Thursday, 9 October 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the honourable the President and members of the Senate in Parliament assembled: We, the undersigned citizens of Australia, being concerned that the Australian Government, in breach of its own stated policies, has lifted the bans on the sale of uranium to France; demand that the Government re-impose the bans on such sales, and further, that the Government ratifies and strengthens the South Pacific Nuclear Free Zone Treaty to prohibit uranium sales within the region. And your petitioners as in duty bound will ever pray. by Senator Sanders (from 137 citizens). To the Honourable the President and members of the Senate, of the Parliament of Australia assembled. We, the undersigned, plead that Parliament will re-invoke the blasphemy, indecency, and obscenity proscriptions into the Customs (Prohibited Imports) Regulations, by adding those proscriptions to the present Section 4a, sub-regulation 1a (b) (i), for the following reasons: because there is a flood of obscene publications into the country because such publications depict the abnormal as normal because such publications degrade men and women because such publications create new, offensive demands on women, with which they do not willingly comply (Eysenok and Nias) because this causes marriage breakdown because children easily obtain such publications because children copy what they see because the child found in possession of such publications is at risk, facing rejection, and carrying the burden of having altered the relationships in his home for the worse, between parents, and between parent and child because such a child faces, alone, the loss of trust because I am a reasonable adult person and I am offended by the obscene books which you have legislated into this community. Your petitioners therefore humbly pray that you will give this matter your earnest attention. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 49 citizens). 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 should close the `joint Australian-U.S.' electronic communication facilities in the Watsonia Army Barracks. by Senator Zakharov (from 344 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned shows: (1) The Agreement between the United States of America and Australia concerning the Joint Defence Space Research Facility at Pine Gap may be terminated by either Government on one year's notice from 19 October 1986. (2) In the event of war between the United States and the Soviet Union, access by the United States to Pine Gap's facilities makes it a probable nuclear target. (3) Access by all nations to Pine Gap's capacity to monitor and verify compliance with existing and future nuclear limitations treaties could contribute to world peace and security. (4) The people of Australia are entitled to be consulted, through their representatives in Parliament, on any extension or modification of the Agreement affecting their lives, security and welfare. And your petitioners humbly pray that: (1) The Agreement between the United States and Australia concerning the Joint Defence Space Research Facility at Pine Gap be terminated one year from October 19 1986. (2) Public discussion and inquiry be instituted into the feasibility of negotiating a new agreement with the United Nations during the International Year of Peace offering the verification facilities of the Pine Gap base to all nations. (3) Any agreement concerning the future use of Pine Gap be referred to Parliament for ratification. And your petitioners as in duty bound will ever pray. by Senator McKiernan (from 41 citizens). Petitions received. Motion (by Senator Grimes) agreed to: That, unless otherwise ordered- (1) The hours of sitting of the Senate on Tuesday, 14 October and Wednesday, 15 October 1986 be varied as follows: (a) Tuesday, 14 October 1986- 2 p.m.-6.30 p.m.; and (b) Wednesday, 15 October 1986- 10 a.m.-12.45 p.m. 2 p.m.-6.30 p.m. 8 p.m.-10.30 p.m. (2) On Wednesday, 15 October 1986, Question Time take place at 3 p.m. (3) Subject to paragraphs (1) and (2), the Sessional Order relating to the days and hours of meeting of the Senate, and the Routine of Business for week 1 apply to the week commencing 13 October 1986. (4) The Sessional Order relating to the days and hours of meeting of the Senate and the Routine of Business for week 2 apply to the week com- mencing 20 October 1986. Bills received from the House of Representatives. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Bills being put in one motion at each stage, and the consideration of all or several of such Bills together in the Committee of the Whole, and as would prevent the reading of the short titles only on every order for the reading of the Bills. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Grimes) read a first time. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(10.04) —I move: That the Bills be now read a second time. I seek leave to incorporate the second reading speeches in Hansard. Leave granted. The speeches read as follows- INCOME TAX RATES BILL 1986 This Bill will declare the rates of income tax payable by individuals and trustees generally for the 1986-87 financial year and for the 1987-88 and subsequent years. In so doing, the Bill will give effect to the significant personal tax cuts announced as part of the September 1985 tax reform package, and their introduction from 1 December 1986 as announced by the Treasurer in his Budget Speech. The tax cuts are to be reflected in lower pay-as-you-earn deductions from 1 December 1986. Another tax reform measure to be implemented by this Bill will allow the tax-free threshold only on a pro rata basis in certain circumstances. The Bill will also declare the rates of income tax for 1986-87 payable on the 1985-86 incomes of companies, registered organisations and unit trusts treated as companies for tax purposes, as well as on the current year incomes of superannuation funds and certain other trusts. As announced in the September 1985 tax reform statement, the company tax rate is to be increased to 49 per cent in 1987-88 to help defray the cost of the new imputation system that is to apply from the commencement of that year. Legislation to declare that higher rate for 1987-88 and subsequent years, which will also be payable by trustees assessed in respect of trust income of non-resident company beneficiaries in 1986-87 and subsequent years, will be introduced later in these sittings. Accordingly, the rate of tax declared by this Bill for 1986-87 for companies and the other bodies taxed as companies will remain at 46 per cent. However, lower rates are to be declared by this Bill on the relevant income of some superannuation funds and on ineligible approved deposit funds as a consequence of the reductions in personal income tax rates. A further lowering of these rates, reflecting the second stage of the personal income tax cuts, will be contained in the later legislation to which I have just referred. I turn now in more detail to the personal income tax rate measures contained in this Bill. The personal income tax burden will be substantially reduced by an increase in the tax-free threshold from $4,595 to $5,100, and by a reduction of all marginal rates of tax, with major reductions in those rates applying at average and higher earnings. The reform of the rate scales will be in two stages. With effect from 1 December 1986 a five step scale will apply and from 1 July 1987 this will reduce to a four step scale. From 1 December 1986 the existing 25 per cent rate on income to $12,500 will be reduced to 24 per cent and the threshold level will increase to $12,600. The 30 per cent rate will reduce to 29 per cent and the next two rates of 46 per cent and 48 per cent will reduce to 43 per cent and 46 per cent respectively. There will be a significant drop in the highest marginal rate applied to incomes above $35,000 from 60 per cent to 55 per cent. From 1 July 1987 the marginal rates applying to income in the ranges $19,501 to $28,000 and $28,001 to $35,000 will both be reduced to 40 per cent, and the top marginal rate will drop from 55 per cent to 49 per cent. These changes to the rate scale will be reflected in the rate payable by non-residents. Because of the commencement date part-way into the 1986-87 financial year, the rate scale for that year is to be an average of the 1985-86 rate scale and the scale to apply from 1 December 1986-made up of five-twelfths of the 1985-86 scale and seven-twelfths of the new scale. The average rate scale will mean a tax-free threshold of $4,890 for 1986-87 with the rate of tax on incomes to $12,500 being 24.42 per cent. A rate of 26.5 per cent will apply in the income range $12,501 to $12,600, 29.42 per cent in the range $12,601 to $19,500 while for taxable incomes in the range $19,501 to $28,000 and $28,001 to $35,000 the rates will be 44.25 per cent and 46.83 per cent respectively. The maximum marginal rate applying to income over $35,000 will be 57.08 per cent. An adjustment is to be made to the maximum rate of tax on the unearned income of minors for 1986-87 to reduce the 60 per cent rate now applying to income over $35,000 to 57.08 per cent. For 1987-88 and subsequent years a flat rate of 49 per cent will apply to all unearned income of minors, subject to shading-in arrangements for such income just over $416. The rate of tax on trustees assessed under section 99a of the Income Tax Assessment Act will be 57.08 per cent for 1986-87 and 49 per cent in 1987-88 and subsequent years. I referred earlier to the adjustment in certain circumstances of the level of the tax-free threshold. In 1986-87 and subsequent years, this threshold will be available only on a pro-rated basis in the year of income in which a person first ceases full-time education at a school, college, university or similar institution. The adjusted threshold level will be the proportion of the full threshold that reflects the number of whole months in the year when the person was not engaged in full-time education, including the month in which such education ceased. Where income is derived in the part of the year before the person ceases education, the adjusted threshold level will be increased by the lesser of the amount of that income or the balance of the full year threshold. The tax-free threshold will also be available only on a proportionate basis where a person becomes, or ceases to be, a resident of Australia in a year of income. This measure will not affect the present treatment of non-residents receiving Australian social security pensions and repatriation pensions that are taxable in Australia. The provisions of the Bill are explained in detail in a memorandum that is being made available to honourable senators. I commend the Bill to the Senate. INCOME TAX BILL 1986 This Bill will formally impose income tax for the 1986-87 financial year at the rates declared by the Income Tax Rates Bill 1986 that I have just introduced. As explained in my second reading speech on that Bill, the rates imposed on individuals, and trustees generally, reflect the significant cuts in personal income tax that were announced in the September 1985 tax reform package and are to apply with effect from 1 December 1986. No change is proposed for the 1986-87 financial year in the rates of tax, which will also be imposed by this Bill, on companies, registered organisations and unit trusts treated as companies for tax purposes. However, for certain superannuation funds and for ineligible approved deposit funds the tax rates will be lowered. This Bill will also formally impose provisional tax payable for 1986-87, and authorise the collection of instalments of tax payable by companies and unit trusts treated as companies on income of 1986-87 year of income. Details of the various rates are set out in the explanatory memorandum that is being made available to honourable senators. I commend the Bill to the Senate. TAXATION LAWS (MISCELLANEOUS PROVISIONS) BILL 1986 This Bill will amend various taxation Acts, mainly as a consequence of the reforms to be made to the personal income tax rate scale by the Income Tax Rates Bill 1986. The Bill will also give effect to some 1986-87 Budget proposals. It will amend the Income Tax Assessment Act to increase the taxable income level, at or below which the maximum pensioner rebate of $250 is available, from $5,595 to $5,914 in 1986-87 and to $6,142 in 1987-88 and subsequent years. The maximum levels of the beneficiary rebates will also be increased from $220 to $280 for married beneficiaries and from $170 to $190 for other beneficiaries. The income levels above which the rebates are to shade-out will also be increased. In addition, the Bill will extend the benefit of the beneficiary rebates to recipients of benefits or payments under the Commonwealth's tertiary education assistance scheme and the adult secondary education assistance scheme. The changes to the pensioner and beneficiary rebates are to take effect from the 1986-87 year. Other amendments of the Income Tax Assessment Act will reduce the level of the rebates of tax available for net medical expenses in excess of $1,000, payments of home loan interest by a first home buyer and the assessable proceeds of certain life assurance policies. These rebates will be allowed at the rate of 29.42 per cent for 1986-87 and 29 per cent for 1987-88 and subsequent years. Also reflecting the changes in personal tax rates, another amendment proposed will adjust the method of calculating the amount of any rebate allowable where payments in consequence of a taxpayer's termination of employment are incurred in his or her assessable income. Other Acts that are proposed to be amended by this Bill as a consequence of the new personal tax rates are the Income Tax (Bearer Debentures) Act 1971, the Income Tax (Mining Withholding Tax) Act 1979, the Trust Recoupment Tax Act 1985 and the Trust Recoupment Tax Assessment Act 1985. Detailed explanations of the amendments to these Acts and others I have mentioned are contained in the explanatory memorandum which is being made available to honourable senators. I commend the Bill to the Senate. MEDICARE LEVY BILL 1986 The Medicare Levy Bill 1986 will declare the basic rate of Medicare Levy for 1986-87 and, until the Parliament otherwise provides, for 1987-88. As announced in the Budget, the basic rate of the levy is to be increased from 1 per cent to 1.25 per cent from 1 December 1986. Consequently, a composite rate of 1.145 per cent will apply for the 1986-87 financial year. The Bill also contains increases in the income threshold levels below which people with low incomes will not be called on to pay any levy. For 1986-87, individuals with taxable incomes of $8,030 or less, and married couples and sole parents with family incomes of $13,370 or less, will be exempt from the levy. The income threshold for married couples and sole parents will increase by a further $1,600 for each dependent child or student. An explanation of the Bill is contained in the explanatory memorandum which is being made available to honourable senators. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bills received from the House of Representatives. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Grimes) read a first time. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(10.05) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- TAXATION LAWS AMENDMENT BILL (No. 3) 1986 This Bill will amend the income tax law to give effect to several of the taxation measures announced in the 1986-87 Budget. In that regard, it will vary in some respects the trading stock valuation arrangements relevant to horse breeders, restore the income tax exemption of the pay of defence force reservists and provide income tax deductions for certain gifts. Other amendments contained in the Bill will authorise deductions in respect of cash bids for off-shore petroleum exploration permits, provide a more generous basis for the offsetting of profit on the disposal of animals under the brucellosis and tuberculosis eradication campaign and effect changes to the withholding tax on interest on overseas borrowings. In addition, the Bill will amend the income tax law to provide for the calculation of 1986-87 provisional tax. It will also give the force of law in Australia to a taxation agreement with Austria and a further protocol to the existing taxation agreement with the Netherlands. Finally, some minor amendments of the income tax and other taxation laws are being effected. Mr President, I will now outline in more detail the significant measures contained in the Bill. Trading stock valuation of horses The Bill will give effect to two 1986-87 Budget measures relating to the valuation of horses for income tax trading stock purposes. Under the trading stock provisions of the law, live stock on hand at the end of a year may be valued, at the taxpayer's option, at cost price or market selling value or at such other value as circumstances may justify. A taxpayer may bring natural increase in live stock to account at a cost price not less than prescribed amounts-$1 per head for sheep, $5 per head for cattle and horses and $4 per head for pigs-but substantially less than actual cost. This allows tax to be deferred until the disposal of the natural increase. The economic and rural policy statement of 15 April 1986 announced changes to the trading stock valuation arrangements for animal stud breeders generally. However, reflecting the fact that the tax deferral advantages are generally much greater for horse breeders than for breeders of other animals, it was announced in the 1986-87 Budget that changes would be restricted to horse breeders and would apply only in respect of service fees. Accordingly, the Bill will amend the law so that for trading stock purposes the cost price of a horse acquired by natural increase is not less than any service fee-whether for physical or artificial service-that is incurred after 19 August 1986 in acquiring the horse. This is expected to result in a gain to revenue of $7m in 1988-89, with negligible gains in subsequent years. The second of the 1986-87 Budget amendments under this heading relates to the special valuation option available to horse breeders in respect of sires and brood-mares. Horse breeders may elect to write down the cost of sires and brood-mares at rates of 50 per cent and 33 1/3per cent respectively on a diminishing value basis or to write down the cost of mares over a minimum period of three years. In relation to horses acquired after 19 August 1986, the Bill will limit this special option to horses that are aged 3 years or more. This Amendment, which should have no revenue consequences, will ensure that, as intended, the concessional basis of valuation is available only in respect of breeding stock. Pay of Defence Force reserve This Bill will give effect to the Budget announcement to reinstate full taxation exemption of the pay and allowances of members of the Defence Force reserves and emergency reserves for service, other than continuous full time service, on or after 1 January 1987. Full tax exemption will also be reinstated in respect of any gratuity paid to members of the emergency reserves by reason of a calling out for continuous service on or after 1 January 1987. These changes are estimated to cost $5m in 1986-87 and $12m in a full year. There will be an offsetting reduction to outlays of $8m in a full year associated with the discontinuance of the special reserve allowance. Gifts Another 1986-87 Budget measure to which the Bill gives effect will allow deductions for gifts of the value of $2 or more made after 19 August 1986 to the Australian Academy of Technological Sciences and to the Australian College of Occupational Medicine. The estimated cost to revenue of this measure is nil for 1986-87 and less than $60,000 in a full year. Cash bidding payments The Bill will implement the proposal announced on 15 January 1986 to allow income tax deductions in respect of payments made to the Commonwealth under the cash bidding system introduced last year for the award of off-shore petroleum exploration permits in highly prospective areas. This will ensure that Australian companies are not placed at a competitive disadvantage compared with foreign based companies entitled to income tax deduction for the payments in their home countries. In cases where exploration leads to the development and production of petroleum, cash bids will be able to be written off on a straight line basis over the lesser of 10 years and the life of the producing field. Write-off will commence in the income year in which a production licence is first acquired in respect of the relevant permit area. In the event that the original cash bidder disposes of an interest in the permit area before the grant of a production licence, the original bidder may transfer to the purchaser an entitlement to deductions. If no production licence is granted, or if the permit expires or is wholly surrendered, the amount of the cash bid will qualify as an eligible capital loss for capital gains tax purposes. The cost to revenue of this proposal is estimated at $1m in the 1988-89 year, increasing to $1.5m in each subsequent year. Mr President, the Government intends to extend income tax deductibility, on the basis just outlined, to cash bids paid under the Commonwealth Cash Bidding/Work Program system introduced in 1967. Deductibility will also be extended to cash bids paid under systems in force in the States and the Northern Territory that are comparable to the Commonwealth systems. In this regard, honourable senators would be aware that, in a joint statement of 16 September 1986, the Minister for Resources and Energy and the Victorian Minister for Industry, Technology and Resources announced the release of a petroleum exploration area straddling Commonwealth and Victorian jurisdictions. The proposed extension of deductibility will ensure that cash bids paid in respect of that area qualify for income tax deductions. The further necessary amendments will be introduced into the Parliament as soon as practicable and, like those contained in this Bill, will apply from 15 January 1986. Profits from death or destruction of livestock Amendments of the income tax law proposed by the Bill will vary the operation of an existing option available in respect of profits resulting from proceeds on the death or destruction of livestock because of bovine brucellosis or tuberculosis. The proposal was announced in the economic and rural policy statement of 15 April 1986 and the variation will apply in respect of the death or destruction of livestock after 30 June 1986. Under the existing law, the average profit per head on livestock that die or are destroyed because of certain diseases may be offset against the cost per head of replacement animals acquired during the year of death or destruction or during the next 5 years. Mr President, the Government recognises that the replacement of animals lost because of bovine brucellosis or tuberculosis may take longer than 5 years and that a lost herd may be replaced by fewer, but more expensive animals. The Bill will therefore broaden the basis on which relevant profits may be offset against the cost of replacement animals. It will extend the period of offset by 5 years. It will also provide for profits to be offset on a herd basis rather than on a per head basis-that is, the whole of the profits may be offset progressively against the total cost of replacement animals. The amendments are not expected to have any significant effect on revenue. Interest withholding tax exemptions The exemption from interest withholding tax for interest payments on overseas borrowings by a State, or by a Commonwealth or State authority where the loan funds are not used in direct competition with the private sector, is to be withdrawn in relation to borrowings contracted for after 1 July 1986 in accordance with the Government decision announced on that day. On 28 July 1986, the Treasurer indicated that it was Government policy that public authorities should face a similar environment in respect of borrowings as do private sector borrowers. Consistent with this policy, the Bill proposes that the States and State and Commonwealth Authorities be exempted from withholding tax for interest payments on public or other widely spread issues of securities overseas in the same way as a resident company raising money for use in an Australian business. The withdrawal of the interest withholding tax exemption for the States and authorities is to apply to borrowings contracted for after 1 July 1986 but will not affect interest payments made on or before the date on which the Bill receives royal assent. Pending enactment, the States and authorities may continue to apply for exemption for overseas borrowings in relation to interest payments made on or before the date of royal assent. Thereafter they will be able to obtain exemption to the extent permitted by the amended provisions relating to public or other widely spread issues of securities overseas. The Bill also proposes removal of the generally applicable conditions for that exemption that the loan be raised in a foreign currency and that interest be payable in a foreign currency. Advocates of these changes have argued that the existing requirements impose unnecessary additional costs and impede the ability of Australian borrowers to raise off-shore funds in Australian currency and so reduce their foreign exchange exposure. These amendments will apply to interest payments made after the Bill receives the royal assent. A recent court decision has shown that roll-overs or extensions of loans contracted for some years ago remain able to benefit from the previous `Australian entity' interest withholding tax exemption. This is an unintended result as the exemption was withdrawn to have general effect from June 1983. Accordingly, the Bill proposes to preclude the exemption of interest paid on borrowings resulting from relevant loan roll-overs and loan extensions effected after 1 July 1986 or from the post-1 July 1986 drawing down of funds under a pre-existing loan facility where the borrower was not, before 2 July 1986, contractually bound to use that facility. Corresponding provisions are proposed in relation to the withdrawal of the exemption for overseas borrowings by the States and by public authorities. Similarly, another provision of the law which, until June 1983 provided exemption in relation to overseas borrowings by the Australian Industry Development Corporation, is to be amended to make clear that loan roll-overs and loan extensions do not preserve the former exemption. Those measures will also apply in relation to interest payments made after the date of enactment of the Bill. Anti-avoidance provisions will prevent the re-arrangement of interest payments to bring them into the period, prior to enactment, in which the relevant exemptions remain available. Provisional Tax for 1986-87 As provisional tax is part of the pay as you earn system and is designed to collect tax on non salary or wage income within the year in which the income is derived, it is generally accepted that the amount of provisional tax charged should approximate as closely as practicable the amount of tax actually imposed for the year. Incomes to which provisional tax applies are expected to increase in 1986-87 but, due to the proposed reductions in personal income tax rates from 1 December 1986, effective rates of tax for 1986-87 will be lower than for last year. As in the past, it is proposed that the basis that would otherwise apply in the calculation of provisional tax be varied for the current year to take account of these two factors. Accordingly, this Bill provides for 1986-87 provisional tax to be calculated on the basis of 1985-86 taxable income increased by 11 per cent and by applying the lower rates of tax for 1986-87. Also reflected in the provisional tax calculation will be the proposed increased rate of 1.145 per cent at which the medicare levy is to be imposed for 1986-87. The increased low income thresholds to apply for levy purposes in 1986-87 will be taken into account. Generally, rebates and credits will be allowed in the provisional tax calculation at the levels allowed in 1985-86 assessments. For Christmas Island residents, however, the rebate allowed in their 1985-86 assessments will be reduced by one-third in line with the arrangements for phasing-in personal income tax on the island. Taxpayers who consider that their taxable income for 1986-87 will increase by less than 11 per cent, or who consider that their rebates will be at a higher level, will continue to have the right to `self-assess' and have the provisional tax for 1986-87 recalculated on the basis of their own estimates. The Austrian comprehensive tax agreement I now turn to provisions of the Bill that will provide legislative authority for the entry into force of a comprehensive double taxation agreement dealing with all forms of income flowing between Australia and Austria. The agreement was signed on 8 July 1986, at which time details were announced and copies of the agreement were made publicly available. It accords with the other comprehensive taxation agreements concluded by Australia in recent years. The Bill will insert the text of the agreement into the Income Tax (International Agreements) Act 1953 as a schedule to that Act. The agreement will not enter into force until all necessary constitutional processes are completed both by Australia and Austria. The agreement is not expected to have any significant effect on the revenue. Second Netherlands protocol The Bill will provide legislative authority for the entry into force of a second protocol amending the existing comprehensive taxation agreement and protocol between Australia and the Netherlands. The second protocol will enable the Netherlands to close an avenue for avoidance of its tax being exploited by Netherlands investors deriving interest from debt claims secured by mortgage over real property in Australia. At present, Netherlands tax does not generally apply to such interest which is treated under the agreement as income from real property. The protocol will treat the income in the same way as other interest is treated under the agreement. This will allow the Netherlands to tax such interest from Australia in full, subject to the allowance of a credit for Australian tax paid on the interest, instead of the interest being generally free of Netherlands tax and subject only to Australian withholding tax of 10 per cent. The tax treatment in Australia of interest flowing from Australia to the Netherlands will be unchanged-the gross amount of such interest will continue to be liable to Australian interest withholding tax of 10 per cent. Mortgage interest derived by Australian residents from the Netherlands is presently exempt from tax in Australia if it is subject to Netherlands tax. Under the protocol, such interest will be taxable in Australia, with a credit for the Netherlands tax, which is limited to a maximum of 10 per cent of the gross interest. The protocol will generally have effect in Australia for years of income commencing on or after 1 July 1986 and, in the Netherlands, for taxable years and periods beginning on or after 1 January 1986. Transitional entry into force arrangements will ensure that the protocol will not apply to interest paid under contractual obligations entered into before 30 June 1986, when the protocol was formally signed, until Australian years of income commencing on or after 1 July 1988 and Netherlands taxable years and periods beginning on or after 1 January 1988. Appropriate anti-avoidance measures will safeguard the operation of the transitional arrangements. The protocol will enter into force after the procedures necessary to give it the force of law in both countries are completed. Minor amendments The Bill will amend the income tax law to add the Secretary to the Department of Science as an authority to approve bodies as approved research institutes for income tax purposes. It will also amend various taxation laws to reverse an unintentional alteration to the burden of proof provisions by the Taxation Boards of Review (Transfer of Jurisdiction) Act 1986. Mr President, an explanatory memorandum which comprehensively explains the measures contained in the Bill, and in another Bill that I will introduce shortly, is being circulated for the information of honourable senators. I commend the Bill to the Senate. BANK ACCOUNT DEBITS TAX AMENDMENT BILL 1986 This Bill will give effect to the 1986-87 Budget proposal to increase the general rates of bank account debits tax. For cheque accounts kept with banks outside the Australian Capital Territory, including Jervis Bay, the highest rate of bank account debits tax will be increased from $1.50 to $2, with other rates being increased by up to one-half. The increased rates will apply to debits made on or after 1 December 1986. In view of the proposal announced in the Budget to introduce a financial institutions duty in the Australian Capital Territory from 1 July 1987, the rates of bank account debits tax presently applying in the Australian Capital Territory will remain unchanged. Mr President, increasing the general rates of bank account debits tax is expected to raise additional revenue of $45m in 1986-87 and $90m in a full year. The explanatory memorandum that has been circulated to honourable senators also explains the provisions of this Bill. I commend the Bill to the Senate. Debate (on motion by Senator Messner) adjourned. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent Business of the Senate, Notice of Motion No. 1 standing in the name of Senator Macklin for the disallowance, two sitting days after today, of the guide to the assessment of rates of veterans' pensions, being called on prior to the consideration of Government Business this day. Motion (by Senator Grimes) agreed to: That, unless otherwise ordered, the order of General Business for consideration this day, pursuant to Sessional Order, be as follows: (a) consideration of Government Papers; and (b) General Business, Notice of Motion No. 242 standing in the name of Senator Watson relating to the fringe benefits and capital gains taxes. Senator MACKLIN(Queensland)(10.08) —I move: That the guide to the assessment of rates of veterans' pensions, made under the Veterans' Entitlements Act 1986 and presented to the Senate on 2 June 1986, be disallowed. The guide to the assessment of rates of veterans' pensions arises from the major changes that were made to repatriation legislation over the last year and a half. Honourable senators will remember the protracted debates in this chamber on that matter. Part of the negotiations that had a successful conclusion with the passage of the Veterans' Entitlements Bill in 1986 was agreement that the guide to the assessment of rates of veterans' pensions be treated in a way that would permit it to be disallowed. We wanted to be able to approach the guide as something to be disallowed or allowed by either House of the Parliament. During that whole debate on the veterans' entitlements legislation, and in particular the discussion surrounding the guide, I took the view that the Senate should look closely at the matter in considering disallowance to see whether it was in keeping with the legislation and in conformity with the intentions of the legislation as it passed through this chamber. A whole range of criticisms could be directed at the guide. The guide to the assessment of rates of veterans' pensions is based on the evaluation of permanent impairment which arises from the American Medical Association. Because of this, I believe it lacks an enormous amount of flexibility that previously has been available in the repatriation area. In particular it does not treat a person who is seeking a pension or a disability allowance as a person to be assessed in totality. Rather, it refers to items in a fixed schedule. If I may give an example, a person with one hip impaired might rate, say, a 20 per cent disability. A person with two hips impaired, by the use of simple addition, would be rated at a 40 per cent disability. We find on page 6, for example, that the rating for the total impairment of a pair of organs or limbs shall be the actual impairment, or twice the rating for the impairment attributable to war-caused injury or disease, whichever is the less. As honourable senators would realise, in fact the difference between having one-hip impairment and two-hip impairment may very well be the difference between being able to walk with a stick or a crutch and being confined to a wheelchair. One can look at a whole range of those types of impairments and disabilities to see whether or not the actual way that the assessment has been made is in keeping with the total person rather than in keeping with this inflexible rating system. The level of disability required to obtain a 100 per cent general rate according to the guide is total disability, irrespective of the severity of the injury or the disease. It is unlikely, using this guide, that the assessment would be 100 per cent and consequently the assessment could not satisfy sections 22, 23 or 24 of the Act. To obtain a 100 per cent general rate pension, a veteran would have to be completely dependent and house-bound. The scale is not applicable to the type of assessment that I believe the guide is meant to be dealing with. Fifty per cent of a complete impairment rating would equate much more closely to the intermediate rate. It certainly seems to be the general opinion of veterans' organisations-this has now been borne out by the material provided at the Estimates committee-that the guide will reduce the ability of veterans to gain support. I believe it reduces the rights of veterans and I believe that in many cases these reductions could be extremely substantial ones. For example, a totally incapacitated veteran will be assessed at the 100 per cent rate. The intermediate and special rates involve additional payments only for the effect of a veteran's incapacity on his or her employability. If the total incapacity rates at 100 per cent, the rate for partial incapacity therefore will have to be correspondingly reduced. Age is not taken into account. An 18-year-old who is unable to do household tasks gets the same impairment rating as a 70-year-old who is unable to do the same tasks. That does not seem to me to be either fair or just. Pain and suffering receives no assessment rating. The individual who works despite pain-we had a very long discussion of many instances of that during the debate on the actual Bill-will get nothing to compensate him or her for this suffering. I believe that there is no foresight contained in the guide and no consideration of men and women who may be involved in conflicts or wars in the future. It seems to be modelled on the male veteran from World War II. Yet there are, as we know, many younger veterans from the Korean and Vietnam conflicts and from peace-keeping forces who the Act should also be covering. I do not believe, the way the Act is written, that it covers these veterans adequately. For example, there is no mention of the problems of the female reproductive system in the section on the endocrine and reproductive systems, although there is mention of the male reproductive system. Numerous medical conditions are not mentioned and are covered only in a very general way under the heading `Activities of daily living' on pages 9 and 10 of the guide. I believe that in keeping with the Act the guide should be flexible enough to cope with changes in our society, in modern weaponry and in the types of injuries that people are likely to suffer. Hence we need to look in a much more flexible way at medical advances, new diseases and new diagnostic instruments which are available and which point us in possible new directions for treatment and understanding things that in the past may have been put down to various possibilities and then put aside. Unfortunately, the near total reliance on fixed assessment tables precludes this from occurring. War widows are also disadvantaged. The percentage of veterans receiving the totally and permanently incapacitated pension will be considerably reduced and, correspondingly, the number of widows automatically receiving war pensions will be reduced. I think it is unfortunate that the short deadlines which were provided for the ex-service community to comment ensured that those comments could not have been taken into account before the guide was introduced. If one looks at the chronology of the printing of the guide and of the closing dates for comments from the ex-service community, one can see that this is a fact. The Minister for Veterans' Affairs (Senator Gietzelt) has advised in response to comments that have been made in the past with regard to this matter that any amendments proposed as a result of those comments would `be considered in the context of an evaluation of the new assessment system to be carried out by my Department during the early days of the system's operation'. That is something that could have been said four or five years ago. I do not believe that it carried terribly much weight today. We have simply to look at the Notice Paper before us or to talk to the Manager of Government Business (Senator Grimes) to see how very difficult it is for any Minister to get a piece of legislation into this place in under 18 months from the beginning of the operation. In other words, we would not be taking the comments made by the veterans' community immediately into account but rather would be waiting until probably the 1988 legislative year before this chamber saw anything with regard to the proposed amendments to the veterans' entitlements legislation. There is also a great deal of concern in the veteran community about the lifestyle questionnaire which arises out of this guide. I believe that questions asked in the lifestyle questionnaire are intrusive and, in many cases, extremely difficult for veterans to answer. Considering the way the Veterans' Entitlements Bill is written, considering the fact that it retains very strongly the notion of not putting the onus on the veterans, of its being a supportive Bill, I invite honourable senators to listen to the questions asked under the heading `3. Personal relationships'. Questions are asked about the kinds of relationships veterans have with other people. Veterans may tick more than one box. The following questions are listed: I am always making new friends I am often irritable with neighbours and family members I do not mix socially outside my own home I get out and mix with people as much as I need to There are some family members I prefer to stay away from I have fewer chances to get out for entertainment with friends as much as I would like I find it difficult to keep up a conversation with casual acquaintances I find it difficult to keep up a conversation with family members My circle of friends is getting smaller, and I don't seem to be able to make new friends very easily. Some days I do not feel like mixing with or talking to people. I keep to myself and avoid other people. That is the list of statements which appear under one question. People can tick any number of those statements. Senator Puplick —Insane nonsense. Senator MACKLIN —Yes, it is insane nonsense. I think it would be far better handled if the veteran were able to meet with a sympathetic medical officer so that there could be a one-to-one discussion. That is the method we have traditionally used. Questions certainly are an invasion of privacy. I refer to question No. 4, which I believe is an invasion of privacy: This question asks about who does a range of activities that are undertaken regularly in and around the home. Please tick the boxes which best describe who in your home does the activities listed. You may tick more than one box for each activity. There are columns headed `myself', `spouse', `community service help', `paid help', and `other'. The veteran is then asked to specify who the `other' is. These activities are then listed: Making beds; preparing meals; house cleaning; ironing; washing up; gardening; lawn mowing; shopping; banking; home repairs-minor; and washing the car. The only activity that is not listed is major house repairs. I believe that the questions in no way go to the essence of what is required by the Act. I believe they go beyond what is required by the Act. I do not see in any section of the Act any justification for that type of operation with regard to veterans. For that reason, and others, I have moved for the disallowance of the guide. The Senate has a responsibility to make sure that any delegating legislation delegates in a way that depends upon the Act and not upon what the Department wishes to ask or engage in regardless of what the Act has required. The Regular Defence Forces Welfare Association has stated: The Government has achieved considerable savings on disability war pensions as a result of the amendments to the Repatriation Act. Further considerable savings will result from the introduction of the new Guide. However, the Parliament is morally obligated to provide reasonable and just compensation to veterans for war caused disabilities. This can only be achieved by the early introduction of an exceptional disability allowance or a new pension structure to provide this level . . . and, the withdrawal of the new guide or its disallowance by the coalition or Democrats in the Senate. I urge the Senate to disallow this guide. I believe it should be disallowed to enable further discussions to take place with veterans' organisations so that the types of items that I raised do not appear in the guide and do not operate for the next two years before some amendments can be made to the Act. Senator REID(Australian Capital Territory)(10.23) —I refer to the motion moved by the Australian Democrats to disallow the guide to the assessment of rates of veterans' pensions made under the Veterans' Entitlement Act 1986. It is not our intention to support the motion for disallowance. But we believe that a number of the matters which have been raised by the Democrats ought to be looked at as the guide comes into operation. We suggest that the guide basically is an improvement but will need major work. I do not think it is likely that any guide of this kind, brought in after the introduction of a new Act, would be expected to work perfectly and not require some amendments and adjustments. But we rely on the commitment by the Minister for Veterans' Affairs (Senator Gietzelt) to set up the independent monitoring committee, which he has said will be set up after 12 months. I hope the Minister will make that commitment to the Senate today in this debate, so that there is no doubt that that will occur. Equally, I have no doubt that veterans organisations will monitor this most closely. I will do so to the very best of my ability. I know that other senators on this side of the chamber who also have a very deep commitment to the welfare of the veteran community will, in their electorates and areas, monitor how it works and will not be slow in coming forward with suggestions as to changes that ought to be made. If anomalies occur, I hope that the Minister will make quite rapid adjustments to the guide and will not necessarily wait for 12 months to pass before seeing that veterans are treated in the way that this country ought to treat them. Previously, the rather informal guidelines, which seemed to change from time to time, were rather loose; administrative arrangements. I personally prefer this new concept, not so much because it is codified but because of the way the impact on a veteran of an injury is assessed. Apart from the form that Senator Macklin has just referred to, I regard the lifestyle rating concept as a significant part of the assessment. I think it ought to be a beneficial and welcome addition to the way in which veterans' injuries are assessed. I certainly agree with Senator Macklin that the form from which he quoted lacks sensitivity and does not appear in any way to recognise this country's commitment to veterans. I hope that the form can be redrafted to address the issues in a less confrontationist way. I believe the guide is more comprehensive. It is based differently, on the guides to the evaluation of permanent impairment which have been adopted by the American Medical Association, and the international classification of impairments, disabilities and handicaps, used by the World Health Organisation. Certainly, we have to monitor the guide to see that it is relevant to the veteran community. We say that the system should be given a chance. The guide deals with impairment and, under the lifestyle section, deals with the effects of impairment on an incapacitated individual as a whole person. I reiterate the defect that Senator Macklin referred to in speaking about the endocrine and reproductive systems. He said, as is the case, that female reproductive organs are not referred to. I regret to say that I see that as a rather significant omission. War widows have been poorly treated by this Government. World War II women veterans have not been treated in the way that they should have been. There are some matters related to defence home loans that need to be addressed so far as women are concerned. I must say that my reaction to this omission is that it is not merely for the sake of brevity or because very few women are involved. I think it is significant that women have been left out of this rather important area. It is true, of course, that the veteran community is divided on this guide. That is not denied. I have seen correspondence that has been quoted and referred to, from the Regular Defence Force Welfare Association and the Australian Veterans and Defence Services Council, and some people within the Returned Services League have expressed genuine concerns. Others within the RSL and supporters feel that the guide ought to come into effect and be allowed to operate. But they, too, will have to rely on the Minister's commitment to review this matter after 12 months. Hopefully, that review will not take too long to complete. I repeat my hope that anomalies that arise in the very near future will be addressed immediately. The first two organisations that I mentioned have indicated that they would prefer to go back to the old system. It has been suggested that the guide does not address the problems that younger veterans might face. That may be so, but I do not see that that is a reason for throwing it out. Perhaps there is a need to acknowledge that more flexibility may be required so that changes to the guidelines can be incorporated quickly, and hopefully without fuss, whenever the need arises. This would be preferable to going back to the old system which itself had defects. There is a suggestion that some veterans would be much worse off under these guidelines. As I understand it, those veterans who have already been assessed under the old system are not likely to be reassessed or in any way lose the benefits that they now have. Some people in the other group may be better off and some may be worse off. The same applies, of course, to the old system; that, I would suggest, is inevitable. The RSL has pointed out an anomaly in table 17 on page 37 of the guide in that a 100 per cent general rate pension will be payable on assessment of a 65 per cent impairment and the same rate will apply to a 95 per cent impairment relating to a comatose condition. It sees it as a gap between reaching the 100 per cent general rate pension and the veteran reaching a comatose state. The RSL regards it as an important principle of compensation that higher levels of compensation should be paid for higher levels of impairment. There are various ways in which veterans have suffered since this Government came into office, which probably explains why some of the veterans' groups have had the reaction to this Guide that they have. I will not go into detail, but the assets test resulted in 13,000 veterans having their service pensions either reduced or cancelled, costing them $25m. They have been the group hardest hit by the assets test-3.4 per cent of veterans as against 2.8 per cent of general age pensioners. They suffered a number of quite significant cutbacks last year in the mini-Budget. Under the Veterans' Entitlements Act temporary and permanently incapacitated pensioners suffered losses of benefits and that has caused some people to react to the guide. The fact is that throwing out the guide would in no way restore the TPI pension that was eroded under the Veterans' Entitlements Act. That is a point which needs to be made on that issue. Without going into all the details of the mini-Budget and the Veterans' Entitlements Act, there were further erosions of veterans' benefits in the 1986 Budget, particularly those relating to war widows and pharmaceutical benefits. The Government is trying to bring in a system which will be more easily understood and which will work better. It does incorporate the lifestyle rating system, which I would like to see incorporated because I think it does address a number of issues that have not previously been addressed in assessing veterans. I acknowledge that there is not universal acceptance of the rates. I ask the Minister, as I did earlier, to make the commitment that any particular anomalies will be addressed promptly and that the review will be put into effect in 12 months, and last for only a very short time. The review should not be allowed to drag on for years before we have an opportunity to see how the guide to the assessment of rates of veterans' pensions is operating. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(10.33) —The Government rejects the proposal of the Australian Democrats to disallow the guide to the assessment of rates of veterans' pensions for a number of reasons which the Government believes are sound, and rejects the basic concept upon which Senator Macklin makes his submission. I have given undertakings in the Senate that a monitoring committee will be established. I draw the attention of the Senate to the fact that the disallowance motion was put down within three months of the passage of the Veterans' Entitlements Bill. If it were to be passed by the Senate it would be disastrous from the point of view of the implementation of the Veterans' Entitlements Act and the determining system, which is an essential part of the commitment of the Government, the Parliament and the community to the veterans of Australia. I point out that there is in fact very little pressure coming from the veteran community to disallow the guide of assessment. Compared to the pressure that was around when we were discussing the Veterans' Entitlements Bill, the views expressed and the pressure with respect to this assessment have been minimal. There has been no demand from within the veteran community, which believes, as the Government does, that there is an obligation on all of us to give the assessment an essential trial period. Once a monitoring committee has been established and the way in which the assessment has been applied is known, then the Senate, after consideration of the various political views, will have an opportunity to make a judgment in respect of these matters. We have to address issues such as what will be the effect and purpose of disallowing the guide to the assessment of rates of veterans' pensions, what will replace the guide, and how will veterans' pensions be assessed in the future if we do not have that assistance from the guide. How much consideration did Senator Macklin give to these issues-which I believe are vital to veterans-when he gave his notice of motion and today when he moved for its disallowance? The new guide replaces a document entitled `A Guide to the Assessment of Incapacity'. The change that has occurred as a result of the enactment of the Veterans' Entitlements Act by this Parliament came into effect on only 22 May this year. The new guide meets the requirements of that Act. It was approved by me, as the responsible Minister, and has been tabled in Parliament as required by the Act. To put it as simply as I can, the old system was not working well. It had a lot of shortcomings and received a lot of criticism. The old system was not as well understood as some people would like to believe. The old guide meant different things to different people in different States. That is borne out by some of the peculiar statements made by some of those seeking to encourage Senator Macklin's efforts to disallow the guide. Naturally, an ambiguous guide means that there is inconsistency in decisions around Australia on the levels of disability compensation payable. As a Minister I have found that I regularly get letters from people asking how it is that a pension is granted on certain grounds in one particular circumstance and not in another. They ask why a veteran in one State should receive a different level of disability pension from another veteran with exactly the same disability living in another State. It is a good question. There is no justification for that situation, but it exists. It is therefore important for any national body with responsibility, such as the Repatriation Commission, to ensure that equal treatment is given to veterans wherever they live in Australia. The shortcomings that existed under the old system are well known to anybody familiar with it. Changes were called for by the Toose Independent Inquiry into the Repatriation System which was conducted in the 1970s. In a report by the Advisory Committee on Repatriation Legislation Review, which was presented to me in November 1983 and which was initiated by my predecessor, Senator Messner, many important recommendations were made about the problems we are now dealing with. This report eventually formed the basis of the Veterans' Entitlements Act. The guide follows a number of recommendations made by that very important Committee, which was comprised entirely of veterans' representatives. As early as 1980, the Federal Court of Australia and the Administrative Appeals Tribunal began to refer to the inappropriate aspects of the old guide. Recently, criticisms of the Administrative Appeals Tribunal have become much more pointed. In a case earlier this year the Administrative Appeals Tribunal said: It is apparently anticipated in the Veterans' Entitlements Bill that new medical guidelines will be prepared and will be prescribed with statutory effect. If they are already in existence they may prove to be more helpful to decision makers than the present guidelines, the anomalies of which have been pointed out from time to time. Any veteran who has made a claim for disability compensation will know that it is very difficult for the Repatriation Commissioner to explain how particular levels of general rate pension compensation were selected under the old system. In a climate of developing administrative law and public accountability this situation could not be allowed to continue. In short, what I am saying to the Senate is that any person with a reasonable working knowledge of the old system knows that it did not measure up to its responsibilities, its need for consistency and particularly its public accountability. The Repatriation Commission's aims in drafting the guide were to provide rules for assessment which meet the requirements of the Veterans' Entitlements Act and to encourage compensation assessments which are comprehensive because they take into account the effects of service on health and lifestyle. I agree with Senator Reid that there is a general acceptance of the lifestyle proposals. The guide encourages consistency of decisions at the level of the dis-ability pension and achieves assessments which in general approximate those which would have been made under the old system. In case anyone has the impression that the new system of assessment has been rushed, let me put that view to rest. Is is not well founded. I remind the Senate that the Repatriation Commission has been improving the assessment processes for some years. The current document reflects the benefit of over 10 years of research and experimentation by the Department and by various Ministers of State. During that time the American Medical Association's concept of the needs of a repatriation system in the Australian environment was adapted to meet Australian content. The Commission has had the benefit of a vast accumulation of knowledge and skills regarding disability compensation acquired by the medical determining staff over many years. A draft of the present guide was publicly available in October last year. There are very few substantial differences between last years draft and the document I tabled recently. Veterans's organisations were not able to provide informed or critical comment about the guide for very much the same reason why I believe it is futile for us in the Parliament to attempt to adjust the guide at this stage. That reason is simply that the guide reflects the best available advice to the Government. Until we have had the experience with it and learnt from it-we should bear in mind that the legislation was passed only in May and our experience with it is only in its infancy-nobody can conclude that the guide will not meet the objectives I have mentioned. The aims of the guide are very clear. We must now measure its performance against those aims. It is essential that we have approximately 12 months to be able to come to any adequate, proper and mature conclusion. I remind honourable senators that in the Veterans' Entitlements Act Parliament has not given the Repatriation Commission carte blanche for the preparation of the guide. Section 29 of the Act quite specifically puts a number of obligations on the Commission. These are that the guide must specify the criteria for assessing incapacity; specify methods for converting the extent of incapacity to a service value of a pension; be binding on the Commission when it makes a pension assessment in a particular case; and have regard to the medical opinion about the nature and effect of incapacity, including the possible effect of any injury or disease, and to the extent to which an incapacity can reasonably be capable of being reduced or removed. Implementation of the guide commenced progressively from 22 May 1986. From 1 November this year all assessment decisions will be made according to the guide. It will be some time yet before a sufficient number of claims has been processed under the guide to provide us with any conclusive results. However, the signs at this stage are that the objectives of the guide are being met. I am advised that, for example, between 22 May and 26 September, 1,645 cases were assessed under the guide. Those 1,645 cases represent about 4 per cent of the number of cases determined under the old system in the 12 months to 30 June 1986. The number of cases determined under the guide is still too small for any meaningful conclusion to be drawn or comparisons made with the results under the old system. However, the results in the small number of cases determined to date show that the average pension increase under the new system is very close to the average increase under the old system. The average increase for cases assessed under the guide so far is 19 per cent and the average increase for cases assessed under the old system during the same period-22 May to September 1986-is 21 per cent. I believe some people in the veteran community, as well as perhaps some members of the Senate, may not realise the effects that disallowance of the guide would have. It would have devastatingly important effects for veterans. After 1 November 1986 the Veterans' Entitlements Act will operate so that all decisions on disability compensation must be made under a guide that has been prepared in accordance with section 29 of that Act. That is the guide that Senator Macklin now wishes to disallow. In the event of its being disallowed, the Repatriation Commission will have no legal authority to make any decision on the general rates of compensation for disability after 1 November 1986. That is a very serious situation. What will the supporters of the disallowance proposal say to veterans who will be unable to have their rates of pension set? What of the veterans themselves who will be denied increases in pensions because of the impact of disallowance? No one expects the guide to be perfect; there is no perfect way to compensate for incapacity with cash. We are dealing with hundreds of thousands of veterans who have had various experiences and have various disability problems, and it is very difficult to have a system operating that deals with people equitably and in a way in which no person is disadvantaged. We believe that this guide is as good a document as can be produced at this time. It has all the benefits of the accumulated experience of the Department of Veterans' Affairs. I do not think Senator Macklin has produced any evidence to show that our early experiences in these matters have revealed any defects. The only way for us to discover whether the guide has any defects or deficiencies whatsoever, and if so where they are, is for it to be used and to be monitored carefully. I repeat the commitment that I made in that respect: Early next year a monitoring committee will be set up which will be representative of the veteran community and, I hope, will be in a position to give us the sort of advice that will confirm our view. I hope that the guide and the Act will operate in the interests of the veteran community. Careful evaluation of the guide in operation is essential. Senator Macklin is aware of this. I said to him, in response to a question in April this year, that I would establish a committee to report on the first 12 months operation of the veterans' entitlement legislation and, in particular, on any aspects of that operation which are of concern to the ex-service community. I am happy to repeat that undertaking: I will set up such a committee; membership will include representatives from the ex-service community; that committee will report to the Parliament in the Budget sitting of 1987; and the Government will respond to that report as soon as possible thereafter. Those were the commitments that I made when we were discussing various aspects of the legislation in April and May this year, and those commitments remain unequivocal. There will be an evaluation and the ex-service community will be involved. There will be a report to Parliament. The Veterans' Entitlements Bill, as amended, was subsequently agreed to by the Senate and it is now law. I understood at that time that Senator Macklin was happy with my response. I do not think anything has changed. There is no evidence before me, the veteran community or the Senate that suggests there has been any substantial change to that situation. The draft guide was available and has been published. Only superficial changes have been made. The existing entitlements for veterans receiving disability pensions are protected by the veterans' entitlements legislation. Where the pension rate, assessed under the guide, is less than the rate being paid to the veterans under the previous system, the veterans' existing rate will nevertheless continue in payment. A pension can be reduced under the new guide only if there has been an improvement in a veteran's medical condition or if the previous pension assessment was based on false or misleading information. That is part of our responsibility to provide public accountability. Therefore I believe the move to disallow the guide has no constructive value; indeed, disallowance would have an adverse, disruptive and greatly detrimental effect on veterans' claims and pension assessments. I doubt that many veterans, least of all those in the leadership of the veterans organisations, support the proposal. I urge support for rejection of disallowance. Senator MACKLIN(Queensland)(10.51) —in reply-I am sorry that the disallowance motion I have moved will not be carried. I listened to the statements of the Minister for Veterans' Affairs (Senator Gietzelt). Basically, all he was saying was that disallowance would cause a great deal of difficulty-the Yes Minister type of response. Yes, we know there would be administrative difficulties; nobody is denying that. What I am saying is that the guide to the assessments of rates of veterans' pensions is not written in conformity with the Veterans' Entitlements Act, and I do not believe it is necessary to use the types of premises that the Minister used. For example, when talking about consistency he said that veterans in different States with exactly the same disability were receiving different pensions. I reject the notion of exactly the same disability because the whole thrust of my argument is that disability has to be seen in relation to the particular veteran. The Minister has already pointed out the methods we have used previously on which to base the guide. I believe a variety of methods and a variety of guides could possibly be in conformity with the Act. The last matter I wish to raise on this guide is very important and is a result of a question I asked the Minister on 22 August as to whether the Minister had indeed approved of the guide, as is required by section 29, sub-sections (3) and (7), of the Veterans' Entitlements Act. This was the Minister's response: Although the Veterans' Entitlements Act 1986 stipulates the guide must be approved by the Minister, there is no requirement in that legislation that an indication of such approval should appear in the printed document. Again, this is an answer which would be worthy of Sir Humphrey Appleby. As I understand it, the answer says in effect that a Minister may secretly comply with his statutory obligations and it is not necessary for it to be known that he has complied with them. When the guide was tabled surely the Senate was entitled to know whether it had been approved by the Minister in accordance with the Act. Persons in receipt of the guide are entitled to know whether it is an approved document and not simply a draft, as we have seen previously, or a proposal issued by somebody else. It seems to me that if the Minister's answer is to be taken seriously it would mean that regulations, ordinances and other instruments having the force of law could be published without any indication on them that they are made in accordance with the relevant statute. I ask honourable senators to think what might occur as a result. Fairly obviously, this would cause enormous confusion in the courts. Indeed, I believe this guide may cause such confusion. Surely some proof other than the document itself would be required to show that the document was an instrument made in accordance with the Act; otherwise the relevant provisions of the Evidence Act would be defeated. I think the way out of the situation obviously would have been for the Department of Veterans' Affairs to admit that it had actually made a mistake and forgot to include the Minister's instrument of approval, instead of saying, as it has, that it is technically legal even though obviously improper. It is a worry that if this situation is allowed to continue in this area or other areas an enormous amount of confusion will result. I hope that in future any alterations made to the guide, or a resubmittance of the guide, with regard to the Veterans' Entitlements Act will carry an indication that the Minister, in conformity with section 29 (3) and (7) of the Act, has actually approved of the guide. Question put: That the motion (Senator Macklin's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 57 —— Majority . . . . . . . . . 49 —— 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. McClelland, DouglasArcher, B. R. MacGibbon, D. J. Aulich, T. McIntosh, G. D. Baume, Michael McKiernan, J. P. Baume, Peter 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. Chaney, F. M. 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. ACooney, B. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Foreman, D. J. Teague, B. C. Georges, G. Townley, M. Gietzelt, A. T. Vanstone, A. E. Giles, P. J. Walsh, P. A. Grimes, D. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Jones, G. N. Zakharov, A. O. Kilgariff, B. F. Question so resolved in the negative Debate resumed from 8 October, on motion by Senator Button: That the Bills be now read a second time. upon which Senator Collard had moved by way of amendment in respect of the Australian Institute of Sport Bill 1986: Leave out all words after `That', insert: `the Senate is of the opinion that this Bill should not be proceeded with as it does nothing more than add to the burgeoning number of statutory authorities already in existence when the functions of the proposed Institute of Sport could well be performed by an existing body'. Senator PUPLICK(New South Wales)(11.02) —The purpose of this legislation is to turn the Australian Institute of Sport from a company limited by guarantee into yet another statutory body. This is part of the continuing attempt by this Government to move into the wholesale bureaucratisation of sport. As the shadow Minister, Mr White, has said in the other place, this is an attempt by the Minister for Sport, Recreation and Tourism (Mr John Brown) to continue the creation of unnecessary statutory bodies throughout his portfolio. In a few minutes I will come to some analysis of exactly what is happening in the Sport, Recreation and Tourism portfolio as far as that is concerned. In the second reading debate in the other place on 22 May, Mr White said: It has also become clear that most people associated with sport in Australia, within the Institute, the Australian Sports Commission and the sporting world generally, do not see the necessity for yet another statutory corporation within the world of sport. That is a point with which I agree. In 1983 one advisory board-the Sports Advisory Council-assisted the Commonwealth Government by making recommendations about the allocation of support for sport. In 1983 there was one board which had nine members; in 1986 there is a 20-member Australian Sports Commission. All the members are paid annual fees ranging from $5,000 to $17,000 each. There is a board of management at the Australian Institute of Sport and there are numerous other bodies in this area, including the board of the Sports Aid Foundation. While Commonwealth funding for sport has approximately doubled from 1983-84 to 1986-87, senior staff costs in the administration of Commonwealth sports programs have virtually quadrupled. That is something to which a degree of attention needs to be directed by this Government. As I said previously, this is part of an ongoing increase in these bodies but, more to the point, a considerable degree of confusion is growing as to the location of responsibilities within the Department of Sport, Recreation and Tourism, the Australian Institute of Sport and the Sports Commission. In dealing with sport and the support of sport at the moment one has to deal with the Department of Sport, Recreation and Tourism, the Australian Institute of Sport and the Sports Commission. Senator Sheil —And the Sports Aid Foundation. Senator PUPLICK —As Senator Sheil said, now also there is the Sports Aid Foundation. I seek leave to incorporate in Hansard tables taken from the estimates submitted by the Department of Sport, Recreation and Tourism on the staff profiles of the Department, the Institute and the Sports Commission. Leave granted. The tables read as follows- DEPARTMENT OF SPORT, RECREATION AND TOURISM STAFF PROFILE 1986-87 Salary band Number of continuing SES positions Estimated A.S.L. Estimated average salary Estimated salaries/ HDA expenditure $ ($'000) Secretary and equivalent... 1.00 1.00 81,262 81 SES-ep Level 6... . . . . . . . . Level 5... . . . . . . . . Level 4... . . . . . . . . Level 3... 3.00 3.00 58,400 175 Level 2... 1.00 1.00 53,667 54 Level 1... 8.00 8.00 52,750 422 SES Supplementary... 1.40 48,867 68 SES total... 12.00 13.40 54,000 800 Band 2... . . 58.10 38,055 2,211 Band 1... . . 270.30 24,691 6,674 Paid inoperatives... . . 9.10 15,934 145 Compo current employee... . . 5.00 15,800 79 Sub-total... 12.00 355.90 27,795 9,909 Salaries expenditure-ep SES expense of office... 15 Overtime... 263 Shift/penalty payments... 107 Lump sum payments... 227 Leave loadings... 193 Superannuation... . . Other salaries related expenditure... 927 Sub-total... 1,732 Less salaries & related expenditure chargeable to other funding sources... 81 TOTAL SALARIES EXPENDITURE CHARGEABLE TO THE FUNDING SOURCE... 11,560 AUSTRALIAN INSTITUTE OF SPORT STAFF PROFILE 1986-87 Salary band Number of continuing SES positions Estimated A.S.L. Estimated average salary Estimated salaries/ HDA expenditure $ ($'000) Secretary and equivalent... . . . . . . . . SES- Level 6... . . . . . . . . Level 5... . . . . . . . . Level 4... 1.00 1.00 63,164 63 Level 3... . . . . . . . . Level 2... 1.00 1.00 53,632 54 Level 1... 1.00 1.00 49,378 49 SES supplementary... . . . . . . . . SES total... 3.00 3.00 55,333 166 Band 2... . . 38.00 40,564 1,541 Band 1... . . 121.00 22,379 2,708 Paid inoperatives... . . 2.00 15,000 30 Compo current employee... . . . . . . . . Sub-total... 3.00 164.00 27,048 4,445 Salaries expenditure- SES expense of office... 2 Overtime... 75 Shift/penalty payments... 130 Lump sum payments... . . Leave loadings... 49 Superannuation... 735 Other salaries-related expenditure... 111 Sub-total... 1,102 Less salaries and related expenditure chargeable to other funding sources... . . TOTAL SALARIES EXPENDITURE CHARGEABLE TO THE FUNDING SOURCE... 5,547 AUSTRALIAN SPORTS COMMISSION STAFF PROFILE 1986-87 Salary band Number of continuing SES positions Estimated A.S.L. Estimated average salary Estimated salaries/ HDA expenditure $ ($'000) Secretary and equivalent... . . . . . . . . SES- Level 6... . . . . . . . . Level 5... . . . . . . . . Level 4... . . . . . . . . Level 3... 1.00 1.00 58,500 58 Level 2... . . . . . . . . Level 1... 1.00 1.00 49,700 50 SES supplementary... . . . . . . . . SES total... 2.00 2.00 54,100 108 Band 2... . .8.00 38,760 310 Band 1... . .12.00 25,660 308 Radio Inoperatives... . . . . . . . . Compo Current Employee... . . . . . . . . Sub-total... 12.00 22.00 33,000 726 Salaries Expenditure- SES expense of office... 2 Overtime... 3 Shift/penalty payments Lump sum payments... 3 Leave loadings... 9 Superannuation... 11 Other salaries related expenditure... 6 Sub-total ... 34 Less salaries and related expenditure chargeable to other funding sources ... TOTAL SALARIES EXPENDITURE CHARGEABLE TO THE FUNDING SOURCE... 760 Senator PUPLICK —Those tables indicate, for instance, that in the Department there is an average staffing level of 355.9; in the Australian Institute of Sport the ASL is 164 and in the Sports Commission it is 22. It is almost impossible to work out how the lines of demarcation and responsibilities interrelate in these three arms of the Government as far as this portfolio is concerned. It is very difficult for people to know which part of the bureaucracy they have to deal with. As I said, there is the question of increasing patronage within Mr Brown's Department. Just recently I had the opportunity to congratulate Mr Brown on having made the one hundredth appointment to positions of patronage within his portfolio. Within his portfolio he has the Australian Institute of Sport, the National Committee on Sport and Recreation for the Disabled, the Australian Tourist Commission, the Tourist Advisory Council, the Australian Sports Commission, the National Australia Day Council, the Working Group on Women in Sport and the Sports Aid Foundation. If one adds all of those up, one will see that he has just completed making the one hundredth appointment to positions of patronage within his Department, and there appears to be absolutely no end to the new bodies that will be created, to the further proliferation of all of these statutory bodies, corporations, institutes, commissions and all the rest of it which are being used by Mr Brown largely to politicise the approach to sport and to sports administration in Australia and by and large to try to make himself a hero to all of these organisations by padding out unnecessarily their membership. For instance, why does the Australian Sports Commission need some 20 people on it? Frankly, when one looks at some of the members of that Commission, worthy individuals though they may be and worthy sportsmen and sportswomen though they may be on the basis of their past records, there is absolutely nothing to indicate that they contribute anything to the way in which the Commission operates or to the functions which the Commission is supposed to undertake. Nevertheless, as far as the Institute is concerned, there are a large number of unanswered questions, some of which I hope the Minister for Education (Senator Ryan) will address in her reply. The first question deals with the continuing problem of the financial management of the Australian Institute of Sport and the unsatisfactory nature of the responses given by the Minister for Sport, Recreation and Tourism to the criticisms contained in the Price Waterhouse report. This matter, of course, goes back to last year. Mr Brown, when tackled by the shadow Minister in the other place on a number of occasions about the financial mismanagement of the Australian Institute of Sport, said: I am not aware of any financial shortcomings at the Australian Institute of Sport. I have not been made aware of any in the past. Mr Brown went on to describe the affairs of the Australian Institute of Sport by saying that everything will be found to be `in apple pie order'. The apple pie certainly got scrambled up fairly quickly when the Price Waterhouse report came down because that report indicated that there were major problems with the financial administration of the Institute. Mr Brown was forced to recant some of his remarks. The Sydney Morning Herald, in its editorial on 30 November 1985 under the heading `Mr Brown pinned for a fall', indicated the extent to which Mr Brown had simply failed to comprehend the financial problems which were involved as far as the Institute was concerned. To date we have not had satisfactory explanations; we have not had satisfactory responses on the criticisms of the financial management, practices and controls of the Australian Institute of Sport. The second point I raise is one which involves continuing police investigation into matters concerning the Institute. It seems to me absolutely extraordinary to read details of how the police, for various reasons, have had to raid not only the Institute of Sport looking for particular papers but also a number of private homes looking for papers which deal with contracts over the Institute's acquisition of boats. This matter was examined in some superficial detail by Senate Estimates Committee D in its hearings on 29 September. I understand that a report by the police will shortly be in the hands, presumably, of the Director of Public Prosecutions who in due course, one supposes, will advise either the Attorney-General's Department or the Minister directly. Hopefully-I think the indications are in this direction-nothing further will proceed from those police investigations. Nevertheless, it seems that before the Parliament goes ahead and establishes the Institute as an independent statutory authority it ought to be a little more convinced in its own mind of the Institute's capacity to manage its affairs. I do not know the last occasion on which the police had to raid a Commonwealth authority. I presume that the Australian Security Intelligence Organisation raid was the last such police raid, although I cannot recall exactly. It seems to me to be a quite extraordinary series of events. In the last couple of weeks we have had the resignation from the Institute of its controversial, to say the least, Executive Director, Dr John Cheffers. Dr Cheffers has indicated that the cause of his resignation was some disagreement with the Board. Fair enough; if the Executive Director and the Board cannot get on, somebody has to go. Nevertheless, Dr Cheffers has indicated that he fears the legislation changing the Institute from a corporation to a statutory authority will mean `a lot more red tape'. I agree with that. Once again there will be a lot more red tape. Once again this is an attempt to establish in Canberra a bureaucratic presence in the area of sport. I can certainly assure the Senate that the policies which the Opposition is developing on sport are such that when it is elected to government at the next election the Australian Institute of Sport will not find itself in the sort of privileged statutory body position which it currently seeks to enjoy. When we are in government that Institute will be substantially changed. It will be substantially brought back under the control which ought to be exercised in terms of its relationship with both the Minister and the Australian Sports Commission. I can assure honourable senators that the easy street or gravy train approach adopted by some of the bureaucrats of the Australian Institute of Sport will be extremely short-lived. Dr Cheffers's resignation, presumably, has some financial implications for the Commonwealth. There is a contract, after all. In the Estimates Committee hearing on 29 September I sought from the Institute some details of the financial arrangements which may have been involved in Dr Cheffers's contract being bought out, wound up or whatever happened to it. I have been assured that the matter will be taken up with the Chairman. Let me say-I propose to have this matter reported equally when Senate Estimates Committee D reports to the Senate-that when Senate committees ask what the financial implications are for institutes such as this, it is simply unacceptable to be told: `We will take it up with the Chairman'. The facts are there; the organisations know what they are. When organisations are not prepared to give the facts, when Senate Estimates committees are told `I will take it up with the Chairman' or `I will ask Sir Humphrey'-or Bernard or whoever it happens to be at the time-`whether he minds if I tell you what you are entitled to know, seeing that you will have to pay the money', that is not a satisfactory response. The Chairman and representatives of the Institute had better have pretty prompt answers for the Senate Estimates Committee if they expect to get appropriations dealt with in an expeditious fashion when they come before the Senate. I had wanted to take up a number of matters about particular sports but I do not intend to take the time of the Senate today to do so other than to draw attention to one matter which gives me some concern and which was a matter of some discussion in the Estimates Committee. I refer to the continuing non-decision about support for cycling in particular. Australian cyclists have been of outstanding quality in recent years. It has been one of the much-neglected sports in which Australians have excelled. There are a number of questions, including the comments made some time ago by Charlie Walsh, the national cycling coach, concerning promises made in September 1984 about adequate support for cycling which, to this date-two years down the track, if I may use that expression-have not yet been satisfactorily responded to as far as the Government is concerned. A number of matters arise about coaching. Letters from coaches, including those who are directly associated with the Institute, were sent to the former shadow Minister, Mr Blunt. One of the national coaches wrote that he was extremely concerned about the way in which the bureaucracy within the AIS had grown in proportion to the people who matter-that is the athletes and coaches-and about the ever increasing amount of money required to service administration to the detriment of coaching and competitive programs. Some significant answers have to be given about that matter. We do not believe that it has been handled in an entirely satisfactory fashion in terms of the relationship between the cost of administration and the money flowing through to the direct support of athletes or to the support of their coaches. The Institute, nevertheless, has been one of the great achievements of the Fraser Government. Mr Ellicott, in announcing on 25 January 1980 the formal opening of what he called at that stage the National Sports Training Institute, indicated that one of its purposes was to help in the development of elite sports men and women. I believe that the Institute has a wider role; that is, it is not simply a matter of elite sports assistance. The necessity to decentralise and to involve increasing numbers of Australians in access to sporting activities is important. Nevertheless, I believe that there is complete justification for concentration upon significant areas of elite achievement. I agree that, in exactly the same way as centres of excellence are important in terms of education and research, and in exactly the same way as the flagship companies in the arts are important and need fostering and special assistance, elite sports men and women ought to have some recognition. Nevertheless, I do find that there is a real problem in attempting permanently to tie the achievements or otherwise of the Institute to the fairly crude measure of what one might call the `gold medals index'-that is, to try to demonstrate that X number of gold medals were won in certain events. Let us compare, for instance, the Commonwealth Games medal tally in Brisbane in 1982 with that in Edinburgh in 1986. There was a difference of one gold medal between our medal tally in Brisbane and our tally in Edinburgh. In Brisbane, Australia finished second to England in the medal tally, but in Edinburgh it came third behind England and Canada. Those comments which occasionally are made in the Press are not particularly effective ways of attempting to measure results. It is a pity to see, for instance, in Time magazine that the report of the success of Australian sports comes under the heading `A tepid triumph'. I think that occurs because there is too much concentration on, as I say, this gold medal index approach. I am far more impressed by the fact that an analysis of determinants of Olympic performance undertaken by Graeme Caughley, a Commonwealth Scientific and Industrial Research Organisation officer, which was published in Search-that is the journal of the Australian and New Zealand Association for the Advancement of Science-in October-November 1984 indicated, and I quote the opening sentence of the summary: The comparison of the performance of the top 25 countries at the 1984 Olympics indicates that medal score is predicted closely by countries' gross domestic product. In fact, it is important to understand that support for sport is far wider than simply attempts to focus upon elite undertakings or to measure results by crude medal tally. There is always a great deal of myth as far as sport is concerned, one of the most significant being the myth of amateurism at the Olympic level. That is one of the great and enduring myths of our time. Indeed, a very excellent book was written by the American classical historian, David Young, which was published in Chicago in 1984, entitled the Olympic Myth of Greek Amateur Athletics. One of the things that we need to do, in looking at the question of sport, is to get away from some of the persistent myths about it. I raise a couple of matters which I think need to be addressed in the wider context of support for sport-that is, the role of big business in sport, the role of commercialism and sponsorship in sport, the question of private ownership of sporting teams, and, frankly, in certain areas, the involvement of what one might call people of less than maximum integrity in the operation of sporting teams and sporting organisations. Richard Cashman, the Senior Lecturer in History at the University of New South Wales, prepared an article for a recent edition of the `Current Affairs Bulletin', entitled `Sport, Big Business and the Spectator'. I think it is true that, in the light of Mr Packer and his cricket, and the fact that sporting events are now, by and large, tied to sponsors' names-there is the Fosters Cup, the Winfield Cup, the Rothmans Medal and all the rest-we need to be conscious of the changes taking place in sporting arrangements because of the increase in the money which is involved. For instance, who would have thought some years ago that a surfer of the status of Tom Carroll could earn an income of $250,000 in 1986? Of course, that amount does not include all of the bits and pieces that go with sponsorship. Who would have thought that Australian golfers of the calibre of Greg Norman would probably be able to pass the $1m mark in terms of prizemoney and earnings? The last figure I saw regarding Martina Navratilova's income from playing professional tennis was that it had already exceeded the $16m mark in the course of her career. I believe that people who are charged with the administration of sport, and governments and Ministers who are charged with the funding of sporting activities in Australia, must be very aware of the potentially corrupting influence of large sums of money. I will not go into the question of the private ownership of sporting teams. That seems to me to be something which, again, is a new development in Australia, although it is commonplace in the United States. From time to time I think it has not been handled in an entirely satisfactory fashion. The last point I make is simply to enter a plea in terms of one of the most disadvantaged groups of sports men and women in Australia-that is, the people who are involved in rifle shooting, and sporting shooting in particular, who are about to lose their rifle range in Sydney, the Anzac Rifle Range at Malabar, as a result of the Government's decision to sell the land. There will be an opportunity to deal with that matter when Estimates committee reports are considered. I do not intend to try to deal with it at this stage in terms of its relationship with the Australian Institute of Sport. Nevertheless, the Opposition has made its view on this matter quite clear. It voted against the legislation in the House of Representatives and indicated exactly what it thought ought to be the position of the Australian Institute of Sport. When the coalition parties are elected to government at the next general election, the mess that this Government has made, including the mess which the Australian Institute of Sport has become, will be sorted out once and for all. Senator RYAN(Australian Capital Territory-Minister for Education)(11.27) —A number of general points have been made during the debate on the Australian Institute of Sport Bill 1986 and the Australian Institute of Sport (Consequential Provisions) Bill 1986. I do not propose to respond at length because my colleague the Minister for Sport, Recreation and Tourism (Mr John Brown) has done so adequately in the House of Representatives. I point out, in response to Senator Puplick's concern that there is a growing bureaucracy in the area of Federal involvement in sport, that of course there is a dramatically increased involvement by our Government in sporting matters which necessitates some increase in the bureaucracy, although we consider it to be of a quite modest dimension. Sporting policies, recreation policies and services to the community have increased dramatically as a result of our Government's much greater support for these activities. The Department now has recreation and fitness responsibilities as well as sporting responsibilities. Increased numbers of sports are now pursued at the Australian Institute of Sport. There are decentralised programs and, of course, the Institute is now responsible for its own facilities, whereas previously the Department of Territories had responsibility for them. The Australian Sports Commission is a new initiative with new programs. I refer, for example, to Aussie Sports, the sports science research program and the Australian Sports Aid Foundation, which will increase private sector funding for sport-something which I thought even Senator Puplick would endorse. Senator Puplick drew attention to the average staffing level of the Department. The ASL of the Department is 355. I point out for the record that only 36 of that number deal with sport. So, in the view of the Government, this new move, designed to give independence to the Institute of Sport, will result in improved operations. There have been some difficulties in the past. I do not propose to reargue all of those. We believe that the legislation before the Senate will lead to an improvement in the administration of the Federal Government's very important involvement in sporting activities in the nation. I commend the Bill to the Senate. Question put: That the words proposed to be left out (Senator Collard's amendment) be left out. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 8 —— Alston, R. K. R. MacGibbon,D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Baume, Peter Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Reid, M. E. Carrick, Sir John Sheil, G. (Teller)Chaney, F. M. Short, J. R. Collard, S. J. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Withers, R. G. Aulich, T. McIntosh, G. D. Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Cook, P. F. S. Morris, J. Cooney, B. Powell, J. F. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. Foreman, D. J. Ryan, S. M. Georges, G. Sanders, N. K. Gietzelt, A. T. Sibraa, K. W. Giles, P. J. Siddons, J. R. Haines, J. Tate, M. C. Jones, G. N. (Teller) Vigor, D. B. McClelland, Douglas Walsh, P. A. Zakharov, A. O. Lewis, A. W. R. Bolkus, N. Jessop, D. S. Colston, M. A. Hill, R. Button, J. N. Knowles, S. C. Grimes, D. J. Bjelke-Petersen, F. I. Robertson, E. A. Question so resolved in the negative. Original question put: That the Bills be now read a second time. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 8 —— Aulich, T. McIntosh, G. D. Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Cook, P. F. S. Morris, J. Cooney, B. Powell, J. F. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. Foreman, D. J. Ryan, S. M. Georges, G. Sanders, N. K. Gietzelt, A. T. Sibraa, K. W. Giles, P. J. Siddons, J. R. Haines, J. Tate, M. C. Jones, G. N. (Teller) Vigor, D. B. McClelland, Douglas Walsh, P. A. Zakharov, A. O. Alston, R. K. R. MacGibbon, D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Baume, Peter Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Reid, M. E. Carrick, Sir John Sheil, G. (Teller)Chaney, F. M. Short, J. R. Collard, S. J. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Withers, R. G. Bolkus, N. Lewis, A. W. R. Colston, M. A. Jessop, D. S. Button, J. N. Hill, R. Grimes, D. J. Knowles, S. C. Robertson, E. A. Bjelke-Petersen, F. I. Original question so resolved in the affirmative. Bills read a second time. AUSTRALIAN INSTITUTE OF SPORT BILL 1986 Clause 1 agreed to. Clause 2 (Commencement). Senator RYAN(Australian Capital Territory-Minister for Education)(11.40) —I move: (1) Page 1, clause 2, line 8, leave out `1 July1986', insert `a day to be fixed by Proclamation'. This amendment moved on behalf of the Government alters the proclamation date. Amendment agreed to. Clause, as amended, agreed to. Clauses 3 to 5-by leave-taken together, and agreed to. Clause 6 (Functions of Institute). Senator VIGOR(South Australia)(11.41) —by leave-I move: Page 2, sub-clause 6 (1), paragraph (a), insert `recognition and' before `development'. Page 2, sub-clause 6 (1), sub-paragraph (a) (ii), after `coaches', insert `, umpires, referees or officials essential to the conduct of sport'. Both these amendments deal with the scope of the Australian Institute of Sport and they are very simple. The first deals with the fact that the Institute must be involved not only in the development of sportsmen and sportswomen within Australia but also in the process of recognising talent and the athletes it wants to recruit. We believe that that recognition must be carried out through some type of joint venture with the States or with the major national sporting bodies. It is important that the task of recognition and development of talent be included in the Bill. However, we do not see the Institute carrying this out without the aid and concurrence of a large number of other organisations. The second amendment recognises that sport cannot be carried out effectively by the participants without the skills of a number of other people, such as umpires, referees and other officials, who are essential to the conduct of sport. Excellence in these officials is extremely important if we are to make certain that Australian sportsmen and sportswomen are to perform at their best and if we are to host successfully international competitions in sport. This second amendment seeks to add umpires, referees or officials essential to the conduct of sport, as people who are concerned in the process and of whom the Institute must take note. I commend the amendments to the Committee. Senator COLLARD(Queensland-Leader of the National Party of Australia)(11.45) —The Opposition will not be supporting these two amendments, particularly the second one. The words `persons who excel' in clause 6 (1) (a) (i) cover all exigencies and we do not see any necessity for all these semantics. Amendments negatived. Senator VIGOR(South Australia)(11.46) —I point out that these amendments were agreed with the Government. The Australian Democrats said that if the amendments were not passed we would support at the third reading stage the Opposition's amendment to the motion for the second reading. I bring this to the notice of the Government. Clause agreed to. Clauses 7 to 10-by leave-taken together, and agreed to. Clause 11 (Directions to Board). Senator VIGOR(South Australia)(11.47) —I move: Page 4, clause 11, after sub-clause (2), add the following sub-clause: `(3) A direction given under sub-section (1) shall be laid before each House of the Parliament within 15 sitting days of that House after the giving of the direction.'. There does not seem to be much point in moving this amendment because the Democrats are going to reject this Bill at the third reading stage. We have made that point to the Government. Senator Walters —This Minister did the same thing to me, so you have my sympathy. Senator VIGOR —This is not a deal. We told the Government that we definitely would not pass the Bill unless our amendments were accepted. That is not a deal, it is a statement of fact. However, I move the amendment, as we want to be constructive in terms of organising better accountability for the Australian Institute of Sport. That accountability requires that any direction given by the Minister for Sport, Recreation and Tourism should be placed before this Parliament so that it may consider that direction and debate it if necessary. I commend this proposed sub-clause for inclusion in the legislation to make it possible for the Parliament to review effectively the operations of statutory bodies and for it to be involved in that process at the earliest possible stage. The requirement for the direction to be placed before Parliament was originally five sitting days. However, we found, in discussions with the Government, that it felt that would be difficult to comply with and hence we agreed to extend it to 15 sitting days. Under those circumstances the Government agreed to pass all amendments, and that is why we modified our amendment. I commend the amendment to the Senate. Senator RYAN(Australian Capital Territory-Minister for Education)(11.49) —Senator Vigor is right in respect of this amendment. The Government has agreed to accept it. Senator COLLARD(Queensland-Leader of the National Party of Australia)(11.50) —The Opposition agrees to the amendment. The Minister for Sport, Recreation and Tourism (Mr John Brown) said that the Australian Institute of Sport should be more responsible and answerable to the Parliament. This amendment provides for precisely that. It is a form of words used in other legislation dealing with statutory authorities. Amendment agreed to. Clause, as amended, agreed to. Clause 12 (Strategic plans). Senator VIGOR(South Australia)(11.50) —I move: (4) Pages 4 and 5, leave out clause 12, insert the following clause: `12. (1) The Board shall develop, prepare in written form, and revise in accordance with sub-section (2), a strategic plan setting out the manner in which it is proposed that the functions of the Institute will be performed. `(2) The strategic plan prepared in accordance with this section shall be expressed to relate to a period of 3 years commencing on a day occurring within 12 months after the commencement of this Act, and shall be revised at the expiration of each period of 12 months occurring after that day so as to be expressed to relate to the period of 3 years occurring after each revision. `(3) The functions of the Institute shall not be performed otherwise than in accordance with the strategic plan as in force from time to time. `(4) The strategic plan, and each revision of the plan, prepared in accordance with this section shall be laid before each House of the Parliament within 15 sitting days of that House after the plan, or the revision, as the case may be, is approved by the Minister.'. The aim of this amendment is to make certain that strategic three-year plans presented and set up by the Australian Institute of Sport are examined by the Parliament on an annual basis. The concept of this amendment is based on a rolling triennial budget. It has been discussed at length with the Department of Sport, Recreation and Tourism. We have changed a few items, including the time for reporting the plan to the Houses of Parliament. We originally said it should be reported within five sitting days. We have agreed with the Government that a reasonable time for the Government to present the plan to both Houses is 15 sitting days from the time of approval by the Minister. This changes the Government's plan, which basically is that there will be a three-year plan and a three-year review. We want an annual review of the process as part of the agreement that statutory bodies be reviewed much more closely. I commend that amendment to the Senate. Senator COLLARD(Queensland-Leader of the National Party of Australia)(11.52) —The Opposition will not be supporting the amendment moved by the Australian Democrats. We do not see the need for a continual rolling plan. I think clause 14 allows for revision if it is necessary. However, if the Democrats' amendment is not carried, I give notice that I have circulated an amendment in my name which basically picks up the fourth paragraph of the Democrats' amendment so that the Government may table the plan in Parliament within 15 sitting days of the Minister's approval. Senator RYAN(Australian Capital Territory-Minister for Education)(11.53) —The Government has no objection to the intent of the fourth part of Senator Vigor's amendment, but it regards the version of it moved in Senator Collard's name as being preferable. We do not regard the first three parts of Senator Vigor's amendment as necessary because what he is attempting to achieve is already achieved in clauses 12, 13 and 14. We will not accept Senator Vigor's amendment, but we will accept the version of it pertaining to the fourth part which has been foreshadowed by Senator Collard. Question put: That the words proposed to be left out (Senator Vigor's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 48 —— Haines, J. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Powell, J. F. 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. 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. Chaney, F. M. Puplick, C. J. G. Childs, B. K. Ray, RobertCoates, J. Reid, M. E. Coleman, R. N. Reynolds, M. Collard, S. J. Richardson, G. F. Cook, P. F. S. Robertson, E. A. Cooney, B. Ryan, S. M. 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. Teague, B. C. Georges, G. Townley, M. Gietzelt, A. T. Vanstone, A. E. 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 COLLARD(Queensland-Leader of the National Party of Australia)(12.00) —I move: Page 5, clause 12, add the following sub-clause: `(4) Each strategic plan prepared in accordance with this section shall be laid before each House of the Parliament within 15 sitting days of that House after approval by the Minister of the plan.'. I have said all that has to be said on this matter. Amendment agreed to. Clause, as amended, agreed to. Clause 13 (Approval of strategic plans). The CHAIRMAN —Senator Vigor, do you wish to move your amendment No. 5? Senator Vigor —No, as it was consequential upon amendment No. 4. Clause agreed to. Clause 14 agreed to. Clause 15 (Membership of Board). Senator VIGOR(South Australia)(12.03) —I move: (6) Page 6, clause 15, after sub-clause (6), insert the following sub-clause: `(6a) Appointments to the Board shall be such that the members of the Board consist, as far as is practicable, of equal numbers of men and women.'. Basically this amendment is an affirmative action amendment. It represents part of the Australian Democrats' general policy in this area and we believe that it should be incorporated into the legislation. I commend the amendment to honourable senators. Senator PUPLICK(New South Wales)(12.04) —Let us pause for a moment on sub-clause (2), in addition to which this amendment is proposed. It states: The Chairperson may be referred to as the Chairman or the Chairwoman, and the Deputy Chairperson may be referred to as the Deputy Chairman or the Deputy Chairwoman, as the case requires. We are to have in addition to this extraordinarily stupid sub-clause the amendment which has just been moved. This amendment concerns the composition of the Board. Sub-clause (1) provides for the Board to consist of a chairperson, a deputy chairperson, the director and not fewer than seven nor more than eleven other members. We then have the extraordinary sub-clause (2), which provides that a chairperson is a human being who may be male or female. I know that on the day after the presentation of the report on human embryo experimentation in Australia all sorts of possibilities may have been opened up and that a chairperson at some stage in the future may be neither a chairman nor a chairwoman, `as the case requires'. Nevertheless, we have put this extraordinary clause into the legislation-one of several like clauses which are dribbling their way through Commonwealth statutes at the moment-providing that the chairperson may be referred to as the chairman or the chairwoman and the deputy chairperson as the deputy chairman or deputy chairwoman, as the case requires. The words `as the case requires' may well mean that on one day the chairperson will be referred to as the chairman and that if he appears in drag the second day he will be referred to as the chairwoman, that being `as the case requires'. It may well be that the chairperson or deputy chairperson is of a sufficient case himself that he does not know whether he wants to be referred to as a chairman or a chairwoman, in which case, presumably, he could simply be referred to as chairperson or, as is becoming extraordinarily fashionable these days, the chair. Senator Dame Margaret Guilfoyle —Chaircase. Senator PUPLICK —Or chaircase. I suppose we ought to put that into this legislation, followed by the words `as the person requires'. This amendment draws attention to the nonsense of sub-clause (2) and of the way in which this Government is going about putting its so-called affirmative action into legislation. The sub-clause which the Democrats seek to add reads: Appointments to the Board shall be such that the members of the Board consist, as far as it practicable, of equal numbers of men and women. Presumably, that means that, given the fact that the Board may consist of between seven and 14 persons, when the numbers are even the ration of men to women must also be equal. Let us consider what the High Court of Australia, for instance, has said about electoral determinations. The words `as far as is practicable' mean that when one can get a result which is a whole number one is required to go to that whole number. So if the Board consists of 10 members, there must be five men and five women, because that represents, as far as is practicable, equal numbers of men and women. When the Board consists of 10, 12 or 14 members there must be exact equality. When it consists of 11 or 13 members, presumably in the absence of a fraction, unless one of the members is prepared to be both chairman and chairwomen as the case requires-- Senator Withers —Five men, five women and one Democrat. Senator PUPLICK —Indeed. That would certainly solve the problem as far as this clause is concerned. Nevertheless, the clause departs absolutely from the principle of appointment on the basis of merit. The Opposition will not be supporting the provisions of proposed new sub-clause (6a), particularly when one bears in mind that the case may well arise where all 14 members ought to be women, in which case the provision will be a monstrous piece of discrimination against women which should not be tolerated under any circumstances. Nevertheless, to depart from the principle of merit, as the Democrat amendment does, is unacceptable. The phrase `as far as is practicable' means a strict ratio. That phrase has been interpreted judicially as meaning that where it is possible for the numbers to be five-all, six-all or seven-all, that must be adhered to and there must not be a 7:5 or 6:5 situation or whatever the ratio may happen to be. As far as the membership of the Board is concerned, the extraordinarily ridiculous sub-clause (2), which allows one to refer to chairpersons as chairmen or chairwomen as the case requires, is an indication of how absolutely stupid this Government has become on the whole question of putting affirmative action into legislation in a way which is totally unnecessary. Senator WALTERS(Tasmania)(12.10) —I am just wondering whether the Minister can answer a simple question: How much is all this nonsense costing us in all the legislation in which these alterations are to be made? Senator RYAN(Australian Capital Territory-Minister for Education)(10.10) —I cannot answer a question that is phrased in that way. If Senator Walters would like to rephrase her question properly I will have a go at answering it. Senator Walters —I will rephrase it. Will the Minister tell me how much it is costing in Public Service time to alter the legislation by renaming chairpersons, et cetera? Senator Puplick —Desex the legislation. Senator Walters —It is commonly called `desexing legislation'. Senator RYAN —I do not think the question is within the scope of this legislation. Senator Walters —As I understand it, alterations have been made in this legislation and, therefore, it is within the scope of this legislation. Senator RYAN —I do not really understand the question that Senator Walters is asking. If she is asking a question in relation to the preparation of this Bill, perhaps she could try to ask it in a meaningful way. Senator Walters —I do not believe that the Minister is as dumb as that. I think she is just being difficult. I do not expect her to tell me off the top of her head how much it is costing to alter all the legislation that the Government is- Senator Coleman —On a point of order, Mr Chairman: I suggest that Senator Walters might care to withdraw the phrase that she used regarding the Minister. I do not believe that that is parliamentary, and it should not be allowed. Senator Walters —If I am made to withdraw it, it will mean the opposite. Don't be silly. The CHAIRMAN —I take it that Senator Coleman is referring to the words `not as dumb as that'. Senator Coleman —Yes. Senator Walters —Mr Chairman, I said that I do not think she is as dumb as that. If I withdraw that it will mean that maybe she is. I do not see how I can withdraw it. I said that I do not think she is as dumb as that. The CHAIRMAN —Order! I think the purpose of the remark is clear. Will you withdraw the implication that she might be dumb? Senator Walters —I just said that I did not think she was. How else do I withdraw it? As I have said, I do not think she is. The CHAIRMAN —Order! I do not want to bandy over semantics with you, Senator. Just withdraw it and get it over with. Senator Walters —I do not either, Mr Chairman, and that is why I said that I do not believe the Minister is dumb. I withdraw my statement that I do not think the Minister is as dumb as that. I have asked the Minister whether she would, please, find out for me the cost of altering legislation to desex the terminology in all the Bills that are coming before us. Senator RYAN —Senator Walters's question is really more appropriate for Estimates committees. She will have an opportunity to ask that question when the estimates of the Parliamentary Counsel come before the Senate. Senator Walters —I thank the Minister. I would be most obliged if the Minister would ensure that the Department gets that message. Motion (by Senator Vigor) put: That progress be reported. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 8 —— Aulich, T. McKiernan, J. P. Black, J. R. Macklin, M. J. Childs, B. K. Maguire, G. R. Coates, J Mason, C. V. J. Coleman, R. N. Morris, J. Cook, P. F. S. Powell, J. F. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Robertson, E. A. Foreman, D. J. Ryan, S. M. Georges, G. Sanders, N. K. Gietzelt, A. T. Sibraa, K. W. Giles, P. J. Siddons, J. R. Grimes, D. J. Tate, M. C. Haines, J. Vigor, D. B. Jones, G. N. Zakharov, A. O. McIntosh, G. D. (Teller) Alston. R. K. R. Messner, A. J. Archer, B. R. Newman, J. M. Baume, Michael Parer, W. R. Baume, Peter Puplick, C. J. G. Boswell, R. L. D. Reid, M. E. Brownhill, D. G. C. Sheil, G. Carrick, Sir John Short, J. R. Chaney, F. M. Teague, B. C. Collard, S. J. Townley, M. Durack, P. D. Vanstone, A. E. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Kilgariff, B. F. (Teller) Withers, R. G. MacGibbon, D. J. Bolkus, N. Lewis, A. W. R. Colston, M. A. Hill, R. Button, J. N. Jessop, D. S. McClelland, Douglas Knowles, S. C. Question so resolved in the affirmative. Progress reported. Motion (by Senator Ryan) proposed: That the Committee have leave to sit at a later hour this day. Senator COLLARD(Queensland-Leader of the National Party of Australia)(12.20) —I wish to speak briefly to the motion moved by the Minister for Education (Senator Ryan). This is a most unusual situation. A relatively small Bill which we opposed at the second reading stage is now before the chamber. The Australian Democrats, under the guidance of their unguided missile with the fuse well lit, are wandering around here with some amendments which are based on semantics and which do not amount to much. Suddenly, because some proposed deal that Senator Vigor had not done did not come to fruition, he made the very bald statement that he and the Australian Democrats would vote against the Australian Institute of Sport Bill 1986 at the third reading stage. The other Democrats have come into the chamber and had their little conclave. They are not sure in which direction their unguided missile is taking them. So that they can have a chance to caucus or to have their conclave or whatever the Australian Democrats have, they now want a little more time. It is a most unusual proceeding. It is one of the many occasions when this Senate is held up because of the Democrats not knowing in which direction they are going. I have no wish to delay this legislation. I would like it to go the way of all bad legislation. We would be prepared to vote against its third reading if that would get rid of it. Our case has been put adequately by the many speakers in the debate. This is another case of the Democrats not knowing where they are going or what they are doing. They do not know who will keep whom honest in this chamber. We are stuck with them; they are here. They do not know what they are doing. Until they find out what they are going to do we have to accept the motion moved by the Minister. Senator PUPLICK(New South Wales)(12.22) —In the sequence of events which Senator Collard outlined as the way in which we have been brought to this situation he managed to miss out a couple of the smaller but more interesting reflections on the way in which the Australian Democrats handle legislation in this place. Honourable senators will recall that when Senator Vigor moved his first series of amendments the Minister for Education (Senator Ryan) indicated that they would not be supported, whereupon the matter was put to the chamber and it was decided on the voices. There was one lone voice which said yes. What happened? The Chairman asked whether there would be a call for a division. Senator Vigor looked around him at the yards of empty red leather to try to find a second poor benighted Australian Democrat who would support him in the call for a division. There was none. So we had an exercise in thumping the desk by Senator Vigor, whereupon he rushed off to the telephone. The next thing we knew Senator Macklin came rushing in here all of a twitter, trying to consult. Senator Macklin got on the phone and Senator Haines came rushing in all in a twitter. Senator Vigor said that, having been betrayed, the Democrats proposed to vote against the third reading of the Australian Institute of Sport Bill. There was the usual sort of telephone box conversation of the Australian Democrats working out their immediate response to this significant piece of Commonwealth legislation. Senator Vigor, the butcher of Australian Capital Territory self-government, was determined that this matter be taken along, that he ought to reflect in the Senate the enormous degree of support he has for his position as No. 3 on the Australian Democrats ticket in South Australia and try to establish why he should move to the Australian Capital Territory to be re-elected to the Senate. In the meantime, negotiations started with the Minister for Education. She was in a state of total panic at that stage about the potential loss of this legislation at the third reading stage. After all, it is not her legislation; she does not know very much about it and does not give much of a continental about the whole thing anyway. Suddenly there was a great furore that a piece of legislation entrusted to her delicate care may well be sliding away at the third reading stage. So there was this enormous `What can we do, David?' type of situation. Despite all the huffing and puffing of the Democrats that they were going to vote against the third reading to keep the Government to its deal, what did we find? Once again we proved the proposition that the Australian Democrats could not be bought on a piece of legislation; they can only be rented by the hour. A shabby deal was done between the Minister and Senator Vigor to get some handle on the thing. The proposal was to report progress and seek leave to sit again. In the meantime, what will happen is that this terrible misunderstanding will be sorted out, the Government will come back and say that it did not understand and that perhaps the words really do not matter that much, and the Government will give way to the Democrats. The Democrats will wave their arms and say that they have substantially amended this legislation and kept the so and so's honest. Mr Acting Deputy President, I note that the Clerk has already been referring to you. I shall be more discreet in my use of parliamentary language in these matters, so I will not use the appropriate Democrats phrase. It is important to understand exactly how we have been brought to this situation. One day last week I think Senator Vigor set a new record in that 18 per cent of the total Hansard was attributable to him. If I continue in this way I will undoubtedly have the opportunity to emulate him. Nevertheless, the point needs to be made in regard to this legislation and the way in which the Democrats are prepared at any stage to enter into any sort of deal, to abandon any sort of principle, to make any sort of threat and to withdraw it the moment that their bluff is called, to go to water the moment the Government raises the pressure on them. We have seen once again that, far from being a party which contributes anything to this place, to the organisation of this place or to the advancement of legislation in this place, the Australian Democrats certainly cannot be bought but as sure as eggs they can be rented by the hour. Senator VIGOR(South Australia)(12.28) —Some points need to be answered in what Senator Puplick has said because they are totally off the point. What the Australian Democrats have been doing is actually trying to make certain that the legislation that goes through this Parliament is good legislation. The Australian Democrats have discussed the Australian Institute of Sport Bill in our Party room. We had various options open to us because we do not have the numbers in this place to make amendments to legislation that we feel are particularly important in standing up for our principles or to defeat bad legislation. We believe that the legislation is passable with the amendments we put. That is what I said at the second reading stage. Senator Puplick implied that the fact that we have asked for the Committee to report progress and for the debate to be adjourned on this matter in some way shows a weakness. I believe it is a strength of the Democrats that we are prepared to talk to people-even to Senator Puplick-in private to try to get better legislation for this country. That is actually what we are currently doing, rather than shooting from the hip, as Senator Puplick would have us do, and rejecting legislation through some type of pique. I support the adjournment of this legislation. Senator Peter Baume —That is not the motion. The motion is for resumption. Senator VIGOR —I support the motion for resumption of the debate later. Senator MacGIBBON(Queensland)(12.30) —If we agree to this motion, what undertaking can we have from the Australian Democrats that whatever deal, sordid or otherwise, they do with the Australian Labor Party, they will stick to this time? The ACTING DEPUTY PRESIDENT(Senator Jones) —Quite clearly I cannot give you any undertaking. You will have to talk to the Australian Democrats. Senator WALTERS(Tasmania)(12.30) —I have very great sympathy for Senator Vigor because the Minister for Education (Senator Ryan) in the past has done exactly the same thing to me. If she now lets the Australian Democrats down, as she did me at the last minute on a similar occasion when she had agreed unequivocally to an amendment for which I had sought her support, all I can say to Senator Vigor is that he should take the action that is permitted in this place and vote with us on the third reading. Question resolved in the affirmative. Motion (by Senator Ryan) agreed to: That, unless otherwise ordered, till 2 p.m. this day, matters of public interest may be discussed by senators, provided that no senator shall speak for more than 15 minutes. Senator MACKLIN(Queensland)(12.31) —We have gone rather suddenly into the matters of public interest debate. Senator Haines was to have spoken first on the matter I shall raise but I will make the comments that I wish to make and Senator Haines can follow me. Honourable senators will realise, when I make my remarks, why I thought it more appropriate that Senator Haines should go first. The day prior to the bringing in of the Budget this year saw the resignation of Senator Don Chipp from the Senate and there has not been an appropriate time since then in which to place on the record the appreciation that members of my Party have for the work that Senator Chipp has done, both in the Parliament and in political life in Australia. I owe my involvement in political life to Don Chipp. I was driving to see some of my students when I heard on the radio his speech of resignation from the Liberal Party of Australia, when he was a member of the House of Representatives. I wrote a letter to him commending the types of sentiments that he expressed in that speech, in particular the need for open debate in Australia, the need for less rigid party structures, the need for members of parliament as a matter of priority to address their own consciences when matters come before these chambers, and a range of other issues that he felt ought to be raised as a result of his experience in the House of Representatives and in public life as a back bencher and as a Minister of long standing. A few days after I wrote to him he rang me up and asked for my assistance in helping to organise a meeting in the Brisbane city hall, a meeting that I chaired and that was followed by the founding of the Queensland division of the Australian Democrats. A lot of the members of the Party had a similar experience. Upon my election to the Senate in 1980 the Democrats gained the balance of power in the Senate for the first time. Obviously I had a lot more involvement with Don Chipp then and when I took my seat in the middle of 1981 it became a day to day involvement, as all senators are involved with one another in their particular party structures. To me, Don Chipp had always seemed to be a person who always showed his emotions-I had only seen him from afar, on television and so on-and I could not help wondering whether or not it was really him. I learnt very quickly that the types of things that Don Chipp said publicly he felt privately. He was a person who had the utmost personal integrity-and still does-a person who, having finally worked through all of the problems that political parties face, had come to the realisation that he was able to offer more to Australia by remaining rigidly true to his own views and beliefs and by always addressing whether or not the things he was called upon to say, do or vote on were in the best interests of this country. Soon after taking up my seat Don Chipp had a reasonably lengthy absence from the chamber as a result of heart trouble and at that stage we missed greatly his guidance and advice. It was a very fast learning curve for all of us and for me in particular since I had never been involved previously in any other political party and had only viewed politics from afar. As Don Chipp was recuperating, he was always available to offer advice, and over the years that we have been associated he has offered me an enormous amount of advice. We have not always agreed on everything, as is obvious from some votes in the chamber, but we were always able to discuss matters in a way that I think he was always hopeful that we might eventually bring to political life; that is, we marshalled our arguments and discussed matters in a rational and reasonable way, and if we finally could not convince one another of our respective arguments, we would agree to disagree in such a way as not to leave rancour or ill will. I am appreciative of all that he has offered me, both on a personal level and on a political level, and I must admit that over the years I gained a growing admiration for him. It is not often that one works closely with a person and goes from a position of having some admiration for that person to a position of having very high admiration for him. Normally one finds that foibles, idiosyncracies and problems tend to lessen a person in one's eyes. It was the very opposite for me in terms of Don Chipp. I think he has a lot more to offer Australian political life. I think that he will, not in an active party political sense but by his judgment, his understanding and his willingness to be always involved in the issues that affect this country, make some further contribution. I wish to have my comments placed on the record because I think that when a person with 25 years of service in this place stands down it is appropriate that some such comments from his colleagues be entered in the record of the place to which he gave so much. Senator HAINES(South Australia-Leader of the Australian Democrats)(12.39) —One of the ways in which politics differs from other forms of business and industry is that in other areas of employment when people leave they are given a gold watch and a speech is made about how wonderful they are and what a great deal of use they have been to the particular organisation. Politicians usually have to wait until they die before somebody says something nice about them. We decided that Don's health is such that that is going to be a long time coming and that it might be a nice idea, since he had been here and in another place for the last 25 years, to say something about him now. Whether one agreed or disagreed with Don Chipp, whether one liked him or disliked him, it was impossible to dismiss as irrelevant the contribution that he made to Australian politics over the last 25 years both when he was a member of the Liberal Party of Australia and for the nearly 10 years that he spent as leader of the Australian Democrats. Politics is, in more ways than the one I have just mentioned, a rather strange business and there is a tendency for it to have a rather dehumanising effect on people who are involved in it. They have a tendency to get divorced from reality, to live in the rather artificial atmosphere of Canberra, to become prisoners, if you like, of their own party's hierarchal system and to allow the adversarial nature of Australian politics to divorce them from the Australian people as a whole. In doing that they very much lose touch with what ordinary people want and expect of politicians, politics and government in particular. I did not know Don Chipp when he was a member of the Liberal Party, so I do not know whether at that stage of his life he actually fell into the trap of being divorced from the people he was elected to represent or the people his party was supposed to represent. I do know that towards the last years of his time as a member of the Liberal Party he became disillusioned with a number of aspects of it. If he did not fall into that trap in the 15 or so years he was a member of the Liberal Party it was quite remarkable. However, in the time I knew him if he had fallen into that trap he had become, if you like, a born again human because he certainly was not divorced from the reality that is Australia, nor was he divorced from the issues that were important to many Australian people. There is no doubt at all in my mind or in the minds of very many people that Don Chipp cared very deeply about ordinary people, especially young people, and that he was deeply concerned about the quality of life that those people face, both now and in the future. Indeed, his concern for the future of this planet as a whole is something of which I do not need to speak now because it was one of the facets of Don that was very well known and well accepted in the community. He embraced the issues of peace, a future nuclear free world and the preservation and protection of our environment with considerable enthusiasm. Because he was Leader of the Democrats and because those were the issues that he was most intimately concerned with, from time to time he gave the impression that those were the only issues that the Party was involved in. They were not, of course. Don was outraged and very concerned about a number of other issues, including the fact that in Australia we had hundreds of thousands of children living below the poverty line, that some students are having difficulty getting access to the education they need and that people in a post-retirement position were having difficulty with health care, access to appropriate accommodation and other services. His concerns were catholic, in the usual sense of that word, embracing quite a large number of issues and a large number of people. From time to time, of course, he ruffled a few feathers with some of his more outspoken comments, for example, his rather forthright comments when the Senate was debating, I think, a condolence motion on the death of Mr Brezhnev. I recall that his comments about it being outrageous to express sympathy for or concern about the death of a man who had what Don Chipp said was the blood of millions on his hands certainly caused some feathers to be ruffled not only here but also in at least one embassy that has a base on Australian soil. In all of this he kept intact a rather wacky sense of humour and managed to survive a normally politically disastrous inability to remember people's names. It is very important for a politician to know who he or she is talking to. People like to be remembered; they like it when one says `Hello, Joe', `Josephine', `Andrew' or `Andrea' and remembers the last time one spoke to them, the names of their spouses and children and the jobs they do. Some politicians are very good at that. Don was woeful at it. Not only could he not remember the names of a lot of people he met casually, socially or in departments and so on, he also had difficulty remembering not only the names of his colleagues, but also the names of his wife and children. I recall a spectacular instance in his Melbourne office when his wife had called in to see him and she had left after talking to him. He suddenly remembered something he had meant to tell her and did not. He went pounding out of his door down the corridor calling, `George, George', at the top of his voice, forgetting for a moment that he was, in fact, talking to his wife and not to his principal private secretary, whose name happened to be George; although, indeed, it could have been the first name that entered his head. Those of us who were his colleagues and on his staff remember regular instances where he would talk to his wife on the phone, as most of us try to do to keep in touch with our families. He managed to get out of forgetting her name by calling her `Love' or `Darling' during the conversation, but when it got around to the time when he had to ask after the health of the children he got himself into some difficulties. So he always made sure there was a staff member or another colleague in the room with him and when he got around to asking after his elder child, Juliet, who is still under four, he would make hand signals to his staff, moving his hand up and down at about the height that Juliet's head would be if she were in the room. The person would obediently say `Juliet', so that he could say to Idun: `How is Juliet?'. When it got to talking about the baby he would rock his arms from side to side and the staff, or whoever was there, would come up with the name that he had lost. The other occasion that springs to mind is when he got himself into a bit of a flap because I was supposed to be in here in the chamber and was not at the time. Using the little phones that we have here he rang his staff office and said, `Get me, get me, get me'-and then in an increasing panic-`What is the name of our woman senator from South Australia?'. They realised who he was talking about, rang me and down I trotted. But he managed to do this with the greatest good humour. Nobody that I know of particularly objected to it. In fact, we turned it into a joke and in order to help him to remember who his staff were, rechristened everybody `Marion' on the grounds that that was a good unisex name and somebody at least would answer when he stuck his head out the door and called out for a staff member. His other most notable quirk was his total incapacity to cope with technology in the form of telephones. Those of us who are here in the chamber will know the sort of array of buttons and things that we have on our telephones; devices that give you the capacity to talk without picking the telephone up, to talk to more than one person at a time, to do all sorts of extraordinary things that most of us really do not want to do anyway. Don would sit there at the phone, push buttons at random and say, `Speak to me somebody', in the hope that sooner or later he would get through to somebody and get an answer. On one memorable occasion, he managed to cut off Paul Keating, who was talking to him from his car phone in Sydney. He then blamed ASIO or Telecom as a consequence. He was a man of, as they say, many parts who cared deeply and seriously about a lot of serious issues, but who had the sort of endearing human qualities and foibles that make even politicians remain somehow attached to the real world and somehow very human indeed. Without in any way wanting to reflect on the value of my colleague Senator Janet Powell, who has replaced Don Chipp as senator for Victoria, I would have to say that we will indeed miss Don Chipp very much. We will miss the dramatic changes that he added to this chamber from time to time. We will miss his experience and his wisdom in the Party room and we will miss, indeed, his own unique and very valuable expressions of concern for the people of Australia. I believe that this chamber is the poorer without him and can only say that the colleagues that he has left here to carry the can, so to speak, will do the best to live up to the standard that he has established for us. Senator SANDERS(Tasmania)(12.50) —I rise to pay my tribute to Don Chipp. I think he was probably the reason I got into politics. In a book in 1972 I wrote `Buy a politician, sell a politician but never be one'. I lived up to that for a long time until the early 1980s when we were embroiled in a fight in Tasmania to stop the people of the Hydro-Electric Commission from damming the Franklin. As we can see now, it is completely unnecessary for them to have done so. They could not justify their demand predictions. At any rate, we were in there having this fight and it became obvious that the best way to scare a politician is through the ballot box. So I decided to stand for office in Tasmania. Rather than stand as an independent, I thought that it would be better if I tried to go in as a member of a party. At that time the Australian Democrats, of course, had no representatives in Tasmania but I was aware of the Party. I researched its policies. I found that, in fact, its policies on the environment, on caring for the future, were exactly the same as mine and Don Chipp, of course, was central in framing those policies. So I became an Australian Democrat candidate and ultimately the first Australian Democrat to be elected to a lower House in Australia. Throughout this time Don Chipp would come through Tasmania and give me advice and support, which I appreciated, but I never really got to know the man until he decided that he would like to take a look at the Franklin River himself. So we organised a raft trip for him down the lower section of the Franklin River, going in at Mount McCall. We had with us Geraldine Brooks, from the Sydney Morning Herald; Don Chipp and his wife, Idun; and some people from the Tasmanian National Parks and Wildlife Service and also people from the Wilderness Society. I was a bit curious to see how he would react, because I knew him only as a politician. I did not realise that in his youth he had been a very good athlete and still tried to keep himself in shape. So we appeared at the top of the Mount McCall haulway-which is about a 1,000-foot descent into the Franklin River-and Don Chipp, the politician, was still very much in charge. He was organising who was going to go where and when, who was going to sleep with whom and how we were going to protect the morals of Geraldine Brooks from the depravations of the hirsute Wilderness Society people. We proceeded to go down this very steep slope. The Hydro-Electric Commission had put in fixed ropes on this slope and when Don Chipp was about halfway down one of the fixed ropes it broke; if fact, Don fell a number of feet. He did not complain. He fell hard; he hit hard but he did not complain at the time. We went on; we got down to the Franklin River, we blew up the rafts, we floated down the first day and never a complaint came from Don except that it was cold and miserable, and we all remarked on that. We fixed our camp on the first night and it turned out that neither Don Chipp nor Idun had ever slept under canvas before. This was their first outing. Unfortunately, where I pitched a tent for them-it was on a very narrow ledge and it was pouring down rain-turned out to be in a watercourse. I did not sleep in it. I slept in another tent which remained dry all night. The Chipps almost drowned, they claimed. I remember in the middle of the night the Don Chipp voice which has reverberated around these chambers so often, saying: `Darling, did you wake me up to tell me that you were miserable?'. Of course, their sleeping bags were soaked and they were in very bad shape by morning. We proceeded down the Franklin and he did learn to love the river. Idun certainly did, as well. It was not until several days later we learned that, in fact, he had broken his wrist on the fall on the Hydro's fixed rope and, in fact, had been paddling down the river for days with a broken wrist without saying anything to anybody about it. I think that is a sign of the guts and determination which Don Chipp has shown throughout his life. He did really become very moved by the Franklin and spoke often about it in subsequent years. Many people thought he was overplaying it-playing it for the emotional appeal that he might make to greenie groups, or whatever-but he did have a strong passion for the Franklin River. I think it is time that the nation recognised the role that Don Chipp and the Australian Democrats of that time played in the salvation of the Franklin River because it was the Democrat initiative that set up the Senate Select Committee on South West Tasmania, the Committee that actually looked into the requirements for the dam. It was the first time that we in the wilderness movement had had a chance actually to talk to an impartial body, a Senate select committee. The Democrats brought in a Bill for the conservation of land in Australia. It became the World Heritage Properties Protection Act. This was actually an Australian Democrat Bill which was brought in and passed by the Senate in the dying days of the Fraser Government. It was later picked up by the Hawke Government and pushed through. This was the Bill which was the basis for the ultimate salvation of the Franklin. So often the things that happen in this chamber are forgotten by historians-there is so much that goes on-and then certainly by the people themselves; but I think it is time that Australians realised the great role that Don Chipp played in the most important conservation battle that Australia has ever seen. Don Chipp, I feel, is a person who will be grievously missed in this chamber. He looked to the future; he felt for the future, he felt for children. He wanted to ensure that the future would be a fit time for his kids and all kids to live and all I can say is that I hope that I can in some small way follow in his footsteps and make sure that his hopes for a better future come true. Senator POWELL(Victoria)(12.57) —I rise, too, for the second time in my short time in this chamber, to pay tribute to the former Leader of the Australian Democrats, Don Chipp. Members of this place may remember that in my maiden speech, just a couple of short weeks ago, I did just that. I did it with great heart and with enormous personal feeling because I believe that Don Chipp has made a major contribution to this Parliament, to the country through his contribution to this Parliament, and in particular-dare I say it-I believe has changed the face of Australian politics by his particularly significant role in the establishment, development and continuation of the Australian Democrats as a significant party on the Australian political scene. In my maiden speech I paid tribute to that contribution. For many people out in the community the Australian Democrats were for a very long time-for some, the Democrats continued to be-Don's Party. That was always a short-sighted view; nevertheless, it was perhaps understandable that a figure so strong, so experienced and so passionate on the political scene, should dominate in a new party, a small party and a developing party. While all that was going on, there was this contribution to the new party, one which was significantly different from other political parties and in which it was very important that all members were able and encouraged to participate. Don Chipp played his part in the encouragement of that participation by all other people within the Party to the extent that it has always been a matter of pride to members of the Australian Democrats that all of us have had an equal say; we have had equal value within the Party, as indeed had Don Chipp, our Leader. Like other senators who have spoken today, and in particular Senator Macklin and Senator Sanders, my own personal involvement in politics is directly as a result of Don Chipp's actions. In resigning from the Liberal Party and in making the points which Don made at that time, and which Senator Macklin outlined, he attracted me as a person who had been interested in politics and current affairs, and who certainly had an enormous interest in the future of this nation. As a mother of four children he attracted me to what seemed to be the likely development of something different in Australian politics. So I made a decision which perhaps too few Australians make, to join a political party. That was the message that Don often had. I recall his saying at many a public meeting that people should join political parties particularly when he was speaking with young people. He always urged them not to be apathetic, to recognise that this is a democracy that we live in, that we all have the opportunity to participate and that we should participate through the political process. He always said that he was never fussy which party they joined but that, of course, his preference would be that they would join him in the Australian Democrats. I think it was to his credit that he was out there urging people, particularly young people, to take a positive role, not to be apathetic and not to be destructive but to work through the political system for the improvement of this country and for the future. So it was that having taken the step to become a member of a political party, we were embroiled very quickly in our first Federal election and subsequently many more elections. In Victoria at one stage last year, total Federal and State elections had been almost on an annual basis in the first eight years of this Party's existence. I very quickly got into the whirl of things and subsequently found myself in this place. During that time I obviously spent a lot of time on the campaign trail with Don Chipp. As a Victorian, this happened perhaps more often than it did for some of my colleagues in other States, before I actually came into this chamber. Of course, had I not had to wait, I would have had the benefit of close contact here that they have had and that is a matter of regret to me. I would have enjoyed serving in this Parliament with Don Chipp, rather than after Don Chipp. During this time he was always very supportive personally and very helpful personally. I would like particularly to place on record the fact that when I as a budding politician, a new candidate, was touring with him in country centres from one end of Victoria to another, at a public meeting where he would be getting all the questions he would always throw some of them in my direction-I have seen him doing this with other candidates-in order that people should have an opportunity to get to know their local candidate better, that they should look beyond Don Chipp and see other Australian Democrats in the arena. As a Victorian, too, and as a former Democrats State President in Victoria, I would like to put on record the fact that it was often difficult for the Democrats in Victoria having to share Don Chipp as parliamentary Leader with the rest of the country. It was, in fact, something which we felt was to our loss because very often our own State senator was not available to us due to his role as the Leader of the Party. We managed, we coped, but we would have liked to have seen more of him in the years that he was leading the Party. Nevertheless, he did give his all to the Party in our State. The fact that he was a national figure perhaps was brought home most closely to us when, indeed, he did resign and of course there was a sense in which he had to be replaced in the Senate in two ways: Firstly, as the Leader of the Party and, secondly, within Victoria as a Victorian senator. It became rather confusing at one stage, or most of the way through that process, and I think even more confusing since the two people who have replaced him in those roles both happen to be female and both happen to have names which start with Jan. I have had quite a series of experiences in interviews in which the interviewer has begun: `Now that you have become Leader of the Australian Democrats'-and so on. One of the things I always had to do was then explain that Don Chipp had not been just the Leader of the Australian Democrats but, indeed, a senator for Victoria. Perhaps most notable in my mind about Don Chipp, particularly in the time that I have been associated with him, was the increasing concern and passion that he showed and expressed over time with those issues with which he became so closely associated in the years that he was the Australian Democrats Leader. I remember the passion, indeed, the compassion, which he brought to the issues of major concern to him and to the Australian Democrats-the nuclear issue, the environmental issue that Senator Sanders has referred to, the issues of quality of life, the issues of a better world for all our children. I believe quite firmly that we need more passion, more compassion, in politics and in this place. I identify with his sense of urgency in these areas, very strongly, as a woman, because my motivation in getting into politics was very much the same: The sense that we need to keep these issues very high up on the agenda. We need to spend a lot of time and a lot of energy making sure that they are in the forefront. I think it is an important model for us all that here was a politician, an individual who, while moving on in life and getting older-as we all do-did not become more conventional, more constrained, more restrained, in the way that we tend to think people will do as they age. I think it is enormously encouraging to have before us an example of someone who was prepared to continue to be in many ways a radical, to really display that sort of passionate concern which is much more associated with youthful people than with people who are of mature years. I think that is the sort of model which is encouraging to young people and it is certainly encouraging to have witnessed it in the political scene. I am often asked how I feel in filling Don Chipp's shoes. I do not believe that is my role. I do not believe that anyone will ever be able to do that. I have come here to sit in the seat that he has sat in as a Victorian senator. I am very proud to do that because he preceded me; I am proud to do that because I do that as a representative of the Party which he was so instrumental in forming and in nurturing through its first decade. He will be missed; he will be missed by me personally in a political sense and, as I said, I feel I am very unfortunate not to have served in this place with him as Leader. He will be missed by this Parliament and he will be missed generally in the political scene. As one of my colleagues has said, I believe he is an individual who has a great deal yet to contribute to the Australian society. I conclude by welcoming the opportunity that we have been given today to place on record our very strong personal feelings and the recognition of the contribution that Don Chipp has made. Senator REID(Australian Capital Territory)(1.08) —I am glad the Minister for Education (Senator Ryan) is present as I want to refer to a report which I understand has been sent to her. It may well be that with the volume of papers across her desk it is a matter that she has not yet had an opportunity to study. It is a report on the printing industry training requirements in the Australian Capital Territory and regional New South Wales. It comes about subsequent to a report which was prepared in 1983 by the National Printing Industry Training Council as a major project to identify the needs of the printing industry training facilities throughout Australia. It did not include the Australian Capital Territory. There are a number of aspects of the printing industry which are significant; relatively Canberra has a smaller number of students, but proportionately much higher cost plant and equipment are needed to train them and for that reason a pro rata share of the available funding of resources is not either adequate or appropriate. The situation at present at the Canberra College of Technical and Further Education is that quite soon final year students will need to go to Sydney for their final year of training. That in itself is a considerable additional cost to the student or to somebody who is to be trained. I would not like to think that printing was not available to students in Canberra because of the run-down of the standard of equipment at our school. Of course, the fact is that it provides training for the printing industry, not just in the Australian Capital Territory but also in regional New South Wales. It is a good report; it is comprehensive, and it deals with all aspects of the training of people for the printing industry. It goes into detail of costs of training and costs of capital equipment. The summary in the document refers particularly to some quite urgent needs for expenditure. They are quite expensive, but they have been identified under the heading of `Summary', as follows: In the interim the following alternatives will be investigated . . . that the allocation of time on Australian Capital Territory industry based equipment as and when required and available, and the utilisation of high technology equipment by trade students only at interstate equipment supply centres of State training institutions. As I said, that in itself involves an additional cost to students if they have to go interstate to complete their courses. There is another section under the heading `Conclusions', and it too needs to be examined. The Council refers to the high capital cost of new equipment. It says: The Australian Capital Territory should be self- sufficient in terms of acquiring the necessary equipment to satisfy both basic and advanced training levels. There have been significant technological changes in the printing industry. To continue to train students on outdated equipment is probably just about in the same category as not training them at all. They need to keep up with the type of equipment that is used. This Committee refers to the funding inequities that have existed previously which must be addressed by the development and apportioning of the appropriate funding, precommitted over defined time periods. There are other matters in the paragraph I have referred to as conclusions which I would wish to draw to the Minister's attention. In the cooking school at the Canberra College of Technical and Further Education there are needs to enable the school more efficiently to meet the demands which are being made upon it. The same applies in the area of plumbing training. The point is that these are all areas where young people can in fact get jobs when they have been properly trained. I want to say not so much that I think it is a question of more money, but that we should be very sure that we have our priorities right, and that we get the right money into the areas where young people can get training and get jobs. Although the general level of unemployment is much lower in Canberra than in other parts of this country, the youth unemployment which does exist here is at a high level. So it is important for training in these areas where jobs become available that a high priority of expenditure in the area needs to be given. The committee which prepared this report also went on to a section of recommendations about adequate funding, adequate staffing levels and the necessary building modifications. I merely wish to say to the Minister that amongst the many reports that have come to her, I commend this report to her, and I hope that she will be able to see that the needs in the area of technical training will be of the very highest level so that young people in this Territory will not be disadvantaged in any way. Senator ALSTON(Victoria)(1.14) —I wish to address what I consider to be a very serious deficiency in the Government's international approach, and that is to the question of exports. In recent days, in the name of alleged economic stringency, the decision has been taken to close the Australian Embassy in Peru. At the present time, we have four operative embassies in Argentina, Brazil, Venezuela and Chile. There are three trade commissions-in Argentina, Brazil and Venezuela. Our trade with South America is such that we have a massive trade imbalance, of the order of $100m. Our exports total less than $300m; our imports are in excess of $400m. With Brazil in particular, we have exports totalling $98m, whereas we import something of the order of $245m. There are remarkable business opportunities in South America. By and large, the continent has returned to democratic rule. The attitude adopted by most South American countries is such that there are very many trade opportunities for Australia; yet what the Government is proposing to do at the present time is to severely limit the opportunities for exporters in that region. It is not just the symbolism that derives from the closure of Peru, which in a sense is one of our smaller trading partners. Our exports to Peru are of the order of $14.2m, our imports are $4.9m. So that is not quite the same order of magnitude as Brazil. But it is highly insulting, for example, to think that now persons requiring visas and other consulate treatment must attend on the embassies in Buenos Aires or Santiago. Chile, I would have thought, is one country where there would be a great reluctance for Australians to be actively involved or for anyone else on that continent to be actively involved, given the gross denial of human rights in that region, its very restrictive and repressive treatment of its citizens. To expect that Peruvian citizens will now have to approach the embassy in Chile is a gross insult to those citizens. But more importantly on the trading front, now that we are vacating the field we will be leaving New Zealand to run riot. In many ways it can be said that New Zealand is well ahead of Australia in terms of trade and economic reform. We have seen in recent times its taxation reform measures which have resulted in the almost painless introduction of a goods and services tax, in marked contrast to the inability of the Government in this country to move towards option C or anything like it and to have effectively thrown in the towel because it was all too hard. New Zealand is embarking on a significant program of corporatisation, which is undoubtedly a first measure in the step towards wider privatisation. It is being done by a Labor government, it is being done in recognition of the need to have a much more efficient and productive economy. Its industrial relations scene is undergoing marked transformation and in many ways New Zealanders are getting their economy into shape when we are neglecting the same opportunities. So it is in trade, and from now on, no doubt, New Zealanders will be rubbing their hands with glee because of the increased opportunities on the South American continent. In terms of the amount of export assistance that the Government gives, again it is very depressing to think that in the name of economic stringency the opportunity has been taken to impose very severe restrictions on the level of incentive and assistance provided to private sector exporters. In the Budget the total assistance to export industries is down by $56.9m, a reduction of some 19 per cent. I presume the Government would say that that has been the rough equivalent effect of last year's devaluation and therefore it is on a par. What it does not do, of course, is to recognise that there is an increasing need to encourage exports to remedy the massive current account deficit of $14.3 billion and, given that in the previous financial year we were able to increase the total assistance to export industries, there seems no reason at all why exports should have suffered in this manner this year. What has happened in the Budget is that export and trade promotion has been increased by precisely the amount of the overall decrease and the massive slash has been in the area of export market development schemes. Whilst one can argue that it is necessary for exporters to come up with schemes that will be able to stand on their own merits without government assistance, the fact remains that in an imperfect world there are very many other countries which are prepared to provide quite significant degrees of assistance. Certainly in the area of private sector assistance, it would be my view that there are a number of opportunities for the Government to assist in trading in the South American continent. But even if one accepts the proposition that industry should be required to bear its own expenses, and as we know the Treasurer (Mr Keating) has repeatedly ruled out the reintro- duction of entertainment expenses for overseas export drives, the fact remains that the very least that could have been done by the Government was to ensure that our diplomatic representation was maintained and, hopefully, expanded; but the opposite is the case. We are now being faced with the very demeaning and demoralising sight of the goods and chattels of our Peruvian Embassy being put up for public auction. Presumably they will sell for a pittance, but the demonstration effect of that one would have thought to be highly insulting to the Peruvians and a marked insult to those who have worked in the Embassy. It might have been understandable if the Embassy had simply been scaled down, but what is going to happen is that a local national will be retained to keep an eye on trade at the very lowest level; otherwise the Embassy will be completely closed down. There will be no charge-d'affaires or any other diplomatic representative in attendance and, of course, the re-opening expenses if and when we were prepared to restore the relationship would be much greater than they would be if we had simply scaled down. This, of course, is compounded by the news from Brazil where it now appears that all staff of the Australian Embassy in Brazil have asked to be withdrawn because of the massive reductions in allowances and expenses. One mission member is reported to have said that his $15,000 allowance has been slashed to $5,000. But perhaps the greatest insult of all is this: Staff calculations are that the Australian Ambassador in Brasilia will now get less than half the take-home salary of the British or Swedish counsellor and will earn less than a stenographer at the Swedish Embassy. You really cannot have a more degrading situation than that. Senator Reid —We truly are a banana republic. Senator ALSTON —We can hardly afford the skins, let alone to go on supporting the activities of our own diplomats. If that is a prelude to the threatened strike within the Department of Foreign Affairs and perhaps large scale resignations, it will be simply a matter that the Government would easily have foreseen but has deliberately embarked upon again in the name of cost cutting. All I can say is that it strikes me that this is an entirely short-sighted and counter-productive measure. It goes against all that the Prime Minister (Mr Hawke) and others have been saying. It is in defiance of the export drive which has just been launched. It is perhaps consistent with the Buy Australia campaign because it is an inward-looking, autarkic approach to economics rather than any attempt to get out there and promote exports, to get out there and ensure that we have diplomatic representatives and trade counsellors who are looking for increased opportunities. Almost every other nation in the world is out there fighting. Even in terms of our overseas aid program there are very many opportunities for that to complement our trade initiatives but, by and large, we have neglected those opportunities. We see that the Japanese are proposing to double their total level of development assistance by 1990. Brazil, in particular, has made massive intrusions into trade on the African continent as a result of its outward looking aid program. So in many ways I think one can say that the Government's approach to international affairs, the approach to balancing the current account is simply myopic, short-sighted and ultimately counter-productive. It is a matter of great regret to me that these facts are not self-evident, that the Government was not able simply to scale down diplomatic representation if that was the requirement; but to have gone the way it has and to have embarked on a program of squeezing embassies around the world until they squeal has undoubtedly resulted in the outcry from Brazil. It has not yet provoked any similar response from Peru, but no doubt if the diplomats there were asked their opinion they would certainly agree that it is about the last thing that the Australian current account requires at the present time. All I can say in conclusion is that if the Government is serious in its desire to expand trade to South America, it will again reconsider the position of the Australian Embassy in Peru. If it really wants to get trade going again in that region, it will immediately re-open it. Sitting suspended from 1.25 to 2 p.m. Senator CHANEY —My question is directed to the Minister representing the Prime Minister. The Minister will recall that, in answer to my question on Tuesday, he was at great pains to separate the principle of the fringe benefits tax from problems of administration. Since then the Prime Minister has said that changes will be made to some of the substance of the tax, as well as to the way in which it is being applied. Is the Minister aware that on the Carleton-Walsh Report last night the Prime Minister specifically ruled out exemptions from the tax for school fees, cars, low interest loans, hostess allowances and the use of credit cards? How will the Government decide what is to be changed and what is to remain within the reach of the Act? In other words, what criteria or principle will be applied to determine the changes of substance which are to be made? Senator BUTTON —Those questions are a matter for the review which has been announced. When that review completes its deliberations, everybody will be told the answers. Senator CHANEY —I ask a supplementary question. I thank the Leader of the Government in the Senate for his mercifully brief answer. Is he saying, then, that there is no principle which has been decided by a meeting of Ministers, a Cabinet group or any other group, to determine the limits of this review? Senator BUTTON —I refer to the answer I have already given. It is pretty clear, and when the review is completed the answers will be clear. Senator REYNOLDS —Has the attention of the Minister representing the Minister for Health been drawn to recent negative statements by the Queensland Minister for Health and Environment, Mr Brian Austin, detailing his Government's refusal to participate in the national preventive education program on the control of the acquired immune deficiency syndrome virus? What impact will this failure to co-operate have on the Federal Government's national program to educate at-risk groups about AIDS? Can any steps be taken to make the Queensland Government more responsible about this very serious health issue? Senator GRIMES —I have seen the statements made by Mr Austin, as has my colleague the Minister for Health, Dr Blewett. The point that must be made about this problem that we face in this country is that, by and large, State governments and the Federal Government are co-operating in an effort to alleviate the effects of AIDS and to reduce the spread of AIDS. The important point is that it is not a political issue, other than that political action and political co-operation are needed. It is not, despite what people such as the Reverend Fred Nile would believe, primarily a moral or a State issue; it is a public health issue. Senator Peter Baume —Not retribution. Senator GRIMES —Like Senator Baume, I do not believe it is a matter of retribution. I do not believe it is a modern equivalent of the black plague put down on us from on high; nor do I or my colleague Dr Blewett believe that we can cope with this problem sensibly by ignoring the facts about it, hoping, therefore, that the whole problem will go away. Mr Austin's statement, which has been condemned by newspapers and commentators throughout the country, seems to be contrary to the co-operative spirit that we have in this country in the fight against AIDS. In, I think, May last year the Health Ministers Conference endorsed a national health strategy to cope with this problem. The various communities affected, in particular the gay community, have worked very hard, not only to prevent the unnecessary spread of the disease but also to provide support groups for those unfortunate individuals who progress to the last stages of AIDS and die. The Health Ministers Conference agreed that having information and education programs for at-risk groups was a sensible way to go about it, and that they should be developed in conjunction with those target groups so that the right information is given out. I know that a significant number of senators and members on both sides of the Parliament have expressed concern that the Queensland Government has decided, because of its rigid attitude in this area, to refuse to send out the education pamphlets and has refused to take part in this education campaign, on the spurious grounds that such a campaign would encourage what it sees as deviant behaviour. This is very unfortunate. I think that those senators and members-as well as the many medical practitioners throughout the country-who are concerned about this program and have indicated that they will write to Mr Austin should do so in an endeavour to change the Queensland Government's attitude to this very real problem. Senator Peter Baume, in writing a report some years ago on welfare problems, used this quote from Browning at the start of the report: `Ignorance is not innocence, but sin'. The public espousal of ignorance in this area is a sin. It will inhibit considerably our capacity to limit the extent of this disease. It is important that we do so because it seems unlikely that either a cure or an effective vaccine will be available in the near future. I am not saying that it will not be available at all, but it will not be available in the near future. It seems that it is a fair way off. In those circumstances, the best weapon we have in trying to contain the disease is through preventive education and through people taking preventative action. I think it is most unfortunate that a Minister such as Mr Austin should take the view that our education program should be limited by his rather narrow view of the world. I think we should do all we can to bring Queensland into line with the rest of the country in this regard. Senator MacGIBBON —My question is directed to the Minister representing the Prime Minister. I refer to the fact that the Government announced its fringe benefits tax 13 months ago and then took eight months to have the legislation drafted and put through Parliament. Is the Minister aware that last night on a television program the Prime Minister said he thought that some of the changes to the tax would involve legislation? Senator Maguire —Last week you said it was rushed and in haste. Senator MacGIBBON —Is the Government seriously asking the people of Australia to believe that it can rectify all the administrative problems and make changes to legislation in less than three weeks before the first payments are due? Will the Government agree to either defer the payment date or ask the Commissioner of Taxation to grant a general extension of time to relieve taxpayers of the impossible task of making assessments and submitting returns when the rules are about to change? Senator BUTTON —I am reminded that we have been charged with rushing this legislation through the Parliament. On this occasion the charge is delay in presenting the legislation. As I said to Senator Chaney earlier, a review will be conducted. I do not know whether that review will lead to any proposed changes in legislation. That remains to be seen. Senator Durack —What about the changes- Senator BUTTON —I said I do not know whether that review will lead to any changes in the legislation. That remains to be seen. Honourable senators opposite can wait patiently and, when the review is completed, decisions will be announced. With regard to instructions to the Taxation Commissioner, as I understand it, the Taxation Commissioner already has a wide range of discretions in respect of the implementation of any tax measure, and particularly in respect of time for payment and so on. Whether it is appropriate at the end of the review for the Taxation Commissioner to exercise that discretion will be decided in the course of the review. Senator MacGIBBON —I ask a supplementary question. The Minister obviously did not understand the point that I made. I will read him a transcript from the Carleton interview. Mr Richard Carleton asked: Are the changes you contemplate likely to involve legislation or will they get through in another way? The Prime Minister answered: I think there will be some that will involve legislation, some statutory rules, and some in administration. My question quite clearly was: In view of the fact that the Prime Minister anticipates that there will be legislative changes, will the Minister address the consequences of the Prime Minister's statement? Senator BUTTON —I can hear the honourable senator's question; I do not know whether he can read it intelligently. The Prime Minister did not say that there would be legislative changes necessarily. I repeat what I said earlier: One awaits the outcome of the review to decide that question. That will be done. Senator Chaney —You wouldn't have a clue, would you. Senator BUTTON —Honourable senators opposite should not get too excited-they who are committed to abolishing, root and branch-- Senator Chaney —Lock, stock and barrel. Senator BUTTON —Lock, stock and barrel-I suppose that is a better appellation for people such as them. Root and branch was what they did in Government with the tax legislation-or the first part, anyway. The fact of the matter is that honourable senators opposite who are committed to abolishing the whole legislation are- Senator Chaney —You don't know what you are doing, do you. Senator BUTTON —I really do not know what they are doing because their actions are quite contrary to the principles enunciated by their tentative leader and by shadow Ministers. If honourable senators opposite want to sort that out in that way by an abrogation of principle, they can persist with that policy; but it is not a matter which concerns us particularly, or the people of Australia, I suspect. Senator ELSTOB —My question is to the Minister representing the Minister for Transport. Has the decision of the Government to allow gambling and other related activities on Australian National trains operating in South Australia, Western Australia and the Northern Territory been taken after due consultation with the State and Territory governments concerned? Will the Minister indicate a possible timetable for legislative changes and indicate the specific arrangements for parliamentary scrutiny to be included in the legislation? Senator GIETZELT —There has been some publicity about the proposals of the national Government to permit some improvements in the leisure facilities on routes serviced by Australian National. The Government therefore proposes to amend the Australian National Railways Commission Act 1983 in the autumn session of 1987 to enable Australian National to provide a broader range of services and entertainment, including gambling, for its passengers using those services in Western Australia, South Australia and the Northern Territory. The Government has taken these steps to provide some leisure outlets because of the long distances involved and so that the objectives of Australian National and the Commonwealth can be realised. The passenger services conducted by Australian National currently lose about $30m a year. The amendments are part of an overall strategy worked out by the Commonwealth to improve the viability of track and passenger services and thereby reduce the contribution of Commonwealth funds to the maintenance of those services. It is true that the gambling proposal attracted some media attention, but it is only part of the wider package designed by Australian National to make the passenger services more attractive. The suggested facilities-I understand that consultations are taking place with the States so that there is agreement on these matters-will include video and sound booths for hire, card tables, a hair salon, as well as bingo, keno and poker machines. So passengers will have quite a range of leisure activities available to them. The Government has set itself a 60 per cent cost recovery target for Australian National passenger services by 1988-89. I stress that gambling activities will be available only to Australian National passengers. It is hoped that as a result of these proposals there will be a much reduced call on taxpayers' funds in real terms. The Government has set itself this objective. Already the Government's attempts to improve the services have resulted in a reduction of Commonwealth funding for Australian National of some 50 per cent since 1982-83. We propose to take steps to see that that is reduced even further by 1988-89. Senator POWELL —My question is addressed to the Minister representing the Minister for Defence. I draw the Minister's attention to the fact that the USS Paul F. Foster, which arrived in Melbourne today, and the HMS Amazon, which docked in Geelong today, are both nuclear armed. I refer also to the 18 September statement by the Victorian Premier, Mr Cain, in which he refused to accept responsibility for dealing with nuclear weapons accidents in Victorian ports and explicitly handed that responsibility to the Commonwealth. I ask the Minister: First, does the Federal Government accept responsibility for dealing with a nuclear weapons accident in Geelong or Melbourne; secondly, are Federal authorities now monitoring radioactivity levels to detect any release of radioactive material; and thirdly, what emergency procedures have been implemented to cope with such a release? Senator WALSH —I was given some notice of this question-I am not sure exactly when, but it was not very long before Question Time. I have not been able to get any response from the Minister for Defence; so, effectively, I will have to take it on notice. Senator CROWLEY —My question is directed to the Minister representing the Attorney-General. Recently the South Australian Attorney-General published some figures on inadequate court sentences under section 99 of the Justices Act. Those figures show that almost one-third of the people convicted received no penalty at all, a further 39 per cent received fines averaging a little more than $100, and only three people were imprisoned. Given that the Family Law Act has provisions for injunctions to protect women in domestic violence situations, can the Minister say whether the results under the Federal legislation are the same? Can he say how many injunctions are sought in each State and Territory; how many of these are repeat applications; how many of these applicants have lapsed; what penalties are imposed on the offenders; is there any evaluation of the outcome of injunctions; and is the Minister satisfied with the situation? Senator WALSH —I have a note about this which is about five pages long. It must have been written by a lawyer. If the Senate is agreeable, I will seek to incorporate all of it. However, I can give some of the highlights. For the 1985 calendar year there were 4,265 applications for injunctive orders. The Family Law Council report for 1984-85 disclosed the following numbers of applications for injunctions since 1 January 1980: In 1980, 4,688; 1981, 4,848; 1982, 5,019; 1983, 4,790; and 1984, 4,501. To examine all the relevant files to extract the information sought would be a lengthy task requiring the cessation of almost all clerical work in every registry for a lengthy period or the provision of substantial additional resources. To virtually close the registries is impractical, and the Government is not prepared to make the additional resources available. There is a good deal more information about penalties and so on which I seek leave to incorporate in Hansard. Leave granted. The document read as follows- The Registries of the Family Court of Australia are to be computerised within the next 18 months and details of this nature should then be readily available from Registries in each State and the Australian Capital Territory. The penalties that can be imposed for contravention of an injunction are contained in sub-section 114 (4) of the Act as follows- ``114 (4) [Penalties for non-compliance] If a court having jurisdiction under this Act is satisfied that a person has knowingly and without reasonable cause contravened or failed to comply with an injunction or order under this section, that court may- (a) order that person to pay a fine not exceeding $1,000; (b) require that person to enter into a recognizance, with or without sureties, in such reasonable amount as the court thinks fit, that he will comply with the injunction or order, or order him to be imprisoned until he enters into such a recognizance or until the expiration of 3 months, whichever first occurs; (c) order that person to deliver up to the court such documents as the court thinks fit; and (d) make such other orders as the court considers necessary to enforce compliance with the injunction or order.'' In addition, a person may be dealt with for contempt constituted by wilful disobedience of an injunction. A person in contempt may be punished by committal to prison, a fine or the giving of security for good behaviour. An internal management survey of the 353 injunctive orders sought in the Brisbane Registry of the Family Court between October 1980 and March 1981 was completed by a Court Counsellor in 1981. The recommendations in the report centred on greater use of counselling facilities and the elimination of delays in hearing such applications. So far as is possible, the recommendations have been implemented in each Registry. Criminal laws on domestic violence, similar to s.99 of the Justices Act (S.A.), now exist in NSW, Queensland, Victoria, WA and the ACT. The operation of these laws is specifically preserved by s.114ab of the Family Law Act. A person cannot take proceedings for an injunction of the Family Law Act where action has been taken under these State and Territory criminal laws. The Attorney-General considers that these criminal procedures are a more appropriate method of providing strict measures to deal with domestic violence than the civil procedures in the Family Law Act. Senator SHORT —My question is to the Leader of the Government in the Senate. The Minister will be aware that the Prime Minister said on the Willesee program yesterday that the Government will `listen to what others have got to say' about the fringe benefits tax and make changes to some areas of substance and administration by the end of the month. Exactly who will conduct the promised review, when will it begin and will it be a full and open inquiry to which members of the public will be invited, or able to make submissions? Senator BUTTON —The review will be conducted under the auspices of the departments of Prime Minister and Cabinet and Treasury. I am not able to say precisely who will be invited but I will seek that information for the honourable senator and provide him with an answer as soon as possible. Senator RICHARDSON —Has the attention of the Minister representing the Minister for Communications been drawn to an article in yesterday's Australian Financial Review titled `New Right communication plan may start Opposition row'? If so, can the Minister provide an assessment of Andrew Hay's policy prescriptions for the communications portfolio? Senator WALSH —I have seen the article in yesterday's Australian Financial Review, which reports another foray into a different area of policy making by one of the numerous extra-parliamentary pretenders to leadership of the Liberal Party, to wit, Mr Hay. He said, amongst other things, that the Department of Communications should be abolished and, I presume, replaced by a ministry for propaganda and public enlightenment, in accordance with the precedent set by an historical figure who shared a number of views with Mr Hay. The other thing Mr Hay proposed and said that the Liberal Party ought immediately to adopt as policy-that ultimatum having been issued, I assume it very soon will be adopted as policy by the Liberal Party-is that private sector cream skimming ought to be introduced for Telecom Australia, Australia Post and the Overseas Telecommunications Commission. What that means, of course, is that all the innately profitable areas in which those three public bodies provide services should be sold off to some of Mr Hay's friends or somebody else who is influential in the Liberal Party. Of course, that would then prevent Australia Post and Telecom from providing services in those areas of the country where the provision of services is innately unprofitable, and that is virtually every part of Australia other than the major cities. I would be interested to know what the National Party thinks about that ultimatum Mr Hay has now delivered to the Liberal Party. Mr Hay also said that the powers of the Australian Broadcasting Tribunal should be curtailed in the areas of advertising and programming content, including children's programming and Australian content. I assume that under Mr Hay's proposal anything anybody wants telecast would be telecast. He also suggested that the Department of Communications should be abolished, as I mentioned previously. However, even though Mr Hay's position in the political spectrum is becoming increasingly well known, there should be no thought that his speech represents only the delusions of one rather peripheral figure. On the contrary, it is an open secret around the Parliament and in other places that many of the ideas in Mr Hay's speech have been spoken of within the offices of the honourable member for Bennelong and the honourable member for Mackellar. One can only suspect that Mr Hay's speech, in its content and its timing, has been cynically contrived to sink the draft policy on communications of the honourable member for Goldstein which is in marked opposition to almost every line in Mr Hay's speech. That is one of the many conflicts within the Liberal Party. For as long as the honourable member for Bennelong remains Leader-I do not expect that he will be Leader for much longer-Mr Hay's views will triumph and the honourable member for Goldstein will be overruled. Senator ALSTON —My question is addressed to the Minister for Industry, Technology and Commerce. Firstly, does the Minister welcome the Australian Council of Trade Unions' acceptance of the need to move away from full wage indexation towards a more flexible system of wage determination? Secondly, does he share Mr Simon Crean's enthusiasm for a campaign to link business investment and industry policy to any new approach to wage fixation? Thirdly, does he see any merit in suggestions for legislative moves by the Government to pressure employers to lift investment in the domestic economy? Fourthly, does he agree that the Budget prediction of a one per cent decline in private fixed capital investment and the continued reluctance of business to embark on substantial investment projects are indicative of a lack of confidence in the health of the economy and the unlikely prospect of moderation in the price increases of all factors of production rather than mere ideological intransigence? Senator BUTTON —The honourable senator asked whether I welcomed the ACTU move to depart from full wage indexation as announced by Mr Crean, as I understand it. That announcement is consistent with Government policy, which was announced in the Budget. The Government made it quite clear in the Budget context that it would seek a 2 per cent discount in the next national wage case, and the statement made by Mr Crean is consistent with that. I was next asked about the linkage between investment and wage policy changes. That is something which perhaps can be talked about between the parties. I think the fundamental determinant of investment in respect of wages is a degree of predictability and continuity in the wage environment, something that business has had since this Government came to office and is likely to have in the future. I think that is the most important element of that link. I was also asked whether there was a proposal about legislation to encourage or pressure people to invest. I would have doubts about the efficacy of such legislation. I was then asked about the Budget prediction of a one per cent decline in fixed capital investment. I believe that to have been for a variety of reasons which the Budget itself sought in part to address. The Government has made no secret of the fact that we expected a decline in the growth rate which this country has experienced for the last two or three years and that, accompanied by relatively high interest rates, which has been a matter of considerable discussion in the Senate over time, I think is a factor which has militated against a stronger investment performance. I must say that, in the context of Senator Alston's question, I would divine the mood of the business community generally as being considerably more optimistic in the last two or three weeks than it has been for some time. I believe that optimism will be sustained as the Budget strategy increasingly takes effect. Senator ROBERTSON —My question is directed to the Minister for Education. On 22 September the Minister advised that Mr Errol West, her chief adviser on Aboriginal education, had gone to the Northern Territory to discuss the handover of Kormilda College to the Presbyterian Church. I ask: Has Mr West submitted a report on his visit? If so, will the Minister indicate Mr West's assessment of the appropriateness of that move? Senator RYAN —I do not have a written report from Mr West but we did have some discussions about developments in the Northern Territory with regard to Kormilda College. In brief, the situation is not resolved. The original proposal of the Northern Territory Government to hand over the administration of the college to the Presbyterian Church seems to have fallen through. The responsible Northern Territory Minister, Mr Manzie, is discussing with the Aboriginal community and other groups the possibility of some sort of Aboriginal administration of the college. If that is the case, the Commonwealth would be delighted to co-operate. The college was established by the Commonwealth some years ago as a boarding and educational facility for remote area Aboriginal students and it would be against the Commonwealth's intention for the college to operate in such a way that Aboriginal students could get no benefit from it. There has been no final outcome of the discussions. I express on the record my hope that there will be improvements in the operation of Kormilda College and that they will be such as to encourage the participation of the young Aboriginal people for whom it was intended. Senator Sir JOHN CARRICK —I refer the Leader of the Government in the Senate to the Government's promised tax cuts which, as outlined, will be introduced in July 1987. I ask: First, will the Government give an unequivocal assurance that these tax cuts will be implemented in full on that date; and, secondly, will the Government also give an assurance that these tax cuts will not be either diminished or offset by increased indirect taxes in either a mini-Budget or in the 1987-88 Budget? Senator BUTTON —The revenue mix in any Budget is determined by the Government, not by me. Senator Withers —What a shame. Senator BUTTON —I think so too. From time to time governments make decisions about mixes in the revenue, and this Government is no exception. Maybe this Government will, maybe it will not; it depends on the circumstances. Senator Durack —Like abandoning the unintended consequences. Senator BUTTON —Dopey, why don't you go back to sleep? The PRESIDENT —Order! I ask the Minister to withdraw that remark. Senator BUTTON —I beg your pardon, Mr President, I withdraw. Insofar as Senator Sir John Carrick's question about the tax cuts is concerned, yes, they will be delivered in December this year and July next year. Senator BLACK —Has the Minister for Finance received a reply to his letters to the Queensland Premier regarding the possible abuse of funds under the natural disaster relief arrangements? In particular, has he received any advice on the $145,000 advanced to Mr Michael Behan and the $168,250 claimed by Mr Ken Morris? If the Minister has not received any reply on these matters from the Queensland Premier, what further action is he contemplating? Senator WALSH —Senator Black's question referred to possible abuse of funds under the NDRA. I do not think that is strong enough because at least in the case of Mr Behan it seems to me that there is not a possibility of there having been abuse; there is a clear case that there was abuse in Queensland's administration of the NDRA. Commonwealth funds, which are supposed to be administered according to guidelines which I issued last year, were paid to Mr Behan-who was a National Party candidate and is presently a National Party employee-despite the recommendation from the Rural Adjustment Board and the Agricultural Bank in Queensland that Mr Behan's application should not be approved and that Mr Behan was non-viable. I do not think it is a question of possibility of abuse; there is a very clear and documented case of abuse in that instance. In the other specific case, involving Mr Morris, the evidence is less clear simply because the evidence is not available. Senator Chaney —You have got your left eye closed. Senator WALSH —In answer to the rest of Senator Black's question I have not had any formal reply from the Premier to the two letters I have written, one concerning Mr Behan and the other concerning Mr Morris, but there have been some garbled responses in the media which indicate that he has no intention of replying. May I say how astounded I am that Senator Chaney seems determined to protect the corruption of the Queensland State Government when the President of the Liberal Party in Brisbane is describing the State Government in those very terms. He accurately describes the Queensland State Government as corrupt. The President of the Liberal Party in Queensland says that, yet Senator Chaney tries to protect the Queensland State Government in the Senate. It is no surprise to me that the Premier has indicated that he will not reply, because an inadequate reply would be likely to implicate other key figures in the Queensland branch of the National Party. On the second occasion on which I wrote to the Premier, concerning Mr Morris, I offered to make representations to the Special Minister of State to provide Federal Police assistance for investigations into any cases where NDRA funds may have been obtained by fraud. I would expect the last thing that the Premier of Queensland would want would be for the Australian Federal Police to go up to Queensland ferreting out the facts about the Queensland State Government's administration of NDRA money. So I do not expect that I will be asked by the Premier to approach Mr Young for Federal Police assistance to ferret out the facts. The problem is that the Commonwealth is not responsible for the administration of individual loans under NDRA. It is self-evident that if the Queensland Government had nothing to hide, it would be meeting my request to supply more information about individual loans which have been granted. Finally, Senator Black asked what I intend to do. At this stage I have not decided, but I may be taking a recommendation to Cabinet in the next couple of weeks, assuming we do not get a satisfactory reply from Queensland. I do not expect to get a satisfactory reply from Queensland given the coded messages, or garbled messages, that seem to have been coming from the Premier. If no replies are received in the next couple of weeks I will have to consider taking the matter to Cabinet for decision. Senator CHANEY —Mr President, I ask the Minister to table the paper from which he quoted in answering that question. The PRESIDENT —The Minister has tabled the document. Senator CHANEY —In the light of the answer from the Minister for Finance on the situation in Queensland, has he yet directed his attention to the situation in Western Australia? Has he seen the call for an inquiry into the State Government's involvement in the sale of Fremantle Gas and Coke Co. Ltd? Does he intend to examine that matter in the way he has examined the matters in Queensland? Will he turn his great concerns about proper public and financial administration to those States which have Labor governments; in particular, the State of Western Australia and that matter which has been drawn to his attention on an earlier occasion? Senator WALSH —I do not have any intention of so doing and there are two very good reasons for that. The first, of course, is that there is not the slightest suggestion, let alone any evidence, that the Premier of Western Australia has received a $400,000 sling from a media magnate in anticipation of favours about to be granted, nor is there the slightest suggestion that the Premier's son had $5m of taxpayers' money spent on building a dam. Senator Chaney —I raise a point of order, Mr President. The Minister's last comment is undoubtedly in breach of the Standing Orders. Since occasionally the Minister deals with matters which are given some protection by Standing Orders I think we should take advantage of that and he should be asked to withdraw. The PRESIDENT —Under standing order 418, I ask the Minister to withdraw the imputation in his comment. Senator WALSH —Very well, Mr President, I withdraw the imputation. The facts speak for themselves. The other even more fundamental reason is that although Senator Chaney sees some irregularity in the Western Australian Government's administration and disposal or purchase of property in Western Australia, it is not using Federal money. Queensland, under the NDRA, is. Senator FOREMAN —I direct my question to the Minister for Industry, Technology and Commerce. What measures are provided by the Government to assist and encourage Australian exporters of manufactured goods and services? Senator BUTTON —Yesterday the Minister for Trade announced a new export drive. In launching this new export drive he referred to a number of matters currently under investigation and a number of proposals being implemented by the Government in respect of export activity. Prior to that announcement, a number of initiatives were already in place aimed at increasing Australia's export of manufactured goods and services. The establishment of the Australian Trade Commissioner Service in January 1986 led to the integration of a broad range of trade and trade support functions into one operating entity with a strong commercial orientation. The Executive Director of Austrade, Mr Lindsay MacAlister, who has a strong commercial background, is implementing those things which were announced at the time of its establishment. Total financial assistance to export industries for 1986-87 is estimated to be about $243m, which includes $92m for the export market development grants scheme. A high technology exporters scheme is to be established under the new initiatives to provide grants for overseas market development to firms producing high technology products. The sum of $2m has been allocated to the publicity and promotional activities associated with the national export drive aimed at improving export investment, production and marketing. Austrade is also developing some specifically directed assistance for promotion of particular products into selected markets. A number of strategies have also been developed in relation to particular markets, notably the China action plan. Similar plans are being developed in relation to particular geographical areas, including the Middle East, Europe, North America and Japan. Extensive market support is also available under the Australia-New Zealand closer economic relations trade agreement. The Prime Minister also announced on 17 September that there would be a special sub-committee of Cabinet to oversee a series of reviews on the effect of domestic policies on trade competitiveness. That initiative is being taken in recognition of the particular priority which should be given in the present circumstances to removing outmoded, ineffective or misconceived policies which are inhibiting the development of internationally competitive industries. A series of reports will be brought forward to the sub-committee for consideration and topics covered will include domestic and international transport, export controls, export inspection, foreign investment and tariff and tax induced input cost burdens. These market strategies to which I refer involve a targeted approach to export development designed to assist Australian firms to develop commercial opportunities or to capitalise on potentially large markets. Senator WALTERS —My question is directed to the Leader of the Government in the Senate. In light of the review of the fringe benefits tax by the Prime Minister and the fact that the Australian Taxation Office has not yet been told how the review will be handled, when it will be finished and who will have the final say in the cleaning up of the tax, what advice does the Minister give to those who will be travelling in the next fortnight and so will be unable to make out their fringe benefits tax forms later than this week? Senator BUTTON —I do not know what Senator Walters is referring to when she says that the Taxation Office has not been told. That statement is just silly. I refute it as a matter of fact. Senator Chaney —It wasn't silly on Tuesday. Senator BUTTON —Of course not. The announcement was made on Tuesday. I am asked what advice I would give to somebody travelling this month. I advise people travelling this month to obey the law, whatever it may be. Senator WALTERS —I ask a supplementary question. Can the Minister tell me what the law is? The PRESIDENT —Order! The honourable senator is not entitled to seek a legal opinion at Question Time. Senator JONES —I ask the Minister representing the Minister for Communications whether his attention has been drawn to the National Party of Australia advertisements in Queensland using television footage of Australian rugby league skipper Wally Lewis-a confirmed supporter, I might say, of the Australian Labor Party-in its advertising on television in the run-up to the 1 November State election. I also ask: In view of Wally Lewis's subsequent objections to this, what protections are available to individuals against such gross intrusions on personal liberties by the Bjelke-Petersen Government and the National Party Administration in Queensland? Senator WALSH —I am advised by the Minister for Communications that virtually all advertisements which appear on commercial television are submitted to the Commercial Acceptance Division of the Federation of Australian Commercial Television Stations for accreditation. On this occasion the advertisement in question was submitted to the CAD and conforms with the provisions of both the Broadcasting Act and the Electoral Act. As such, the advertisement was approved by FACTS for screening. As far as I am aware, no formal complaint has been lodged with the Minister for Communications or the Australian Broadcasting Tribunal concerning the advertisement. It would seem, however, from that advice that as far as the Broadcasting Act and the Electoral Act are concerned the advertisement in question does not breach the law. If that is the case-I heard Mr Lewis's protests on AM this morning about the unauthorised use of his name in association with the Queensland campaign and movie footage of him receiving a cup from the Premier; Mr Lewis is understandably very annoyed at having had, albeit in a subliminal way, his political affiliations misrepresented in the way that they have been-nothing can be done under the Electoral Act or the Broadcasting Act. The only thing I can suggest is that Mr Lewis should seek advice as to whether he has an action for libel. Personally, I cannot imagine anything more libellous than to have been associated by anybody with the National Party Government of Queensland. Senator Gietzelt —He might get $400,000. Senator WALSH —I was just about to say that. With a bit of luck, Mr Lewis might get the $400,000 from Mr Bjelke-Petersen which he in turn extorted from Alan Bond. The PRESIDENT —Order! I ask the Minister to withdraw that imputation. Senator WALSH —I withdraw the word `extorted' and refer to the sum that he received from Mr Bond. Senator TEAGUE —My question is directed to the Minister for Education. Is it the Government's intended or unintended outcome that the fringe benefits tax places new tax penalties on education institutions? I cite three examples: First, resident tutors and teachers who are provided with accommodation in tertiary colleges and schools; secondly, discounted or free tuition for the children of staff of independent schools; and, thirdly, meals provided to school staff at school functions. Senator RYAN —Those and associated matters are under review. Senator ZAKHAROV —Is the Minister representing the Minister for Health aware that the Australian Medical Association has issued posters stating that due to the deferral of doctors' fee increases `patients such as health card holders, who in the past have received service without cost, may find they now have to pay something out of their own pockets'? Is there any justification for this statement? In what circumstances would health card holders need to pay part of the cost of treatment? Senator GRIMES —I have-- Senator Peter Baume —Doctor bashing, is it? Senator GRIMES —Yes, doctor bashing! Any criticism in this place of any medical practitioner anywhere is doctor bashing, according to Senator Baume. The AMA has produced posters indicating that medical practitioners would be justified, in its view, in imposing on health card holders extra charges for medical treatment. I think that is a pity. The AMA has reversed its long-standing policy of asking its members to direct bill pensioners and other health card recipients. It advises doctors in notifications to them to charge in accordance with their circumstances and the patient's circumstances. No group is more jealous of its position in the community than the colleagues of Senator Peter Baume, Senator Crowley and I in the medical profession. They object very strongly when anyone suggests that anyone outside the medical profession who has been trained medically should have any capacity or ability to take over their role in the diagnosis and treatment of medical disorders. Yet they are advising members of their Association to assess their patients' financial circumstances. Doctors are apparently supposed to say to their patients: `How much do you have in the bank? How much are you earning? How much do you have invested?' As a result, the doctor, the medical practitioner, who has no training in this area at all, is apparently to judge how much he or she should charge that patient. I suggest that it is very strange that a profession that, for so long, has so jealously guarded the monopoly that it believes it should have in another area should want to intrude into that area for which it has had no training. I think it is a pity that the Australian Medical Association has resiled from its long-standing policy in this area of direct billing pensioner card recipients and other health card recipients in this country. The AMA's action follows the Government's deferral of schedule fee increases from 1 October 1986 to 1 November 1986 as part of the Budget strategy of restraint with equity-restraint across the board. I also remind honourable senators that no one in this community more than the medical profession wanders around the place demanding that we cut government expenditure, that people should pull in their belts and that the Government stop spending money in the way it has been and stop providing the services it has been. But as soon as the medical profession or representatives of the medical profession are asked to pull in their belts a little for a couple of months we get this ridiculous reply. The Government has no constitutional power to control doctors' fees. Everyone in this place knows that and the medical profession knows that. I know that the AMA initially was supportive of the deferral of medical fee increases and the AMA representative at the time said that most doctors would not increase their charges. In fact, they will not increase their charges. Most medical practitioners will continue to provide these services without extra charge to the disadvantaged patients that they are serving. I think we must be reminded that doctors are amongst the highest paid groups in the country. They are a privileged professional group. They set their own fees without restraint. Their fees are heavily subsidised by the taxpayer through the Commonwealth Government and, as such, I believe they should be prepared to delay the fee increases in the way that they have been asked to do so. It is my experience that what has happened in this case, as in any other, is that the medical practitioners who are out working with patients and dealing with patients are too busy to attend AMA meetings, that the people who have the time and the capacity to become officers and spokespersons for the Australian Medical Association are those well-established, wealthy and conservative medical practitioners and that when they come out with requests such as this for their colleagues to penalise people who are amongst the most disadvantaged members of the community most of them do not do it. To calm Senator Peter Baume's and Senator Walter's anxiety about this area, most medical practitioners in this country treat their disadvantaged patients reasonably. They do not charge them more in this regard and they do respect the fact that, for a long time, medical practitioners in this country have not charged people who have received those cards. They will ignore the cries of the greedy minority who have more concern for their profits, their Mercedes and their fancy houses in Vaucluse, Sandy Bay, Toorak, Newstead, or wherever it may be. I think people will be treated decently, as they were in the past. Senator VANSTONE —My question is directed to the Minister Assisting the Prime Minister on the Status of Women. I refer the Minister to a report in yesterday's Canberra Times which states that a meeting this week between the Office of the Status of Women and Australian Capital Territory employer and union representatives was told that Australian Capital Territory women would have jobs open to them if restrictive clauses in wage and conditions awards were lifted. I draw the Minister's attention to one example of such a clause, which states: . . . women are not required to do `any cleaning work in male conveniences or lavatories, climb ladders for the purpose of cleaning far walls, windows or blinds'. I ask the Minister: How will the removal of such a clause increase the status of women? What criteria will the forthcoming national tripartite conference on legislation and award restrictions to women's employment use to assess the appropriateness of retaining or removing such clauses? Senator RYAN —I have not seen the newspaper report to which Senator Vanstone refers so I cannot comment on it or any claims made in it or about it. However, the Government has a long-standing commitment to hold a tripartite conference on State regulations and elements in State awards which prevent women undertaking employment. The general criterion would be that women should not be prevented from undertaking employment which they are willing and able to do. Senator VALLENTINE —I wish to ask the Minister representing the Minister for Defence the same question that I asked yesterday concerning the inquiry of the Senate Standing Committee on Foreign Affairs and Defence relating to the accidental release of radiation from visiting nuclear powered or armed vessels in Australian ports and waters. Bearing in mind that, between 1971 and 1976, nuclear powered warships were banned from Australian ports at the request of the Liberal McMahon Government pending an environmental impact study, the results of which are still secret, and bearing in mind the recent sinking of a Soviet nuclear submarine, should not the Government now impose a ban on the visits of nuclear armed and nuclear powered warships until the Senate inquiry is completed and until adequate port safety plans to cope with possible accidents have been drawn up and exercises conducted in every Australian port likely to be visited by nuclear warships? Senator WALSH —We seem to be in a time warp here. We have the same question as that asked yesterday and I am going to give the same answer. If honourable senators want to know what it is, I suggest they should look up yesterday's Hansard. I will try to get a reply from the Minister for Defence. Senator MACKLIN —My question is directed to the Minister for Education. I refer to the proposal by Mr Alan Bond to establish a private educational institution on the Gold Coast in Queensland with full fee paying students. I ask the Minister: Will such students be able to receive the tertiary education assistance scheme allowance if they conform with the current eligibility criteria? Do the current States Grants (Tertiary Education Assistance) Acts enable the Queensland State Government to redirect Commonwealth funds to such a private institution? If so, does the Government intend to amend the Acts to prevent such payments? Senator RYAN —The Government's policy on proposed private institutions is that we do not support them. By that we mean that we will not provide any funding for them, including funding for students attending them. So any such institution that starts up must be very clear that it is starting up entirely under its own auspices and that it cannot, as has been the practice with so many private institutions in this country in the past, start off claiming to be private and self-funding and then very shortly come with its hand out for a public subsidy. No public subsidy of any kind will be forthcoming. Having said that, I should point out too that the Government has no particular constitutional responsibility in this area. The States have the legislative capacity to name institutions as universities and to establish Acts under which they can operate and so forth, but that legislative action does not have any consequence for Commonwealth funding. The Commonwealth will fund public institutions, such as those that it currently funds, and it will not fund private institutions. It is also already a guideline for Commonwealth-funded institutions in respect of their capacity to take full fee paying private students that public funds going to public institutions are not to be used for the purposes of creating opportunities for private students. Those students must come in again on a completely full cost basis and not draw off any of the funds that are intended for the public purposes set out in the Tertiary Education Commission's States Grants (Tertiary Education Assistance) Acts. Senator MAGUIRE —Is the Minister representing the Treasurer aware that recently the first anniversary occurred of the Government's crackdown on taxpayer subsidised lunches, the so-called free lunch? Does the Minister have any up to date information on employment in the restaurant and hospitality industry? If so, do the figures support or undermine the range of Opposition claims about the impact of the Government's tax reform package on the Australian economy? Senator WALSH —The answer to the last part of Senator Maguire's question is a very unequivocal yes, the facts do undermine the assertions and claims that were made by various people in the Opposition. The latest Australian Bureau of Statistics publication relevant to this question, for those who might want to look it up, is catalogued No. 6203.0. The subdivision which covers restaurants is designated `Restaurants, hotels and clubs'. Upon request the ABS is able to provide separate data for clubs on the one hand and restaurants and hotels on the other but no finer subdivision of the data is available. For restaurants and hotels, total employment in August 1985 was 176,000. Twelve months later, in August 1986, it was 188,600-an increase of 12,600, or 7.2 per cent. Because I am comparing August 1985 figures with August 1986 figures there can be no question of that increase being the result of seasonal influences. A number of people in the Opposition made such a claim when trying to dismiss the facts revealed by previous ABS publications. It is possible that the greater part of the 12,600 employment increase has been in the accommodation area rather than in the food and drink area but it is very difficult to see how these figures could be compatible with the sort of gloom and doom mongering put about last year by spokespersons lobbying for the continuation of the taxpayer-subsidised boozy lunch. It would appear that where a restaurant meal was an essential adjunct to business activity it is still being consumed. Where it was a prized social activity disguised as a business lunch that prized social activity is still going ahead even without the massive subsidy from the taxpayer. The lunches that have been knocked off are those which were based on a misallocation of resources brought about by a distortion in the tax system. No one should cry over them. In short, predictions about employment consequences of the termination of the tax subsidised boozy lunch made by Senator Michael Baume are about as reliable a guide to reality as a Patrick Partners prospectus was. Senator Messner's predictions are about as reliable a guide to reality as his predictions about the effects of wine taxes last year or in 1984. Senator BUTTON —On 7 October, Senator Sheil asked me a question without notice relating to a statement in the journal Computing Australia in relation to the offsets program of the Government. I have obtained an answer for Senator Sheil which is as follows: My Department, through its responsibility for the administration of the civil element of the offsets program, is keen to ensure that overseas suppliers to the Australian Government and its agencies approach their offsets commitments in a positive and constructive manner. In fact, the Department of Industry, Technology and Commerce has an excellent working relationship with most of the firms involved in the offsets program. The recent considerable publicity on offsets achievements is evidence of this. Honourable senators will probably recall an article on the front of the Australian Financial Review last week. Nevertheless, the Government stands by its policy statement of 15 January which clearly states that companies with an unsatisfactory offsets performance will face more stringent conditions in tendering for Government business. The article to which the honourable senator referred makes it clear the companies concerned were identified by industry sources and not by my Department. I believe it is in the public interest for senior officers of my Department to explain Government policy. Senator WALSH(Western Australia-Minister for Finance) —by leave-Mr President, I have been misrepresented and wish to make a brief personal explanation. I have in my hand a transcript put out by the Leader of the Opposition (Mr Howard). It is a transcript of the `doorstop' by the Leader of the Opposition this morning. I will not go into all the obfuscations; only a couple of sentences are really relevant. He said of the statements by the Prime Minister (Mr Hawke) yesterday on fringe benefit taxation: Mr Kerin won't buy into it because he said the matter hasn't been discussed in Cabinet; Senator Walsh says there has been a full ministry meeting . . . The important word is `full'. I said no such thing. The Hansard record shows that I said `a ministerial meeting'. What I believe I said, and I am having the tape on this checked, was `a meeting of Ministers'. Either way, it certainly was not a full ministerial meeting, as Mr Howard asserted, and therefore there is no inconsistency between what Mr Kerin is alleged to have said and what I said. Consideration resumed from 17 September, on motion by Senator Reid: That the Senate take note of the paper. Question resolved in the affirmative. Debate resumed from 17 September, on motion by Senator Vigor: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.07) —The service and business review and outlook paper of Australia Post is a useful document for the Parliament to have. It gives an idea of the performance in the last financial year, and the expectations for this year, of an organisation that is extremely important to the whole of Australia. We find, for instance, that 90 per cent of postmarked standard articles were delivered on time in 1985-86. In New South Wales and the Australian Capital Territory the performance has improved dramatically since last year's major dispute over rostering. Now, more mail sorting and management people are on duty when they are really needed. Two hundred more people have been employed and the performance has improved remarkably. I congratulate Australia Post on this success. My understanding is that the percentage figures for next day delivery are now in the middle to high nineties. I congratulate all those whose efforts have helped to achieve this. I hope that the new approach will continue to work in the future. In the divisional and State offices many people want to achieve further improvements but unfortunately are stifled by the bureaucracy at headquarters. Yesterday I mentioned the problem of the indexing machines being in storage for over two years while headquarters waited to negotiate with the unions. Industrial relations matters are very difficult if the channels of communication are blocked and there is an atmosphere of total mistrust. Greater effort will have to go into forward planning and talks with unions about the phasing in of new technology. These matters are never easy but they become virtually impossible if things are done on the run and after the event. The attitude of Australia Post to automation and technology will come up for further scrutiny despite the abandonment of the efficiency audit by the Auditor-General's Office dealing with automation of counter services. I mentioned yesterday that some of the arrangements in the tendering process for the purchase of counter services terminals need a lot more explanation. In particular, it is disturbing to hear that conversations between Australia Post officials and private sector principals were apparently known in detail to Commonwealth banking officers the following day. I shall certainly be examining just how Australia Post is going about the computerisation of all its information systems. It is essential that the choices made are forward looking and do not tie the organisation to ineffective and obsolescent equipment. Our computer software industry is sufficiently adept to provide Australia Post with everything it should ever want, providing that that industry gets enough notice. If we go about it sensibly, we can also develop export markets through the buying of Australian software and Australian products by institutions such as Australia Post. One other point that emerged from the abandonment of the audit report related to the siting of post offices. Obviously facilities should be available where people need them and will make extensive use of them. However, Australia Post red tape does not always allow that to happen. For instance, in some parts of the country there is a rule that there must be 75 shops or professional suites in a shopping complex before it qualifies for a post office. There is another rule about agencies being too close to each other. The combination of these rules has prevented the Macquarie Fair complex in the Mount Hutton area of the Lake Macquarie region from getting a post office, despite the fact that it is the hub of the community. I believe that Australia Post needs to look at these types of bureaucratic rules and solve some of these problems. I shall be following up the rationale for the various rules about the siting of post offices to see what sort of economic analysis lies behind them. We should be making more inquiries about the principles involved in decision-making within Australia Post and also within similar statutory bodies within Australia in order to save vast amounts of money for the Government and for the people of Australia. Question resolved in the affirmative. Debate resumed from 17 September, on motion by Senator Vigor: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.12) —I rise again to talk about a very effective body-Telecom Australia-but one which needs a few directions, particularly in the area of its directories. The Government is doing the same thing to Telecom as it is doing to the Overseas Telecommunications Commission-it is bleeding back $98m in loan repayments when Organisation for Economic Co-operation and Development experts say that we need to spend more on development and if we want to develop a communications industry in Australia Telecom is the hub of our telecommunications industry. I believe that we should take a lead from the French-not just provide them with uranium, as the Government seems to want to do-in the area of telecommunications. They have an excellent system of directories in which every person who has a telephone has in fact a computer phone. This means that directory assistance is never required. French people who have telephones are becoming computer literate and French industry is being supported because the terminals used are produced in France. I believe that we have a sufficient market to develop cheap terminals and develop our own computer industry if Telecom would simply look at the cost of operating its directory as a computer-operated directory and using the telephone network to access data bases, which could contain not only telephone information but also information about government and local government operations. All of this could be provided through the telephone service and make Australia a country in which people are informed about what is happening in the community. If we use Telecom in this imaginative way I believe that we can develop Australia's consciousness of computing, we can develop Australia's consciousness of the new techniques of communication, and justify moving over to fibre optic networks, et cetera. It is about time that Telecom revised its charging policy. Large corporations tie up lines all day at local call rates and use cheap rates for computer access. This is just ripping off the country. If a charge per minute were introduced in cities and towns so that country people could make calls at a similar or the same charge per minute as city people, I believe that would result in almost the same cost of providing services. The usage may be different, but the advent of optic fibre systems, which can carry a lot more telephone calls per cable, would make it possible to offer country people real service at the same price city people have to pay. If all calls were on a time charge basis and if all calls were the same price, it would be of real advantage to Australia. One way of bringing Australia together is actually to use the advantages of our telecommunications systems and services. I recommend that Telecom move into some of these exciting areas and that the Government encourage Telecom by not ripping all its profits off it and by allowing it to reinvest some of its profits into socially useful functions such as developing our industry, training our people in computing and providing a service to everybody, whether they live out in the country or in the city. Question resolved in the affirmative. Debate resumed from 17 September, on motion by Senator Vigor: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.16) —The Advisory Council for Inter-government Relations is once again proving its importance to the people of Australia by taking up issues which very closely affect the well-being of people. I refer particularly to local government. Local government lacks proper access to Commonwealth controlled services. As a result of the lack of consultation between the Commonwealth and local government, unnecessary hardship is created. Many of the decisions of the Commonwealth Government directly affect people at local levels. Yet until the establishment of the Advisory Council for Inter-government Relations, there was little communication between these two disparate levels of government. They came together only at such things as the Australian Constitutional Convention, where local government was represented, but that has been abolished by the Government and replaced by the Constitutional Commission. This report deals in particular with measuring population changes at local and regional levels. Constitutionally the Commonwealth Government has a responsibility for census and statistics. Financial restraints mean that a full population census is only undertaken every five years. The full census does give accurate information about population at the local level. However, local government currently has little input into the process of deciding on other information to be obtained through the census process. It is vital for local government planning to know about the types of people living in particular areas. This is so that local government can plan ahead for services needed in the future. The ACIR recommends that local government should have representation on the Commonwealth-State statistical co-ordinating committee, to co-ordinate population monitoring activities and State and local government population forecasting data requirements. Since a census is only held every five years, population movements are estimated in the intervening years by `intelligent' or `informed' guesses. This is known as population forecasting. The outcome of these guesses is vitally important to local government since its income from State and Commonwealth grants is assessed on a population basis. Yet the forecasts are currently subject to enormous errors, as the movement of people on a local scale bears little relation to overall State population movements. Currently there is no procedure for taking local effects into account in assessing population in the intervening years. The closure of a factory, a downturn in prices for a particular commodity or the opening of a popular educational or recreational facility will have large effects on local population changes. Economic swings rarely affect a State equally. Regional and local factors have a much more marked effect in certain areas than on a State overall. Current arrangements for collecting national data are too inflexible to detect, let alone take into account, changing situations at regional and local levels. The report describes how the inaccurate prediction of growth for the Fairfield City Council in New South Wales led to the Council losing around $135,000 in funds from Commonwealth and State grants between the census years 1976 and 1981. The population was underestimated by 6,000 people out of a total of 132,000 people. Even more wrong was the prediction that the population in the Penrith City Council area would grow from 79,000 in 1976 to between 98,000 and 131,000 by the year 2001. In fact, by 1981 the population had already grown by 30,000-a 38 per cent increase in only five years. It is extremely important that these statistics be available. This report illustrates the cost effectiveness of ACIR in facilitating the collection of the best possible type of statistics about people so that services can be provided in a timely and efficient way. It also recommends changes so that the cost of collecting this information can be minimised while its usefulness is maximised. I commend this report and the ACIR to the Senate. However, the Government appears to want to close it down. Anything that appears to be effective and efficient the Government seems to want to close down. Debate (on motion by Senator Sheil) adjourned. Debate resumed from 17 September, on motion by Senator Vigor: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.23) —We are dealing with papers that were presented about three weeks ago. I commend the report of the Export Finance and Insurance Corporation to the Senate. This is the final report of EFIC in its original corporate structure. It marks the transition between EFIC as an independent statutory body and the new Austrade. It also marks the separation of the Department of Trade advisory services to government from the active trade promotion and support role now incorporated and merged into Austrade. At this stage I reaffirm my support for this logical, efficient and appropriate division which the enlightened Department of Trade undertook. It is always worth giving a few bouquets. It is always a mistake to expect Public Service personnel to perform efficiently in the market-place. The need for accountability and constant preoccupation with rules and regulations, which is apparently part and parcel of a democratically responsible Public Service, imposes far too great a restraint on risk taking, quick responses to market demands and positive action. There are a number of other Public Service departments whose requirement to fulfil multiple disparate roles severely hampers their capacity to perform any of them effectively. In particular, I refer to the Department of Science, in which I have a special interest as Australian Democrats spokesman for science. The Department of Science has a hotchpotch of advisory, research, technical services and industrial roles which it is quite inappropriate to lump together under the administrative control of a single Public Service umbrella. However, I digress. Senator Button —Frequently, if I might say so. Senator VIGOR —I hope that the Minister has at least noted my point about the Department of Science. EFIC has performed, and will continue to perform under its new umbrella. It provides a vital service of insurance, guarantee and finance to support Australian exporters in trading on the exposed markets of the world. It has carried out this function through a period of change in international currency relativities and banking practices and through a period of disastrous collapse of world commodity prices. That EFIC has done so at a considerable profit while offering exporters a real service is, I believe, a testimony to the expertise and the management in that organisation. EFIC paid nearly $16m into general revenue in the last full year it traded and another $5.7m in its last six months of trading. I point out that this is extra revenue raised from our exporters. Under the new Austrade arrangement this revenue will be used to fund services to exporters provided by other divisions of Austrade, and I believe that this is right. At this time I also pay tribute to Australia's exporters, that intrepid group of entrepreneurs who have carved out a niche for their products and who, together with the Australian consumers, pay a heavy price for the protection of Australia's non-exporting industries. The protection given to import substitution development in the past, the encouragement of overseas corporations to manufacture in Australia rather than to import their products, cost Australia dearly. Those sectors which pay are our exporters, our consumers and our unemployed. That is a disadvantage to our community. The reason for inviting highly protected manufacturing enterprises into Australia was ostensibly to develop our own manufacturing capability, our own technology base and our own defence base. However, the outcome has been to sell off our indigenous manufacturing enterprises to foreign owners; to come to depend on licensing of imported technology which is often outdated and restricted to local markets, while neglecting our indigenous industrial research and development; and to buy more and more of our defence requirements in preference to supporting local industry, thus leaving us exposed to any blockade of our international lines of supply. We now face an economic depression of massive proportions with rampant unemployment-in a country where resources are plenty the population is small. These are the consequences of ill-understood protective practices and a flooding diarrhoea of foreign capital forcing up our dollar and holding down our exports. I commend our intrepid exporters for their will to export and for their determination, which holds Australia barely afloat. I commend this report to the Senate. Question resolved in the affirmative. Debate resumed from 16 September, on motion by Senator Vigor: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.28) —The statement of expenditure for the Advance to the Minister for Finance 1985-86 is a very important paper. Moneys paid from the Advance to the Minister for Finance can indicate a variety of things. Estimates can prove inadequate because of increased work loads, unexpected salary jumps or other unanticipated factors. They can prove inadequate because project management is not up to scratch. The statements of expenditure from the Advance to the Minister for Finance for the period April to August disclose some interesting information. Further government waste is still in the pipeline and I would like to bring this to the notice of honourable senators. I believe that is inexcusable in view of the Budget cuts which have not been thought through properly. Some of those ill-considered cuts have affected regional and rural Australia and could have been spared. For example, the closure of the six regional offices of the Department of Immigration and Ethnic Affairs will disadvantage many people without introducing efficiencies in the Department. The closure of nine education centres, including the Port Pirie, Benalla, Tablelands and Warwick centres in regional areas, is a disgrace. It indicates a step away from equality of opportunity. It is entirely avoidable by the Government keeping a tighter watch on waste. For instance, in the April and May expenditure statements $240,000 was set aside for `expenses relating to planning for the establishment of a national identification system involving the issue of a card to be known as the Australia Card'. This amount is on top of the previous sums spent. I note that $35.5m will be allocated to this project this year, of which $4.3m is being thrown into the planning expenses area. This really is extraordinarily extravagant. I hope that some of these activities will be useful when we get improved tax file procedures and banking transaction reporting, instead of the current proposed system, which appears to be simply an attack on civil liberties. Another example of waste appears in the June statement of expenditure. An amount of $232,000 was set aside for the Parliamentary Commission of Inquiry which was established to investigate the activities of His Honour Mr Justice Murphy. This was quite a disgraceful attempt by the Government to pass the buck and have some heat taken off it. The implications for civil liberties and for those in high office who do not tug the forelock to vested economic interests are quite grave. The Australian Democrats were alone in opposing the establishment of the Commission. The July and August statements contain $6,177,000 as compensation to persons affected by the social security conspiracy case. The payments arise, quite rightly, from the recommendation of the Hon. Dame Roma Mitchell, who conducted an inquiry into those prosecutions. The whole episode is one of shame for Australian law enforcement personnel. People were subjected to quite insensitive and even abusive actions because of their nationality. Conspiracy charges were gradually withdrawn. A magistrate suggested that charges be laid against a former policeman who was involved in running the case. The media were cajoled into treating those charged as though they were guilty. Many innocent people suffered further great personal injury, and we are now paying out $6,177,000 for that mistake. I hope that this type of episode from the Fraser era never recurs in this country. I turn briefly to the April allocation to the Antarctic Division of the Department of Science and the May allocation to funding under the community development employment program within the Department of Aboriginal Affairs. I believe that these are both worthy programs. The Antarctic Division allocation dealt with ships that were stuck in ice because of special conditions. The CDEP is a very worthy cause. I believe that it would be even more effective if we could get more trained personnel into the area of community development employment programs in Aboriginal communities. Indeed, that area has been seriously neglected by this Government and previous Governments. I recommend to the Senate that we should examine these allocations much more closely. The ACTING DEPUTY PRESIDENT(Senator Jones) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Consideration resumed from 24 September, on motion by Senator Reid: That the Senate take note of the paper. Question resolved in the affirmative. Senator WATSON(Tasmania)(3.34) —I move: That the Senate- (a) notes that the new fringe benefits and capital gains taxes are administrative nightmares, impose on business a massive paper burden, contains inequities and inconsistencies, and should be repealed; (b) calls on the Federal Government to introduce legislation to remove all anomalies and problems confronting: (i) isolated local councils, (ii) mining operations, (iii) other businesses operating in remote areas and overseas destinations, (iv) the elderly and infirm, (v) non-profit-making organisations, and (vi) small businesses; (c) calls upon the Government to make plain its intention to deal with anomalies and apparently unintended effects of the Income Tax Assessment (Capital Gains) Act, particularly sections 160zzs, 160zzt and 160zl and to amend the legislation to give proper effect to shareholders' rights; and (d) notes with concern that the Commissioner of Taxation has issued a ruling known as IT No. 2121 which: (i) appears to catch those family arrangements which have been legitimately established with the purpose of providing limited liability to family assets such as the family home or to provide a `going concern' legal entity for the contractors' business; and (ii) in many cases has been employed by the Commissioner of Taxation to penalise contractors whose circumstances do not warrant such heavy-handed treatment. It would appear that at last the eyes of the Prime Minister (Mr Hawke) have been opened to the disastrous consequences of the fringe benefits tax, three weeks before that tax is due to be paid. It seems inconceivable that, after all the submissions and pleading by concerned groups and individuals on this matter, the Prime Minister has only just acknowledged the monumental difficulties associated with this iniquitous tax. After all, it is not surprising, seeing that he remained unaware of Australia's calamitous trade difficulties until last year, when it was too late. In the same way as he and his senior spokesmen have sought to blame the trade difficulties on corrupt markets instead of on their own ineptitude and mismanagement, they are now seeking to blame the extraordinary community unrest and confusion about the fringe benefits tax on corrupt tax cheats. This tax was aimed allegedly at stopping some pretty highly paid executives from manipulating the system-for example, by having their children's school fees paid or by having other taxes paid by their company. But this has become a monster which has reached down to the lowest rungs of the social ladder. What will we hear today? The Government will concentrate on talking about people at the top level. But it is at the bottom level that this tax is biting so hard. The Government has been seen to be in error at this level. This fringe benefits tax is not only damaging farmers, miners, small businessmen, old ladies, the infirm, the Royal Society for the Prevention of Cruelty to Animals, the Youth Hostels Association of Australia, residential colleges, and so on; it is also affecting sporting and social clubs, and, according to the Department of Defence, it is even affecting the moving of the family pet. In fact, the Defence Department originally said that it would have to fork out $115.6m. But even the Defence Department could not get it right; it was out by $40m. If even government departments cannot understand this tax, how can the ordinary small businessman understand it? Whichever way one looks at it, it is an awful lot of money that could be spent on flying an F18 or running a battleship. Air-conditioning allowances for personnel in tropical areas and free water supply for residents on the Woomera base are caught by this fringe benefits tax. We hope that these are all unintended consequences. The Government estimated that only about 15 per cent of farmers would be affected by the fringe benefits tax. Actually, we have found that four out of 10 are now affected in a major way. If an employer is good enough and humanitarian enough to send a bowl of fruit to a sick employee, this attracts a fringe benefits tax. How sick can the Government get when it taxes this sort of thing? The compliance provisions of this legislation need to be looked at. The Government has seen the light in relation to the fringe benefits tax. I now call upon the Government to look at the anomalies and inconsistencies in relation to the capital gains tax. It should not wait until three weeks before 30 June, when the returns in relation to the capital gains tax are due. It should act now. It should use all of the combined resources that will look at the inequities of the fringe benefits tax and apply their minds to this area. The message has not got through. The Government still has blinkered vision in relation to the capital gains tax. We can only hope that the Prime Minister is not kite flying and that he will be genuine. A few years ago our beloved Prime Minister enunciated nine principles. They were universally accepted because they were right. We acknowledge that they were right. Nobody disputed them. When they were paraded across the country the applause came from every sector of the community. However, that applause and that anticipation of a better future quickly degenerated into a slow hand clap when the fringe benefits tax was announced. The cheers of ordinary, middle class people turned to anger, dismay and confusion. I am not referring to the top executives who have been paraded around this country; I am referring to the ordinary people who travel by train and carry their lunches in brown paper parcels, the lower levels of society if one wants to be class conscious. All of these people had to come to terms with the effects of this iniquitous tax. The fringe benefits tax offended four of those nine grand principles. One of those principles was that the tax system had to be simpler and fairer so that it could be easily understood. But what has happened? It has become an administrative nightmare. It is full of anomalies and inconsistencies. It has led to tremendous confusion throughout the community. In no way, for example, would I support any scheme which allowed executives, professional people and the self-employed to receive a major part of their income as a tax fiddle while the majority of the people were taxed at source. But what has the Labor Party done? It has legitimised the payment of fringe benefits to the top executives. It has legitimised that payment at last and it is supposed to be the party which is in favour of the working class, the lower levels. What has this fringe benefits tax done that it does not realise the consequences of its legislation? Senator Robertson —Give us an example of that. Put your money where your mouth is. Senator WATSON —I will give the honourable senator an example. Any top executive earning over $35,000 a year is now in a position to convert part of his salary to fringe benefits. He can legitimately convert $50,000, $100,000 or $200,000, if the company is big enough, in terms of maintaining a car, support for his wife and family, his children's education expenses, home loans and those sorts of things. The company pays at the rate at 49c in the dollar. They are some examples for Senator Robertson. But what about the middle level executives? They have missed out. What about the lower paid persons? What about the lassie who goes home after work at 8 o'clock in a taxi paid for by her company? She will not be able to do this in future because a fringe benefits tax will have to be paid. These people have been cashed out. Principle No. 5 says that the tax must be paid according to a person's ability to pay. This principle was applauded. However, the fringe benefits tax does not recognise this principle. It is not a tax on profitability; it is a tax on expenses. Many people in the community do not have a large enough income to pay these additional taxes as such because they are being screwed by this unconcerned Government. Farmers in the outback who offer cheap housing to secure labour in isolated areas and whose incomes are well below the poverty line have to pay this unjust tax in accordance with a market-related rent. How can one arrive at a market-related rent when one is 50 miles out in the bush and there are only half a dozen sub-standard houses there, all empty? Senator Robertson knows that this is a lot of rubbish. Non-profit organisations have to pay fringe benefits tax on the meals they provide to their workers-the people who work in soup kitchens and charities. A fringe benefits tax has to be paid by these charitable organisations on the value of the soup and meals that their workers receive. How unjust can one get! This tax will apply to youth hostel organisations which provide meals and entertainment, residential colleges which are attached to universities and so on. The list is just so long. It also applies to the cost of providing live-in accommodation at night to people who look after the elderly in need of nursing attention and invalids. A tax has to be paid on accommodation provided overnight to people who look after the sick and the infirm. How cruel can one get? People who do not have the capacity to pay are to be taxed 49c in the dollar for providing this accommodation. I want honourable senators opposite to tell me what is fair about an employer having to pay a tax which is really for the benefit of the employee. What about the situation in which an air-conditioner is installed in a car in accordance with the provisions of a salesmen's award in New South Wales? In such a case the employer has to pay a fringe benefits tax. Principle No. 8 sets out that any reform must provide the best possible climate for investment, growth and employment. But look at what has happened in relation to overseas contractors. Because of pressure in this instance, the Government had to back down. But it did not back down in a humble way. It said: `That is a technical amendment. We never intended to cover these sorts of consequences'. We are heading towards a situation of administrative change rather than legislative change. Very few people really knew what would be the impact of what has been happening. We have had off the cuff answers. We are told that any reform package must have widespread community support. What a laugh! The Australian Bureau of Statistics says that something like 58.9 per cent of the work- force receives a fringe benefit of some kind. If the boos and the jeers at the Victorian Football League grand final in Melbourne and the rugby league grand final in Sydney did nothing else, they certainly delivered a message to the Prime Minister that his actions no longer have the support of the majority of Australians. Maybe this was the instigator that at last has changed the Prime Minister's mind. The fringe benefits tax was initially devised to eliminate privileged perks. The tax has been a monumental disaster. It is inequitable, discriminatory and an administrative nightmare. The compliance provisions themselves, with all of the anomalies and inequities, really make it a bad law. It is a bad law because it is unjust. It taxes the provider of the benefits instead of the person who receives them. It is complex, inefficient and increases unemployment. It is a tax on employment. It is inequitable because it destroys the incentive to invest. Even the Confederation of Australian Industry estimates that over $2 billion in revenue will be collected. This is seven times the estimate of the Government. How wrong can the Government be? How far out can it get? Senator Robertson —Who is wrong this time. Senator WATSON —The Government is going to correct it. New Zealand has it right. It does not tax non-profit organisations. They are exempt. There is a relatively simple tax over there. We have followed every burrow down the line to get the maximum tax from everybody we can. The tax is complex and mountains of paper work are involved. Let me give an example which borders on the ridiculous. The Bowater-Scott Ltd paper organisation has a problem in relation to its 800 employees when they buy stock which is manufactured by the company. Under the FBT, every toilet roll sold below the trade price attracts a fringe benefits tax which the Bowater company is liable to pay where the value per employee exceeds $200 a year. Every time an employee purchases a cheap toilet roll his name is entered on a computer in order to determine the company's tax liability. What a farce! What a waste of resources in this country! This tax is inefficient and complex. An additional 590 people have been employed to administer this tax. Morale in the Australian Taxation Office is at an all time low. People at the top levels are leaving because of the complications of not only the fringe benefits tax but also the capital gains tax. The fringe benefits tax will also increase inflation. Export industries are affected in a major way by this tax. I call on the Government to exempt export industries from any major fringe benefits tax. It will reduce employment opportunities because it is a tax on employment. People who have a negative or zero income are going to be taxed on this income. The tax destroys incentive, growth and development. Rather, we should be trying to stimulate investment, productivity and employment. As I said, we have to encourage export industries. The tax is full of absurdities. The annual children's Christmas party, service awards, presentation dinners and gifts to people in safety organisations, such as volunteer firemen, are all subject to fringe benefits tax as far as the employer is concerned. If an employer takes the company utility home in case he is called out to an emergency, the employer is going to be taxed. Safety incentive and award schemes are subject to fringe benefits tax. If an employee is granted a loan and later disappears, fringe benefits tax has to be paid until the loan is repaid or written off. Firms that provide off-street parking to their employees are subject to fringe benefits tax. Let us look at the sorts of ridiculous situations that apply in the Department of Defence. The removal of a pet, air-conditioning allowances, water supply at Woomera, child reunion travel, library services, free access to a library of a community nature, relief trust fund allocations, compulsory sporting fees where members of the defence forces require registration, local affiliation, umpiring fees and so on are all subject to this iniquitous fringe benefits tax. Let me say just a few brief words on the capital gains tax because my time is limited and we have a long list of speakers. This tax will also raise a lot more than has been estimated. In fact, the top level meeting which was recently held between the top executives of the Law Council of Australia and the Taxation Office to sort out the problem broke up in utter confusion because no common ground for discussion could be found. We find the inequities for unit trust holders still unresolved. There are tremendous problems in this area. I therefore call upon the Government to repeal this iniquitous tax and certainly to remove all the anomalies by legislative force rather than by administrative action. We call upon the Government, therefore, to introduce legislation to remove the anomalies and all the problems, especially those confronting isolated local councils, mining operations, businesses operating in remote areas and overseas destinations, the elderly, the infirm, non-profit making organisations and small business. Senator NEWMAN(Tasmania)(3.50) —One would think this is a government in the last stages of decline. Day by day we see a stumbling, bumbling government having to undo its decisions. The people of Canberra recently succeeded in changing the Government's will when it broke its promise to the mortgagors of the Australian Capital Territory. We are now seeing the Government having to take back all the words which have spoken by its members over the last six months or so and having to look again at this dreadful tax. This is a government in retreat. It is interesting that this Government is not listening to the people. This is not a question of consensus or discussion. The Government had plenty of opportunities for consensus and discussion before this tax was introduced, but it was deaf to all entreaties. It is interesting that the only way this tax seems finally to have been brought up for review is because the nervous nellies of the various factions went to breakfast with the Prime Minister (Mr Hawke) and persuaded him that they were in trouble. Because of that it looks as though we might at least get a review of this iniquitous tax. There was another necessary criterion and that was that the Treasurer (Mr Keating) had to be sent out of the country. This Government seems to lurch from crisis to crisis when either the Prime Minister or the Treasurer is out of the country. When they are separated we usually see some sort of drama in relation to the financial management of this nation. Senator Sheil —He's trying to teach the Americans. Senator NEWMAN —Is that what he is up to? I thought he was out buying clocks as a hedge against inflation and a downturn in the economy. I have said that the Government was given plenty of advice. It is interesting to note who gave it that advice and what sort of advice it got. The Government is now talking about unforeseen circumstances and the unintended results of this tax. It really is a case of `they told you so but you would not listen'. The Tasmanian Advocate of 6 June this year reported: The Federal Government's new fringe benefits tax could see the loss of more than 300 jobs in the Tasmanian motor vehicle industry, according to the President of the Australian Automobile Dealers' Association (Mr Grahame Woodward, of Hobart). . . . . Tasmanian statistics are usually not far behind the national trend, and if this is any indication the State could see average reductions of personnel from 10-20 p.c. as surveys in Sydney and Melbourne have shown. Mr Woodward was not alone in that belief. The industry told the Government that the slump in new car sales in Tasmania was continuing, with the latest figures confirming that the industry had suffered a 29 per cent drop in April from the same period last year, and that Tasmanian new car dealers had largely blamed the slump on the uncertainty surrounding the Federal Government's fringe benefits tax. The Senate will recall that during Question Time on Tuesday I asked Senator Button about the situation relating to the fringe benefits tax and the car industry. I asked was it not a fact that the one important thing the Government could do to help the industry would be to remove the fringe benefits tax. He said that as far as he understood the situation, the August sales and registration figures for motor vehicles in industry terms suggested a bottoming out of the decline in motor vehicle sales, and that it had also been reported to him that the figures for September showed some slight improvement on what was anticipated. I do not know who was anticipating it, but I would like to tell the Senate what the situation has been in my State over the last nine months in relation to passenger car registrations-the very area that is affected by fear of what the fringe benefits tax will do and what it is already doing. From April 1985 to April 1986 there was a decline of 29 per cent in new registrations; in May there was a decline of 25 per cent; in June there was a decline of 23 per cent; in July there was a decline of 22 per cent; and in August, as Senator Button should recall, there was a decline of 28 per cent. If that is bottoming out, it has gone up to bottom! The September figures will show another 28 per cent decline compared with last year. I do not know where the Minister for Industry, Technology and Commerce (Senator Button) is getting his advice from, but I suggest he change his source. The figure for new passenger vehicle registrations in Tasmania for the nine-month period from January to September 1986 it was 6,550-a decline of 25 per cent over last year. In fact, Mr John Nettleford, the Vice-President of the Australian Automobile Dealers Association in Tasmania said: The fringe benefits tax has been disastrous for our industry. Members have all been putting people off. It has caused widespread ill-feeling inside and outside the industry. Another member told me: Our business has collapsed around our ears-the fringe benefits tax has done it. The miners also told the Government what was going to happen. They said in May that the fringe benefits tax was a folly. The Australian Mining Industry Council said: The new tax impost represents more than five per cent of profits for the industry in 1984-85. To recover this, the iron ore industry will need to sell about five million additional tonnes of iron ore-equivalent to finding a new market equal to our Korean exports. . . . . The fringe benefits tax is a tax on mining employment in remote areas. . . . . At a time when the Government and unions are looking for additional industry investment, to impose an additional tax of this magnitude is folly and the Government should reconsider its decision. The Government was told that in May. Two separate mining companies on the west coast of Tasmania are up to $500,000 and $1m. The industry is on its knees. Even the reduction in the rate of the dollar has not helped in terms of their being able to sell their products overseas because of the low price for their minerals. Yet regardless of their profits, they are required to pay half a million dollars and $1m in these two separate cases for benefits that are supplied to their workforce. These are not rorts. They can in no way be described as fat cat tax perks. The accountants told the Government in April or May this year, when debate on this matter began, that the tax would mean that there would be more work for employers, more work for Government members, and more work for the lawyers of this nation. The Government did not listen. The Australian Parents Council told the Government in May what the tax was going to do to the boarding schools of the nation. The matter of isolated children is very much a motherhood thing with the Government, but when it comes down to it, the Government simply does not allow for the high costs of providing proper care for the children from isolated areas when they have to stay in boarding schools or hostels in town. The schools and hostels who care for these children will now have a liability for fringe benefits tax. Schools will have to assess their liability for the fringe benefits tax for those occasions on which teachers attend school functions as part of their job. The Australian Parents Council said in May: To impose such administrative burdens and taxes on non-government schools would divert scarce resources away from teaching children. The Government cannot say it did not know. The Returned Services League of Australia told the Government in May that public spirited citizens would be less willing to help when an even greater proportion of their donations was absorbed by the administrative costs of a voluntary organisation, through the extra clerical work needed by the fringe benefits tax legislation and, of course, through having to pay taxes where none existed before. The RSL was concerned that the fringe benefits tax would add to the destructive processes that have made it increasingly difficult in the past decade for charitable organisations to continue their work. The RSL believed that in applying the new fringe benefits tax to welfare and charitable bodies, the Government would be adding to its own social welfare bill. Inevitably it would have to provide additional services to compensate for those previously provided by non-government bodies. The Australian Chamber of Manufactures told the Government in May what it was doing. It wrote to the Prime Minister and said: The Australian Chamber of Manufactures, representing some 6,200 member companies spread across the whole spectrum of manufacturing industry, is implacably opposed to the proposed fringe benefits taxes. . . . . The proposed fringe benefits taxes introduce a nightmare into administration. The returns which have to be provided to the Taxation Office, the log books that have to be kept in vehicles and the sheer effort of keeping track of all the detail will strain the viability of many businesses. Large companies may be better placed to deal with this onslaught, but small business cannot afford or cope with the administration burden. . . . . Any rational individual, weighing up the need for manufacturers to make an improved contribution to higher levels of activity, both domestically and externally, must conclude that this is not the time to levy further imposts on business . . . Government prefers to exploit industry as a milking cow to fund uncontrolled public expenditure rather than take hard political and economic decisions needed to enable industry to perform more effectively as the engine for balanced economic growth. It makes a mockery of the attempts of the Minister for Industry, Technology and Commerce, Senator Button, to help with problems of inefficiency in private enterprise. I have here a Press release from Senator Button dated 29 September in which he says: The experience of leading overseas countries which have competitive economic environments that reward innovation, confirms that the competitiveness of their individual firms and industries can be significantly undermined by lags in the application of new management techniques and technologies. He does not mention how they can be significantly undermined by taxes on a business which is making little or no money at all. The Government has been told over and over-we know that the Premiers have all been trying to tell the Government-what it is up to. Mr Burke said that he could not see value in a tax that did nothing but raise the cost of services provided by State and local governments. He said that the iron ore industry alone would have to find an extra $25m to cover the fringe benefits tax. He was presenting a submission which said that the State Government would lose because of the impact of the tax on the ability of mining companies to pay State royalties based on their profits. This Government has been told by everybody, but it simply will not listen. We all knew what the end result would be. What does Australia say now? The Advocate in Tasmania states: That the tax has intruded Big Brother-like is evident from its burgeoning impact on employee housing, to give one example. It's all very well for the PM to say such-and-such was never intended. It is happening, as many amazed Australians have learnt; moreover, fresh areas to be milked seem to surface daily. If the tax cannot properly discriminate, it will have to go. The Government almost certainly will if it doesn't. I conclude by drawing attention to the Minister's second reading speech in which he claimed that the loss of unit sales due to the tax will fall within tolerable limits for the industry. How hard-hearted and cruel that statement is. He said that the design of the tax is directed at making the operation of the tax as readily manageable as possible for employers. How hollow that is now. He finally concluded by saying that it represented another major step towards completing the Government's tax reform program. If that is a tax reform program, God help Australia. Senator RICHARDSON(New South Wales)(4.03) —Today we are debating Senator Watson's motion on the fringe benefits tax. Senator Watson has put up, I hope, an honest view. However, it has been difficult for those on this side to find too many honest views in the Liberal Party on the fringe benefits tax. I do remember one person with an honest view. His name is John Valder, the Federal President of the Liberal Party. I quote what he said earlier this year: . . . to reverse the whole disease . . . of fringe benefits . . . I've got to say I think that is a fair and just thing in this country . . . The longer we leave doing it, the harder it is going to be . . . electorally . . . They are not easy to do so I have said many times . . . let the Labor Party get on with implementing the more necessary, but perhaps less popular parts of our policy- note the words `our policy', possessive pronoun and all- and let's hope they get them into place and promptly lose office. Now that is an honest view from the Liberal Party. At least John Valder knew what his Party was about. After we look at John Valder, the President, I suppose we have to look at the parliamentary leadership to find out what it thinks on the question of fringe benefits. That is where honesty gets harder and harder to find. We have the Leader of the Opposition, Mr Howard, doing back flips every day. What we really have from the Liberal Party is a secret tax, because it will not tell anyone what it will do. All John Howard can say is: `We want to leave all the options on the table. I am not going to let you know'. In the Sydney Morning Herald of 30 May 1986 there is an article by Milton Cockburn headed `Libs about-face on fringe benefits tax'. There have been a lot more about-faces since. Mr Howard, the day before, had pledged to repeal the fringe benefits tax. The article stated that until the day before Mr Howard had said that no decision could be made until the Opposition announced its tax policy. That statement was made nearly five months ago. We all breathlessly await the announcement of the Opposition's tax policy. But the reason we do not have that announcement is that the Opposition knows it has to keep the money raised from the fringe benefits tax. Therefore it will keep the tax on. In a sleight of hand it is saying: `We will abolish the tax but we will stop tax evasion'. John Howard has pretty well discovered that tax evasion is a bad idea. However I remember, somewhere in the dark recesses of my mind, a person called Costigan, the royal commissioner, describing the growth during the Fraser years of tax avoidance. He said that that industry grew at a rate faster than the heady days of the Victorian gold rush. That is what the Opposition wants to return to. It wants to get rid of any equity. This motion backs up that view. It wants to throw this fringe benefits tax out the window and let the majority support the perks of the minority. That has always been what the Liberal Party is about, it just cannot hack fairness. It is not part of its nature or its name. If we go back to the remarks of John Howard we will see how they have changed regularly. We also have to look at Jim Carlton, who has also had a few things to say. On 20 August on radio station 4BC he told Haydn Sargent that the coalition would `feel justified in being tougher on taxing those sorts of fringe benefits'. They were Carlton's words on 20 August. That is why my search for honesty has to continue. Every time one of the Opposition's senior spokesmen makes a statement on this issue he contradicts the last one to have made a statement. At the National Press Club on 27 August 1986, a week after he had made his statement on 4BC, Mr Carlton said: We'd be back with the old law which in fact imposed a tax on the employee for a benefit received. That actually is true because the Opposition, in government, did just that, but in practically every case those benefits were never declared and therefore huge amounts of tax simply were never collected. I turn to the Australian Financial Review. The duplicity of this lot opposite is chronicled in many places. `Key Liberals continue to move out in front of Howard', said the Financial Review in Greg Earl's article on 29 September this year. Sir William Knox, a Queensland Liberal-I think-said that a Federal Liberal Government would abolish Labor's FBT. `But', he said, `housing and other perks will still be taxable'. That is, of course, what most of them say. The Opposition will not tell us how it will tax fringe benefits or how much it will tax them. In the end it is another sleight of hand. Mr Wilson Tuckey is normally known for dropping buckets on innocent people in the other place and is capable of saying anything. On 27 September 1986 he decided not to bucket Keating; he decided to bucket Howard. I would never want to misquote Wilson Tuckey; that would be a dangerous business and I lack the courage. He said: The fringe benefits tax is to stay. He said that they would maintain the FBT specifically for cars, housing and education. I am told that this person is a front bencher in Senator Watson's Party. I have been given this information on reliable authority. I know that he is kept in the background and is let out of the cage only on occasions, but obviously he escaped that morning. Howard, it is said, would abolish the tax lock, stock and barrel-but not Tuckey. He said that he would maintain it for cars, housing and education. Carlton and Sinclair said on 25 September that the coalition would tax fringe benefits under the original anti-avoidance provisions. So all we get is a continuing chronological list of events which contradict each other day after day. Then there is the 30 September 1986 edition of the Age. If there were no problem in the Liberal Party about fringe benefits, if Opposition members were all of one mind, why would the headline to Michelle Gratton's article in the Age read: `Howard orders team to toe fringe tax line'? John Howard had read the riot act. Ralph Hunt did not hear it. He went on to say: `We are going to have a fringe benefits tax'. So we now have six different spokesmen with six different lines. I find it very hard in this search for honesty to find a scrap of it. I do not find it in Senator Watson's motion. John Howard was reported in Mike Steketee's article in the Sydney Morning Herald on 30 September as having said: I have a fairly good idea of what I think is tax avoidance. That was an idea he never came to grips with in his seven years as Treasurer. I want to try to give him and Senator Watson an idea of why the fringe benefits tax will be retained. Senator Walters —Ask your boss. Senator RICHARDSON —I speak to my boss, as Senator Walters puts it, a bit more often than she does. I have a rough idea of what he is thinking. Senator Walters has no idea of what her Leader is thinking because he is not game to think anything until he has asked Carlton, Tuckey, Sinclair and Hunt for their views-and they are all different. If honourable members opposite need to know what a fringe benefits tax is, I will give them an example. Senator Newman —Was it a decent breakfast? Senator RICHARDSON —The breakfast was nice. The sausages were well cooked and the eggs were soft. If one considers equity in the tax system one must consider the development that has occurred in 10 years, particularly the development that occurred during the last Liberal reign, when tax avoidance ran wild. Under the equity of the former Government's system an employee may have earned $45,000, but let us look at what executives were doing for themselves. An executive on $45,000 may also have been given a representative allowance of $3,000; superannuation of $6,000; a motor vehicle lease, even on a Toyota, of $5,800; a subsidy for motor vehicle maintenance, running costs, registration, et cetera of $1,900; a hostess allowance, because the wife has to work hard on occasions, of $4,000-good pay that; a home telephone subsidy of $300; a low interest loan of $8,500; a school fees subsidy of $3,000-it is very important to look after the kids; and $3,000 for holiday travel, because there is no reason why an executive should ever pay for his own holidays. They have to be funded by the taxpayer. That package amounts to $78,850. That is a lot of money, but only $45,000 is in the form of salary. If an employee received only salary he or she would have had to be paid $115,000 to get the same reward. Under the previous Government tax was avoided daily by citizens all over the country. They could do it not only with that Government's permission but also, if one is to judge by some of the statements made today by Senator Watson and Senator Newman, with its encouragement. This Labor Party Government will not cop that sort of thing because if we allow it to go on, those who do not get fringe benefits-the vast majority of Australians-will have to continue to subsidise the perks I have just read out. If one takes a wide definition of fringe benefits, finally Senator Newman got something right. It took her a while, but she got there. A great many Australians at least enjoy the fringe benefit of getting some sort of discount on goods purchased where they work. That is true. But that is a tiny fringe benefit. It amounts to virtually nothing for shop assistants and brewery employees. What we are talking about is not that sort of small perk. We are talking about the perks I have just read out. This Government will continue to defend that principle because it is right. Senator Watson —It is your greed that went wrong. That is where you went wrong. Senator RICHARDSON —When it comes to greed, we could all take lessons from Senator Watson and his Party. But fortunately, because we have the interests of the majority uppermost in our minds, we are not going to. We are going to make sure that there is some equity in this system. This, I must confess, is not easy because the one thing the Opposition is right about, which the Government has acknowledged, is that there is too much paperwork. There is too much of an administrative burden. That is why we are conducting a review. The tax was introduced on 1 July, only three months ago. Senator Walters —You hadn't thought it through. Senator RICHARDSON —In three months the Government, being the sort of government that is capable of listening to the people, and fortunately being the sort of government that does not have to listen to Senator Walters-- Senator Watson —What about the capital gains tax? Senator RICHARDSON —I have often asked Senator Watson in this place to be patient. We will get to capital gains. There is plenty of time. He should relax and take three deep breaths. We will get there. After the tax has been operating for three months the Government has been prepared to say `We will review it' and to look at what the Prime Minister (Mr Hawke) called `unintended consequences' and at the administrative burden about which small business has been complaining. I for one applaud the Government for doing so. It is timely. This Government is not going to insist on sticking to every comma and cross on a `t' just because we introduced the tax in the first place. If an error is made the Government is prepared to review it. That is what is happening now. The growth of fringe benefits over 10 years has continued to place an added burden on Australians who work in occupations where fringe benefits are not available. That is an unavoidable and absolute consequence of the growth of fringe benefits. Honourable senators opposite cannot deny it. The reality is that most Australian cannot get their children's school fees at expensive schools paid. They cannot get subsidised travel overseas and do not have subsidised Mercedes in the garage. They are not able to get those sorts of benefits. They have to put up with paying tax every week. Senator Walters, who is trying to interject, would not know too much about paying tax. Most Australians are not able to afford expensive accountants in the way that she can. They have to front up every Thursday or Friday, look at their pay packets and see how much they have paid out. If this Government allowed fringe benefits to grow, ordinary Australians would have to keep paying more. We will not allow that. Honourable senators opposite do not have a concern for ordinary Australians, only for those at the top of the tree. That is where we differ. It is a fundamental difference. If it is the case, as I am certain, that it is a small and very select section of the community which enjoys the kinds of fringe benefits an example of which I gave earlier and if we are to bring about any tax equity at all, we have to do something about those benefits. That is what we have started to do. The Australian Bureau of Statistics-I referred to this earlier in commenting on one of the things that Senator Newman said-said in 1983 that 42 per cent of employees received no fringe benefits. Are honourable senators opposite disputing the Bureau of Statistics figures? Senator Watson —Yes. Senator RICHARDSON —They are, are they? Senator Watson —That 58 per cent get a fringe benefit? Senator RICHARDSON —Senator Watson would know, would he? Has he done a survey in Tasmania or read the Advocate? The Bureau of Statistics went a bit further. It went right around Australia to get its information. It had a good look and found that 42 per cent of employees receive no fringe benefits at all. Of those who did receive fringe benefits, 77 per cent-that is, three-quarters of the rest-were getting only the kinds of benefits I mentioned earlier. If they were shop assistants they were perhaps getting small discounts up to a certain amount each month on goods they could purchase. That is by far the most common fringe benefit. If personal income tax is to remain progressive for those who predominantly derive their income from wages and salaries, we will have to make certain that those in the upper brackets cannot make the system less and less progressive for their own benefit by taking their salary package in a form in which they can avoid paying tax. We have stopped the rort. At the end of the day we have to accept that there will be some pain for having stopped it. I accept that no one applauds a government that takes something off the people, but for the Government to make it a fair system in the end, it was the only way for it to go. We will make it a fair system. Just to back that up, for those who have been affected by the fringe benefits tax, for those whose employers will not pay the tax, two very significant tax cuts are coming up in December and July. Those tax cuts will finally get around to addressing the John Howard 60c tax rate. John Howard brought that rate in. Honourable senators opposite were in government when it was decided to tax those on high incomes at that high rate. This Government is setting about reducing that rate and getting it down to a top rate of 49c by next July. That is something that a Labor government is delivering for higher income earners, having already delivered very significant tax cuts during 1984 and 1985 for lower income earners. Obviously there are problems in any tax system. The reality is that all governments-this one or even previous ones-are prepared to keep taxation under review. All that this Government has done in the last few days with its announcement about the review is to say: `On this particular very new tax that has been operating for only three months we are prepared to have a look at those areas it is going into where we are worried that it is having consequences that were never intended'. Having had a look around Australia and having talked to as many people as I can, it is obvious to me that the question of log books has been one of the main grievances. Obviously they will be up for review by the Government during the next few weeks. We are not saying that this review will take for ever. The date on which it is to commence is only a few weeks hence and we will get there pretty quickly. By the end of that very short period, I trust that we will be able to announce that we have addressed those problems that have been raised that do no affect the principle of the fringe benefits tax, because that principle is something that we are going to effect. There will be a minimal impact on revenue. We will not simply give back the free lunch. Seventy-five per cent of people have been paying for the 25 per cent who have been having the free lunch. That will not come back. I am very sorry for honourable senators opposite, but those days have gone forever and they will have to start paying for themselves. I know that it will be a shock and an effort for honourable senators opposite, but it will start happening. Fortunately, we are going to ensure that the application of the tax to cars will be retained as well. We will ensure that all the mates of honourable senators opposite will pay up for their cars too. It is terrible, is it not! It really shocks honourable senators opposite that everyone will have to pay and they will not be subsidised by ordinary Australians. We will bring that subsidisation to an end. I turn again to the Australian Financial Review, which is part of the Fairfax network. I would like just to go through what it says about fringe benefits. Senator Parer —You don't believe it. Senator RICHARDSON —I believe it with great passion. The Australian Financial Review of 12 August 1986 stated: Non-cash benefits are already taxable. The problem is that employees almost never declare them. That has been the problem all the way through. The Australian Financial Review, from the Fairfax stable, conceded: The fringe benefits tax is a method of reducing tax evasion, part of a broad tax reform aimed at producing more equity and fewer rorts-- It is not a matter of what I believe or what I say. If we go to a paper such as the Australian Financial Review-one could say that it is a fairly classy journal-we see that it is saying the same things, because it realises that the days of the rort are over. The problem is that the days of honourable senators opposite are over as well. They are living in an old Australia-one that has gone. The editorial continued: and improving incentive for effort by getting the top marginal income tax rate down below 50 per cent. That is something that this Government has done. Honourable senators opposite always talk about incentive, but they put the rate up to 60c. What we are doing, without the necessity of moving a motion such as that moved by Senator Watson, is getting rid of the previous Government's high tax rates. That is something that honourable senators opposite could not do; they could only talk about it. They are very big on rhetoric and very slow on action. Senator Watson —Wait until you see our rates. Senator RICHARDSON —The difficulty we have is that we are all hanging by the neck waiting to see the Opposition's rate. Every day we say to John Howard: `Come and tell us what your tax policy is'. What does he say every day? He says: `I'm sorry, we're not ready yet'. The problem with the Liberal Party is that it has not been ready in a decade to tell us about its tax policy, and it will not now. John Howard has squibbed it every time. I listened to him on radio yesterday morning in Sydney again squibbing, unable to admit what his real tax policy is; that is, after Wilson Tuckey has told him what it is allowed to be. We all await with glee the day when we can get up in this chamber and debate the Opposition's policies. However, I suspect that it will never tell us, because when the crunch comes it has neither the brains nor the guts-- Senator Short —We will bring taxes down, not put them up like you are. Senator RICHARDSON —The problem is that the Opposition, when in government, did not do that. During the years of the Government in which the honourable senator once served, before the people in his Victorian electorate threw him out, tax avoidance grew and grew. I have already quoted what Mr Costigan said. He said that tax avoidance grew at a rate similar to that in the heady days of the Victorian gold rush. The contribution of the Liberal Party to the tax debate was to encourage tax avoidance. It was the only industry that grew in the seven years of the former Government. This Government has brought it to an end. It has stopped it dead in its tracks. Honourable senators opposite just could not get to it, and the reason is that all their mates were in the rort. That was the problem. This Government, representing the majority of Australians who just could not get into that category, did something about it. It stood up and stopped it. Senator Newman —It made a mess of it. Senator RICHARDSON —The honourable senator said that it made a mess of stopping tax avoidance. We have saved a couple of hundred million dollars. I know that honourable senators opposite would like to go back to those days, but we have stopped all the schemes and all the rorts that grew like Topsy under the previous Administration. I turn now to the Melbourne Age. If people opposite do not believe me they will find it much harder to knock over what the Australian Financial Review said-and now we come to the Age. The Age editorial of 12 August stated: The fringe benefits tax debate involves two separate issues-one economic, the other political. It is right so far; even Senator Short would not disagree with that. It went on to state: . . . a tax on fringe benefits is sensible, fair and necessary. This is the editorial of the Age, not the socialist workers paper. The editorial continued: It offers a way of closing loopholes through which millions of dollars of taxation revenue were slipping each year. That is precisely our argument and that is precisely what we have done. The editorial continued: The money obtained by closing these loopholes could be used to finance tax cuts, including substantial cuts for high income earners. That is what we have done. Those tax cuts will be implemented in December and in July-John Howard's 60c rate goes for ever. The Age editorial also stated: . . . an employer could choose to avoid the cost and paper work . . . by giving his senior staff compensatory wage rises . . . That is good advice for employers! The editorial continued: . . . fringe benefits are simply forms of income and should be taxed accordingly . . . That is what the editorial of the Age said. It also said: Unless tax scales are readjusted as promised-and indexed-the FBT will rightly be seen as another selective penalty against effort and initiative. We are readjusting them. Three months ago we introduced a new tax which is a great departure from days previous. The new piece of legislation undoubtedly was complex. Following the introduction of that legislation we then got the bureaucrats at work to see what sort of administration it should have. The Government is saying that, after three months of operation-which is a reasonable period to see how it is going-it has looked at that administrative burden and said that it will cut some of it out. Obviously, if one looks at some of the more bizarre examples of areas into which the tax has gone one sees that they too will go. There will not be an effect to revenue as they were never a factor in the Government's figures. The reason they were not is that, as the Prime Minister has said, they are unintended consequences. Senator Short —How did the Government do its calculations? Senator RICHARDSON —Properly, as usual. It has taken the Government several months to look at this new piece of tax legislation to find out how it is working and to clear it up. I might say that all we are doing is clearing it up around the edges, because we are sticking to the principle of the tax-a tax that this Government supports absolutely. Senator Walters —What about-- Senator RICHARDSON —I have waited for three and a half years to come into this chamber and hear the honourable senator make sense. I hope I do not have to wait another three and a half years and that Senator Walters will give us a big shock by saying something sensible soon. That would make us all feel better. Successive governments considered that the resources needed to police fringe benefits under section 26 (e) of the Income Tax Assessment Act were too great. Indeed, the previous Government rejected changes to that section. This Government has acknowledged that the problem exists. It will not reject changes. It will not stick to every single tiny detail of the administration of the tax. We will look at the details and where there are problems we will get rid of them. This Government, as usual, will act quickly. In the minutes left to me I shall refer to the scope of the review. The principle and integrity of the fringe benefits tax are not at issue; they are not to be reviewed. We will examine the tax for the impact mentioned earlier and look at some relevant amendments and administrative corrections. We expect any of the changes to be made to have a minimal impact on revenue yield because the areas affected are areas in which the Government did not intend the tax to have an effect. I turn to the review process. The Government will conduct the review in a very short period-over only the next few weeks. A wide range of material will be made available to the Government. Senator Messner —Why can we not get those answers from Ministers? Why do we have to get them from a back bencher like you? Senator RICHARDSON —I concede to Senator Messner that I am a back bencher-a humble back bencher doing his best. On the question of whether the instalment date will be changed, the first instalment is due on 28 October. That is the big day. Senator Walters —For some. Senator RICHARDSON —Some of Senator Walters's mates will not pay because they have been avoiding tax for years. I am trying to get people to pay up when they should. The Government intends to complete the review process in time to announce any changes before 28 October. It is open to the Commissioner of Taxation under the current law to extend the time for payment if those affected by changes can demonstrate to the Commissioner that they had genuine difficulty in assessing their liability to pay. So paying by 28 October is not a problem for individuals who are suffering hardship or particular difficulties. The Commissioner has already stated that tax will not be payable in cases in which it is decided to remove the fringe benefits tax liability under current legislation. The reality is that this review will be conducted very quickly. We will look at the unintended consequences of the legislation and at the administrative burden. Where small business is being unnecessarily disadvantaged by that burden we will act. We have made concessions before; we will make them again. Tax policy, even after this review, will continue to be under constant review, as it has been under every government since Federation. This Government will keep working at it. We listen to the Australian people and we give them what they want-good, sound government which at least has enough principle to accept the political risk involved in taking a benefit from those who are rorting the tax system. Senator MESSNER(South Australia)(4.33) —I rise to congratulate Senator Watson on bringing forward this motion today to put into proper perspective the disaster of the fringe benefits tax, the capital gains tax and the other actions which the Government has taken since September last year. Let me pick up just a few of the points that have come from Senator Richardson. He gave us answers about what this review is all about but no Minister has been prepared to answer on it in this place or in the House of Representatives in the last few days. We cannot get any clear answers from them as to what is intended. Yet Senator Richardson is able to speak on behalf of the Government, apparently, and tell us all about it. Who is running this Government? Is it a Hawke Government or a Richardson government? It sounds very much like a Richardson government. Most of the points that Senator Richardson raised were raised by us at the outset last May, in the initial debates on this legislation. Apparently it has taken the Government five months to wake up to the things that we were drawing attention to in this very Senate chamber during the debates on the legislation in May. Only now is it starting to address these issues. What kind of government, so-called, is it? It is supposed to be peopled by geniuses, but government members clearly do not understand what is wrong with this legislation and they have not right from the start. Let us look at what Senator Richardson called abuses. He describes disabled people in need of home help who have to employ somebody to look after them at home as abusing the taxation system; consequently they will have to pay the fringe benefits tax. Companies which give gold watches to their employees after 25 years service or on retirement are apparently abusing the tax system and consequently have to pay fringe benefits tax. The Government goes on and on with these kinds of stupidities under this legislation. I will not reiterate them. Senator Watson did a great job in exposing the weaknesses of the legislation. It is not just the Opposition which sees the stupidities in this legislation. Mr Acting Deputy President, you may have seen a Press release which came today from the Real Estate Institute of Australia. It refers to the administrative work load associated with this tax. It refers to the log books that have to be kept for motor cars. I shall quote a small piece: But the log book at present is the only way to claim full entitlements to business deductions. That is absolutely right, notwithstanding that Keating always gets it wrong. The Press release continues: The need to spend at least half an hour a week making log book entries is an embuggerance we can well do without. That is a firm statement which deserves to be written into the record. The Real Estate Institute of Australia understands the point which this Government has only just woken up to after five months of review. Labor voters apparently are well aware of these stupidities as well. In the Daily Telegraph this morning is the result of an exclusive poll taken of voters throughout Australia on the Federal Government's fringe benefits tax. A total of 69 per cent of Labor voters say that the fringe benefits tax ought to be substantially modified or dropped altogether. Yet-this really makes the point-78 per cent of that same group of Labor voters, when asked `Have you been directly affected by the fringe benefits tax?' answered: `No'. So although nearly 80 per cent are not affected by the tax, they plainly see, by a margin of 69 per cent to 31 per cent, that it is such a stupidity that it ought to go. That makes the point absolutely clear that the Government's own constituency knows that this is the most stupid tax that has ever been introduced and should be repealed lock, stock and barrel. Let us deal with this furphy of what Mr John Howard is supposed to have done or not done in regard to income tax avoidance. The man who crushed the tax avoidance industry of the 1970s was none other than the Treasurer of Australia at that time, John Howard, the now Leader of the Liberal Party in Canberra. Senator Walsh —Five years of intertia until he was flushed out by Costigan. Senator MESSNER —Senator Walsh well knows that the legislation that destroyed the tax avoidance industry was introduced in 1980, the Crimes (Taxation Offences) Act. It absolutely wiped out the industry in 1980 and Senator Walsh knows it. It was nothing to do with Labor's legislation. That law was passed three years before Labor came to office. Also, legislation was introduced to deal with specific schemes. I remember the legislation to deal with the Curran scheme and other asset stripping schemes of the same kind. Above all, I recall the legislation in 1981 to change substantially old section 260 of the Income Tax Assessment Act about which Senator Walsh complains so much in this place and to replace it with a whole new Part IVa, which was specifically designed to attack tax avoidance. Those actions alone absolutely destroyed the tax avoidance industry. The only tax legislation of any real moment this Government has introduced since it came to office is the package we saw last May, which came before us as a result of the Keating so-called tax package last year. So let us have no more humbug about John Howard and tax avoidance, and let us turn to the real questions at issue. The reason why fringe benefits have become such a big problem in the avoidance industry is quite clearly the very steep marginal income tax structure. That has led to many people seeking to abuse the system in the way that it has been abused. We do not deny that. Nevertheless we believe that the fundamental change that should occur in order to curtail those avoidance schemes is a change in the income tax structure. That is why we are working to prepare policies that will introduce a system of lower and flatter rates of personal income tax. That is where the solution to these problems lies-not in band-aid proposals involving taxes as stupid as the fringe benefits tax which the Government has introduced. Let us just look at what the Government says it will achieve by the introduction of a new tax structure by next July. When this Government came to office in March 1983, the marginal tax rate applying to the average weekly earner was 30 per cent. That is the tax rate that he paid on his next dollar of income. But lo and behold, after this Government has struggled mightily to bring in a new tax system to apply from July next year, that tax rate will go up to 40 per cent. That is how much better off the taxpayers of Australia will be. They will have a 10 per cent rise in the tax rate that they have to pay. The same applies to those taxpayers with a family, with a dependent spouse and two children. The tax rate applying for an average weekly earner in 1983 was 30 per cent but next year, after this episode, that rate will rise to 40 per cent. This is the kind of nonsense that this Government goes on with-telling us that it will save us taxation when all it is doing is pushing us into higher and higher tax brackets. It is doing nothing in the way of fundamental tax reform and unfortunately the people of Australia will have to await the result of the next election before they get a National and Liberal Party Government which will change the tax system and fundamentally change the incentive of Australians. That will come. Let us turn to some of the other points raised in this particularly good motion of Senator Watson that draws attention to the Government's tax failures. We have the famed capital gains tax that was a part of the package in which the fringe benefits tax nonsense was recently introduced. We are now starting to see that the Government is fundamentally breaking its promises in this area too. It has said to us on previous occasions that if one held assets before 19 September last year which were sold and a profit realised, one would not be taxed. This has been found to be absolutely untrue because many old people who have retired and many others in the community who have put money into unit trusts-a very common form of investment these days-now find that if there is a change in the membership of the unit trust of more than 50 per cent, they will pay capital gains tax on the profit they make on the eventual realisation of those units. Similarly, we find that if a trust estate, such as a unit trust, buys and sells property and makes a profit, tax will apply it that profit insofar as there is a change to the underlying property of the trust which is thereby reflected in the unit holder's asset. One other area of real concern to the Opposition at present is the administration of the tax laws. The Commissioner for Taxation issues very many taxation rulings these days. I would like to refer to one-No. 2121-which sought to change the way in which contractors are taxed. It is true that there have been a large number of sham arrangements in this area which have deserved to be attacked by the Commissioner for Taxation. Senator Watson's motion acknowledges that. But it is also true that many contractors, in order to protect their assets and to limit attack from outside by creditors, have arranged themselves into limited liability companies. They have done so quite legitimately with the purpose in mind not of tax avoidance or evasion but of simply ordering their affairs in a business-like way. Yet those people are now being caught by the Commissioner's ruling No. 2121. It is leading to vast taxation disadvantages for people in that legitimate situation. This is again part and parcel of this Government's administration of the taxation law, which brings into question its bona fides in terms of what it is really on about in relation to tax abuse and evasion. It is fascinating to see that there are to be no Australian Democrat speakers in this debate. I suppose that the reasons for that are painfully obvious-they were part and parcel of the deal done to introduce this nonsensical fringe benefits tax. Senator Newman —It was a Keating-Haines Act, wasn't it? Senator MESSNER —Yes, it was the Keating-Haines axis which introduced these fringe benefits and capital gains taxes and which disallowed legitimately incurred entertainment expenses, consequently leading to the deterioration of industries in this country. For Senator Walsh's benefit, I instance the wine industry, which of course will be affected in his own State. Those kinds of actions are part and parcel of the policy of the Democrats on taxation. Quite clearly they will have to answer to the electorate for that when the time comes. The fact is that most of the issues raised by Senator Watson so clearly during this debate and in his motion were raised during the initial debate on this tax legislation. The absolute shame is that this Government has taken five months to wake up to what was painfully obvious to everybody in this Senate at the time of that debate. We could have saved the people of Australia an enormous amount of worry, time and wasted energy had the Government listened to us in the first place and thought again about the introduction of this crazy fringe benefits tax legislation. The time has come when the Government deserves to be turned out, but before that happens we call upon it to repeal the fringe benefits tax lock, stock and barrel. We call upon it to face up to its responsibilities and modify the legislation so that we can at least have some kind of workable tax. Senator KILGARIFF(Northern Territory)(4.48) —I support the motion of my colleague Senator Watson, who, together with others on this side of the chamber, has highlighted again the problems and confusion in the community which the Federal Government's fringe benefits tax has caused. Only a couple of weeks before employers are expected to lodge their first FBT declarations, we find ourselves in a chaotic situation where no one is certain of what they are expected to do. This has been exacerbated by the announcement this week by the Prime Minister (Mr Hawke) that the tax is to be reviewed. This morning's newspapers reflect the dismal state this Federal Government is in and the problems it is foisting upon the nation. The story `Confusion reigns on review of FBT' in this morning's Australian sums it up. The Government's review is ill-defined, but then that should come as no surprise as it is consistent with the whole tax, which is ill-defined, confusing, indiscriminating and vague. I suppose that this is the sort of tax legislation one gets when the architects of the tax-the Prime Minister and the Treasurer (Mr Keating)-are so divided over how to deal with it. The Australian Financial Review this morning reported that the Prime Minister and the Treasurer cannot agree on how to review the tax, with Mr Hawke favouring the consensus approach while Mr Keating is all for the Australian Taxation Office controlling any modifications. Indeed, there appears to be a very serious rift between those two leaders of the nation. Mr Hawke's consensus with the Australian community is wearing a bit thin and, with his inability to reach consensus within the ranks of his own Party, I do not like his chances of getting anywhere with the people who are really affected by this tax. But if he is really genuine in his wish to consult the community, I suggest that he consult those people who were polled by Newspol for the Sydney Daily Telegraph, as referred to by Senator Messner. Only 15 per cent of those polled were in favour of the tax. The overwhelming majority wanted the tax dropped or modified. As for Mr Keating's wish to keep the review in the hands of the Taxation Office, I am not sure that that would be advisable in view of the confusion which is apparent there. Yesterday a Taxation Office spokesperson was reported as saying that the Office was still waiting to be told what was meant by the words `unintended consequences'. If the Taxation Office itself is still unaware of what changes are to take place, how is the Australian public expected to be able to make head or tail of the tax? No wonder accountancy firms, overwhelmed by the complexity of this legislation and the difficulty to employers in determining what liabilities they face under it, have lodged claims for deferments and extensions of time. It will be interesting to see how those who do not lodge returns by 28 October will be treated by the Taxation Office. Are employers still required to lodge their FBT statements by this date in view of the proposed review which has left them not knowing what they should declare? It is appalling to see a Federal government which is so incompetent as to have taken from September last year to May this year to produce the legislation, to take from May to October to iron out what is going on. It is fewer than three weeks until the day when employers are supposed to lodge declarations, yet they have been threatened that failure to do so could mean they face gaol. Still the Federal Government has not been able to get its act together or even realise what it is doing. Earlier this week the Prime Minister demonstrated his ignorance of the consequences of the fringe benefits tax for disabled persons who have to pay the tax on live-in help. He claimed that the Opposition was derelict in its duty in not raising the matter when, as many as four months ago, this issue was raised with the Treasurer in a letter from the honourable member for Wentworth, Mr Coleman. Clearly, the Government and its Ministers are not aware of the ramifications of this tax and are now back- pedalling as they realise just how much damage will be done within the electorate. Senator Watson's motion makes particular mention of the effect of the tax on isolated areas, mining operations and small business. The effects upon these sectors have been examined in the Northern Territory in a study commissioned by a number of employer groups. I mentioned in the adjournment debate yesterday that I had presented a petition from 1,868 Northern Territory residents who are opposed to the fringe benefits tax, calling for its rescission on a number of grounds. The petition stated that the tax will increase both personal and company taxation; undermine employment levels through reducing profitability and international competitiveness; lead to price increases; force employers to withdraw voluntary incentives to employees paid over and above existing payments; and endanger stable industrial relations because of the potential for forced withdrawal of fringe benefits. These are all legitimate concerns arising out of this legislation and when one considers the findings of the employer group study one sees that they can be substantiated. The employer groups involved were the Northern Territory Confederation of Industry and Commerce, the Master Builders Association of the Northern Territory, and many other organisations. The survey which was conducted represented a sample of 13.2 per cent of the private sector work force, which is quite a sizable sample and very reliable. As I have said, the survey was to establish in dollars and cents terms the impact of the FBT on the private sector, and the form and subsequent analysis were undertaken by an economist. One very interesting fact shown by the survey was that long-standing award provisions are now deemed to be fringe benefits taxable in the hands of the employer. These provisions are awards of the Australian Conciliation and Arbitration Commission, they were not introduced or contemplated as tax avoidance schemes. The survey concluded that the benefits of these employers which would be subject to the new taxation were worth about $60m, so the tax payable would be about $26m. The highest tax payable was estimated at $1,451 in the mining industry and, at the other end of the scale, the estimate was $258 per employee in the pastoral industry. The weighted average was $755 per employee. This taxation represents an increase in private sector costs of 5 per cent-and we are looking for development. The report addressed the administration difficulties with the tax and found that all Northern Territory employer organisations were having massive difficulty in advising their members as to the interpretation of the legislation. Of course, this is just a sample taken in the Northern Territory but it is a nationwide problem. Senator Watson's motion referred to the administrative nightmares and massive paper burden imposed by this tax. Nowhere is such a burden more difficult to bear than on the land. Many pastoralists are flat out making enough merely to get by these days without being forced to fill in log books and to do massive amounts of paperwork justifying the meals and board they provide to workers. This legislation, which was supposed to catch the tax cheats, is hurting the little people more than anyone. But in the long run no one will win from this tax. It will hurt employers, employees and consumers alike. In the Territory, as in other remote areas of Australia, we already have our fair share of additional costs to consumers. We can do without more. The FBT will impose particular hardships on outback people, the small people. It attacks subsidised housing, assistance with children's education-the small people's education-vehicle allowances and the like, which are part of many remote area employment packages over and above an employee's salary. These packages are provided to employees at all levels, not just to well-paid executives-there are not too many well-paid executives out in the scrub-and are often necessary to get people to live in remote and isolated areas. Things such as assistance with air fares to southern States have been criticised as perks, but these are provided because most people in the Territory have come from elsewhere and still have their families in the south. It is only reasonable that they should be able to keep in touch with their families and have a holiday south. It is unreasonable that this assistance should be taxed, just as it is unreasonable that employers who fly people into the Territory for job interviews are liable to pay the tax. Relocation expenses should not be subject to this tax. The introduction of this tax could literally kill development in the outback, with employers unable to offer the benefits which are necessary to bring people there. At a time when development and population growth are coming on very nicely, we now have the FBT to contend with. It is not a question of perks or handouts. The people of the north work very hard but often in much more difficult conditions than do their southern counterparts, and the incentives which employers provide are essential. Senator WALTERS(Tasmania)(4.57) —I rise today to support my Tasmanian colleague Senator Watson in the motion he has moved. Yesterday we witnessed the Prime Minister (Mr Hawke) finally cracking. He finally backed down on his beloved fringe benefits tax. That occurred, of course, only because Bob Ansett and the Livestock and Grain Producers Association have said that they will not pay the tax and have advised other people not to pay it. Indeed, they were leading a tax revolt. The Prime Minister could not allow one section of the community to refuse to pay the tax. Because he could not gaol them all-once one section of the community got away with not paying the tax everybody would join in the avalanche-the Prime Minister was forced to back down. He buckled as he promised to review the tax. It is no use Senator Richardson blaming the Opposition for objecting to the fringe benefits tax being paid; there has been a general revolt by the people of Australia against the tax that is so unfair. As my colleagues have said today, a headline in the Daily Telegraph states `Australians reject perks tax'. We have the extraordinary situation in which 69 per cent of Australian Labor Party voters say that the tax is no good; and 78 per cent of those ALP voters say that is does not affect them but the injustice of it is appalling and they will not put up with it. Let us find out what has been occurring. There is no doubt that at the moment there is a crisis in Australia regarding the fringe benefits tax. Today I asked the Leader of the Government in the Senate (Senator Button) what advice he would give to people who would be travelling in the next fortnight and, as they were forced to compile their fringe benefits tax details before 28 October, they would have to do so this week. His advice to them was: `Abide by the law'. That would be very good advice if we knew what the law was. We have no idea what the law is. When I asked him to explain it, he hid behind the fact that it was a legal question and he did not have to answer it. There is, indeed, complete chaos. A headline in the Daily Telegraph reads: `Crisis talks on the FBT chaos'. The article reads: As the fringe benefits tax confusion turned to chaos yesterday, the Federal Government decided to meet business groups next week in a desperate attempt to rescue the tax by the October 28 deadline. What has been occurring to date, of course, is that, as the anomalies that the Labor Government did not even think about came up, the tax man has been asked by the Government to give his interpretation of the legislation. Following the debate in this House, the tax man came up with his interpretation of how it would affect farmers. It was not the legislation that we passed in this place, but the interpretation put on that legislation by the tax man under the direction of this Government. I asked the Minister for Finance (Senator Walsh) this question: What would be the situation if a farmer employed his son as a farm labourer on a full time salary? If that lad were living in the family home, eating meals cooked for him by the mother, would the farmer have to pay fringe benefits tax on the accommodation and meals, as would be the case in regard to any other employee? After great consultation with his bureaucrats who were sitting behind him, Senator Walsh came up with this extraordinary answer: `It depends whether the farmer is allowing his employee-his son-to have accommodation because he is his son or because he is an employee'. That, of course, was the first indication that the Opposition had that directions would be given to the tax man to place his interpretation on the legislation so that the Government would not appear to be backing down and having to amend the legislation. Let us look at the part that has been played by the Australian Democrats. The Democrats have played a disgraceful part in this whole business. Open letters were written to the Democrats, stating that they had let down small business. One such letter stated: This Country can no longer afford the luxury of having Senators-- that is, Democrat senators-- who have been elected by some 5 per cent of electors, controlling the destiny of the rest of the population. In another letter we were told that the Democrats had made this statement in an article in the Sunday Telegraph of 1 June this year: Now is the time to do unpopular things because the Australian memory is such that by the end of 1987, when the next election will be held, people will forget this. That is an extraordinary way for the Democrats to carry on. They have told us that they are assisting the Government to bring in unpopular things. They then say: `But we are only doing it because by the end of 1987, when the election will be held, the Australian people will have forgotten about it, and it will not worry us'. Of course, that letter, Mr Acting Deputy President, as you know, states: Well, now that's a coincidence. You see, I have already allowed for that contingency. I have planned to place a full page advertisement in the National Press every quarter, when the employers are filling out their quarterly Fringe Benefits Tax forms and cheques. Those advertisements will certainly make the people well aware-and their memory will be refreshed every quarter-that the Democrats have let down small business and that the Democrats, by doing a deal with the Labor Government, had joined with it to pass this ridiculous piece of legislation. Headlines such as `Perk slug causes misery' have appeared in the Press. I refer to the various Labor Premiers who have come out of the woodwork. We have heard from the South Australian Premier, Mr Bannon, the Labor Leader in Queensland, Neville Warburton, Mr Burke and Mr Cain. The latest is Mr Unsworth. A newspaper article states: The fringe benefits tax is making lives miserable and will cost the NSW Government at least $1 million to administer . . . Mr Unsworth, who has been a staunch opponent of the way the FBT has been allowed to spread, yesterday launched his most vicious assault on the tax. So all of the Premiers have abused the Federal Government and have said that the whole thing is unjust. Let us look at the way in which the back bench is asking the Government to back off. Back benchers, according to the Australian as far back as August, have pleaded with the Prime Minister: `If you are going to keep this fringe benefits tax, for heaven's sake, let us sell it better. Let us get our story across to the people.' We then had the absurd situation of Senator Richardson saying today: `The people we are after, and the only ones we are after, are the big wigs'. He told us of one incident. The Treasurer, Mr Keating, of course, talks about the poor workers travelling by train, carrying their lunch in paper bags, looking out of the windows at the expensive cars. He does not talk about the farm labourers. He does not talk about the delicatessen owner who gives his employee free milk on a Friday as he closes the door. He does not talk about the butcher who gives his employees cheap meat on a Friday as he closes his doors for the weekend. The nervous back benchers are well aware of this, because they are more involved at the street level. They understand the problems that this fringe benefits tax is creating. The situation must be changed. Just as the little purple book that was first put out in May had to be withdrawn, this tax should no longer exist. Senator SHORT(Victoria)(5.08) —I am very pleased to join other Opposition senators who have spoken to this motion calling for the repeal of the Hawke Government's fringe benefits tax. I congratulate my colleague Senator Watson on moving the motion. There are many reasons for opposing this legislation and for opposing it with all the strength at our command. In doing so, I recognise, of course, that the tax came into being only because the Australian Democrats supported the Hawke Government. The Democrats supported a piece of legislation which is an absolute nightmare for small business, in terms of both cost and administration. Yet the Democrats have the pathetic hypocrisy to parade themselves as the champions of small business. Nothing could be further from the truth. That is perhaps not surprising, because truth and integrity are not words which spring readily to mind when one thinks of the Democrats. The Hawke Government's fringe benefits tax is wrong in principle because it violates the cardinal rule of taxation-that is, that tax should be paid by the receiver of the benefits, not by the giver. The Hawke Government's legislation taxes the giver. Apart from the total inequity and abrogation of principle that this involves, it also imposes a double cost on the provider of the benefit. The provider has to pay the fringe benefits tax as a business cost but is then not allowed to claim it as a deductible income tax item. The inevitable result, of course, is increased costs to business and increased inflation to consumers. The fringe benefits tax violates three of the basic tax principles which the Prime Minister (Mr Hawke) laid down prior to the 1984 election. First, he said that any changes to the system should simplify the system. Yet, here he introduces a new tax which comprises 139 pages of legislation, 176 pages of explanatory memorandum, two booklets of 69 pages, 14 rulings of 115 pages and innumerable pamphlets, Press releases and a video tape. Some simplification! Not even the Taxation Office can understand it. It has become blindingly clear in recent days that the Prime Minister, the Treasurer (Mr Keating), Senator Walsh, Mr Hurford and Senator Button have no clue as to what it is all about. By the way, guess who is the presenter on the video tape. I am advised that he is none other than Richard Carleton, that intrepid blood-on-your-hands interviewer of the Prime Minister. What an irony that is. The second of the Prime Minister's own principles which this tax violates is that of providing the best possible climate for investment, growth and employment. In total contrast, this iniquitous tax imposes a mountain of incomprehensible and non-productive administrative paper work and excessive compliance costs. The fringe benefits tax will inhibit investment, retard growth and reduce employment. We are already seeing this in many areas, even before the first tax instalment is due. The motor vehicle industry is a vital case in point. The third of the Prime Minister's principles which the fringe benefits tax violates is that tax changes should have wide community support. As already mentioned, a national survey published in today's Sydney Daily Telegraph indicates that 75 per cent of Australians want the fringe benefits tax dropped altogether or modified. So much for widespread community support. Other speakers in this debate have mentioned many examples of the iniquity of this tax. The Royal Society for the Prevention of Cruelty to Animals will be forced to pay $50,000 in fringe benefits tax this year because of the free accommodation that it supplies to its lowly paid regional inspectors in homes that are used also as 24-hour animal shelters. An 80-year-old crippled war widow pensioner in Melbourne will have to pay fringe benefits tax on the meals and accommodation provided to the live-in housekeeper without whom she cannot live. Senator Newman —Don't forget the National Trust. Senator SHORT —The National Trust of Australia is also affected. I am advised that the contribution by an employer to the cost of funerals of employees, including employees who may have been killed at work, is also subject to the fringe benefits tax. The tax will apply also when the children of farm hands living in remote areas become ill and the employer provides medical treatment or transport to a hospital. The tax will apply also to the prizes which sporting clubs provide to their members, the free car-parking spaces that are provided by an employer for his employees and the use of a farm vehicle by a worker living on a farm simply to drive his kids to the bus stop. The list is endless. Senator Messner —What about taxi fares? Senator SHORT —It affects many taxi fares as well. The list goes on and on. I will conclude my brief remarks today, because time is short, by mentioning one other example which to my knowledge has not been made public. I refer to the very long and very complex application of the fringe benefits tax to film production. I will highlight a couple of the more ridiculous aspects. Accommodation away from home for film crews, actors, director, producer, et cetera, is not subject to fringe benefits tax. However, the cost of breakfast has to be withdrawn from the accommodation component because meals are treated differently for fringe benefits purposes. Breakfast provided to employees with accommodation is subject to fringe benefits tax at the rate of $2 per breakfast. I am advised by the Screen Production Association of Australia that, unless and until the Tax Office changes its present position, fringe benefits tax is payable at 46 per cent of $2 for each lunch provided to crew and cast on location away from home. But when the crew and actors are not filming away from home, fringe benefits tax is payable at 46 per cent of the total cost of the meal to the producer. When filming away from home and using country extras-say, in a provincial centre such as Ballarat-the lunch of the crew and the major cast is taxable at 46 per cent of $2, but the country extras would be taxable at 46 per cent of the total cost of the meal. What are we coming to in this country? How crazy can we get? How long can we survive the stupidity of this bureaucratic socialist ideology? Four weeks ago the Prime Minister said that the fringe benefits tax: `will not be watered down. No, we will not change it'. Yesterday he changed his tune and said that aspects of the tax will be reviewed, that the review will be completed in three weeks, by the end of October, and that in undertaking this review the Government would listen to what people think. I think the Prime Minister had best enjoy or make the most of the next few days because when Paul gets back from his present overseas soiree he will not be at all amused by this further cave-in by his so-called leader. Today in this chamber the Leader of the Government in the Senate (Senator Button) was unable to tell me in detail who would conduct the review or when it would commence. He was totally unable to tell me whether the public would be able to make submissions to enable the Government to listen, as it says it wants to do, to what the people think. No amount of review will correct the fundamental flaws and the iniquities contained in the Hawke Government's fringe benefits tax. The tax is bad law. It violates long standing theories of taxation. It violates the Government's own tax principles. It is a legal nightmare, it is vague, it is ambiguous, it is contradictory and it is a total shambles. It is the product of a socialistic, ideologically twisted government that is totally out of touch with the real world. It must be repealed. It appears though, and it is certain, that this Government will not take this step. The next government-a Liberal and National Party government-will, and that is a total and unequivocal commitment which the Leader of the Opposition, John Howard, has given on behalf of the coalition. Senator MICHAEL BAUME(New South Wales)(5.18) —The only Government speaker on this matter today has been Senator Richardson who, as everyone knows, is the de facto leader of this Government. The interesting thing is that when he spoke he in fact made no effective response to the very serious concerns that have been expressed across a wide range of Australians-not simply the Opposition, not simply big business but in fact those people who are most affected by this tax-the ordinary Australians, the decent Australians, the honest taxpaying Australian, so many thousands of whom have been hit unfairly, unreasonably and improperly by this tax, and particularly those who are disadvantaged. We have heard many instances of people-Senator Short has just raised some of them-such as paraplegics or persons involved in non-profit organisations who are being obliged to suffer. It is interesting to note that Senator Richardson's basic complaint about the Opposition was that it had provided no details of its tax policy and that, as a result-the impression I got was that this was the burden of his argument-it should not be listened to on this matter, whether or not it happens to be reflecting the attitudes of the great bulk of Australians. We have just heard in this place the results of a recent poll conducted by the Sydney Daily Telegraph. Let us recognise this: Senator Richardson's incredible hypocrisy really bears examining. Before the last election in December 1984 Senator Richardson was a member of a party which went to an election with no tax policy beyond the policy of saying: `We will have a meeting to discuss what our tax policies should be after the election'. Senator Watson —Didn't he say no capital gains tax? Senator MICHAEL BAUME —As my friend Senator Watson interjects, the Australian Labor Party did have one positive element in its tax policy, and that was that there would be no capital gains tax, and that was said in words that even we could understand. I think it is remarkable that Senator Richardson expects the people of Australia to have such short memories that they are incapable of remembering this perfidy by the Party opposite, this perfidious performance under which it first promised that there would be no capital gains tax and then introduced one. Then it had the hide to go to an election with no remaining tax policy whatsoever beyond saying: `We will talk about it. We will have a talkfest'. A key member of that same Party in this chamber, in fact the key member of that Party, if one believes what goes on on the 10th floor of hotels where the Australian Labor Party has its conferences, has had the hide to criticise the Opposition at this stage, 18 months before an election, for not being prepared to state in detail how it is going to achieve its tax objectives. Yet the Party opposite had no policy whatsoever at election time. We will, in fact, have a policy stated clearly at election time so that the people of Australia can make a judgment on which party's policy they prefer. I imagine that the Government's performance and the performance of Senator Richardson today will underline the dramatic difference between the positive policy-- Senator Messner —We've still got it. Senator MICHAEL BAUME —As Senator Messner interjects, we still do have a policy. The only thing we are not divulging at the moment is our method of achieving those policy objectives. For the benefit of people such as Senator Richardson or those he has managed to confuse, let me restate that it is key and central to our tax policy that abuses involving tax avoidance should be dealt with and removed. That is essential. We are not saying how we will achieve that, for a variety of reasons, the first of which is that, quite frankly, we are sick and tired of having policies we announce knocked off by the Government because it is incapable of developing its own. Senator Newman —Except messes like this. Senator MICHAEL BAUME —Except of course, to create messes such as this, which, I hasten to say, is an example of their not following our policy. Senator Watson —It is a mess. Senator MICHAEL BAUME —When the Government goes it alone it makes an incredible mess, as Senator Watson quite rightly interjects. Here the Opposition has a clear policy thrust, a clear set of objectives, and this Government is endeavouring to muddy that water by pretending that somehow it is in a stronger moral position. What kind of morality is that? I suppose we could ask what kind of person would claim his to be a moral position? What kind of person could possibly justify going to the last election with no tax policy beyond a promise not to introduce a capital gains tax, and then criticising us, 18 months before an election, for not having released the fine tuning details of how we will achieve our policy objectives, which were clearly stated in 1984 and which continue to this day. Our policy objectives in taxation are clear. They are to reduce the incidence of taxation and to reduce even further the incidence of income taxation by replacing it in some areas with a broader based consumption tax, and then to stop abuses involving tax avoidance. There is no doubt about that. Let us look at the confusions that have emerged over this tax. I have some very strong views about this indeed. There certainly is confusion because when a member of my staff rang the Taxation Office today to try to get a copy of the video that was being made available-one of the many expensive items that have been produced by the Government to try to justify and/or explain this ludicrous tax-she was told that it was not available, that it had been withdrawn from distribution. Senator Newman —It is inaccurate. Senator MICHAEL BAUME —Because frankly the Taxation Office just does not know whether it is accurate or not. Senator Newman is quite right. The Government has no idea what is going to happen to this tax at the moment and the Taxation Office presumably has less idea than even the Prime Minister (Mr Hawke). Heaven knows, we have already seen that he has no idea. Senator Messner —We do not know what the unintended consequences are. Senator MICHAEL BAUME —We know nothing of the unintended consequences because as far as I am concerned-every one of those consequences that Mr Hawke is calling unintended was pointed out to him, over the last two, three or four months-and as far as the Taxation Office is concerned I believe those consequences were not unintended; they were intended consequences. The letter from Mr Hurford, as Acting Treasurer, to our colleague Peter Coleman in other place clearly indicates that those consequences were intended and that the intention was that they should not be removed. This relates to the paraplegic person in particular. Let us look at the other confusions that are taking place. In the Public Service, which has to pay this fringe benefits tax at a cost to the taxpayer, there is overwhelming confusion. Honourable senators who were in the House today would have been made aware that during the hearing of the Senate Estimates Committee inquiry into the Department of Defence, we were told that the Department made a $45m mistake about what it thought should be its fringe benefits tax bill. That was a 40 per cent mistake. In its original estimates the Department of Defence allocated $115m. Senator Newman —Does it include the rations tax and other items? Senator MICHAEL BAUME —Senator Newman asks whether it includes these various items. Who knows what it involves. The essential point is that the Department of Defence made that estimate in good faith. It then found, after lengthy discussion with the Tax Office, that perhaps it may have been wrong and as a result has subsequently amended that amount to $70m. It was wrong by $45m. Senator Watson —What sort of resources did they use? Senator MICHAEL BAUME —As Senator Watson says, what sort of resources had to be used within the Public Service to establish what were the realities of this tax? To what extent did it depend on the Taxation Office putting out subsequent clarifying statements, changing things around and creating confusion? If the Public Service is confused about this, for heaven's sake, what about the ordinary taxpayer? Even worse, I continually asked other departments whether they would stand by their budgeted fringe benefits tax amounts and how strongly they would do so. Most of them said: `Well, they are a degree of rubbery'. This is clearly one of the rubbery elements. If the departments do not know, if the Government does not know, how can the ordinary taxpayer be expected to know? Another thing I want to know is whether the Prime Minister will have to pay a fringe benefits tax on the nights he is spending at the Regent Hotel in Sydney while Kirribilli House is being renovated over five months at a cost of half a million dollars? Having just spent half a million dollars on the Lodge, he is now spending half a million dollars on Kirribilli House. According to him, it is urgent, immediate and essential expenditure. He is the only person who thinks that that is so at this time of restraint. I understand that he receives an allowance when staying in other capital cities. There is no doubt that the cost of staying at the Regent Hotel would be far above whatever the Remuneration Tribunal allows. This sort of question comes to mind: Will the Prime Minister's Department have to pay fringe benefits tax on the cost of staying in that place? There is a whole range of uncertainty about this, and that is why I strongly support Senator Watson's motion. I congratulate him on bringing it forward. It is about time that we had a more coherent response from the Government on all these serious questions affecting many thousands of Australians. For heavens sake, stop talking about the rip-off merchants and start talking about the real people, the decent people who will be unfairly hit by this tax. Question put: That the motion (Senator Watson's) be agreed to. The Senate divided. (The Deputy President-Senator Hamer) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 34 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. Messner, A. J. Archer, B. R. Newman, J. M. Baume, Michael Parer, W. R. Baume, Peter Puplick, C. J. G. Boswell, R. L. D. Reid, M. E. (Teller)Brownhill, D. G. C. Sheil, G. Carrick, Sir John Short, J. R. Chaney, F. M. Teague, B. C. Collard, S. J. Townley, M. Durack, P. D. Vanstone, A. E. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Kilgariff, B. F. Withers, R. G. MacGibbon, D. J. Aulich, T. McKiernan, J. P. Black, J. R. Macklin, M. J. Childs, B. K. Maguire, G. R. Coates, J. Mason, C. V. J. Cook, P. F. S. Morris, J. Cooney, B. Powell, J. F. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. Foreman, D. J. Robertson, E. A. Georges, G. Ryan, S. M. Gietzelt, A. T. Sanders, N. K. Giles, P. J. Sibraa, K. W. Grimes, D. J. Tate, M. C. Haines, J. Vigor, D. B. Jones, G. N. Walsh, P. A. McIntosh, G. D. (Teller) Zakharov, A. O. Lewis, A. W. R. Bolkus, N. Hill, R. Colston, M. A. Jessop, D. S. Button, J. N. Knowles, S. C. Coleman, R. N. Bjelke-Petersen, F. I. McClelland, Douglas Question so resolved in the negative. AUSTRALIAN INSTITUTE OF SPORT BILL 1986 Consideration resumed. The CHAIRMAN —The Committee is considering clause 15 of the Australian Institute of Sport Bill 1986 and an amendment moved by Senator Vigor to insert a new sub-clause (6) (a) in the clause. The question is that the words proposed to be inserted be inserted. Senator VIGOR(South Australia)(5.37) —A number of remarks, including those by Senator Puplick, have been made on this subject. One has to point out that we have women's sports and men's sports rather than persons' sports. As we have women's sports bodies and men's sports bodies which are separated by the community it is important that there be equal representation of men and women on the Board of the Australian Institute of Sport. If we had persons' sports bodies I might agree that the merit alone should be used for selecting the board. But in this case I believe that both women's and men's sports, each representing approximately 50 per cent of the community, should be equally represented on the Board of the Institute. Senator RYAN(Australian Capital Territory-Minister for Education)(5.39) —Although I am in sympathy with the spirit of Senator Vigor's amendment I remind him that it is the policy of our Government, and one we have gone to considerable lengths to implement, that on any Government appointed body there should be as far as possible equal representation of the sexes. In that sense, the amendment is unnecessary and therefore it is not accepted. The intent, of course, is incorporated in the legislation. Senator PUPLICK(New South Wales)(5.40) —I rise to correct an Australian Associated Press report dealing with this matter which states that, despite what is described as a tortuous explanation of this clause, the amendment was passed by 35 votes to 27. Whether the statement on the part of AAP that the clause will be passed by 35 votes to 27 was a prophetic one-in which case AAP knows that the Minister for Education (Senator Ryan) and the Australian Democrats have done yet another deal and nobody else has been informed of it-or whether on this occasion Senator Ryan, having said that she will not accept the amendment, will stick by her guns and not accept it, we shall wait to see. I wanted to indicate my understanding that the report, which has already appeared on the wire service, that this amendment has been passed by 35 votes to 27 is not correct. Amendment negatived. Clause agreed to. Recommittal. Clause 6 (Functions of Institute). Senator VIGOR(South Australia)(5.42) —by leave-I move: Page 2, sub-clause 6 (1), paragraph (a), insert `recognition and' before `development'. Page 2, sub-clause 6 (1), sub-paragraph (a) (ii), after `coaches', insert `, umpires, referees or officials essential to the conduct of sport'. I canvassed this matter fully in my original speech on these two amendments. I thank the Government for keeping to its arrangement in this case. I commend the amendments to the Senate. Senator COLLARD(Queensland-Leader of the National Party of Australia)(5.42) —One Simon Cameron once said that an honest politician is one who, once he has been bought, stays bought. I do not know how one interprets the behaviour of the Australian Democrats at this stage. As Senator Puplick said in his dissertation this morning on the Democrats and their behaviour, they are for rent, and they are for rent by the hour. We have now seen what the Democrats are really all about. We are still opposed to the amendments. We think they are a useless exercise in semantics. As I indicated this morning, the phrase `persons who excel' covers all. But for the purpose of the experiment, and obviously for Senator Ryan to get her Bill through, the Government has succumbed to the tremendous pressure that has been put on it by the Senate's rent-a-crowd. So the amendments obviously will be passed. I will not be calling for a division, but I place on the record that these amendments are a useless exercise in semantics. It has all been covered. But everybody has his price. Senator MASON(New South Wales)(5.43) —I support the amendments moved by Senator Vigor and wish to comment on remarks made by Senator Puplick both in the Committee stage of the consideration of this Bill and earlier in the debate on the motion for its resumption. Senator Puplick commented about the diligence with which Senator Vigor pursues his work in this place. Senator Puplick might find it better if he were to do more work rather than if Senator Vigor were to do less work. The clear implication of what Senator Puplick said was that he felt that Senator Vigor was working too hard for Senator Puplick's comfort. I give Senator Puplick that mild injunction, that mild piece of advice. If he applies himself to his work as a senator with more diligence he might not have to force himself to make that sort of invidious comparison. As for Senator Collard's bleat that the coalition did not know what was going on, how can one expect to give any information to a party as gutless, spineless and hypocritical as the Liberal-National Party which hides behind the specious excuse, which all its members know to be a lie, that certain things must not be touched here because they are reported here on Budget night? I say to Senator Puplick and Senator Collard that they are a part of this gutless organisation which has betrayed and sold out people by the millions. Even over the last week it sold them out over the ex-servicemen's pensions and superannuation- The CHAIRMAN —Order! Senator Mason, we are discussing two amendments moved by Senator Vigor to clause 6. Senator Puplick's remarks were made in another context and are not up for debate now. Senator MASON —With respect to you, Mr Chairman, Senator Puplick remarked again only a few minutes ago that he wondered why the Opposition was not informed about the arrangements we had made about these amendments. That is the point I was addressing. The CHAIRMAN —As long as you confine your remarks to the amendments you may proceed. Senator MASON —I will indeed do so. Thank you very much for your advice, Mr Chairman. These amendments are now to be accepted by the Government. We are pleased that that is to happen. It is a part of normal negotiation over legislation which is to be applauded and which allows the smooth workings of this place to proceed. On that basis I commend the amendments to the Senate and especially to the Opposition. Amendments agreed to. Clause 6, as amended, agreed to. Clauses 16 to 20-by leave-taken together, and agreed to. Clause 21 (Meetings of Board). Senator VIGOR(South Australia)(5.47) —I move: Page 8, sub-clause 21 (8), leave out all words after `vote' (first occurring), insert: `only, and in the event of an equality of votes the question before the Board shall be resolved in the negative'. We move this amendment with the intention of not giving the chairman of the Board any special position. We believe that the normal practice would be for a chairman, if he had the casting vote, to vote in the negative. However, we would prefer to have it written into the legislation. Unlike the other amendments, it is not an amendment on which hinges the fate of the Bill. However, it is an amendment to which we would like the Committee to agree. Senator COLLARD(Queensland-Leader of the National Party of Australia)(5.48) —I am not quite sure what Senator Vigor puts the fate of the Bill on. However, we will oppose the amendment. Most organisations, except this august chamber, give their chairman the ability to have a casting voter. The main reason why the chairman in this august chamber does not have a casting vote is the equality of representations from the States. A casting vote by the chairman would undoubtedly give an advantage to one State over the other States and would give that State literally an extra senator. Not giving such a vote to an organisation that is as likely to have a deadlock as is any other organisation is as ludicrous as half the other stuff we have heard from the Australian Democrats today. Senator RYAN(Australian Capital Territory-Minister for Education)(5.49) —The amendment proposed by Senator Vigor in our view suggests a lack of confidence in the chair. We do not share that lack of confidence, so we will not accept the amendment. Amendment negatived. Clause agreed to. Clauses 22 to 37-by leave-taken together, and agreed to. Clause 38 (Application of Division 2 of Part XI of Audit Act). Senator RYAN(Australian Capital Territory-Minister for Education)(5.49) —I move: Page 14, clause 38, after sub-clause (1) insert the following sub-clause: `(1A) Division 2 of Part XI of the Audit Act 1901 (as that Division applies by virtue of sub-section (1) of this section) has effect in relation to the year ending on 30 June 1987 in accordance with section 17 of the Australian Institute of Sport (Consequential Provisions) Act 1986.'. As I explained at the outset, this amendment is necessary because of the changed timing for the conclusion of the legislation. Amendment agreed to. Clause, as amended, agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. AUSTRALIAN INSTITUTE OF SPORT (CONSEQUENTIAL PROVISIONS) BILL 1986 The Bill. Senator RYAN(Australian Capital Territory-Minister for Education)(5.50) —I move: Pages 6 to 8, clauses 17 and 18, line 14 (page 6) to line 5 (page 8), leave out the clauses, insert the following clause: Application of Division 2 of Part XI of Audit Act in relation to year ending on 30 June 1987 ``17. Division 2 of Part XI of the Audit Act 1901 (as that Division applies by virtue of sub-section 38 (1) of the Australian Institute of Sport Act 1986) has effect in relation to the year ending on 30 June 1987 as if- (a) sub-sections 63G (3) and (4) were omitted and the following sub-sections were substituted: `(2A) The Auditor-General may inspect and audit such of the accounts and records of financial transactions (including transactions relating to money received or held on trust) of the company named ``Australian Institute of Sport'' that was incorporated on 24 September 1980 under the Companies Ordinance 1962 of the Australian Capital Territory and records relating to the assets (including assets held on trust) of, or in the custody of, the company, being accounts and records in so far as they- (a) relate to the period commencing on 1 July 1986 and ending immediately before the Australian Institute of Sport Act 1986 came into operation; and (b) have become assets of the authority under section 12 of that Act, and shall forthwith draw the attention of the appropriate Minister in relation to the authority to any irregularity disclosed by the inspection and audit that is, in the opinion of the Auditor-General, of sufficient importance to justify the Auditor-General in so doing. `(3) The Auditor-General shall- (a) at least once in the year ending on 30 June 1988, report to the appropriate Minister the results of the inspection and audit carried out under sub-section (1) of the accounts and records of the authority in so far as they relate to the period commencing on the day on which the Australian Institute of Sport Act 1986 came into operation and ending on the expiration of 30 June 1987; and (b) at the time at which the Auditor-General makes the first such report to that Minister, also report to that Minister the results of any inspection and audit, carried out by the Auditor-General under this Act or any other Act, of the accounts and records of the company referred to in sub-section (2A) in so far as they relate to the period commencing on 1 July 1986 and ending immediately before the Australian Institute of Sport Act 1986 came into operation. `(4) The Auditor-General or a person authorised by the Auditor-General is entitled at all reasonable times to full and free access to- (a) all accounts and records of the authority relating directly or indirectly to the receipt or payment of money by the authority or to the acquisition, receipt, custody or disposal of assets by the authority; and (b) all accounts and records of the company referred to in sub-section (2a) that have become assets of the authority under section 12 of the Australian Institute of Sport Act 1986, being accounts and records relating directly or indirectly to the receipt or payment of money (including money received or held by the company on trust) by the company or to the acquisition, receipt, custody or disposal of assets (including assets received or held by the company on trust) by the company.'; and (b) section 63h were omitted and the following section were substituted: Annual report and financial statements `63h. (1) The authority shall, as soon as practicable after 30 June 1987, prepare and submit to the appropriate Minister in relation to the authority a report of- (a) the operations of the company referred to in sub-section 63g (2a) during the period (in this section referred to as the ``first period'') commencing on 1 July 1986 and ending immediately before the Australian Institute of Sport Act 1986 came into operation; and (b) the operations of the authority during the period (in this section referred to as the ``second period'') commencing on the day on which that Act came into operation and ending on the expiration of 30 June 1987, together with financial statements in respect of the year ending on 30 June 1987, in such form as the Minister administering this Act approves, that- (c) in so far as they are statements in respect of the first period, relate to the company during that period; and (d) in so far as they are statements in respect of the second period, relate to the authority during that period. `(1a) The report referred to in sub-section (1) shall, in so far as it relates to the company referred to in sub-section 63g (2a), be prepared by the authority having regard to- (a) such of the accounts and records of the company as have become assets of the authority under section 12 of the Australian Institute of Sport Act 1986; and (b) any information concerning the operation of the company that is given to the authority by persons who were members of the Board of Management or staff of the company. `(1b) The financial statements referred to in sub-section (1) shall, in so far as they relate to the company referred to in sub-section 63g (2a), be based on the accounts and records referred to in paragraph (1a) (a) of this section. `(2) Before submitting financial statements to the appropriate Minister under sub-section (1), the authority shall submit them to the Auditor-General, who shall report to the appropriate Minister- (a) whether, in the opinion of the Auditor-General, the statements are based on proper accounts and records; (b) whether the statements are in agreement with the accounts and records and, in the opinion of the Auditor-General, show fairly- (i) the financial transactions of the company referred to in sub-section 63g (2a) during the first period; and (ii) the financial transactions and the state of affairs of the authority during the second period; (c) whether, in the opinion of the Auditor-General, the receipt, expenditure and investment of monies and the acquisition and disposal of assets, by the company during the first period have been in accordance with the law; (d) whether, in the opinion of the Auditor-General, the receipt, expenditure and investment of monies and the acquisition and disposal of assets, by the authority during the second period have been in accordance with the enactment establishing the authority; and (e) as to such matters arising out of the statements as the Auditor-General considers should be reported to the appropriate Minister. `(3) The appropriate Minister shall cause copies of the report and financial statements together with a copy of the report of the Auditor-General to be laid before each House of the Parliament within 15 sitting days of that House after their receipt by the appropriate Minister.'.''. This amendment simply put into effect the amendment that the Committee has just approved. Amendment agreed to. Bill, as amended, agreed to. AUSTRALIAN INSTITUTE OF SPORT BILL 1986 AUSTRALIAN INSTITUTE OF SPORT (CONSEQUENTIAL PROVISIONS) BILL 1986 Bills reported with amendments; report adopted. Bills (on motion by Senator Ryan) read a third time. Debate resumed from 11 June, on motion by Senator Button: That the Bills be now read a second time. Senator DURACK(Western Australia)(5.52) —The Inspector-General of Intelligence and Security Bill 1986, the Australian Security Intelligence Organization Amendment Bill 1986, and the Intelligence and Security (Consequential Amendments) Bill 1986 make major changes-very serious changes in our view-to the legislation dealing with the administration and control of Australia's intelligence agencies. Of course, those agencies are not confined simply to the Australian Security Intelligence Organisation; they comprise the Australian Secret Intelligence Service, the Joint Intelligence Organisation, known as JIO, the Office of National Assessments and the Defence Signals Directorate. This legislation is comprehensive, but its main impact and focus, as one would expect in legislation from the present Government, seems as usual to be directed at ASIO. That is not surprising because the Australian Labor Party has a continuing paranoia, to the point of obsession, about ASIO. As the Deputy Leader of the Opposition (Mr N. A. Brown) said in another place when speaking on this legislation: . . . I would not trust the Australian Labor Party as far as I could kick it so far as its having anything to do with the security services of this country is concerned. I certainly agree with and adopt the attitude expressed by Mr Brown in the debate in the other place. The concern that we have about the Labor Party's ability to influence a Labor government, particularly in relation to ASIO but in relation to security services generally, is well justified because of this continuing evidence of paranoia by major elements of the Party, certainly in the left wing, and, I think, because of some concerns of a somewhat prurient kind in other areas. Unfortunately, the man responsible for introducing this legislation, the Deputy Prime Minister and Attorney-General (Mr Lionel Bowen), and other people whom I regard as the saner elements in the Party in these matters, have been too weak-kneed to resist the pressures which have been brought to bear upon the Government, through the Party organisation generally, about matters of security in general and ASIO in particular. There is no doubt that the proposals in this legislation are politically motivated and will result in a further shackling, in particular of ASIO. That is very serious and very sad. The Government justifies its action and these wide-ranging amendments by falling back on the report of Mr Justice Hope. It says that it is implementing the Hope recommendations. To a large extent that is so. It is implementing Hope recommendations, but it is implementing a very major matter which Mr Justice Hope rejected-namely, the establishment of a joint parliamentary committee to oversee ASIO. That proposal was well canvassed before Mr Justice Hope and he rejected it. There are other matters in the legislation which certainly implement the recommendations. That proposal is not implementing a recommendation of Mr Justice Hope; it is, in fact, implementing a proposal which he specifically rejected. That is probably the centrepiece of this whole exercise. It is certainly a matter which gives the Opposition the greatest concern. I say at this stage that we will be voting against the amendments to the Australian Security Intelligence Organization Act, primarily because of the proposal to set up this committee but also because of other criticisms which I will develop later. Before I go into the details, I want to speak generally about the question of our security services. I will direct my remarks mainly to ASIO because I think that is the focus of this government legislation and this obsessive interest by many members of the Australian Labor Party and the Government. ASIO has been well and truly investigated and well and truly reformed over the last 10 years or so. The Whitlam Government set up a royal commission presided over by Mr Justice Hope, who reported to the Fraser Government. It proceeded substantially to implement his report in a major piece of legislation that was passed by this Parliament in 1979. Whatever ASIO's faults may have been in the past, as a result of that investigation by Mr Justice Hope, as a result of the appointment of the Director-General, Mr Justice Woodward, who presided over the Organisation with great success and distinction for a number of years-his work was carried on by his successor, Mr Barnett-and as a result of the morale and resource building of that Organisation by the Fraser Government, it was transformed in those years. Mr Justice Hope came back again to look at the Organisation. He was invited to do so and was given a further commission in 1983-84. At the end of 1984 he made his report, the recommendations of which the Government says it is now implementing in this legislation. He had a lot of interesting things to say in his report about the Organisation, comparing it as it is now with the Organisation he first looked at. He specifically mentioned the changes that he had found. He said: The ASIO that I have reviewed is very different from the ASIO that I got to know during the RCIS. That was his previous royal commission. He went on to say: My overall view is that ASIO has properly served the interests of the Australian people and Government in recent years and that it has done so with a fair degree of effectiveness. He went on to canvass the continuing need for security services to defend, by their work, the basic interests and the security of the nation. Mr Justice Hope, referring to his earlier Royal Commission, said: . . . I reported that Australia needs intelligence of quality, timeless and relevance, and that for this purpose it requires to have a highly professional system of intelligence and security services. These needs are as important as they were a decade ago, and indeed the matters in respect of which Australia requires intelligence have expanded considerably. The report which is the subject of this legislation goes on to say: The product of Australia's intelligence services is of great value to the nation. No doubt there will always be room for improvement, and no doubt their need for resources will always have to be measured against the proper claims of other national interests. I am satisfied, however, that Australia's investment in its intelligence services is well justified, and that governments should continue to ensure that they are able to fulfil the important roles they play in helping to advise and protect Australia's national interests. That is what we are concerned about; that is what this debate is a about. Those considerations will be gravely affected by many of the proposals in the legislation the Government has placed before us and for which it is seeking our support. Security services must be secret; they cannot be otherwise. The importance of their work for the nation and for the protection of our liberties is at the very core of this debate. As I have said, they are the very things which so many people in the Labor Party do not understand. I regret that many people in the community-I hope there are not any in the Labor Party-want to see those things destroyed. Legislation of this kind which puts more and more shackles on the effectiveness of such organisations has to be considered seriously. If the requirements placed upon the organisations are too severe such proposals should be opposed and certainly deplored. Mr Justice Hope is not the only person who has been making this point about the need for proper security organisations and in particular the Australian Security Intelligence Organisation, but of course he is the person to whom Labor governments turned on two occasions to investigate and report on the Organisation. So even by the Government and members of the Labor Party one would expect him to be accepted as an authority. Interestingly, the new Director-General of ASIO, Mr Alan Wrigley, formerly Deputy Secretary of the Department of Defence, recently spoke at the National Press Club about the ASIO that he has found in the just over 12 months that he has been its Director-General. In the speech to the Press Club he addressed the need that Australia has for an organisation such as ASIO. He emphasised the threats within our society to the maintenance of our basic values, institutions and freedoms. He made it clear that, as any sane person would know, there are threats in our society and people are working away to undermine and destroy our society. Such people could be just as effective, if they were not properly watched, controlled and resisted, as an enemy from outside. Indeed, the activities of these people are in many cases directed and financed by enemies from outside-foreign governments and foreign organisations of one sort of another which are engaged in trying to undermine and subvert our institutions and our basic ways of life. Mr Wrigley has pointed this out. To the Press-it was well directed at the Press because it has been very reckless and irresponsible generally in this country in the way in which it has reported on this matter-Mr Wrigley said: You shouldn't be under the slightest doubt that there are undeclared foreign intelligence officers working in Australia today, and some of them use coercion and prey on character or family vulnerabilities and other human frailties in order to enlist Australian residents to work against this country's interests. He went on to talk about those engaged here in preparing for terrorist activities or politically motivated violence, which is of course abhorrent to us. He instanced a case in Australia at the end of 1982. He said that several hundred people could have been killed if it were not for very skilled intelligence work-as recently as at the end of 1982. He also went on to talk about the other important needs of ASIO. He said that even though the old concept of subversion had been removed from the Australian Security and Intelligence Organisation Act, nevertheless the sorts of activities and threats that used to come under that concept of subversion were now being brought back into the charter of ASIO. There is a focusing on matters which may not be called subversion but which concern much the same things as used to be called subversion. These are realities in our lives. We need these intelligence agencies to cope with them. We need intelligence agencies that are efficient and well resourced. Although they must be accountable to somebody they should not be hobbled or shackled by so many controls that they are ineffective. Let us turn to the controls that have been put on ASIO in recent years very much as a result of the first Hope report. ASIO now operates under a charter. As Mr Justice Hope found, it operates within the legalities of that charter. If it does not operate under that charter it can be challenged in the courts of this country, as it has been in the High Court of Australia. Of course, it is subject to the general control of the Attorney-General, the Minister responsible for it; but the Prime Minister of the day traditionally takes a great interest in the activities of the Organisation. ASIO reports annually to the Government and tables in the Parliament a version of its report in which secret and sensitive matters are eliminated. The full ASIO report must be given to the Leader of the Opposition and the Leader of the Opposition must be consulted on the appointment of the Director-General of ASIO. People who have been the subject of an adverse or qualified security assessment can appeal to the Security Appeals Tribunal. Since it was set up by the 1979 legislation it has overturned a number of decisions of the Director-General on such matters. The Attorney-General of the day, as Mr Wrigley recognised in his speech to the Press Club, personally signs warrants for telephone interceptions and listening devices which are legally available to ASIO under the proper procedures in existing legislation. Having been the Minister responsible for ASIO for 5 1/2 years, I can confirm that the personal attention which is required of the Attorney-General in respect of applications for warrants, which Mr Wrigley has said is still continuing, means that the Attorney has a great deal of knowledge of the way ASIO works and so has a major degree of control, particularly over human rights and civil liberty questions. In place at the moment is a series of bipartisan controls-I mentioned the role of the Leader of the Opposition-which work effectively, and it is very difficult to see why more are required. Under this legislation, in addition to all those controls that already exist, the Government proposes to establish an Inspector-General of Security Agencies. Admittedly he will oversee not only ASIO but also all the other security agencies, but the Government again seems to be focusing his attention on ASIO. The Inspector-General, either on his own initiative or at the request of the Prime Minister or the Attorney, will investigate virtually the whole range of activities of intelligence organisations, but particularly ASIO. The legislation gives him a much greater focus on ASIO than on the others. It will obviously be a very sensitive office. The Inspector-General will virtually sit in the room next door to the heads of any of these agencies when he is devoting his attention to them. I have no doubt that he will be spending a lot of time with and, in effect, second-guessing the work of the Director-General of ASIO. When directions are given to ASIO by the Minister of the day the Inspector-General will have to be shown them and he can comment on them in his annual report. He will be virtually looking over the shoulder of the Attorney as well. It is very difficult to see how in practice his role will be other than virtually a dual control of these organisations. On the one hand there will be the Director-General or Director of an organisation, whatever he may be called, and on the other hand there will be the Director-General of Security. This is a major new and additional person who will have to be responded to by the security organisations and to whom the organisations will be clearly answerable and accountable. This is in addition to this panoply of control that I have already referred to. In addition to the creation of this new office of Director-General there is to be a wider role for the Attorney-General. He now will have much more direct control over ASIO. He can even direct organisations as to who they will and will not investigate. He cannot direct them as to the advice they give, but he can direct them individually. This is a grave political problem which we will debate at the Committee stage in more detail. I think there is a grave political danger created in this legislation of using ASIO for political purposes. In addition to this wider role of the Attorney-General and this new office of Inspector- General, the proposal is to create a parliamentary joint statutory committee as well. Although certain matters will be excluded from it, such as sources and the operations of the organisations, nevertheless the organisations will have to account to that committee. That is in addition to accounting to the Attorney, the Prime Minister, the Leader of the Opposition, the Security Appeals Tribunal and the Director-General of Security. It is really the totality of these new proposals which the Opposition believes are so serious because they introduce so many more requirements for reporting that the degree of accountability expected from the intelligence organisations, and particularly from ASIO, will mean that a great deal of work of the senior officers of the organisations will be taken up in accounting for what they are doing and explaining what they are doing, or want to do. The time they have to devote to running and achieving the purposes of the organisations will be seriously affected. There is no doubt that the morale of ASIO has been seriously affected in recent years. In Mr Justice Hope's latest report he sadly reported on the morale that he found in 1983 and 1984. He said: There are several reasons for this. One of the more important reasons is the battering (in my opinion quite unjustified, except in relation to a limited number of mistakes which it made in its reports of facts) which it took from the media at the time of the inquiry- that was his inquiry- into the Ivanov-Combe affair. Time will heal that scar, but it is incumbent on those responsible for leading the organisation to restore the firm belief which its officers must have in ASIO's purpose, and in the importance of that purpose to the nation. From what Mr Wrigley said in his speech to the National Press Club a few weeks ago, that morale rebuilding is certainly taking place. Time will heal poor morale, provided there is proper leadership, and proper understanding of and support for the organisation by the Government of the day, and provided it is defended properly by the Government of the day and, I might say, by the Opposition of the day. There is the most widespread support for ASIO. Mr Justice Hope dealt with complaints made by a number of people about the organisation but he found that there was virtually no substance in any of them. There were not even a great many people who came forward with such complaints. Mr Wrigley, in his speech, recorded the extent of the support that ASIO gets from ordinary members of the community when it seeks their help. ASIO has to rely on ordinary members of the community. He recorded, I think with some surprise, the extent to which ordinary members of the community want to co-operate with and help ASIO. As I said, that is to be contrasted with the sort of battering that the media and elements of our society have given ASIO. Unfortunately, in many cases those criticisms have come from members of the Australian Labor Party, particularly its left wing. It should not surprise the Director-General that ASIO gets support from the Australian community because, as polls have shown, there is overwhelming agreement in the community with the need to have this organisation. It simply amazes me that we have to debate and defend so often the need for this organisation. The need for this organisation has been attested to by Mr Justice Hope, who was twice selected by the Labor Party to investigate ASIO on its behalf; by people such as Mr Wrigley, who has just taken over responsibility for it; by people such as Mr Justice Woodward, whose leadership contributed so much to the reform of the organisation; and by the community. It simply amazes me that we have this continual battering of the organisation in the Press by totally immature and irresponsible people and, as I said, that criticism is fanned by small elements of the community, particularly on the far left of the political spectrum. It is high time that governments stood up and defended the need for these organisations. It is high time this Government came out fighting for them rather than simply giving in to the pressures of small minorities in the community and, as I have said, problems within the left wing of its own Party. Clearly, there is a need for efficient organisations to be well resourced, but there is an overwhelming need for them to be supported and encouraged by the government of the day. Senator MACKLIN(Queensland)(6.21) —The Inspector-General of Intelligence and Security Bill 1986, the Australian Security Intelligence Organization Amendment Bill 1986 and the Intelligence and Security (Consequential Amendments) Bill 1986 raise some very interesting questions in a democratic society. I think the need for intelligence, both internally for the security of the country and externally, is recognised by most people. The difficulty of politically controlling such organisations is also recognised. But one of the premises of a democratic society is that the people of the country are able to elect their own government and that that government shall be paramount within the country and shall direct and have knowledge of the activities of those who are servants of the community. The Australian Democrats do not believe that it is possible within a democratic society to have organisations which are totally independent of the Parliament and the Executive of the day. However, the difficulty arises when one attempts to translate those somewhat conflicting ideas into practical terms. How does one have a security organisation which, by its very nature, must undertake activities of a kind that cannot find their way on to the front page of newspapers day after day? How is one to keep the necessary political control over servants of the state so that no group funded by the people of the country is outside the control of the people? This package of Bills refers not only to the Australian Security Intelligence Organisation but also to the Australian Secret Intelligence Service, the Defence Signals Directorate, the Office of National Assessments and the Joint Intelligence Organisation. Together those five organisations have a role, both internally and externally, of operating to promote the general well-being of this country. I, on behalf of the Democrats, am not in any way upset that we have had a continuing debate about these organisations in Australia. In any healthy democracy those types of organisations, operating under the type of tension to which I have already referred, ought to be the subject of continuing scrutiny by the representatives of people; that is, by the Parliament. I think it is outrageous to suggest that we should not look at them, that somehow or other that is wrong. One of the essential features of parliamentary democracy is a continuing and rigorous scrutiny of all elements of society. The major changes to the Australian Security Intelligence Organization Act occurred in April 1979. It is now October 1986. That does not seem to represent an excessive preoccupation with such organisations or with ways in which we might be able to fine tune the delicate relationship which has to exist. I hoped that we would apply our minds to the Bills to see whether the proposals take us forward in that type of relationship and to look at the details of the measures the Government proposes. I now turn my attention to the various pieces of legislation we are debating. The first is the Inspector-General of Intelligence and Security Bill. The purpose of this Bill is to create an Office of Inspector-General of Intelligence and Security. That office will be called upon to assist elected Ministers of State to ensure that the public interest, in the proper functioning of those security agencies, is met. The final report of Mr Justice Hope's Royal Commission on Australian Security and Intelligence Agencies recommended the creation of the Office, and the Australian Democrats believe that that recommendation ought to be followed. We believe that it will be a valuable addition to the existing machinery. It is very interesting that Senator Durack pointed to various items in Mr Justice Hope's report but not to this recommendation. Specifically, the Inspector-General will be required to inquire into the agencies' compliance with legality, propriety, ministerial directions and guidelines, human rights and the procedures relating to grievances of employees. I believe that that is a very useful step forward. It resolves one of the difficulties that have arisen previously, particularly with regard to employees of those agencies. I refer to the difficulty of integrating them into any reasonable type of arbitration system under which their rights and any particular grievances they may have with regard to their employer organisation can be looked at. There does not seem to be any other conceivable way of dealing with that matter. I would have thought that that measure ought to be supported by every senator. I would also have thought that it was the obvious way to go in terms of seeking compliance with ministerial directions. How are ministerial directions to be handled and followed through? This, I believe, is the appropriate method. It is not direct intervention but rather a method with which the various agencies will be able to work easily and well. Apart from those roles that I have mentioned, the Inspector-General will have two additional functions vis-a-vis ASIO in particular. First, at the request of the responsible Minister, and providing it is outside the jurisdiction of the Security Appeals Tribunal, the Inspector-General will inquire into actions that should be taken to protect the rights of Australian citizens. Considering the fact that ASIO is working internally, I think that it is an appropriate way of dealing with that issue. The second function of the Inspector-General regarding ASIO relates to a written direction to ASIO as the responsible Minister concerning the justification on security grounds of the collection or communication of intelligence about a particular individual. Sitting suspended from 6.30 to 8 p.m. Senator MACKLIN —Before the suspension of sitting for dinner I was referring to the first of the Bills that we are debating as allied Bills-that is, the Inspector-General of Intelligence and Security Bill. I wish to refer now to the second of the Bills-that is, the Australian Security Intelligence Organization Amendment Bill. Basically, this is a clarification Bill with regard to the role and power of ASIO. I draw attention in particular to the Hope Royal Commission's recommendations on the collection of foreign intelligence. Clause 8 of this Bill amends section 17 of the Act so that ASIO will now have the power to collect certain foreign intelligence in Australia. It also clarifies its power with regard to advice and protective security. I think they are important elements in this Bill. It is a development that clarifies and distinguishes the role of ASIO from those of the other security agencies, particularly ASIS-the Australian Secret Intelligence Service-with regard to domestic and foreign security gathering. Probably one of the most significant changes proposed in this Bill is the establishment of the Parliamentary Joint Committee on the Australian Security Intelligence Organisation. This is not a recommendation of the Hope Royal Commission; it is something on which the Government has chosen to move. I think it is very interesting, but I will reserve my comments on it until the Committee stage, since the Opposition parties will move amendments with regard to that measure; hence there will obviously be a debate at that time. Attention ought to be drawn also to clause 3 of this Bill, in particular the endeavour to delete various anachronisms in terms of subversion and terrorism. I also make particular mention of clause 9, which inserts into the Act a new section to make it completely clear that the ASIO Act is not to limit the right of any Australian citizen to engage in lawful advocacy, protest or dissent. This is a most gratifying addition to the Bill. The third Bill that we are debating is the Intelligence and Security (Consequential Amendments) Bill. This Bill seeks to amend a range of Acts with regard to security measures. It will amend the Administrative Decisions (Judicial Review) Act, the Archives Act, the Audit Act, the Crimes Act, the Freedom of Information Act, the Human Rights Commission Act, the Migration Act and the Telecommunications (Interception) Act. The Acts basically are being amended to allow the establishment of the position of Inspector-General. For example, the Archives Act is being amended in such a way that the Inspector-General will not be required to transfer to Archives records which it obviously would be inappropriate to transfer. I note that the Opposition will move some amendments, particularly in regard to the Crimes Act and the Human Rights Commission Act. I think that they are probably more appropriately debated at the Committee stage. The Hope Royal Commission in its report raised many of the issues that have fully come to fruition in these amending Bills. Justice Hope reiterated his view, in terms of the evaluation of the performance of the agencies, that Australian needed intelligence equality, timeliness and relevance, and also required a high professional standard from the security services. The Government, in terms of this legislation, has endorsed those views and has, I believe, sought to come to terms with them in a way which is compatible with the requirements of a democratic society; hence the Australian Democrats will support the Government's Bills in general. I will indicate, as each of the Opposition's amendments are moved, what our view is with regard to those amendments. We will also move two amendments to clause 39 of the Australian Security Intelligence Organization Amendment Bill. I will briefly rehearse the reasons for those amendments. We are interested, in particular with regard to page 17, as to who will make the definition of those various exclusions which are included in proposed new sub-section (4). I believe the Bill is deficient in as much as it does not clarify who is to make the decisions with regard to those exclusions. We will also be looking at proposed new sub-section 92f (2). We propose to leave out the words 'with the approval of the Minister'. It seems to us inappropriate to move to the new arrangements with regard to the Committee of this Parliament and to then have it subjected to the operation of the Executive. I believe that runs counter to and confuses in a very radical way the powers of the Parliament and the powers of the Executive. If there is to be a joint committee on ASIO, it must be a joint committee of the Parliament. It seems to me to be inappropriate for that committee to then be subjected to ministerial direction as to whether it will do this or that. If any particular exclusion is desired, as is the case in regard to proposed new sub-section 92c (4), it would be appropriate to exclude it by way of legislative operation which would then be passed by this Parliament. I feel that there is confusion and that that confusion should not be allowed to occur. I flag those amendments at this stage so that the responsible Minister may give attention to those points at the appropriate time. I reiterate that in general the Australian Democrats support these measures. We believe they are an advance on the present position. I also reiterate the point that I believe it is timely from time to time that the Parliament reviews in a serious manner the operation of the security forces of this country. It seems to me that to do so in the span of seven or eight year periods, as has been the case, probably is not adequate and that a more timely way of doing it might be in the way that the Government has suggested-by way of a joint committee of the Parliament; hence we would support that most strongly. I believe it is a function of the Parliament to do that. For example, one finds that in the United States the Congress is involved in the supervision of the intelligence agencies and has in recent years taken a much more rigorous role in circumscribing the activities of intelligence agencies. I believe that by this advance, as with the Joint Committee on the National Crime Authority, the parliamentary role is being expanded and enhanced. I think that is an important development in our constitutional history. I hope that that continues and that the Parliament does undertake a vigorous role in this manner. I am minded, of course, of the initial problems that the Joint Committee on the National Crime Authority had and I hope that those problems will not emerge in the early history of this Joint Committee. If there is to be a joint committee, I believe that a fruitful role for it would be to support the proper role of intelligence agencies, not to interfere in their workings. This is the sort of approach that was made very clear by the Joint Committee on the National Crime Authority. Such a joint committee should seek to enhance the democratic scrutiny of such organisations. There is disquiet in the community over these types of agencies and authorities. I believe that one way of satisfying the public's uncertainty about the types of powers that such groups hold within our community is for the Parliament to be actively involved in the overseeing of such organisations. Hence, the Democrats will give their strong support to the proposal that the Government has mentioned in this regard. Senator Sir JOHN CARRICK(New South Wales)(8.11) —The Senate has before it three Bills relating to intelligence and security systems in this country. The Bills are the Inspector-General of Intelligence and Security Bill 1986, the Australian Security Intelligence Organization Amendment Bill 1986 and the Intelligence and Security (Consequential Amendments) Bill 1986. The Bills come before the Senate by way of a response by the Hawke Government to a very comprehensive inquiry into our security systems carried out in recent years by Mr Justice Robert Hope. I should add that Mr Justice Hope is a very senior judge of the New South Wales Supreme Court, a man universally regarded for his qualities of intellect, his analytical ability and his integrity. He has undertaken two such very detailed inquiries and his reports, therefore, bear detailed study. To understand the nature of the need for legislation, let me start with a single premise, and that is that every country, sadly enough, has found it necessary, indeed imperative, to set up security and intelligence systems of its own. Every country has found that within it there are agents acting in the interests of foreign countries and often against the interests of the indigenous community. Countries have also found that there is always the danger of subversion and terrorism. So I make the initial point that all countries have intelligence and security services, that all of them regard such services as imperative to their national security and that all seek to install both efficiency and integrity in those services. Over the years Australia has developed five individual security and intelligence systems and those systems have all been the subject of review by Mr Justice Hope. The one most commonly known is ASIO-the Australian Security Intelligence Organisation. ASIO is responsible for the collection, evaluation and communication of intelligence relevant to the protection of Australia from espionage, subversion and terrorism. It is important to understand its nature because so often it is quite wrongly projected by the media and others who seek to damage it as having some kind of political internal activity, that it is acting in some partisan manner. That is well beyond its charter and no evidence has ever been shown of that. It is important to understand that ASIO has no powers of interrogation and no powers of detention and arrest. ASIO's functions are the gathering of intelligence and security information and the informing and advising of governments. It is important to understand that over the years the Prime Ministers and Attorney-General of the day have had direct access to ASIO. The very important work of ASIO is such that it can be scrutinised continually buy a Prime Minister and an Attorney-General. The Australian Secret Intelligence Service-ASIS-is responsible for the collection of foreign intelligence for Australia. The Joint Intelligence Organisation provides specialised intelligence databanks and analyses and assessments for the government of the day in relation to Australia's strategic environment. The Defence Signals Directorate-the DSD-is concerned with information and intelligence from electronic emissions and with the security of government communications. Finally, the Office of National Assessments-ONA-provides the government of the day with assessments on international matters of political, strategic and economic significance. So Australia has five individual bodies working in the community to safeguard our security. Over the years Australia has been well served by the Directors-General of ASIO. One thinks in the early days of Directors-General such as Brigadier Charles Spry, who was involved in the formation of ASIO and who was respected by governments of both Liberal and Labor faith. One remembers more recently Mr Justice Woodward, who gave very distinguished service, and Mr Barnett and his successor, Mr Alan Wrigley, a former Deputy Secretary of the Department of Defence. The integrity and ability of these Directors-General have never been seriously questioned. Their devotion and dedication to their charter have never been seriously questioned. Indeed, it is fair to say that ASIO itself has never been under very serious question. The sad part of its history was the tragic raiding of it by a former Attorney-General and member of the Senate in the Whitlam regime. That tragic situation sent a message round the world that our security system might not be secure. But worse than that was the revelation of a breach of security. It is important to understand that ASIO itself simply gives information to the government of the day. It was never thought that its information and files would be revealed to the general public or used in any way to condemn people. Sadly, I recall the tabling in this Senate of some 2,000 names of immigrants to Australia, largely of Yugoslav Croatians, with the inference that they were bad people-an inference which was never justified and which really pointed to the grave danger of political intervention in the intelligence and security services of this country. I say that with sadness because we are looking to establish in any kind of reforms a system of considerable integrity. I pay tribute to the Directors-General over the years. Many of them are outstanding Australians. I pay tribute to all those servants of ASIO who work in a very difficult and anonymous fashion. Against that background, it is important to understand that there have been two very thorough investigations of ASIO by Mr Justice Hope. Both were instigated by Labor governments and the reports are available for honourable senators to peruse. It is utterly important to understand that in the more recent report. Mr Justice Hope reported very favourable indeed upon all of the five elements of our security and intelligence services. It is important to understand that he said of ASIO, amongst other things: ASIO has been concerned to ensure that its operations and actions are within its charter, the Australian Security Intelligence Organization Act 1979 (ASIO Act), since the Act came into force, whether in relation to the collection or communication of intelligence or to advice to Ministers and Commonwealth authorities. It has been substantially successful in achieving that goal. That is a very significant commendation. Looking at the changes in ASIO from 1979 to 1984, Mr Justice Hope went on to say: Perhaps one of the greatest changes that I have found in ASIO is in the degree of its concern for compliance with the requirements of the law and of propriety. I pause here to say that the judge on whose report we must place our trust, a man of very great respect in this community, has said that he has found that ASIO has complied with its charter and that its work is successful. He went on to mention the second of the bodies, ASIS, and of course made note of that very unfortunate aberration at the Sheraton Hotel in Melbourne. He mentioned it as an aberration and said: Firm and clear steps have been taken to ensure that no such incident will happen again. He went on to deal with the Defence Signals Directorate and said that neither in the former report on security nor in this inquiry had he found any evidence supporting any allegations that had been raised against that organisation. He said that the effectiveness and efficiency of ASIS appeared to have been growing over the decade. Those are pretty strong commendations of these bodies. Of the Office of National Assessment he said: Although it is a relatively small body, ONA has been able to establish its independence and authority, and it has done this by the quality of the work which it produces. That is also a pretty good commendation of such a body. In relation to JIO he said: JIO has adjusted well to the changes it had to make, and it handles a vast amount of intelligence and issues assessments and reports, many of which are of a high standard. Its product is well regarded by those who receive it. Those are a significant number of commendations from the Royal Commissioner, a man who over the years has learnt a lot more about the intimate structure, detail and function of our security system than any other living Australian. May I, while on my feet, pay tribute to Mr Justice Hope and say that Australia is well served by senior members of the judiciary, such as he, who are willing to set aside their judicial duties for infinite lengths of time to undertake a most painstaking examination of our security systems. I think honourable senators on both sides of this chamber would want to place on record that commendation, and I so do. I remind the Senate that Mr Justice Hope's report is very comforting for Australians. He has said that despite the reports that appear in the media from time to time and despite the allegations and the rhetoric of some careless politicians, the security services in this country have acted sensibly and with full regard for their charter and have carried out their duties in the best interests of Australia. One could scarcely have a better commendation than that. Senator Durack referred to a recent public statement made by the present Director-General of ASIO, Mr Alan Wrigley, at the National Press Club in relation to ASIO as he finds it today. Mr Wrigley, a former senior member of the Department of Defence, had had the chance to look at ASIO, to take stock of its work, and to look at its integrity and the quality of its work. He said a number of important things. First of all he said that the existence of such a body was amply justified and that there are and have been very real threats to Australia's security in various ways and that the actions of ASIO over the years had frustrated such dangerous incidents. That is a pretty high tribute, said in public by the present Director-General, a man who, with his Defence background, would know these things. We come to this legislation against that background. We come to it with a number of recommendations by Mr Justice Hope, many of which are in the legislation before us. There are two about which I wish to comment and the others will be dealt with in the Committee stage. Mr Justice Hope has recommended the appointment of an Inspector-General. I respect the man who has put forward this recommendation, but I must say that nothing I have seen has justified that recommendation or the translation of it into legislation. In fact, the very report of Mr Justice Hope argues against the need for such an appointment. He has said that ASIO observes its charter, that it is successful and efficient, and that it has a quality of integrity. If it has all those and if indeed the Prime Minister and the Attorney-General have supervisory roles over it, what need is there for further looking over the shoulder of ASIO? Putting an intermediary in between the government of the day and the Director-General is to do something that could be both destructive and corrosive, and it could certainly be divisive. If someone is appointed whose eternal job is one of auditing and looking over the shoulder of the Director-General and looking into ASIO as an organisation, of querying whether this or that is right, no person in a managerial position can feel that he has any sense of independence. If there is one great virtue that a Director-General of ASIO must have, it must be the freedom to be independent and objective in what he does. If all the time he knows that somebody is double guessing him, he must feel constrained. In any case, there will always be room for differences of judgment in the conduct of such an organisation. Such a position would make the Director-General of the day feel that he was under scrutiny all the time. Already he is under scrutiny by the Prime Minister and the Attorney-General as often as they wish to seek, to ask, to inquire, to investigate. How can a man have many masters? How can the Director-General be in a situation in which right down to the grass roots, to the very employment of his staff, to the very question of a dissident member of staff raising some problem, he himself is not totally responsible in the end, to deal with it? Someone is looking over his shoulder, someone who can have an inquiry, someone who can query things and raise doubts. The government of the day would be put in a dilemma. How could it adjudicate if from time to time it had two sets of opinions? How could the Director-General go about his business that way? Sadly, I feel, having read Mr Justice Hope's report, that a wrong conclusion has been reached. We have had over the years and have at the moment an organisation of great integrity which observes its charter and works with great efficiency. It has a Director-General acting with independence and objectivity, reporting to the Attorney-General and to the Prime Minister. In future by its actions the Government will put a dilemma into the system. Who is to say what the quality of the Inspector-General will be? We ought to be picking the best man in Australia for the job as Director-General of ASIO. If we are not, where is our judgment? The Director-General will have an Inspector-General who ought to be next best to him-not best. If we have chosen as Director-General the best qualified man in Australia, how can we have somebody second-guessing him? If we have an Inspector-General with such qualities we should make him the Director-General, otherwise we have a nonsense system. Who would ever have in a major enterprise in this country a managing director and an inspector reporting over him to the board of directors and who would say to that board: `I do not think he is right; I think he is wrong. Bill Smith, the third grade clerk, has a grievance and I think that the managing director handled it wrongly.' That is a nonsense. I come to the formation of a parliamentary committee to which certain information is to be given about ASIO but not about particular events. There will be a constant probing by the parliamentary committee, a constant guessing of what is happening, and therefore in my judgment a constant threat to the integrity and the security of ASIO. I am not reflecting upon individual members of the Parliament, but if we cannot have a Senate select committee report such as that brought into this place yesterday without it being leaked as it was leaked to the Age last Friday, how can we stop leaks from a parliamentary committee which acts in the ordinary, free and independent way that such committees do. Unless the parliamentary committee knows everything, how can it make judgments on a few things? That is the dilemma. Mr Justice Hope has said that Directors-General and the organisation have acted within ASIO's charter and with integrity, so why do we introduce a third force to look over the Director-General's shoulder? All that will happen is that we will emasculate ASIO. Sadly, that is what some would want. We will make ASIO fearful to act. Nobody has ever suggested that it has, over its long history, ever acted badly or against the interests of the Australian nation. Over history the quality of its actions has stood up under an independent Director-General responsible to a Prime Minister and to an Attorney-General. We are to have an Inspector-General who, if he is good enough, ought to be the Director-General. We will then have a parliamentary committee. What we are doing-it is what every one of those foreign interests in this nation would like our indigenous community to do-is opening out and exposing the clues to our security system; in other words, we are being helpful to those who are not concerned with the best interests of Australia. I cannot imagine why we would do such a thing. If a parliamentary committee is to be set up, it ought to do what it purports to do. There ought to be an assurance to the Australian people that it knows all there is to know about ASIO and therefore can be a safeguard, the watchdog of the Australian people. But that is not intended at all; the committee is to know only what it is told. It will probe and, as is the ordinary way of parliamentarians, make allegations and assertions which will be picked up by the media. We will have every wild hare running that one can imagine. When we spell it out, we can see the lack of common sense of these things. Every country finds it imperative to have a security and intelligence system, so every country knows that it is vulnerable from within. A democracy, in particular, is doubly vulnerable. A totalitarian state can deal with those who are subversive, who are terrorists, who will threaten its security. Democracies open up their activities and so expose their soft underbellies to the terrorists. Therefore, it is most important that we have a security system that can act effectively and fearlessly. If I had any evidence before me that the system has not been, or is not, acting in this way I would look with much greater interest at the idea of an Inspector-General and at the idea of a parliamentary committee. But I have before me the words of the royal commissioner; words which reinforce the view that each of the reforms made to the security system have been faithfully taken up, carried out and discharged. He says that ASIO is obeying its charter, that it is efficient and that the other bodies are going about their business efficiently and in the best interests of Australia. In looking at one of the most important jobs in Australia, that of Director-General of ASIO, I repeat that we must search Australia to find the best qualified person there is, put that person in that position and put our trust in him. There are all sorts of safeguards. ASIO is always held up by those who want to denigrate it as being a body that races around, subversively tapping telephones, invading the privacy of people and getting information, not in the interests of Australia but because of some party political interest. That is an absolute nonsense. Australians must understand that before ASIO can tap a telephone, before it can invade the privacy of someone, before it can look at particular information, it must go to the Attorney-General of the day who will or will not give it the authority to act. So if there is an allegation that ASIO is doing these things, it is a reflection on the Attorney-General and the Prime Minister of the Day. None of these things has happened. I remind the Senate that sadly the only reflection on ASIO occurred when it was raided and papers that should never have seen the light of day were tabled in this Senate. Those who denigrate ASIO say that ASIO would be raising files on people to denigrate them. I know of no file prepared by ASIO that has ever been exposed to the light of day-other than, presumably, to the Attorney-General and the Prime Minister-other than those tabled in this Senate. It is to the disgrace of this Senate that it was ever allowed; it is to the disgrace of the political system, not of ASIO, that it ever happened. One must conclude that whilst there are a number of worthwhile mechanical measures in the reform of these security systems, we have had a major assurance from the royal commissioner who has said that after two thorough searches of these organisations he has found so much to commend and so very little to criticise. He has found integrity, he has found efficiency and he has found dedication. On that note I repeat that one should record one's thanks to the people in these various organisations who anonymously or otherwise go about their business in the interests of the safety and security of Australia. Senator COONEY(Victoria)(8.39) —A strong defence has been made of the Australian Security Intelligence Organisation, its integrity and its record. It is good to hear that defence being made but it does not necessarily follow from that that the sorts of conclusions reached are correct. I turn to clause 9 of the Australian Security Intelligence Organization Amendment Bill 1986, which inserts the following new section 17A into the principle Act: This Act shall not limit the right of persons to engage in lawful advocacy, protest or dissent and the exercise of that right shall not, by itself, be regarded as prejudicial to security, and the functions of the Organization shall be construed accordingly. This section has been proposed because of a perception by people, whether rightly or wrongly-it has been suggested that such people may be of the extreme Left or at least in the minority which, I think, denigrates them-that ASIO has gone outside its charter. I am talking now of perceptions. Partly as a result of those perceptions two inquiries have been conducted by Mr Justice Hope. The results of those inquiries have been discussed here tonight. If there is this perception of ASIO, and if ASIO carries out internal investigations within Australia as it is meant to do, there must be concern, not that ASIO is necessarily doing the wrong thing, but certainly that people are being watched for the purpose of seeing whether they have in some way prejudiced the security of Australia. Certainly one can understand people who are looked at in this way feeling quite badly about it. Two instruments which have been objected to are, at the very least, a reassurance to the people of Australia that ASIO is operating within its charter. I refer to the appointment of the Inspector-General of Intelligence and Security and the appointment of a parliamentary committee, the Joint Committee on the Australian Security Intelligence Organisation. There has been criticism of the proposed establishment of this Committee. I find that somewhat strange, for the following reason. Certainly the Prime Minister of the day and the Attorney-General of the day have a supervisory role over ASIO, but they are members of the Executive. The supreme body in Australia is the Parliament. Parliament is the place where citizens' rights are protected, where people are looked after and where the excesses of the Executive are checked. If Parliament cannot in some way look at a body which has the potential to look at and inform upon its citizens, either rightly or wrongly, if Parliament cannot be put forward as an instrument in some way to supervise a body such as ASIO, what have we come to? The very heart of our democracy is the parliamentary system. It seems to me to be going too far in the protection of ASIO to deny the supreme body, the Parliament of Australia, a proper role. That proper role is set out in Part Va of the legislation, which deals with the Joint Committee on the Australian Security Intelligence Organisation. Senator Durack spoke about the proper functions of our society. He spoke about its basic values and institutions. I ask Senator Durack: If this Parliament is not one of the basic institutions of our society, perhaps along with the law courts, what are we all about? It has been said that this parliamentary body would leak to the Press and that in some ways it would be untrustworthy. Nevertheless, the Parliament is an elected body-which ASIO is not-a basic institution of our society. I want to say something about the use of the words `basic values'. The basic value of this society, I hope, is freedom being very much to the fore. Ours should be a benign, tolerant and aspiring society which can go about its functions untrammelled by the rigours of the state and by the instruments that are set up in totalitarian regimes. Senator Sir John Carrick pointed out that there are risks in democracy. Of course there are risks in democracy, but if one wants to save democracy, those risks must be taken. To say that a non-elected body can, without any scrutiny at all by the elected representatives of Australia, look at the citizens of Australia and the way they live, perhaps for the most legitimate of reasons, seems to me to turn on their head the values we ought to be desperate to preserve as a country and as a people. Criticism has been made of the proposed appointment of the Inspector-General of Intelligence and Security. It has been said that his function will double up on that of the Prime Minister and the Attorney-General. It is interesting to look at clause 4 of the Inspector-General of Intelligence and Security Bill, which states: The objects of this Act are- (a) to assist Ministers in the oversight and review of- (i) the compliance with the law by, and the propriety of particular activities of, Australian intelligence or security agencies . . . Certainly it is proper that ASIO, or any of the other organisations whose function is mainly to collect intelligence other than on the citizens of Australia, complies with the law as set down by Parliament and acts with propriety. This legislation will enable the Attorney-General and the Prime Minister to see that that happens. Senator Durack —What is wrong with the courts? Senator COONEY —The courts are not an investigatory body. They do not consider whether a particular organisation has stayed within the law. They decide on the evidence brought before them whether there has been compliance. How do we know whether a body such as ASIO complies with the law if we do not have an Inspector-General of Intelligence and Security, as Mr Justice Hope suggests we should? Senator Durack —Mr Justice Hope looked at them and found that they were not complying with it. Senator COONEY —Senator Durack has raised an interesting point. It has been felt necessary to have two royal commissions conducted by Mr Justice Hope. With the appointment of an Inspector-General of Intelligence and Security and the establishment of a parliamentary committee, that sort of need will now be eliminated and we will have a proper functioning of this body with the ability to assure people that all is going well. One will not now need a royal commission which, by its very nature, is quite disruptive. I do not say that in any critical sense at all, but obviously a royal commission, entering a field in an extraordinary way-the very function of a royal commission is to act in an extraordinary way-is disruptive. We will not have the need for that in the future because we will have, firstly, an Inspector-General of Intelligence and Security and, secondly, a committee of parliamentary representatives. They will be able to reassure the people of Australia of the effectiveness, use and integrity of ASIO, which have been spoken about by speakers before me in this debate, and that the organisation has stayed within its charter and within the objects of the Act as set out in clause 4 of the Inspector-General of Intelligence and Security Bill 1986. I quote again clause 4: The objects of this Act are- (a) to assist Ministers in the oversight- It is not as if the office of the Inspector-General will be an instrument additional to the Prime Minister and the Attorney. The objects of the Act will be: (a) to assist Ministers in the oversight and review of- (i) the compliance with the law . . . (ii) the effectiveness and appropriateness of the procedures of those agencies relating to the legality or propriety of their activities- surely nobody will object to that- (iii) certain other aspects of the activities and procedures of certain of those agencies; (b) to assist Ministers in ensuring that the activities of those agencies are consistent with human rights; I have not heard it suggested, and I hope I do not hear it suggested-that a body that is set up to protect us against an internal or external threat to our security will do so in a way which is inconsistent and denies human rights. In addition, clause 4 states: (c) to allow for review of certain directions given to ASIO by the Attorney-General. So to say that we have the Attorney-General and the Prime Minister compartmentalised, as it were, and that the Inspector-General of Intelligence and Security will operate separately from them I think is to misread what this legislation is all about. The Inspector-General is to operate to assist the Ministers and to see that ASIO functions, and functions properly. I turn now to clause 8 which, under the heading `Functions of Inspector-General', states: (1) Subject to this section, the functions of the Inspector-General in relation to ASIO are- There are special provisions as far as that goes because ASIO operates within Australia and the other agencies tend to operate outside Australia, so that the sorts of people we are looking at are different. Clause 8 continues: (a) at the request of the responsible Minister, of the Inspector-General's own motion or in response to a complaint made to the Inspector-General, to inquire into any matter that relates to- (i) the compliance by ASIO with the laws of the Commonwealth and of the States and Territories; I repeat that I certainly do not think it has been suggested in this debate that, in some way, ASIO should be allowed to range outside the laws of the Commonwealth, the States and the Territories. Clause 8 states further: (ii) the compliance by ASIO with directions or guidelines given to ASIO by the responsible Minister; (iii) the propriety of particular activities of ASIO; (iv) the effectiveness and appropriateness of the procedures of ASIO relating to the legality or propriety of the activities of ASIO; or (v) an act or practice of ASIO that is or may be inconsistent with or contrary to any human right, being an act or practice referred to the Inspector-General by the Human Rights Commission; The clause goes on. But none of the legislation presently before the Parliament suggests in any way that any of the additional instruments set up can interfere with the day to day running of the intelligence organisations concerned. The legislation does not suggest in any way that it can override the proper directions given by the Inspector-General to his staff. Senator Sir John Carrick used the example of a company. He said that we do not have somebody overriding the executive director of a company. Of course we do not, but nor do we in this legislation. A company is very much subject to the law, to the courts and to supervision by the community to ensure that the company will stay within the law. All this legislation does is enable an assurance to be given that intelligence organisations, in particular ASIO, are doing the same thing. So when we look at the legislation in those terms we can hardly say: `Here is legislation that in some way will disrupt, corrode'-I think that was one word that was used-`the way in which ASIO operates'. I think the words `destruction' and `corroding' the influence of the Inspector-General were used. When we look at the legislation and see how it functions and what the Inspector-General's functions are it is very hard to see how those words can be justified. I will now deal with the sorts of powers that the parliamentary committee will not have. That is set out in proposed new section 92c (4) of the Australian Security Intelligence Organization Bill, which states: The functions of the Committee do not include- (a) reviewing a matter that relates to the obtaining or communicating by the Organization of foreign intelligence; (b) reviewing an aspect of the activities of the Organization that does not affect any person who is an Australian citizen or a permanent resident; (c) reviewing a matter, including a matter that relates to intelligence collection methods or sources of information, that is operationally sensitive; or (d) originating inquiries into individual complaints concerning the activities of the Organization. Here we have very specific exclusions from the Committee's activities and powers. If we read in fair measure proposed new Part Va of the Australian Security Intelligence Organization amendment Bill we see that it gives the Parliament what I say is its proper role as the supreme elected body of this land over a body which is its creation and which is not elected. But it does it in such a way as to ensure that that creation of the Parliament is still able to operate effectively so as to protect the legitimate interests of the citizens of this country. So to talk about it in the strong terms that have been used so far is to be unfair, firstly on the Parliament, secondly, on the Committee and, thirdly, on the creation of the Office of the Inspector-General. It has been said in debate that only extreme left wingers would object to ASIO being unfettered, that only a minority would take up that position. I think if we were to put fairly to the Australian people the question of whether organisations created by Parliament, including intelligence organisations such as ASIO, should stay within their charter, should be under some sort of supervision to see that they do that, we would find the people of Australia saying: `Of course they should do that. Of course there should be supervision at that level'. We certainly do not want bodies interfering in the very important functions of this Organisation but, at the same time, we want some assurance that the body that our parliament created and that we have adopted over the years will stay, as every organisation ought to do, within the law and that it will act with propriety, justice and fairness to all. Senator Durack —Do you want to have a parliamentary committee on the AFP as well? Senator COONEY —The Australian Federal Police are subject to scrutiny. That is exactly the point. The Australian Federal Police act by investigating crime, arresting people and bringing them before the courts. What they do and how they function is very much subject to the scrutiny of the courts. Their activities are well and truly in the open but the activities of ASIO, by their very nature, are not in the open. The Inspector-General and the proposed Parliamentary Committee will provide that missing link which, as far as the police force is concerned, means that it operates publicly. Let us say, for example, that ASIO collected information and passed it on wrongly. Surely that is something that ought to be checked. I find difficulty with Senator Durack's approach in that he seems in some way not to trust the Parliament-the very body to which he has been elected. He seems to be saying that the Parliament that he has served so nobly over the years, served with such distinction as Attorney-General and served, no doubt, to the pleasure of us all is in some way a failure, that it is a debased body that should not be trusted, that when it operates it is somehow less these intelligence bodies such as ASIO that have not been elected and that act is secret, as they must-that is at the very essence of their functions-and that somehow they are superior bodies. It is at that level that I find difficulty with Senator Durack's arguments. It seems to me that he lacks faith in the very institution that he has adorned over the years. It is a pity that somebody who has served the Parliament so well as Attorney-General and in other capacities over the years does not have trust in the very institution which he has served with such distinction. If Senator Durack does not feel that Parliament should be able to provide a body to see that this organisation it has created stays within the bounds of the law and propriety, I find it difficult to see what he would accept as functions which the Parliament may be able to perform well. I suppose that is where we differ. Australia lives in more freedom than perhaps any other nation in the world. We can come and go, exchange differences of opinion, and walk freely in the streets. I have been recently to London and Paris, where one cannot walk in the streets without police being there and bags being searched because of the sorts of activities that are being carried on. Australia is a place where one still can walk abroad. It has a quality of life and an approach to things which I find most exhilarating. Lessening that in any way ought to be resisted. Senator Macklin —Do you include Queensland in that? Have you walked abroad in Queensland? If you do it with one other person you might cause a march. Senator COONEY —I have been told that there have been some difficulties with police there recently, particularly with regard to the Aborigines, but that is another matter. I am talking about the great institution of the Federal Parliament which Senator Macklin and Senator Durack adorn. I do not wish to speak much longer. It distresses me when people in some way discount and belittle the institution of Parliament, that they should somehow see it as nasty or subversive to have an Inspector-General of Intelligence and Security to help the Prime Minister and the Attorney-General to perform their function. If it is subversive to have Parliament and the elected Attorney-General and the elected Prime Minister oversee a body that is not elected, surely we have started to twist the values, the culture, the very ethos of this community, and that is a great pity. I am sure that when people think about this matter they do not reach that conclusion. People have seen that there is a parliamentary committee and an office of the Inspector-General of Intelligence and Security and they have thought that the two bodies would somehow reduce the effectiveness of ASIO. They have wrongly reacted adversely. This process will save the need to have a royal commission in the future and will keep ASIO within the proper bounds of its functions without in any way making those functions any less effective than they have been. When people see this they will agree that this is good legislation. We should join as with one voice in passing this legislation when it is put to the vote. Senator HAMER(Victoria)(9.04) —The problem of the control of intelligence and security organisations is one of the most difficult to face a democracy. How does one ensure respect for human rights? How does one ensure that the public is told what it has the right to know without damaging the operations of the agencies? They are really difficult problems for any democratic government. They are no problem at all in a dictatorship such as the Soviet Union. They do not have to respect human rights. They do not tell the people anything they do not want them to know. Even in the Soviet Union, organisations such as the KGB, which is far more ruthless than anything we could contemplate, sometimes appear to get away from political control and take actions which could scarcely be in the interests of the foreign policy of the government they are supposed to be supporting. Even in a country such as that, control of such organisations is a continuing question. Here in this democracy we have five relevant organisations. The Australian Security Intelligence Organisation deals with internal security. It is the most public of our security organisations. I think I should qualify something that Senator Cooney said. ASIO is not an organisation which can arrest or charge anyone; it is an intelligence collection agency. If, as a result of its investigations, someone has to be charged, it has to go through the ordinary public courts. ASIO is an intelligence collection organisation, not a law or security enforcement agency. It is very important that people should understand that. It is the first of our security organisations and perhaps the one most in the firing line. The second is the Australian Secret Intelligence Service, which is involved in the clandestine collection of overseas intelligence. Of course it hit the news headlines some time ago following the Sheraton raid. I do not want to deal with that, except to say it was a very unfortunate incident caused by a total lack of a meeting of minds between some new ex-Special Air Service Army recruits devoted to a very public and dramatic way of solving problems and the organisation of ASIS, which never contemplated people would tackle problems in quite such a direct way. It was a matter of a lack of control and a lack of understanding by new recruits. The fourth security organisation is the Defence Signals Division, which deals with electronic intelligence. The Joint Intelligence Organisation of the Department of Defence has an obvious function. The Office of National Assessments has the job of giving advice to the Government. I have long been a critic of that organisation, mainly because of its dominance by the Department of Foreign Affairs. Foreign Affairs officers, in my experience, by their training and background are quite unsuited to perform intelligence functions. Nevertheless, they have a regrettable control over ONA. In a democracy, when dealing with these organisations, we must look for three things. Firstly, they must be efficient, and that may well require secrecy. Secret organisations can scarcely be expected to be public because, if they are public, they will cease to be efficient. Efficiency may require secrecy. The second requirement is responsiveness to government directions. These directions must be on the record. The organisations must not be subservient; they must be independent. It is just as important for the Director-General of ASIO to be an independent statutory officer as it is for the Auditor-General or the Commissioner of Taxation to be independent of direct Government orders. They must follow general policy directives but not detailed orders. The third requirement for the control of our security organisations in a democracy is that they must respect the human rights of citizens. Things can go wrong in a democracy. They have very publicly gone wrong in America in recent years. The stories of President Nixon using American agencies to pursue political enemies are horrifying. The stories of President Johnson being fed with files on political friends and enemies by the chief of the Federal Bureau of Investigation and laughing over the stories of alleged failings of his political acquaintances are horrifying. We must not have that sort of thing-a direct improper involvement of political heads in the operations of security and intelligence organisations. That was the real worry about the events mentioned by Senator Sir John Carrick-the raids on ASIO-when into the hands of political people who were in no way entitled or qualified to receive it went raw ASIO intelligence, intelligence not in the form in which ASIO might have wanted to present it. It may not have been checked. It may not have been accurate. We must not have a system in which political heads can get their hands on intelligence organisations and use them for political purposes. Everything that is done must be done above board. Things can go very wrong. As I said, they did go wrong in America. They have gone wrong in Australia, but not very often. These Bills institute two new controls. I will look at whether these Bills are going to help the situation I have outlined. There are three requirements: Efficiency, which may involve secrecy; responsiveness to government directives; and respect for human rights. The Government proposes two things. The first is the establishment of the office of Inspector-General and the second is the establishment of a parliamentary committee to supervise ASIO in particular. I can see a role for an Inspector-General. It is always awkward if something comes up, if serious allegations are made against an intelligence organisation, and one has to set up a royal commission. It is dramatic, it is news, and there are allegations grossly in excess of what has really happened when one has to set up a special royal commission. I can understand the setting up of an Inspector-General to act in two ways: First, to act as an ombudsman for complaints about the operations of ASIO; and, secondly, on direction by the Minister, to investigate any particular worries the Minister might have about the operations of ASIO. In my mind those are reasonable and acceptable roles for the Inspector-General. But that is not all of the responsibilities that the Inspector-General is given. If one looks at the Bill, he is permitted `of the Inspector-General's own motion', to inquire into any matter that relates to the compliance by ASIO with the laws of the Commonwealth, the States and Territories, the compliance by ASIO with directions or guidelines given to it by the responsible Minister and the propriety of particular activities of ASIO'. What he is really doing is supervising all the activities of ASIO. This seems to me to be a total administrative nonsense. One appoints the Director-General and, if one is not satisfied with him, one can get rid of him. But to have an Inspector-General with virtually all functions of the Director-General sitting beside him and on his own initiative allowed to investigate virtually any activity of the Director-General seems to me to be an administrative nightmare. It will cause great problems and great friction. Maybe if the new Inspector-General shows great tact and forbearance it will work, but I do not think it is sensible administration, I do not think it will act for the efficiency of ASIO and I do not think it will act for the good of the country. In my view it should be cut out of this Bill. If the Government is not prepared to do that, it certainly should be reviewed after a short period to see how it is working and I think experience will show that it is very damaging to the efficiency of ASIO. The second new control is the establishment of a parliamentary committee to oversee ASIO. I think the Government might be copying the United States of America. I think for anybody who is interested in this it is worth looking at what has been the effect of those congressional committees, one in the House of Representatives and one in the Senate, on the efficiency of the American intelligence service. In my view-I think I would be supported by many others-it has been catastrophic. It has not made for more efficiency and more accountability; it has just made for inefficiency, cover-ups and incompetence. I do not believe that we should use the American experience as a guide to what might be a successful operation here. I wish to refer to something that Senator Cooney said-that the Parliament is supreme, therefore surely we have the right to supervise in detail any organisation we set up. That is not strictly true. Under our system, the detailed conduct of defence and foreign affairs is a matter for the Executive, not for the Parliament. Parliament can supervise everything else, and does. Under the British tradition detailed matters of defence and foreign affairs are matters for the Executive. For Parliament to intrude into this there has to be a very clear reason why this will be advantageous. I cannot see that that reason has been established. One of the problems of setting up a parliamentary committee is the danger of leaks. A leak occurred recently when the report on the Joint Select Committee on the Human Embryo Experimentation Bill 1985 was leaked two days before its publication. Leaks do occur in Parliament and I think we would be very foolish if we thought that if a parliamentary committee were given highly sensitive information it would not be leaked. The American experience indicates that it would be leaked. I see no particular reason why it would not be leaked here. The result is going to be either a dramatic drop in the efficiency of ASIO or the parliamentary committee will be given incomplete or inaccurate information. Mr Justice Hope referred to the American Congressional committees and he said about this matter: It is particularly important to keep in mind what it is that the Congressional committees do in the course of their oversight. Much of their influence is exercised through their participation in the budgetary process. In reviewing the financial bids for the agencies they examine the justification advanced for the various programs for which the agencies are seeking funds. The emphasis in the review by the committees is on the nature of the programs rather than on particular operations which may be included in them. That is not a role which could be done under our system by the committee. Mr Justice Hope went on to say: If a special committee to oversee ASIO were to have access to detailed information consideration would have to be given to the practical problems which would be created by further widening access to such information. Difficult questions would also arise about the position of committee members in relation to such information. When the information is of sensitive operations activities, committee members would in a real sense share a degree of responsibility for those operations. Mr Justice Hope came down very clearly against the setting up of such a committee. It is a constitutional innovation. I think it has great security problems for ASIO and I do not think any proper case for its establishment has been made out. Therefore, I think it should be opposed by this Parliament. Senator HARRADINE(Tasmania)(9.17) —The Senate is considering three pieces of legislation concerning the Australian Security Intelligence Organisation. They are the Australian Security Intelligence Organization Amendment Bill 1986, the Inspector-General of Intelligence and Security Bill 1986 and the Intelligence and Security (Consequential Amendments) Bill 1986. The principal Bill is the Australian Security Intelligence Organization Amendment Bill 1986, which amends the Australian Security Intelligence Organization Act 1979. The major changes proposed by the Bill are the following: To delete the term `subversion' from the definition of `security'. The term `subversion' is to be replaced by a new concept of `politically motivated violence'. This new concept covers what is included in the definition of terrorism in the 1979 Act as well as a more narrow definition of what previously went under the definition of subversion. The Bill also seeks to replace the definition of `active measures of foreign intervention' with that of `acts of foreign interference' in the 1979 Act. It seeks to establish greater ministerial control over ASIO and to establish a parliamentary joint committee on ASIO. The latter amendment has been dealt with in the Senate by previous speakers, including the last speaker, Senator Hamer. The Minister for Resources and Energy, Senator Gareth Evans, said in his second reading speech: . . . substitution of `subversion' for `politically motivated violence' has been designed to concentrate ASIO's attention more clearly `on those violent activities going beyond the scope of lawful advocacy and dissent, directed at undermining Australia's system of government'. This objective is met by clause 9 of the ASIO Amendment Bill, which inserts into the Act the following new section 17a: This Act shall not limit the right of persons to engage in lawful advocacy, protest or dissent and the exercise of that right shall not, by itself, be regarded as prejudicial to security, and the functions of the Organisation shall be construed accordingly. On the face of it, this amendment appears to be unexceptionable. It seems simply to give expression to the democratic tradition of ensuring to each and every individual and group in our society their freedom to advance in the sphere of civic life their particular political principles and policies. The problem, however, arises from the assumption implicit in the amending Bill that ASIO, by its very nature, poses a threat to political liberties. This assumption, which the historical record does not bear out-certainly in recent years-and the move to counteract this presumed threat, appears to have placed a severe and unnecessary limitation on ASIO's ability to be an effective organisation. I realise that we are touching on very delicate matters and that concern for security should definitely not develop into a preoccupation which devours in the end the very liberties and institutions which security agencies are intended to protect within democratic countries. On the other hand, the opposite tendency, namely, a myopic preoccupation with preserving civil liberties, can weaken a nation's defences so that it becomes incapable of preserving its liberties and institutions when they are faced with a real threat. It is into this second trap that this legislation has the risk of falling. The ASIO Amendment Bill proposes that, as long as individuals and organisations do not go beyond lawful advocacy, protest or dissent, ASIO will not target them for investigation. To put it another way, only those individuals or groups who explicitly adopt political principles and programs of action which involve commitment to violent political activity will receive attention from ASIO. This means that ASIO will be prevented from detecting within otherwise peaceful seeming and legitimate groups embryonic developments which could ultimately take the form of a clearly violent threat to legitimate government, the Constitution and democracy itself. In other words, this Bill appears to prohibit ASIO from investigating potential subversive activities. From my reading of the Bill, ASIO must wait until potential subversion becomes actual. Moreover, this signals to subversive activists, whether they be domestic activists or agents of foreign powers, that a disguise of lawful advocacy, protest or dissent will debar ASIO from conducting intelligence operations against them. Therefore, this legislation offers what amounts to an invitation to undertake subversive activities of a kind in which, on principle, ASIO will be obliged to take no interest. It is true that the Bill contains a definition of the words `acts of foreign interference' which should adequately cover what the 1979 Act terms `active measures of foreign intervention'. Nevertheless, there seems to be nothing in the Bill to suggest that individuals and organisations acting in collaboration with a foreign agency, for the purpose, say, of affecting our political or governmental process will not be protected from the attentions of ASIO while it confines its activities to the level of lawful advocacy, protest or dissent. For example, one of the chief ways in which the Soviet Union interferes in the internal affairs of other countries is by making alliances with individuals or groups engaged in lawful advocacy, protest or dissent of a kind which, from the Soviet point of view, objectively advances Soviet interests. This is precisely what the KGB means by its term `active measures'. I conclude from the recent remarks of the Prime Minister (Mr Hawke) on Soviet connections with certain movements within Australia that he understands this point, even if the political illiterates in the media who are outraged at his remarks do not. I wonder whether the Minister and the Government can assure the Senate that, on the basis of either this Bill or ASIO's operational orders, ASIO will not be deterred by the concept of lawful advocacy, protest and dissent from identifying and investigating individuals or groups who are targets of, say, Soviet active measures. Could any assurance which the Minister might sincerely give have any objective value? I ask this in light of the amazing decision handed down on 1 June 1983 by the Security Appeals Tribunal to the effect that the Communist Party of Australia is not a `subversive' organisation within the meaning of the ASIO Act 1979. It is clear that, as a result of this decision, ASIO is now obliged to ignore CPA activities as such, even though these are clearly subversive in that they attack the fundamental national security interest of Australia. The judgment of members of the Tribunal notwithstanding, certain groups within the country, such as Marxist groups, clothe their activities, as a matter of policy, in the garb of legitimate advocacy. Senator Macklin —What about groups that receive other funds from overseas? Senator HARRADINE —That is an interesting question. I also thought about currency manipulation, for example, although that may well result in a demarcation dispute between ASIO and the Australian Federal Police. I think currency manipulation is a subversive activity, particularly when a country is faced with an economic crisis which, according to the Prime Minister, is one such as we have not seen since World War II. Despite being, according to the Tribunal, a non-subversive organisation, members and, for that matter, some former members of the group concerned do maintain active contacts with officials and organs of the Soviet Union for the purposes of promoting policies which in reality serve the interests of the Soviet Union at the expense of Australia. I refer particularly to the agency that was known as the Pacific Trade Union Forum, which is now known as the Pacific Trade Union Community. This organisation, of course, was established and is activated by individuals who do not wish to see or follow a policy which is consistent with that of the security of this country. It is more likely to advance the foreign policy objectives of the Soviet Union in the Pacific Ocean and indeed, in that sense, would be contrary to the external security interests of Australia. It is also true that, in the current situation in the Philippines, a feature of our policy towards the Philippines is to seek to sustain the democratic process in that country against the trust which is now taking place by the NPA-the New People's Army-backed up by the Communist Party of the Philippines. Some groups within Australia are actively campaigning to support the activities of the NPA which appear, on the face of its policies, to pose a problem for the security of the region. It seems to me that there needs to be an assurance or a guarantee that-bearing in mind what I said about the need to ensure that the pursuit and investigation of subversive activities does not ultimately devour the democratic character of our society-despite the provisions of this Bill, the Australian Security Intelligence Organisation, ASIO, will be able to investigate organisations which support acts of foreign interference to the detriment of Australian government policy and the security of peoples and governments with whom Australia is friendly. Senator GRIMES(Tasmania-Minister for Community Services)(9.34) —I thank honourable senators for their contributions to this debate-a debate which is often difficult and a debate which, as Senator Macklin reminded us, does not occur very often in this place, despite the protestations of some honourable senators opposite that some people in this place are apparently preoccupied with the activities of the Australian Security Intelligence Organisation and our other security organisations. Let me say at the outset that, in my wilder and less responsible days, I may have responded to Senator Harradine's remarks a little differently. I may have given some examples of organisations in another section of the political spectrum which may have warranted the attention of our security agencies in the way that a couple of organisations that we mentioned have. I do not intend to comment tonight on the organisations, individuals or agencies that he referred to; nor do I intend to respond to them in kind. I intend merely to cover the points which have been raised by honourable senators which are pertinent to the legislation before us. I think all honourable senators tonight have recognised the difficulty in a democracy of coping with the problems of our security agencies. I believe that all members of this Parliament-or certainly all parties in this Parliament-would accept that those security agencies are necessary for the internal and external security of the country. I point out that honourable senators opposite tonight have frequently drawn on the reports of Mr Justice Hope for support for their advocacy of our security agencies, in particular ASIO, and their support for the efficiency, effectiveness, et cetera, of that Organisation. I point out equally that members on this side of the House agree with those reports of Mr Justice Hope. I point out to Senator Durack and Senator Sir John Carrick in particular that Mr Justice Hope made recommendations which form the basis of most of the provisions of this legislation. Most of the provisions follow the recommendations of his Royal Commission on Australia's Security and Intelligence Agencies. The major exception, of course, is not, as one gets the impression from Senator Durack, the appointment of an Inspector-General, but is the appointment of a joint parliamentary committee on ASIO. We will undoubtedly have some debate on that at the Committee stage. Mr Justice Hope recommended that we have an Inspector-General in the way that this legislation provides. I think it is very interesting that Senator Sir John Carrick spent most of his speech using the words of Mr Justice Hope and the report of Mr Justice Hope to back his arguments, but then said-and I do not think I am being unfair to him when I say it-that Mr Justice Hope's report does not back the appointment of an Inspector-General. It is one of his recommendations. Contrary to comments by Senator Durack, Senator Sir John Carrick and others, the Government accepts, and has always accepted, the need for Australia to have an effective intelligence and security capability. We do not want to see the intelligence and security agencies destroyed, as has been alleged by Senator Durack. We do not want to place unnecessary shackles on such agencies. As long as we have such agencies, as long as we recognise the need for such agencies, there will be differences of opinion in this place and in the community in general about what are reasonable restrictions on the activities of such agencies. There will undoubtedly be those who, like Senator Sir John Carrick, seem to believe that such agencies should be left untrammelled to do as they please. It is certainly not a view that is shared by the governments of the United States of America, Canada or any other democratic nation. There are those who take another extreme view that we should not have such agencies, but most of us believe that we should have such agencies and that we should strike a balance so that the civil liberties and rights of individuals in this community shall be protected. Senator Durack suggested in his speech that the Inspector-General will duplicate the work of ASIO. In fact, I believe he has misread the legislation's proposals for the Inspector-General. I believe he has a misunderstanding of what is proposed. The functions of the Inspector-General are quite different from the functions of ASIO. He or she will be charged with the review of the various agencies, not with double guessing their activities or taking over their functions. With a staff of five, it is impossible to suggest that the Inspector-General has the capacity to duplicate the functions of ASIO which, on my information, has a staff of about 700. We in fact take up the recommendation of Mr Justice Hope in this area. But we agree with Senator Macklin and the Australian Democrats that finding the right balance between accountability and the effectiveness of such agencies is difficult. We think we have found the right balance. We think we have taken up the proposals of Mr Justice Hope. Where he has made them, we think we have improved them with the increased parliamentary oversight that we are talking about. I must make the point that Senator Sir John Carrick claimed that nothing in Mr Justice Hope's report justifies the creation of the Office of Inspector-General. I refer honourable senators to page 23 of Mr Justice Hope's general report of the Royal Commission on Australia's Security and Intelligence Agencies. In paragraph 3.20 he says: Both ASIS and DSD have to operate within the law of Australia, and at times (although less often than in the case of ASIO) questions of propriety affect their activities. Although the occasions have been infrequent, allegations of misconduct have been made against each of those services. If any official statement is made about such allegations, it is liable to be challenged (rightly or wrongly) as being based on a response by the service itself. In paragraph 3.21 he says: There is thus a case for the Inspector-General to check, as occasion requires, the legality and propriety of the activities of each of these services as well as of ASIO. Since the rights or standing of Australian citizens would rarely be involved, this responsibility should not be onerous but it would be valuable in providing an assurance for the Minister and the public, as well as a protection for the services, if allegations of misconduct are made against them. In paragraph 3.24 on page 24 he said: There is little occasion for the involvement of an Inspector-General in the case of ONA or JIO. As I indicate in respect of those agencies (Chapter 1), issues of legality and propriety can rarely arise. These services report upon or assess intelligence collected by others. However, there have been occasions when matters within these organisations have had to be investigated. I have concluded that the Inspector-General should not have any general role in respect of them, but that he should be able to investigate and report upon any particular matters referred to him by the Minister responsible for the particular service, the Prime Minister in the case of ONA and the Minister for Defence in the case of JIO. I would not expect this to happen often; but the facility of resorting to the Inspector-General could be useful from time to time. In paragraph 16.77 on page 329 of his report on ASIO, he said: Having regard to the nature of ASIO's functions, the public concern to which those functions can give rise, and the secrecy pertaining to them, there is strong pressure on the Attorney, as the responsible Minister, to satisfy himself that ASIO conducts itself in a proper fashion. However diligent the Attorney may be, there are practical limits on his ability to investigate and satisfy himself that ASIO is at all times acting properly or appropriately. At the very least, full inquiry requires time which a Minister cannot be expected regularly to spare to examine materials and to interrogate people. In paragraph 16.78 he says: Moreover, apart from the procedures for review of security assessments by the Security Appeals Tribunal, ASIO, unlike departments and many other agencies, is not subject to provisions for external review of its administrative actions. In particular (and for reasons which I fully understand), the Ombudsman does not have jurisdiction in respect of ASIO, and documents held by ASIO are not subject to the Freedom of Information Act 1982. Decisions by ASIO are not subject to review by the Administrative Appeals Tribunal or by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977. The Attorney, therefore, does not have the assurance that is provided where a body for which he is responsible is subject to the ongoing discipline of independent external review. Hence the importance of the Inspector-General in Mr Justice Hope's recommendations and in this legislation; hence, I think, the adequate docu- mentation and support for the recommendation which is made by Mr Justice Hope and which has been picked up in this legislation. It is important that ASIO use its resources efficiently and effectively. So far as intelligence collection is concerned, this means devoting its investigation capacity to activities that represent a real threat to the security of the nation. It is important that we, as elected representatives of the people, can be assured that this happened, and it is in line with this that Mr Justice Hope recommended, and the Bill in fact deletes, the vague term `subversion' from the definition of security in favour of the concept of politically motivated violence. Of the activities previously covered by subversion, only those activities that can be reasonably regarded as being of security concern are included in the new definition. I think the explanations given by the Attorney-General (Mr Lionel Bowen) and by others in this area are adequate to demonstrate to the Parliament that what we are concerned about is in fact actual breaches of security-a legitimate security concern-rather than the sort of fairly vague legislation that we had before. As far as increased ministerial control is concerned, which was expressed by Senator Durack and Senator Sir John Carrick, I point out also that the provisions in the legislation are in line with Mr Justice Hope's recommendation. I point out to honourable senators that greater ministerial control over ASIO carries greater ministerial accountability, and this is an essential aspect of the new accountability procedures. The function of proposed new section 8 is to increase ASIO's accountability by a proper strengthening of ministerial control. It firstly provides that in the performance of its functions under the Act the Director-General is subject to the directions of the Minister rather than the general directions as presently provided. The current provision that the Minister cannot override the opinion of the Director-General on the nature of the advice which should be given by ASIO is retained in this legislation. The Act currently provides that the Minister cannot override the opinion of the Director-General on the question of whether the collection or communication of intelligence concerning a particular individual would be connected with security. This, too, is retained, subject to the very important qualification which recognises that there can be occasions when a conscientious and responsible Attorney-General should so act. If he does do so, he must do so in writing. He must also give a copy of any such direction to the Prime Minister. He also must give a copy of such directions to the Inspector-General of Security. It will be open to the Inspector-General to make inquiries in relation to that direction and it will be open to him to comment on the matter in his annual report, a copy of which is given to the Leader of the Opposition. The giving of directions, therefore, may be subject to additional ministerial scrutiny, independent examination and possibly notification to Parliament. Where possible to do so, guidelines must be laid before each House of the Parliament. Copies of the guidelines should be made available to the Leader of the Opposition and the Inspector-General. Unless inappropriate, guidelines will be examined also by the parliamentary joint committee. I believe the scrutiny to which the Minister's action may be subject provides a satisfactory check to the possibility of abuse. Any suggestion that the Attorney-General could make ASIO his own private police force is, I believe, a nonsensical suggestion and should be treated as such. I think the checks and balances in this sort of proposal demonstrate the Government's concern that we should in fact be very careful in providing that balance between the democratic process and the need for security. I found it very difficult to understand Senator Sir John Carrick's assertion that what we should do is somehow find the best person to be the Director-General of ASIO-I certainly do not argue with that-and that, once we have found him, in our judgment we should let him do what he likes. The honourable senator argues that we should not have an Inspector-General with his staff of five looking at what he does, we should not have the Attorney-General questioning what he does and we should not have a parliamentary committee questioning what he does. Once we have decided that this is the right person, then apparently we all should accept that he can do absolutely what he likes. That is the impression I gained from Senator Sir John Carrick's proposal. Senator Sanders —What happens if he turns out to be a mole? Senator GRIMES —That is a very real problem, but I am not going to go into that sort of nonsense tonight. Senator Harradine was rightly concerned about changes to the definitions, particularly in the area where I think he believed that those people who belonged to or infiltrated organisations which claimed through their actions or aims to be indulging only in lawful advocacy and lawful protest or dissent would be able to get into organisations which are hostile to Australia's well-being and, because they were in those organisations, would apparently be protected from the activities of ASIO. Proposed new section 17a of the legislation makes it clear that there is a basic right to engage in political activity but it states: This Act shall not limit the right of persons to engage in lawful advocacy, protest or dissent and the exercise of that right shall not, by itself, be regarded as prejudicial to security, and the functions of the Organisation shall be construed accordingly. I think most honourable senators would accept that the exercise of that basic right should not by itself be regarded as prejudicial to security, and I do not see that there should be much argument about that. Persons whose activities and intentions go further than engaging in lawful advocacy, protest or dissent could be subject to the scrutiny of ASIO if their conduct comes within the definition of security in the Act. The definition of security in the Act covers, as Senator Harradine pointed out, a fairly broad area. The scrutiny that such persons come under from ASIO will not be based on their participation in ordinary political activities, but on the activities and the intentions that lie behind such participation. It is always difficult in this area not to swing one way or the other. I accept that it is always difficult not to make life impossible, as happens in the Soviet Union, as Senator Harradine pointed out, and in other areas, by stifling almost all dissent. Most of us do not want to go the other way to a system of anarchy where there are no such restraints. I would have thought that proposed new section 17a of the legislation and the definition of security, as it has been introduced into the legislation, would cover most situations. The Government will be moving an amendment to the Australian Security Intelligence Organization Amendment Bill in the Committee stage. The amendment, which relates to the Security Appeals Tribunal and which I understand has been distributed, is an exercise in fine tuning rather than a substantive change to the legislation. The Tribunal's function is to review adverse or qualified security assessments furnished to government agencies by ASIO. An adverse assessment contains an opinion, an advice or information which is or could be prejudicial to the interests of the person involved, together with a recommendation from ASIO that relevant action, such as the granting of security clearance, be not taken. A qualified assessment contains opinion, advice or information but it does not contain a positive recommendation. The amendment proposed is to clarify the effect of the Tribunal's findings in respect to information contained in the statement of grounds upon which an adverse or qualified security assessment is based. The amendment is to make it clear that information is to be deleted by the tribunal from an assessment only if that information is incorrect, incorrectly represented, or could not reasonably be relevant to the requirements of security. The amendment does not affect the Tribunal's power to include in its findings an opinion on the weight to be given to any particular information. It compliments the new definition of qualified security assessment provided for in clause 19 (b). I hope honourable senators opposite have been given sufficient time to consider that amendment. I again thank honourable senators for their reasoned and reasonable contributions to this legislation, which I dare say will continue in the Committee stage. This legislation was last amended in 1979. I believe it is not surprising that such legislation should need amending from time to time in the light of changing circumstances and changing community attitudes. It is important that we have security legislation which strikes the balance that so many honourable senators opposite have spoken about between the preservation of democracy, the preservation of civil liberties and the preservation of the security, both internal and external, of this country. For those reasons I can understand that we have differences of opinion and differences in attitude. I think the differences that have been expressed here, however vigorously they may have been expressed, have been pretty marginal. I would hope that debate on the legislation in the Committee stage will clarify a lot of the problems we have. I commend the legislation to the Senate. Senator Durack —Mr Acting Deputy President, I seek the division of the question. There are three Bills and, to my surprise, they were put in one question. I ask that they be divided into three questions. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Is it the wish of the Senate that the second reading votes on these Bills be taken separately? There being no objection, it is so ordered. The question now before the Chair is: That the Inspector-General of Intelligence and Security Bill 1986 be now read a second time. Question resolved in the affirmative. The ACTING DEPUTY PRESIDENT —The question now is: That the Australian Security Intelligence Organization Amendment Bill 1986 be now read a second time. The Senate divided. (The Acting Deputy President-Senator MacGibbon) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 2 —— Aulich, T. McKiernan, J. P. Black, J. R. Macklin, M. J. Childs, B. K. Maguire, G. R. Coates, J Mason, C. V. J. Cook, P. F. S. Morris, J. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Robertson, E. A. Georges, G. Ryan, S. M. Gietzelt, A. T. Sanders, N. K. Giles, P. J. Sibraa, K. W. Grimes, D. J. Tate, M. C. Haines, J. Vigor, D. B. Jones, G. N. Zakharov, A. O. McIntosh, G. D. (Teller) Alston. R. K. R. MacGibbon, D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Baume, Peter Parer, W. R. Bjelke-Petersen, F. I. Puplick, C. J. G. Boswell, R. L. D. Reid, M. E. (Teller)Brownhill, D. G. C. Sheil, G. Carrick, Sir John Short, J. R. Chaney, F. M. Teague, B. C. Collard, S. J. Townley, M. Durack, P. D. Vanstone, A. E. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Harradine, B. Withers, R. G. Kilgariff, B. F. Bolkus, N. Lewis, A. W. R. Colston, M. A. Hill, R. Coleman, R. N. Jessop, D. S. Button, J. N. Knowles, S. C. McClelland, Douglas Bjelke-Petersen, F. I. Question so resolved in the affirmative. The ACTING DEPUTY PRESIDENT —The question now is: That the Intelligence and Security (Consequential Amendments) Bill 1986 be now read a second time. Question so resolved in the affirmative. Bills read a second time. INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY BILL 1986 Clauses 1 and 2-by leave-taken together, and agreed to. Senator DURACK(Western Australia)(10.05) —The Opposition is proposing amendments to delete from this legislation the jurisdiction of the Inspector-General of Intelligence and Security to perform his various functions in relation to several intelligence agencies to the extent to which those organisations exercise their human rights functions, which are widely defined. The first amendment deals with the definition of human rights. Amendments Nos 2, 3, 5 and 6 all deal with the same issue-they pick up the functions of the Inspector-General in relation to the Australian Security Intelligence Organisation, the Australian Secret Intelligence Service and the Defence Signals Directorate. The CHAIRMAN —Do you wish to move amendment No. 4 separately, Senator Durack? Senator DURACK —No, I am suggesting that I move amendments Nos 1, 2, 3, 5 and 6 together but not 4 as it deals with a different matter. The CHAIRMAN —It would be simpler if we took the remainder of the Bill as a whole if the amendments relate to different clauses. Is it the wish of the Committee that the Bill be taken as a whole. There being no objection, it is so ordered. Remainder of Bill. Senator DURACK(Western Australia)(10.06) —by leave-I move: (1) Page 2, sub-clause 3(1), leave out the definition of ``human rights''. (2) Page 3, clause 4, leave out paragraph (b). (3) Page 5, sub-clause 8(1), leave out sub-paragraph (a) (v). (5) Page 5, sub-clause 8(2), leave out sub-paragraph (a) (iv). (6) Page 6, sub-clause 8(3), leave out sub-paragraph (b) (i). A matter of concern to the Opposition relating to the office of the Inspector-General is the extraordinary width of his role. We have not voted against the Bill on the second reading as we believe that the recommendation of Mr Justice Hope that there should be such an Inspector-General is worth some trial. I will be moving an amendment later to oppose a sunset clause to the Inspector-General experiment. I will speak more generally about the office and its operation when I move the amendment. In a sense, the way these amendments are put is putting the cart before the horse. This is a minor aspect of his role; nevertheless, that is the way we have to proceed. The Inspector-General is given, in relation to several of the intelligence agencies-particularly in relation to ASIO-a very wide role. He is not only given the task of ensuring, either at the request of the Minister or of his own motion, that the organisation complies with the laws, as according to the finding of Mr Justice Hope ASIO has so complied; the Inspector-General also is to keep an eye on ASIO to make sure that it continues to comply with the laws. Another of his functions is to inquire into any matter that relates to the propriety of particular activities of ASIO, which seems to be an extremely wide role. It is difficult enough to determine whether people are abiding by the laws of the Commonwealth and the States. However, to have to make a judgment about the propriety of particular activities of an intelligence organisation is a mind-boggling task. There is no definition of propriety in the Bill. Therefore, this is an extraordinarily wide power to give to the Inspector-General. I do not know how he will be able to cope with it. He also has the role of checking on the effectiveness and appropriateness of the procedures of ASIO in its determination of whether its officers are abiding by the law or by the proprieties of its functions. Finally, the Inspector-General is given the role of determining whether any act or practice of ASIO is or may be inconsistent with or contrary to any human right, being an act or practice referred to the Inspector-General by the Human Rights Commission. It is to this role of the Inspector-General that these amendments are directed. We are proposing that they should be deleted. We do so for two reasons. There is an enormous, further widening of the Inspector-General's role. I suppose that we could have proposed an amendment to eliminate the function of checking on the propriety of activities of ASIO using the same argument. However, on top of that general, vague role and in addition to his other very wide functions-not necessarily vague but very onerous ones-there is the function of checking on the propriety of activities of ASIO and the role of investigating whether acts or practices of ASIO have been consistent with a human right. Human rights are those defined by the Human Rights Commission which covers the ambit of the International Covenant on Civil and Political Rights. The Human Rights Commission's definition of human rights is: All rights and freedoms recognised in the International Covenant on Civil and Political Rights, the Declaration of the Rights of the Child, the Declaration on the Rights of Mentally Disabled Persons or as recognised in any international instrument to be an international instrument relating to human rights for the purpose of the Human Rights Act. As the Government keeps reminding us, we had our longest debate ever in the Senate earlier this year on the Bill of Rights legislation and the implementation in Australian domestic law of the rights under the International Covenant on Civil and Political Rights. I do not need to emphasise again the extraordinarily wide ambit of the Covenant or the extraordinary vagueness and controversy about the meaning of sections of that Covenant and the extent to which they are qualified in one form or another within the Covenant by reference to concepts of law which are quite foreign to our legal system. Questions arise in relation to this matter which may well provide the greatest difficulties for the highest courts of the land to determine. We were very critical of the attempts by the Government to import into our domestic law these very vague and potentially extraordinarily wide concepts and their qualifications-concepts which are quite alien to our legal system. In one fell swoop, added to all the other burdens of the Inspector-General we have an obligation to determine whether something referred to him by the Human Rights Commission-a body which incidentally will expire under a sunset clause on, I think, 10 December this year, although the Government has said that it will re-create the Commission in some form or another-is consistent with any human right. However, from what we can ascertain from the Senate Estimates committee which examined the estimates of the Attorney-General's Department, the Government does not yet have the foggiest notion as to what it will do about replacing the Human Rights Commission. The question arises also of whether the proposal to replace it will go through the Parliament. Certainly, the Opposition does not intend to support the re-creation of the existing Human Rights Commission, because of the discredited nature of that body. Yet it is that body's right to refer to the Inspector-General questions of whether ASIO has observed some act or practice contrary to the International Covenant to which I have referred which in this Bill we are being asked to acknowledge. Apart from those mind-boggling tasks which may be referred to the Inspector-General and their inappropriateness, the very idea of having the actions of ASIO judged on the basis of whether or not they conform with a human right as defined in the Covenant is beside the point and self-contradictory. The very existence of a security and intelligence-gathering organisation and the powers that are properly given by this Parliament to that organisation are themselves major qualifications of the guaranteed civil and political rights set out in general terms in the Covenant. As I have said, the Covenant gives rise to great controversy as to the limitations it places on its generally stated rights. But one thing that is quite clear under the Covenant is that many qualifications may be made to them to make them work at all. It is for this Parliament to decide on the sorts of qualifications to be made on general guarantees of human, civil or political rights which individuals would otherwise have. It has done so in the ASIO legislation. It is not for the organisation to have to be second-guessed or third-guessed by the Inspector-General as to whether or not its activities conform with any human right. It is a most incredible provision to appear in a Bill of this kind. It will clearly impose an enormous, further impossible burden on the Inspector-General. For those reasons the Opposition has moved this series of amendments which are designed to remove that burden from the Inspector-General. Senator GRIMES(Tasmania-Minister for Community Services)(10.20) —The Government does not accept the amendments moved by Senator Durack. Senator Durack, I think, argued considerably during his long contribution that civil and human rights violations by intelligence and security organisations should not be investigated and that to ask the Inspector-General or anyone else to investigate them was an intolerable burden. It is the Government's view that it is not a question of whether such human rights violations should be investigated but a question of by whom they should be investigated. Currently they can be investigated by the Human Rights Commission. The legislation provides that the Inspector-General should look at the effectiveness and appropriateness of the procedures of ASIO relating to the legality or propriety of its activities-when they are referred by the Human Rights Commission certainly, but also the Inspector-General can do this off his own bat. The Government believes that such investigations should be carried out by the Inspector-General rather than by the Human Rights Commission as it is at the moment. We believe that the Inspector-General is far better placed to do so, being familiar with and having full access to the agency's activities, and he can then make a judgment about the legality and the propriety of such things. To suggest that the Parliament collectively can make a judgment about such propriety I think is drawing a very long bow indeed. The Government recognises that intelligence and security activities sometime involve justi- fiable violations of human rights, as Senator Durack has said-this is inherent in the activities of intelligence and security organisations-but we do not think it is unreasonable that someone who can relatively independently at his, or I suppose her, discretion examine complaints when complaints are made about violations of human rights. Complaints in this area happen to have been very infrequent. I do not think, on past history in this area, that such complaints will place an onerous burden on the Inspector-General. The legislation has been drafted on the basis that we have the current human rights legislation and certainly subsequent amendments will be required when the future of the human rights machinery has been settled by this Parliament, but we do not think it is unreasonable that some individual, in this case, should have a look at potential violations of human rights by our intelligence and security organisations. We do not think it is unreasonable that such a person should look at the propriety of intelligence agencies' actions in such circumstances, recognising, of course, that sometimes the activities of such organisations involve justifiable violations of human rights. It is for these reasons that we think the legislation is reasonable and we think the Opposition's amendments are unnecessary. Senator MACKLIN(Queensland)(10.24) —The amendments moved by the Opposition are not supported by the Australian Democrats. In simple terms, what the Opposition spokesperson in the other place, Mr Spender, said when he said that the broad purpose of these agencies `invariably involves from time to time trespassing on human rights and freedoms' seems to us to be an adequate explanation as to why one would want to have an inspector-general with a capacity to involve himself in looking at those human freedoms and human rights that the Opposition has already accepted will invariably be violated from time to time. If the Opposition has accepted that that will occur, it seems to me that it should also accept that it is an inadequate role for the Inspector-General to look at such cases to see what might be able to be done in terms of those citizens whose human rights have been violated by these organisations and to determine whether some changes can be made to prevent such occurrences in the future. If this is not possible, it seems to me that, flowing from this, the people whose rights have been violated should in some way be compensated. Presumably, such recommendations should be able to flow from any Inspector-General's investigations of such activities. I really cannot understand the Opposition saying, on the one hand, that invariably human rights will be violated and, on the other hand, that nobody should do anything about it. Senator DURACK(Western Australia)(10.26) —It really seems, particularly from Senator Macklin's comment but also from the comment of the Minister for Community Services (Senator Grimes), that the problem the Opposition has with such a provision in this kind of legislation is this: We are certainly saying that, inherent in the nature of a security service, limitations are placed upon what would otherwise be acknowledged as human rights. That is done by this Parliament. It sets down those limitations. It may in other pieces of legislation, or indeed in security legislation, give life, force and clarity to what it believes are civil and political rights. As I have pointed out in other debates in this chamber, we believe that giving effect to human rights should be determined by this Parliament in the legislation it passes, as we do in relation to racial discrimination and as we have done in recent years in relation to sex discrimination and manifold other matters in this area where we determine what those rights are. We have had the experiment of an executive body, such as the Human Rights Commission, floundering around and trying to determine what human rights are in the minds of the officials of that organisation. We are extremely dissatisfied with the result, to the extent that we are opposed to the continuance of the Human Rights Commission. We believe that that has proved to be the wrong approach for the Parliament to take in handing over the determination of what are human rights, what these vague generalisations in the International Covenant on Civil and Political Rights really mean. We believe that for such matters to be determined in that way has proved to be quite inappropriate. Thank goodness we in this chamber insisted on amendments to the Human Rights Commission legislation which put in a sunset clause, as a result of which the Human Rights Commission will disappear, we hope, on 10 December this year. Admittedly, at that stage there may be legislation to recreate it in some shape or form and our position in relation to that legislation will be determined when we see it. If it simply perpetuates the present discredited organisation we will certainly not be supporting it. That is one objection that we have to this provision which I thought I had made clear before, but the basic objection we have to it is that here we are handing over the very function performed by the Human Rights Commission, which we believe has been a failure, to the Inspector-General of Security and Intelligence-a pioneering, herculean task for any person to have to perform. I have pointed out the extent of that task. As it is, without this problem being given to him, we believe that an absurdly wide further obligation and function is being placed upon him. We also believe that it is a quite inappropriate task for him to have to decide what is a human right in any case in accordance with the terms of the International Covenant. It is not as though we can just read from tablets of stone just what a human right is. The Inspector-General will have to work that out for himself. That is what we are objecting to and that is why we have moved the amendments. 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 —The question now is: That the Senate do now adjourn. Senator REYNOLDS(Queensland)(10.30) —Today the National Party of Australia demonstrated its absolute contempt for the people of Queensland by launching a policy that completely ignores the reality of its performance in economic areas over the last three years. It is a speech which is big on rhetoric but very limited in detailing just what the National Party proposes for Queensland in the next three years if, heaven forbid, it is given the opportunity. The Queensland Premier has demonstrated yet again his complete inability to plan rationally. His speech is full of gross distortions and blatant inaccuracies, which I will detail in a few moments. He fondly imagines that Queenslanders will continue to accept the lies that are constantly put forward by his propaganda machine. He is so obsessed with his own particular- Senator Boswell —Mr President, I raise a point of order. Senator Reynolds used the word `lies' in regard to the Queensland Premier. I ask her to withdraw the word. The PRESIDENT —I did not quite hear what the honourable senator said, but if she used the word `lies' in that respect I ask her to withdraw the word. Senator REYNOLDS —I used the word `lies' in relation to the propaganda machine of the Queensland National Party, Mr President. I believe that the Queensland Premier has become so obsessed with what he believes is the truth in Queensland that he can no longer discriminate between fact and fiction. Let me give some examples. In his speech on employment he claims: Queensland has left the rest of the nation far behind in the job creation stakes. Let us examine that claim for fact. The Australian Bureau of Statistics labour force survey shows employment growth from September 1983 to September 1986 as follows: New South Wales, 8.6 per cent; South Australia, 9.4 per cent; and Queensland, 10.4 per cent. In fact there are five other States and Territories well ahead of Queensland. What about job creation figures? Who funds the community employment program that the Queensland Premier so conveniently forgets? How much has Queensland actually received from the wicked Federal Government that Premier Bjelke-Petersen is so fond of criticising? Up to 23 June 1986 Queensland had received $184m for the community employment program and this has generated over 19,000 jobs in Queensland alone. Yet still Queensland has one of the highest rates of unemployment. Figures released only today by the Australian Bureau of Statistics show that Queensland has an unemployment rate of 9.3 per cent compared with a national rate of 8.3 per cent. In the last 12 months Queensland has increased its unemployment levels from 8.7 per cent to 9.3 per cent. That scarcely seems to me hard evidence of the fanciful claim: The National Party provides the most attractive climate in the nation to establish and expand and create new jobs. The facts are that Queensland has had the worst unemployment record of any State over the past two years. Since October 1984 Queensland has had either the highest rate of unemployment or the second highest rate of unemployment in the country. National Party claims that Queensland's high level of unemployment is due to migration of young unemployed southerners to resort areas have been torpedoed by a special report soon to be released by the Minister for Social Security (Mr Howe), but the same report shows very significant increases in youth unemployment recorded in Brisbane suburbs and rural areas in Queensland. Furthermore, the Queensland Government should not blame high unemployment in the State on transient young people. Let us look at another area, transport. The poor deluded Premier notes in his speech today: Queensland's road system is the largest in the nation. Thank goodness, he got something right, but his pretence that his Government is involved in the expenditure of more than $1.5 billion is utter fraud. The Federal Government has funded 60 per cent of Queensland road projects. Queensland has the poorest record of all the States in regard to road funding. The Premier says that he will provide thousands and thousands of jobs through the State with around half the budget being allocated to private enterprise and the remainder to sustain employment in local authority and main roads department work forces. But tenders have to be called. Clearly, neither the minority Queensland Government nor the Queensland Premier can be relied on to give the facts. They refuse to face the reality. They refuse to co-operate in recognising anything good that might have come out of Canberra since the Hawke Labor Government was elected. They are much more interested in financial rhetoric. Proposal for things such as space launching facilities on Cape York indicate a great degree of imagination but fail to solve the reality of Queensland's dismal economic performance and the problems that exist in regard to people services in that State. Let me place on record a number of facts because I am much more interested in facts than is some of the rhetoric that is continually coming out of the Queensland Government. Of 18 key economic indicators released up to September 1986, Queensland had the worst result in four, the second worst in nine, and was below the national average in 14. Does that sound like the vision that the Queensland Premier continually referred to in his speech today? Queensland has the worst results in several areas. It had the lowest average weekly male earnings for May 1986. Queensland also has the second lowest average weekly earnings for females. Queensland had the highest fall in the number of new dwelling units approved for the three months to July. For the three months ended August 1986 Queensland had the highest drop in the number of new telephone connections and Queensland had the lowest job vacancy rate in August 1986. Queensland also had the second worst results in the following areas: The unemployment rate; the number of overtime hours per employee working overtime in August 1986; and household income per capita, which was $10,410. This was 9.8 per cent below the national average. The number of new residential buildings under construction in the March quarter 1986 had dropped by 1.5 per cent compared with the same period a year ago. The number of new residential buildings commenced in Queensland for the June quarter 1986 was 28.4 per cent below the figure for the same quarter a year previously. So the facts pile up one after the other. If only we could get facts out of the National Party Government in Queensland! (Quorum formed) I was detailing some facts about Queensland's dismal economic performance. The Queensland Premier constantly carps about Canberra. Anything that happens in Queensland must somehow be the fault of Bob Hawke or Canberra. He is absolutely paranoid about this Government. He has not accepted the wishes of the people on two occasions and he has made no secret of the fact-- Senator Boswell —What two occasions were they? Senator REYNOLDS —At the beginning of 1983, at the end of the election campaign, he disgraced himself when he was in Japan by speaking against the election of the Hawke Government and again in 1984 he was not prepared to accept the umpire's decision. But then I suppose if I were a minority Premier I would be a little bit sensitive about the majority vote of Bob Hawke. He says that any Queensland problem must be the fault of the Federal Government. But again let me give the Premier a lesson in cold hard facts. He does not seem to like facts. I do not know whether he reads them, whether he is advised about them or whether he just prefers to grandstand with his own particular and peculiar form of biases. The 1986-87 Federal Budget Papers show that recurrent grants to Queensland total $1,215.45 per head of population, in comparison with New South Wales, with $1,076.04 and Victoria with $1,081.56. Senator Boswell —How much in Tasmania? Senator REYNOLDS —I am more concerned with Queensland. Queensland was actually favoured ahead of those two more populous States and received more than the six-State average of $1,173.75. All this talk of Bjelke-Petersen's that Queensland is badly off because of Canberra and that Queensland is discriminated against is nonsense and cannot be substantiated by anybody who is interested in facts. But we all know that the National Party, in particular the Leader of the National Party in Queensland, Sir Joh Bjelke-Petersen, is simply not interested in facts. The National Party fondly imagines that it can fool the people of Queensland. This election is going to see the time that it can no longer fool the people of Queensland. In housing, health, welfare and education the same blatant dishonesty applies. Today's policy claims $100m assistance in housing. I wonder where it came from. It is the result of Federal priorities; it is the result of Federal public policy commitment. The Premier even tries to tell us that people in other States are three times sicker than people in Queensland, simply because he and Mr Austin mischievously manipulate health care funding facts. But again Queensland will receive some $915 per head from the Commonwealth in 1986-87. This compares with $782 for New South Wales, $753 for Victoria and a State average of $859. Does that sound like discrimination against Queensland? Senator Walsh —No. Senator REYNOLDS —I thank the Minister. Therefore, it is clear that Queensland has been generously funded by the Hawke Government. The Queensland Government has been unusually quiet recently about the total level of Federal funding to the State for its health services and it can only be assumed from this that the famous chapter 7 of the 1985 Commonwealth Grants Commission report-an independent arbitrator's report feared and banned from Queensland but which has at last found its way north over the border-has established beyond doubt that, except for a small Commonwealth contribution which has been paid to the State this financial year, the State of Queensland was not disadvantaged by Medicare. As well, the Federal Government has announced funding of more than $23m over the next three years for new equipment to upgrade considerably facilities in public hospitals throughout Queensland. Do not forget that it is very difficult for anybody interested in public hospitals in Queensland actually to get in to see what is happening in those hospitals, especially if one happens to be the Federal Minister for Health (Dr Blewett). He is not allowed into public hospitals in Queensland. Senator Boswell —Not if he does campaigning with the nurses. That is what he was there for. Senator REYNOLDS —He was there to discuss a very important matter relating to nurse education and one assumes that that was important enough for the Federal Minister to be allowed into the Toowoomba Hospital. But the Queensland Health Minister is so sensitive about the failures of his Government that he banned the Federal Health Minister from the Queensland hospital system, just as Senator Susan Ryan, as Minister for Education, was banned from Queensland schools during the last federal election campaign. That is the kind of paranoia that exists in Queensland. Let me conclude by referring to all those glaring omissions in the National Party's policy. We have pages and pages of the typical rhetoric from the National Party and from Bjelke-Petersen that we have all become used to, but let us see what has not been included. Let us see who has been missed out. First of all there is no mention of the National Party's need to lift its welfare spending, which is currently the lowest in Australia. Aged care, child care and the family services cannot rate highly in a speech delivered to concentrate on private enterprise. The Premier is very interested in co-operating with private enterprise but he and the Minister responsible for aged care services-Brian Austin, the Queensland Health Minister-will not even allow the Government to join a community consultative committee set up by the Federal Government to plan aged care services. Again, aged care service funding is lower in Queensland than in any other State with the possible exception of Tasmania. There is no mention of any of those service areas in the National Party's policy released today. I seem to have crossed swords over women's policy with a couple of representatives of the National Party in the last six months. As we know, it is non-existent. Some 51 per cent of the population rate just four lines. I would like to read those four lines because we had better hang on to them. They state: Your Government- it is certainly not a government concerned with women- has always recognised women as equal partners in Queensland's progress and has ensured increased participation in all fields of endeavour through policies that provide all Queenslanders with the opportunity to advance according to their merit. That applies as long as they are closely associated with the National Party and preferably paid up members of the Bjelke-Petersen Trust Fund. There is no recognition in those four lines, no policy commitment, no legislation, and no reference to a women's advisory committee, a toll free telephone service, nurse education, et cetera. It is the only State-again with the exception of Tasmania-not to have a women's policy and not to be interested in providing services to 51 per cent of the population. Obviously, the women of Queensland have no reason to vote for such an arrogant regime of old men. Let us now look at another significant group that has been overlooked in the National Party's policy. Queensland has approximately 50,000 Aborigines and Torres Strait Islanders. They do not even rate a mention in the National Party policy. They do not exist as far as the Premier is concerned. Senator Boswell —They are equal citizens with everyone else. Senator REYNOLDS —If they are equal, I am not quite sure why it is good enough to pick out business enterprises throughout the policy and not to mention Aborigines and Torres Strait Islanders. Senator Boswell —We even had one of them as a candidate. That is what we think of Islanders and Aboriginals. We ask them even to stand for us. Senator REYNOLDS —You even do, do you? Senator Boswell —Yes. We have Getano Lui, in Cook, and he will take the seat. The PRESIDENT —Order! Senator Boswell, you have been continually interjecting and I ask you to cease. Senator REYNOLDS —We all know that the Queensland Premier has a reputation as a racist-an international reputation, unfortunately for this country-but I would have thought that even he and wiser heads, if they exist in the National Party, would be-- Senator Peter Baume —Mr President, I raise a point of order. I think I heard the honourable senator say that she thought the Premier had a reputation as a racist. I believe that that breaches the terms of standing order 418 and I ask that appropriate action be taken. The PRESIDENT —If Senator Reynolds used the term `racist' in respect of the Queensland Premier, his being a member of the Queensland Parliament, under standing order 418 I ask Senator Reynolds to withdraw that remark. Senator REYNOLDS —I withdraw that remark in deference to you, Mr President. I was saying that I am surprised that even the National Party would not be prepared to announce policies for 50,000 Aborigines and Torres Strait Islanders in the lead up to the Queensland election. However, it is not only women, Aborigines and Torres Strait Islanders who do not rate a mention, or who rate very little mention, in the National Party's policy; there are about 200,000 migrants in Queensland and again there was no reference to migrant policy. In the last 12 months or more I have had a considerable number of representations from representatives of the Queensland migrant community who are very concerned about the lack of services, particularly interpreting services, which are so important. Senator Sheil —It is a Federal matter. Senator REYNOLDS —It is a Federal matter-I see. Perhaps I can send Senator Sheil some details of what other States are doing in regard to migrant services. It might help him catch up with the reality of joint State and Federal co-operation in this regard. Obviously, the National Party's policy is an anti-people policy. The only people who rate as far as the National Party is concerned are those who are close to the National Party ranks and who have money and influence. It is a dishonest policy and it relies on fear and smear tactics. Clearly, this minority State Government is too frightened to run its campaign on State issues. Its own performance is so impossible that it is not prepared to run on State issues; it has to run a State election on Federal issues and campaigns against the Hawke Labor Government. Time is running out for those who have led this corrupt regime, even for the Premier who apparently has other plans for after 1 November. I fail to understand how a Premier who is running for another term in Queensland and who launched a policy today with great pomp, ceremony and, I believe, even tinsel can be talking to leading members of the right wing business community about how he will move to Canberra. He would take things over here and change the whole direction of Australia's traditions in regard to the way of life that we have accepted over many years. Obviously, even the Queensland Premier has some doubts about whether he will be successful on 1 November. Otherwise, why would he be talking to business communities about taking over here? Clearly, everything about the policy and everything that has been said by the Premier today and on previous occasions is not reliable and, in many instances, is blatantly fraudulent. Senator REID(Australian Capital Territory)(10.58) —Last week was Deafness Awareness Week. Perhaps deafness is one of the most difficult handicaps. In many respects that may be hard to justify when one thinks of what people have to suffer. However, a person who suffers from deafness frequently looks to be a totally unhandicapped person in every other respect, and for that reason the handicap he or she suffers by being profoundly deaf makes life particularly difficult. Other people when dealing with the deaf tend not to know their handicap. They overlook it and expect from them a standard to which they are not able to adhere. There are 900,000 profoundly deaf people in this country. Twenty thousand have been born that way and many become deaf during their lifetime. There are a number of reasons for this. Deafness sometimes occurs through industrial accidents, many cases are caused through leisure activities and some people acquire deafness through age. The importance of Deafness Awareness Week is to let people know that a number of things can be done about the problem. It is needed to highlight the fact that this is the case and to encourage people to get help rather than to let the problem get worse after they have become aware that helpful aids are available. The Deafness Council does a great deal to promote the problems of deafness, and Deafness Awareness Week is one of the activities it organises. I think Deafness Awareness Week was particularly successful in Canberra, where films were shown in libraries and a number of other activities were held. One day during the week Capital 7 had the news signed by a person skilled in sign language. It is not easy to present such a program. It would be nice if it could be done every night, but that is not yet the case. I think it was appreciated that Capital 7 did this. There was considerable publicity for the week in various media outlets in the Australian Capital Territory. It needs to go on for more than just one week a year for people to become aware of what can be achieved. It is necessary to have telephones with the right sort of facilities situated where deaf people are able to use them. A number of aids can be made available reasonably simply in the community if the need is known. There was an article in the Canberra Times on 29 September entitled `My son Brendan, deaf since birth'. The parent of the child, who wrote the article, concludes by saying: Hopefully, Deafness Awareness Week can stimulate a real interest in the effects of deafness on children and thereby generate the changes necessary to ensure children such as Brendan have only one disability, not many, caused by the inability to hear sounds clearly. There is a significant problem in regard to education for people who have a high degree of deafness. One of the difficulties is that there are only four people in Canberra who are qualified to translate in sign language. This is not a large number of interpreters to deal with police or court situations. There is less assistance available in organisations such as the Public Service than one would hope. The publicity generated by Deafness Awareness Week hopefully will address some of these problems. A number of retired people could take this on, in a sense as a hobby but in a way filling a very real purpose. If they were able to learn sign language they could assist considerably in coaching deaf children with their education, assisting in other ways and interpreting if they acquired the relevant skills. I think there are many in the community who, if they were aware of what they could contribute in this way, could provide very valuable assistance. I commend the local Council for what is achieved last week. I hope that we will all continue to be aware of what deafness and profound deafness mean to so many people and not forget the difficulties that they have in living. Senator PETER BAUME(New South Wales)(11.03) —On Monday this week the Australian newspaper ran as its lead story an item which used certain documents dating from 1951 which seemed to reveal a lack of enthusiasm on the part of certain civil servants in the pursuit of alleged war criminals in this country. The documents came from me. I, in turn, got them from the Australian Archives, as anyone can do. Indeed, I am getting more documents every day. But as a result of that story an item was run on the AM program at 8 o'clock. I have only today had a chance to look at the transcript of that AM program. Senator Walsh —I heard you on it. Senator PETER BAUME —Yes. Now I have looked at the transcript, I want to be quite certain that no injustice is done to anyone. In particular I am concerned that some listeners may have gained a slightly unfair view of the position of the then Colonel Charles Spry, now Sir Charles Spry, in one of the documents which he provided to the Government at that time. What I desire to do, therefore, is put the documents themselves into the record to allow people to make their own judgment about the role of the Commonwealth Public Service at that time. I am concerned that the documents contain certain allegations against two named persons. To be fair, I have not named the people publicly, nor has the Press, because they are only allegations and it would not be fair to name the people. I will not name them now. Indeed, in seeking to incorporate the documents in the record, I have expunged the names of the persons wherever they appear. There are several documents. The first is dated 4 June 1951. It is an internal minute in the Department of External Affairs marked `for the Secretary' and headed `Yugoslav ``War Criminals'' in Australia'. It sets out the problems which faced the Secretary in the light of certain requests from the Yugoslav Government. I seek leave to have that document, with the names of the two persons expunged, incorporated in Hansard. The PRESIDENT —Has the document been shown to the Minister? Senator PETER BAUME —I have mentioned it to Senator Grimes. Senator Walsh —I would rather you left the names in as well. It is your choice to take them out. Senator PETER BAUME —The documents can be obtained from the Records Office-- The PRESIDENT —Order! Is leave granted for the incorporation of the document in Hansard with the names expunged? Senator Walsh —Yes. Leave granted. The document read as follows- EXTERNAL AFFAIRS File No. 1550/20. FOR THE SECRETARY: Yugoslav ``War Criminals'' in Australia The Yugoslav Consulate-General has asked that the Australian authorities should deliver to the Yugoslav Government two Yugoslav displaced persons now resident in Australia named . . . and . . . , who apparently have been named as war criminals by a Yugoslav Federal Commission. The Yugoslav Note is attached. 2. . . . is at present Editor of the Perth migrant newspaper ``Sloga'', which is allegedly hostile to the present Yugoslav Government. . . . is stated to be associated with . . . on ``Sloga''. The political motive behind the Yugoslav request is thus quite apparent. 3. The evidence advanced against . . . is particularly weak and is unsubstantiated. A rather better prima facie case has been made out against . . ., but of course it should not be accepted as true without verification. There does not appear to be any international agreement binding on Australia to surrender such persons. 4. Even if investigation discloses that there is some truth in the Consulate-General's allegations, it does not appear desirable to accede to its request for the men's extradition. Similar requests have been made to the United Kingdom Government, but almost all have been refused on the grounds that it is time to bring to an end the punishment of minor war criminals. The few persons handed over to the Yugoslav Government were those who ``by the nature of their official positions, rendered such signal service to the enemy that it would be difficult, if not impossible to justify a refusal to consider surrendering them''. . . . and . . . do not appear to be in this category. 5. It is recommended however that a copy of the Note should be referred to Immigration and the Security Service for a report, for it seems desirable to ascertain the facts of the matter and to inform these agencies that this request has been made. A report might also be obtained from the British Embassy in Belgrade, if this is practicable for it, upon the findings of the relevant War Crimes Commission and the validity of its decisions. 4th June, 1951. PO'C/HN Legal & Consular. Senator PETER BAUME —I thank the Senate. The second document, in response to the document just incorporated, dated 11 July 1951, is from the Director-General of Security. It was, at that time, marked `secret' but has now been released under the normal provisions. It is a letter from the then Colonel Spry which was the subject of some comment in the Australian article. Again, the names of the two people have been expunged. I seek leave to have that letter incorporated in Hansard. Leave granted. The document read as follows- COMMONWEALTH OF AUSTRALIA ATTORNEY-GENERAL'S DEPARTMENT, D BRANCH, BOX 5219 BB, G.P.O., MELBOURNE 11th July, 1951. TELEGRAMS: `AUSTERITY, MELBOURNE' SECRET The Secretary, Department of External Affairs, CANBERRA. A.C.T. Dear Mr North, With reference to your memorandum 1550/20 of 13th June, 1951, seeking information in connection with the note from the Yugoslav Consulate General requesting return of . . . and . . . to Yugoslavia for trial as War Criminals, I am forwarding the attached report compiled by my officers. While this matter appears to be an extension of Yugoslav internal politics, it must be stated these two men represent a body of Yugoslavs who cause infinitely less trouble to this organisation than the great body of their fellow immigrants. They are unceasing in their campaign against Communism and can and do assist A.S.I.O. to the limit of their ability. It would be appreciated if I could be informed in due course of the nature of your reply to the Yugoslav Consulate General. Yours sincerely, Colonel Spry Director-General of Security Senator PETER BAUME —I thank the Senate. The final document is a minute in the Department of External Affairs to the Secretary, dated 14 September 1951, which brings together the advice received from various officers regarding the request by the Yugoslav Consulate. Again, the names of the two people have been expunged. I seek leave to incorporate the minute in Hansard. Leave granted. The document read as follows- EXTERNAL AFFAIRS For the Secretary: You will recall from a minute of the 13th June that the Yugoslav Consulate-General in Sydney requested that two migrants, former displaced persons now in Australia, be delivered to the Yugoslav authorities as war criminals for trial before a Yugoslav court. The two persons in question are named . . . and . . . . Copies of the Yugoslav note in question were passed to the Department of Immigration and the Australian Security Intelligence Organisation and also to the Australian External Affairs Officer in London for comment. The Department of Immigration has provided all the information known to it on these two persons and has confirmed that both men would have been security checked in Europe before emigration. The particulars supplied by the Department of Immigration mainly relate to the life histories of these persons and their families, and throw no light on the present request. The Department of Immigration has been endeavouring to obtain any further information which might be available from Europe but so far has not been able to obtain anything which might be relevant. The Australian Security Intelligence Organisation has pointed out that in Western Australia where the two persons in question are now residing, the Yugoslav community is divided into three sections: (1) Royalists (a minority), (2) supporters of the Tito regime, (3) anti-Tito and pro-Soviet supporters (the dominant group). The Director-General of Security goes on to say that these two men represent a body of Yugoslavs who cause infinitely less trouble to his Service than the great body of their fellow migrants. They are unceasing in their campaign against communism and can and do assist A.S.I.O to the limit of their ability. The United Kingdom Government some years ago surrendered to the Yugoslav Government, after careful examination of all the charges, 58 persons. It has been stated in the House of Commons in 1948 that the United Kingdom Government would also be prepared to return 19 other Yugoslavs if they were found on United Kingdom territory. They would, however, be disinclined now to hand over any persons other than the 19 specified lest the charge should have a political rather than a criminal basis. It was also expressed in the House of Commons that it was considered by the United Kingdom Government that there must be some time limit during which war crimes charges could be pressed. This last argument would, however, perhaps be less appropriate in the case of the Australian Government which has only recently concluded its trials of Japanese war criminals. It seems clear that the present approach stems very largely from political motives, in view of the activities of these persons in connection with the anti-Tito newspaper ``SLOGA'' with which the both are connected. There is the further point as to how the persons in question could be handed over if it were desired to do so. The Yugoslav note in question claims that the persons should be handed over pursuant to the 1943 Allied Declaration on Atrocities which was made in Moscow on the 30th October, 1943, with the Big Three acting for the other allies. This Declaration has been examined, however, and appears only to relate to ``German officers and men and members of the Nazi Party''. The fact that it purported to relate only to Germans seems clear from the title-``A Declaration on German Atrocities''. There certainly is no possibility of arbitrarily arresting persons within the jurisdiction, whether they be Australian citizens or aliens. In the case of these two persons the machinery deportation perhaps could be invoked if it were desired to remove them and the only other alternative would be for a formal request to be made through the normal channels for their extradition. A list of extraditable crimes is set out in the 1900 Extradition Treaty with Yugoslavia which is still in force, but obviously at that time war crimes were never thought of and it seems fairly safe to say that the machinery of extradition could not be relied on. For all the reasons outlined above it would seem that the Yugoslav request should not be met, and unless a long explanation is to be given to the Yugoslav Consul-General, it would seem preferable that a short reply should be sent. A draft suggested reply is attached for your consideration and signature if approved. Consular and Protocol, 1550/20 AHB/PF 14th September, 1951. Senator PETER BAUME —I thank the Senate. It is now possible for anyone who may be concerned to understand what the article in the Australian newspaper was about to look at the Hansard record and make his own judgment. While I was not particularly happy with the way that the requests from the Yugoslav Consulate were dealt with, I want people to be able to make up their own mind on a perusal of the documents. Senator SHEIL(11.07)(Queensland) —I do not rise to rebut the confused and vitriolic invective of that knocker from the north, Senator Reynolds. If she wants to conduct a State election campaign in the Senate late at night, I am willing for her to do so. I am not here to talk about her. I am concerned about the threat issued today in another place by the Minister who is noted for his association with Paddington bears that he will raise the issue of the Queensland Premier's settlement with Mr Bond every day from now until the Queensland State election in the hope of creating suspicions that political favours have been shown, that there have been political kickbacks or other political arrangements, which I think is a typical Labor tactic. It has been used here today by the Minister for the Lack of Finance, Senator Walsh, who is in the chamber at the moment. Labor members hurl personal abuse and accusation in the hope that some of it will stick like mud and react to their advantage. They should consider a little of the old philosophy of Confucius, who said that he who slings mud always lose ground. I think that that will show up in their actions. All their accusations are not standing up to scrutiny. The Premier and the Queensland Government have an unbeatable record with their decentralised and prosperous State. An election is coming up and people will get their chance to show their appreciation of the Government-or not, if they are not appreciative-and that is despite the holding back of Federal funds from Queensland. Obviously, neither the Minister for Finance (Senator Walsh) nor the Special Minister of State (Mr Young) are conscious of the investigative reporting in the Courier-Mail of 27 September by a reporter who is not noted for his support of the Queensland National Party or the Premier. He gave a very accurate and truthful report of the whole case of the Bond-Bjelke-Petersen settlement. In fact, I think the Labor Leader in Queensland thought that he was going to score a big win by using this incident. He threw out the accusations, hoping that they would create suspicions about the Queensland Premier, but it looks as though he has dropped the pass on the way. In fact, when the settlement was first suggested, I do not think the Queensland Premier thought that it was ever going to cause any political trouble at all. Senator Kilgariff —It was only because of the previous owner. Senator SHEIL —That is right. This matter arose only because when Mr Bond bought the television station he bought the court case with it. People talk about the Queensland Premier suffering from a rash of writs. This one was the very first writ that he issued. He warned the television station that if it went ahead and published this allegation that he had used his position as Queensland Premier when he was overseas to raise money to finance his son he would sue. He even told the station this an hour before the show went to air. Senator Walsh —He did? Senator SHEIL —He did. This is reported in the newspaper article to which I referred. The show still went to air and so he sued the station. The case went on for a couple of years. The Channel 9 show Today Tonight, which is now defunct, probably because of this action, put the program to air and so the station got the writ. That writ was current when Mr Bond bought the station, so the matter had to be settled. Senator Kilgariff —So there is no connection between the two? Senator SHEIL —There is no connection between the two. There was an out of court settlement. The Bond Corporation documents, which were made public a couple of days after that, showed no evidence of political favours, kick-backs or arrangements favourable to either party. They are public documents which are being published now. Senator Walsh —Who said that? Senator SHEIL —They were made public by the court. They show that there is no evidence- Senator Walsh —But who said it? Senator SHEIL —The article is by Peter Morley in the Courier-Mail of that day. The Premier and Mr Bond had to go ahead and come to some arrangement about the settlement. The legal advice to Mr Bond was that the Premier had a case and the damages were variously estimated as being between $75,000 and $300,000. This was on the advice of Tom Hughes, QC. Senator Walsh —A hired gun; and ex-Liberal Party Minister. Senator SHEIL —The Minister would not be game to say that outside this place. So in an ordinary business arrangement, rather than have court costs, legal costs and all the other costs, they settled the case. There is no question of there being any of the favours, kick-backs or other political arrangements that have been suggested by the Government. As part of the settlement, it is up to Mr Bond to release the figure, whatever it was. Even if he does, what will it prove? It will prove absolutely nothing. It might be interesting to compare the size of the settlement with other out-of-court settlements that have been made to other state politicians. The Minister for Finance, who is in the chamber tonight, always associates these matters with the loan that was given to Mr Michael Behan on ministerial discretion, but he fails to say that in order to qualify for that ministerial discretion one has to be refused loans from every other source before the Minister can use his discretion. Why does the Minister have discretion? The discretion is written into the legislation. In any case, such loans have to be paid back, unlike the deal in Western Australia where the Minister's State Government has paid an enormous amount of money for assets that are overvalued. The Minister does not want to know anything about that. He says: `Oh, that is State money and they can do with it whatever they want'. Because Mr Behan got national disaster relief money the minister thinks that the Federal Government should say a lot about it. However, he says nothing about the Western Australian money. Similarly, the Minister always associates such matters with John Bjelke-Petersen, the son of the Premier of Queensland. He says: `Ah, they have built a bitumen road right outside his house. They have built a dam for him and they have built a bridge for him'. It is curious that one of his reporter friends from the Sydney Morning Herald got bogged on the road outside John Bjelke-Petersen's house. It is a dirt road. There is no bitumen road. John Bjelke-Petersen went out in his tractor and pulled him out of the bog, but the reporter still went back and said there was a big bitumen road outside his house. The dam that the Minister talks about is 35 miles from John Bjelke-Petersen's house. He gets no water from it. He does not need water from it because he happens to have sufficient rainfall where he is. I think the bridge is 100 miles from his place. It is on a road that does not even service his place. These are the kinds of innuendos that some politicians spring out in the hope that some of the mud will stick. It is suggested that there has been political patronage and favouritism shown by the Premier to his family. That is just not so. If politicians want to play this sort of game, they must expect reaction in a couple of ways. I have heard of Mr Uren boasting about his out of court settlements. I believe he has got three houses. He names them after the companies he has sued and got the money off them. He calls one house the Sydney Morning Herald and another house the Age. I do not know what the other one is called. The Prime Minister (Mr Hawke) has also had out of court settlements. He has a swimming pool which he calls the Murdoch swimming pool, which he got from an out of court settlement. He has a tennis court at his Sandringham home which he calls the Packer tennis court, which he got from out of court settlements. There are probably a lot of other settlements that have been made that could qualify in a dirt slinging match if people want to have it. I have heard that Mr Keating has got a house on Lake Como. Why do they want to have these sorts of fights? They are completely out of all political principle. I hope that by what I have said tonight, I can show that the argument about the Bjelke-Petersen-Bond settlement has no undertones of a political nature. Young John Bjelke-Petersen's house is disconnected from any accusations of a road, a dam or a bridge. If the Minister in the other place and the Minister here want to go on with it, there are probably a lot of other areas that could well do with closer scrutiny. Senator GEORGES(Queensland)(11.18) —I did not think that I would ever come to the support of the Bond Corporation Ltd, but I feel it is necessary to do so tonight. The truth of the matter raised by Senator Sheil is that the Bond Corporation was brought under considerable pressure by the Premier of Queensland to come to a settlement. In fact, the pressure was such that one could almost use the word-I hesitate to use it in this place-blackmail. What in effect happened was that the Bond Corporation bought the television station to which Senator Sheil referred and that television station was subject to a writ by the Premier of Queensland for $1m. The Bond Corporation had a considerable number of investments in Queensland. One of the investments was in the television station concerned. The other investments were in the company which brews XXXX and the Bond Corporation had decided, for some reason or other, to become active in the Queensland economy and to invest a considerable amount of money. The Premier of Queensland was so obsessed by his desire to acquire a considerable amount of money that all he could refer to in any discussion between the Bond Corporation and himself was the $1m demand that he had upon this particular television station arising from some idle comment which, in normal circumstances, may have attracted a payment of some $10,000 to $20,000, perhaps even $30,000. My information is that the Bond Corporation on a number of occasions endeavoured to discuss the matter with the Premier of Queensland, and it said to him: `Look, we have a stake in Queensland. We bought a television station and we purchased a very successful brewing company and we want to talk to you about those investments'. The response from the Premier was this: `I am not interested in all that, I am not interested in what you are doing in Queensland; what I am interested in is the sum of $1m which you owe me. That is all I am interested in'. The $1m which the Premier demanded from this television station was all that he was interested in. The Bond Corporation came to the commercial conclusion that in order to protect its investments in Queensland it had to come to an arrangement with the Queensland Premier. The insurance company gave the Bond Corporation the advice that the Premier was not worth $30,000 let alone $1m and it said to the Bond Corporation: `Go and pay, but we are not paying. If you pay, it is your responsibility.' The Bond Corporation, in order to protect its interests in Queensland, paid the money, $400,000 in settlement of a $1m claim, to the Premier, in spite of the advice from the insurance company. That smacks of blackmail by the Premier of Queensland against the Bond Corporation. Nothing could be more despicable than that sort of action by a Premier of a State, because he was in a position to prejudice the investments of the Bond Corporation in Queensland. The person Senator Sheil protects is not worthy of protection. Let me tell the honourable senator of another incident in which the Premier of Queensland was involved. Any sense of outrage in Queensland should have destroyed the Premier. I refer to the previous exposition of the amoral attitude of the Premier. At a liquidation sale he bought an oil rig and, having bought it, he then endeavoured to dispose of it. He approached a company which had contracts with the Queensland Government and said: `I have an oil rig for disposal. I would like you to buy it.' The engineer of that company said, `We have no requirement for it' and the Premier said: `Well, I have an oil rig and I think you want to have a requirement'. The engineer persisted and said that there was no requirement, and he lost his job. A small man lost his job because he came into conflict with the Premier of Queensland. Eventually that company did not buy the rig but leased it. If the Queensland media was prepared to expose that story, on that issue alone the Premier would have gone down. But such is the situation in Queensland that the Premier is protected in every amoral position he takes. To my mind that single incident of the engineer losing his job because he resisted the pressure of the Premier of Queensland to have his company purchase an item which it did not require demonstrates the pattern of behaviour of the Queensland Premier. When Senator Sheil endeavours to protect him in this controversy concerning $400,000, he is really defending the indefensible, because the Premier of Queensland could be accused of blackmail, intimidation and using his powers as Premier of Queensland to extort. Senator Walsh —Bond's deposition confirms that. Senator GEORGES —Exactly. The Premier could be accused of using his power to extort $400,000 from the Bond Corporation in spite of the advice that the Bond Corporation received from its insurers which said, in effect: `If you pay, we do not pay'. That is the situation. If the honourable senator wants to try to defend the Premier of Queensland he must realise that the truth will come out. The Premier of Queensland in a certain situation shows himself to be insupportable, exposed as a person who ought not to be the Premier of Queensland. Senator Sheil —Say it outside. Senator GEORGES —It is not a matter of saying it outside. The honourable senator knows as well as I do what would happen if I was to move out of this House and say these things, where the privilege to expose roguery is given to me. What would the Premier do? He would issue a writ. He would put his millions which he has extorted from others-- The PRESIDENT —Order! The honourable senator cannot use that expression in respect of a member of another Parliament. Senator GEORGES —I am sorry, I will replace that word. He would put the power of the millions that he has extracted from others against the miserable holdings I have. I would be defenceless in that sort of situation. Senator Sheil talks to me about going outside. Senator Sheil —Yes, if it is true, go outside and say it. Senator GEORGES —The honourable senator should not anger me with that sort of defence of the Premier of Queensland, because I seldom get up in this place and use angry terms against people. But Senator Sheil defends the Premier of Queensland in this sort of situation in which he virtually extracted-since I cannot use the word `extorted'-$400,000 from the Bond Corporation by intimidating it and saying: `I am only interested, not in your investments in Queensland, but the $1m which you owe me'. That is virtually what he was saying and that is what the Bond Corporation is revealing before the Australian Broadcasting Tribunal. I think that the Premier has to stand exposed by what is occurring at present. Senator Sheil —He had the case against the television mob. Mr Bond bought that. He wanted his money for the defamation. Senator GEORGES —Yes. Well, by his avarice will he suffer; by his avarice he has been exposed; by his avarice he will be defeated. Question resolved in the affirmative. Senate adjourned at 11.28 p.m. The following answers to questions were circulated: (Question No. 1048) Senator Jones asked the Minister representing the Minister for Health, upon notice, on 1 May 1986: (1) Has the Federal Government noted the action of the Government of New South Wales, which, as reported in the Sydney Morning Herald of 1 May 1986, has moved to ban the sale of household packs of organochlorine pesticides to the general public because they are considered to be a potential health hazard if used incorrectly. (2) What are the brand names of the chemical products to be subjected to the proposed ban. (3) Are any of the chemical components contained in them used in crop spraying. (4) Has there been any evidence discovered in New South Wales of contamination caused to milk or any agricultural produce. (5) What action has been taken or is proposed by the Federal Government in conjunction with all Australian States to monitor all pesticide products on a national basis with a view to banning the sale and use of any found to be dangerous to health. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) Yes. The National Health and Medical Research Council (NHMRC) recently reviewed toxicology data on a number of organochlorine pesticides. The views of NHMRC were that further restrictions on the availability of these pesticides were justified. This information was relayed to the States and Territories for implementation where appropriate. The New South Wales action is in part a result of the advice provided by the NHMRC. (2) Brand names vary from time to time but the most recent listing of affected products registered in New South Wales is listed below. (3) Apart from the use of dieldrin for the control of White Fringed weevil larvae and Apple Root weevil larvae in fruit tree nursery stock and non-bearing fruit trees, the chemical components mentioned in the proposed ban are not used in crop spraying in New South Wales. The above use requires a special permit to be obtained by the user from the New South Wales authorities. (4) In view of the persistence and previous widespread use of these compounds one would expect, from time to time, possible contamination of agricultural produce. All reports are investigated. There have been recent reports of the detection of pesticide residues in milk which are being followed up by New South Wales authorities. Stock foods are also being monitored as a possible source of the contamination. (5) Pesticide residues in food are monitored nationally in the Marked Basket (Noxious Substances) Survey conducted by the National Health & Medical Research Council and in the National Residue Survey conducted by the Department of Primary Industry. These Surveys have demonstrated that the Australian public is not exposed to potentially hazardous levels of pesticides through pesticide residues in foods. ORGANOCHLORINE PRODUCTS Shell Aldrex* 60 insecticide Shell Aldrex 600 insecticide Campbell Chlor 80 Barmac Chlordane 80 insecticide Chemical Enterprises Chlordane 800 Chemspray Chlordane insecticide Rentokil Chek-pest industrial insecticide Lane Chlordane household and garden insecticide Lane Chlordane insecticide Velsicol Chlordane 800 emulsifiable concentrate insecticide R. & T. Chlordane 800 emulsifiable concentrate insecticide Chemspray Chlordane 800 insecticide Gold Crest pest control products chlordane 800 EC insecticide Hortico ant and termite killer Garden King Chlordane Pestkil insecticide Garden King ``Pestkill'' ant, spider and cockroach spray insecticide Rentokil Chek-pest household insecticide Garden King Pestkil (r) insecticide Rentokil for white ants Rentokil for borers household insecticide Gold Crest pest control products termide emulsifiable concentrate insecticide Velsicol termite tm emulsifiable concentrate insecticide Farmco Pestex-250 miscible oil insecticide Crop King agricultural chemicals DDT 25 miscible oil insecticide I.C.I. 25% DDT miscible oil emulsifiable concentrate insecticide I.C.I. Rulene (r) emulsified concentrate insecticide Nufarm Toxipest 25% DDT miscible oil insecticide Lane DDT 25 emulsion insecticide Lane DDT 25 miscible oil insecticide Lane Wellspray garden insecticide Shell miscible oil (25% DDT) insecticide Chemical enterprises dieldrin 30 Crop King agricultural chemicals dieldrin-30 miscible oil insecticide G.F. Dieldrin 30 Nufarm Dieldrin 30 insecticide Lane Dieldrin 30 insecticide Chempack Dieldrin 30 insecticide Shell Dieldrin* 30 insecticide Crop King Dieldrin-30 miscible oil insecticide Chemspray Dieldrin insecticide Chemspray white ant killer insecticide Hortico Dieldrin ant and termite killer insecticide Rentokil Dieldrin insecticide concentrate Lane Dieldrin 15 insecticide Flick timbex dry timber borer eradicant Chemical enterprises heptachlor 400 Crop King agricultural chemicals heptachlor 400 EC emulsifiable concentrate insecticide Crop King Heptachlor 400 EC emulsifiable concentrate insecticide Lane Heptachlor 40 insecticide Velsicol Heptachlor 400 EC emulsifiable concentrate insecticide Gold Crest pest control products heptachlor 400 EC insecticide I.C.I. Gammexane smoke generator No. 25 I.C.I. Gammexane (R) smoke generator No. 22 Garden King chlordane antkill (r) insecticide Cliftons ant dust Cliftons Chlordane dust 5% Hortico Chlordant ant and earwig killer insecticide Note: * (r) tm Registered Trade Marks (Question No. 1253) Senator MacGibbon asked the Minister for Finance, upon notice, on 19 August 1986: Have any other funds been allocated towards the marking of the International Year of Peace, aside from those funds allocated through the Department of Foreign Affairs; if so, how much has been allocated, through which portfolios, and for what purpose. Senator Walsh —The answer to the honourable senator's question is as follows: An amount of $21,000 has been allocated for the International Year of Peace from within the funds of the ACT Community Development Fund for disbursement in 1986-87. This allocation represents the equivalent of a state contribution from the ACT towards the International Year of Peace and is matched on a dollar for dollar basis by the Commonwealth (through the appropriations of the Department of Foreign Affairs). No other funds additional to those allocated through the Department of Foreign Affairs were identified as having been allocated towards the marking of the International Year of Peace. (Question No. 1275) Senator Michael Baume asked the Minister for Finance, upon notice, on 19 August 1986: (1) What reclassifications of Senior Executive Service positions in your Department have been made since 5 March 1983. (2) What were the dates and the salary details of these reclassifications. Senator Walsh —The answer to the honour- able senator's question is as follows: Further to my answer which appeared in Hansard, page 479, of 16 September 1986 the following information is provided to the amended question. (1) Nil. (2) Not available. (Question No. 1335) Senator Sheil asked the Minister representing the Minister for Aviation, upon notice, on 21 August 1986: What percentage of all currently-held Senior Commercial Pilot Licences and Airline Transport Pilot Licences were granted to the holders on the basis of being the holder of the equivalent or higher overseas pilot certificate, and in which countries were these qualifications obtained. Senator Gietzelt —The Minister for Aviation has provided the following answer to the honourable senator's question: The Department of Aviation has had no requirement to record the statistics which you have requested. The only way the information sought could now be retrieved would be to individually inspect every licence holder's flight crew history file. In the circumstances, I believe the resource cost involved in obtaining the information is not justified.