, that farmers make the best parliamentarians because they know how to make decisions. This country having been led largely by farmer politicians in the decades post-World War II, if that is the case and they make the best politicians, why are our farmers now facing such a mess? This is happening because those farmer politicians could not see the writing on the wall. In the 1960s the Common Market was not seen as a threat. As has been said: `He did but see her walking by and yet he loved her 'til she died'. It was thought that Britain would never do the dirty on Australia. So much for planning at the hands of farmer politicians. No, farmers do not necessarily make the best politicians. Even here in this chamber, on this day, they are not prepared to stand up for their electorates which rightly expect their support on these issues. In the past they have acted directly against the interests of their electorates which support them. In particular, I refer to the members of the National Party. In coalition with the Liberals they have joined with the Government so that we now have no effective income equalisation deposits scheme for people on the land, even though the Democrats stood firm. Again, through their joining with the Government increased export charges apply in a range of primary product areas. The Liberals and the Nationals will find that that part of their electorates will be much more sceptical. The Liberals and Nationals will not support us in our amendments. They will not support Australian fruit juice producers who are already threatened by foreign products subsidised and dumped on the Australian market. They have turned their backs on dairy producers who are still coming to terms with the painful reality of rationalisation in the dairy industry. The Labor Party is responsible for introducing these taxes. I support tax increases on harmful products such as tobacco and on luxury products. We do not oppose taxes on luxury products in this legislation-the spas and swimming pools. I find it difficult to support a tax on fruit juices and milk which, generally speaking, are nutritious and are bought by almost all Australian households, whether rich or poor. As I have said, these are taxes on the necessities of life, on food products which are consumed in considerable quantities by children. This imposes yet another burden on families which those on low incomes, and especially those living below the poverty line, can ill afford-households which, I remind the Senate, include 800,000 children. To be realistic, we could not have expected those in a Liberal-National coalition to take up the cause of the poor or low income families, but at the very least it might have been the expectation of a very large part of what they consider to be their electorates that the coalition would have supported them in this matter. Those people who live in rural Australia producing milk and fruit, those living in country towns servicing those producers and those working in the related processing industries would have thought that at least they would get support on these measures through support for the Democrat amendments to come. Only the Australian Democrats are prepared to stand firm on principles. We have opposed sales taxes on the necessities of life and will continue to do so. We have opposed legislation which does not support our very strong interests in the need to support our vital rural industries and we will continue to do so. I repeat: It is anomalous of a government which reduces the incomes of people already on low incomes and below the poverty line to introduce a broad-based sales tax at the same time as it is expecting this Parliament to pass legislation which further reduces the incomes of those groups. Senator MICHAEL BAUME(New South Wales)(8.10) —We have heard the usual cant and hypocrisy from the Australian Democrats on this matter. I stress to Senator Powell, who has just given us this lecture about the Budget, that the fringe benefits tax, which her Party supported with such enthusiasm, has done more damage to the Australian wine industry, for example, than anything that will be involved in this 10 per cent increase in tax, which simply worsens an already disastrous situation. I think it should be remembered by all those people involved in this industry that that tax which was supported by the Democrats and which we opposed because it was not a Budget matter, has had a disastrous impact. We do not hear any apology- Senator Siddons —Absolute humbug. Why don't you join us in a few amendments? Senator MICHAEL BAUME —We hear the expression that this is absolute humbug. If the Australian Democrats can prove that the fringe benefits tax has not decimated the South Australian wine industry, I would be grateful to hear it. Senator Siddons has failed to use his opportunity in this chamber to defend his indefensible position in his attack on the wine industry, an attack which he enthusiastically supported. He has come in here with all this humbug about a marginal addition which is damaging-there is no doubt about that-to the Australian wine industry. I agree with him that it should not have taken place. Senator Siddons —Why don't you support us? Senator MICHAEL BAUME —The reality is that this humbug who is consistently interjecting had an opportunity to defend his nonsensical position over wine, where he supported a gross and damaging attack on the wine industry, which has done more damage to that and to employment in Australia than this sales tax has done. But this humbug comes into this chamber and interjects with phrases such as `humbug', which is exactly the word he used to me, and continues, as does his acolyte, this incredible pressure. What is the incredible pressure all about? It is about trying to get a double dissolution. Senator Puplick —Survival. Senator MICHAEL BAUME —It is about survival, as Senator Puplick says. The Australian Democrats' own activities have demonstrated that they have no interest in the welfare or future of, for example, the wine industry. They have no interest in whether or not there is massive unemployment as a result of the fringe benefits tax. Their sole interest is in whether they will get an electoral situation in which they can survive. They are the classic, if you like, centre party. They are searching desperately and continually for issues on which they can seek to grab a temporary benefit, whether or not it suits their principles, if any. They simply do not care. They clearly have no concern. The burden of the speech we have just heard was basically that there should be a bigger deficit, that there should be no taxes. The Democrats have already given an indication that they think $6 billion is not a bad sized deficit. They continually talk about getting rid of taxes and complain about government spending being cut. What sort of an economy do these people want? The answer clearly is this: Everything they have said points to an economy where interest rates would soar, where the Government would be obliged to borrow more, where the whole thrust of policies, certainly those which the Opposition has been strongly pressing, would be reversed, and they are the policies of responsibility, of restraint and of preventing this economy going down the gurgler. We have complained for years about the reckless behaviour of the Government. I have to say this in the Government's defence: It almost looks respectable compared with the Australian Democrats; but only almost. Here we have the most irresponsible ratbag organisation that has graced this chamber, which is opposed to everything that would involve any political disfavour but which would grab anything upon which it could build its hope that it will achieve some momentary support of an electoral nature. These political opportunists, who know they will never have to live with the consequences of what they are doing and saying, come here and act out this self-righteous charade in this place as if they were people who should be taken seriously. As honourable senators know, the Australian Democrats have very little chance of survival unless there is a double dissolution. They have no prospect of getting more than the 14 per cent quota that is required in a half Senate election, and yet in some States they have two people coming up for election. Clearly the only way that they can get one person elected, let alone two, is to have a double dissolution. I would not back their chances of getting one person elected in most States; in fact, one could almost say in all States, in view of the incredible and evident opportunism that is now being revealed by their undisguised self-interest in their approach to legislation, particularly this Bill, the Sales Tax (Exemptions and Classifications) Amendment Bill, and allied Bills now before the Senate. I would very much like to reinforce and support all the points that were made by Senator Messner in expressing our concern and opposition to these unfortunate sales taxes which will have a serious effect on the industries concerned. We do not deny that. That is one part of what the Democrats are saying that we agree with: This legislation will have an unfortunate effect, just as the fringe benefits tax, which they supported, had an unfortunate effect-we use the word `unfortunate' there in its most peripheral sense-a disastrous effect. Let us recognise the reality. The Senate has the capacity to defeat this Budget Bill, as has been stated here by the Australian Democrats. However, we do not have the capacity to cut government spending. In other words, the only capacity we have is the capacity to increase the deficit, to increase the amount of money the Government would have to borrow, to increase the Government's impact on interest rates, to push up interest rates affecting the whole nation-affecting home buyers, manufacturers and employers of people. This is the sort of policy that the Australian Democrats clearly favour by grasping at this particular straw of self-interest. We take the view that no matter how wrong we believe the Government's Budget to be-and we believe it to be very significantly wrong basically because it has not cut government spending-it would be totally irresponsible for us, as we have no power to cut government spending, at the same time to reduce the Government's income and thereby increase the deficit, as that would have a disastrous impact on the whole of Australia. Although I say that the Government has not cut its spending, we have seen immense propaganda that it has. The Government has continually talked about spending cuts. Let me assure the Senate that there has been no such thing. This Government increased its spending by $4.8 billion in the current Budget-that is, by 6.9 per cent. After that has been adjusted for inflation, it is still a record level. The so-called Budget cuts are simply cuts in what the Government wanted to spend by continuing the hugely increased spending programs that it had introduced over the previous three Budgets. In its first Budget the Government increased spending on its own new programs by something like $2 1/2 billion; it was another $1.3 billion, I think, in the second Budget, and so on. The cuts were simply a continuation of its programs that had been expanded in this irresponsible and reckless way-almost an Australian Democrats way. The cut is simply on what that spending would have been for this year had it not pulled its horns in a little. As for cuts in spending, there are none this year. Spending is going up by a record level. The people who will have to pay for that irresponsibility, for the Government's lack of concern and lack of preparedness to do what is right for Australia, are the people who will be paying this tax, the people who will be paying the fringe benefits tax, the people who will be paying this whole range of taxes which this year is increasing the tax burden on Australians to the highest level in real terms on record. That is despite the so-called tax cuts that are coming later this year. Despite those tax cuts, the taxes ordinary Australians will have to pay will rise to record levels. If the Government can deny that, I would like to hear it do so. We have not heard that denial yet. There is not much point in asking the Democrats to make a coherent comment, so I will not ask them to deny it. We face the reality of having no option, if we are a responsible opposition, but to accept this dreadful Budget. I can only urge the Australian Democrats to cease playing politics on this matter. That does not exclude the fact that there are many unexpected disadvantages, if I could use those words. What was the phrase the Prime Minister (Mr Hawke) used today in the other House about the consequences of the fringe benefits tax? Senator Messner —Unintended effects. Senator MICHAEL BAUME —Yes, unintended effects. The Prime Minister today, having been bombarded by the Opposition ever since this tax was announced in the Budget with the inevitability of disaster in what is basically a bad tax imposed in a bad way and having bad consequences, finally admitted that there are these unintended consequences and that the Government would look at it. Let me tell the Government that I trust the disastrous consequences of the sales tax rise are also unintended. If they are so unintended, maybe the Prime Minister and the Government should have another look at this as well. If it is good enough for the Government to have another look at the fringe benefits tax and its unintended consequences because there is an election in Queensland-and we hear rumours of a Federal election perhaps at the end of this year-how about it having a look at the unintended consequences of these sales tax rises? I use the word `unintended' almost in inverted commas because I frankly do not believe that it is unintended. I think this Government has set out on this course for a whole curious range of reasons. I believe that the Government is still basically against the small businessman. I think this Government sees the small businessman as a threat-it is not simply the socialist ideal of having the State looking after everyone-to the cosy coalition of big business, big government and big unions that this nation is now being governed by. Senator Vigor —Big opposition. Senator MICHAEL BAUME —I think it is big foot in big mouth over on Senator Vigor's side. I believe that this Government has no concern or interest in small business but in fact has strong hostility towards its very principles, its very procedures-its whole atmosphere of small business. Individual entrepreneurs who are not the business bureaucrats, the governmental bureaucrats or the union bureaucrats but are the real people of Australia, want to have a go. They are the sort of people that this tax specifically hits, just as the fringe benefits tax specifically hits a whole range of middle Australians, not the rich people whom the Government keeps talking about, but the many people who eat their lunches out of Mr Keating's brown paper bags. I would be interested to consider the last time Mr Keating ate his lunch out of a brown paper bag. God knows what else he receives in brown paper bags, but it is not his lunch. I would now like to deal with other matters in this sales tax legislation in terms of the unintended consequences. We wonder whether the unintended consequence relating to the computer industry has been recognised by the Government. I doubt it. There is no doubt that a tax of a quite discriminatory nature has been introduced on services provided in the computer industry. In particular, it discriminates against Australian operators in the industry. Senator Vigor —Hear, hear! Senator MICHAEL BAUME —I am glad to hear Senator Vigor say `Hear, hear' because among the things I respect concerning him is his knowledge of the computer industry. Senator Messner —He has got more to respect than most of them, too. Senator MICHAEL BAUME —Yes. What intrigues me is that Senator Vigor, who has some knowledge of this matter, is so little regarded by his colleagues that he has been put in an unwinnable position on the South Australian ticket. That probably reflects, quite properly and quite reasonably, the sorts of priorities the Australian Democrats have. They are not concerned with having anyone with competence or knowledge in particular areas in this place and as a result they are banishing him to an unwinnable position. I have no difficulty in commending him on his knowledge of this area and regret that that knowledge will soon no longer be available to us. On the other hand, I do not regret that the presence of his colleagues will not be with us much longer either. Nevertheless, the question of computers is quite interesting. A long letter in the Age newspaper a couple of weeks ago dealt with this situation at some length. I regret to say that I did not ask the Minister for Veterans' Affairs (Senator Gietzelt) whether I could incorporate this letter in Hansard but it would save me reading it. I would be grateful if the Minister, after having looked at it, would give me leave to have it incorporated. Leave granted. The letter read as follows- Keating plays a game that he alone can win from Mr Darryl Hubbard, Sandhurst Computer Services Has Mr Keating stumbled upon the ``ultimate computer game'' with his sales tax on the ``manufacture'' of computer software? STRIP-Sales Tax Rip-off of Intellectual Property-seems to be a winner-takes-all game with Mr Keating never losing. According to a representative of the Melbourne sales tax office, a computer program will be deemed to have been manufactured when it is transferred from RAM (random-access-memory) to a storage medium such as tape or disk. Consequently, when a programmer entrusts the products of his intellectual processes to magnetic immortality, Mr Keating scores with STRIP. As it may take many tries for the programmer successfully to transfer the computer program, Australia's computers will resemble video STRIP poker machines with tax money pouring out to mark a successful compilation. Perhaps the State governments will require that computers be registered-but then it is not gambling, it's sure money! Who must pay the sales tax? The manufacturer (i.e., programmer) according to the sales tax office representative, except when the programmer is an employee of a company which intends to use the computer software ``in house''. Where the computer consultant is an independent consultant, he must be registered as a manufacturer of computer software and, hence, is required to pay sales tax. Now we have an interesting problem when two programmers are working on a computer program for the same company, one an employee of the company, the other a consultant. Given that the ``Event'' of the manufacture occurs when the program is transferred from RAM to disk, does the liability of sales tax fall on the person who presses the key to initiate the process which ``manufactures'' the computer program? In future the computer consultant will be able not only to write computer programs but also to play STRIP with Mr Keating. Is this all fair? Consider the situation of the computer consultant with an income of $36,000 from a year spent ``manufacturing'' computer programs. He must give Mr Keating $6000 sales tax and, on the remaining $30,000, pay $8612 income tax-a total tax contribution of $14,612. A programmer employed by a company could also earn $36,000 in a year spent similarly and pay a total of $11,525 income tax. Therefore, the computer consultant pays 27 per cent more tax for the same work. Of course Mr Keating would astutely advise that the consultant charge the client an extra $7200 sales tax in order to maintain his gross income of $36,000. Now the consultant will contribute $18,725 in tax to Mr Keating, which represents 62 per cent more tax for the same work-a much higher score. What is the situation if the company for whom the consultant works will not pay another $7200 for the consultant to score for Mr Keating? The first result is that his income is reduced immediately by 20 per cent. Alternatively, he could be offered temporary employment to manufacture the computer program and, hence, the sales tax is avoided. Or is it? Could both the company and the consultant be caught by the catch-all tax legislation and give Mr Keating an even larger jackpot with extra penalty points being added to the original score. Perhaps Mr Keating could answer these questions for me. Are computer programmers only the first victims of STRIP? What about lawyers, accountants, journalists and others who use their intellects to ``Manufacture'' written advice to their clients via computer in the form of a word processor? Mr Keating's coup de grace would be to require a sales tax chip to be fitted to all computers to record every RAM to disk manufacturing process so that sales tax can be calculated exactly and accurately, preferably combined with a point-of-sales tax terminal to provide an automatic funds transfer to Mr Keating's STRIP score. DARRYL HUBBARD Bendigo Senator MICHAEL BAUME —I thank the Minister. The detail I want to go into on this matter of professional services is that many Australian computer firms sell directly at retail. They do not have a wholesale price. When they sell directly at retail, because they do not operate through wholesalers, there is no wholesale price on which the sales tax can be calculated. As I understand it, the Australian computer companies in this situation have approached the Australian Taxation Office and the Treasurer and said: `For heaven's sake can't we have an imputed wholesale price against which the sales tax can be assessed rather than having it assessed on the only price available which is the retail price?'. The Taxation Office has, I understand, said: `No, that cannot be done'. This is incredible. It means that if an international group such as IBM brings in some software from the United States of America at a wholesale price of say $50,000 with a retail price of say $100,000 it will pay sales tax at the wholesale price, which is 20 per cent on $50,000. Yet if an Australian manufacturer gets the contract, he has to pay sales tax at the only price available which is the retail price-let us say it is exactly the same as IBM's-of $100,000. In other words, the client of the Australian company in this case would have to pay $120,000 for exactly the same equipment he could buy from a multinational company, for example, which might have imported it for $110,000. The Government is having another unintended impact, an unintended effect, because of the way this legislation will operate. Senator Vigor —It is worse than that because IBM can get away with bringing its software in as an aid to manufacture. Senator MICHAEL BAUME —Exactly. I thank Senator Vigor for his point. It brings me to the next interesting point about anomalies. Under the legislation there is also the absurdity that if a consultant advises a company that its software program should be rewritten and if the company follows that advice, the consultant's fee is taxable, as I understand it. Because the advice has led to a change of software, the consultant's fee is part of the change and is therefore subject to a 20 per cent sales tax. How a consultant can properly quote a fee for his consultancy without knowing whether or not at the end of it there will be a change in the software program heaven alone knows-or rather heaven and the Commissioner of Taxation, because he appears to regard himself as interchangeable with heaven. Senator Vigor —It is the other place. Senator MICHAEL BAUME —I take that point, too. The reality is that if, as a result of a consultancy, there is a change in software the whole consultancy is subject to sales tax. All one has to do to avoid that is not to have the consultant do it, to have the company do it in house. One might ask: Why not have that done? It could be done by a big company with the capacity to do so. Once again the person being belted by this ludicrous legislation is the small businessman whose business does not have the capacity to do it and who must employ a consultant to do the job. So we have a succession of ludicrous anomalies, anomalies which have been brought to the attention of the Government. As I have demonstrated, there have been letters to the newspapers pointing out the unfairness of the situation. Yet this Government, simply because it has not felt the need to respond to the pressure it has had on the fringe benefits tax-in other words, because it does not see the same political need-is not now making the expedient changes in this area which it is prepared to make to the fringe benefits tax. I suggest to the Government that many of these areas deserve to be considered. As Senator Messner said, it is incredible that at a time of vine pull in South Australia the Government is belting the wine industry again, an industry which is under such heavy pressure. There is the dairy industry, and the imposition of a sales tax on flavoured milk. This is ludicrous. Who would suggest that the dairy industry is in a healthy situation? As I understand it, dumping by Brazil is very badly affecting the orange juice industry. It is not simply the taxes this Government is introducing; the Government's timing compounds the problem. There is no doubt in my mind that the case against these taxes is overwhelming, provided the offset is a reduction in government spending. I would be overjoyed at the prospect of getting rid of these taxes if at the same time we could get rid of the government spending that the taxes are paying for. As I have said, we do not have the capacity in opposition to impose on the Government the sort of discipline, self-restraint or responsibility it keeps talking about but never practises-this big spending Government. It would be totally irresponsible of us, in attacking this Budget, to do anything to increase the deficit. We have consistently and responsibly and I believe credibly argued that the main task this Government has is to reduce its demands on Australians, to get off Australians' backs. The only way it can do that is by cutting government spending. Yet tonight we have heard once again the people who allowed the fringe benefits tax legislation to go through, the Australian Democrats, who supported the Government at the time, calling for the cutting of government revenue and the increasing of government spending-the classic irresponsibility. I do not believe that it would be right or in Australia's interests for the Opposition to be as opportunist as the Australian Democrats. We are far more responsible. Under the proposals of the Australian Democrats Australia would suffer even more in terms of falling investment, rising unemployment and the worsening of the current account deficit, which this Budget expects. So, no matter how strongly we oppose these taxes-as we do; we think the consequences will be most unfortunate in some areas and almost as severe in some areas as the consequences of the fringe benefits tax which the Democrats support-we believe that in terms of responsibility and credibility we cannot vote against them unless we can reduce government spending equally. In those circumstances I suggest to the Australian Democrats that they stop playing politics and thinking of their prospects of survival at a double dissolution and start thinking about the whole of Australia. Senator HAINES(South Australia-Leader of the Australian Democrats)(8.37) —We have just heard a rather extraordinary speech from an honourable senator who quite clearly can find no real justification or any rational argument for the odd stance the Opposition parties are taking in supporting the Sales Tax (Exemptions and Classifications) Amendment Bill 1986, the Sales Tax Laws Amendment Bill 1986 and the Sales Tax Acts Amendment Bill 1986, and who therefore had to spend something like half his speech abusing the Australian Democrats. In doing so he made a number of rather contradictory statements. He alleged, for example, that the only reason the Democrats were opposing this legislation and supporting the industries that are to be affected by the legislation was so that we could avoid political disfavour. He said that a sentence or two after he had accused us of all sorts of political chicanery and rejection of what was in the best interests of industry and commerce by failing to oppose the fringe benefits tax. I would have thought that if we were in the game of avoiding political disfavour-and Senator Michael Baume thinks there is a tremendous amount of odium attached to supporting the fringe benefits tax-surely we would have joined the Opposition in voting against the fringe benefits tax. If we had joined the Opposition in voting against the fringe benefits tax we would have denied this Government access to something like $370m, or some 10 times the amount that would be denied to this Government by not going along with the legislation before us. The fact that the fringe benefits tax legislation was not a Budget measure does not mean that it was not real money the Government was trying to raise from the fringe benefits tax. Money is money and revenue is revenue, whether it is raised by a Bill which is introduced between August and November or a Bill which is introduced between February and June. If Opposition senators are going to divide artificially the legislation we consider in this place into those two parts of the year, then I suggest that they all vacate the premises between August and November and go back to their electorates, where there is some chance of them doing some good-although I doubt it-and possibly earning the money they are paid. The trick that they have been trying to pull for so long on so many people in the com- munity-that Budget Bills are somehow sacrosanct and somehow linked with Supply-is simply not washing any longer. Their credibility in areas such as the Riverland in South Australia, in Mildura and elsewhere, is nil. The National Farmers Federation in that area, the United Farmers and Stockowners of South Australia, and equivalent organisations in other States, have sought independent advice about what the constitutional role and rights of the Senate are. They have been told what I have been telling them for some time. Any piece of legislation which is defeated twice, with a period of three months in between, provides grounds for a double dissolution. But that dissolution is called at the Government's discretion, as Malcolm Fraser proved in his last years in office. The only thing that forces a government to call a double dissolution is if Supply is blocked, as it was in 1975, and that is not likely to happen in this chamber again-at least while we have any say in the matter. Senator Michael Baume and his colleagues can stop trying to continue this farcical argument that there is something sacrosanct about Budget Bills and that the country will fall into a bigger hole in the ground than it is already in if we defeat one or two of them. That is not the case, and we proved that in 1981 when we amended the Fraser Government's sales tax legislation by removing from it reference to the necessities of life. I understand that that cost the Government in the vicinity of $250m, if the then Minister for Finance was to be believed. While it was certainly used for the calling of a double dissolution 15 months later, it was simply a device. The government of the day did not fight the election on the question of the sales tax on the necessities of life, nor should it have, of course. But it was defeated in any event. If Senator Michael Baume wants to run the rather puerile argument that the only reason that we are opposing this legislation is that we want a double dissolution because it is in our political interests, I point out again that in 1981, when we amended the Fraser Government's sales tax legislation in a similar way to the way in which we want to amend this legislation, three of the five senators of the Australian Democrats that year were five months into six-year terms. We had every justification then, if we wanted to play pragmatic and opportunistic politics, simply to sit on our hands and wait until our turn came around again. We chose not to because, as far as we are concerned, whether legislation is introduced in August-September, February-March or some other time, it ought to be looked at on its merits. One ought to consult the people involved and act accordingly, and not spread some sort of specious story around the community that one somehow cannot do it. That is political cowardice of the worst sort. I point out to Senator Michael Baume and his colleagues that there is not much point in setting up a wine industry action group to look into an industry that may not exist by the middle of next year. That fact is made perfectly clear by the submission that was put out by the Australian Wine and Brandy Producers' Association which, amongst other things stated: The Australian wine industry is facing a crisis. The biggest crisis it is facing, of course, is having this lot in opposition instead of having them out of the place altogether, replaced by a group of people who are prepared to care for industries and the people who are employed by the industries that they see as part of their constituency. The Association continued: The sales of Australian wine are stagnating; stocks remain high and prices are depressed. It is not just the wine prices that are depressed, either. The submission continues: Wine producers have largely absorbed the 10% sales tax on wine to maintain sales throughput and cash flow. The intended tax on consumers has therefore been a tax on wine producers/retailers. Many wine producers are on a fine edge of viability. Any additional pressure on wine sales or erosion of wine producers profit margins will force these producers out of business. So I imagine that whatever committee has been set up, calling itself the wine industry action group, will not have a very difficult task. There will not be a very large wine industry to look at. It will comprise largely the boutique wineries and the very large conglomerates, both of which are likely to survive this additional hike in sales tax. The boutique wineries will survive because they make small and selected products and the purchasers of those products are prepared to pay pretty much whatever the producer asks. The larger wineries will survive because they will simply narrow the range of their products, so that they can cut their production costs. It is the middle-of the-the-range wineries, the sort of wineries that we see in the Riverland in South Australia, that will suffer, and when they suffer, the growers suffer. When the growers suffer, the entire area suffers. An area such as the Riverland is dependent very much on wine production and on citrus fruit products, which is the second of the areas that we are particularly concerned about. This legislation is hitting very hard a number of industries and a number of areas which Liberal and National Party senators have been telling us for years comprise the bulk of their constituencies. These people are now starting to wake up to what the Opposition's little game is all about. The other problem of an area such as the Riverland in South Australia is that those people who are involved in citrus growing are also vine growers in many cases. As both of those areas are being hit in these Bills, there is no way that they can offset the losses that they are likely to suffer. So a number of towns in the Riverland of South Australia will have increasing numbers of families who are reliant on social welfare benefits of some sort, with a consequent impact not only on their standard of living and self esteem, but also on other small businesses in the area. When one cuts the disposable incomes of large numbers of families in a small area such as the Riverland, the impact on local small businesses is tremendous. I do not think it is going too far to say that the entire area could become poverty stricken in no time at all. With regard to the tax on fruit juices and milk, as my colleague Senator Powell said earlier, these are taxes on foodstuffs and are particularly stupid for a number of reasons. The flavoured milk sector of the dairy industry is one of the few growth areas that that industry has. As far as fruit juice is concerned, the Government is putting a 10 per cent tax on pure fruit juice at the same time as it has referred the problems of that industry to the Industries Assistance Commission. If the Government is prepared to accept that citrus fruit growers are having sufficient problems to warrant an inquiry by the IAC, why is it pulling the plug thoroughly on these people and allowing them to go down the gurgler in this way? They are already suffering from what is essentially the dumping of Brazilian orange juice in Australia, orange juice which, unfortunately and unfairly, is made competitive with the Australian product because of subsidisation of that industry by the Brazilian Government. It is ridiculous that, in addition, Brazil should also receive developing nation preferential tariff treatment in this country. It seems to me that this Government, with a little help from the Opposition, is doing its damnedest to destroy a number of extremely efficient Australian industries at a time when it should be propping them up. At a time when it is talking about buying Australian, for goodness sake, it is attempting to pull the plug on a number of first-class Australian industries. The proposed 10 per cent tax on fruit juice and milk is unquestionably a tax on food and, as Senator Powell said earlier, on food which is traditionally regarded as important in the growth and development of children. One wonders whether this is not merely the thin edge of the wedge and whether we will see next a tax on bread and fresh vegetables in an attempt by this Government to raise revenue from whatever sources it can whilst, I might add, ignoring the fact that there are some extremely wealthy entrepreneurs in this country who are entitled to negatively gear on overseas financed money used for some very unproductive takeovers in this country. As I said, the citrus fruit growers are already hard hit by the large volume of heavily subsidised imported juice from Brazil. The wine tax, which is a doubling of the impost already placed on that industry, is a tax on one of the up and coming export areas we have in this country. At a time when our balance of trade is as bad as it is, I see no reason why this Government or the Opposition should assist in hammering the last nail in the industry's coffin. The small amount of revenue that is to be raised by this legislation cannot justify the action on the part of this Government or the two-faced behaviour on the part of the Opposition. For the Opposition to argue that it cannot challenge this legislation and will not oppose it, simply because the Government needs this revenue in order to keep its deficit down, ignores the fact that the Opposition parties voted against two other measures that would have raised substantially more money-the capital gains tax and the fringe benefits tax. As I said earlier, whether those are Budget Bills or not, they are revenue raising Bills, and the Opposition knows it. The money is still coming in, no matter where it is coming from. I think that the Opposition needs to come up with either more rational arguments for supporting the legislation or it ought honestly to admit that it supports the taxes on these products-that it is hoping and, indeed, planning to benefit from the taxes on these products should it ever get back into government-and at least earn the respect, if not the support, of the people who it is damaging in supporting these iniquitous pieces of legislation. Senator VANSTONE(South Australia)(8.53) —The Sales Tax (Exemptions and Classifications) Amendment Bill 1986 quite obviously deals with some changes to the imposition of sales taxes on a variety of products in Australia. I have a particular concern with one product affected by this Bill. The particular concern I have is with the effect this Bill will have on the wine industry-an industry which is more strongly represented in South Australia than in any other State. I will deal with my concerns with respect to the wine industry first. In 1983 the Australian Labor Party promised that it would not introduce a wine tax. Not long after that it introduced a 10 per cent sales tax on wine. At the same time the reduction in differential between domestic and imported wine was introduced. Following that we had the fringe benefits tax and the entertainment tax, both of which substantially affect the wine industry and both of which were supported by the Australian Democrats. Now we have effectively the doubling of this sales tax on the wine industry. We have this doubling despite the recommendations of the Government's own study into the wine industry. As I have said, this particular sales tax very much affects South Australia. We produce 57.5 per cent of Australia's wine. Quite obviously we produce more, therefore, than any other State. This tax will affect a wide variety of people. I have heard some people say that it will particularly affect the big wine companies, the conglomerates, and that they can afford to pay. But what the people who say that sort of thing forget is simply this: They forget or ignore the employees of those companies who may well be dismissed in the interests of efficiency. They forget or ignore the small wine makers and their employees. They forget or ignore the grape growers and they forget or ignore the people with jobs in retailing and marketing of wine. They are the sorts of people who will be affected by this tax. As I pointed out, my State will be affected by this tax more than any other State. The effect on my State will be very broadly spread. It will be spread right across the State from Coonawarra down in the south east to the Barossa Valley, the Clare Valley, the McLaren Vale area and the Riverland area, which will be particularly hard hit by this tax because it is also an area which produces citrus juice and which is affected by another aspect of this legislation. It will also affect the wine makers and grape growers on the Adelaide Plains. This tax will not only affect my State more than any other State but also its effect will spread very broadly across my State. I believe that it is an ill-considered tax. It is common knowledge within the industry and in fact amongst members of this chamber and of the lower House that this was a last minute tax. Rumours in the industry are that the Minister for Primary Industry (Mr Kerin) did not really want this tax but he was informed at the last minute, euphemistically speaking, by the Treasury that this tax was to be imposed. Our Treasurer (Mr Keating)-the Labor Treasurer; I do not want to call him my Treasurer-told all Australians that he wanted well planned tax reform. The doubling of this wine tax at the last minute is no indication of his capacity in any way whatsoever to introduce well planned tax reform. What this tax represents is a last minute grab at an industry that is predominantly South Australian. In the population sense we are a relatively small State. We provide only 13 Federal seats in the House of Representatives. Federal Government is not won or lost in South Australia. A relatively small swing will not affect the distribution of seats between the major parties in South Australia. On the other hand, a relatively small swing in the eastern States may well change the Government. That, of course, is the very reason for this chamber coming into being. Given the effect of this particular tax and the doubling of the wine tax that I have outlined, I asked myself: What does the Labor Premier of my State, Mr Bannon, intend to do? It is a very short answer, of course. He intends to do virtually nothing. I am told that he admitted in a somewhat embarrassed tone-I would be embarrassed if I were he-to a meeting of wine industry representatives that he would not come to Canberra and be humiliated by the Treasurer. That is okay. If he is too weak to make these representations, that is his problem. But what about Mr Bannon's own backyard, the area where Mr Bannon has the power to do something? What is he doing in South Australia to assist this industry? The answer is, nothing. Mr Bannon, the Premier of the Labor Government in South Australia, stands to collect an enormous windfall from the increase in licence fees-a tax on a tax. At least Mr Bannon could return this in some way to the wine industry in his State, but what do we hear? Nothing; silence. I strongly disapprove of other matters dealt with in this Bill; not the least of these is the imposition of a tax on 100 per cent fruit juice and also the tax on flavoured milk. I agree with my colleagues with respect to the effect that these taxes, and for that matter the wine tax, will have on the respective industries. But these matters will not affect my State to the same degree as the doubling of the wine tax. South Australia produces 57.5 per cent of Australia's wine and thus this tax hits my State proportionately much harder than any other State. The Australian Democrats have made much tonight of their shopping list which is designed to woo votes from sectional interests. They do so knowing that they have no chance of ever being in government, no chance of ever being in the position of having to put their promises into practice. There is no chance of ever letting the electorate see whether the party which says that it is here to keep the so-called bastards honest-and that is the remainder of us in the chamber-would, if it were in government, practise what it preaches. I submit that if ever such a misfortune were to befall this country we would find that the Democrats would not practise what they preach. In fact, quite the opposite would be the case. You, Mr Deputy President, would be well aware of the number of times that in this chamber we have tried to get pieces of legislation referred to respective committees. The Australian Democrats have a policy that legislation should be scrutinised by committees. Where has the support of the Democrats been when we have given them the opportunity to put their policy into practice? Their support for putting their policy into practice has been right out the door. But enough of the Democrats. One can devote only so much of one's speech to the likes of the Democrats. I wish to return to the wine tax. I am conscious of the bipartisan call from my State Parliament against this tax. The announcement by the Leader of the Opposition (Mr Howard) of a wine industry study group is, I believe, a positive contribution to the development of a long term policy for this important industry, not just for my State but for all of Australia. As a member of that group, I look forward to working towards the resolution of the industry's problems. As Senator Messner pointed out earlier this evening, the problems of the wine industry go well beyond this tax. All of those problems, including this tax, require urgent and serious attention. They need to be dealt with in a comprehensive manner so that we can understand how different policy aspects interrelate. In other words, we want a co-ordinated approach to this industry. Despite Labor grandstanding in the South Australian Parliament, Labor members and senators in Canberra have not spoken out to defend their State's clearly identified interest as the Liberals have done here tonight. I accept the Opposition's general response to the Budget. This is a Labor Budget and the Labor Government is responsible for the harsh consequences it creates for many Australians. That is true, and I will continue to promote that view. However, senators are elected, amongst other things, to represent their States. The Liberal Party firmly believes that an upper House is a necessary element in our Federal parliamentary system. Unlike the Labor Party, Liberals are proud of the independence we give to our parliamentary members. What it amounts to is that in the final analysis we must each be responsible for the decisions we make. As a member of the States House, I believe I have an obligation to take a stand for South Australia and demonstrate in the forum to which I have been elected-namely, this chamber-my opposition to this tax. Accordingly, with some regrets, I will support the amendment to remove clause 5 (2), which effectively doubles this tax. Senator MACKLIN(Queensland)(9.05) —I had not intended to speak tonight. However, I have been provoked by some statements made by the two previous speakers in this debate-Senator Michael Baume and Senator Vanstone. They raised important issues to which I wish to respond immediately. Senator Baume came in here in his normal bitter fashion and made a whole series of statements. He indulged in name calling which, I suppose, has tended to become his badge. I certainly knew about him when he was in the House of Representatives. It seems that he has continued to engage in identical types of activities in this place. I must admit that the name-calling exercise does not worry me at all. However, I am quite happy for him to act in this way if it helps him to avoid having a heart attack or whatever. Nevertheless, there are other places where that can be done. I am not sure why he insists on inflicting this behaviour upon us in this place time and again. I might suggest to him that he would be better served if he prepared a few more little notices of motion with which he fills up the Notice Paper and which must cost an enormous amount of money to run off each week. This is the man who is interested in saving money. I think Senator Haines covered fairly exhaustively the contradictions that he raised in his speech. The fact that the Liberals have voted against Budget Bills seems to have escaped him. Senator Vanstone, the previous speaker in the debate, made a point which, from my point of view in terms of parliamentary democracy, I found very odd. In particular, at the end of her speech she referred to her responsibility as a senator for South Australia. She made the accusation that one in fact would not be respon- sible for something or other unless one were actually in government. Quite frankly, I have always rejected that extraordinary view. I find it extraordinary because in a parliamentary democracy the Parliament and not the government is responsible for passing legislation. The Executive is not, and never has been, responsible for passing any legislation in this country. The people who are responsible for passing legislation are members of the House of Representatives and the Senate. Quite frankly, I find it an extraordinary statement and one of the most incredible and worst types of accusations that anyone could make in this place that other senators were in fact willing to vote one way or another without taking any responsibility for their actions. I hope we take responsibility for our actions on every Bill we vote on in this chamber. For some reason the odd political philosophy has become perpetrated in Australia that parliamentarians are not responsible for legislation. It so happens that for the majority of the time since Federation governments have in fact not controlled this chamber. Hence, for a majority of the time this chamber has made or broken various pieces of legislation. Quite frankly, I am quite happy in terms of the job that I do to remain a senator. It is a job to which I believe everybody in this country would aspire. It is an incredibly responsible job. Yet time and time again we find senators coming into this place not only denigrating other senators but also denigrating themselves in terms of the work that they should be doing. I find this such an odd political philosophy that I must admit that I am sometimes lost for words. The last point I want to make in regard to the comments made by Senator Baume and Senator Vanstone is that the major import of what was said by Senator Baume is that a member of the Opposition could not be responsible and oppose this Bill. I think Senator Vanstone quite conclusively suggested why she was being responsible in at least opposing part of this Bill by supporting a particular amendment. There, I think, we have the inherent contradiction in the Opposition's case. Essentially, if Opposition members were in fact addressing the interests of their electorates, as Senator Vanstone argued, they would be doing what she is doing. I think her actions conclusively show that the points of view that Senator Baume was making were pure arm waving and an attempt to assuage his own guilty conscience. Senator WALSH(Western Australia-Minister for Finance)(9.10) —I have not heard a lot of the second reading debate, but I have noted with considerable amusement that it has consisted mostly of reciprocal vilification between the Democrat humbugs and the Liberal Party humbugs. I have also noticed Senator Vanstone's cheap populist gimmick that she intends to vote with the Australian Democrats in the hope that she can attract some support, I suppose, from the troglodytes and others in the South Australian Liberal Party. I note that the position she has taken makes a complete mockery of the alleged belief of the Liberal Party and of her weak Leader, who is a puppet of the ratbag Right, in allowing market forces and consumer choice to determine consumption patterns instead of discrimination by governments through the tax system of the type that is designed to influence consumer choice. That is typical of the sort of thing I have come to expect of grandstanding, populist Liberal Party cheer-chasers. Otherwise, I wish the legislation a speedy passage. Question resolved in the affirmative. Bills read a second time. (Quorum formed). SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) AMENDMENT BILL 1986 The Bill. Senator SIDDONS(Victoria)(9.13) —The Australian Democrats have four amendments to the Sales Tax (Exemptions and Classifications) Amendment Bill 1986. I formally move the first amendment: Page 2, clause 5, leave out sub-clause (2). The effect of the amendment would be to eliminate the 10 per cent increase in sales tax on alcoholic wine and cider. We have just experienced the most extraordinary piece of convoluted logic by the Opposition. It has spoken at great length about how disastrous the imposition of a new tax will be on the wine growers, the wine industry, in the Murray Valley; yet it is not prepared to do anything about it. During hours of debate we have heard that the industry is going through bad times, that it is going through a shake-out period, and yet at that very time the Government has introduced an additional 10 per cent tax. The Opposition is not prepared to do anything about it. It simply says: `Oh, this is a Budget Bill'. The logic is incredible. The Opposition has accused the Australian Democrats of not being prepared to join it in opposing the introduction of the capital gains tax and the fringe benefits tax, although we moved very substantial amendments in both cases. We saved the car industry $200m in respect of the fringe benefits tax. We moved 16 amendments to the capital gains tax legislation. We adopt the attitude that, as a responsible opposition, we should not fundamentally attempt to block Government initiatives. However, as a responsible opposition, we should amend the worst aspects of the Government's legislative program. We did that in the case of the capital gains tax and the fringe benefits tax, and we are asking the Opposition to join us and do it again in the case of this enormously vicious tax on an industry that is already on its knees-the wine industry of the Murray Valley. It is not possible to understand how the Opposition could not support us in our amendments. We can only imagine that it is not doing so because of some deal worked out between the laborials behind closed doors. It seems that both the Australian Labor Party and the Liberal Party of Australia have a common constituency-the rich and the privileged-and are not concerned about the poor and the underprivileged, those living below the poverty line. I can only say that if members of the Liberal Party or the National Party of Australia visit the Murray Valley in future they will have to do so like policemen in Harlem-in pairs-otherwise they will be lucky to get through with their lives. I commend the amendments to the Committee. Senator MESSNER(South Australia)(9.18) —First and foremost, let me deal with two or three points raised by Senator Siddons. He said that he was responsible-single-handedly, apparently-for changing substantially the fringe benefits tax and the capital gains tax. He knows full well that he could not have achieved any of that without the Liberal and National parties totally opposing those stupid taxes. He could not have done anything to get those amendments if it had not been for our total opposition to the taxes. That kind of hypocritical statement does not bear any analysis. Let us address ourselves to the question of Budget legislation. We in the Liberal and National parties have a very clear view about that. The Government is entitled to its Budget. That means that in seeking to run its financial affairs it is entitled, when it brings down its Budget, to have the passage of both its taxation legislation and other spending legislation. Senator Walsh —What about Vanstone? Senator MESSNER —She has to make up her own mind about that matter. These are the decisions that have been made in the Liberal and National parties' party room. The position is simple. In the event of legislation being in the normal form and not of an outrageous character, such as retrospective legislation and so on, we have an obligation not to oppose the Government's legislation. Clearly that is the decision of the Liberal and National parties and has been our position for some time. The Australian Democrats make the point that somehow opposing this measure is the same as opposing the fringe benefits tax and the capital gains tax. Nothing could be further from the truth because neither of those taxes were Budget matters. They were brought down in a hotch-potch fashion about a year ago. The Government struggled manfully through the next nine months to prepare legislation of which we saw nothing until it finally appeared in the House last May and was rushed through this place at a great rate of knots. Of course we are now suffering all the effects of that legislation. Female employees going home from shift work at night will be under all kinds of pressure because the Government will force employers to pay the fringe benefits tax on the fares for taxis provided for female employees in that situation. Gold watches will be taxed when they are eventually handed out to long term employees of a company who retire. Domestic help for crippled people at home will be subject to the fringe benefits tax. Guess who has brought us these great benefits? None other than the Democrats, none other than Senator Siddons, have brought us these magnificent pieces of legislation which we oppose strongly. However, that is not the point I want to make. The point is this: Senator Siddons makes out that somehow this tax is connected to the Budget of the Government. I recall very well that during debates on this legislation in the Senate only last May Senator Siddons said that the Government would not be able to give people their tax cuts unless we passed the legislation for a capital gains tax and the fringe benefits tax. The legislation has nothing to do with the deficit. By the admission of the Democrats, it is to do with providing people with tax cuts and it has nothing to do with the Budget or its deficit. That is the essential point we make. The TEMPORARY CHAIRMAN(Senator Elstob) —Order! We are discussing an amendment on orange juice. I ask you to keep to the matter before us. Senator MESSNER —I thought the matter was highly relevant. However, I think I have made that point. The next thing that is obviously necessary for the wine industry in South Australia and in all other parts of Australia is stability. What this industry has been subject to for the last seven or eight years-I extend this to the period of the brandy excise introduced in 1978-is the atmosphere of constant change. The industry has not been able to settle down to its own affairs, to organise itself or to be able to plan ahead and develop itself in any kind of comprehensive way. Yet this is the very industry that depends so much upon long term planning. For instance, it requires a seven-year period for a vine after being first planted in the ground to grow, become mature and start producing grapes. All the planning that has to go on in that period indeed takes a great deal of investment faith and experience in dealing with the growing of grapes. It is that kind of activity which this Government fails to recognise and which obviously, through its constant actions of the last three years, continues to jeopardise the future of the industry. What this industry needs above all is stability. The regional nature of the problem, particularly in South Australia along the River Murray, is how one gets stability into a policy which is administered by both State and Federal governments. The reason why the Liberal and National parties have established a wine study group is so that they can bring together the policy elements of both State and Federal government areas to ensure that a comprehensive policy can be developed for the Liberal and National parties in government. This will enable them to implement such a policy for the benefit of the industry. This is what the industry needs. While dealing with a matter such as a wine tax is very important, it is only an element of the total problem that is faced by the wine industry, the grape growers and the regional areas of South Australia that are involved in this problem. That is why we on this side of the chamber, excluding the Democrats, say that a policy is needed. We are determined to establish it so that we can develop a comprehensive and consistent theme for the industry to follow in the future. We intend to consult widely with all community groups in regional areas, with industry leaders and with those who are deeply involved in the marketing of wine. We know that the wine industry has a lot to offer by establishing better techniques for the marketing of its products both domestically and overseas. Rather than spend $8m as this Government is doing on pulling vines out of the Clare Valley and the Riverland area, piling them into heaps and burning them, we would prefer to see money spent in other directions such as the promotion and development of markets overseas. Apparently, neither the Government nor the Democrats are capable of getting together that kind of progressive thinking. One of the very serious problems that has arisen with the wine industry has been the capital gains tax, the fringe benefits tax and the entertainment tax. Informed people in the wine industry make it quite clear that the biggest single factor causing the industry to decline since 1984, when this Government first introduced the wine tax, was the abolition of entertainment expenses for taxation purposes last October. Senator Siddons —Absolute rot. Senator MESSNER —That is absolutely true and the wine industry people will tell the honourable senator that. Senator Walsh —You mean those tycoons were just on the booze on Friday afternoons? Senator MESSNER —No, I am talking about the wine boutiques in the Margaret River area in the Minister's State that are establishing new industries and employing his constituents. Those are the kinds of people who are suffering most from the effects of this group of people in the corner-the Democrats-who supported the Government in introducing these outrageous new taxes that were put into place. I notice Senator Vigor sitting behind Senator Siddons. He was the only Democrat who saw the light on the entertainment tax and voted with the Liberal and National parties against the legislation. That is something to be said for Senator Vigor because he is regarded by many on this side as one of the best Democrats, a man whom one can really understand and who has a political future. We look forward to seeing him in Parliament after the next Senate election. The position is quite clear. The Liberal and National parties will allow the passage of this legislation for the reasons I have outlined. It represents Budget legislation and the Government is entitled to its Budget; it is entitled to legislation authorising both expenditure and the raising of taxation in its Budget. We would expect the same from the Australian Labor Party were it in opposition. We look forward to the days when that will occur and when we know we will have the co-operation of those principled men who now occupy the treasury bench. Senator WALSH(Western Australia-Minister for Finance)(9.30) —I will be very brief but I should put on the record that the amendment technically is defective in that even if it were carried the rates Bill would still apply a sales tax on wine at a level of 20 per cent. I say that in order to draw attention to the essentially populist and fraudulent nature of Senator Vanstone's bit of cheap grandstanding and cheer-chasing on this issue. Question put: That the words proposed to be left out (Senator Siddons's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 46 —— Haines, J. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vanstone, A. E. Powell, J. F. Vigor, D. B. Alston, R. K. R. Jones, G. N. Archer, B. R. Kilgariff, B. F. Aulich, T. MacGibbon, D. J. Baume, Michael McIntosh, G. D. Baume, Peter McKiernan, J. P. Bjelke-Petersen, F. I. Maguire, G. R. Black, J. R. Messner, A. J. Boswell, R. L. D. Morris, J. Brownhill, D. G. C. Newman, J. M. Carrick, Sir John Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Ray, RobertColeman, R. N. Reid, M. E (Teller)Collard, S. J. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Robertson, G. F. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Foreman, D. J. Teague, B. C. Georges, G. Townley, M. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Question so resolved in the negative. Senator SIDDONS(Victoria)(9.38) —by leave-I move: (2) Schedule, leave out clauses 5, 6, 7 and 8. (3) Schedule, leave out clause 23. I do not wish to speak at any length to these amendments. I believe that I have made their purpose quite clear. I leave it to honourable senators to support them. Question put: That the words proposed to be left out (Senator Siddons's amendments) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 47 —— Haines, J. Powell, J. F. Harradine, B. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Alston, R. K. R. Kilgariff, B. F. Archer, B. R. MacGibbon, D. J. Aulich, T. McIntosh, G. D. Baume, Michael McKiernan, J. P. Baume, Peter Maguire, G. R. Bjelke-Petersen, F. I. Messner, A, J. Black, J. R. Morris, J. Boswell, R. L. D. Newman, J. M. Brownhill, D. G. C. Parer, W. R. Carrick, Sir John Puplick, C. J. G. Childs, B. K. Ray, RobertCoates, J. Reid, M. E. (Teller)Coleman, R. N. Reynolds, M. Collard, S. J. Richardson, G. F. Cook, P. F. S. Robertson, E. A. Cooney, B. Sheil, G. Crowley, R. A. Short, J. R. Devlin, R. Sibraa, K. W. Durack, P. D. Tate, M. C. Elstob, R. C. Teague, B. C. Foreman, D. J. Townley, M. Georges, G. Vanstone, A. E. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Jones, G. N. Question so resolved in the negative. Senator SIDDONS(Victoria)(9.46) —I move: Schedule, clause 24, leave out all words after `omitted'. This amendment relates to a 10 per cent tax being applied for the first time to fruit juices, cider and other non-alcoholic beverages. The reason for this amendment has been made very clear during the debate so far, therefore I do not wish to elaborate on it. We have made it very clear that it is an iniquitous tax on an industry which is already on its knees, and under no circumstances should be allowed to pass through the Parliament. Question put: That the words proposed to be left out (Senator Siddons's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 46 —— Haines, J Powell, J. F. Harradine, B. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Alston, R. K. R. Jones, G. N. Archer, B. R. Kilgariff, B. F. Aulich, T. MacGibbon, D. J. Baume, Michael McIntosh, G. D. Baume, Peter McKiernan, J. P. Bjelke-Petersen, F. I. Maguire, G. R. Black, J. R. Messner, A. J. Boswell, R. L. D. Morris, J. Brownhill, D. G. C. Newman, J. M. Carrick, Sir John Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Ray, RobertColeman, R. N. Reid, M. E. Collard, S. J. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Robertson, E. A. Crowley, R. A. Sheil, G. (Teller)Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Foreman, D. J. Townley, M. Georges, G. Vanstone, A. E. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Question so resolved in the negative. Bill agreed to. SALES TAX LAWS AMENDMENT BILL 1986 Senator SIDDONS(Victoria)(9.54) —by leave-I move: (1) Page 2, clause 4, paragraph (a), leave out the definition of `Computer program'. (2) Page 2 clause 4, paragraph (c), leave out proposed new paragraph (e). (3) Page 3, clause 4, paragraph (d), definition of `Material form', leave out `or a computer program,' and `or the computer program,'. (4) Page 3, clause 4, paragraph (f), proposed new sub-section 3 (1a), leave out `, or a computer program has,', `or a computer program,' and `, or that computer program to be copied or reproduced or converted to another language, code or notation,'. (5) Page 3, clause 4, paragraph (f), proposed new sub-section 3 (1b), leave out `or a computer program', `or that computer program' and `or that computer program is,'. (6) Page 5, clause 7, proposed new paragraph 18b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (7) Page 6, clause 7, proposed new sub-sub-paragraph 18b (1) (e) (ii) (b), leave out `, or a computer program that has,'. (8) Page 7, clause 10, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (9) Page 9, clause 14, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (10) Page 10, clause 18, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (11) Page 12, clause 22, proposed new paragraph 4a (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (12) Page 13, clause 27, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (13) Page 15, clause 31, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. (14) Page 16, clause 35, proposed new paragraph 4b (1) (a), leave out `, or a computer program (in this section also referred to as the ``embodied material'') has,'. These amendments all relate to one area, namely, the 20 per cent sales tax on computer software. We have already made clear our reasons for moving these amendments. We have in this country a flourishing software industry. It is a growth industry of some magnitude. A sudden 20 per cent tax on this industry would have a devastating effect on it. We have also pointed out that the 20 per cent sales tax can be circumvented by various devices such as telephonic communication, and particularly by multinational companies through a variety of mechanisms. For all those reasons we are very strongly opposed to the imposition of a 20 per cent sales tax on computer software. Senator MASON(New South Wales)(9.55) —I declare an interest in this matter. A member of my family is an Australian who has devised a software program, a word processing program called Word Magic. It is already being exported to New Zealand and there is a prospect of it being exported to other parts of the world. With this amending legislation the Government is proposing to ensure that people in Australia who do anything of value immediately are militated against. As I understand it-I would be glad if the Minister for Finance (Senator Walsh) will elucidate this-this is a tax on the intellectual content of software. As with many other people who have been part of this type of operation and who do not have very much money, this member of my family has licensed the program to a software manufacturer who will manufacture it from this month and market it. As I understand the Bill, the deviser of the program, in this case the member of my family, will have to pay initially a 20 per cent tax on whatever royalties he gets from that company and income tax thereafter. I would be obliged if the Minister will tell me if I am wrong on this as a number of people in the software industry have told me that this is the case. If it is not the case there will be great relief throughout the community. This Government-the Prime Minister (Mr Hawke), the Minister for Science (Mr Barry Jones) and the Minister for Finance-says that Australian industry has to get off its backside and that the Australian people have to innovate, they have to do things, they have to be creative, they have to export. Yet when they do so the Government says that it will impose a 20 per cent tax on them at the first instance. I cannot really believe that this is the case, that we have such a topsy-turvy, Alice in Wonderland situation with this Labor Government. It said when it came to power in 1983 that it would try to do something reasonable and innovative to get this country back onto a creative, outward looking road. So it became an exporter, it did something of value. But now the Government is saying to somebody who is creative, who is inventive, that he will be hit immediately with a 20 per cent tax and then pay income tax thereafter. I wonder where this tax will go. Will it go to every area of innovation in the country? Will the Government say to an inventor, a writer, a musician, or a playwright that eventually he will be taxed on what it calls the intellectual content of what he does? How long does the Government think people will go on bothering to innovate, to take any notice of what Barry Jones and the Prime Minister say-that we have to get this country off the ground, that we have suddenly to become an exporter, that we have to become good, that in a high technology society we have to become excellent-if the Government undercuts in this way? What is there in it? There is not a great deal of money. It is just another case of the Government yet again knocking people who might be of some value. The Labor Government in my mind is a self-destructive mechanism. It has reached the stage where possibly it has been in government long enough. Is it destroying itself internally. I do not care much about that, but it is beginning to destroy this society and its economic base at the important point, which is the point of innovation. All of us know, and the people in this Government have said it many times, that that is what we have to do. We have to get ourselves up by our boot straps. When we do that, what happens? The Government immediately attacks. I would be most grateful for the Minister's response to that specific point. Senator VIGOR(South Australia)(9.59) —As Senator Mason said, software is an intangible, intellectual property, protected not by patents but by copyright. The sales tax we currently have is levied on the hardware, on the device on which the software is stored, not on the software or intellectual property itself. This amendment to the sales tax laws tries to apply sales tax to the intellectual part of that combination, but the tax will apply only if the software is written on some type of storage medium. That is the subject of an enormous possible rort in the system. Software which is transmitted directly from computer to computer or through the air waves will not be taxable. Already the legislation is outdated in its concept because many micro-computer owners are buying software through bulletin boards, by having it directly delivered to them into their computers through modems, the telephone system or other means of direct communication. The other area where the Government seems to be very much at sea is in what it thinks is software manufacture. As far as I can see in the Bill, software manufacture is deemed to be the act of copying the software material from one medium to another. Is not that great? The Government seems to ignore completely the process of programming and assembling software. Maybe the Minister for Finance (Senator Walsh) could tell me whether the assembling, the programming of software, is a research and development activity which will always be subject to the 150 per cent taxation allowance. That would certainly be a boost to the industry. The Bill will destroy the fledgling Australian software industry because it is totally biased towards large international multi-national companies which have obtained a number of concessions under the Bill. A master tape which is imported containing software will be exempt from the wholesale tax. That is the main component which costs the money. Under the Government's definition it will be an input to manufacture. The tax will be levied only on copies made from that sale. The development of software is not deemed to be manufacture and therefore software purchased for modification which brings jobs into Australia-which the Government claims it wants to do-is not exempt. Hence we are taxing jobs in Australia and encouraging people to produce software overseas. Senator Mason —The Government is selling out to foreign interests again. Senator VIGOR —Exactly, as Senator Mason says. I do not know who the Government is working for, but it is certainly not the Australian people. Senator Mason —Where is the money going? Whose pocket is it going into? Senator VIGOR —Indeed. Computer equipment which is purchased for software development is not tax exempt under the Government's proposal. However, computer equipment which is bought for copying software which has been produced overseas and which can be done automatically without employing Australian labour is tax exempt. This tax is directed at killing the software industry in Australia. Already an extra burden has been imposed by our distances and market-places in Australia. Software developed in Australia and delivered on hardware mediums such as tapes to which licensed rights for use are sold will be liable to sales tax. One of the main ways in which contract programmers develop their programs is by doing a job for a particular Australian company and then taking the product and developing it further for sale as a general package. Those are the very people who form the core of the Australian software industry. They are the people who will be knocked by this process, especially if they want to retain title to that intellectual property, the software. If, however, the software is sold or deemed to be owned by the person for whom they produced it, the individual firm for which they produced it, it will be free from tax. So there will be no encouragement for people to develop a piece of software which works adequately in industry, in commerce and in an Australian environment and to take that software and use it in other places. This is exactly the opposite of what is needed to boost industry within this country. Packaged software is always developed in conjunction with an initial purchaser because there is no other way of debugging it properly, of getting it to work properly. It is always the case if the vendor is to make any money out of it, that he must retain the copyright and ownership of the product. Under this law such development software will attract sales tax, an enormous extra burden of 20 per cent on our local industry. To summarise, I hope that the Minister can disillusion me about this matter and show me that I am wrong. I hope so for the sake of Australian industry, but I do not believe that he can. I believe that the impact of this tax will fall specifically on local products in a completely unjust way and will lead to increased costs of development of software locally. It may also lead to the transfer of ownership rights from the developer who can profitably develop the package for Australia by sale and for eventual development of an export product once it has been tried on our local markets, to a purchaser who is in another business altogether and who will never develop that software any further. So we will lose a lot of great intellectual property. The incentive to buy-in packages and modify them under contract, to have them tailor-made for the purchaser, will mean that we will be handing over that industry to the larger operators, the IBMs of this world. That is exactly what the Government is doing. It is handing over our industry on a plate to the large multi-national companies. Senator Mason —Like they did with the foreign banks. Senator VIGOR —Exactly. It has done it to our banking industry. It has done it to our mining industry. It has done so in many areas. If the Government is keen on its buy Australian program it should also be encouraging Australian companies to produce here. This legislation is doing exactly the opposite. Currently, novel packaging techniques which by-pass the physical medium by the direct delivery of software will be encouraged but they will be available only to the large companies which have the money to do so. The small Aussie battler will be hit. That is what the Government is doing. We will end up with a run down of the Australian software development industry and an increased reliance on imported software. We will become a colony in an area where Australia has been establishing a reasonable reputation. That is what the Government will achieve. I think it should be damnably ashamed of it. Senator MICHAEL BAUME(New South Wales)(10.09) —It is reasonable to ask whether it is deliberate Government policy to kill off the smaller end of the Australian software industry when one considers this tax. If it is not deliberate Government policy then presumably, as I suggested in my speech during the second reading debate on the Sales Tax Laws Amendment Bill, it is what one could describe, I suppose, as an unintended consequence of the sales tax. As I also said during my speech in the second reading debate, unintended consequences have flowed from the fringe benefits tax legislation. The Government has decided that the unintended consequences of the fringe benefits tax are worthy of examination. I repeat: Why are they not worthy of examination in this situation as well? Senator Mason —Because we are talking about another Bill at the moment. Senator MICHAEL BAUME —Senator Mason's earlier interjection was much more intelligent when he suggested that it may have been Government incompetence. The point I was endeavouring to make, was that if it is good enough to have unintended consequences destroying such large sections of Australian industry and creating unemployment in the matter of the fringe benefits tax-which Senator Mason supported, of course; no wonder he is embarrassed about it-he should be encouraging the Government to re-examine this matter, rather than grandstanding as, of course, he and his colleagues have been doing today. I do not want the Australian software industry to be deluded into thinking that the only people who are expressing concern about it of a genuine nature are the people who will beat their breasts and vote against this tax-that is, the Australian Democrats. The reality is that what this Government must do is to get rid of this tax and offset the revenue loss by cutting some of the incredibly wasteful expenditure which, for example, members of the Coalition Waste Watch Committee and many other Opposition members have demonstrated not only went on last year, but also is occurring this year. It is almost a demonstration of failure by the Minister for Finance to cut out the ramps and rorts that he keeps talking about. This tax is unfortunate and has very bad effects. It would have been totally unnecessary had the Government really cut its own spending. I support the points that have been made by Senator Mason and Senator Vigor about the unfortunate effects. They are matters that I raised-had Senator Mason been here and listening-in my speech on the second reading of the legislation. I remind the Australian Democrats that during that speech I supported the interjections made by Senator Vigor. I reject totally the suggestion made by Senator Macklin that I had somehow acted improperly and used personal abuse to denigrate the position of the Australian Democrats. The fact that I returned Senator Siddons's comment of `humbug' to the Australian Democrats can hardly be regarded as personal abuse. That kind of hyperbole by the Australian Democrats does not do their intellectual position or any other position any good. I reiterate that this tax is an unpleasant one. It will have most unfortunate effects on this industry and is a direct result of the Government failing to cut its own spending. As a result, it is imposing an added burden on a section of Australian society which cannot carry it. Senator HARRADINE(Tasmania)(10.13) —I feel that a quite substantial question has been raised about this measure. The amendments that have been moved by Senator Siddons, and the reasons that have been given by him and by Senator Vigor and Senator Mason in support of those amendments, should surely make the Government reconsider this question or at least give the Committee a full response to the matters that have been raised. As has been indicated, the Government, through its Ministers-particularly the Minister for Industry, Technology and Commerce (Senator Button) and the Minister for Science (Mr Barry Jones)-has encouraged throughout the length and breadth of Australia industries such as the computer industry. The Minister for Education, Senator Ryan, has encouraged students to go into the field of computers. In fact, she has encouraged school students to start computer studies very early in the piece. This industry is of great importance to decentralised areas and to areas such as Tasmania which have transport problems. If, as has been suggested by speakers in support of the amendments put forward by the Australian Democrats, the Government proposal that is before us is likely to affect seriously that type of industry, I believe it is important for the Government to respond to those points that have been made. As Senator Michael Baume said, perhaps there are unintended consequences-those consequences not having been considered by the Government when this measure was prepared. I am not sure whether one can establish criteria, in regard to a product that is protected by patent or by copyright, as to whether sales tax should apply to that product. I did not quite follow that argument, if it was an argument. I would be interested to know what products which are protected by copyright also attract sales tax. Books, of course, do not. Senator Mason —I wonder whether they are going to. Senator HARRADINE —There was, as we all know-- Senator Siddons —Books will be the next one. Senator HARRADINE —That was attempted previously. Books do not, but I am pretty sure that music tapes do, do they not? Senator Mason —I don't think so, Senator-not yet. Senator HARRADINE —The tape itself does. Senator Mason —Not the actual contents. But that will be next. Senator HARRADINE —Thanks for the help. I wondered whether that was a point that needed to be considered. I feel that what has been said does need a full response. If it cannot be proffered now, perhaps the Government should reconsider what it is doing, if this is an unintended consequence. Senator MASON(New South Wales)(10.18) —I do not think it is sufficient to allow the Minister for Finance (Senator Walsh) to continue sleeping in his place without considering this matter and the points that have been raised. I am disappointed that he does not rise. I would like to say a word about Senator Michael Baume. I have a great affection for Senator Baume, going back to the days 20 years ago when he and I shared champagne on the Hunter's Hill ferry. He may recall that. But he has again carried out an operation which he carried out in the last sitting week. He is very much like the emperor with the fictitious clothes. I suggest to him that, with his figure, he might not cut a very good figure without any real clothes. He is without real clothes in this matter. It is a fact that the Australian Democrats are right in this matter. Senator Baume said as much himself in his speech. I accuse him of being gutless, as I did last time we debated this issue. He is not voting for something for which he ought to be voting. He ought to vote against this measure; he knows that. I can see that he is smiling. There is every reason why he should support the amendment. He is a member of a party which I thought was concerned about individual initiative and free enterprise in this country-as, indeed, are the Democrats. This is an area of free enterprise which is being attacked unfairly. He agrees with me that it is being attacked unfairly, but he says that he will not support the amendment that we have brought forward. What is more, he allows the Minister to sit there sleeping, as he is doing now, without giving any reasonable answer in this matter. As far as I am concerned, we will talk about this until the Senate adjourns, or until we get an answer from the Minister. We will go on talking until we get an answer. If he wants consideration of the Bill to be completed, he had better answer us. I ask the Minister: Is it not a fact that the Government, through this legislation, is attacking Australian initiative and the very things that the Government says these industries should do and hand it over, as Senator Vigor said, to IBM and the big companies. Senator Walsh —No, it is not a fact. Senator MASON —The Minister can speak in a couple of minutes. The Australian innovator-the person the Government says it supports-is going to be cut back to size with this legislation. I would just like the Minister's comments on that please. Senator VIGOR(South Australia)(10.21) —I am appalled that the Government is currently taking this type of attitude-that the Minister for Finance (Senator Walsh) is sleeping in his place while the software industry is being destroyed. Frankly, I believe that the people of Australia need to know that this is going on, that the Government's attitude is one of: `I do not care about that industry'. People such as Senator Button are making noises about the development of a new and exciting industrial era in Australia while people such as Senator Walsh and the Treasurer (Mr Keating) are destroying it systematically. As far as I can see, this particular piece of legislation is directly destructive of the Australian software industry. I again make the plea that the Minister answer at least some of my questions. For that reason I am standing up to reiterate them. The fact is that software is an intangible product. It is intellectual property. It is not protected by patents, as are other industrial products; it is protected by copyright. Is the Minister planning to extend this tax to other products which are `intellectual property'? Is the Government going to sap Australia's know-how, Australia's skills and Australia's intellectual heritage? We have asked this question and we are going to go on asking it until the Minister at least comes up with some type of plausible answer. The next question we have asked the Minister at length is what he is going to do about the rort which is available within this system whereby people can bring in software, call it an aid to manufacture, then just sit there transferring it by telephone to all their clients, even lending them modems or the wherewithal to do it, and charging them for the software arriving inside their computer as compared with being delivered on magnetic media, thus avoiding tax. That is a serious question to which Australians deserve to know the answer. As well as this we have asked-- Senator Walsh —You are a serious bore. Senator VIGOR —I will sit down if the Minister will stand up and answer those two questions. Senator WALSH(Western Australia-Minister for Finance)(10.24) —I thought we had this bore inflicted on us only at Estimates committees. I did not realise we had to have him inflicted on us everywhere else as well. About five years ago the Party that that particular bore represents introduced a Bill which was predicated on the assumption-- Senator Mason —Mr Chairman, I raise a point of order. There is no reason why Senator Vigor, in the process of doing his work, should be referred to by the Minister as a bore. The Minister can be boring enough in his own right, as we all know. The CHAIRMAN —Senator Mason, I accept your point of order. I ask Senator Walsh to withdraw that remark. Senator WALSH —I withdraw. Five years ago the Australian Democrats introduced a Bill which was predicated on the assumption that computer software was taxable. As it happened, it was not, so the Bill sought to remove a non-existent tax. The Bill also had in it a sunset clause which, had the Bill had any basis in fact in the first place-one can overlook that sort of monumental factual error-it would have about now removed the exemption on a tax which did not exist and imposed a tax. That demonstrates that these people should not be taken seriously about anything at all. If the Treasurer (Mr Keating) does want to take them seriously-I cannot speak for him for certain-I will refer the questions that they have asked today to him and I will see if he is inclined to give them an answer. Otherwise, I suggest that we should dispense with this legislation and go home. Senator MASON(New South Wales)(10.25) —I gather that what the Minister for Finance (Senator Walsh) is proposing is a con trick-that we allow this legislation to pass and that he will then go at this own leisure to the Treasurer (Mr Keating) and find out what might be done about it. I am not really impressed by that. If the Minister had suggested that we defer this matter and perhaps seek leave to debate it again I might be more convinced, but he has not done that. Nor, I might say, has he replied to the points raised by Senator Vigor, Senator Siddons, Senator Michael Baume or me. There is an area of concern here which has been raised with us by responsible business people in Australia and that has been demonstrated time and time again. Anybody would know that there is an area of concern. But what does the Minister do in this place? He talks about things that happened five years ago. Is the Labor Government going to be preoccupied with what happened five years ago? I know that it is always worrying about what happened 11 years ago in 1975, as it keeps returning to that. Its job is to run the country and to administer it properly in 1986, not in 1975 or in 1981. I would have thought that a Minister of the Crown in this place would see that he had a particular responsibility in terms of his office and the payment he receives to make statements and to reply fairly and reasonably to matters which are raised in the Committee stage of debate on Bills in this place. A situation which has become sanctified here is that when matters are raised in the Committee stage, the Minister gets up and uses some subterfuge such as what happened five, ten or 15 years ago, or personal abuse, which Senator Walsh uses regularly enough-I think that is a fair enough statement, Mr Chairman-to cloud us; in other words, not to give answers. With all respect to them, I suggest that they do this in the interests of their bureaucrats because they find that their bureaucrats have not got the answers on the spot. Therefore the Ministers hedge. That is not good enough at all. I will go back to these points patiently because I feel that Senator Walsh and his bureaucrats might not have understood me. I want answers from him as to why the Government is bringing forward a measure which will tax the creative efforts of Australians whom the Government has asked to be innovative and to provide new ideas and initiatives in this country, for the export trade especially as well for as the domestic trade. An interesting point that should be raised at the Committee stage is that this Bill excludes exports. I would like the Minister to answer this: If a software manufacturer says `Okay Minister; okay Treasury, this is designed for the export trade' is it going to be let off the hook? Is that the way out? If so, it is a very cynical piece of legislation. I would like the Minister's answer to that question too. Senator Walsh —You don't pay sales tax on exported motor vehicles. Senator MASON —I am not interested in motor vehicles at the moment; I am interested in software. I am interested in the Minister's comments, statements and response as a responsible Minister of the Crown to the points that I have raised. I add that point to the other points that I have raised. Is it a fact that there are certain people whom he or the Government might think are in this business for profit, who can get out of this tax by saying that they are going to export, while the Government is going to clip the people who are devising programs to try to get this country off the ground to make Australian industry and business more efficient? It seems to me that that is very much the way things are going. The Minister should not think that he can sit there and simply use personal abuse and invective and refer to what happened five years ago but that when people outside read in Hansard what he says it is not seen as evasion on his part. Of course it is seen as evasion on his part. His refusal last week to answer my questions on whether or not the Government is going to extend the discounting of pensions to the aged is now a matter of very hot dispute in this country. I am getting letters from every pensioner organisation in Australia referring to the fact that he did not answer that question. His Government will be very sorry that he did not answer it. Here we have another case in point. The Minister is not answering the questions that we are raising. I would have thought that we sit in Committee so that the Minister can answer rationally and reasonably the points that we raise. The Minister has sat in this chamber for the last hour and has not answered any of those points. I ask him again, and I will go on asking him, to answer them. The CHAIRMAN —Order! It being 10.30 p.m., under sessional order I put the question: That the Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Chairman having reported accordingly- The PRESIDENT —Order! The question is: That the Senate do now adjourn. Senator MACKLIN(Queensland)(10.30) —I wish to raise with the Government an issue of which I think a lot of people in Australia are aware. I refer to an event that occurred on the evening of 27 September in the Returned Services League hall at Rosalie in Brisbane. The television channels carried shots of what could only be called a riot that occurred at an Aboriginal dinner dance. They carried pictures that I think no one would ever believe they would see in this country. I am quite sure that all Australians would hope that they would never see such pictures again. Contrary to some Press speculation about comments I have made to date, I do not raise this issue tonight to seek to place blame on either the Aboriginal people or the police. My interest is in trying to make sure that such events do not occur ever again in Australia. Quite frankly, I think that that view is shared not only by the Aboriginal people but also by the vast bulk of the police force in my own State. I would like to read to the Senate a letter that was written by a person who was at the dance that evening. I was not there and hence I am not in a position to be able to say what occurred, but I think this letter gives a very clear description. I believe that honourable senators will be able to judge for themselves the veracity of the letter because what is written and the concern that is expressed so obviously ring true. The letter states: This is my letter of complaint about the atrocious behaviour of the Queensland Police towards us Aboriginals at an end of season football dance on the 27th September, 1986. The dance was held at the Ithaca R.S.L. sub-branch in Nash Street, Rosalie. This is an account of what happened as I saw it. My husband and I were standing within the grounds of the R.S.L. with a friend and several other people. We had just come out of the R.S.L. building for some fresh air. The time was approximately 11.15 p.m. The police arrived on the premises, there were six at that time, they demanded to see the liquor licence, the licence was produced by the Brisbane Natives Rugby League committee member, Mrs Edith Mickelo. The police then left the premises, but, only to return five minutes later with reinforcements. There were plain clothes men, uniformed men and one woman, and dogs. The time was approximately 11.20 p.m., about twelve policemen raced around the other side of the building with batons in hands and their dogs. They entered the building through a side door. Approximately two to three minutes later, the police had left the building and regrouped on the road opposite the R.S.L. They waited it seemed another couple of minutes, then twenty policemen armed with batons in hands and dogs stormed the building. They were yelling obscenities at us as they raced past. They pushed, and shoved and pulled people as they went into the building with the guns unclipped in their holsters. The dogs were barking at our people, we were all shocked and stunned because we did not know what the police were doing there. I did not see what happended inside the hall, but I heard someone call for reinforcements. Very quickly ten more policemen rushed into the building, they were uttering obscenities like- a range of obsenities is listed- as they charged the building. This time the police, about four of them, dragged a young girl down the stairs, knocking over other women and children as they went to put the girl into the paddy-wagon. When the police were coming out of the building, I saw an old lady, aged between the fifty and sixty, pushed down the stairs, when she fell at the bottom of the stairs, a policeman hit her across the head with his baton. Then, when all of the police were out of the building, I saw a uniformed policeman let his dog loose onto an Aboriginal man and woman who were just walking along the footpath. The Aboriginal couple jumped up onto the bonnet of a car for protection from the dogs, then, a couple of policemen dragged the man off the car and slung him to the ground and bashed him mercilessly with riot batons. The police waited around in the yard and on the street another few minutes, then most of them stormed the building again. This action was uncalled for and they were unprovoked. My husband, who was standing beside me, said `Why don't you go and solve some murders, pick up some rapists and drug pushers, instead of picking on us poor blacks! A policeman grabbed my husband from behind and and said `Right you're under arrest!' I said `Why are you taking him?' The policeman replied `Because I said so!' Then he and another two or three policemen armed with batons, took my husband and put him into the paddy-wagon. Some of the police raced up the stairs again, indiscriminately hitting people with batons. We did not know and could not understand why they were harassing us. They arrested several other people, there were women and children screaming, and dogs barking at us. We were all scared and confused. The police did not seem to care what they did to us; they were verbally abusing us the whole time. And reinforcements were arriving all the time. The police were inciting a riot against us. At that stage my friend and I walked away from the yard because the police were hounding us. We tried in vain to get a taxi, taxis could not get through anyway because the streets were cordoned off by police. The last incident I saw was a group of our young people, twenty in all, most were children, huddled together screaming on the footpath. They looked really scared. They just stood still because the police let their dogs loose on them. Many of our men folk were arrested by this point in time, that is why our women and children retaliated by throwing bottles and empty cans. After this incident the police set their dogs on all the people who were still in the yard, they stormed the building again and were chasing our people in all directions. They swarmed upon our people who were still in the yard. The police created havoc. I feared for my life and for the other people there who were being harassed and intimidated. The whole terrible ordeal was like a scene one sees on television that happens in South Africa. I was really very shaken up, I sincerely believed then that the police were going to start firing their guns at us. Thank God they did not resort to that because there were about seventy to eighty police personnel on the scene. The situation was so incredible, because the entire nasty incident was created by belligerent police who appeared very psyched up for aggression against us. It seemed that the police came specifically to antagonise and intimidate us. The nightmare of police brutality was horrific, it was a traumatic experience for me and one I shall never, never forget. As I said, I was not seeking and I am not seeking to work out who is to blame for the incident that occurred. Some 60-odd people were arrested and there will be a whole range of court cases that will, hopefully, in justice, sort out who is to blame. My interest in raising the matter is because of the moral, legal and constitutional responsibility that is held by the Commonwealth Government regarding Aboriginal affairs in Australia. I believe that such an issue is not one for a State government, because it is not an issue which people in any other country will see as a State issue. They will see it as an Australian issue. I believe that it should be seen as an Australian issue. It is one that I think warrants an inquiry and one which needs an inquiry. As I said at the beginning of my speech, I do not believe that the majority of police in Queensland, the majority of Aboriginals or anyone who has viewed the television pictures of that incident want to see such an event ever occurring again in Australia. When one saw the events, one could not but be reminded of the scenes that we have seen from South Africa. It is not Australia that we saw on those television cameras. It does not reflect the types of views that people in Australia hold. The Queensland authorities have already indicated that they have no intention of holding an inquiry. I think that that is the case. However, the people of Australia have handed the responsibility of Aboriginal affairs to the Commonwealth Government. I believe that this is a matter for the Commonwealth Government. It is a matter for our nation to ensure that such events do not occur again in Australia. I ask the Leader of the Government in the Senate (Senator Button), who is at the table tonight, to seek from the Government an assurance that it will have an inquiry into the matter to ensure that Australia's name now and into the future can, on such matters, always be the name of a nation that will not allow such elements and events to go uninvestigated and that it will not allow such events to occur in Australia again. Senator REID(Australian Capital Territory)(10.42) —I want the Leader of the Government in the Senate (Senator Button), who is at the table tonight, to refer to the Attorney-General (Mr Lionel Bowen) a matter that I shall go into in some detail. It relates to legal aid in a case before the High Court of Australia. I think that at the moment legal aid resources are fairly short. I question whether they are being spent in the best possible manner in the case to which I refer. It relates to a man called Allen Douglas Thompson who has been convicted for six separate murders. He was convicted in 1984 for murders in Richardson of Ms Radmila Milosevic, her de facto husband, Mr Tony Baker, and their two young children. Subsequently, he was charged with the murder of two other Milosevic sisters, two murders which were alleged to have occurred in 1981 when a car crashed on the Monaro Highway. It was subsequent to the first convictions that he was then charged with those murders and was convicted for those murders. Mr Thompson appealed to the Federal Court which rejected the appeal against his convictions for offences alleged to have occurred on the Monaro Highway. Apparently, he has now appealed to the High Court. There is no suggestion, in the article that reports all this in the Canberra Times last Saturday, that it had anything to do with guilt or innocence. It is all to do with the border issue as to whether or not the two girls murdered in the motor vehicle were murdered in the Australian Capital Territory or New South Wales. Many people would say: `Who cares?'. I am a lawyer, but I am inclined to say that also. The case is written up as an interesting legal issue. I have no doubt that it is. However, the article says that Thompson is appealing through his representatives, the Australian Capital Territory Legal Aid Office. It is not a question of a life sentence for murder; it is merely a question of whether the murders occurred in the Australian Capital Territory or a few yards away in New South Wales. I question whether legal aid funds are properly used for that purpose, even if it is a very important and highly significant legal issue. Perhaps there has been a special grant for this purpose to enable the case to go forward. However, I think that it is a matter that the Attorney-General should look at in terms of the guidelines for legal aid, where the money goes, and whether it is being well spent. Senator GEORGES(Queensland)(10.45) —I had intended to ask a question tomorrow on the matter raised by Senator Macklin, but I think that it is relevant for me to give support at this stage to the matter raised. I do not think that the Senate can ignore what occurred in Brisbane. I believe that the Senate should support the proposition that there ought to be an inquiry. It is a Commonwealth responsibility. It is the responsibility of this Parliament to see that the Government carries out some investigation of the rather horrific incident that took place. It is very difficult for us to take the stand that we do on South Africa and on apartheid when what occurred in Brisbane is exactly what is occurring in South Africa. Those of us who saw the television broadcasts were appalled by the action of one plain clothes policeman who used a baton repeatedly on a person and, having forced that person to the ground, proceeded to kick that person at length. That is only one incident of a number of incidents which occurred in the night. I do not think that we can ignore the call by Senator Macklin for an inquiry. Senator Button —Which night was this? Senator GEORGES —The twenty-seventh. I think that the Leader of the Government in the Senate (Senator Button) should take up the matter with the Minister for Aboriginal Affairs (Mr Holding) and search out what response the Government intends to take to make certain that this sort of activity by the police authorities, whether in Queensland or Western Australia, but in this particular case in Queensland, should continue. It seems to me that in Queensland we have lost the ability to be outraged by the behaviour of both government and citizens, in particular of the police. Since that sense of outrage seems to have been lost in Queensland, surely it is not lost nationally. I return to my first position. Senator Macklin's appeal for an inquiry should be strongly supported by the Senate and the Government. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.48) —I thank honourable senators for their contribution to the adjournment debate. I will see that Senator Reid's request is addressed by the Attorney-General (Mr Lionel Bowen). I do not quite know what his scope to do things is in that respect. That is only an observation and I shall certainly seek his advice. I did not hear all the circumstances as outlined by Senator Macklin. I shall certainly take steps to refer his request to the appropriate Minister very quickly. I appreciate very much what Senator Macklin and Senator Georges said about the matter. I think that it should be so referred and I shall see that that is done. I am not quite sure who the appropriate Minister is. Clearly, the Minister for Aboriginal Affairs (Mr Holding) has to be involved. However, the Attorney-General may also be interested in the matter. Question resolved in the affirmative. Senate adjourned at 10.49 p.m. The following answers to questions were circulated: (Question No. 958) Senator Reynolds asked the Minister for Education, upon notice, on 12 March 1986: (1) What criteria are used for determining funds for university centres of excellence. (2) How is selection determined when a new department is competing with an established department. (3) Is the selection panel influenced by the success of a given department to meet (a) student need; (b) research need; and (c) community need. (4) What is the future of this program to encourage innovation and excellence in tertiary education. Senator Ryan —The answer to the honourable senator's question is as follows: Although the honourable senator's question mentioned only Special Research Centres formerly known as Centres of Excellence, the information provided below relates also to Key Centres of Teaching and Research which this Government established to enhance teaching and research effort in both the university and advanced education sectors. (1) & (2) The level of funds available for both Special Research Centres and Key Centres of Teaching and Research is determined on a triennial basis. For the 1985-87 triennium, over $16m is being provided for Special Research Centres and over $3m for Key Centres. Funds are made available to individual Special Research Centres to meet the costs of the necessary salaries, equipment and support services associated with the required higher level of research activity. Individual Key Centres receive an equal share of available funds directed towards the concentration of teaching and research effort by covering the costs of such items as the transfer of students and staff between higher education institutions, the purchase of equipment and library materials and the payment of contract academic and support staff. Both Special Research Centres and Key Centres were selected on the basis of merit after calling for applications for grants. In the case of Special Research Centres, assessments were made in terms of leadership qualities, business management, the applicant's development potential, the adequacy of present university support, and the relevance of the intended work to national research interests; expert advice was sought from a wide range of Australian and overseas sources to assist the selection process. In selecting the Key Centres, attention was given to the capacity of applicants to develop a high standard of concentrated teaching and research activity, especially in areas of national need; particular emphasis was given to undergraduate work and to the promotion of links between higher education and the private sector. Institutional ranking, State priorities and the need for a balanced distribution among States, sectors and disciplines were also taken into account, along with advice from various bodies with expertise in the fields concerned. (3) Under both programs, selection was influenced to varying extents, by the ability of applicants to meet student, research and community needs. While student need was not a major influence in determining the selection of Special Research Centres, an important outcome of this program has been the provision of enhanced research training opportunities for post-graduate students. (4) Special Research Centres and Key Centres were established for the purpose of improving standards in higher education and their progress in this direction was to be reviewed after a suitable period of time. The Government will have an opportunity to assess their achievements when it receives advice on the future of both programs from the Commonwealth Tertiary Education Commission in the context of planning for the 1988-90 triennium. (Question No. 1044) Senator Sanders asked the Minister representing the Prime Minister, upon notice, on 1 May 1986: (1) When will the Government notify the Advisory Council for Inter-government Relations (ACIR) and its staff of the future of the organisation. (2) Why has the Commonwealth review of ACIR and its functions due for completion in January 1986 taken so long, or not been presented. (3) Why is it that the contract staff of ACIR appear to know so little about their overall conditions of employment. (4) What provisions are being made for redundancy payments to contract staff. (5) Is the Government considering relocating ACIR staff into other areas of government. (6) Why are the two references to ACIR broad and insignificant while real issues of inter-governmental relations such as the National Crimes Commission, the future of south-west Tasmania and personal income tax sharing (Commonwealth to local government) not been referred. Senator Button —The Prime Minister has provided the following answer to the honourable senator's question: (1) The Prime Minister wrote to the Chairman of ACIR on 12 August 1986 notifying him of the Government's decision to abolish ACIR, which was taken after consultation with the States, the Northern Territory and the Australian Council of Local Government Associations. (2) The Task Group to review the role and structure of ACIR was established in September 1985 and reported on 17 January 1986 following extensive consultations with the contributing parties to ACIR and submissions from the public and interested organisations. Following the Report of the review the Government consulted with the other contributing parties to ACIR and the Report was tabled in the Parliament on 19 August 1986. (3) to (5) Under the Advisory Council for Inter-government Relations Act 1976 ACIR itself determines the terms and conditions of employment of its employees, including conditions with respect to the duration of employment or dismissal from employment. Commonwealth officials have advised ACIR of the scope of the redundancy payments that the Commonwealth believes should be provided to ACIR staff, consistent with arrangements that the Commonwealth would adopt in similar cases. In his letter of 12 August 1986 to the Chairman of ACIR the Prime Minister supported the redundancy package suggested by Commonwealth officials. With regard to redeployment, ACIR staff are able to apply for public service positions which are advertised outside the public service. Where such an application is made the Public Service Board will ensure that the claims of ACIR staff are properly considered. ACIR staff have also been advised of public service entry points. Late applications will be accepted from ACIR staff for the Assistant Research Officer scheme. (6) Two references to ACIR were provided by the Premiers' Conference in April 1977. Most of the Council's work has centred around these references and in particular, the local government sub reference under which the Council was asked in 1978 to focus on the relationships which should exist between local government and Commonwealth and State Governments. Under this reference ACIR has examined issues such as the relationships between the three levels of government concerning the provision of roads, services for the aged and post arrival services for immigrants. While the Council continued its work on these issues it was not considered appropriate to provide further references. (Question No. 1117) Senator Mason asked the Minister representing the Minister for Territories, upon notice, on 29 May 1986: When will the reply to my question, which first appeared on the Notice Paper of 12 February 1986, be forthcoming. Senator Gietzelt —The Minister for Territories has provided the following answer to the honourable senator's question: The answer to question 826 appeared in Hansard dated 16 September 1986 on page 445. (Question No. 1136) Senator Michael Baume asked the Minister for Education, upon notice, on 2 June 1986: Has the Minister's department, or any statutory authority or organisation for which the Minister is responsible made available any grants or funds to any trade union body or related organisation in the financial years 1983-84, 1984-85 and 1985-86; if so- (a) Who received those funds; (b) For what purpose; (c) What amounts were involved; and (d) When were these funds granted or given. Senator Ryan —The answer to the honourable senator's question is as follows: With respect to the Department of Education: Yes (see below); with respect to the Commonwealth Schools Commission and the Commonwealth Tertiary Education Commission: No. (a) (b) (c) (d) Who received those funds For what purpose What amounts were involved $ When were these funds granted or given Administrative and Clerical Officers Association ... Travel to participate in Departmental consultative process 4620.75 5619.10 1984/85 1985/86 Australian Public Service Association ... Travel to participate in Departmental consultative process 3551.00 3097.45 1984/85 1985/86 Professional Officers Association ... Travel to participate in Departmental consultative process 2231.80 6692.19 1984/85 1985/86 Australian Journalists Association Travel to participate in Departmental consultative process 670.20 1985/86 (Question No. 1201) Senator Macklin asked the Minister for Education, upon notice, on 11 June 1986: (1) Do ethnic community organisations argue that the Multicultural Education Program should remain a separate specific-purpose program rather than being incorporated within the General Resources Program, as had been recommended by the Quality of Education Review Committee. (2) Have ethnic community organisations expressed concern that although the Commonwealth Schools Commission in its ``Quality and Equality'' Report recommended that an Australian Community Languages and Cultural Program be established as a specific-purpose program for 1987 to 1989, that the program be reviewed during 1988 to determine whether it should be transferred to the Recurrent Grants Program. (3) If the Multicultural Education Program is transferred to the Recurrent Grants Program, will this, in effect, mean that States will become responsible for the distribution of funds; if so, is the likely effect to be that small ethnic communities will have no say in how the funds are to be distributed. (4) If the recommendation is accepted, would it result in a devastating reduction in the level of participation of members of minority ethnic communities in decision-making in education. Senator Ryan —The answer to the honourable senator's question is as follows: (1) A range of views has been expressed by ethnic community organisations concerning the future of the Multicultural Education Program. Some ethnic community organisations expressed the view that the program should continue as a separate specific purpose program. (2) Some ethnic community organisations have expressed this concern. (3) and (4) The Government has taken the decision, announced in the Budget, that the Multicultural Education Program will be discontinued from 1 January 1987. (Question No. 1228) Senator Sheil asked the Minister for Education, upon notice, on 13 June 1986: (1) Will additional funding be provided to the Brisbane College of Advanced Education for the purpose of funding the Deaf Students Support Group (who work with Deaf Students seeking to obtain Diploma of Teaching to enable them to teach at Primary School level and in Special Schools). (2) Is the Minister for Education able to comment on the recommendation in the Report of the Senate Standing Committee on Education and Arts on a National Language Policy (1984), that a Special Support Service be established within at least one Australian University or College of Advanced Education. Senator Ryan —The answer to the honourable senator's question is as follows: (1) Within the framework of triennial planning the Commonwealth Government provides financial assistance to approved higher education institutions for their operating and capital costs. The allocation of resources to individual courses and activities is a matter for each institution to decide. I understand that the Mount Gravatt campus of Brisbane CAE has deaf students enrolled in an approved diploma of teaching course alongside regular students. Supplementary funds to provide special support arrangements for the deaf students are made available by interested community groups and some support is provided for individual students through the Commonwealth Rehabilitation Service (CRS). I am advised that the CRS support will not be available beyond 1987 after the current students leave the program. In 1986 Brisbane CAE will receive over $38m from the Commonwealth to run its broad range of programs. In 1987 over $39m will be provided. Brisbane CAE is self governing and it is open to the College to apply the funds provided by the Commonwealth to special purposes such as the support of arrangements to assist deaf students. (2) On 20 April this year I announced the appointment of a special consultant, Mr Joe Lo Bianco, to co-ordinate the development of a national policy on languages for the Government's consideration. In undertaking this task Mr Lo Bianco will be examining all aspects of language policy canvassed in the Senate Committee's report as well as its recommendations, including those relating to the language needs of persons with communication handicaps. It is therefore inappropriate for me to comment on individual recommendations of the report at this stage. (Question No. 1268) Senator Michael Baume asked the Minister representing the Prime Minister, upon notice, on 19 August 1986: (1) What reclassifications of Senior Executive Service positions in your Department have been made since March 5, 1983. (2) What were the dates and the salary details of these reclassifications. Senator Button —The Prime Minister has provided the following answer to the honourable senator's question: (1) and (2) No Senior Executive Service position has been reclassified upward or downward since March 5, 1983. In the course of normal departmental administration some positions have been transferred between Divisions. (Question No. 1277) Senator Michael Baume asked the Minister for Education, upon notice, on 19 August 1986: (1) What reclassifications of Senior Executive Service positions in your Department have been made since March 5, 1983. (2) What were the dates and the salary details of these reclassifications. Senator Ryan —The answer to the honourable senator's question is as follows: (1) and (2) There have been no reclassifications of Senior Executive Service positions in my Department since 5 March 1983. (Question No. 1293) Senator Michael Baume asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 20 August 1986: (1) What reclassification of Senior Executive Service positions in your Department have been made since March 5, 1983. (2) What were the dates and the salary details of these reclassifications. Senator Ryan —The answer to the honourable senator's question is as follows: (1) One position of SES Level 1 reclassified to SES Level 2. (2) Approved by the Public Service Board on 7 June 1984. The salary details were an increase from $43974 pa to $48262 pa. (Question No. 1373) Senator Mason asked the Minister representing the Minister for Trade, upon notice, on 17 September 1986: (1) Did the Minister for Trade note the comments in the Annual Report 1984-85 of the Australian Overseas Projects Corporation and I quote: ``Following the review, the Board was satisfied that there was a need for an organisation with functions such as those of AOPC but that, in its present form and with its current operating policy practices framed within the limitations of the Act, the corporation is not a viable proposition in terms of its fundamental aim, nor is it acceptable to many Australian private enterprises.'' (2) Did the Minister also note that the Corporation had an operating loss of $351,108 for 1984 and $559,443 for 1985. (3) What reasons can the Minister give for the continued existence of the Corporation. Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question: The Australian Overseas Projects Corporation is no longer in existence. The Australian Overseas Projects Corporation Act 1978 was repealed in accordance with Section 5 of the Australian Trade Commission (Transitional Provisions and Consequential Amendments) Act 1985, taking effect on commencement of the latter Act on 6 January 1986. I refer the honourable senator to my second reading speech on the introduction of the Australian Trade Commission Bill 1985 which is recorded in House of Representative's Weekly Hansard No. 14, 1985, pages 1924 to 1929 inclusive. As well as foreshadowing replacement of a number of statutory authorities, including the Australian Overseas Projects Corporation, by the Australian Trade Commission my speech referred to the past limited success and accumulated losses of some $2 million of the Australian Overseas Projects Corporation. It also mentioned the various constraints which had hindered the Corporation's past activities and which would be removed to enable the Commission to take a more active role in assisting Australian firms to secure overseas contracts. I am confident that the provisions of the Australian Trade Commission Act 1985 and action being taken by the management of the Commission will result in a significant improvement in Australia's performance in relation to participation in overseas development projects. Senator Ryan —On 18 March 1986 (Hansard, page 1122), Senator Peter Baume asked me a question without notice in part about reports that more than 33,000 people, including 477 working apprentices, had been turned away from technical and further education courses this year in New South Wales. After receiving advice from the Commonwealth Tertiary Education Commission I am able to respond to that part of his question: CTEC has confirmed that, on the basis of information which was current in the middle of March 1986, the number of unsuccessful applications for TAFE courses in NSW was of the order of 33,000 including some 2,000 applications for Stream 6 (personal enrichment courses). While these raw figures are correct I understand that they represent an over-estimate of the actual number of individuals who cannot gain entry to a course. The figures are derived from course standby lists from each college. These lists record the names of students who have applied for courses (and, where appropriate, are qualified to enter the course) but for whom a place is not available. Double counting occurs where individuals apply for more than one course at a college and/or for courses at a number of colleges. The figure of 33,000 unsuccessful applications thus exceeds by an unknown margin the number of persons who were unsuccessful seeking entry to TAFE courses in NSW early this year. It is likely that some of these persons will be successful later in the year. The Commission has also confirmed that the number of unsuccessful applications did include 477 from apprentices in work. More recent information, however, indicates that 435 of the apprentices concerned were enrolled in the second semester. (Question No. 208) Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 17 April 1985: (1) Does Aerojet have prime responsibility for computer software management at the satellite ground station at Nurrungar, South Australia. (2) Does Aerojet produce the infrared telescope systems deployed on United States early-warning satellites. (3) Is data received at Nurrungar stored on magnetic tape by Aerojet and subsequently sent to Aerojet in Azusa, California. (4) Can the Minister for Defence provide an assurance that data on ballistic missile launch and re-entry phenomenology which has been accumulated by Aerojet has not been used in analyses of the sensitivity, clutter rejection, resolution and booster trajectory accuracy of ballistic missile intercept systems as part of the United States Strategic Defense Initiative (SDI). Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1), (2), (3) and (4) Aerojet is one of the contractors involved with the JDSCS. Consistent with the Prime Minister's statement on 6 June 1984 I will not comment on the technical functions or capabilities of the JDSCS or on speculation as to those functions or capabilities. The United States Government has assured the Australian Government that the joint defence facilities are not involved in the SDI research program. These assurances were repeated by United States Secretary of Defense, Mr Weinberger during his visit to Australia in April 1986. (Question No. 1150) Senator Archer asked the Minister representing the Special Minister of State, upon notice, on 5 June 1985: (1) What action has the Government taken on recommendations numbers 6 and 62 of the Stewart Royal Commission of Inquiry into Drug Trafficking concerning the setting up of a National Criminal Records Bureau, with access available to the Department of Immigration and Ethnic Affairs. (2) Has a discussion taken place in the light of the Government's response to the above recommendations on 15 December 1983, that ``this matter is under discussion with the States in the Australian Police Ministers' Council''. (3) When will a National Criminal Records Bureau be established. (4) Will the records of the National Criminal Records Bureau be available to the Department of Immigration and Ethnic Affairs. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) and (2) In discussion with the States and the Northern Territory in the Australian Police Ministers' Council (APMC), it was agreed that the NSW Criminal Records Bureau be upgraded and, under the auspices of the APMC, assume the responsibilities of the National Criminal Records Bureau. On 16 May 1986 cost sharing arrangements with the States and the Northern Territory were agreed and will remain in force from 1 January 1986 to 31 December 1988. (3) The National Criminal Records Bureau has now been established and systems are being upgraded and implemented progressively. (4) Appropriate access arrangements are in place with the Department of Immigration and Ethnic Affairs. (Question No. 1190) Senator Reid asked the Minister representing the Minister for Local Government and Administrative Services, upon notice, on 11 June 1986: (1) What are the procedures required by private companies or persons wishing to tender to Commonwealth Government contracts. (2) Has a directive been given to exclude ``Family'' Companies or businesses; if so, what is the directive and what is hoped to be achieved by such a directive. Senator Gietzelt —The Minister for Local Department and Administrative Services has provided the following answer to the honourable senator's question: (1) I am advised that Commonwealth tendering and contracting procedures make no distinction between private companies or persons and any other tenderers. By way of further assistance to the honourable senator, the Minister for Local Government and Administrative Services has forwarded a copy of the publication ``A Guide to Doing Business with the Commonwealth Government''. This booklet sets out information designed to help suppliers understand the Commonwealth system of purchasing. (2) No. (Question No. 1210) Senator Childs asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice, on 12 June 1986: (1) Would the Minister for Immigration and Ethnic Affairs advise the number of persons who have been processed under the new policy as announced in the statement made by the Minister for Immigration and Ethnic Affairs on 17 October 1985, relating to illegal immigrants in Australia. (2) Will the Minister advise the number of persons so processed, on a State by State basis- (a) who have been permitted to leave Australia voluntarily; (b) who have been deported; (c) the number of persons in either (a) or (b) who were in a de-facto relationship with either an Australian permanent resident or Australian citizen; (d) the number of persons in either (a) or (b) who were married to an Australian resident or Australian citizen; (e) the number of children of either married or de-facto relationships affected by either voluntary departure or deportation; and (f) the number of persons processed under this new policy in either de-facto or married relationships who have been permitted to stay in Australia. Senator Grimes —The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator's question: (1) Statistics are not kept on the total number of illegal immigrants (i.e. prohibited non-citizens under the Migration Act) who have been or are being processed under the policy on illegal immigrants which I tabled in the Parliament on 17 October 1985. Nor are statistics kept on those who have made applications for and been granted temporary entry permits and/or permanent residence. Between 1 October 1985 and 31 July 1986: * 1,709 illegal immigrants were recorded as leaving Australia of their own volition, without the necessity to supervise their departure or consider their possible deportation; * 2,016 illegal immigrants were located through the field enforcement activities of my Department and their circumstances have been or will be considered under the policy on illegal immigrants. (2) Because my Department does not maintain statistics on the total number of illegal immigrants who have been or are at one stage or another of ``processing'' under the applicable policy, it is not feasible to provide the statistics requested. However, as a result of the honourable senator's question, my Department conducted a file survey of all deportation and permament resident decisions made in respect of illegal immigrants during May and June 1986. The survey identified all children born of the relationship between the illegal immigrant and Australian citizen or resident, where those children were born in Australia. Detailed information about illegal immigrants departing voluntarily is not available because the majority of these cases are not subject to a formal decision and files are not maintained. Results of the survey are: Illegal Immigrants Granted Permanent Residence Status May and June 1986 STATE OF RESIDENCE N.S.W. VIC. QLD. W.A. S.A. Total A) Claimed relationship with Australian citizen/resident Spouse of citizen... 6 1 4 12 2 25 Spouse of resident... 2 2 4 De-facto spouse of citizen... 1 1 3 5 Sub-Total... 7 1 5 14 7 34 B) No claimed relationship with Australian citizen/resident... 1 1 Total Decisions... 7 1 6 14 7 35 C) Children of Australian citizen/resident (i.e. A above) Australian-born in Australia... 1 2 3 Australian-born overseas... 2* 2 Total Children... 3 2 5 * 1 case Illegal Immigrants Ordered Deported May and June 1986 STATE OF RESIDENCE N.S.W. VIC. QLD. W.A. S.A. TAS. N.T. A.C.T. Total A) Claimed relationship with Australian citizen/resident Fiance of citizen... 1 3 4 Fiance of resident... 1 1 Spouse of citizen... 1 3 1 5 De-facto spouse of citizen... 3 2 1 2 8 De-facto spouse of resident... 1 1 1 3 Sub-Total... 4 5 4 7 1 21 B) No claimed relationship with Australian citizen/resident... 29 26 23 17 5 2 3 5 110 Total Decisions... 33 31 27 24 5 3 3 5 131 C) Children of Australian citizen/resident (i.e. A above) Australian-born in Australia... 2* 2 Total Children... 2 2 * 1 case NOTE: In addition to visitors who remained in Australia beyond the period authorised, these figures include persons who gained entry to Australia by deception or who had serious criminal convictions in Australia or overseas. (Question No. 1294) Senator Michael Baume asked the Minister for Veterans' Affairs, upon notice, on 20 August 1986: (1) What reclassifications of Senior Executive Service positions in your Department have been made since March 5, 1983. (2) What were the dates and the salary details of these reclassifications. Senator Gietzelt —Further to my answer to the honourable senator's question which was published in Hansard on 16 September 1986, a completely revised answer, to take account of the amended text notified by Senator Michael Baume, is as follows: (1) Within the Department of Veterans' Affairs four Senior Executive Service positions have been reclassified since March 5, 1983. (2) Details are as follows: On 2 February 1984 two Senior Executive Level 2 ($46,361) positions were reclassified to Level 3 ($50,481) and a Level 1 ($42,242) to Level 2 ($46,361). On 27 March 1986 a position of Senior Executive Service Level 3 ($58,398) was reclassified to Level 2 ($53,632). All salary levels are those applicable at the time of reclassification. (Question No. 659) Senator Sanders asked the Minister representing the Minister for Territories, upon notice, on 6 November 1985: (1) Will the Minister for Territories table all the documents held by his Department and the Parliament House Construction Authority, relating to rainforest timbers being used in the new Parliament House, requested by the Wilderness Society under the Freedom of Information Act, which referred to the sources, suppliers and users of rainforest timbers throughout the new Parliament House. (2) Can the Minister give an assurance that rainforest timbers being used in the new Parliament House are not coming from rainforests identified as being part of the proposed World Heritage nominated area of the wet tropics of north-east Queensland. (3) Can the Minister give an assurance that the Parliament House Construction Authority will not attempt to obtain the rosewood denied to them by the action of the New South Wales Government, from areas of rainforest in Queensland. Senator Gietzelt —The Minister for Territories has provided the following answer to the honourable senator's question. (1) References to rainforest timbers proposed to be used in the new Parliament House are contained on numerous files held by the Parliament House Construction Authority. Such timbers, as interior materials proposed for those spaces, are referred to on both design and construction files for various spaces in the building. Identification and collation of all such references would be extremely time consuming. Many of the references are likely to be neither particularly helpful nor meaningful. In the circumstances and particularly given the disparate and in many cases cursory nature of the references, it is considered that identification and tabling of all documents would be an unreasonable diversion of the scarce resources of the Parliament House Construction Authority. The Department of Territories has not been subject to any Freedom of Information claim on this matter. (2) The provisions of the Australian Heritage Commission Act 1975 prevent the procurement by the Parliament House Construction Authority of timbers in areas listed on the Register of the National Estate. To the extent that parts of the area of the wet tropics of north-east Queensland are not included on the Register of the National Estate no assurance can be given. (3) Sufficient stocks of rosewood had been obtained at the time of the NSW decision and there is therefore no need for the Authority to seek other supplies. Senator Walsh —On 3 June 1986 (Hansard, page 3232) Senator Vanstone asked the Leader of the Government in the Senate a question without notice seeking comment on: (i) The failure to implement traineeships within Ansett Airlines of Australia; and (ii) what has gone wrong with the Government's plan for traineeships to proceed in the private sector. In his reply, Senator Button suggested that the question would be more appropriately directed to the Minister representing the Minister for Employment and Industrial Relations, and undertook to arrange for an answer to be obtained. The Minister for Employment and Industrial Relations has provided the following response: (i) While traineeships have not yet been implemented within Ansett Airlines of Australia, discussions with all parties involved in the development of the concept within the organisation are continuing and I am confident that young Australians will benefit as a result of Ansett's and the Government's commitment to the concept; and (ii) nothing has gone wrong with the Government's plan for traineeship in the private sector. As at 26 September 1986, 4809 traineeships had been created of which 1415 are in the private sector. (Question No. 1175) Senator Archer asked the Minister representing the Special Minister of State, upon notice, on 5 June 1986: (1) Has the Government given any further consideration to recommendation 10 007 of the Costigan Royal Commission on the activities of the Federated Ship Painters and Dockers Union calling for the repeal of the requirement of a reference being granted by the Inter-Governmental Committee and its attachment to every summons issued by the National Crime Authority. (2) Is the Government aware of the severe restrictions that the above practice places upon the powers of the National Crime Authority and, in particular, on its ability, of its own motion, to investigate any matter in any real sense. (3) Would the Government now support recommendation 10 007 which is designed to reduce the Inter-Governmental Committee's powers over the granting of coercive powers to the National Crime Authority; if not, why not. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) No. The Inter-Governmental Committee on the National Crime Authority, which represents the Commonwealth and all the States, has by resolution specifically rejected the recommendation. The National Crime Authority has also advised that, in light of its experience to date, it does not see any difficulty with the requirement that a reference be granted by the IGC. Should experience indicate that the requirement to attach a copy of the reference to every summons is creating difficulties for the NCA, the Government would be prepared to review the matter. (2) The NCA is able to investigate ``in a very real sense'', any matter involving relevant criminal activity as defined in the Act and is undertaking a range of such investigations. When it forms the judgment that coercive powers are required to advance a particular investigation it seeks a reference from the IGC. The IGC has not refused any reference requested by the NCA to date. (3) No. Acceptance of the recommendation would result in a breakdown of the present degree of State co-operation with the NCA which, under present complementary Commonwealth/State legislation, may undertake investigations under reference into State matters as well as Commonwealth matters. This would represent a most significant diminution of the NCA's effectiveness. (Question No. 1232) Senator Archer asked the Minister representing the Special Minister of State, upon notice, on 19 August 1986: Does the Australian Federal Police have a specialist unit to deal with computer related crime; if not, will the Special Minister of State raise the establishment of such a unit with Commissioner Grey of the Australian Federal Police. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: I am advised that the Australian Federal Police (AFP) does not have a specialist unit dedicated to computer related crime. AFP investigators can, however, utilise specialist skills from both the public and private sectors when making enquiries into computer related crime. Where such crimes extend to more than one AFP Regional Command, the responsibility for investigation rests with the AFP's National Criminal Investigation Branch. It is worth noting that computer related crime tends to be perpetrated mostly within private enterprise falling within the jurisdiction of the State police forces.