Thursday, 16 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. The petition of the undersigned shows: That we urge you to oppose the Australian Bill of Rights Bill because: We get no legally enforceable rights under the Bill The Bill does not guarantee vital rights such as the right not to belong to a trade union, the right to own private property and not be deprived of it without just compensation and the right of choice between Government and non-Government schools. The Bill gives Canberra extra powers to change our Federal system by the back door with a constitutional referendum. The Bill gives dangerous new powers to a Federal Government Commission. Your petitioners ask that the Senate, in Parliament assembled, should vote against the Bill of Rights, support Opposition amendments and seek a genuine public debate and a referendum on the Bill. And your petitioners as in duty bound will ever pray. by Senator Durack (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: 1. That the Bill of Rights will have the power to override and negate our Common Law within five years of its enactment. 2. Because the Bill of Rights is based on an International Covenant this will take the control of our country out of the hands of the people and their democratically elected representatives, giving the power to those outside Australia. Your petitioners therefore pray: 1. That the Senate rejects the Australian Bill of Rights and all cognate Bills. 2. That as our representatives, you protect our Australian Heritage and Christian culture and values, both in the Education System, and through the Media. And your petitioners as in duty bound will ever pray. by Senator Durack (from 253 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 potentials nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the ``Joint Australian-U.S.'' electronic communication facilities in the Watsonia Army Barracks. by Senator Cooney (from 125 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: 1. That over 67,000 men, women and students enjoy the pursuit of their sport and recreation every year at the Anzac Rifle Range at Malabar and have done so since 1967. 2. The people of Sydney through their membership of 41 clubs headquartered at the Anzac Rifle Range together with a number of other community, school and commercial groups, the police and armed forces will lose this community facility if the Federal Government proceeds to sell the Range to private developers. 3. The Australian Bicentenary Fullbore Rifle Championships are to be conducted at the Anzac Rifle Range in April 1988 as part of the celebration of Australia's Bicentenary. Your petitioners most humbly pray that the Senate in Parliament assembled should ask the Federal Government to retain the Anzac Rifle Range for the continued use and enjoyment of the people of Australia. And your petitioners as in duty bound will ever pray. by Senators Sir John Carrick (from 205 citizens), Childs (from 197 citizens), Gietzelt (from 207 citizens), McIntosh (from 429 citizens), Puplick (from 224 citizens) and Richardson (from 1,004 citizens). Petitions received. Senator PUPLICK(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (1) congratulates Mr Elie Wiesel, a survivor and historian of the holocaust, on the award to him of the 1986 Nobel Prize for Peace; (2) commends the Norwegian Nobel Committee on its choice and notes with admiration the words of its citation that Mr Wiesel `is a messenger to mankind, his message is one of peace, atonement and human dignity' and that his example shows that `the forces fighting evil in the world can be victorious'. Senator GRIMES(Tasmania-Manager of Government Business) —I give notice that, on the next day of sitting, I shall move: That, unless otherwise ordered, the hours of meeting of the Senate, for the remainder of the Budget sittings, be varied as follows: (a) During the first sitting week- Tuesday, 2 p.m.-6.30 p.m. 8 p.m.-10.30 p.m. Wednesday, 10 a.m.-12.45 p.m. 2 p.m.-7.30 p.m. Thursday, 10 a.m.-6.30 p.m. 8 p.m.-10.30 p.m. Friday, 9 a.m.-12.45 p.m. 2 p.m.-3.45 p.m.; and (b) during the second sitting week- Monday, 2 p.m.-6.30 p.m. 8 p.m.-10.30 p.m. Tuesday, 2 p.m.-6.30 p.m. 8 p.m.-10.30 p.m. Wednesday, 10 a.m.-12.45 p.m. 2 p.m.-7.30 p.m. Thursday, 10 a.m.-6.30 p.m. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate, recognising that- (a) nuclear peace for the world will come through adequate, supervised reductions in nuclear weapons; and (b) arms limitation arrangements between the United States and the Soviet Union specifically provide for verification, and the general purpose of the Pine Gap facility contributes to this objective, calls upon the Federal Government to give an unequivocal commitment to renew the lease on the joint Australian-United Stated defence facility at Pine Gap, Alice Springs, for a further term of 10 years, when the present lease expires on 19 October, 1987. Senator COONEY(Victoria) —I give notice that, at the giving of notices on the next day of sitting, I shall withdraw Business of the Senate, notices of motion Nos 2, 3, 5 and 11 standing in my name for nine sitting days hence, relating to the disallowance of certain delegated legislation. I seek leave, Mr President, to make a short statement. Leave granted. Senator COONEY —Motions Nos. 2 and 3 relate to the Air Navigation (Charges) Regulations (Amendment) and the Departure Tax Collection Regulations (Amendment). The Committee has received an explanation from the Minister for Aviation (Mr Peter Morris) concerning the Committee's questions about strict liability offences. The Committee agrees with the Minister that the defence of reasonable and honest mistake of fact will be available in these cases, and the Committee withdraws its objection to these regulations. Notice No. 5 relates to an amendment to an earlier set of postal bylaws which were not tabled and are therefore void. We were concerned to establish that the amendment, which was tabled, was valid and could operate independently of the invalid bylaws. We are satisfied that it can do so without prejudice to any individual. We are still examining the effects of the bylaw which was not tabled as it should have been. Notice No. 11 relates to the Air Navigation (Charges) Regulations (Amendments) which raised aircraft landing fees, and we were concerned to establish the legal basis of the increase. In keeping with the Committee's usual practice I seek leave to table the Committee's correspondence for the information of honourable senators and others. Leave granted. Sentor COONEY-I table the correspondence. Consideration resumed from 15 October. Clauses 15 to 17-by leave-taken together. Senator MASON(New South Wales)(10.07) —I rise in the Committee stage of the Freedom of Information Laws Amendment Bill 1986 to place on record what I believe to be a necessary contribution in the form of an opinion of the New South Wales Council for Civil Liberties with particular relation to the relevance of this whole amending Bill to areas of public concern demonstrated recently by what has been called the Army land grab. As honourable senators will know, the Committee of this- The CHAIRMAN —Order, Senator Mason. We are considering clauses 15 to 17. Is this relevant to those clauses? Senator MASON —I believe it is relevant. All the areas of this amending Bill are relevant to this point. In the opinion of Mr Tim Robertson, the Secretary of the Council for Civil Liberties-and I agree with him-this is a very important public matter and should be put to the Committee. I would crave the indulgence of the Committee to that extent, but I accept your ruling on that, Mr Chairman. The CHAIRMAN —You may proceed, Senator Mason, but I would like you to link your comments to clauses 15, 16 and 17 in some way. Senator MASON —I think the obvious link is obfuscation. In other words, the purpose of these amendments is to continue the Government conspiracy to obfuscate the process of gaining freedom of information. This is simply and obviously demonstrated by every aspect of this Bill. This Bill is designed to hand over to public servants the means of refusing honest citizens theirrequests. Mr Robertson says in his letter: Every department whose filing system is in disarray can now refuse almost every FOI request if this Bill goes through. He goes on-I think this is worth quoting: The purpose of the amendments before the Senate is to make absolutely certain that the Act can never again be used to enable the people to defeat a major Government project. That is a serious statement to be made by the Secretary of the Council for Civil Liberties and especially by a person of the stature of Mr Tim Robertson who, as we all know, is a leading barrister. Senator Gareth Evans —Mr Chairman, I believe that not only your indulgence but that of the Committee as a whole is being tested by Senator Mason at this stage. The only obfuscation is in the nexus between what he is saying and the clauses that we are now dealing with. I believe that he ought to be ruled out of order. The CHAIRMAN —I have not been able to see any connection, Senator Mason. Your speech might be quite appropriate at the third reading stage, but it is not appropriate to clauses 15, 16 and 17. Senator MASON —I accept your ruling, Mr Chairman. I will make the speech at the third reading stage. Senator MACKLIN(Queensland)(10.10) —Clause 17 refers to the application to the Administrative Appeals Tribunal. As Senator Gareth Evans said in rebuttal last night in the debate, people could, of course, go to the AAT if they had trouble getting the information and a range of other matters. I remind the Committee that this Government has, in fact, put a $200 charge on the operations of the AAT, which effectively rules out that operation if the original charge in the internal review that will go on here will cost $20 and $40. It is hardly likely that people will go to the AAT and charge themselves $200. Clauses agreed to. Clause 18 agreed to. Clauses 19 to 22-by leave-taken together, and agreed to. Clauses 23 and 24-by leave-taken together. Senator MACKLIN(Queensland)(10.11) —The Australian Democrats will be opposing clauses 23 and 24. These consequential amendments relate to charges. I also foreshadow that we will be opposing new regulation 5 in clause 25 and the Schedule to the regulations, clause 27. I will not canvass the arguments that were put extensively last night. However, I want to raise with Senator Puplick, who is leading for the Opposition, that the amendment he moved last night-that is, the amendment to multi-document searches which we supported and which was carried-also involves considerable costs. It seems that if one is trying to distinguish, as Senator Puplick did, between parts of Budget Bills which are not Budget Bills and parts of Budget Bills which are Budget Bills, I am not sure how that whole thing eventually stands up. The costs were there and the costs are here. Again, I appeal to the Opposition to oppose with its vote these two clauses. I believe that the types of charges we see put on here and the types of reasons Senator Puplick gave in the Opposition's view about these, ought lead one to oppose these particular clauses and the other ones I mentioned which deal with charges. Question put: That the clauses stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 59 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 52 —— Archer, B. R. Harradine, B. Aulich, T. Jones, G. N. Baume, Michael Kilgariff, B. F. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. MacGibbon, D. J. Black, J. R. McIntosh, G. D. Boswell, R. L. D. McKiernan, J. P. Brownhill, D. G. C. Maguire, G. R. Carrick, Sir John Messner, A. J. Chaney, F. M. Morris, J. Childs, B. K. Newman, J. M. Coates, J. Parer, W. R. Coleman, R. N. Puplick, C. J. G. Collard, S. J. Ray, RobertColston, M. A. Reid, M. E. Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crichton-Browne, N. A. Robertson, E. A. (Teller)Crowley, R. A. Ryan, S. M. Devlin, R. Sheil, G. Durack, P. D. Short, J. R. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Georges, G. Townley, M. Gietzelt, A. T. Vanstone, A. E. Giles, P. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Zakharov. A. O. Haines, J. Powell, J. F. Macklin, M. J. (Teller) Sanders, N. K. Mason, C. V. J. Siddons, J. R. Vigor, D. B. Question so resolved in the affirmative. Clause 25. Senator MACKLIN(Queensland)(10.20) —I move: Clause 25, leave out proposed new Regulation 5. I do not think there is any need to rehash the argument regarding the application fees of $30 and $40 in terms of the internal review. Senator PUPLICK(New South Wales)(10.20) —I wish to say a couple of things which relate not only to clause 25 but to the whole of Part III which is now quaintly known in the jargon around the place as the Barney Cooney repeal Bill. The purpose of amending regulations by Acts on this occasion has been largely to mount the subterfuge-it is a subterfuge; there is no doubt about that-of dealing by means of substantive legislation with amendments to regulations dealing with fees. Yesterday, as you will recall, Mr Chairman, you made some detailed comments on the question of tacking, that is, of the Government putting into legislation certain financial provisions as though by dealing with them as Budget legislation a method had been found by the Government of getting its legislation through, whereas if it had proceeded in the normal fashion, that is, by introducing amending regulations, that would not have been achieved. I want to put a couple of points on the record which arise from the very preliminary reading I have been able to give in the last hour or so to some of the statistics in the report of the interdepartmental committee to which the Minister for Resources and Energy (Senator Gareth Evans) referred yesterday. Once again the interdepartmental committee indicates the bogus nature of previous cost estimates regarding freedom of information. At the heart of the Government's now saying that it must have the capacity to increase charges is that the cost of freedom of information has blown out enormously. On page 10 of the IDC report the point is made that the Department of Finance advised the IDC that it ought to be working on the basis of 50 per cent to 75 per cent to be added for on-costs, rather than the 88 per cent which has been used in previous reports. It is interesting to note that on pages 17 and 18 of the IDC report, on the basis of a survey undertaken by the Department of Finance on the average search and retrieval time for chargeable requests, the requests are broken down into four categories. The first category is `personal', which is the sort of request an individual might make to the Department of Social Security, the Australian Taxation Office, the Department of Veterans' Affairs or the Department of Immigration and Ethnic Affairs for information about his own case. Another category is `personnel', which is the access to personnel records and files held by departments about Commonwealth employees' business and policy. It amazes me that the IDC report goes on to say that the steps involved in each search and retrieval are typically `consultation with applicant over scope of request where necessary, identification of files and documents, collection of files, examinations of files, copying of documents and recording what has been examined and copies'. In terms of the section marked `personnel', that is said to take on average 12 hours. If a person goes to the department and says, `I would like to have a look at my own personnel records', how can the survey possibly state that the average time for processing that request is 12 hours? It seems to me to be absolutely mind-blowing. I cannot imagine the sort of `consultation' required. On the `identification of files and documents'-for heaven's sake, how long does it take to identify a file of an employee of a department in a particular department? As to the `collection of files', we may be told that a file cannot be got up from registry to wherever it has to be examined in other than a couple of hours. I can believe that, because during the Estimates hearings, the Department of Education actually told us that the time taken to get a file on new recruitments up from the registry to the officer checking the advertisements that were to go in the Commonwealth of Australia Gazette for appointment of a new officer was a day. Apparently this is the sort of charge that we are talking about here. For `Examinations of files, copying of documents and recording what has been examined', I just cannot believe that the average time taken in the Commonwealth bureaucracy for assessment of personnel files on that basis is 12 hours. If it is, it is an absolute disgrace. The other point that I seek to draw attention to is that on page 5 of appendix G the Government is a little bit exposed by its IDC report, because under the heading `Effect of charging on request volume' it reads: The more a fee structure is oriented towards cost recovery, the more likely it is to reduce the number of requests. Presumably that is the intention of the legislation-to reduce the number of requests. All of the comments made by Senator Gareth Evans and others about dealing with this legislation on the basis that it is not an attempt to restrict access or discourage people from using freedom of information is, I think, very largely blown out of the water by the comment in the interdepartmental committee report, `The more a fee structure is oriented towards cost recovery, the more likely it is to reduce the number of requests'. Reading through the IDC report-it has some 200-odd pages and we have had it in our hands for only a few minutes-one finds some very disturbing elements in it. In the tables, particularly those starting on appendix A7, one can really see the extent to which freedom of information statistics and freedom of information costs are very largely distorted if one looks at the burden which the Australian Taxation Office has as one of the principal subjects of requests being made. For instance, one should look at the number of requests that are policy requests. We were told yesterday that policy requests are both the most time consuming-according to the statistics here they take an average of 56 hours to deal with-and the most costly in terms of the actual work, the review and everything else that goes with it. I accept that to be perfectly correct. Of the 2,364 policy requests received in 1984-85, 683 of those were directed towards the Tax Office. Interestingly enough, the next highest-this certainly came as a surprise to me-were the 239 requests directed to the Department of Aviation. I found it surprising that that was where the impact of policy requests should be. The third highest was the Attorney-General's Department, which got 176. I am not sure exactly what sort of policy requests they were but I presume they go to matters such as law enforcement, advisings and things of that nature. The statistics for access staff years show that again the Australian Taxation Office has the highest number of requests in terms of personnel requests, for personal records-19.5 staff years. The figure for the Department of Defence is a little hard to work out because it has aggregated personal and personnel requests. Again the Taxation Office is by far the highest in terms of personnel. It is overwhelmingly the highest in terms of business requests, taking 10.9 staff years out of the total for the whole of the bureaucracy of 23.17. The Taxation Office has one of the highest figures for policy matters. As the Senate Standing Committee on Constitutional and Legal Affairs has a chance to examine the interdepartmental committee report I believe it will be necessary to try to work out whether the applications made to the Taxation Office have so poisoned the overall statistics as to be providing an excuse, because of the volume and the cost of those requests to the Taxation Office, for a Public Service-wide clampdown, even though costs have been generated in only one or two small areas. I finally come back to the point which I have made previously on behalf of the Opposition. We have indicated that despite the fact that we do not like these increases in fees, the revenue-raising measures directly contained in Part III are seen by us as a part of the Government's Budget arrangements and on that basis the direct imposition of charges in this fashion should not be resisted by the Opposition. However, I make the point again that it is not only undesirable but slightly dishonest for the Government to mix up these revenue-raising matters with the rest of the Bill in this tacking arrangement which was certainly not what was intended under the Constitution in terms of the way in which legislation should be put together. Two pieces of legislation are being dealt with in this one Bill in this fashion. In fact the title of the Bill reads: An Act to amend the Freedom of Information Act 1982 and the Freedom of Information (Charges) Regulations, and for related purposes. That clearly indicates the Government's intent in the matter. As I have said, this is the Barney Cooney repeal Bill because it is an attempt to avoid the scrutiny of regulations that Senator Cooney's Committee, the Senate Standing Committee on Regulations and Ordinances, would otherwise have given had these changes been introduced as regulations on their own. This chamber will have to pay some attention to the principle that if the Standing Committee is going to have its status and authority subverted by amendments to regulations being made in Acts rather than in other regulations, as the Committee exercises its authority to scrutinise and report, governments will be more and more tempted to avoid the scrutiny of the Regulations and Ordinances Committee by making amendments to regulations within substantive Acts. I think the Senate as a whole has to be cautious on that. This is certainly not the only occasion when that has happened. It has happened in numerous Acts. This year they were the Taxation Laws Amendment Act (No. 2) and the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act. In 1985 the Sales Tax Laws Amendment Act 1982 was treated in the same fashion. Nevertheless, I do not believe this is a desirable practice and it is something which the Senate as a whole will have to pay attention to, otherwise governments will be tempted to use this device more and more for purposes which in that respect I do not think are entirely proper. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.35) — There are three matters that require some comment. The first is Senator Puplick's concern, which he has just reiterated, about the amendment of the charges regulations by way of the legislation rather than amending regulations. It is a rather odd turning of basic principles on their head that we have just heard from Senator Puplick. The traditional concern of the Parliament has been that its rights not be subverted by significant and substantive matters being dealt with by way of regulation. Senator Puplick is now expressing a concern to the exact contrary, that the Parliament's rights are somehow being subverted by virtue of a regulatory change being made in the substantive Act rather than by way of the subordinate legislation mechanism. For all the status and dignity of the Senate Standing Committee on Regulations and Ordinances, one would not have thought it had the same status and dignity as the Senate chamber itself. We have done the Senate the courtesy of enabling it to consider these measures in the chamber-the Parliament as a whole-because they are clearly of importance and significance. The fact that we have bypassed the Regulations and Ordinances Committee in the process I would have thought is a mere bagatelle rather than something that justifies indignation of the order that we have just heard. Moreover, this was an opportunity for the Senate Standing Committee for the Scrutiny of Bills to look at these issues, if not in this instance the Regulations and Ordinances Committee. I cannot see that it deserves the implicit censure that Senator Puplick has offered in his approach to this particular matter. The Government put these provisions in the Bill for a number of reasons-certainly to emphasise the character of these measures as measures of not only Budget relevance but Budget significance. What this is all about is an exercise in cost saving and in cost recovery. The particular finance provisions are not merely incidental to what this legislation is all about; they are central to it. The measures are properly seen and construed as a single package and it is for those reasons that they have been put forward and brought into the Parliament in this way. The course adopted has the further advantage of greater speed and simplicity, which might be thought to commend itself to honourable senators, even if not to Senator Puplick. A second matter that deserves reply is Senator Puplick's disbelief of the times specified in the interdepartmental committee report for certain processing. He expressed particular incredulity about the 12 hours allegedly taken on average by departments for what he said was the search for and retrieval of personnel documents. Senator Puplick need to read a little more carefully paragraph 4.2.5 of the interdepartmental committee report on page 17 where he will see that the 12 hours that is there identified as an average for personnel documents, along with a number of other figures, was a figure relating not just to search and retrieval but also to the decision-making time involved in assessing the documentation by reference to all the categories of exemption and so on that it is permissible for agencies to apply. It is not mere search and retrieval; it is the whole processing that is there being referred to. In any event, it ought to be noted that even though some things do tend to take longer in the Public Service than any one without direct experience of running it, or being in it, would believe possible-it ought to be acknowledged, I repeat-some personnel documents can be rather hard to locate. The Department of Social Security is one of the biggest departments in terms of the number of personnel and has one of the biggest target areas for freedom of information access requests. In that Department there is a long tradition of people being moved around from one regional or branch office to another in different parts of the country, leaving a trail of personnel records littered behind them in a number of different physical locations. The mere task of assembling that material can be quite a significant and substantial one. The situation is similar, of course, in the Department of Defence, where physical mobility is a very common and recurring phenomenon. I make those points only in passing. I think it is important to appreciate that the figures, when properly understood, in the form in which they have been put forward, do not really give rise to the kind of reaction that Senator Puplick had. The final point I make about the fees-we are only, for the purposes of this amendment, talking about the application fee of $30 and $40 respectively, in proposed new regulation 5; we are not talking about the charges of so many dollars per hour, which we will come to later, for the actual reviewing time occupied by an agency-is that it ought to be acknowledged that those fees are not payable, of course, in relation to requests for access to documents of a personal character by income maintenance recipients. That is, as we have seen, the largest single class of FOI access requests. No charge is being made in relation to that class. Furthermore, to the extent that there are other categories of personal documents that might be sought, other than by income maintenance recipients, there is still a provision retained in the legislation for a remission of this fee on the basis of hardship in any individual case. We believe that that particular safety net mechanism will ensure that no injustice is done and no insuperable difficulties are put in the way of anyone seeking access to those classes of documents which, I repeat, are both the largest single class of documents that are sought under the Act and also the class of documents where the problem of financial disincentives is obviously most acute. By and large-although there will no doubt be exceptions from time to time-people seeking business documents, people seeking policy documents, are people who can afford quite easily to pay the very modest charges that are now set out. Senator PUPLICK(New South Wales)(10.42) —I am not entirely satisfied with the attempt by the Minister to slide over my comments about all of the delays in terms of personnel by saying that the Department of Social Security does not keep its records in very good order. For instance, how would one balance that if one looks at table 3 on A7 of the interdepartmental committee report? The Department of Social Security received 220 requests for access to personnel files and it took, according to table 5, 5.8 staff hours on access requests and 0.64 access staff years. That should be compared with figures for the Department of Science, which got three requests for personnel files; yet, if one looks at the way in which those other tables are set out, it took 0.03 access staff years and was involved in 20 staff hours on access requests. If one looks at the Department of Immigration and Ethnic Affairs, it got one request for personnel files and, under the `personnel' heading in the next table, the figure is 0.01. In the table which shows staff hours spent on access requests the figure is 20. I do not believe that the Minister can skate over this business by saying that the Department of Social Security does not keep its records in very good order, therefore it is not surprising that the figures are as high as they are. Quite clearly, if that is the real problem, somebody ought to put the proverbial rocket up the Department of Social Security, instead of saying: `It is all terribly sad, but there it is, fellows'. As Senator Evans would undoubtedly say at the end of the day: `Bad luck'. I will not say what he would have said if Senator Sir John Carrick had been making the point; otherwise, he would have just said: `Bad luck'. The other point is that the point I was making about the tacking arrangement was not that this was some disrespect to the Parliament, but that it was clearly a device whereby one of the Senate committees-the Standing Committee on Regulations and Ordinances-was being shut out of a particular process. Without being unkind, in terms of both general appearance and colouring, Senator Evans may aspire to look like a sort of cut-down version of a Holbein portrait. But if he now wants to establish a new variation of the Henry VIII principle, he is going about it pretty well. I reiterate the point that if the Regulations and Ordinances Committee is clearly being cut out of a process because the Government knows that that Committee has been particularly vigilant in looking at a particular matter, that is something which is of concern to the Senate, and certainly something which the Opposition will be keeping under close review in regard to legislation that continues to be presented to the Senate. Senator VIGOR(South Australia)(10.46) —I have been listening to the debate between Senator Puplick and Senator Evans. I am getting more and more worried about, firstly, the efficiency of the Public Service, which I was quite worried about before we started and, secondly, the real understanding that either the Opposition or the Government seems to have of what these problems are about. I would like Senator Evans to give us some type of idea-he says that cost saving is the central theme of why this legislation has been introduced-of exactly what type of budgetary figures he used to estimate what the budgetary effects of each of these amendments will be. I asked that question during my contribution to the second reading debate. I repeated it last night with respect to a couple of areas, particularly the internal review process and the process of application to the Administrative Appeals Tribunal. I am particularly concerned about the real effect of these fees on people who can make these applications for freedom of information. The $30 charge may be quite reasonable, especially if it is waived in the case of all personal and personnel requests. The interdepartmental committee report, which we have not had much time to look at, may give us some of the breakdowns, but certainly not in the detail in which I would like to see them. I would like to see budgetary figures which basically predict-not looking backwards over the last year-what type of revenue the Government expects to raise in each one of those categories; and what it expects to raise through departmental incompetence, which is basically what the $40 appeals application fee is about. The $40 application fee is applicable when the department has refused to give a document and the matter then goes to the AAT or through an appeal process. If all of those appeals support the department, at the end of the process, that $40 may be justified. I believe it should probably be refunded if the applicant is proven to be right and the appeal is sustained. What are the arrangements for recovery of cost in that situation? As I said, I can understand the $30 charge. I see the $20 as being just an open-ended charge on people, over which applicants have absolutely no control and no budgetary understanding. The matter is not mentioned in this clause but again it will be open slather, an encouragement, to departments to continue to procrastinate. Firstly, what will the Government do, or what is it doing, to try to improve the efficiency of the Public Service? Secondly, what is the Government doing to change the attitude of departments which have very high refusal rates and high rates of pushing for appeals? How will that be monitored and reported to this Parliament? If this does not take place we are just legislating blindly: That is exactly how I currently feel. We are accepting figures from a government; we are told that the Department of Social Security's personnel files are in a total mess and that that is an excuse. We are told that the Australian Taxation Office receives half of the freedom of information applications and is totally distorting the picture. If we get reasonable statistics and the Government intends to produce reasonable statistics we will need to have budget predictions now of what the Government expects to raise in each of these areas and in a year's time we will need some type of review process by which we can compare the Government's predictions on the Budget-this will show how good a manager it is of the Public Service-with the actual performance. Currently, the Government is expecting us to take everything on trust. What amount does the Government expect to retrieve from each of these categories? The Minister may want to take that question on notice but I would expect him to have the answer now. I would be very surprised and most disappointed if the Minister said: `This cost saving measure is the central part of the whole legislation but I do not have the figures'. Can the Minister give us the budgetary figures and tell us what he will do about giving us a report on how effective or efficient they are and what he will do when he finds that certain departments have attitudes which are anti-freedom of information? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.53) —I think I should defend the honour of the Department of Social Security against some rather squalid little accusations that have been made by both Senator Puplick and Senator Vigor, purportedly based on something that I had said. The point I was making was not that Social Security records are in a mess but that the very character of so much employment within that Department is such that personnel records tend to be located in a number of different places reflecting the employment history of a number of the people there. That apart, let me respond to just another aspect of what Senator Vigor said. Senator Vigor has, as we all know, and have found out and suffered to our cost in Estimates committee hearings, an absolutely insatiable appetite for detail. One of the great mysteries of this place, rivalling I suppose in its magnitude the disappearance of the Marie Celeste, is what exactly he does with the information when it is ultimately supplied to him. One of the things governments have to bear in mind is that sometimes the cost of supplying very detailed statistical information can be such as to simply not be justified, given the nature of the savings that are attempted to be made by introducing the reform in the first place. An awful lot has to depend upon rule of thumb estimates and assumptions. The basic assumptions on which this legislation is proceeding are spelt out in the financial impact statement on page 2 of the explanatory memorandum, where the Attorney-General (Mr Lionel Bowen) states: It is estimated that the proposals in the Bill will result in cost savings of about $4m and revenue of about $4m. How precisely those figures are arrived at is something I will put to the Attorney-General, and I will see whether he wishes to add something more than that. Most of the raw material, in terms of drawing these calculations, is to be found in the interdepartmental committee report that has been tabled. There are innumerable disaggregations to be found in the different classes of documents. Of course one has to make assumptions about elasticity of demand in the context of fees being imposed. Various things simply cannot be quantified with precision in advance, besides which practices are changing, as I indicated last night. Productivity has been substantially improving over the life of this legislation to date as departments get experienced in the operation of the legislation and become familiar with its demands and limitations. That trend may well continue and be an important factor in cost reduction. We cannot give the detail for which Senator Vigor is clamouring, the sort of detail that, when he receives it, no one ever quite knows what he does with it and is certainly never quite persuaded that the public interest is advanced as a consequence. I will see what further information can be provided to him in due course by the Attorney-General. However, for the moment I believe that we have put on the record, in the general terms of the explanatory memorandum, the second reading speech and the more detailed data base of the interdepartmental committee report which has now been made available, as much as could be reasonably required of any government. Question put: That the words proposed to be left out (Senator Macklin's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 60 —— Majority . . . . . . . . . 53 —— Haines, J. Powell, J. F. Macklin, M. J. (Teller) Sanders, N. K. Mason, C. V. J. Siddons, J. R. Vigor, D. B. Alston, R. K. R. Jones, G. N. Archer, B. R. Kilgariff, B. F. Aulich, T. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Baume, Peter McIntosh, G. D. Bjelke-Petersen, F. I. McKiernan, J. P. Black, J. R. Maguire, G. R. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Newman, J. M. Childs, B. K. Parer, W. R. Coates, J. Puplick, C. J. G. Coleman, R. N. Ray, RobertCollard, S. J. Reid, M. E. (Teller)Colston, M. A. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Robertson, E. A. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. 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. Harradine, B. Zakharov, A. O. Question so resolved in the negative. Clause agreed to. Clause 26 agreed to. Clause 27 (Schedule to Regulations). Senator MACKLIN(Queensland)(11.05) —Two items are built into this clause. Basically, the first item involves the movement of the hourly rate from $12 to $15. But much more importantly, this clause seeks to impose an additional cost by adding the following item to the end of Part I: A charge in respect of the time that is spent (other than on an application under section 54 of the Act for the review of a decision) by an agency or Minister in deciding whether to grant, refuse or defer access to the document or to grant access to a copy of the document with deletions, including time spent- (a) in examining the document; (b) in consultation with any person or body; (c) in making a copy with deletions; or (d) in notifying any interim or final decision on the request. According to the Department of Finance estimate, the average time taken for decision ma-king and consultation for a FOI request is 11 hours. So the total cost will be based on $30 to make an application and the cost of the number of hours that are involved. Can the Minister for Resources and Energy (Senator Gareth Evans) tell me-I do not seem to have the information in the material in front of me-the average number of working hours that will be involved under item 2 of Part I? On the basis of the Department of Finance estimate the cost would be calculated at 11 hours at $20 an hour. So we are starting at a bare minimum, without taking into consideration the working time involved, of $250 on average per request. But I would take the matter even further than that. Applicants who have applied for information which is of a sensitive nature fairly obviously will come under this section in a very heavy way. It is like, quite frankly, sitting in a taxi on the Sydney Harbour Bridge and having the meter tick over in a traffic jam. That is what we are going to do here. The cost will tick over at a rate of $20 an hour in respect of information of a sensitive nature. There will, of course, be discussions by all sorts of people who will be involved. From the discussions that have gone on, we know that this could take months. This has already happened. We are looking at a cost of thousands and thousands of dollars for any information that is vaguely sensitive. There is no cap or ceiling on the cost. The meter is ticking away at $20 an hour. There is no mention in the Press, which seemingly has shown no interest in something which I would have thought was absolutely vital to it in terms of freedom of information, particularly with regard to items of such a sensitive nature. That $20 an hour meter rate will become an item which any reasonable person in the community, who is unaware of how the bureaucracy might work, may not be able to afford. People cannot go into an open-ended financial commitment. They cannot undertake an open-ended liability over which they have absolutely no control. Basically, the Government will be able to bankrupt an individual who goes to it and seeks information. It will be able to bankrupt a person merely because he is seeking freedom of information material. This can happen quite simply under this legislation-with no trouble whatsoever. Just consider for a moment what the Government could do if it wanted to get at a person who is seeking information. It could simply sit down and talk and then bankrupt the person-who sought what? He sought information, not the Government's information. He then goes off to the Administrative Appeals Tribunal, but what does he go to it about? He cannot go to it just because he believes this is an exorbitant amount, provided the bureaucracy, the Government, has been careful and made sure that it is examining a document, consulting with a person or a body, making a copy with deletions or notifying any interim or final decision on the request. So here we have this meter ticking over with no end in sight. What ordinary citizen in the community is going to go into that? Perhaps the Minister for Resources and Energy, being a lawyer, has a much more laid back attitude because the legal field is about the only other area in which ordinary citizens have to enter into open-ended commitments. We have had debates in this place plenty of times about the extreme reluctance of ordinary citizens to approach the law. Why do they have that reluctance? They have it because of the open-ended liability; not because they do not want to have their rights violated, not because they do not necessarily have a reasonable case, but because when they are confronted with the bureaucracy, with a multinational company or with someone who has more resources than they do, they know that those persons, organisations and the Government can prolong a court hearing until they are bankrupted. As I have said, perhaps the Minister, being a lawyer, would be much more happy to look at those items. But, quite frankly, no citizen who thinks that his request might in any way be sensitive is going to do this. What requests have we got? We have had excluded personal file requests, so what else will we be looking for? We are going to be looking for material that a government as a matter of course does not provide. Almost by definition there will be at least something provided. The Department of Finance has said that the average time that will be taken will be 11 hours. Once this clause is in the Act I can see that averaging time increasing dramatically. Here the Government has taken the golden opportunity to make sure that if people finally find anything out they will certainly not come back for a second try. The Government is making certain that anybody who is going to look for anything sensitive any more in these files will cop such a hefty bill that he will be deterred from thinking of getting any more information out of the Government. In many cases a person will be paying off the bill for the rest of his life if he is not dragged before the courts with a debt recoverable by the Commonwealth from that individual who has been stupid enough to think that in a democracy the information gathered actually belongs to the citizens just by exercising the basic right. This clause effectively destroys any reasonable chance by any citizen other than the richest to approach the Government with a freedom of information request. If a constituent approached me in my office and raised, as has been raised in the past, the desire to get some information, I would counsel him very strongly that it would be a very bad thing for him to do. I believe that if any other member of parliament does not counsel a person in that way, he could be criminally liable for suggesting that the person may make a freedom of information request without having told the person of the enormous costs that are down the road for him and of the possibility of his having to owe every penny to the Commonwealth when he finally gets that piece of paper he is looking for. Senator Vigor —With bits deleted. Senator MACKLIN —And probably with bits deleted. In the end he might not get anything but a bill. This freedom of information legislation under this Australian Labor Party Government is simply for the rich people and the rich corporations which do not worry about those things as they do not worry about the law. They have their team of lawyers. They take the law courts as a matter of course and they are in and out of them every day of the week. They have a budget set aside for those contingencies. They are the types of people who will be able to use the Freedom of Information Act and they will continue to use it. The Freedom of Information Act is not for the ordinary citizen of this country but for the rich and the powerful. I believe that the rich and the powerful in Australia have enough access to government as it is. I thought that the Freedom of Information Bill, when it was introduced and argued for very strongly by the Minister, was in fact for the ordinary citizens of this country to enable them to get some of the information which they felt was necessary for them. They were the sentiments and arguments put by the Minister. In speech after speech, not only in this place but outside, in articles that he wrote-I have a list of them on my desk in my electorate office-and time after time the Minister eloquently argued that ordinary citizens did have an undeniable right in a democracy for freedom of information. This clause, which is supported by the Opposition, will effectively destroy the right of those people to make such requests. If they do they will have this most terrifying open-ended commitment. As the law is terrifying for ordinary citizens so will this be, because without any control over that meter, they could be running up a bill which they cannot meet and which they never thought they would have to meet. My worry is not only for those citizens who might come and see me or another senator or member of the House of Representatives but for those citizens who might be foolish enough to think that we have a Freedom of Information Act which means that they will have access to freedom of information, who will put in a request and think that the $30 charge might be their only cost, or that the $15 an hour charge for work done might be their only cost, and who will not realise what an open-ended commitment they are entering into. I would be interested to know how the Government is going to counsel anybody in the future who has the audacity to think that some of that information might be his, as a democratic right. I want to know what the Government is intending to do to stop people seeking freedom of information, because I think that is what it needs to do now. How is it going to stop people bankrupting themselves? What type of counselling is the Government intending for anybody in the future who has an inkling of possibly using this Act or what is left of it? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.08) —I acknowledge, as I have to, that it is the case that this particular provision will increase applicants' costs in a number of cases and will have some deterrent effect as a result in relation to some applications that would otherwise be made. But there are a number of points that can properly be put in defence of these provisions other than the recurring theme of the Government's need to limit the costs of this legislation and to get some better revenue return, that is, to get a more realistic contribution to the costs of open government and to ensure that FOI users who do derive some benefit from the legislation are not in a sense unfairly subsidised by taxpayers who do not use the Act. Apart from all those financial considerations, however, there are a number of points that can be made. The first which I will quickly make is that, to the extent to which this new provision in the regulations will operate as a deterrent, that is not wholly bad or undesirable, at least in relation to some classes of request which we have experienced in the past and which have been manifestly unnecessarily broad. When asked in the past `Do you want document X or Y?' in the face of a very broad request, rather than honing down and contemplating what might be involved and saying `Either X or Y', the applicant has tended to say: `I want both. Dig them all out, then I will look at them and decide what I want'. The provision we are now installing here will clearly operate as an incentive for people to hone, shape and refine their request with rather more precision than they have been minded to in the past. That is a perfectly desirable outcome from the point of view of rational public administration. The second point I make goes to Senator Macklin's nightmare of the ticking meter, the open-ended character of the request that he waxed so lyrical about just a few moments ago. I think that amounts to a very considerable distortion of the way in which this will operate in practice. Not only is there a requirement in the Act itself, section 29, as to notification of liability to pay any charges, or potential charges, but also there are a series of mechanisms built into the existing Act and regulations which will ensure that people do not, in fact, find themselves up for huge bills which they are manifestly unable or unwilling to pay. For a start, there is a continuing requirement in the regulations-I refer to regulation 12-for the provisions governing the payment of deposits. They will continue to apply to the charges that are contemplated here in respect of reviewing an evaluation time just as they will continue to apply to the earlier categories of charges for search and retrieval time. The provision there is that where the amount, or the estimated amount of the charge exceeds $25, the agency can make a decision to require the person to pay a deposit before further efforts are expended and costs are incurred in the evaluation in question. That payment of the deposit will be a point-- Senator Macklin —That is for every item now? That $25 covers every item? No item can come out under $25 now? It is $30 to get into the exercise. Senator GARETH EVANS —I am not talking about a fee for an application; I am talking about the charges down the track, discretionary charges. Senator Macklin —It is not going to take under an hour. Senator GARETH EVANS —I am just saying that there is a capacity. The point is the same whether or not this particular provision is triggered in every case or whether it is triggered only in some. The point is that wherever there is any substantial sum of money involved, or likely to be involved, beyond $25, it is perfectly competent for the agency-a prudent agency undoubtedly will do this rather than expend the cost in the first instance without a guarantee as to a return-and open to the agency to seek the payment of a deposit. That notification associated with the request for a deposit will be an excellent indicator to the applicant as to what the anticipated cost of the whole exercise will be. It will be a perfect opportunity for the applicant to refuse to pay the deposit and thus bring the process grinding to a halt at that particular stage. Senator Macklin —Does he get his $30 back? Senator GARETH EVANS —He is under no obligation to pay-I am not talking about the application fee-as a recoverable debt, the amount of the charges incurred to that particular point. That point can also be made in relation to, let us say, a sum of $200 or $300 that may be incurred, or the liability that might be incurred to pay, if the $20 per hour charge does, in fact, mount up in the way that Senator Macklin said. Senator Macklin —Do you accept the average from the Department of Finance of 11 hours? That is $220 to start off with. Senator GARETH EVANS —If the fee is charged and it is discretionary-I will come back to that in a moment-it may well be that that sort of figure will prove to be a realistic one, at least for non-routine classes of documents which are essentially the ones we are talking about. What I am trying to say in making a further point is that it is not really a matter of someone being confronted with a bill, the non-payment of which will expose him to court action and debt recovery and all the rest of the horrors that Senator Macklin summoned up for us. There is no provision in the legislation for the formal recovery of an amount thus incurred by way of a debt. Senator Macklin —It is a debt to the Commonwealth. Senator GARETH EVANS —No, it is not necessarily to be regarded as a debt at all. The only sanction is that if the amount is not paid the person will not get his information. That is the only sanction that is in the terms of the legislation. If the person gets the information, the argument that it is a debt recoverable at law is very much stronger, but if it is a demand for the payment and if a person does not pay it he will not get the documents. Senator Macklin —That is an extraordinary situation. Senator GARETH EVANS —No, it is not an extraordinary proposition; it is a perfectly common and garden proposition and it is why this legislation is drafted as it is in terms of a description of certain liabilities as debts recoverable at law in the procedures that are set out. It is some time since I have worn my lawyer's or Attorney-General's hat and I do not want to be taken as committing the Government irrevocably to the proposition that these things are not recoverable. But that is my impression and it is not one from which I have been dissuaded by the departmental advisers on my left whom I do not want to dob in, in case they want to check the point further. It follows from first principle. Senator Macklin —Are we now to advise people to do it and not pay their bills? Is that what you are saying? That would run up enormous costs to the Commonwealth. Senator GARETH EVANS —Realistically, people, rather than being exposed to open-ended meter ticking and horrendous bills at the end of the day which they do not know anything about and are utterly unwilling or unable to pay, in most cases will get advance notification and will have an opportunity to bale out before the costs are even incurred by the Department. If at the end of the day they do not like, cannot pay, or cannot afford the fee that has been incurred, they will, I believe, have the option of not paying the bill and simply, as a result, will not get the information. That puts into a slightly more relaxed context some of the shark feeding frenzy of indignation that we had from Senator Macklin on that particular point. A third point that I think needs to be made and emphasised is that the payment of these charges is not mandatory-it is discretionary. It does not have to be sought by the Department in question, and no doubt there will be a great many instances-I cannot speak for Treasury or one or two others-when departments will not want to or will not get around to identifying the charges that are involved and actually seeking recovery from the individuals concerned. One of the interesting experiences of the existing legislation has been the extent to which departments simply have not charged to the extent that they could have done so under the existing terms of the legislation. No doubt that phenomenon will continue in the future. I will not go so far as to say that working for the FOI applicant is the natural indolence of the bureaucracy when it comes to collecting these things-that would be a quite unfair aspersion-but what one might say is that the combination of the administrative difficulty involved in gathering these charges, combined with the natural instinct of the bureaucracy towards openness and willingness to assist members of the public in their reasonable requests, will be such as to not, in practice I believe, place too overwhelming a burden upon people in just and deserving cases, those cases particularly where there obviously is a financial difficulty involved for the person in paying for the charges that might be incurred. The final point I make is that there is a real agency accountability that is still maintained in the decision making in this area. The provision for charges to be payable is not an invitation to the agencies to incompetence or oppression on their part. The charge provisions are to a significant extent self-regulatory. Agencies will have to justify publicly their time, not just to the AAT, which raises further objections I have heard about fees for review applications, but also to the Commonwealth Ombudsman. He will have jurisdiction. He does not cost anybody anything. Senator Macklin —Thank goodness for that. We are about to get a Bill on that, I imagine. Senator GARETH EVANS —Not yet, anyway. Those who dither over innocuous documents will be exposed by the Ombudsman, the review procedures, or in other ways. One must work on a presumption of reasonableness as far as the bureaucracy is concerned. Senator Macklin —Why, if this is freedom of information? The TEMPORARY CHAIRMAN(Senator MacGibbon) —Senator Macklin, let the Minister speak. You may speak later if you wish. Senator Macklin —I am helping him along. The TEMPORARY CHAIRMAN —Senator Macklin, I warn you. Senator GARETH EVANS —My goodness! That is all I need to say. It certainly is all I am able to say in response to the contributions that have been made. I urge that the Committee support the amendment accordingly. Senator PUPLICK(New South Wales)(11.31) —The Minister for Resources and Energy (Senator Gareth Evans) has advanced four of the most fascinating propositions ever to come forth from a Minister of the Crown about why this matter should be viewed with equanimity. They are: First, that the Australian bureaucracy is open and anxious to help people; secondly, that the charges are not mandatory anyway; thirdly, that even if charges are made, people do not have to pay them if they do not want to; and fourthly, that, after all, the bureaucracy is accountable. I do not think that anybody has ever constructed such a flimsy framework of justification for a particular clause but the Minister deserves considerable credit for having tried so manfully on the basis of those propositions to defend this clause. The points that I want to make, however, relate to some of the statistical information in the interdepartmental committee report. Senator Macklin has been using the average time of 11 hours as an example. On page 17 of the inter- departmental committee report the averages for various categories of request are analysed. In terms of the processing times for search retrieval and decisions it says under the averages for various categories of request that for policy documents the average is 56 hours. In other words, a policy document takes an average of 56 hours to be processed through the system. That results in a charge of $616 plus $30 to get into the system in the first place. The idea that people will not be pursued for the money becomes quite interesting when one looks at the fact that in 1984-85 the Australian Taxation Office had 683 requests for policy documents. If all were taken on the average figure that I have just given, the Tax Office would have been able to charge $441,218. Given the voracity with which the Commissioner of Taxation pursues people for $10 or $20, the temptation on his part to chase up $441,218 will be somewhat greater than is indicated by the dismissive attitude of the Minister towards the open-hearted approach of the Commissioner of Taxation to assisting average citizens to live their lives free from persecution. The points made by Senator Macklin in that regard stand without having been answered by the Minister. However, two amendments have been made by the chamber on the way through the passage of this legislation, one of which is to delete the multi-document request provision and the other to strengthen the public interest exemption. I think they are significant and hopefully will pull the teeth out of some of the more objectionable implications of this amendment. The other point is that the Administrative Appeals Tribunal certainly will have to lay down some very early rules or guidelines for the bureaucracy about the sort of attitude that it intends to take. It will be necessary to have a couple of early test cases. Hopefully, the AAT will have some impact on departments indicating where they will and will not defend, particularly bearing in mind the suggestion being widely canvassed that the Tribunal ought to have powers to be more flexible in the way it awards costs. I hope that the Tribunal would be in such a position from time to time, particularly where the case at issue was the Department's attempt to deny access, that the Department would end up bearing far more substantial costs. I know that the Attorney-General's Department has been quite active in trying to persuade departments not to go to court when it is not necessary. Certainly, it has put the onus on departments not necessarily to brief senior counsel to come along with batteries of juniors and so on. There are new mechanisms in place whereby appeals matters are very much filtered through the Attorney-General's Department. That has been a very great contribution by the Department. Nevertheless, Senator Macklin argued about the impact of this legislation on public interest groups. I particularly reject the claim by Senator Evans that many freedom of information users will get some advantage and they should not be subsidised by the rest of the taxpaying public. After all, many requests, particularly those taken out by public interest and advocacy groups for policy documents will be of enormous public benefit on the basis of exposing what government is doing, establishing policy or establishing the facts which are relevant to important public debate. The Minister cannot shelter behind that excuse. The last matter on which I will comment is that I notice the admission by the Minister that this clause will have a deterrent effect. It is clearly what it is intended to do. Therefore, I conclude only by saying once again that if this matter had come to us in legislation which was not adjudged to be a Budget Bill we would be very much opposed to this new regime of charges. I make it clear that it is only because we accept this legislation as a Budget Bill, that it has been tacked on as a regulation to a Budget Bill-- Senator Gareth Evans —Will you repeal it in office? Senator PUPLICK —The Minister will not have to wait long to have that question answered. He will have to curb his natural enthusiasm and his patience will have to be tested in that regard. All one can say is that one is aware that that is an attempt by the Minister to overcome the fact that he has made promises which he was not capable of delivering and he seeks to seduce others into doing likewise. While I may be temporarily on the front bench, there are absolutely no guarantees on the matter. Nevertheless, if this legislation had been in a separate document or regulations it would have been opposed by the Opposition. Because we accept it as a Budget measure we will not vote against this clause. Senator MACKLIN(Queensland)(11.39) —Regarding this funding or procrastination section, the Minister for Resources and Energy (Senator Gareth Evans) raised a point about departments not collecting fees. I ask the Minister two things: First, what discretion has a department not to collect money which is owed and, secondly, are the charges and their computation able to be charged? In other words, I can imagine that one reason why a department would not bother to collect some fees would be if the cost involved in estimating the fees could very well exceed the fees. Can the Minister inform me whether the cost of the time taken to compute the fees that are charged is now able to be charged to the individual? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.40) —As to the latter point, the answer is clearly no. The terms of the regulation as proposed to be amended extend only to permitting a charge to be made for the time taken in considering a particular document on its face. One could not add that extra component. As to the business about how could the department or agency have some discretion as to whether or not it will pursue these charges, I draw Senator Macklin's attention to regulation 3 (1) of the existing Freedom of Information (Charges) Regulations which is not proposed to be altered in any way by this legislation. It says: Where an applicant has made a request for access to a document of an agency or an official document of a Minister, the agency or Minister may make a decision whether the applicant is liable to pay in respect of the request . . . any of the charges applicable under these Regulations. So it is clearly discretionary. There is no doubt about that. It is quite deliberate on the part of the Government. There is no desire to make this mandatory. Everything else I said as a result follows naturally from that. Senator MACKLIN(Queensland)(11.41) —I am at a loss on this matter. Senator Puplick, who I presume has had access as a committee member to material to which I do not have access, but to which the Minister for Resources and Energy (Senator Gareth Evans) obviously does, made a re-estimate. I was only able to go on a Department of Finance estimate of an average of 11 hours. Senator Puplick's estimate got up to-- Senator Puplick —Fifty-six hours for a policy document. Senator MACKLIN —Thank you. Does the Minister accept that as the accurate average cost we would now be looking at under the freedom of information legislation for a policy document? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.42) — The reference that Senator Puplick made was to page 17, paragraph 4.2.5, of the interdepartmental committee report which has been made available to the Committee. The figure of 56 hours for a policy document occurs there but is a reference not just to decision-making time within the meaning of this clause but also to search and retrieval time. Senator Macklin —Is there a breakdown? Senator GARETH EVANS —I do not have a breakdown here. There may be a breakdown somewhere else. Why does Senator Macklin not make a freedom of information application for this document and wallow around in it? In 45 days time we will make sure that he gets it, provided that he pays the appropriate charges. I am happy to make this document available in the exercise of my unauthorised discretion to Senator Macklin, provided he agrees to vote on this provision within the next two minutes so that I can get to a meeting. I make the point that 56 hours is cumulative and covers all these things. It would be recognised that many of the policy documents that have been sought have been quite elaborate and technical in character and have involved a lot of search and retrieval time as well as review time. A further disclaimer is made throughout the IDC document, particularly in paragraph 2.7.1, which is that the statistics on which estimates of FOI costs are based must be treated with some caution. They are based on agency estimates which used a variety of means and sources. Clearly, it is very difficult to get uniformity of data, even with the best will, effort and skill in the world, from the Attorney-General's Department. These figures should be taken as merely indicative rather than in any way as gospel. That apart, I do not think there is anything more I can usefully add to what Senator Macklin has asked me. Senator MACKLIN(Queensland)(11.44) —What the Minister is saying, with all the ifs, buts, maybes and shuffles, is that, on average, for a policy document we are looking at about $600. Senator Gareth Evans —If it is asked for. Senator MACKLIN —I do not imagine that it would cost a penny if it were not asked for, although it could very well do; we will probably get a Bill on that shortly. What we are facing in terms of freedom of information has been clarified. We are facing massive hikes in charges. As I say, clause 27, which the Australian Democrats will vote against, essentially funds procrastination on the part of the bureaucracy. The longer the bureaucracy procrastinates, the more it will cost. To my way of thinking that is the most extraordinary thing we have heard in a long time. I would have thought that the longer it took the bureaucracy to come up with a request, the more a person would be entitled to a discount. He should not have to pay more. Obviously, this provision will effectively stop most ordinary citizens from ever wanting to go anywhere near this legislation again. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.46) — Mr Chairman, I am the last person to want to prolong this debate as I have to be somewhere else, but I think I ought to mention for the record that I should have made a fifth point in explaining and justifying this provision, and that is that the hardship remission provision in section 30 (3) (a) of the existing Act is applicable to this new category of charges as well as to the pre-existing category of charges. That is, the Minister can remit, taking into account whether the payment of the charge or any part of it would cause financial hardship to the applicant in question. That is a further qualification to what Senator Macklin wants to describe as the rigours of this provision and as such it ought to be understood. Senator VIGOR(South Australia)(11.47) —The starry-eyed view of the Minister for Resources and Energy (Senator Gareth Evans) of the attitude of the Australian Public Service towards freedom of information is obviously firmly held. I believe that the Minister has answered the questions reasonably well about what will happen to people under this legislation. They will be charged a lot of money if they want any documents. But will this provision also not be an open-ended invitation to the Public Service to procrastinate? This amendment will become known as the procrastination promotion provision. Unless guidelines incorporate Senator Evans's starry-eyed view about why departments should not charge people and all that type of thing, which I would like on the public record if we are to save anything in this freedom of information legislation, I ask the Minister how he will stop this provision from becoming an excuse for procrastination. Departments and agencies would be able to beat their breasts and say: `We are getting more revenue'. The Minister said at the beginning of the Committee stage that this was a cost saving measure and would reduce average costs. Can the Minister tell us what guidelines he will issue to departments to give them the type of `morality' he would like them to have? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.48) —I do not know whether morality can be engendered by guidelines of any kind. The Attorney- General's Department has prepared a series of memos which are guidelines on the administration of existing clauses and sections of the Act and regulations. One such memo gives such guidance to other agencies on the existing charges as they presently apply and all the discretions that are available to departments. That memo will be rewritten as a result of the passage of this legislation and further guidance will be given by the Attorney-General's Department, which is sensitive to many of the considerations that have been advanced here today. I am sure that will, again, moderate some of the rigours that are alleged to exist by virtue of these new provisions. Question put: That the clause stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 59 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 52 —— Alston, R. K. R. Harradine, B. Archer, B. R. Jones, G. N. (Teller)Aulich, T. Kilgariff, B. F. Baume, Michael Lewis, A. W. R. Baume, Peter MacGibbon, D. J. Bjelke-Peterson, F. I. McIntosh, G. D. Black, J. R. McKiernan, J. P. Boswell, R. L. D. Maguire, G. R. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Morris, J. Childs, B. K. Newman, J. M. Coates, J. Parer, W. R. Coleman, R. N. Puplick, C. J. G. Collard, S. J. Ray, RobertColston, M. A. Reid, M. E. Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crichton-Browne, N. A. Robertson, E. A. Crowley, R. A. Ryan, S. M. Devlin, R. Sheil, G. Durack, P. D. Short, J. R. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Gietzelt, A. T. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walsh, P. A. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Withers, R. G. Zakharov, A. O. Haines, J. Powell, J. F. Macklin, M. J. (Teller) Sanders, N. K. Mason, C. V. J. Siddons, J. R. Vigor, D. B. Question so resolved in the affirmative. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported with amendments; report adopted. Motion (by Senator Walsh) proposed: That the Bill be now read a third time. Senator MASON(New South Wales)(11.58) —I rise to address the Freedom of Information Laws Amendment Bill 1986 on the third reading because either the Opposition does not know the real purpose of the Bill or it is in a cynical conspiracy with the Government to see that Australia reverts to a more absolute rule by bureaucrats. If this Bill passes its third reading, without doubt not only will the bureaucrats' power be extensively increased but also they will have been given an open mandate to deceive, conceal, conspire or do whatever they feel without any recourse by the public to that action. The bureaucrats will know that that is the case. That is a serious charge to make. I propose to substantiate it by going back to a matter that honourable senators know about quite well-what has been called the Army land grab in New South Wales. The Army attempted to secure large areas of land in the Orange district against the will of the land-holders there, and this resulted in probably the most successful and best organised citizen protest that has ever been carried out in this country. I was at the final victory dinner of the No Bases Committee in Orange not two months ago. At that meeting, the main topic of conversation of virtually all of the 400 people there was that this Bill, which is virtually passing the Senate, represented a result of that exercise; that because of that exercise and the facts that the Government and the Department of Defence were literally found to be in a state of lying and that a citizen group had succeeded in exposing those lies for what they were, these amendments to the legislation have come forward. I believe that is the purpose of this exercise. This amending Bill is intended to make it virtually impossible for any public interest groups-peace groups, farmer groups or anyone of that type-ever to have recourse to freedom of information provisions. It is another piece of tinkering which has become very popular with government, not only in this country but also in others. They fool the public by appearing to have legislation to do something and then they tinker with it until it does not do that type of thing any more. Believe me, if this Bill receives a third reading there will no longer be freedom of information machinery in Australia. That is what it means; it is being destroyed. I am very concerned that it is being destroyed by apparent agreement among the National, Liberal and Labor parties. Going back many years, I remember the long and bitter debate during the term of the Fraser Government over the introduction of the Freedom of Information Bill. Senator Gareth Evans fought inch by inch for every amendment he could possibly get. Now what has happened? The conclusion now is that we are going to destroy the freedom of information machinery. I will illustrate this by quoting extensively from a letter to Senator Haines from Mr Tim Robertson, the Secretary of the Council for Civil Liberties, describing how the Defence Department behaved and what happened when freedom of information legislation, especially section 24, was used. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Senator Mason, I remind you that you are not permitted to rehash arguments that have already been put to the Senate. Senator MASON —Mr Acting Deputy President, my request is to quote from a letter which has been sent to the Australian Democrats by a constituent which has a bearing on this matter. To my knowledge it has not been raised previously in the debate. The ACTING DEPUTY PRESIDENT —I shall watch that point very carefully. Senator MASON —Mr Acting Deputy President, I think this is of vital consideration because it illustrates more than anything possibly could the damaging effects of this Bill. The letter reads: In July 1985 the No Base Central Tablelands Association requested of the Department of Defence all documents relating to the Army Training Facilities Project. The Department replied that it was relying on s. 24 to refuse to process the request, and invited the Association to narrow it down. Section 24 was that provision put into the Freedom of Information Act to protect public servants, properly, against silly, unusual or facetious requests for documents. This request was not in that category. Even before these amendments, section 24 was abused. I continue to quote from Mr Robertson's letter: As the Association's lawyer I rang the appropriate officer of the Department to engage in ``consultation'' on that request. I asked for the names and numbers of the files held in Army Office and Defence Facilities Divisions of the Department on the Project, so that we could request specific files- I would have thought that was a reasonable request- . . . and therefore exclude from the request the many copy documents that were floating around other parts of the Department. I was informed that the Department was under no obligation to give me any information concerning the nature, quantity or description of any of its files. Without that information it was of course impossible to narrow the request. Accordingly, I decided to draft a request that would not fall within s. 24-- The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! Senator Mason, you are out of order. You must relate your speech on the third reading to the Bill. It cannot be a second reading type of speech. In my opinion you are not relating your speech to the Bill at all. I ask you to address your remarks to the Bill. Senator MASON —Mr Acting Deputy President, should I take you to have ruled that I may not quote this example which seems to be a precise example of what is actually in this Bill? Remember that it is section 24 that has been amended in this Bill, Mr Acting Deputy President. The ACTING DEPUTY PRESIDENT —You must relate your remarks to the Bill. You are entirely out of order. I ask you to talk to the Bill. Senator MASON —I relate these statements precisely to the amendments to section 24 of the Act. I repeat that point: Everything I say or quote is relevant and relates to amendments in this Senate to section 24 of the Act. Senator Puplick —Mr Acting Deputy President, I raise a point of order. By virtue of the passage of the Opposition's amendment, there are no amendments to section 24 of the Act. The ACTING DEPUTY PRESIDENT —I uphold the point of order. Senator Mason, you must relate your remarks to the Committee stage. The amendments were dealt with in the Committee stage and your remarks at the third reading stage must relate to that. You must not make a second reading type of speech and your remarks must relate to the Committee stage. I make that ruling and I ask you to confine your remarks in that way. Senator MASON —The amendments to section 24 of the original legislation-I am obliged to Senator Puplick-were dealt with extensively by Democrat spokesmen, I know, in the Committee stage of the Bill. I support their view and reiterate it at this stage. Mr Acting Deputy President, I wish to continue to quote from Mr Robertson's letter because I believe it is relevant to this Bill and to what has been done. I most seriously ask you whether you rule against my continuing to quote from it. The ACTING DEPUTY PRESIDENT —Yes, I must. It does not relate to the Committee stage and I have to rule against that. You may quote it on the adjournment or at some other time but in the third reading debate you simply must relate your remarks to the Committee stage. You cannot make a second reading type of speech. Senator Georges —Mr Acting Deputy President, I seek clarification of that ruling. I am afraid we might be creating a precedent which will limit debate in this place. A speech at the third reading stage does not allow the introduction of new material, I would take it, as far as I can recall. I am even doubtful on that, but I thought the third reading stage gave an opportunity for honourable senators to put a point of view that they had not previously put and to recap some of the material that had come before the chamber. If we are to limit the third reading debate to only what has happened in the Committee stage it will lose a considerable amount of its worth to members and senators. Later, at a quarter to one, I shall raise a matter concerning the way in which the procedures in this place have so altered that the rights of members are becoming limited. I do not think you intend by your ruling that the ability of an honourable senator who raises matters at the third reading stage be further limited, in addition to what has occurred because of changes in the procedures of this House. Senator Peter Baume —What about if an honourable senator was not present for the Committee stage? Senator Georges —Yes, there are a number of reasons why the third reading is provided as an opportunity to speak. It could enable an honourable senator who was absent from the chamber on other work within Parliament House to speak on the subject. The ACTING DEPUTY PRESIDENT —That is not a point of order. I simply ask Senator Mason to relate his remarks to the principles of the Bill. This is the third reading stage and not the second reading stage. Senator MASON —As a point of explanation, Mr Acting Deputy President, I have risen at the third reading stage at the suggestion of the Chairman of Committees. I raised the matter in the Committee stage. The relevant clause was dealt with last night while I was not here, for good reasons. The Chairman of Committees properly reminded me that I ought not to press the matter in the Committee stage and suggested that I raise it at the third reading, which indeed is what I am doing. However, with respect, I accept your ruling and I will not continue to quote from Mr Robertson's letter, or its penultimate point, which I think is of vital importance in this debate, and in the circumstances I shall continue by asking honourable senators to come to me at some later stage so that I can provide them with copies of the letter. Senator Georges —Oh, no, that is not satisfactory. Senator MASON —No, I do not find it so. I would like honourable senators to see the letter. Of course the Bill will have passed by then. I am greatly concerned. All I can say at this stage is that I implore the Opposition to reconsider its position and to join the Australian Democrats in voting against the third reading of this Bill because it is a destructive Bill. The whole debate during the Committee stage has illustrated that point. The admissions of the Minister for Resources and Energy (Senator Gareth Evans) during the Committee stage have made it absolutely plain that it will be virtually impossible for any public interest group to afford to institute any kind of freedom of information inquiry. This legislation was put in place in this country because the need for that sort of thing, and for bureaucrats to be responsible for what they do, was evident. What are we doing now? We will, provided this third reading stage is passed, hand it back to the bureaucracy. It will be able to act irresponsibly, without any responsibility to this Parliament or anybody else. The bureaucracy has been put in an ivory tower where nothing can be done to touch it. Every department that has a filing system that is in disarray will be able to say: `This is too much trouble'. An inefficient government department will be able to conceal its inefficiency and will be able to say `We can't give you this. It is too much trouble', or `it will cause an inordinate amount of work'. Honourable senators will know that that is the effect of the amendments to section 24 of the original Act. Delays, costs of an impossible nature and, as some of my colleagues have said during the Committee stage of the Bill, a virtual impossibility for any interest group or individual to know in advance what it will cost them to carry out some freedom of information inquiry, make this, to my mind, one of the most cynical, one of the most despicable and one of the most deceptive pieces of legislation ever perpetrated on the unfortunate people of this country. Question put: That the Bill be now read a third time. The Senate divided. (The Deputy President-Senator D. J. Hamer) Ayes . . . . . . . . . . . 59 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 52 —— Alston, R. K. R. Jones, G. N. Archer, B. R. Kilgariff, B. F. Aulich, T. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Baume Peter McIntosh, G. D. Bjelke-Petersen, F. I. McKiernan, J. P. Black, J. R. Maguire, G. R. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Newman, J. M. Childs, B. K. Parer, W. R. Coates, J. Puplick, C. J. G. Coleman, R. N. Ray, RobertCollard, S. J. Reid, M. E. Colston, M. A. Reynolds, M. Cook, P. F. S. Richardson, M. Cooney, B. Robertson, E. A. (Teller)Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. Short, J. R. Durack, P. D. Tate, M. C. Elstob, R. C. Teague, B. C. Evans, Gareth Townley, M. Foreman, D. J. Vanstone, A. E. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Harradine, B. Haines, J. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Powell, J. F. Question so resolved in the affirmative. Bill read a third time. Debate resumed from 8 October, on motion by Senator Ryan: That the Bill be now read a second time. Senator PETER BAUME(New South Wales)(12.18) —The Senate is debating the Student Assistance Amendment Bill 1986. The legislation has been introduced within the context of the statement by the Minister for Education (Senator Ryan) in the last week or so about what she has called Austudy, the Government's new proposal for student support generally. But let us put that to one side for a moment. In short, the Student Assistance Amendment Bill which is now before the Senate does only three things. First, it widens the definition of a student to include secondary students, mainly by deleting the word tertiary wherever it appears and allowing secondary students to be considered as students for the purpose of this Bill. Secondly, in proposed new Part III the incidentals allowance is deleted. That allowance is now absorbed into the higher allowance rate at the tertiary level. The Opposition has no concern about that. Thirdly, the Bill provides certain transitional arrangements. For example, it tightens up certain double dipping arrangements which existed between student assistance and the Social Security Act, and we have no objection to that. All the substantial elements of Austudy, which were announced by the Minister for Education in her statement, are taken up not within this Bill, which is a fairly small piece of legislation, but within the appropriate regulations which are made under the amended legislation. The existing regulations are very substantial. Most of the changes will take place by regulation, not legislation. The Bill sets out to do some quite significant things. It sets out to amend the principal Act to provide for the granting of assistance to students in secondary education. The current provisions limit student assistance under this Act to students enrolled in universities, colleges of advanced education and certain students in technical and further education colleges. The amendment Bill will be the legislative framework to achieve that change and for regulations to be made to introduce the Austudy scheme. They will allow the establishment of a single scheme of assistance covering both secondary and tertiary students. We do not have any concerns with that. The Austudy scheme has arisen from considerable work which has been done and considerable disquiet which has been expressed about the disincentive effects of unemployment benefits as they relate to educational benefits. As early as 1983 the Beswick report on Studies of Tertiary Student Finances-I think I commissioned it when Minister-advocated equating the rates payable under the unemployment benefit and the rates payable under student assistance at the tertiary level. Honourable senators will be aware that those rates have always been different and are different today for most students. It was thought desirable that they should be brought together because a perverse incentive has existed for young Australians, when given the choice, to follow the money, to take unemployment benefit, which was the higher rate, rather than to undertake further study and take a lower rate of educational benefit. So the Beswick report, as early as 1983, recommended that the rates should be brought together. The policy document, which the Liberal and National parties took to the 1984 election-as shadow Minister for Education I produced that document-actually advocated, as policy, that those two rates be brought together. We could see the wisdom of what the Beswick report recommended; we could see the foolishness of the perverse incentive and we thought the rates should be brought together. There have been further reports, such as the Organisation for Economic Co-operation and Development review of youth policy in Australia and those prepared by the social welfare policy secretariat, and they have all recommended widening the scope of education benefits generally to include all people in post-compulsory education in Australia. The Austudy proposal-let us forget the name `Austudy,' which is a jargon name-attempts to put some of those recommendations into effect. It was introduced as part of the Government's Priority One: Young Australia strategy. Briefly, what is proposed is that from the age of 16 years there will be an allowance structure based on age-I will come back to that matter-with higher rates applying from the age of 18 years. It will be phased in so that from 1989 the student assistance rates and the unemployment benefit rates will be aligned for each group. It will take a couple of years for that to happen. It has further been proposed in this legislation that the Austudy allowances, like unemployment benefits, should be paid directly to student beneficiaries. This represents a very significant change from existing support. At present students in years 11 and 12-the senior levels of secondary schooling-could, if their families have qualified by income, draw benefits from the secondary allowance scheme under which assistance in respect of secondary students is paid to parents or legal guardians of the students. That measure was introduced, promoted and expanded in an attempt to help families who may be needy to encourage young Australians to stay in schooling. This Bill proposes to change that to pay the benefit directly to the students. Certainly two issues immediately arise from this legislation. They are the payment of money directly to students rather than to families and the qualification by age rather than by level of study undertaken; for example, it is a move from the senior levels of secondary study back to age 16 years, and that raises some problems. The Opposition does not oppose this legislation; we will support it. However, we are concerned about those two matters to which I have referred. We are not concerned about, in fact we applaud and support, the proposal to bring together the unemployment benefit level and the student allowance level. We think the difference between them, which acts to the disadvantage of education, has been unfortunate. We do not support it and we are glad to see that it is being attended to in this legislation. However, we are concerned about the other two matters to which I have referred. First there is the question of benefits being paid directly to students rather than to parents. The Government is, to some extent, in a cleft stick because while the benefits are paid to parents or legal guardians, to families of students in years 11 and 12, the student may say: `There is no benefit to me accruing from the payment of this benefit and therefore I might leave school and take the dole which is paid directly into my hands'. That is not just a theoretical possibility. At one time I was Minister for Aboriginal Affairs and had the unpleasant experience of knowing of examples within the Aboriginal community in western New South Wales where some bright young students, who should have gone on to years 11 and 12 in school, actually took that decision. They said, quite openly: `If we leave school we get the money. If we stay at school other people get the money.' So, they took the opportunity of leaving school and taking the money in their hands. Of course it was to their long term disadvantage. The Opposition is concerned that one of the reasons the secondary allowances scheme was introduced was to try to help families in need to support the minors who were still in schooling to go on through years 11 and 12 even though that family was in need. If the allowance were paid directly to the student and if the family does not get the allowance and the family now has to rely upon payment of family allowance, upon maybe family income support payments, one of the benefits of the SAS would be lost immediately. It seems from what I have read that one of the stimuli to students staying on at school, completing years 11 and 12, adding to the pool of skill available to Australia and helping to produce a better retention rate through year 12 is the influence of family advice and family counselling upon their children. It seemed to us that each time we increased secondary allowance payments-in the 1982 Budget we were able to get a very significant increase; I have an idea that it was 40 or 45 per cent-that was followed by considerably increased interest in the benefit from families in the community and by increased take-up of the benefit. We have no doubt that the result was that children within families were being given advice to stay at school because if they did their families could draw the benefit and would be able to see it through financially. There is no doubt that having a student at school in the post-compulsory years represents a financial dilemma for some families. If they encourage the student to leave school extra money may come into the household. If the student stays at school the amount of money coming into the household may be less but the family may be planning for a longer term benefit. The Opposition believes that most of the students we are talking about-students in years 11 and 12-are still minors. Most of them are 15, 16 and 17 years old. Some of them, of course, will be 18 years old. They will be adult in that sense. But the ones who are 15, 16 and 17 years old are still minors. We still look to families to support those students where family structures are adequate. We believe that the arrangement under which this benefit is paid to parents or legal guardians in respect of students is a better arrangement. It is an arrangement which we would like to see continue. I indicate now to the Minister that during the Committee stage we will move an appropriate amendment to seek to retain that provision so that the benefits, which we welcome, can be paid to the parents or legal guardian in respect of minors and particularly in respect of those children in years 11 and 12, as is being done now. If there is a good educational reason-not just a reason of convenience of administration of the unemployment benefit-for changing the payment from families to the student, we would like to hear it from the Minister in due course. The other matter I wish to refer to is the question of moving from qualification by level of education to qualification by age. This proposal presents us with a different set of difficulties. We understand that the present proposal by the Government to pay a benefit to 16-year-olds-I take it that it will not apply to all 16-year-olds; it will apply only to students who qualify in terms of income-will bring an extra 38,000 students within the purview of the benefit. I would like that point clarified. If we did not move to an age qualification but retained the present educational qualification, there would actually be a cost saving to the Government. If we simply said, as we do now, that the parents and guardians of students who stay on in years 11 and 12 should be able to apply for access to this benefit, there would be a cost saving over what the Government is proposing now. The difficulty is that this is not just a black or white, clear-cut problem. I can well remember some of the difficulties we had involving 17-year-old students who planned to go back to years 9 or 10 because they wanted to take up the education that they had missed. Of course, under the present rules, a student of 17 years of age, who is not an independent adult and who went back to school to undertake study in years 9 and 10, could not qualify for access to this allowance because it applies only to years 11 and 12. So we see that the Government, by turning to this age qualification, may in fact be helping a group of people who need to be helped. But I think the Government will have to acknowledge that it will also be disadvantaging another group of students. The fact is-and I believe other senators will draw attention to it-that many students who are only 15 years old and presently qualify because they are in year 11 will lose their qualification for this benefit if the Government's proposal goes through. The Government's proposal says that they must be 16 years old. What will happen to the 15-year-olds who are in year 11 in States like Western Australia-in fact, in most States in Australia? Senator Teague —And South Australia. Senator PETER BAUME —I hope that my colleague Senator Teague will participate in this debate and make this point because we have some very interesting correspondence in relation to South Australia. If the Government's plans are put into effect, people who have access to this benefit at the moment will lose that benefit. We want the Government to explain why this is being done. How will the Government explain this change to the families of students who lose access to a benefit which they now receive. Surely the Government should be trying to ensure that more Australians complete their schooling and more Australians go on to undertake further education. The difficulty we see is the considerable extra costs that will be involved if we try to take the best of both schemes, if we try to retain the present entitlement based on academic qualifications-that is, for years 11 and 12-and if we try to add to that the benefits of what the Government is trying to do by bringing in the 16-year-olds who would not otherwise have qualified. The Opposition finds this a very difficult matter to address. I would indicate that we have some sympathy for what the Government is trying to achieve. But we have considerable disquiet about this legislation, and we will be looking for explanations from the Minister at the Committee stage. Since the Minister is not in the chamber at the moment, we may repeat these arguments when the Bill is being considered at the Committee stage. We will be seeking from her explanations about the people who will actually face disadvantage, who will actually lose access to a benefit as a result of these changes. I have indicated that it is the view of the Opposition that this legislation will not be opposed by us. While we support most of the changes, we draw one exception. We are not in support of the proposal to move the payment from parents or legal guardians to students of age 16 or 17 years. We will move an amendment to try to give effect to that view. We are going to seek more information from the Minister in relation to the consequences of her decision to move payments to secondary students from those in years 11 and 12 to those who qualify by age alone. We see some quite significant problems in this area which, as far as we are concerned, are unanswered, unresolved and unexplained. Senator ZAKHAROV(Victoria)(12.36) —The Student Assistance Amendment Bill 1986 introduces changes which are of major importance to students and the families of students. It gives me a lot of pleasure to speak on this Bill, which constitutes a real step forward in assisting students. Of course, it also offers long term benefits in terms of social effects on employment patterns and the reduction of social inequities. This legislation also means a lot to me personally because for a number of years before coming to the Senate I was a student counsellor in a high school and dealt with the very real problems facing students who wanted to stay at school but whose choice was made difficult or impossible through poverty or through family difficulties which had forced young people on to their own resources. In the past, student allowances have been related not only to income-certainly they should be so related-but also to the place where the student was studying. Thus in 1983, when I left my work in student counselling, the weekly rate for a secondary student who received the full allowance was $16.70-a grossly insufficient sum to live on-and there was no extra allowance for those living away from home. In contrast, the maximum tertiary education rate was $38.55 at home and $59.45 for students living away from home. So a student undertaking a business course at a high school had to try to exist on less than $17 a week, while the student doing a similar course at a business college or a technical and further education college could receive more than double that allowance even if he or she were living at home and much more if living away from home. In my experience, this had adverse educational effects in many cases where the high school was offering a course which included at the year 11 level academic subjects such as year 11 English, economics, and accounting, which would increase the students' chances of a job compared with those of students who had done a business college or TAFE course, although the students' financial needs would force them to transfer to another school just to obtain an allowance on which they could try to exist. Further, since the allowance was related to the level of study and the type of institution in which the student was enrolled, there was no adjustment for the age of the student. This legislation introduces an Austudy allowance which will replace three former schemes-the tertiary education assistance scheme, which most people know as `TEAS'; the adult secondary education assistance scheme, which had its own problems in respect of the definition of `adult', so some students in particular age groups fell between two schemes-- Senator Peter Baume —Seventeen-year-olds. Senator ZAKHAROV —Seventeen-year-olds mainly and older students at various stages of the scheme's history. The third is the secondary allowance scheme, which obviously deals with secondary students. The Austudy scheme will come into operation at the beginning of next year and is expected to assist about 238,000 students compared to an estimated 187,000 students receiving benefits this year in total under the three schemes it replaces. Austudy will make available allowances to all eligible students aged 16 years and over undertaking full time secondary or tertiary studies, thus removing the anomalies to which I referred previously. There will be two rates of allowance: One for 16- to 17-year-olds and the other higher rate for those who are 18 years or over. Over the next three years the maximum Austudy allowance will be progressively increased to bring it into line with the unemployment benefit so that by 1989 the relevant rates for young people of the same age will be equal. That is a very important reform as it will go a long way towards eliminating the disincentive for young people to remain in education, and I will return to that issue later. When this new allowance structure is in place there will be indexation both of allowances and of income test levels to ensure that the real value of the allowance is not eroded. As with the existing schemes, there will be gradual tapering down from the maximum payment. In 1987 the cut-off point will be from $23,894, where there is one secondary student involved, through to $45,914 where there are two tertiary students living away from home. The cut-off points are higher for the 18 years and over age group. In 1987 there will be an increased rate of allowance for nearly all students and no present student will be worse off. As I said before, all rates will increase in 1988 towards parity with the unemployment benefit. The maximum income test will be raised by 5 per cent in 1987 to ensure that recipients of Austudy allowances will not be penalised by rises in income levels in the community. In other words, they will be indexed. Students presently receiving the secondary allowance or TEAS in 1986, who are still under the age of 16 years at the beginning of 1987, will be covered by transitional arrangements. Another important change is that the payments will be made to the student rather than to the parent or guardian. Here I would disagree with the previous speaker, Senator Peter Baume. From my own experience as a student counsellor I believe this is a very important step towards independence for many young people which will remove a source of friction for a small group of families-I emphasise that it is a small group-where parents sometimes use this payment as a form of emotional or financial blackmail of their sons or daughters. It has also been my experience as a parent as well as a counsellor that young people respond very positively to managing their own finances. I believe it has been anomalous that in the past a student in secondary school was kept dependent on parents in this way while the young person of the same age who was working or in tertiary education could be responsible for his or her own financial arrangements. Payments will be made fortnightly, and that is also important. Previously TEAS and the adult secondary allowances have been paid monthly and the secondary allowances have been paid by the term. This has meant very real hardship for students waiting for the first payment and has also been a financial burden for those many schools, such as the high school where I worked, which deferred charges for school requisites until the payment was received and thereby had to wait a full term for that payment. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Walsh) 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 GEORGES(Queensland)(12.45) —Mr Acting Deputy President, I want to raise a matter at this time but I am somewhat constrained by the new arrangements that have been introduced into the Senate. I do not wish to canvass the decision of the Senate to remove, in fact, the facility of senators to speak on the first reading of money Bills and replace it by a period discussing matters called public interest between quarter to one and 2 o'clock on a Thursday. The first reading speeches, of course, on the money Bills allowed senators to raise matters which they considered to be urgent. Senator Grimes —They still can, you know. Senator GEORGES —On the first reading? It is by arrangement then that this procedure is now being followed where we have dispensed, by agreement, with the first reading speeches in order to talk of matters of public interest. It is fairly obvious from what Senator Grimes says that perhaps I am not fully aware of the procedures. That is the problem of being diverted from parliamentary work in the House by committee work in other places, at times both when we are entitled to meet and when we are not entitled to meet. In any case, I should not apologise for my lack of knowledge of the new arrangements. Let me merely say that there is a further understanding during this period that no matter of a controversial nature shall be raised. I am about to raise a matter which was a matter of controversy and which was raised during a public interest debate on one occasion by the then Senator Primmer. Having in mind that it may also again become of a controversial nature because of my contribution I sought to speak to Senator Chaney prior to this debate to inform him that I was going to raise the matter of his placing on the Notice Paper yesterday and making a matter of Senate business two documents, apologies by ex-Senator Primmer to a Mr Henderson and a Mr Bowden. I wished to advise him that I had certain comments to make on that. Unfortunately Senator Chaney was not available at the time I called and I also found out that he has another engagement, an official engagement, to fulfil. Therefore I will not expand on the matter as perhaps I would like to. I would also say to the Senate that I am under a further constraint as the matter has been placed on the Notice Paper and, in effect, that somewhat limits my ability to speak on it at this stage. The matter is on the Notice Paper and if I were, say, in a position to object I would object if any senator endeavoured to speak on a matter that has been properly placed on the Notice Paper. There is a possibility that it could be discussed in the adjournment debate. Let me get to the matter which arose when notice of motions Nos 426 and 427 was given by Senator Chaney yesterday. It was an unusual procedure for a senator to place on notice two apologies made outside the House in connection with a certain matter that was before the courts. I regret that Senator Chaney did so because it reopens a whole debate. It is unfortunate that it should open again the whole debate because there are many of us in this House who were aware of the circumstances of Senator Primmer's statements in the House and his one or two subsequent comments referring to his statements in the House which led to an action by a Mr Henderson and a Mr Bowden. That should be a warning to all members of the Senate that they should be extremely careful in what they say in the House. They may be obliged to say it in the public interest, as I think Senator Primmer did. One has to be very, very careful about what is said concerning a matter outside the House, even in referring to what was said in the House, to give further currency to the matter and to the statement. In this particular case it led to a defamation action being taken by Mr Bowden and Mr Henderson against Senator Primmer for statements that he made inside the House and to which he referred outside the House. Senator Chaney is lawyer enough to understand, I do not doubt, and others who are lawyers here would understand, that often a defamation case becomes a test between the two litigants and the test is who has the strongest will and who has the greater purse. Some of us were aware of the pressures being brought against Senator Primmer and the pressures were considerable to the point where they affected Senator Primmer's personal life. One could argue that perhaps it was brought upon himself but it did seriously affect his personal life in a rather drastic way. It also affected his financial position in that he had to put in a defence. My experience in this place has been that defences against actions are costly. Sometimes the actions are frivolous. Sometimes they are a test of, as I said, will and financial resolve. It was suggested to Senator Primmer that we should take the matter up in the House to explain the pressures that were being brought to bear on him. Senator Primmer took the view that it ought not to be done, that he wanted an end to the matter, that he had reached the stage where he wanted it to go away. He could not withstand the pressure; he could not withstand the worry and the matter was starting to affect seriously his personal position and his health. So we did not take the matter up. We did not take the matter up to justify further the position that Senator Primmer had taken at that time because there were other sources of information and other honourable senators were familiar with what was going on within the Department of Foreign Affairs; not in particular relation to this matter, but in a number of other matters. There were problems in the Department of Foreign Affairs which stemmed from the head of the Department right down to ordinary staff. I have had personal experience of that. I raised it on the Public Accounts Committee at one stage. I was concerned about the intimidation, the pressure, and the harassment of employees by the head of the Department at that stage. Nevertheless, it was decided not to reopen the matter and to let the whole matter go away. Ex-Senator Primmer decided against his better judgment, because of reasons that I have mentioned, to come to an arrangement and to tender an apology. The apology was published in the Press. Mr Henderson had the opportunity on an Australian Broadcasting Corporation program-it was also party to the defamation case-to express his gratitude that the matter was over and to indicate that he felt free of the difficulties which had been imposed upon him. He was entitled, of course, to say that and he was entitled to his defence. Those of us who were privy to the matter were satisfied to let it rest. Now Senator Chaney has placed it on the Notice Paper. Senator Chaney has now made it a matter for debate. Senator Chaney has now made it possible for us to defend Senator Primmer and to explain the circumstances of the apology; to explain that the apology was made under economic duress and must be considered in that light. That would not have been necessary if Senator Chaney had not, for a reason known only to himself, placed it on the Notice Paper. Why do I speak at this stage instead of speaking later? It has gone on to the Notice Paper as notices of motion Nos 246 and 247, possibly to be buried for months, perhaps never even to reach the Senate unless action is taken to bring it forward. What has happened as a result of the notices being put down, the usual action taken by Senator Chaney? Further currency has been given to the apology in every newspaper that I have read this morning. In the Courier-Mail I notice a substantial argument, which spreads ex-Senator Primmer's apology across its pages. It is not the intention, perhaps, that Senator Primmer had in mind. I believe that he may have made other arrangements, even to his own disadvantage, to take the matter to the courts, because he had a defence. He had a defence of privilege and he had a defence of fact. He decided that he just could not face that tortuous and expensive path. The apology received was printed in several newspapers at the time it was made. But I do not think ex-Senator Primmer, those who defended him, or those who had further information to give, expected that the matter should be so treated that it gave widespread coverage to his apology. For that reason, I stand to explain the circumstances of the apology. By making references to the apology and the way that it was given we have then to reopen the matters which Senator Primmer raised. I am not happy about raising those matters again. There are certain times when matters are brought to debate and sometimes, shall we say, some heat is engendered, some charges are made and then it becomes the news of yesterday. That is the way this matter should have rested in the best interests of Mr Henderson, Mr Bowden and ex-Senator Primmer. But that is not the case now. I regret that I have to restate that the apology must be considered in the light that it was given under substantial personal and financial pressure against a person who would not otherwise have apologised. Senator Chaney possibly would like to respond to what I have said, I reiterate that I regret that he has raised the matter again. He may have some reason to have brought the matter forward. He may have felt so strongly about the charges which Senator Primmer had made and the manner in which they were made. I think Senator Chaney was particularly vocal at the time about it, and perhaps justifiably so, having in mind the charges that were being made. But let me say that when you look at what Senator Primmer was saying, he was justified because of subsequent results. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator Sir JOHN CARRICK(New South Wales)(1.00) —I rise to speak on the matter raised by Senator Georges. First of all, I make plain that what Senator Chaney did yesterday was an attempt to achieve bipartisanship in this chamber and it followed discussions with three Ministers, including the Leader of the Government in the Senate (Senator Button). The intention that Senator Chaney expressed was simple enough: That a matter which had occupied this chamber enormously over a period of two and a half years and had gone on after that for another two years, a matter which had captured the attention of the Press dozens and dozens of times throughout Australia and had come from this chamber, must find its final resting place in this chamber. I do hope that Senator Georges will accept these statements I am making. Senator Georges must know-if I may say this to him-that I intervened many times with Senator Primmer to try to see that this matter never got to this stage; so I say this with the best of good will in the world. The fact is that the matter had occupied 200 questions on notice, was well advertised in the media throughout Australia, had been the subject of 12 statements here by the then Senator Primmer and statements by the Ministers for Foreign Affairs of both a previous Liberal Government and the present Labor Government; it had massive investigations and had to find its resting place in the end in the Parliament from which it was initiated and in which the seed bed of its growth developed. The intention was very simple indeed. The intention and the hope were that there would be quite objective speeches on both sides of the Parliament. I remind Senator Georges that the approach to Senator Primmer was a bipartisan one. Both Labor and Liberal governments had reached the same conclusions. Both Labor and Liberal governments had made investigations. The then Attorney-General had made it perfectly clear in the Senate where his Government stood. The then Attorney-General had expressed the view in the Senate that Senator Primmer had exceeded the bounds of privilege in this place. All that is documented. It was intended to find a way of putting into the record the statements of apology and was hoped that the matter then would rest. Let me put an old fashioned view to Senator Georges: We have in this community two places in which one can find justice and equity; this place with its rules, and in the courts of law. It is an old fashioned matter of principle that when one has recourse to one of those places and reaches a result, one obeys the umpire's decisions. There has been recourse. Simply then, Senator Primmer took his independent opportunities in this chamber many, many times and therefore made himself subject to examination for doing it. He went further and in public committed his comments. He therefore is subject to the ordinary events of the law and the processes of the law. I do not think it is indeed in the ordinary course of justice to be able to come in here now and to try to denigrate an apology on the basis that there was some duress in it. I have never heard that kind of situation expressed. It gets to the very roots of a challenge to our principle of justice. The fact of the matter is that, as ex-Senator Primmer signed these statements, he knew that in fact they should be read for what they are, not be read as a result of having some pressure exerted on him at all. Are we now to say that he does not believe what he says? Senator Georges —What I say. Senator Sir JOHN CARRICK —With great respect to Senator Georges, and I respect and admire him for many of his principles and for his willingness to support a friend, let me say this: He may be doing great damage to his friend by the journey on which he takes himself. Senator Georges cannot put into a legal apology, a settlement which is endorsed in the courts of law, any kind of interpretation other than what ex-Senator Primmer says in the statements. Both the statements are unequivocal apologies. Both of them are absolute apologies and, in fact, they say that the many charges that he had made he has now found out were based on bad information, were untrue and that exhaustive investigations had found them to be so. There is no purpose in a court of law, there is no purpose in coming together in an agreement if one is going to say, `You must not read this apology for what it is, behind it is another reason.' The fact is that if that were said outside it would put the present Mr Cyril Primmer in very great peril and I do urge that this not be committed here. The fact of the matter is that we have had Senator Gareth Evans, time after time in this place, saying that there was no evidence to support the then Senator Primmer, saying that there were in fact breaches of privilege. One could go to Hansard and recall these things. One has had the fair play. How much more does one want than both sides of politics having the opportunity through their Ministers for Foreign Affairs to make investigations, to look behind the evidence, and to come out with their statements? How much more does one want than to invite Cyril Primmer to give the evidence, have it examined and have it tested? If the present Government and the present Opposition members say `We have done this and we find no evidence,' how much more do we want then for the opportunity for this to be tested in a court of law, and indeed, then to have a completely unequivocal statement made? Now the suggestion is that the statement does not mean what it says. I put it to Senator Georges that he is on a perilous journey. I ask him not to proceed on that journey, in the interests of his friend. His friend has said quite clearly now that what he had done had been proven to be untrue. It is very important indeed to understand what he has said. I invite the Senate to listen to the terms of the apology to Mr Bowden: I withdraw without reservation or qualification all accusations, allegations and innuendos which I have at any time made within and outside the Parliament, against Ivor Gordon Bowden, an officer of the Department of Foreign Affairs, formerly Australian Ambassador to Iran and Australian Commissioner in Hong Kong and currently serving as Australian Ambassador to Pakistan. While I acted in good faith, I acknowledge that I produced no evidence to sustain these attacks and that successive, competent investigations, whose verdict I unreservedly accept, have on each occasion cleared his name. I regret and apologise sincerely for the distress which these unwarranted attacks have caused him and his family and for any damage which these attacks including those contained in the letter I wrote to the Head of State of Pakistan on Mr Bowden's appointment as Ambassador may have done to his career and to his standing in the community. That is a totally unequivocal statement. If it had not been raised today, that item would never have come up for debate in this place. The apologies would have been put in the Senate records; they would have been read by the people of Australia; there would have been no need for a debate; everyone would have understood that Mr Hayden and Senator Gareth Evans and the members of their Government had made their investigations and had reached a conclusion, as Mr Street and the Fraser Government had done. Everyone would have been satisfied that what ex-Senator Cyril Primmer had done in a manly fashion had put an end to the matter. I wish it had rested at that. I understand that Senator Georges did not consult his people to find out the discussions had happened. He would have found that we had said to the Ministers: `We want a bipartisan approach on this. We do not want any vexatious debate on this. We do not want this matter to be opened up, it can do nobody any good. We believe in the legal processes, we rest on the legal processes. What a pity indeed that this should have happened? It is a first-class situation now if it is left at this, because we have had an unequivocal clearing of the good names of Mr Peter Henderson and Mr Bowden. I only wish that Sir Nicholas Parkinson could have had just a similar kind of statement. I regard it as outrageous to have suggested that there was anything improper in the retirement of Sir Nicholas Parkinson, when everybody knows that his medical condition regarding his eyesight was of a perilous nature. I rise here simply to say that. I plead with Senator Georges to accept that we approached in good faith the Ministers of his Government and expressed the fact that since the matter had been born in this place, nurtured in this place, and spread to the four winds through the media in this place, by the then Senator Primmer, it is very proper indeed that the wording of these apologies should come to rest in this place. We expressed the view that any debate at all ought to be a debate that was not vexatious, that was bipartisan and would put the matter to rest. The last thing in this world that one would want to do, either for Cyril Primmer or anyone else, is to look behind an apology and to put meaning into it which can never be there. In a court of law these kinds of agreements mean what they say in plain words, and it is not for any of us to presume to alter the course of justice in this regard. It is bad enough to have the abuse of privilege here. It is bad enough indeed, and one would hope that never again in this place would privilege be used to the extent that it was done in that regard. I quote Senator Gareth Evans: Senator Primmer has just stated that he believes on this occasion, as on others on which he has canvassed the same topic, that he has not abused parliamentary privilege. Others will have a different view. That is pretty clear. Again I quote: It is not right that there should be a capacity within Parliament to injure reputations carelessly and indefensibly without any form of redress or at least a reply being available. I could go on and quote and quote. A matter which ranged over two and a half years of Senator Cyril Primmer's occupancy of this place, 200 questions, 12 statements, and investigations, has come to rest in legal statements and settlements. Let us leave it at that. Men's reputations which had been sullied are now cleared. It is for us who believe in British justice to uphold that, to uphold what the plain meaning of the words is and to rejoice in the fact that good men have been found to have been men of high reputations and their reputations stand and that nothing that has been said in the past has sullied them in any way. I do hope that we will leave it at that. Senator GEORGES(Queensland) —I claim to have been inadvertently misrepresented. Senator Sir John Carrick —I would not have done it intentionally. Senator GEORGES —Yes. Inadvertently I have been misrepresented and it does not concern me personally, but I want to make it fairly clear that nothing in what I said can be taken to mean ex-Senator Primmer has the view that I have. It must be fairly clear. There has been no consultation, no discussion, no communication with ex-Senator Primmer. It is my view that what has happened happened in the way that I have expressed it, not Senator Primmer's. I want to make that particularly clear. Senator MASON(New South Wales)(1.15) —I rise to speak in this debate to address an issue which I feel honourable senators and all members of parliament ought to note and that is the issue of overregulation and the economy of Australia. The difficulties that many families find themselves in, I think, make it essential that the process of government should give a top priority to the means of reducing costs to the consumer of items where, indeed, those are caused by acts of government. It is notorious, of course, that acts of government cause enormous costs to the consumer. I speak on the issue of overregulation as it affects the sale of margarine. It is a classic example, important in its own way, because although it is impossible to quantify a precise figure, it is a fact that every family in Australia pays unnecessarily 5c, 10c possibly more, for every container of margarine that they buy. As early as 1905 there were discussions in this country about the need to adopt model food laws throughout Australia and 80 years have passed without anything really having been achieved in that regard. The Confederation of Australian Industry, when discussing the need for uniform business legislation, has indeed stated that uniform food legislation is its No. 1 priority. In fact, CAI has estimated that in the decade to 1985 Australian consumers paid an extra half billion dollars in food prices due solely to conflicting State legislation. That, I think, should be a pointer to the Commonwealth Government to immediately set into train consultations with the States to see whether this question of uniform food legislation cannot be brought back into the meeting hall so that at least in the future the public will know that those sorts of things are no longer a problem. Margarine is a classic example. As background, there are two major margarine manufacturers in this country: Goodman's Fielder, which accounts for about two-thirds of the market, and Unilever Australia Ltd, catering for the other third. There are other manufacturers, but their share of the market is relatively small. Because the market is, in fact, dominated substantially by two manufacturers it is highly competitive in nature. There are some 30 different State government Acts and regulations covering the manufacture and sale of margarine in Australia. Rather than tediously bore the Senate with a list, I seek leave to incorporate in Hansard a list of these different Acts and regulations. Leave granted. The document read as follows- LEGISLATION AFFECTING MARGARINE MANUFACTURE (a) South Australia: Margarine Act, 1939-1975 and amendments. Margarine Regulations, 1976 and amendments. Food Act, 1985. Regulations Under Food Act, No. 13 of 1986, incorporating South Australian Food Standards Code, 1985. Dairy Industry Act 1928-1974 and amendments. (b) New South Wales: Pure Food Act, 1908 and amendments. Pure Foods Regulations, 1937 (under the Pure Food Act) and amendments. Dairy Industry Marketing Authority Act 1979 and amendments. (c) Victoria: Food Act, 1984 and amendments. Food Standards Regulations, 1985 and amendments. Margarine Act, 1975 and amendments. Margarine Regulations, 1976 and amendments. (d) Queensland: Food Act, 1981 and amendments. Food Standards Regulations, 1982 and amendments. Margarine Act, 1958-1978 and amendments. Margarine Regulations, 1959 and amendments. (e) Western Australia: Health Act, 1911 and amendments. Health Act, Food & Drug Regulations, 1961 and amendments. Margarine Act, 1940 and amendments. Margarine Act Regulations, 1974 and amendments. (f) Tasmania: Public Health Act, 1962 and amendments. Public Health (Food & Drug Standards) Regulations, 1971 and amendments. Public Health (Food Standards) Regulations, 1986. Public Health (Food Hygiene) Regulations, 1977 and amendments. Dairy Produce Act, 1932 and amendment. Dairy Produce Margarine Regulations, 1944 and amendments. Dairy Produce Amendment Act 1982. (g) Northern Territory: Food Standards Act, 1979 and amendment. Food & Drugs Act, 1980 and amendment. Senator MASON —Thank you, Mr Acting Deputy President. The situation, I am informed by the industry, is least oppressive in New South Wales and probably at its worst in Western Australia. Hence the situation in Western Australia is worth discussion. Under the Western Australian Margarine Act, section 29, sub-section (1), it is required that starch be added to margarine by 0.1 per cent weight. It is further required under section 30, sub-section (1) (a), that table margarine be sold only in cube form. These two mysterious happenings go back to a very strange and outmoded view. The addition of starch for Western Australian products is of considerable nuisance value as special blends are required to conform with Western Australian regulations. The regulation requiring starch was introduced in the 1940s so that it was possible to distinguish margarine from butter. It is an example of a regulation which is no longer required and should be repealed because the whole issue of passing margarine off as butter is no longer one that is really relevant to the community. The cube tub requirement, which is unique in Western Australia, has a very similar background. Small brand volumes in Western Australia mean very short tub manufacturing runs and this, of course, involves high packaging costs; added to this are the costs of maintaining separate stockholdings of the packed product and the loss of machine changeovers in the factory. All these are inefficiencies in the industry which could be avoided if this whole issue were brought back to Commonwealth-State consultation. The Western Australian Government says that the clear requirement is necessary only so consumers can easily identify margarine from butter; that is, as I say, no longer of any significance in the community. It has been put to us by Unilever that the result of the differing regulations in Western Australia can be stated at some $288,000 per annum. If that be so, extra cost to the consumer of that one item alone is 4c to 5c for a 500-gram pack or some 8c for a kilogram of margarine purchased from Unilever Australia Ltd in that State. Mr Acting Deputy President, there is a further classic example in the production of Fairy margarine variance. In New South Wales and South Australia there are no specific regulations covering cooking margarine and the product is manufactured to normal margarine colour level and sold in a common wrapper; so it is not a complication or problem there. However, in Victoria, aside from specific labelling requirements in respect of cooking margarine, the Margarine Act 1975 forbids the manufacture of cooking margarine containing prescribed colouring or flavouring substances and specified a maximum colour level for the base oil blend. These requirements necessitate the holding of stocks solely for Victoria with a cost penalty incurred yet again. Tedious though these points may seem, all of them represent, I must remind honourable senators, a material cost to consumers which finally ends up on their grocery bill. In Western Australia it is prohibited under the Margarine Act to manufacture cooking or manufacturing margarines, quite apart from ordinary margarines, `in imitation or semblance of butter'. To conform with this legislation many types of margarine have to be produced and handled, with another resultant increase in cost to the consumer. In Queensland the relevant Act governs the labelling of cooking margarines so that labels with different wording are required for Fairy margarine sold in Queensland from those on Fairy margarine sold in most other States. Again, here is another cost burden being applied to the community because these labels have to be printed separately and this is passed on directly to the consumer. Fairy margarine is not a major brand in terms of tonnage, but the net result of this conflicting legislation is for variants of this type of margarine. Manufacturing margarine is the third major area of margarine manufacture and it is the final point I want to discuss today in the light of these comments. The term `manufacturing margarine' refers to a large range of industrial cooking margarines which are used by large scale industrial pastry producers, artisan bakers and pastrycooks. In Victoria the Margarine Act forbids the production of manufacturing margarine containing prescribed colouring or flavouring substances. Under section 10, sub-section (b) (iii), a statement is required which specifies the constituents of the fat content of the margarine which must contain a minimum 60 per cent of edible tallow. There are no real reasons for any of these provisions above the standards of other States. In New South Wales, for instance, there are no restraints on the composition of the fat content and colouring is permitted. In Queensland, under the Margarine Act, it is required that the product blends contain a minimum of 40 per cent of edible tallow and these must be separately cartoned because of the different regulations regarding labelling, even though the blend may be identical with the New South Wales blend. Hence there are at least five products affected, some of which are packed both in solid block or as in extruded pieces for easier use, but in each case storage and packaging requirements are trebled and the additional costs incurred, here again, are passed on to the consumer. One could go on and on through all these 70 regulations. I do not propose to do so; I think I have made the point. I have made the point to the Government that in referring to this one example I have made a case, I believe, that the time is ripe for the Government to look again at uniform business laws and uniform food laws, particularly in this country. It should be a top priority for the Government, given the willingness of the State governments, to amend the so-called `uniform' Companies Act of 1961 and for the partial rewriting of the Model Food Act by the South Australian Government, to cite two examples. The willingness and the will are there on the part of the States. The Federal Government could make a promising start in this regard by holding discussions with the State governments with a view to implementing a model food Act for Australia which, after all, was endorsed by all State Health Ministers back in 1980. Sitting suspended from 1.24 to 2 p.m. Senator CHANEY —I address my question to the Minister for Industry, Technology and Commerce. In a speech last night at the annual dinner of the Textile, Clothing and Footwear Council of Australia he referred to the fact that in considering the future level of protection afforded these industries, the Government would: . . . seek to provide reasonable levels of protection during the period of adjustment and, at the end, the industry will be protected at a level more than three times that of manufacturing industry as a whole. In referring to three times a certain figure, is the Minister talking about the present overall level of effective protection for manufacturing-that is about 25 per cent-or does he mean approximately 15 per cent which applies when the highly protected textile, clothing and footwear and motor vehicle industries are removed from the average? In other words, is he suggesting an ultimate textile, clothing and footwear industry protection level of about 75 per cent, or is he saying that the Government's decision is likely to result in a protection level of under 50 per cent? Senator BUTTON —I quite clearly was not saying either of the things that Senator Chaney would like to suggest. I was referring to the average rate of protection for the manufacturing industry, excluding the two majors. All I was saying was that under any formula which the Government is likely to adopt, the rate of protection for the textile, clothing and footwear industries will exceed three times that amount. The mathematics of it are fairly simple. Senator COLSTON —Can the Minister for Community Services explain the applications process being used in Queensland under the home and community care program and why no organisations have been told whether their applications for funding were successful? Senator GRIMES —The situation in Queensland as far as the home and community care program is concerned is a worry to us all. The only new projects that have been funded in Queensland to date have been those funded from unmatched Commonwealth funds. I approved these projects earlier in the year and the money was paid to the State before the end of the last financial year. The home and community care program is a joint Commonwealth-State program with the State being responsible for its day-to-day administration. The Commonwealth, in fact, funds the State to carry out that administration. On the application side, we, at the Commonwealth level, drafted an application form which we asked a number of States to use. The Queensland Government refused and drafted its own form which is described by various people with such words as `dreadful', `too complex', `hard to fill out' and `extremely bureaucratic'. I am concerned also that the form used in Queensland is numbered by the Queensland Department of Health and that only those people who fill out the numbered forms have their applications considered. Only organisations of which the Department of Health approves get an application form. So we have an extremely bureaucratic and restrictive application system, whereby only those organisations whose applications have been vetted are even considered. Those applications have to be approved by the Queensland Department of Health and, I assume, by the National Party in Queensland, which seems to be the way things operate up there. I have asked officers of my Department to go to Queensland to talk with Queensland officials to see just what is happening and why this screening out process is occurring. If this is going to happen I question the worth of being involved with the State in such a program. A further problem in Queensland is the time taken to consider applications. Applications were to be in by 15 July, 15 August and 15 September. I understand that no applications have been considered by the Queensland Government, and that the Minister, Mr Austin, has announced that nothing will be approved until after Christmas. As my Department has practically finished the administrative process I think that is a pity. Senator Colston —He might not be there after Christmas. Senator GRIMES —He might not be there, that is true. The administration of a new program such as this is always complex, but the complexities and the difficulties in the bureaucratic process which are going on in Queensland, and which I can only believe are aimed at restricting funds to organisations of which the Queensland Government does not approve philosophically, will be the downfall of the scheme in that State. That would be a great pity, but I would rather see the scheme not working in that State than for it to become a source of political patronage by the Queensland Government. Senator SHEIL —I refer the Minister for Industry, Technology and Commerce to my question on 7 October and his response on 9 October on the offset liabilities of computer companies tendering for the Australia Post office contract. Is the Minister aware that the information given to the Press by a senior officer of his Department, prior to the evaluation of tenders, has been commercially damaging to two of the computer companies concerned? Does he consider that the disclosure of such information is merely explaining Government policy, particularly if the information were untrue, as one of the companies is $25m in credit in its offset obligations? Senator BUTTON —I understand that it has been alleged that it was commercially damaging to the companies in question, but these allegations fly back and forth and I cannot be an arbiter of those matters in Question Time in the Senate. I will see whether, I can get a more detailed explanation of the situation for the honourable senator. Senator COATES —I ask the Minister representing the Minister for Health a question about the Co-ordinating Committee on Women and Health, the membership of which consists of women's health advisers from the Commonwealth and the States. Does Tasmania participate on this Committee by sending a representative, and given that Tasmania does not have a women's advisory unit, is the representative suitably qualified to represent the health interests of Tasmanian women? If Tasmania does not participate on this Committee, how does this lack of participation reflect the Gray Government's attitudes to the needs and concerns of Tasmanian women? Senator GRIMES —The Commonwealth-State Co-ordinating Committee on Women and Health had its first meeting in October 1985 following a resolution from the second National Women's Health Conference that the Commonwealth sponsor such a committee. The role of the Committee was and is to facilitate the exchange of information on women's health issues between the States and the Commonwealth to see how these can be developed in a satisfactory way. All States sent senior representatives to the first meeting, but Queensland and Tasmania have declined to send representatives to meetings this year. The person who has represented Tasmania at a couple of the meetings made a valuable contribution to the Committee. In fact, everyone agrees that her absence from recent meetings is a matter of regret. Despite the non-participation of Tasmania and Queensland, copies of meeting papers and minutes are forwarded to all States, including those two States. The Tasmanian Government has, as Senator Coates says, no women's advisory unit, no women's advisor, no women's advisor on women's health, and no anti-discrimination legislation. They are not interested in that sort of thing down there. Senator Walters —They don't need it. Senator GRIMES —I know they have Senator Walters to give all the advice, but her advice tends to be a little biased. Senator Newman is only new so I understand that they go only to Senator Walters. That is why the Gray Government is notorious for its views which echo Senator Walters's views rather than the previously echoed views of Senator Newman. I think it is a pity that the Gray Government seems to have no regard for more than 50 per cent of the population in this way. It is a pity that it does not participate at least on a committee of this type which is a co-operative committee and which is trying to improve the delivery of health services to women. One can reflect only that it is because of something deep in the psyche of the Premier of Tasmania and his colleagues. Senator HAINES —My question is directed to the Minister representing the Minister for Foreign Affairs. Senator Ryan —He is on the phone. Senator HAINES —As long as the Minister is concentrating on the question, I will continue. Senator Gareth Evans —One ear is enough. Senator HAINES —It is probably an improvement to be all ears instead of all mouth. Is the Minister aware of the contents of the Liberal Party publication `Living in a Nuclear World' which has been distributed to schools in Victoria by the Victorian branch of the Liberal Party and which has been described by the Victorian Secondary Teachers Association as a blatant political document which attempts to promote Liberal Party foreign policy? Does the Minister agree with the assertions in the publication that getting out of ANZUS would not help the disarmament process, that the bases we share with the United States of America help peace and that uranium mining does not mean more nuclear bombs? If the Minister disagrees with these assertions, what actions will he take to counteract this misinformation which has been given to school children in Victoria? Finally, does the Minister consider that this publication confirms the view of South Australian Liberal member of the Legislative Council, Mr Lucas, that the Liberal Party leadership is open to criticism for its hero worship of the United States on peace issues? Senator GARETH EVANS —I have seen the pamphlet to which Senator Haines refers. I am afraid that I could not accept that it presents quite such a picture of unrelieved gloom and toadyism of the kind that she paints. I will not go so far as to suggest that it demonstrates any sophistication or sensitivity in the Liberal Party but the document is something of a curate's egg-it is good in parts. One of the parts which is good is that which endorses a number of the policies on arms control and disarmament which have been adopted by this Government. It is gratifying that the Opposition has accepted in great part the wisdom of our approach in this respect. Among the things in the pamphlet with which we agree are the propositions to which Senator Haines refers, namely, that getting out of ANZUS would not help the disarmament process, that the joint defence facilities help the cause of peace and that uranium mining, whatever else it means, does not mean more nuclear bombs. The reasons why we agree with those propositions have been canvassed repeatedly in ministerial statements and publications and most comprehensively in the paper issued by Mr Hayden in 1984 entitled `Uranium the Joint Facilities Disarmament and Peace'. When all that is said, the pamphlet contains a number of assertions with which this Government profoundly disagrees. I mention in particular that the Government cannot accept the comments in the pamphlet that are made about the United States strategic defence initiative program. Our view is that SDI is not merely a research program but is also an initiative that carries with it the high risk that it will lead to intensification and strategic competition or the extension of military competition into outer space and complicate the conclusion of new agreements limiting and reducing nuclear arsenals, as we saw so unhappily in Reykjavik a few days ago. We do not endorse either the SDI or comparable research programs from the Soviet Union. The Government places a different emphasis from that in the pamphlet on nuclear deterrence. We support deterrence because, until better systems of restraint are in place, to forgo deterrence would not serve the cause of peace and would risk catastrophe. Government policy is primarily directed towards achieving a world where deterrence will no longer be necessary once the goal of the complete elimination of nuclear weapons has been achieved. As we have communicated to both the United States and Soviet government emissaries this week, we fully support the continuing efforts of both super-powers in seeking to achieve this goal. I should also mention that there is an error of fact in the pamphlet in one obvious respect. The Government has no evidence that the Soviet Union has deployed weapons systems in Vietnam which directly endanger Australia. That is just another rerun of some outdated theories and neuroses which do not deserve wider currency, particularly with young people. To that extent there are elements of misinformation and error in the pamphlet. I have to say in response to the last part of Senator Haines's question that it would not be appropriate for the Commonwealth to take any particular action other than the kind I am taking today in drawing attention to those matters. The material distributed to schools in Victoria is a matter for the State education authorities. The Government's policy is one of allowing all points of view, however misconceived, to be expressed and discussed. Senator AULICH —Can the Minister representing the Treasurer please inform the Senate how the Government's tax reform initiatives, such as the removal of double taxation on company profits, will advantage small businesses? Senator WALSH —Perhaps the best way to answer that question would be to draw a comparison between the taxation of a hypothetical small business under the administration of the former Treasurer and how it will be taxed under the Hawke Government's reformed tax system. When Mr Howard was Treasurer and a small business made a profit, pre-tax, of $100,000, what happened? The company would pay $46,000 in company tax. The remaining $54,000 was then taxed at the personal income tax rate of up to 60c in the dollar. As a result, the total tax bill of the business could be as high as $64,000. Even more horrendous, for each extra dollar this small business earned, nearly 80c went in tax to the then Treasurer, now Leader of the Opposition. That is, one extra dollar in profit was taxed at 46c in the dollar in the hands of the company and at 60c in the hands of the individual. That resulted in 21c for the small business person and 78.4c for the Leader of the Opposition. Under the Hawke Government's new tax policy, the same small business with a pre-tax profit of $100,000, under the imputation system which wipes out tax for small business, would pay a tax of $49,000. If it then distributed a dividend of $51,000, the $49,000 already paid would be offset against the total tax liability of the shareholder. Depending on the individual's marginal tax rate there is the possibility that the individual would receive a rebate and pay less than $49,000 tax in total after the distribution of the post-tax profit, against an amount of $64,000 under the previous system. That assumes that the hypothetical company or companies concerned had been honestly paying tax in the past. It is a matter of historical record that a huge number of companies, owned and controlled by prominent people in the Liberal Party, did not pay any tax because they were into all sorts of tax avoidance and tax evasion schemes, bottom of the harbour rorts, macadamia nut schemes, cherry picker schemes and so on. So there will be exceptions. The many prominent people in the Liberal Party who had become accustomed to paying virtually no tax during Mr Howard's treasurership will pay more tax than they paid previously. They are kicking up a big fuss about that. That is not surprising. Those are the sorts of people who are kicking up the fuss. These prominent members of the Liberal Party who are manipulating these puppets in here and telling them-- The PRESIDENT —Order! The honourable senator will withdraw that. Senator WALSH —I will withdraw that, Mr President. Those people are manipulating the members of the Opposition and denigrating the system of taxation which this Government is about to introduce, which is much more satisfactory for honest companies which have been paying taxes all along but less satisfactory for those who have been in the habit of evading-such as all those prominent members of the Liberal Party who have become accustomed to evading their tax liabilities. Those people are kicking up a fuss. They are telling the Opposition that it must oppose this tax reform. The Opposition dutifully is doing so. Senator Messner —Mr President, I ask that the Minister table the document from which he quoted. The PRESIDENT —The Minister has tabled the document at the request of Senator Messner. Senator SHORT —I refer the Minister representing the Prime Minister to reports of the changes proposed by the Australian Council of Trade Unions to superannuation which would mean, amongst other things, the establishment of a national development fund for the purpose of industry investment. I ask the Minister: Has the Government yet had any discussions with the ACTU on this proposal? Senator BUTTON —Discussions were held yesterday with the ACTU. They were led by the Prime Minister and other Ministers, including me, participating in those discussions. The ACTU put a number of matters to us which I think have been fairly well publicised, certainly the issue to which Senator Short referred. The Government has made no response on any of those issues. We will be meeting again with the ACTU in due course. Some issues clearly require close examination. Senator SIBRAA —Has the Minister representing the Minister for Foreign Affairs seen media reports which indicate that South Africa is poised to invade Mozambique? Was the South African decision to expel Mozambiquan workers from South Africa another step in the campaign to destabilise the region? Senator GARETH EVANS —The Government is aware of reports that a meeting of leaders of the front line states in Maputo, the capital of Mozambique, on 12 October, expressed their deep concern at the external assistance reportedly being given to rebel forces in Mozambique and at the possibility of renewed acts of South African destabilisation against Mozambique. The concerns of leaders of the front line states come at a time when South Africa has announced the expulsion of Mozambiquan migrant workers from South Africa, although the South African defence force has denied that its forces are concentrated along South Africa's border with Mozambique. The Australian Government has repeatedly expressed its concern over South Africa's policy of regional destabilisation. We remain concerned over the deteriorating situation arising from the South African Government's refusal to negotiate a peaceful end to apartheid and the deeply unsettling effect this has on the southern African region as a whole. Apartheid remains the underlying cause of violence and a very serious threat to regional peace and security. I mention also, as we have previously stated, our complete and unequivocal rejection of the use of armed force in the region to resolve differences and, in particular, South African armed attacks. We sincerely hope as a government that all parties will exercise caution and restraint and that confrontation will be avoided. Senator PARER —I direct my question to the Minister for Finance. In view of the fact that sophisticated superannuation schemes provide a benefit geared to the contributor's final salary-for instance, a company which typically would pay, say, 11 to 12 per cent of its wages bill to provide five times the employee's final average salary-is the Minister aware that to maintain the employee benefit under the regulations proposed by the Australian Council of Trade Unions, employers will have to increase their contributions? Will the Minister advise the impact on the economy of the ACTU proposal? Senator WALSH —I do not have in front of me, nor do I have memorised, the ACTU proposal in question, so I am not in a position to answer the question off the top of my head. Private superannuation is the Treasurer's responsibility. I am responsible only for superannuation for Commonwealth Government employees and Commonwealth authorities. I will refer the question to the Treasurer and get an answer. Senator COOK —Has the Minister representing the Treasurer seen the article in yesterday's West Australian headlined `Holiday offer leads Libs' membership drive'? Does the article deal with the Liberal Party brochure entitled `Knocking on a few doors can win you a trip for two to Europe'? Can the Minister advise the Senate whether a political party offering holiday packages as an incentive for signing up new members would be subject to the fringe benefits tax? If the Western Australian Liberal Party is subject to fringe benefits tax for providing that incentive package, is it an intended or unintended consequence of the fringe benefits tax? If the Western Australian Liberal Party is not subject to fringe benefits tax for providing the incentive package, will the Minister take steps in the context of the present review to ensure that it becomes an intended consequence of the fringe benefits tax to tax the package? Senator WALSH —In response to the last part of the question, which could be interpreted as an invitation to victimise the Liberal Party-- Senator Archer —Outside the law, you mean. Senator WALSH —I certainly will not recommend that that should happen. I do not think it would be very fair to single out the Western Australian Liberal Party for unduly harsh treatment. It has enough problems of its own making without the Commonwealth Government adding to them. I have seen the article. Subject to the confirmation, I suppose, by the Commissioner of Taxation, I believe that the position is as follows: If the people receiving the incentive package are members of the Liberal Party but are not employees of the Liberal Party the incentives would not be subject to the fringe benefits tax. If the people receiving the incentive package are employees of the Liberal Party and are not members of the Liberal Party the incentives would be subject to the fringe benefits tax. If the people receiving the incentive package are employees of the Liberal Party and also members of the Liberal Party the question of whether their incentives were subject to fringe benefits tax would depend on whether they took part in the recruiting program as part of their duties as an employee of the Liberal Party or as members of it. Returning to the second part of Senator Cook's question as to whether I would recommend that that particular incentive package be subject to the fringe benefits tax in all circumstances, I have already mentioned that I do not think it would be proper to discriminate against the Western Australian Liberal Party in that way. Senator Chaney and some of his moderate friends are trying to do a good job in their attempt to rebuild the Liberal Party in the face of the scungy practices which have flourished within it for so long. For example, there has been widespread stacking of branches, formation of skeleton branches, armfuls of proxy votes from fictitious branches carted into State conferences, signing up members out of telephone books, transferring members between branches-- The PRESIDENT —Order! The Minister is debating the issue. He is clearly now out of order. I ask him to come back to the answer. Senator WALSH —Certainly, Mr President. For the reasons I have mentioned and for a number of other reasons-if anyone wants to see me afterwards I would be pleased to give them a more comprehensive list of what has been going on in the Western Australian Liberal Party-apart from the general impropriety, even, of a government designing its tax policy in a way that discriminated against a particular political party, on the grounds of more general fairness, Senator Chaney and his friends, who are trying to do a good job, albeit with little success, should not be further impeded in their attempts to clean up the sorts of scungy practices which Senator Crichton-Browne and his friends indulged in in the Liberal Party for so long. Senator SIDDONS —I ask the Minister for Finance: How much was Tasmania overpaid in dam compensation money in relation to the Franklin River? Will the Federal Government reconsider future payments? Senator WALSH —I find the question a little difficult to answer because of the definition of overpayment. I presume that Senator Siddons is referring to the fact that the forecasts by the Hydro-Electric Commission of the growth rate of power consumption were, by a factor of about three, in excess of that which has occurred. The actual growth rates in power consumption were even marginally in excess of those which had been estimated by the Commonwealth Department of Resources and Energy when I was Minister for Resources and Energy. However, the capacity planning of the HEC endorsed by the State Government had built into it the assumption that power demand would grow at that rate. The Tasmanian Government, especially the Premier, was too stubborn and pigheaded to take advice from those who, it has now been demonstrated, knew better. I suppose it could be argued on those grounds that the Commonwealth has overcompensated the Tasmanian Government, and, indeed, has effectively underwritten the planning errors of the Tasmanian Government. However, an agreement was signed. I suppose other people are at liberty to raise this matter with other Ministers if they wish, but it is not my view that the Commonwealth at this stage ought to review the $20m per year which, in January 1984 prices, it has agreed to pay to Tasmania. In addition to that compensation, of course, large additional amounts were provided to Tasmania to maintain employment in the interim period between the cessation of construction on the Gordon below Franklin dam and the winding up of construction on the two alternative schemes. Virtually all of that money has been spent in any case, but the bottom line, assuming that I have correctly divined the purpose of Senator Siddons's question, is that the Commonwealth's fiscal treatment of Tasmania has been extremely generous. Perhaps if we had known at the time not only how ungrateful Mr Gray would be for Commonwealth generosity but also his propensity habitually to distort facts and misrepresent facts, we may have been less generous. But I think that is water gone down the creek, or the river, so to speak. Senator JONES —My question is directed to the Minister representing the Treasurer. I ask: Has the Minister's attention been drawn to an open letter to Sir William Knox, the Leader of the Liberal Party of Australia in the Queensland Parliament, published in the Suburban Express on 14 October by Frank Gaffy, QC, the National Party of Australia candidate for Ashgrove? The letter calls on Sir William to dissociate himself and the Liberal Party from statements describing the Queensland economy as the worst in Australia, made by Alan Sherlock, the Liberal candidate for Ashgrove. Can the Minister comment on the accuracy of Frank Gaffy's assertions in the letter that Queensland's economic difficulties result from ill-advised Federal policies which adversely affect Queensland more than any other State, including excessive interest rates, unreasonable levels of tariffs and the effect of a decade of a grossly overvalued Australian dollar? Senator WALSH —I have, indeed, seen the letter to which Senator Jones refers. In reply, perhaps I may say, firstly, that how alleged inappropriate Federal Government policies would affect Queensland any more than any other State remains a matter for wide-eyed conjecture. No suggestion or line of argument is developed as to why that would be so. As to whether the Federal Government's policies in question are inappropriate, I suppose to some extent that is a matter of judgment, but it does surprise me that the Queensland National Party candidates are so ready to put the blame on the policies of their Federal National Party colleagues as well as their Liberal Party colleagues, or enemies, these days. The three policies mentioned in the letter were quite specific. I will go through them. The first was excessive interest rates. Of course, the former Treasurer, John Howard, holds the record for having presided over the highest interest rates ever recorded, of more than 21 1/2 per cent on 90-day bank bills in April 1982. Secondly, reference was made to an alleged unreasonable level of tariffs. The level of tariffs in Australia peaked in the 1960s when the National Party or then Country Party leader, John McEwen, was effectively running the country. That is when the level of tariff protection peaked, and it did so under a Country Party coalition government, which party later became the National Party. I do not know whether we should assume from that that as well as repudiating the present Federal Liberal Party and the present Federal National Party, the candidate, Mr Sherlock, is also repudiating McEwen. Finally, and most importantly, is the reference to a decade of a grossly overvalued Australian dollar. That is, in the main, true. It was not grossly overvalued for a whole decade but it was certainly grossly overvalued through the late 1970s and the early 1980s. Not only was it grossly overvalued but also it was deliberately overvalued because the then Treasurer, Mr Howard, used a grossly overvalued Australian dollar as a substitute for a wages policy. Because he had no wages policy, the Treasurer of the day, Mr Howard, and the Government of the day deliberately maintained an overvalued Australian dollar in an attempt, futile as it ultimately turned out to be, to control domestic inflation. In closing, this letter to which Senator Jones refers is really just another instalment in the mutual Queensland Liberal and National Party slanging match. To demonstrate the bitterness of that, I remind the Senate that I have written to the Queensland Premier in an attempt to exhume some of the sordid details of some of the national disaster relief loans that have been granted in Queensland. I can advise that a senior official of the Queensland Liberal Party has made an indirect approach to me and has asked that, if I manage to dig up any dirt about that, would I let him have some of it. Senator BROWNHILL —My question is directed to the Minister representing the Prime Minister. In light of the recent statement by Mr Alan Coates, Managing Director of Australia's largest superannuation fund, the AMP Society, that `the speed of growth of investment opportunities, especially in the case of equity investment, is not sufficient to enable the total funds to be absorbed efficiently', and in view of the fact that the overseas portfolios of the major super funds are far outperforming their Australian portfolios, even after the payment of 15 per cent withholding tax to foreign governments, is the Government considering introducing any changes to existing regulations to force investment capital back on shore? Senator BUTTON —That is a question that is more appropriately directed to the Minister representing the Treasurer. As far as I am aware, the Government is not currently considering that matter. I will make inquiries, and if the Treasurer has some proposals about that matter, he will either announce them in due course or I will tell the senator that he has some proposals. Senator McKIERNAN —My question is directed to the Minister representing the Minister for Aviation. A letter from a Western Australian headed `True blue and Qantas' which appeared in the Australian newspaper last Monday, 13 October, was critical of Qantas's policy of supplying its passengers with overseas made goods such as English butter and Swiss jam rather than Australian made goods. Could Qantas's purchasing policies be seen to be in breach of this Government's announced policy on purchasing Australian goods wherever possible? Will the Minister comment on this matter and report on any Government representations made to Qantas about it? Senator GIETZELT —There is a view, which I believe has bipartisan support, that buying Australian goods is a very important ingredient in improving our economic circumstances. Therefore, we would expect the Qantas organisation and our principal domestic airlines to follow that practice. In respect of the question asked by Senator McKiernan, I understand that Qantas adopts a policy of substantially complying with government policy and that something in excess of 95 per cent of its purchases are goods made in Australia. But there are some particular difficulties about quarantine regulations involving other countries, as well as freight problems in taking, for example, Australian jam to a port overseas; there would be a freight charge in respect of the use of fuel for that particular matter. In respect of butter, we might come into conflict with other countries because of quarantine regulations. Australia's public and private domestic airlines, Australian Airlines and Ansett Airlines of Australia, have an obligation to comply as far as they are able with requests of government to purchase Australian goods. From travelling on both those airlines I have noticed that that policy is not being put into practice by our domestic airlines. Whilst Qantas has difficulties in respect of its obligations to other countries, such difficulties do not apply to our domestic airlines. I have found, for example, that Ansett has both crockery and cutlery purchased from other countries. Australian Airlines has crockery purchased from other countries. I expect, therefore, that they will apply government policy in future purchases of these items. Whilst they are statutory and public organisations outside the control of government, I think they have an obligation as far as is possible to comply with government policies in these matters. On the particular question asked by Senator McKiernan, I am advised that Qantas largely complies with government policy in these matters. Senator WATSON —The Minister representing the Treasurer will recall that on 25 September 1986 he answered a question I put to him on the capital gains tax as it relates to principal residences and he stated that his answer was subject to confirmation. I ask: Does the Minister now confirm his answer or is he now aware that his statement that a home is exempt, whether lived in or not, misled the Senate and is incorrect? In view of the fact that the Government has claimed that the family home is exempt when in fact the family home is taxable in many circumstances, does the Minister define this as an unintended consequence? If so, will he review the matter? Senator WALSH —I do have some recollection of the question to which Senator Watson referred. I believe he correctly said that I said `subject to confirmation'. No, I do not have any confirmation yet. What I can do for Senator Watson though is to let him know what one of the intended consequences of the capital gains tax legislation will be, and that is that people who have played around with company take- overs to minimise their taxation obligations in the past and who have gained huge tax free capital gains through manipulating those company takeovers, people such as, for example, Mr Elliott, the Federal Treasurer of the Liberal Party-- Senator Chaney —Mr President, I raise a point of order. The Minister has demonstrated for a second time his incapacity to answer the particular question addressed to him by Senator Watson. He is now proceeding to debate a question which has not been asked and to engage in his usual rhetorical flourishes. I ask you to sit him down so that we may get on with Question Time. The PRESIDENT —Order! The Minister is still within the realm of the question asked of him but he is getting on to the periphery of it. I ask him to relate his remarks to the question. Senator WALSH —Certainly, Mr President. May I note for the record that at least Senator Chaney is trying to cover up the scungy activities of his own party members this time instead of those of members of the National Party in Queensland. The PRESIDENT —Order! I ask the Minister to answer the question asked by Senator Watson; otherwise I will ask him to resume his seat. Senator WALSH —Certainly, Mr President. If people want to know one of the intended consequences I refer them to an article written by Terry McCrann and published in the Age on Tuesday, 15 April 1986 which refers to the takeover of Henry Jones by Elder Smith and the various devices by which Mr Elliott cleared for himself a tax-free profit of $650,000. The PRESIDENT —Order! I ask the Minister to resume his seat. That is clearly outside the realm of the question. Senator ROBERTSON —Is the Minister for Community Services aware that some criticism has been levelled at the adequacy of child care provided in rural areas? How does the Minister respond to the claim that in the provision of child care rural areas are disadvantaged when compared with metropolitan areas? My concern, of course, is with the Northern Territory and I would be grateful if the Minister would comment on the situation in the Northern Territory in his response. Senator GRIMES —Indeed, there has been criticism of the inadequacy of children's services in rural areas. I suppose that in some ways that criticism is justified. In the past children's services have developed on a submission basis and people in urban areas frequently have had the capacity, the experience and the skilled representatives to provide information on which to base such submissions. Therefore they were closer to the source of funds. Secondly, programs have been a bit rigid in the past in not allowing for the special needs of people in rural areas, particularly those in smaller country towns who do not need the long day services but who need more occasional care, crisis care. However, in recent times, by changing from a submission-based model, by creating more flexible services such as multi-functional centres which can cover a wide range of needs in a small centre, by increasing the number of occasional care services and by extending family day care to rural areas, we have been managing to overcome those deficiencies of the past. In the Northern Territory, in co-operation with the Northern Territory Government, we have introduced special programs aimed at assisting Aboriginal communities and the more isolated communities, particularly of the Centre. In those areas previously there had been no capacity to provide funding. In recent times we have provided new family day care schemes in rural areas such as Ballina and Byron Bay in New South Wales, the north-west coast of Tasmania, the upper Murray Valley in Victoria and Port Lincoln in South Australia. We have also provided a new remote areas funding package in the Northern Territory, as well as the funds I mentioned earlier, which will enable us to develop low cost self-supporting structures in some of the communities in the Territory which are more suitable to their remoteness. Gradually we will be able to do much more, particularly for rural women, such as the farmers' wives who, I have noted, are willing to travel considerable distances to provide advantages for their children in play groups, pre-schools or child care centres to overcome some of the isolation which they think affects their children due to living on their properties. As I said, I think in the past some of the criticism has been justified. We should be able to overcome the difficulties in the future. Senator CHANEY —My question is addressed to the Minister for Finance and follows his continuing interest in the affairs of non-Labor governments, non-Labor parties and their supporters. I ask the Minister, since I have raised the matter with him several times, whether he has made any inquiry about the Western Australian State Government's involvement in the purchase by the Western Australian State Energy Commission of part of the assets of Fremantle Gas and Coke Co. Ltd. Is he aware that part of the company's assets were bought by the State Energy Commission for $40m when the whole of the company had been acquired in a recent competitive market-place situation for $25m? Has he examined the role of the Western Australian Labor Minister for Minerals and Energy, Mr Parker, in that transaction and in particular the role of the Minister in exercising his statutory powers in approving a substantial increase in the authorised capital of Fremantle Gas and Coke Co. Ltd, as a result of which the asset acquired by the Government had its market value enormously enhanced? Has he examined the role of Australian Labor Party members and donors to the Australian Labor Party in that State in this transaction? If the Minister has not taken any action to inquire into or examine these matters, will he do so or does he reserve his indignation for those who dare to involve themselves in political parties other than the Australian Labor Party? Senator WALSH —Mr President, I could request, I suppose, that you rule the question out of order on the grounds that it has nothing to do with my ministerial responsibilities. But I will not plead that because I am very happy to answer it. The fact remains, however, that Senator Chaney is yet again trying to protect the National Party Administration in Queensland. I suggest he should take a leaf out of the book of the senior Queensland Liberal Party official who said: `If Walsh manages to get any dirt about those drought relief loans, will he let me have some of it'. I think Senator Chaney would be much better advised politically to follow the lead of that Queensland Liberal Party official, rather than the practices that he follows here. The reason for my interest in the disaster relief loans, of course, is that Commonwealth money is involved. Whatever the Western Australian Government may or may not have done, it did not use Commonwealth money to do it. Senator Chaney seems to think there is something very peculiar about the value or the price paid for a company increasing from $25m to $40m in a fairly short period. That may or may not be so; I really do not know. But it is very much more peculiar, I think, for an outlay of $3,000 to produce within a very short period a return of $657,000, all of it tax free. That is exactly what the Federal Treasurer of the Liberal Party engineered for himself, as a director of Elder Smith when it took over Henry Jones. Senator CHANEY —Mr President, I ask a supplementary question. I ask the Minister: Does the Federal Government have any interest in the total loan raisings of the State Government of Western Australia and other State governments, and the loan raisings of statutory authorities in those States? Does the Commonwealth therefore have any interest in the fact that $40m is required by the State Energy Commission to meet this contract? Is he concerned at the very odd circumstances which surround the transaction, and the involvement of a Labor Minister in the issue of shares, which have caused a substantial revaluation upwards of the company? Senator WALSH —Borrowings by the State Energy Commission of Western Australia are now contained within agreed limits. The administration of those borrowings is a matter for the Treasurer, not me. I add, of course, that in the last couple of desperate years of the Fraser Government, there was no such control on borrowings by electricity authorities, and that that abdication of responsibility by the then Treasurer, as part of the resources boom hype-the resources boom which never happened-- Senator Chaney —You are just a fraud, Walsh. You are an absolute fraud. The PRESIDENT —Order! The Leader of the Opposition will withdraw that remark. Senator Chaney —It is a two-faced approach. He is going on and on. I think it is utterly offensive to this Senate. The PRESIDENT —Order! I have asked the Leader of the Opposition to withdraw the remark he made about the Minister. Senator Chaney —Mr President, I withdraw the remark, but I accuse the Minister of rank hypocrisy. The PRESIDENT —Order! I take it that the Leader of the Opposition has withdrawn the remark unequivocally. Senator Chaney —Yes, I did, Mr President. Senator WALSH —In the last couple of desperate years of the Fraser-Howard regime, there were no such agreed limits on borrowings. Because of that, State governments recklessly borrowed enormous amounts to provide infrastructure for a resources boom that never happened. That was the reason why the current account deficit as a proportion of gross domestic product reached its all-time record level in 1981-82. Although it is correct that there are agreed limits on borrowings by State government business authorities, such as the Western Australian State Energy Commission, there is certainly nothing remotely resembling the direct linkage between the provision of Commonwealth money, from the Commonwealth Budget, for administration by State governments, as happens in respect of national disaster relief arrangement loans and the Queensland Government. To the extent, if any, that Senator Chaney's question has any relevance to Commonwealth administration, it is a matter for the Treasurer. Senator REYNOLDS —Is the Minister representing the Minister for Social Security aware of a report on social security recipients in Queensland? If so, will he inform the Senate of any details relating to claims made by the Queensland Premier that a winter influx of southerners can be blamed for increases in unemployment in that State? Senator GRIMES —Fortuitously the Minister for Social Security, Mr Howe, has given me some information on these matters. I think it is worth while putting to rest the nonsense that has been spoken by the Queensland Premier and some sections of the Queensland Press about suntanned dole bludgers who they apparently believe abound in Queensland. The report on social security recipients in Queensland outlines the following facts, as distinct from myths: The fastest growth in the number of unemployment beneficiaries in Queensland has been in metropolitan and rural areas, not in resort areas. Young people in receipt of the unemployment benefit are not over-represented at resort areas and their numbers have been growing less rapidly than the numbers of older beneficiaries. Regional office statistics from the major resort areas-Southport, Burleigh Heads, Maroochydore and Mackay-show that since 1983 the growth in the under 25 age group has been below the growth in all other age groups. There has been a 2.5 per cent increase in the under 25 age group and an average of 7.3 per cent in the others. Since 1985, with accelerating unemployment growth across Queensland, the UB numbers in resorts rose at a considerably lower rate than in other areas. In the resort area the figure for growth has been 3.9 per cent; in the non-resort area growth has been 10.3 per cent. The State-wide average has been 8.9 per cent. In fact, there is a net outflow of young people from Queensland and a net inflow of older people to Queensland. It seems that the young cannot wait to get away from Queensland. Permanent migration between Queensland and other States shows a net outflow of the 15 to 34 age group of 4,000 and a net inflow of the 35 to 45 plus age group of 7,100. The Queensland Government takes cold comfort from the Australian Bureau of Statistics September labour force report. The drop in the unemployment rate in Queensland for 15 to 19 year olds was from 21.8 per cent in August to 18.8 per cent in September. We are talking in this area about a tiny sample of about 18,000 people. In regard to the sort of interpretation that has been put on that figure by the Queensland Government, it will almost certainly find that it is nothing more than a statistical hiccup. What has been happening in Queensland is that Premier Bjelke-Petersen, in his use of primitive politics, has been trying to make the young unemployed, in particular, and also sole supporting parents, the scapegoats for the economic failures of that State. In fact unemployment beneficiaries and sole parents in Queensland make up less than 20 per cent of social security recipients. The simple fact is that Queensland is being hit by an economic slowdown because the Queensland Government has great difficulty with its economy. The economy suffers from a narrow industrial base. If current policies continue, there will be a continuing increase in unemployment in Queensland. That increase will continue to be greater amongst older people in rural areas and in the metropolitan areas, not in the resort areas. That is why Queensland accounts for about 16 per cent of Australia's population and about 19.7 per cent of Australia's unemployment beneficiaries. At the end of September the unemployment rate for Queensland was 9.3 per cent. The national average is 8.3 per cent. The numbers of unemployed in Queensland grew from June 1985 to June 1986 by 11 per cent; Australia-wide the growth has been 1.5 per cent. The Queensland Government should stop blaming the young unemployed and sole parents and look to itself for the reasons for the difficulties in that State. Senator TEAGUE —My question is directed to the Minister representing the Minister for Foreign Affairs and concerns disarmament and arms control. Following the visit to Australia yesterday of Ambassador Ken Adelman, the Head of the United States Arms Control and Disarmament Agency, who came here direct from the summit meeting in Iceland, what is the Government's assessment of the prospect now for progress in disarmament and arms control, including the tacit proposals for agreement that were considered by President Reagan and General-Secretary Gorbachev earlier this week? Senator GARETH EVANS —The Government is not entirely without confidence that some further progress can be made notwithstanding the unhappy outcome of the Reykjavik meeting, foundering as it did as a result of the rigidity of the difference between the two countries over the strategic defence initiative. However, the respective positions of the two countries on SDI remain a matter of concern to the Government, particularly in the light of briefings it has received from Mr Adelman first and more recently this morning from the Soviet Ambassador. It remains a matter of concern that at the moment the gap on that issue appears to be very close to unbridgable. Certainly, as the Prime Minister said yesterday, during the briefing with Mr Adelman, he and the Ministers at the meeting with him explored a number of ways in which the various difficulties might be accommodated while permitting progress toward the complete elimination of offensive weapons over the 10-year period as proposed, very constructively, by President Reagan. I do not think I can say anything more at the moment as far as the Australian Government is concerned other than that we hope that negotiations can proceed both in the context of the intermediate-range nuclear force round of discussions and the strategic arms reduction talks negotiations in relation to the larger missiles and that it will be found that when those discussions resume the constructive proposals that were on the table in relation to INF, START and test bans will remain there and will be able to be picked up at the same time as discussion on the more unbridgable matters proceeds. Obviously, it is crucially important for the future of the world that a constructive, not a negative, approach is taken by the two countries concerned. Australia will be devoting all its resources and efforts and calling upon every ounce of our credibility and status as a reliable ally of the United States of America to make that view known and to give that process the momentum it obviously deserves. Senator FOREMAN(South Australia) —In accordance with the provisions of the Public Works Committee Act, I present the report relating to the redevelopment of the School of Military Engineering, Casula, New South Wales. Ordered that the report be printed. Senator FOREMAN —by leave-The Army's School of Military Engineering, located at Casula near Liverpool, New South Wales, is responsible for providing a wide variety of training courses for members of the Royal Australian Engineers and for other Army units. In 1985-86 the school conducted 66 courses of varying duration involving about 1,500 students. Much of the 200-hectare site occupied by the school has been developed by the Army as an outdoors training area in which students undergo practical training in various engineering disciplines, techniques and equipment. The proposal examined by the Joint Committee on Public Works is for the redevelopment of the school by providing new buildings for training, administration, accommodation, messing, vehicle and plant maintenance and stores. The limit of cost estimate for the redevelopment is $29.7m at January 1986 prices. The Committee found that existing facilities for accommodation, administration, indoors training and support activities at the school are below acceptable standards and should be replaced or refurbished. The Committee satisfied itself that the scope of the redevelopment of the school effectively utilises available functional areas consistent with the master plan and provides accommodation, instructional and support facilities at a scale consistent with its role. Debate resumed from 14 October, on motion by Senator Durack: That the Senate take note of the paper. Senator HAINES(South Australia-Leader of the Australian Democrats)(3.06) —When this paper was put before the Senate on Tuesday I was commenting first of all on the fact that the Government was to be congratulated on taking steps to put out a discussion paper prior to launching itself into what could have been rather precipitate, and perhaps controversial, legislation and that it was giving community groups, described in the foreword as `appropriate community organisations', the opportunity of making submissions on the contents of this discussion paper. Unfortunately, they will have only six or seven weeks in which to make those submissions. However, presumably since this discussion paper has been flagged for some months, large numbers of community groups will be only too anxious to have their say about exactly how we should go in this country about ensuring that children from broken marriages are supported financially to an adequate and appropriate extent. As the Government has pointed out on page 8 of this paper, currently just over a quarter of a million sole parents and class A widows' pension recipients are caring for some 450,000 children. For the majority of sole parent families the pension or benefit is their only source of income. Government expenditure on social security payments for class A widows and supporting parent beneficiaries has risen substantially over the last decade from $160m in 1973-74 to $1,757m in 1985-86, an increase of some 245 per cent in real terms. The paper goes on to emphasise that part of the problem facing those sole supporting parents is that there are very limited labour market opportunities and that most of the people who are affected are women. Their difficulties are compounded by the fact that we already have more people unemployed than there are jobs but in the main an additional burden facing these women is that they have school age or pre-school age children and therefore require not full time work but permanent part time work and in addition to that child care, the availability of which is, as we know, rather limited in this country at this stage. The paper points out the problems currently facing custodial parents with regard to the receipt of maintenance. Over half the custodial parents who are entitled to maintenance never receive, or receive only irregularly, the money that is due to them, and this means that they are facing an increasing financial burden, particularly as the children get older. We are also faced with the fact of life that in many ways the Family Law Act encourages a fairly low level of payment per child-usually it averages about $20 a week per child-and this is insufficient on any criterion that is used for an adequate amount of support for a child. There is also some concern about the way in which maintenance has become an optional payment in many cases. Because it is not deducted at source but is left up to the maintenance payer to forward the payment to the custodial parent, in many cases other debts are given priority and this, of course, rebounds enormously on the welfare of the children concerned. We hope that the Government will listen to the responses for the community. We hope that it will reject any suggestion that maintenance payments should be somehow tied to access of the children, because the two should be regarded as separate, and that it will make the legislation as fair and as flexible as possible. For example, those existing maintenance orders which are currently complied with should not necessarily be picked up under the legislation, although this Government should make every attempt to collect payments, under the auspices of whatever legislation it brings forward, from those people who have evaded paying maintenance to date. Senator AULICH(Tasmania)(3.11) —I wish to spend a few moments recommending to the Senate the Government discussion paper on child maintenance entitled `Child Support'. This paper represents a vital discussion document in the light of recent trends in Australian society-trends that are best summarised on page 7 of the Government's discussion paper. The Minister for Social Security (Mr Howe) has to be commended for recognising both the human and fiscal problems relating to the breakdown of marriages or de facto marriages and the situation of the children involved in those breakdowns. Especially relevant is the attempt in this discussion paper to address the significant problems caused by the fact that less than 30 per cent of custodial parents receive regular cash payments from non-custodial parents. It must be said at the outset that no amount of government legislation will solve the problems associated with matrimonial breakdown, especially in cases where one of the partners is determined, or both of the partners are determined, to be unco-operative or vindictive. What can be done, however, is to provide a framework in which couples can separate cheaply and as co-operatively as possible and in which the children are cared for as appropriately as possible. The Government recognises, however, that any improvements to the system cannot be imposed on the community without widespread discussion and detailed analysis of the likely effects of new legislation and administrative procedures, especially those aimed at protecting the interests of children. It is therefore the wish of the Government to elicit as great a response as is possible prior to any legislative and administrative action. The Family Law Act has been a marked improvement over previous legislation, but in practise, for many couples, it has fallen short of achieving, firstly, the protection of children's interests; secondly, the fair division of property; and, thirdly, the lowering of costs involved in matrimonial separation. Of particular concern is the evidence coming before us that single parents and their children are most likely to face poverty or a substantial drop in their standard of living as a result of separation. By 1984, for example, the proportion of female-headed sole parent families dependent on government welfare had grown to 87 per cent from a 1974 figure of 65 per cent. At this stage, I wish to talk about the stereotype of the typical defaulter in matters of child maintenance. I believe it is a stereotype that is causing some problems in terms of governments being able to address the real issue in a rational way. This defaulter, who is usually a male, is supposed to be working in another State, probably under a different name-all with the purpose of escaping the payment of child maintenance. In fact, the opposite is more likely to be true. Most live in the same city, work at their usual jobs, but pay irregularly. Attempts to receive the full entitlement by the custodial parent often involve expensive and time consuming legal action. Given that the average maintenance payment is set at about $20 per week, the result of successful legal actions hardly seems worth while. Nor is the defaulter always a man on a low income. He may be a professional who uses every legal trick to avoid his responsibilities. According to recent research reported in an Institute of Family Studies document entitled `Settling Up-Property and Income Distribution after Divorce in Australia', affluent men are often those who are least likely to be paying for the support of their wives, despite the fact that, as this discussion paper points out, most men are substantially better off after divorce than their former spouses bringing up their children. According to Ruth Weston from the Family Studies Institute, women who choose to be full time housewives and/or mothers are the women most likely to have difficulties gaining employment after divorce due to a disrupted work history and/or their lack of work experience. A very high proportion of women in this category have been married to high income earning husbands. The development is not surprising. More affluent men tend to have assets and income tied up in areas which are excluded from the divorce settlement: Businesses, often incorporated with such complexity that even the tax man must have difficulty following the trail, superannuation policies, and a life-style where personal possessions, from cars to houses and furnishings, are considered part of those almost untouchable business assets. Many women in this category have been ignorant partners in the associated companies and either have little or no knowledge of the business arrangements or, in some cases, have been deliberately excluded from any effective access or power. To receive justice on separation, those women are then forced to take expensive legal action, a course which they often do not have the financial or emotional resources to follow through to a satisfactory conclusion. The division of barrister and solicitor functions in some State legal systems exacerbates the problem still further. The net result is that those affected women often accept settlements which are inadequate and unjust in terms of their own contribution to the failed marriage or in terms of their future capacity to care financially for their children. I am raising this issue because public discussion about child maintenance and the family law in general has often been plagued by the use of stereotypes, which has inhibited sensible government action in this area. In matters relating to child maintenance, the suggestion in the discussion paper that the major departmental responsibility should be carried by the Australian Taxation Office is a good one. The Tax Office has readier access and greater powers to investigate the affairs of individuals involved in divorce. Of course, what is needed is a mechanism which makes it possible to achieve a true and more cost-efficient assessment of the non-custodial parent's financial position. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator CHANEY(Western Australia-Leader of the Opposition)(3.16) —I welcome the fact that this report on child support is before us. I differ from Senator Aulich in his commendation of the Minister for Social Security (Mr Howe). Indeed, I would condemn the Minister and the Government for their pathetic failure to act over 3 1/2 years on a matter which has been seen by the whole community as one of some urgency. The fact is that the measures that were brought forward by the previous Government in the Budget of 1982-83 were set aside by this Government. The national maintenance inquiry produced a report of some 400 pages in February 1984. It took the Government a year and a half before a Cabinet sub-committee was established to examine options for reforming current child maintenance arrangements, and that has finally resulted in the discussion paper before us now. So we have had 3 1/2 years without any action by this Government on a matter which, as I say, is widely perceived in the community as requiring urgent action. A few simple statistics in the discussion paper make it clear why there is community concern. As a proportion of all families in Australia, sole parent families rose from 9 per cent in the mid-1970s to 14 per cent in 1986. Between 1974 and 1986 the number of sole parent families increased by 73 per cent, from 183,000 to 316,000. The proportion of sole parents on a pension or benefit went from 65 per cent to 85 per cent over the last decade. Presently there are about a quarter of a million people receiving the supporting parents' benefit, with 450,000 children in their care. Less than 30 per cent of these parents have any additional source of income. Government expenditure on supporting parents has risen by 245 per cent in real terms since 1973-74, from $160m to $1,757m in 1985-86, with less than 30 per cent of custodial parents receiving regular cash payments from non-custodial parents. In only a minority of cases does a court order or maintenance agreement exist, and less than half of court orders for maintenance made are complied with. Unmarried sole parents are less likely to receive maintenance payments-only 10 per cent do-and divorced sole parent pensioners are most likely to receive maintenance payments, but even there, the figure is only 36 per cent. This is a matter of deep public concern for two basic reasons. The first concerns sole parents themselves and, even more importantly, their children. It has been known for years that that group is more likely than almost any other to suffer poverty and hardship and to need to beg. So this has been seen as an urgent item on the welfare agenda for years-hence the moves taken by the previous Government to start some action. There is also concern, however, on a second front, and that is for the wider community, which has shouldered the rapidly increasing burden of financing income support for them. The report canvasses most of the key issues which have to be considered and on which this Government will have to take action. I trust that the period of consultation allowed-the seven weeks or so-will assist the Government in achieving answers. The point I want to make, in this short contribution, is the shameful political and careless way in which this Government has approached this problem. We introduced amendments to the legislation in 1983 which were voted down by the Government and the Australian Democrats. Subsequently Senator Durack introduced a private member's Bill which encompassed three key areas of change. It is worth noting that those three areas of change received little attention and were dismissed by Government speakers when addressing the legislation. Yet now we find in this paper acknowledgment of the three areas that Senator Durack's Bill proposed to challenge as being key areas for consideration. In the debate on the Family Law Act in 1983 we sought to have the provisions which require the Family Court to take into account the availability of social welfare benefits in determining the maintenance obligations of non-custodial parents deleted from the Act. We failed in that but the Government-again, it was criticised when we brought the matter back into this place in Senator Durack's private member's Bill-now acknowledges in this discussion paper the structure of social welfare benefits and the deliberately low maintenance orders and agreements consequently made through the Family Court as being a key issue. The second issue addressed in our Bill and now belatedly recognised by the Government as requiring attention and action concerns the priority of obligations facing non-custodial parents for the provision of support for their original and subsequent families. The third concerns the relationship between the division of property and the determination of maintenance. I welcome the signs that the Government may be stirring itself in this area. The poverty suffered by sole parents and their children and the excessive burdens of taxpayers stand as a condemnation of the Government's inattention to this matter over 3 1/2 years. Senator CROWLEY(South Australia)(3.21) —I am not surprised by Senator Chaney's opening remarks in his contribution, but I think it is tied with the possibility of two criticisms. One is that his Government had seven years and why did it do nothing about this for all that time? His Government left us with such a mess when we came into government that it was not possible to address everything straight away. There is no doubt about that. Senator Walters —That one has been done to death. Senator CROWLEY —Thank you for that contribution, Senator Walters. If only death would overtake the honourable senator. We have to say this again and again for the people to appreciate it. This Government came into office facing the chaos left behind by seven years of Fraser Government. In that time that Government did not address the maintenance question and yet its members have the gall to carp and criticise this Government, particularly in the face of this document about which some very useful comments have been made, including by Senator Chaney. I think the debate about maintenance ought not to be too distracted by the tedious points of who should get the kudos. I think it is very important to appreciate that this document does give a focus for all of the critical issues involved in this area so that community discussion can focus on those issues that are indeed very well covered together in this booklet. Community response will be welcomed. In fact by some of us it will be sought very particularly and very actively. It is the Government's firm belief that, as is stated in the conclusions on page 41 of the report, titled `Child Support. A discussion paper on child maintenance': . . . all children have a basic right to be supported by both their parents to the best of their ability. I think that sentence needs to be underlined and reiterated. The rights and responsibilities of parents are recognised by this Government. Parents do have to accept responsibility for the financial assistance towards bringing up their children. The consequence of divorce particularly and marriage breakdown is the principal reason why we have such an increase in the number of sole parents. It is sometimes believed in the community that we have sole parents because lots of younger women are not seeking to be married. This document points out that that is a misunderstanding and that the majority of sole parents are the consequence of marriage breakdowns. Of course, as has been said by previous speakers, the consequence of those marriage breakdowns means that many of those single parent families-some 94 to 96 per cent of single parents are women looking after children-are now likely to be living in considerable poverty in this community. That is not to say that poverty did not exist prior to 1973 or 1974, particularly for women who were supporting parents. What we now have is the very hard statistical data to make that unmistakeable. Senator Chaney drew our attention to-this is on page 7 of this document-the dramatic increase in the number of families likely to live in poverty because of the increase in the number of sole parent families, particularly since the early 1970s and until 1985. As well, an expectation has somehow developed in the community that the responsibility of non-custodial parents has not been insisted on to the extent that many non-custodial parents have abandoned their responsibilities for maintenance and have left it to the taxpayer to pick up the responsibility for the maintenance, care and provision of children in our community. That bill has risen from $160m in 1973-74 to $1,757m in 1985-86, which is an increase of 245 per cent in real terms. I think the Government is very concerned that not only will there be a response from the community on this discussion paper but that there will also be action taken by government to require the responsibility of parents, particularly non-custodial parents, to contribute to the maintenance of their children. Senator VANSTONE(South Australia)(3.25) —It is almost in a state of stunned disbelief that I rise to speak on this matter. I could not believe my ears at the former speaker's contribution-- Senator Button —I can't believe your ears either. Senator VANSTONE —I could not believe what my ears heard, Senator Button, that a Government member would wish that death would over take a member of this chamber. It is one of the most childish and insulting contributions I have heard-only one of the most because I have heard a number from the Government, but that one in particular stands out. I endorse the comments made by my Leader, Senator Chaney, on the paper on child support that the Government has released. The Government has had the report since 1984. Since then its Cabinet sub-committee has looked at it and no doubt it employed consultants at vast expense and now it has produced this report which has, as Senator Crowley said, focused on some of the issues that need to be resolved before the Government can proceed. Nonetheless, after all this time these issues are unresolved. It is simply not adequate for the Government to say that this is as far as it has come because it now needs to consult with the community. Seven weeks is not sufficient time in which to consult with the community. As Senator Crowley pointed out, responses from the community will be welcomed and, as she further pointed out, they will be sought by some of us. I would like to be one of those people who would seek community response to this report. As a consequence of that desire I have tried to acquire further copies of this report so that I can distribute it through the community and ask people what they think. But I can get only 4, 5 or 6 reports from the office of the Minister for Social Security (Mr Howe). For the Government on the one hand to pretend that this report is released as a discussion paper and that it is seeking views from the community and on the other hand to produce a report, sufficient copies of which are not available to allow that consultation process to proceed, is ludicrous in the extreme. Another point that I do not think is adequately addressed in this paper is this: When the Government finally does decide on the resolution of these issues on which community views are being sought, it will presumably act and remedy the situation for the children of couples who will divorce from that point on. However, there remains the problem of the people on the supporting parent benefit, generally women in poverty, as sole parents with children who will not be assisted by the outcome of this report. I am not suggesting that any retrospective legislation be introduced which would affect the rights and responsibilities of people who have settled their arrangements on the basis of existing laws, but I am suggesting that something more could be done than what this report suggests. I look forward to the Government, as soon as it has dealt with this issue, dealing with the issue of the many people now living in poverty as a consequence of the inadequacy of our law in this respect. Senator REID(Australian Capital Territory)(3.30) —This is an important document which we are at last considering, because I think most people have been aware for a long time that it is necessary for us to amend the law as far as the payment of maintenance and the enforcement of maintenance orders are concerned. Senator Chaney has outlined our position on the matter in the past and has highlighted the fact that the Government did not respond to the opportunities it previously had to make some significant changes. Senator Crowley perhaps should also note that the Family Law Act only came into operation in 1976, so some considerable time was necessary to elapse before it was possible to assess what adjustments needed to be made. It is a fact that a number of children are living in poverty as a result of marriage breakdowns. When we assess what changes need to be made in the area of maintenance payments we have to be very careful that we do not just focus on one group of people who are in this category. There are some children from families which were living almost in poverty before the family broke up, and no changes in maintenance arrangements will help them a great deal. The responsibility for many of those children lies squarely within the social security system and will have to be addressed there. Of course, that is not the case with all children. We know that a lot of people pay maintenance, men and women, and accept a very real responsibility for their children. I think we also in that area need to be careful that we do not embark upon setting up formulas for establishing maintenance, setting up enforcement procedures, which intrude into the areas where maintenance is working properly. People whose marriages have failed but who both accept a very real responsibility in working together in a way that gives their children the very best opportunity should have the opportunity to make their own arrangement and see that it works. But having identified those two groups, those extremes, there are cases where maintenance is not paid where it ought to be and is not capable of being collected as it ought to be. We have to remember that we are dealing with human beings and that as a result of marriage breakdowns there will be occasions when both parties will be vindictive. It is necessary in establishing formulas, new rules and enforcement procedures that somehow we get around that problem, so that a woman who wants to pursue her husband cannot do so in a way that is directed more by vindictiveness than by the welfare of the children or, on the other side, so that a man does not refuse to pay maintenance because he is attempting to get back at his wife. It is the children who will suffer most. It will be very difficult to draw up formulas that get it right. For that reason, although this matter is urgent, I suggest that to allow only from now until the end of November for submissions to be made flies in the face of what has to be done. There are many groups in the community which have looked at this problem and which have prepared papers. They now need to look at this problem in the light of what is before us and within the guidelines of what the Government has invited them to address themselves to. The question of access has been mentioned. Nobody would suggest that access and maintenance should be tied together, but we cannot prepare any formula for the payment of maintenance and ignore the fact that access is frequently withheld and is used in a vindictive manner. There is no doubt that that is often the case. While addressing the question of maintenance one must look at the arrangements that can be made for access to children in some of the very difficult cases which presently are before the courts. The Government has set out in paragraph 3 of the tabling statement the issues on which views are particularly sought. I think it is a pity that in that there has been no reference to taking into account the capacity of a custodial parent to pay. There are instances where the custodial parent has a better capacity to pay than the non-custodial parent. I would not want anyone to think that because it is the non-custodial parent's maintenance that is particularly being addressed that that should be ignored. It is referred to in passing under item (c) as to whether the custodial parent's financial circumstances should be considered and if so how. The present Act requires a court assessing maintenance to take into account the needs of the children and the capacity of parents to pay. Of course, the needs of the children still must be very much up front when we start considering contributions to the support of the children from each of the parents. We have to have a formula which takes into account the fact that at different ages children have different needs and demands. We have to have a formula which is capable, while not being abused, of being adjusted to meet these different matters. There is a great deal more that could be said. It is an important report. Senator WALTERS(Tasmania)(3.35) —The reason for this discussion paper, `Child Support', is that in 1975 this Senate passed the Family Law Act that gave the judges, when deciding on maintenance, a requirement to take into account the eligibility of the supporting parent for the supporting parent's benefit. Judges are not entitled to ignore the fact that there is an eligibility, when deciding on matters of maintenance. In 1980 the then Fraser Government set up a joint select committee to review the Family Law Act. As a result of those deliberations we brought forward recommendations to cover the area of maintenance. Those recommendations were in the process of being legislated for when we went out of office and the Labor Government came in. Because the Labor Government did not take any action at all in this area, Senator Durack introduced a private member's Bill in which it was suggested that the requirement for a judge to take into account the eligibility for a supporting parent's benefit when deciding maintenance should be taken out of the Family Law Act. The Government voted against that. I do not know why because ever since it has been beating its breast and saying that it should not be in there. It has now had two committees look at it. As has already been stated, this Cabinet sub-committee on maintenance has reported and the Government has had this report for some time. We know that 40 per cent of maintenance is not paid in full. We know that those who refuse to pay maintenance say they refuse to pay for a number of reasons. Some of these reasons have already been mentioned by Senator Reid. On matters of access they say: `If I'm not given access that has been attributed to me by a judge-the judge said I must have it-and I have not been able to get access easily from the mother looking after the children, I refuse to pay the maintenance'. This place cannot legislate for human behaviour. We have never been able to legislate to make parents responsible for their children. If they decide that they are not going to be responsible for their children we should make some effort, and we can make it easier for the law to place the responsibility where it should be placed, that is, on both parents. I hope that the discussion paper will be distributed widely. It is important that people who are affected by this discussion paper be able to put their views to the Government. I hope that as a result of this discussion paper we will be able to work out the most appropriate way of gathering maintenance. Many suggestions are floating around the community that maintenance should be gathered either through the Department of Social Security or through the Australian Taxation Office. It is essential that we have that input by people who are affected in this area. I certainly hope that we will not go on and on, and that the Government will not linger in deciding this issue. It is imperative that something be done very quickly. Debate resumed from 14 October, on motion by Senator Powell: That the Senate take note of the paper. Senator GILES(Western Australia)(3.41) —I am glad to have the opportunity to return to the report of the Better Health Commission which came before us two or three days ago, at which point none of us had had an opportunity to grasp the magnitude of the work reported or the significance of the report. I expect that I am being charitable to Senator Sheil when I refer to his contribution on that occasion. I suspect that he looked very briefly at the report, took one small portion quite out of context and found that small portion, concerning specific targets to be established for the reduction of injury in Australia by the year 2000, to be a nonsense and a subject of levity, ridicule and trivialisation. This does the report and its authors a very serious injustice. I draw attention to the fact that in sections 11.5 and 11.6 the report summarises for the very first time in Australia a composite picture of the nature and magnitude of the injury burden. I quote: This investigation highlights two major factors: The need for adequate resources to be devoted to injury control, including premature death resulting from injury, which affects a substantial proportion of the population; and the need for a national centre for injury, epidemiology and prevention. No detailed data covering the total spectrum of injury, including its severity, magnitude and cause, exist. From that beginning, the injury task force goes on to identify what is injury and then comes to the extent of the injury burden in Australia. There is no nonsense or trivia about this. It is a matter of very great concern. The report states: Although there is a dearth of recent national data . . . the data that are available indicate that each year there are approximately 7600 deaths, 300 000 hospital admissions, 2 million bed-days, and 10 million medical treatments as a result of injury. It is estimated that the total economic burden of injury in Australia is approximately $11 000 million. During this discussion the report goes on to summarise the recommendations of the injury task force. This is where the totally legitimate concept of targets is introduced. The World Health Organisation's program of health for all by the year 2000 contains implicitly the concept of targeting. It is a cause of great satisfaction to me that our Department of Health has so thoroughly produced a blueprint of this nature. To go once again to the specifics which Senator Sheil found so amusing, I refer to the report, which says there is evidence, for example, that proper rules for safety can almost eliminate pool drownings of babies as a cause of death. Therefore, being realistic the report does not say that pool drownings can be completely eliminated in the next year or so. The report proposes that the following would be realistic: A 90 per cent reduction in pool drownings of children under 2 years of age by the year 2000; a 95 per cent reduction in pool drownings in all children under 12 years of age by the year 2000. If we look further we might be able to say that the state of the wisdom of the world would be enough to eliminate 100 per cent of pool drownings by the middle of the next century. These targets are followed in the report by a set of perfectly legitimate and valid strategies for achieving them. I simply wanted to put on record that this report is full of excellent statements of this nature, statements which are realistic, which go to the heart of the questions and which should be seriously studied by everybody with an interest in the issue. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator KILGARIFF(Northern Territory)(3.46) —I will speak briefly to the report `Looking Forward to Better Health'. I refer to chapter 12, `Health Problems of Groups at Additional Risk', particularly the part which refers to the health of Aborigines. When one looks at the pessimistic view taken in the report one can only believe that there will be no improvement in Aboriginal health in the future. The submission from the Department of Aboriginal Affairs points out that the history of the Aboriginal people is one of conquest, dispossession, dispersion and oppression. It continues along those lines. One wonders where on earth we are going on this very important subject. To measure the magnitude of the poor health of Aboriginal people we could look at the grave-yards, child care, hospitals, emergency services and homes for aged people. Then perhaps the magnitude of the problem before the nation can be appreciated to some degree. We have a very real responsibility to improve the health of Aborigines. This is not to say that something is not being done. In the field, in hospitals and in so many other areas there are many dedicated people but at the same time much has not been done that must be done. The Better Health Commission report states: The Commission recommends that its proposed national `Community Development Fund' be especially applied to groups that have specific health concerns. This is one of the aspects of Aboriginal health that concerns me because the report says that money in the form of a community development fund will help the problems. For quite a long time I have been talking about the money spent on Aboriginals. It involves an incredible amount. Just the budget for the Department of Aboriginal Affairs is over $300m, I believe. If one adds up all the funds in the various other Federal government departments, the activities in the States and so on, in my estimation-it is very difficult to assess because governments do not know what they spend in association with each other-there would be well over $600m a year spent on Aborigines. What is being gained? That is what concerns me. It seems that the achievement is to say: `We spend $600m on Aboriginal people'. But it should be seen how this money is spent because if money and services were better utilised there could be more inroads made into Aboriginal health. Between 1,000 and 1,200 organisations are funded supposedly for the benefit of Aboriginal people. Many of us who live in Aboriginal areas and, for that matter, honourable senators from other States, would know that a lot of money is ill spent and is not getting down to Aboriginal people at the nitty gritty. It is a very big regret of mine that money is being ill spent. Money which is required for better Aboriginal health services is not getting down to those people. Time is against me already, so I am unable to talk about child mortality and various other aspects of Aboriginal health. Perhaps at some other time I will have more time to do so. If the Australian Government and the Australian people wish to bring about better Aboriginal health they should consider the money that is being ill spent now, whether by the Department of Aboriginal Affairs or elsewhere. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator PETER BAUME(New South Wales)(3.51) —I wish to address some remarks to the part of the Better Health Commission report which refers specifically to the health problems caused in Australia by tobacco. I wish to relate those remarks to some actions by Qantas Airways Ltd which are not in keeping with efforts that have been made in this country over some years to make the Australian public aware of the dangers of cigarette smoking. I have in my possession-I think I obtained it from you, Mr Acting Deputy President, at an Estimates committee hearing-an empty packet of cigarettes containing the words: `Warning-Smoking is a Health Hazard'. You will know, Mr Acting Deputy President, as I know, that every packet of cigarettes sold in this country, in the States or the Territories, is required to carry a health warning. There are moves to change the health warnings on cigarette packets. I became aware that Qantas Airways on its flights sells packets of cigarettes which do not have that health warning. I have in my possession now a packet of Benson and Hedges cigarettes which carries on its side the notation `Specially packed for Qantas' and which contains no health warning or statement that smoking is a health hazard. I have another packet of cigarettes, Peter Styvesant filters, also carrying the note `Specially packed for Qantas' and also containing no health warning whatsoever. These cigarettes were purchased by an acquaintance of mine on a Qantas flight. Not only do those cigarette packets have no warning at all, but also there is some other relationship between Qantas and the cigarette companies. I draw the Senate's attention to the fact that I am holding a shopping bag containing on one side the Qantas logo and, on the other side, an advertisement for Marlboro cigarettes. Senator Vigor —Which was tax deductible. Senator PETER BAUME —As Senator Vigor says, it was probably a tax deductible exercise. So we are probably paying for some of this. I took the opportunity at a hearing of Estimates Committee F on 18 September to address some questions to officers of the Department of Aviation in relation to the unmarked cigarette packets and the shopping bag. I have subsequently learned, by the way, that the Peter Stuyvesant cigarettes, whose packets are without the health warning, are produced in Australia at the Phillip Morris factory in Moorabbin, Victoria. There is no question: They are not manufactured in India and brought on to the aircraft; they are manufactured in Moorabbin, in Victoria. The cigarette companies do this as a direct attempt to avoid having to obey the law which requires health warnings on packets. During the Estimates, I addressed questions to a Mr Potter from the Department of Aviation. I have some sympathy for Mr Potter, who had to try to cope with all the questions. A number of questions were referred to Qantas Airways for answer. I might say that I always try to fly Qantas. I will continue so to do. Qantas is my preferred airline. However, I would like Qantas not only to obey the law of the land in relation to cigarette smoking but also the spirit of the law of the land. The spirit of the law in this country is that cigarette packets will contain information for the use of consumers so that they can become aware that smoking is harmful to health, a fact which surveys show up to 40 per cent of smokers do not know, even today. The questions I put to Qantas were as to how Qantas explained certain matters, whether it felt it had a civic duty of corporate citizenship, whether it regarded its action as being outside the spirit of Australian law, what its relationship was with the cigarette companies and so on. I have now received through Estimates Committee F a letter from the Secretary advising me that Qantas Airways is refusing to answer the questions put to it at the Estimates Committee hearing and that it has referred these matters to its lawyers. The response states: Qantas is involved in investigating questions of law with the Department of Health. A response will be forwarded as soon as it becomes available. I find that highly unsatisfactory. We are concerned with better health for Australians. The diminution of smoking is the single greatest public health measure we could institute today to the benefit of Australians. Qantas Airways is not playing its part. It is clearly breaching the spirit of the regulations which apply in this country. When questioned it chooses not to answer by hiding behind some legal stratagem. Senator REID(Australian Capital Territory)(3.56) —We are debating a report entitled `Looking Forward to Better Health' by the Better Health Commission. The many and varied contributions to date highlight the many areas in which preventive medicine is important and that perhaps it should have a much higher profile. The area I specifically want to address relates to women. I hope that we will be able to say that from now on younger women can look forward to better health than has been the case for many women until now. I refer particularly to a problem which affects women more than men, osteoporosis, referred to in an article I read recently as `the quiet lady killer'. The reason I suggest that younger women ought to be able to look forward to better health is that now much more is known about his disease from the point of view of getting more exercise, not going on crash diets, maintaining one's calcium intake and being aware of the sorts of foods which contain calcium such as broccoli and red salmon which can help to increase the calcium content in the body, thereby helping to counteract the effect of osteoporosis. Osteoporosis undoubtedly gradually happens to every woman, from about the age of 35 onwards. The report says that medical practitioners could be a major resource in preventing disease, particularly diseases which are caused mainly by specific behaviours or lifestyles. I hope that all doctors who have women patients over the age of 35 or so, particularly around the age of 50, will not just treat them for the things they ask about but also, on occasions, say to them: `What are you doing about the problem of defeating osteoporosis and not becoming another victim?'. Many older women in our community will become victims of and suffer from the consequences of osteoporosis. Victims of osteoporosis are in hospitals and nursing homes now. It is a debilitating disease. It is distressing and should be unnecessary in the future. It is certainly very costly to hospitalise the many women who suffer from broken bones because they have this disease. I hope that the medical profession will accept a very high degree of responsibility to see that its women patients are made aware of the causes of osteoporosis and the ways in which they can help themselves not to become victims of it. It is a matter of diet. Other things can and need to be done. No doubt the disease will not be eliminated completely, but we can make significant inroads if there is publicity, if people talk about it and if women go to their doctors and ask about it. It is certainly frequently written about in women's magazines. If a woman's doctor says that it does not matter or that he or she does not know about it, the woman should go and find another doctor who will take the matter seriously. One's old age will undoubtedly be of a much better quality if one knows that one has done everything one can to avoid this disease. It is certainly possible. I have referred briefly to only one matter that is raised in this report. It highlights the need for preventive medicine, not just by doctors but by all of us. This is an area I regard as particularly important. I hope that gradually there will be more and more publicity so that the women of the future are free of osteoporosis. Question resolved in the affirmative. Consideration resumed from 14 October, on motion by Senator Kilgariff: That the Senate take note of the paper. Question resolved in the affirmative. Debate resumed from 14 October, on motion by Senator Powell: That the Senate take note of the paper. Senator POWELL(Victoria)(4.00) —I commend this report to the Senate. In speaking to the report, I wish to draw attention to the section headed `Study of Agricultural Co-operatives'. In February 1985 a working party on agricultural co-operatives was formed and its report was submitted to the Australian Agricultural Council with the following proposals: (a) the establishment of an Agricultural Co-operative Service; (b) enactment of uniform co-operative legislation; (c) a review of the taxation legislation and its effect on the operation of co-operatives; (d) collection of uniform statistics on co-operatives; and (e) specific research into aspects of co-operative operation. I am concerned that the Australian Agricultural Council did not endorse the working party report but merely released it as a discussion document. I believe this represents an extraordinarily short-sighted attitude on behalf of the Agricultural Council. Given the current problems of viability being experienced by many rural people and the need for restructuring in the primary industry sector, co-operatives would surely represent an alternative economic unit, both for those facing survival problems now and for others who might wish to establish themselves in a rural industry but who lack substantial capital base in going in on their own. I draw attention to a recent report on co-operatives prepared for the Victorian Government called `The Co-operative Way'. This report came to the Victorian Government from a ministerial advisory committee on co-operation which was set up in 1984. That report defines the co-operative philosophy as stated by the International Co-operative Alliance as follows: The common element at all times has been that co-operation at its best aims at something beyond promotion of the interests of the individual members who compose a co-operative at any time. Its object is rather to promote the progress and welfare of humanity. It is this aim that makes a co-operative society something different from an ordinary economic enterprise and justifies it being tested, not simply from the standpoint of its business efficiency, but also from the standpoint of its contribution to the moral and social values which elevate human life above the merely material and animal. This report to the Victorian Government also noted that co-operatives play an important part and could be a viable alternative to the agra-business firms which are making a heavy impact, forcing farmers to accept less for their produce as these giant firms increasingly monopolise agricultural markets. Further, Victoria today produces about 67 per cent of Australia's milk, which is almost all processed co-operatively. Co-operatives could play a crucial role in that they would ensure that farmers retain control over their produce. I think we can even look beyond Australia to the Mondragon co-operative enterprise in the Basque region of Spain where both rural and urban enterprises are undertaken in a co-operative way. Overall it seems to me that there is considerable potential for co-operatives in development in the rural sector, but, as the report says, future worker and food co-operative development are awaiting decisions from government. I hope that the Agricultural Council will look at the Victorian report and support its working party recommendations. Finally, also from the report but on a different matter, as today is World Food Day, I simply take a minute to express concern at the resolution of the Council to oppose the Economic Community's ban on the use of growth hormones and to deplore the increasing and extended use of that process in Australian agriculture. Senator VIGOR(South Australia)(4.05) —I commend to the Senate the report of the 124th meeting of the Australian Agricultural Council in Adelaide. One of the points that I wish to address is that, as set out on pages 8 and 9 of the report, world-wide, developing countries are enduring an economic crisis of massive proportions. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Order! Time has expired, Senator. Senator VIGOR —I seek leave to continue my remarks on the next day of general business. Leave granted; debate adjourned. Debate resumed from 14 October, on motion by Senator Puplick: That the Senate take note of the paper. Senator KILGARIFF(Northern Territory) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 14 October, on motion by Senator Archer: That the Senate take note of the paper. Senator ARCHER(Tasmania) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 14 October, on motion by Senator Peter Baume: That the Senate take note of the paper. Senator VANSTONE(South Australia) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MICHAEL BAUME(New South Wales)(4.06) —I move: That the Senate, noting Australia's rising inflation, increasing unemployment, worsening balance of payments crisis, record interest rates and declining investment- (a) deplores the confusion created by misleading and contradictory statements made by the Treasurer (Mr Keating) on the state of the Australian economy and calls on the Federal Government to: (i) reduce the record spending budgeted for this year, (ii) restructure the industrial relations system as recommended by the Federal Opposition, (iii) reduce the heavy burden of Government regulation, and (iv) abandon its damaging anti-business taxes; and (b) condemns the Treasurer for trying to paper over these defects by reverting to his old habit of falsely talking-up the economy. Yesterday the Treasurer (Mr Keating) stood on the front steps of this place and said: `Gilt, gilt, gilt'. He was spelling it with an `i'. In fact, he spelt it wrongly. It is `guilt, guilt, guilt' on the Treasurer's part, relating to his guilt in misleading the people of Australia and, it may well be, misleading people overseas about the consequences of his own actions in playing such a large part in generating a very difficult economic environment for Australia. Let us look at how serious that environment is. We hear a lot about comments from overseas about Australia. When the Treasurer was talking about `gilt, gilt, gilt' and how much money could have been thrust upon him by overseas people had he only wanted it, his pockets were already full with the wooden spoon he was given during the week for being the world's second worst Treasurer. Let us look at what Salomon Brothers Inc., the world's leading international bond market people from the United States of America, said about the apparent strengthening of the Australian dollar. It said this: The shift in sentiment appears to be related to the willingness of the Australian authorities to maintain a high interest rate policy for a longer period than financial markets had anticipated, although the recent economic indicators suggest that the Australian economy may be slipping into a recession. What it is saying there quite simply is that the Australian authorities-the Australian Government-is artificially holding up interest rates, damaging the housing sector and hitting people who are borrowers, simply to push up the Australian dollar and to hold it up there. Salomon Brothers further said: It is widely believed that the Government has set a floor of US$0.60/A$ for the currency and that rates will eventually be relaxed as the currency continues to appreciate. I stress `the Government has set a floor'. It further said: In the near term, the Government will be constrained by upcoming current account and inflation statistics. These data are expected to show a continued large deficit on the current account in September- of course, that has happened now- and October and a pickup of inflation in the third quarter of 1986 to 8.5% . . . So there is a clear recognition from overseas that things in Australia are far from fine. The Treasurer apparently endorses the comments of Moody's Investor Services Inc. in Moody's Sovereign Credit Report, which predicted continuing high inflation, unemployment rises and current account imbalances for the current financial year. It said that structural rigidities in the labour system will constrain economic prospects into the 1990s. It said that short term interest rates will remain in the 14 to 18 per cent range, which is among the highest in the Organisation for Economic Co-operation and Development. It said that the economy will slow sharply in 1986, that escalating debt servicing charges will cancel out a large part of the trade gains from the depreciating currency and that the flow of long term funds into Australia is likely to slow as investors show a wariness about Australia's external debt situation. In addition, Moody's described the Australian Labor Party-Australian Council of Trade Unions accord as being on shaky ground and declared that institutionalised wage inflation is a main cause of Australia's high inflation rates relative to its major trading partners. It said that with Australia's strong trade union movement there is limited scope for removing inefficiencies and rigidities and that Australia's international competitive position will continue to be undermined by this structural phenomenon. Moody's forecast that Australia's unemployment rate will average 8.3 per cent in 1986, and given the outcome of the first nine months this implies a projection that unemployment will rise to above 9 per cent before the end of this year. Moody's predicted the Australia's external debt to gross domestic product ratio, which is a measure of our external imbalance, will continue to rise through the next few years before stabilising around 1990. This, of course, is in sharp contrast with what Mr Keating told an investment seminar in London only last week when he said that the debt burden would stabilise in the not too distant future. Moody's also warned of factionalism within the ALP between Hawke's free market centrists and the Party's socialist left wing and referred to the trade union movement as an albatross. It is worth noting what Moody's had to say because the Treasurer has now endorsed and accepted Moody's assessment. He has been trumpeting that all over the place. Let us see what has happened as a result of the Treasurer's own actions. He is now saying that the economy is on track and that the Government has the right policy settings. He is saying all the same things that he was saying before April's extraordinary reversal. Remember, everything was going wonderfully then; there were no problems. In fact, he was encouraging Australians to borrow overseas, at enormous risk as it now turns out, in order to proceed with investment. He was criticising those people who did not do so. It was his confidence and his misleading of many Australians which caused them to go heavily into debt on foreign exchange markets. As a consequence many of them are in severe financial difficulties as a result of even further devaluations. Once again the Treasurer is giving the impression that everything is all right. The things he is saying now are as meaningless, as inconsequential, as misleading, as damaging and as dangerous as those very same words were prior to his banana republic statement of April-May. This Treasurer has no concern for the consequences of his comments other than the seeking of short term political gain. What is really happening in Australia? Let us look at the rising inflation. The annual rate at the moment is 8.4 per cent, compared with the OECD rate of 2.2 per cent. Our rate is something like four times as bad as that of our major trading partners overseas. To my knowledge, that is the worst ever inflation ratio that Australia has had. Of course this is a result of the incredible activities of the world's second worst Treasurer. We have increasing unemployment. The rate currently is 8.4 per cent, the worst for 15 months, and it is rising toward 9 per cent. We have a worsening balance of payments crisis with an annual rate of something like $17 billion. That means that Australia is going bad at the rate of about $32,000 a minute. That is the rate at which we are going into debt because of the Government's incompetence and incapacity to regulate and effectively run this economy. Senator Crichton-Browne —We have lost $300,000 since you started speaking. Senator MICHAEL BAUME —I like the point. We have lost $300,000 since I started speaking and by the time this debate concludes, how many millions will we have lost? We have record interest rates. It is incredible to hear Senator Walsh still trying to pretend that, because on an overnight market once in 1982 a couple of people got caught in trading and had to cover themselves suddenly and unexpectedly, the momentary rate that applied that day reflects a genuine interest rate. This sort of phoney argument is just intolerable. Everybody knows that Australia is now suffering the worst real interest rates in its post-war history. At the moment these record interest rates are three times Japan's, they are 50 per cent worse than those of the United States, they are double West Germany's and they are one-third worse than those of the United Kingdom. Yet this Government appears to be quite happy to listen to Senator Walsh misleading the Australian people about the state of interest rates in Australia. What about economic growth? I do not know whether honourable senators are aware that Dr Barry Hughes, who is the Treasurer's adviser, was recently in Washington. It was reported that while he was there he made some comments about the Budget forecast of a 0.5 per cent increase in domestically generated product. That is a pretty appalling rate anyway. It was cut back because of the Government's belated recognition that it had overheated the economy. The 0.5 per cent which appears in the Budget apparently has now been revised according to Dr Hughes. No one has bothered to tell this Parliament. The Government would not tell the Senate. Senator Walsh would like to keep us in the dark. He has no interest in relating the truth or the reality to this chamber. He is endeavouring to keep this quiet. We heard the news from New York that the rate has been revised to zero. Judging by a report from a Government official, the Treasurer's economic adviser, this year's growth will be reduced from 0.5 to nil. Dr Hughes is hoping that this will not mean a reduction of the hoped for 2 1/4 per cent rise in gross domestic product over the full year because the turnaround in our external account will make up the difference. In other words, imports will be reduced and exports will be increased in order to give us that 2 1/4 per cent growth. That is not going to happen. That is not talking the economy down; that is talking reality to try to make certain that people are not so misled that they are exposed to grievous risk, as they were exposed by the Treasurer in the past and as he is trying to expose them again now through this incredible and irresponsible talk that he goes on with. The reality is that even if there is a 2 1/4 per cent economic growth rate this year that will lead to a significant rise in unemployment. Australia needs an increase of about 3 per cent in economic growth simply to maintain the present unemployment level. So we are certain to have a massive and continuing increase in unemployment even if this Budget forecast is achieved. But what Dr Hughes has admitted in Washington, and what the Government has not yet admitted, puts an immense additional pressure on the balance of payments situation. So far we see no evidence of this big increase in the external account. On the contrary, it is far worse. We have had enormous growth in external debt. It was $86 billion in June and it will be $100 billion or so by December. The current account deficit for the first quarter is $4.2 billion. Let us see how the improvement, the turnaround in our external account that we keep being promised by the Government and its apparatchiks, is going. So far in this financial year exports are down by 3 per cent and imports are up by 4 per cent. This is providing, of course, a record deficit on merchandise trade of $1.5 billion. We have never in our history had such a trade deficit. Yet the Treasurer is still talking this economy up. We have throughout a whole range of activities-in the housing industry, for example-continuing disasters. We have had an 11 per cent fall in dwelling approvals in August. The Managing Director of the Housing Industry Association of Australia has said that the private rental market is in a parlous state and unless firm action is taken to alleviate the rental crisis, many thousands of low income families will be pushed even further into housing poverty. We see across a whole range of activities the consequences of this Government's extraordinary economic policies, which all stem back to one dominant factor-that is, its total refusal to cut its own spending. We have heard all about the so-called spending cuts. How realistic are they? This Government will increase its spending by $4.8 billion this year. That is an increase of 6.9 per cent. It is a record increase even after one takes inflation into account. It is that massive increase in government spending that has taken place, not simply this year but over the previous three years, which has put the Australian economy into this intolerable situation. That is why the Opposition has a very sound, very sensible and very practical approach to resolving these problems. That is why the Opposition is calling on the Government to reduce the record spending budgeted for this year, and to restructure the industrial relations system, as recommended by the Opposition, and which has been pointed out by almost every overseas commentator as being a major reason for Australia's present economic disaster. We certainly want to reduce the heavy burden of government regulation, which is one of the factors in the expected fall of one per cent in investment in Australia this year. Quite frankly, that expected fall of one per cent, I believe, massively understates what the real fall will be. We are saying we should reduce the heavy burden of government regulation to allow investment to proceed. Of course, it would also have a better chance to proceed if the Government were not forced to use monetary policy-in other words, high interest rates-to try to cover up its other massive mistakes. Of course, we seek to abandon its damaging anti-business taxes. Income taxes overall are going up by 11 per cent to a record 25.5 per cent of gross domestic product this year. The Government keeps pretending that there will be tax cuts. We will deal with that later today when we debate another matter. But the reality is that under this Government the economy is in a crisis situation. We would have had problems anyway because of the terms of trade. But because of this Government's actions it is in crisis. To make matters worse, the Treasurer has in the past, and is now, talking the economy up and is trying to paper over his mistakes and his Government's mistakes, thus putting more and more Australians at risk. Senator SIDDONS(Victoria)(4.24) —I rise to speak very briefly on Senator Michael Baume's motion. I know that many honourable senators wish to speak about the important issues that have been raised in this motion. I was interested in that part of the motion which calls on the Federal Government to restructure the industrial relations system-a very topical question at the moment. Only yesterday the Australian Council of Trade Unions was negotiating with the Government on the so-called two-tier system of wage fixing, the inevitable fact that the accord mark 2 is now defunct and a new wage fixing system must necessarily come into being. I believe that industrial relations and wage fixing are the critical issues today. As I have heard Opposition senators speak from time to time, it seems to me to be very clear that the essential difference they are advocating, as far as the management of the economy is concerned, between themselves and the Government, is that they have a different approach to industrial relations in general and wage fixing in particular. I believe that this debate could very profitably focus on this important and topical issue. I want to throw in a few thought starters and indicate, in general terms, the Australian Democrats' position on wage fixing and industrial relations. In fact, next week we will, I hope, introduce a Bill which sets out in great detail our ideas on wage fixing. It is to be called a collective agreements Bill. The title, I think, indicates the fact that the Democrats believe there is a place for direct bargaining, for collective agreements, in the wage fixing system. To that degree we agree with the Opposition. But I am not absolutely certain what the Opposition is advocating, so I will say what I believe the Opposition's position is on direct negotiation and collective agreements. As I understand it, it is advocating that the employer and the employee negotiate directly on an agreement and that that negotiation should take place, if necessary, in isolation from the trade union movement. In other words, it is advocating that the work force and management should negotiate directly and, if necessary, bypass the trade union movement. It is also saying that they should be allowed to negotiate on both above award rates of pay and below award rates of pay; in other words, they should be allowed to negotiate the wage rates downwards. The Democrats are in fundamental disagreement with the Opposition on those two matters. We see no way in which one can bypass the trade union movement in this country. I was a member of the Senate Select Committee on Industrial Relations Legislation. I must say that the Committee was brilliantly chaired by Senator Harradine. We heard evidence from almost every important trade union in the country. We heard evidence from every employer organisation in the country, and from the ACTU. It is my very firm belief, as it is of my Party, that there is no way that one can disband our system of conciliation and arbitration, short of a revolution. The system is ingrained in our society. To confront it would be to precipitate enormous industrial upheaval in this country. Our suggestion is at variance with what the Opposition is advocating. We believe that there is a place for collective agreements, but only on the basis of above award payments. We believe that the parties concerned should get together and negotiate on a broad range of issues-not only on wage rates, but also on issues such as profit sharing, employee participation, working conditions and so forth. If there are to be negotiations on broad issues, it is better for the two parties-management and the work force-to negotiate directly, but in association with the unions. If one tries to bypass the unions they will demand their pound of flesh sooner or later. Any agreement on a company by company basis must involve the trade union movement. The better approach is to say: `We will negotiate directly with the trade unions and the workers on an agreement, but that agreement must be ratified by a secret ballot of all the work force'. The problem with the large number of trade unions in this country is very real. In an enterprise there can be six, seven or up to 10 trade unions represented. The solution to that problem is to embrace the concept of a principal negotiating union. The unions within an enterprise get together and decide which is the dominant union, and appoint that union as the chief negotiating union. It then negotiates directly with management and arrives at an agreement which is set down in writing for a period of 12 months, two years or three years, and that agreement should be enforceable in our civil courts. The essential point I wish to stress is this. The basic problem with Australia's industrial relations is that we try to use two systems concurrently. We have our system of centralised wage fixing and at the same time we negotiate directly with companies. This was common before the accord. Unions put a log of claims in front of enterprises and say: `We want to negotiate on that log of claims and if we do not get a satisfactory answer we will call a strike'. So management is used to direct bargaining. But the essential problem is that we use both systems together. We use centralised wage fixing-we have national wage cases-and we also allow unions at the same time to negotiate directly. The Democrats' concept under our collective agreements Bill is to voluntarily disassociate the two systems. If the unions and management wish to negotiate directly they are allowed to do so within the legislative framework which would make an agreement legally binding in the civil courts. However, if they opt for that alternative they are not bound by the centralised wage fixing system. So we use one system or the other; not both together. If centralised wage fixing or collective bargaining were an option collective agreements would become very popular. Both systems could work without impinging on each other. If we were left to the parties concerned to decide which system they wished to adopt I believe we would find that collective agreements would become popular. Certainly they would become popular in companies that had export contracts to meet and companies that had specific problems. They would become popular with small business. They could arrive at an agreement, in association with the trade unions, setting down conditions for a period of years. They would be isolated from the centralised conciliation and arbitration wage fixing. I hope that other speakers in this debate will make clear what the Opposition is advocating in its new industrial relations initiative. I would like them to address the problems of how they hope to negotiate awards downwards. I would like them to address the problem of how they hope to negotiate in isolation from the trade union movement. These are critical and central questions and I believe that the Opposition must address them. It must make it clear whether it is advocating a confrontationist approach in industrial relations, whether it thinks it can bypass trade unions and get away with it. I do not think that we can and I do not think that is the way to go. It will lead to enormous industrial upheaval. Trade unions are a part of life in this country; they are a necessary part of our conciliation and arbitration system. It is written into our Constitution. So let us accept the trade union movement and say: `We want to co-operate. But let us have two systems-a centralised system and a system of direct negotiation, both of which involve the trade unions'. One involves the conciliation and arbitration system and the other the collective agreements system which would be subject to new legislation and would establish a legislative framework to make written agreements between the work force and management legally binding. It is probably no surprise to the Senate that there is no way that agreements can be made legally binding today outside the conciliation and arbitration system. So we need new legislation and with that I believe that we could set up two systems running together both of which were viable and would meet very pressing needs in specified industries. Senator SHORT(Victoria)(4.36) —I join my colleagues today in first of all congratulating Senator Michael Baume on bringing forward this motion. I speak in support of him and my other colleagues in deploring the confusion that has been created by the misleading and contradictory statements on the state of the Australian economy by the Treasurer (Mr Keating) who is trying to paper over the defects in the economy by reverting to his old habit of falsely talking up the economy and in doing so ignoring completely the parlous state into which the policies of this Government have put the Australian economy. It is a parlous state which is evident around us through rising inflation, increasing unemployment, a worsening balance of payments crisis, record interest rates in real terms, declining investment, declining consumption in Australia and declining economic growth all adding up to increasing unemployment. It is an extraordinary situation into which the Treasurer has put our nation and himself. Only two years ago, against everyone's expectations and the reality of the situation, Treasurer Keating was given an award by the influential magazine Euromoney as Finance Minister of the Year. Senator Siddons —The Mexican Treasurer got the award the year before. Senator SHORT —How he ever got that award I do not know. Senator Siddons says that it is probably because he followed Mexico. In the space of two short years he almost got an even more significant award. Yesterday he was nudged out by a short half head as the worst Treasurer in the world. He was second in line for the wooden spoon award for the man who has done the most harm to his economy. He ran in a notable field. The choice for the wooden spoon included Yugoslavia, Morocco, Australia and Malaysia. In the end, the winner of the wooden spoon award was the finance Minister for Egypt. The reason for this remarkable turnaround in the world's perception of the Treasurer, and through him, very sadly, the Australian economy, is the achievements that have been seen as a result of the economic policies of this country over the last two or three years and this Government's very conscious and very deliberate economic policy decisions for which the Treasurer has been the prime spokesman. The dollar has plunged more than 50 per cent since Mr Keating received his Finance Minister of the Year award. Anyone who moves around the financial communities either here or overseas must get disgusted as I do with the fact that our dollar and our balance of payments have become the butt of endless jokes. We have seen for the first time in our history a reduction in our credit rating. We have seen our foreign debt mushrooming at an extraordinary rate. By June next year at the latest, it will reach a figure of $100 billion, yet only three years ago it was less than $30 billion. As this has happened, the Treasurer has become even more contradictory and oscillatory in his attempts either to talk down or to talk up the Australian economy. Only on 20 March this year the Treasurer is reported in Hansard as saying of the Government's economic strategy: The strategy has been entirely appropriate. Again, on the same day, he is reported as saying: The fact is that the Government's policy settings this year have been totally correct. Only three weeks later, on 3 April, when addressing a conference on equity financing, the Treasurer said: We are convinced that the policy mix which has underpinned our achievement-particularly the policies of the prices and incomes accord and our overall approach to fiscal and monetary policy-are the right mix for Australia. Within a month of that, the Treasurer made his famous, or rather infamous, `banana republic' statement. Suddenly, within the space of three or four weeks, the Treasurer had turned his views on the Australian economy, its prospects, and its situation, both present and future, on their head, and he had accused the Australian economy of running the risk of rushing down the road to banana republicanism. But within six days of that, he was back on the track of trying to talk the economy up again. On 20 May, six days after his banana republic statement, he said: . . . what we have is an entirely healthy economy. He also said: Let me make the point that the Australian economy has been entirely robust. It is no wonder that the financial markets and the observers of the Australian economic scene-the people both within Australia and overseas whose decisions on investment and other financial matters determine the fate of this country in terms of economic growth, employment, inflation, interest rates, the value of the dollar, and so on-are greatly confused. The Treasurer obviously is. His Government also is obviously confused as to just what is the real state of the economy. If one looks at the situation in any depth at all, one can see that there are very considerable problems. I can only endorse entirely the comment by Terry McCrann in today's Melbourne Age when he said: . . . Mr Keating has embarked on the dangerous course of talking up policy and the dollar to attract the necessary capital inflow to cover the current account deficit. That is something that can be done for a period. One can paper over the cracks. But the longer one does that, the more difficult one makes the long term situation and the more difficult it becomes to take the necessary measures to correct that situation. Just let us have a look at the real state of the economy, at some of the basic facts concerning the Australian economy today. Interest rates, in real terms, are at their highest level in our history. The level of unemployment is on the rise again. There is a very significant decline in the rate of economic growth in this country, including the rate of investment and the rate of consumption. Indeed, at a recent conference in Washington the Treasurer's private economic adviser, Dr Barry Hughes, was reported as having said that the Budget forecast of half a per cent real growth in domestically generated product for 1986-87, a key statistic on which the 1986-87 Budget was produced, has now been revised down to zero. That has some very significant implications for our balance of payments situation, for an even further slowdown in total gross domestic product growth, for an on-flow negative effect on investment and for an inevitable surge in unemployment. These things are happening not, as the Treasurer would have us believe, because of matters outside the control of Australian governments or the Australian economy. They are essentially the result of economic policies deliberately put in place by this Government. Those polices have been lamentable, disgraceful and very costly to this nation in several key respects. I know that even the Minister for Finance, Senator Walsh, has tried very hard within his own ranks to get spending under control. However, he missed; he failed lamentably. The Government as a whole, in terms of its spending, has produced a rate of increase which is entirely beyond the capacity of this economy to pay for. As a result of that, we have taxation which is now at record levels. We have borrowings at dangerously high levels, both domestically and overseas. All of these results have flowed directly from the Government's wanton, spendthrift policy in terms of the expenditure side of the revenue. I wish to quote from an excellent article by an acute observer of the Australian scene, David Hale, who, after examining the Australian economy just a few months ago, wrote: When the financial history of the 1980s is written, Australia's large offshore borrowing may prove to be a case study of how large budget deficits interacted with financial deregulation and surplus global liquidity to produce a dangerous and ultimately destabilising rise in external indebtedness. That in turn all stems from the essential problem that this Government has faced, and that is its total inability to control expenditure to a level that is within the capacity of governments, and more importantly, the nation to pay. The price that this has imposed in terms of the whole range of activities in this country is enormous. They are the sorts of things that financial markets are looking at. They are the sorts of things that are making people disbelieve the ability of the Treasurer of this nation to produce policies which are in line with the needs of this nation. It does the Treasurer no credit at all to quote selectively, to paint up a picture of the Australian economy which is totally out of line with reality. If this picture is not changed in terms of the policy direction of this Government, as the highest spending and highest taxing government Australia has ever known, the Treasurer's premonitions of months ago will prove much more accurate than his wantonly deliberate and misleading statements of recent days. Senator WATSON(Tasmania)(4.49) —In July 1985 the trade weighted index of currencies stood at 68.5. A year later it was valued at 49.8. This is a depreciation of 28 per cent in 12 months. Against the yen-the currency of our major trading partner, Japan-the fall has been considerably more. In fact, Australia's fall from respect has paralleled that of the fall from grace of the Treasurer (Mr Keating), because a little over two years ago he was stamped as one of the best Treasurers in the world. As my colleague Senator Short said, he was narrowly beaten for the wooden spoon just recently. In New South Wales students studying for the Higher School Certificate are being advised in the special school feature in the Telegraph, written by experts in their field, that the J-curve is deemed to be a likely question in the economics exam. The interesting feature of the article on that is that if they want to pass this exam they need to recognise problems in the J-curve phenomena: Like the Scarlet Pimpernel `the cursed Keating seeks it here, seeks it there . . .' as so much of government policy hinges on the upturn of the J or an improvement in the ballooning current account deficit. The politically thorny path of high interest rates to support the declining $A and to slow down the import `gobbling' recovery was expected to be a short one: one abandoned as Australian competitiveness and the current account deficit improved. How did those experts sum it up? They said: The J-curve was a `get-out-bet' in the last race and regrettably it's still running. This expertly written article just shows how out of touch the Treasurer of Australia really is. At the moment even he would not pass the HSC economics examination. Let us get off the subject of the Treasurer and look at some of the problems besetting Australia. The Australian economy remains riddled with so many regulations and other restraints to competition that even if all tariffs and quotas, my dry friends, were removed there would be no guarantee that improved efficiency would result, because in Australia we have a high level of bureaucratic interference, an inflexible labour market and a lack of research and development, and all of these contribute to Australia's declining performance. Australia has a high reliance on imports of capital and intermediate goods. This means that when the value of the dollar goes down, firms' cost structures move up. Competitiveness is eroded as a result of currency depreciation. One of the best yardsticks with which to gauge the state of the economy is the ratio of foreign debt servicing costs to the value of our exports of goods and services. Five years ago debt servicing costs-this was in the time of that so-called dreadful Prime Minister, Mr Fraser-were only 8 per cent of our export income. The figure now, under the Hawke Government, this so-called great achieving Government, in 1985-86, is likely to be 36 per cent, and for 1986-87, 39 per cent. This almost puts us in the same category as the Philippines, Morocco and Nigeria. We recently entertained the Indian Prime Minister. How does India perform in relation to this ratio? It stands at 15.5 per cent. Where is Australia? It stands at 36 per cent-India is less than half. Where does Canada stand? It stands at 16.6 per cent. Japan stands at 9.7 per cent and the Netherlands at 3.9 per cent. This is testimony to the poor state of the Australian economy and it has all happened in the time of this Hawke Labor Government. We are really in trouble. Senator Michael Baume —It will be 42 per cent soon; 42 per cent this year. Senator WATSON —And it is growing, yes, Senator Baume. Australia must have a dramatic fall in interest rates before we can expect an upturn in our domestic economy. Those in the Government and in the Australian Council of Trade Unions who continually urge business to invest more are obviously unaware that business will do so only when the after tax real rate of return on investments exceeds the available return on low risk financial assets. But what is the best that the ACTU can say? It says that business has gone on strike in Australia. What a pathetic attitude. It is vital that Australia increase its domestic savings and raise its export performance. Australia will see no improvements in its economic position until the terms of trade can be turned around. The Government is blaming low commodity prices as the sins for all its neglect. The slight improvement in the value of the Australian dollar in the past few weeks could prove to be a problem to us unless there is a coinciding improvement in the terms of trade. In fact, our balance of payments problems could worsen as imports become cheaper and exports become more expensive. Australia is the only developed country whose exports have failed to grow as a percentage of gross domestic product over the last decade. Senator Walsh —Whose fault is that? Senator WATSON —That is right; it is your responsibility. Our traditionally strong mining and farming export sector can no longer be relied on to support the economy. Falling prices and stronger competition dictate that Australia must improve the quality, marketing and packaging of its products. In spite of all the Government's rhetoric about encouraging exports and the growth of Australian industry, it has set out systematically to destroy business incentiveness. How has it done this? It has established abhorrent taxation regimes such as the capital gains tax, the fringe benefits tax, negative gearing and increases in company tax rates. There are millions of dollars in Hong Kong and all around Asia that people want to bring into productive investment in Australia, but this has been prevented by the high tax rates applicable to companies. The money we are getting is going into all those speculative areas; the very things the Government condemns all the time, but its policies are pushing in the wrong direction. It is encouraging the wrong sort of growth and investment. The Government claimed earlier this year that investment would be strong next year as firms, particularly those in manufacturing and mining, move to take advantage of the depreciation of our currency and induce improvements in our international competitiveness. I must say that the prospect of this occurring at this stage seems remarkably remote. In fact that is what the kids were told when they were studying for their HSC if they wished to pass the economics exam. The Government's economic policies, centred on the prices and incomes accord, have provided significantly higher inflation, higher wage and interest rates than have been provided in our major trading partners. This is a major problem which we are faced with because the accord has not proved to be the big success that the Government claims it has been. In fact Moody's Investor Services Inc., which recently downgraded our credit rating, saw the inflexibility of the prices and incomes accord as not being able to cope with the critical trade problems we are facing. In order to run the country efficiently Australia must have a more flexible system, particularly in the wages area, so that when the terms of trade improve the country can take advantage of that. The Australian Conciliation and Arbitration Commission must be made to acknowledge that our terms of trade deterioration must be taken into serious consideration in future national wage decisions. We seem to have a preoccupation with entitlements rather than with ability to pay. Restraint with equity was the explicit basis of the accord. However, since the accord unions have gone from strength to strength. What is the ordinary person's attitude to this? Opinion polls have shown a steady drop in public approval of union activity in recent years. In fact a recent poll showed that eight out of 10 Australians believe that the unions have far too much power. I wish to compliment my colleague, Senator Michael Baume on his motion. I support the motion 100 per cent. Senator CRICHTON-BROWNE(Western Australia)(5.01) —I support the notice of motion moved by Senator Michael Baume, which reads: That the Senate noting Australia's rising inflation, increasing unemployment, worsening balance of payments crisis, record interest rates and declining investment- (a) deplores the confusion created by misleading and contradictory statements made by the Treasurer (Mr Keating) on the state of the Australian economy and calls on the Federal Government to: (i) reduce the record spending budgeted for this year, (ii) restructure the industrial relations system as recommended by the Federal Opposition, (iii) reduce the heavy burden of Government regulation, and (iv) abandon its damaging anti-business taxes; and (b) condemns the Treasurer for trying to paper over these defects by reverting to his old habit of falsely talking-up the economy. The Australian Labor Party Government could not have come to office in a more favourable world economic climate. Real gross national product in the United States of America grew by 6.6 per cent in 1983-84. Over the previous year it increased by 4.4 per cent. Real GNP grew by 4.3 per cent and then by 4.8 per cent over the same period in Japan, and by 4.5 per cent and 4 per cent in the seven major Organisation for Economic Co-operation and Development countries. The growth in the major economies of the world, countries which form our major trading partners, provided an enormous boost to the Australian economy. At the same time the drought broke and during that year Australia's total agricultural production increased by 24.7 per cent, equivalent to a windfall to the economy of something of the order of $4 billion. Together, these factors contributed to major increases in export earnings. In the two years from 1982-83 and 1984-85 our export earnings increased by 41 per cent. The Treasurer (Mr Keating) at that time saw himself as the world's greatest Treasurer. This Government took all the credit, but the situation was that there was little more than fortuitous circumstances at that time. The Government was riding on the crest of a wave with no long term vision for the future of Australians. While it lasted it kept on riding. The Government spent and spent, increasing outlays by 15.7 per cent and 12.9 per cent in its first two years of office. In an increasingly competitive world market the Government tolerated an industrial relations system which was and still is hopelessly inappropriate for modern international trading conditions. In the name of consensus the Government effectively handed over the economy to the trade union movement with, in the first place, accord mark 1 and accord mark 2, and in the second place with the National Taxation Summit farce which gave, as we now know, the Australian community the capital gains tax and the fringe benefits tax. Fortuitous economic circumstances do not last forever and there comes a time when a government must do that which it was elected to do. Talk no longer works. Policies are needed and hard decisions are required. Decisions have to be made. Governments have to govern. The Hawke Government has betrayed this trust. It has not governed. It has let the Australian people down, it is sending the economy into ruin, and it is gambling with the future of our children as it does so. We now have an annual rate of inflation of 8.4 per cent which is more than three times that of the inflation rate of our major trading partners. The unemployment rate is now at 8.4 per cent and this is higher than all but five months of the 86 months of the Fraser Government. Presently, there are 634,200 unemployed, and 31,800 young people between the ages of 15 and 19 are presently looking for work. This is six weeks before more young people will come on to the job market. In fact, more than one in five of the people between the ages of 15 and 19 can expect to stay on the dole under this Government. Australia's balance of payments deficit is still hopelessly out of control. We spent $13,713m more than we earned last financial year. This is the largest current account deficit in the industrialised world on a per capita basis. Other than the United States, to my knowledge, in aggregate terms it is the highest. In September, the balance of payments deficit was $1,450m taking the total for the three months to the end of September to $4,263m. The Prime Minister (Mr Hawke) tells us that he is reasonably satisfied with the current account figures. The deficit for the three months to September this year is 18.6 per cent higher than the deficit for the three months to September 1985. If the Prime Minister is `reasonably satisfied' with the balance of payments deficit increasing by more than 18 per cent over the past 12 months, I wonder what is his idea of a problem. Australia's interest rates are the highest since the Great Depression. Overdraft rates start at around 19 per cent and rise into the low 20 per cent range depending upon the customer. Finance company interest rates vary between 20 per cent and 24 per cent for the purchase of some goods. These rates of interest are a direct result of the Government holding the dollar at a higher rate than the market would otherwise have given it. It is a reflection of the $2 billion of taxpayers' money that has been sent to the money markets to prop up the dollar at the modest level at which it presently flounders. The government has also had to maintain the exchange rate at a higher level than the market would have set. If it falls any further it will, of course, spark further increases in the consumer price index. This Government does not have the courage to tell the trade union movement that there will be a discounting effect on wages if the consumer price index is to be compensated throughout the economy. Again, this Government has shirked its responsibility and fails to govern in a responsible way. The need to finance our current account deficit has been met, by and large, by borrowings. Our high domestic interest rates have, however, forced many borrowers to find sources of funds overseas. At the end of June 1983 Australia's gross external debt was $35,646m or 13.7 per cent of gross domestic product. At December 1985 it had risen to $74,589m. Treasury estimates in the Budget Papers now put the figure at $86m to the end of June 1986, or 37 per cent of GDP. Australia's debt has more than doubled in the 3 1/2 years that this Government has been in office. Some is private debt. However an increasing percentage is public debt. A significant proportion is now public debt. In June 1983, the first year of this Government, the public sector was responsible for, by Australian standards, a modest 14 per cent of the net external debt. At the end of 1985 it was responsible for 34 per cent of the net external debt. To a very large extent this is due to the need for the Government to borrow to finance its spending programs. The high interest rates, the lack of confidence in the economy and the Government's taxes have all contributed to a fall in real investment in Australia. Private new capital spending fell by 19.1 per cent in seasonally adjusted constant dollar terms in the June quarter. This is the highest fall in this Government's term of office. It is the highest fall that I can remember in many years. Gross domestic product has either fallen or stayed constant for three quarters in a row. That, by definition, is a recession; that, by this Government's definition, is a recession. The response of the Prime Minister, of the Treasurer, and of the Government, has done nothing more than try to talk the economy around. Earlier this year the Treasurer was maintaining that the economy was running to plan-whatever his nefarious plan might be. On 2 March 1986 Mr Keating said: The economy has been doing very, very well. On 11 March of this year he said: The fact is that the policy mix at the moment is entirely and appropriately balanced. The Prime Minister also contributed to this euphoria. At a Press conference on 19 February 1986 he said: This is a government which has shown its capacity to produce an overall economic strategy which produced the best results for the economy. At the National Press Club on 5 March 1986 the Prime Minister said: We don't have to come to the Australian people and say: `Trust us', we will do it, because we have got the runs on the board. That is the way we have operated successfully to this point. We will do it again in the preparation of the 1986-87 Budget. Yet within the space of two months the economy had changed from being on course to being on the course towards becoming a banana republic. Now, only several months after these statements, the Treasurer is claiming that there is a new-found air of confidence in the Australian financial markets and that the Budget strategy is again working. I wonder who the Treasurer imagines he is fooling. Does he really believe that the average Australian, in an economy of $230,000m, imagines that in one month all the structural faults inherent in a banana republic can be rectified as a result of a Budget? The Treasurer certainly has not fooled the business community or those contemplating investing. This talking rather than taking decisions which are necessary to put Australia back on the road to prosperity is why the country is in the trouble that it is in. Rather than being the world's greatest Treasurer as he was but two years ago, Mr Keating is now judged by the people who gave him that rather illustrious title-Euromoney-as being in a photo-finish for the worst Treasurer in the world. The policies which the Government has pursued have not improved the economic situation but have contributed to its destruction. Those policies were formulated in the boom years. There has been no attempt to prepare Australia for years when things are not as easy as they have been. This dereliction of duty has placed Australia in its present situation. Worse still, stubborn persistence with this extravagant style of government means that this Government has not learned from its mistakes. It has continued to compound its errors. The most crucial need in Australia today is to make existing industrial components competitive and to provide an economic climate in which there will be investment in new productive and competitive industries. The policies of the present Government have not provided this. This Government is a high spending, high taxing government. In 1984-85, in a more prosperous economic climate, Commonwealth spending was equal to 30.4 per cent of GDP. That was at the time when we were high-rolling, when we set our sails for future strong growth. We were running well, on top of the waves. Now we are in a climate equivalent to `a state of war', to quote the Prime Minister. What harsh decisions has the Government made? It plans to spend the equivalent of 29.4 per cent of GDP. Its decision to rectify the state of the economy will reduce the sector of GDP related to government spending by one pathetic per cent. The sacrifices which have been made have not been made by harsh decisions of government but by taxpayers. Taxes have increased by 11.1 per cent, equal to 25.5 per cent of GDP. Australians, on average, will now be working for almost three days out of ten for the Commonwealth Government. We work from the beginning of the year until about 17 May each year at the present rate to pay for government spending alone. My time has almost expired. As long as this Government continues in pursuit of its present economic policies and continues in its headlong fashion as a large taxing, large spending government with no cognisance of the reality of economic signals we can expect the economy to continue to deteriorate. No short term measures will achieve a turnaround in the economy. Structural rigidities in our export commodities will not be varied in the short term, so we can expect the economy to continue to deteriorate because this Government is neither competent, confident nor capable of changing the economy to one which is compatible with the Australian lifestyle. Senator MESSNER(South Australia)(5.15) —I strongly support the motion by my colleague Senator Michael Baume today which very correctly and in a timely way points out the difficulties in the Australian economy, draws attention to the real problems being faced by the Australian people and points to a line of action that should be undertaken by this Government to restore some sanity to the Government's control of the economy. The situation has been outlined very well by my colleagues who have told us about the problems in the economy. Let us focus on the great and critical weakness of this Government's period of office of the last 3 1/2 years. Essentially, it boils down to the fact that this Government has believed in borrowing, borrowing, borrowing on world markets to blow up the economy, to create a situation in which it believes that it can get away with an argument that it has actually done something to improve the economy. All the Government has done, as with any balloon with a pump attached, is blow the economy up more and more so that when it finally explodes we will all be covered in confetti-bits of rubbish-which will be deflated valuable dollars. Eventually they will come back as borrowings which our children and grandchildren will have to repay out of the future earnings of this nation. That is what this Government has done. It has taken over a country with a modest borrowing program totalling about $35 billion in 1983 and built it up to a level now of something like $100 billion. The drag on our Budget of some $7 billion or $8 billion a year in terms of interest servicing and charges is now costing us more than the education budget, the defence vote and the health vote. This is becoming an extremely heavy burden upon the taxpayers. Who is responsible for all this? It is quite critical to understand where the problem really lies. If ever we had an example of where the real blame lies it was on our television screens last night when the Treasurer (Mr Keating) was interviewed outside this building and said that he could have come home from Europe in the last couple of days with his pockets stuffed full of money because everyone wants to lend money to Australia. He said that he could bring back another $20 billion for Australians to borrow. Senator Michael Baume —That is worse than Rex Connor. Senator MESSNER —Of course, Rex Connor wanted only $4 billion. This man wants to bring in $20 billion. When one thinks about what the trade union movement has as its national development plan-confiscating superannuation funds' money to put into a compulsory government investment scheme-we have a very clear idea of the way this Government thinks about such matters. Let us come back to the borrowing of $20 billion that the Treasurer claims he could raise immediately for the benefit of Australians. What is he really telling us? He is saying that there is no hope of getting the balance of payments into any kind of order and that we must be prepared to continue to borrow and borrow, $1.4 billion, every month, to keep the economy afloat and pay for the deficit on our current account. Senator Michael Baume —And do it through high interest rates. Senator MESSNER —As Senator Baume rightly points out, it will have the inevitable result of creating higher and higher levels of interest rates. We all know what that means. It will be harder for individuals to buy their homes and vehicles-big ticket items in particular-and also just to stay alive. More importantly, it makes it extremely more difficult for business to be able to borrow and invest in new job opportunities. That is the fundamental and critical problem that we all face; that we do not create enough jobs to employ our young people, let alone to reduce significantly the unemployment level which is running at 8.5 per cent, or there- abouts. So this Treasurer is committed to a future policy of borrowing more and more, of putting this country into hock with overseas bankers, more and more. The Treasurer seems to enjoy getting around the world and talking to bankers and no doubt enjoying their hospitality. One does not know whether those people are getting tax deductions for that entertainment, but they would not be doing so in Australia because the Treasurer has wiped out those tax deductions. The Treasurer seems to enjoy hobnobbing with the bankers of this world. He seems to be currying favour with them at the expense of the Australian taxpayer. He wants to borrow more and more to keep us out of trouble. This is in absolute contrast to the lies we have been told by this Treasurer over quite a number of months. We were told that everything was getting better and better until we had the famous statement in May that we were on the verge of becoming a banana republic. The Treasurer must have had a rush of blood to the head. The truth suddenly came home to him. He realised something the Opposition had realised for a long time. When we were being told how terrific everything was the Opposition was being lampooned and criticised up hill and down dale by the Treasurer. We were called sleazebags, frauds, immoral cheats, blackguards, pigs, mugs-you name it; he used anything he could lay his tongue to. We were told that all our arguments were crazy. Yet eventually the Treasurer had to admit that the banana republic was around the corner. That sudden change on the part of the Treasurer has so unsettled business confidence in this country and undermined even more the position of investors in this country. The Treasurer's actions, his ill-thought-out, hasty, ill-considered, shoot-from-the-hip-type statements are doing so much damage to the Australian economy. The interest withholding tax announced on 1 July was designed somehow to get at the borrowings from overseas. The Treasurer realised that when the dollar crashed to 57c within a month, he had to do something drastic about it. So before he had even introduced the legislation, he immediately announced that he was not going ahead with it. This kind of nonsense and unsettling behaviour by one of the leading Ministers in this Labor Government is creating so much damage to the Australian economy. I believe that it is time Mr Keating resigned from his position as Treasurer and handed his position over to somebody else who might be in a more stable frame of mind and be able to control the affairs of this nation a little better than he is able to do. Worst of all is the fact that this Government relies so much on raising the levels of taxation higher and higher in order to fund its spending. It is now taking the greatest share of gross domestic product in tax of any Federal government in history. This is in direct contravention of the supposedly firm, solid, sincere commitment given by the Prime Minister (Mr Hawke) at the last election in 1984 when he committed this Labor Government not to increase taxation on the Australian people above the level of the previous year. Yet at the first opportunity he had, in both the 1985 and 1986 Budgets, he imposed a higher level of taxation on all of us. It is the highest level we have ever seen and poses a tremendous problem for the Opposition when it becomes the government in 18 months time. It will have to scale back the huge burden of taxation on the Australian people. I believe that we owe Senator Michael Baume a debt of gratitude, as do the Australian community and the Senate, for bringing forward this most important motion which has my wholehearted support and that of my colleagues. Senator VIGOR(South Australia)(5.23) —I share Senator Michael Baume's concern for the future of Australia's economy. I support his diagnosis of rising inflation, increasing unemployment, a worsening balance of payments crisis, record interest rates and declining investment, but I do not support all his solutions. Australia, like most developing countries, faces a crisis of similar proportions to that faced by Germany before the 1939 war. The crisis is not local. It is caused by a massive breakdown of the world's economic system and its trade. It affects both developing countries and developed nations, but in different ways, depending on their current state of industrialisation. Unemployment is a general international problem caused by the increasing automation of industrial processes which a lack of planning enhances. The problem is also shared by Australia. Technology and wealth have concentrated in the hands of corporations which cross national boundaries and which owe allegiance to no people and to no government. The maximisation of profits and tax avoidance world-wide seem to be the main drives of such corporations. One of our problems is that we are not collecting tax from the right people. I am talking about taxation rorts such as transfer pricing, which neither the Government nor the Opposition is willing to attack. It is extremely important that we follow-up this rort in Australia. Successive reports of the Commissioner of Taxation over the years have dealt with this rort. A new Division 13 was inserted in the Tax Act to replace section 137 to counter most effectively avoidance of Australian tax through what is commonly referred to as transfer pricing or profit shifting arrangements. That was mentioned in the 19821-82 report. A much bigger section in the 1982-83 report deals with this rort. It states: These practices have been given a great deal of prominence in recent years, both in Australia and overseas, largely as a result of the growth of international economic activity and the increasing use of tax havens . . . Some industries more than others possess all or most of the classical features generally found to be associated with profit shifting. The report said that the Taxation Office was trying to co-operate with the United States Internal Revenue Service for industry-wide exchanges of information associated with the aluminium and oil industries. In the 1983-84 report, an even bigger section deals with transfer pricing. There was still inaction by the Government. The report stated: This innovation- which was the monitoring of international business transactions- followed increasing concern over the incidence and potential use of transfer pricing and other arrangements to shift profits abroad or to eliminate taxation in Australia . . . The other main role of the new branch- which was being introduced into the Taxation Office- is to examine selected foreign investment proposals and certain exchange control applications to discover taxation implications which may be detrimental to the Australian revenue. Research has shown that profit shifting is more prevalent in particular industries. . . . Cases being examined at 30 June 1984 were drawn from seven industries and further studies were being conducted into others . . . More accurate criteria are being developed for selecting potential audit cases. In 1986, all of that has been dropped. We have now completely dropped the proposals of 1983-84. The 1984-85 report states that heavier penalties are needed. It states: Treaties issued to companies in six industries with total adjustments to taxable incomes of $183m and total increases in tax payable of $80m. Some of these adjustments are under challenge. In excess of 90 cases have been identified for examination of transfer pricing practices. This seems to be only the tip of the iceberg. The report continues: Increased computer resources will be required to cope with the expansion of audit activity in the international arena. Industry studies have been undertaken in respect of 10 industries to date and industry-wide audits have commenced in those industries identified as having features conducive to profit shifting practices. In 1986 the Treasurer reversed all of these types of foreign controls and all of the controls which would allow these tax rorts to be detected and closed down. What has he done? He has left our own farmers and small businessmen completely open to major taxation problems. The real solutions are not those solutions proposed by Senator Michael Baume. What we need to do is introduce a few large scale government backed projects, such as the Snowy Mountains scheme, which we had previously, and later the European Launcher Development Organisation Program-the ELDO program-at Woomera, which brought money into the country. However, we also need to support technology and to buy Australian-particularly the Department of Defence and Telecom Australia. The Australian Government is not properly supporting any of these major technological developments. I believe that the 150 per cent tax deductions which have been introduced and the grants for industry research and development are only very small attempts to overcome our problems. In the meantime, the Government continues to kill the geese that lay the golden eggs, such as the Overseas Telecommunications Commission and Telecom and their dependent high technology industries. There is no respite in sight. The Treasurer is the chief executioner. I believe that the Treasurer has left himself no alternative but to try to paper over all of the defects and to talk up the economy, because he seems to be devoid of any other sensible or reasonable solutions. Senator WALTERS(Tasmania)(5.32) —I thank Senator Vigor for allowing me the remaining time. We heard from Senator Cook today that anyone who criticises the Government's economic policies and what this Government has done to the economy is nothing short of a traitor. We are told that we are saboteurs. The Minister for Trade, Mr Dawkins, has said of members of the New Right, who are pointing out that the Government's economic policy has been a great disaster to this country, that they are traitors. Mr Hawke has called them troglo- dytes. Any criticism of the Government or of its economic policies is met with threats and intimidation. This is a sad state for a democracy. The balance of payments figures that came out yesterday show that for the September quarter the deficit was $4.263 billion-the highest on record. For the first quarter of 1986-87 it is the highest on record. Senator Michael Baume —It is $32,000 a minute. Senator WALTERS —It is increasing by $32,000 a minute, I am told by Senator Michael Baume. The current account deficit went up 19 per cent on the same quarter last year. Yet we are told by Senator Cook that we must not talk about it, and that if we do, we are saboteurs. The Treasurer, Mr Keating, has gone further. Indeed, he leaked a foreign document in the House of Representatives. Today there is a report by the Australian Associated Press that the executives of Moody's Investor Services Inc. are furious at the premature leak of its confidential assessment of the Australian political climate. Moody's was shocked today to learn that the Treasurer had read a copy of its report to the Parliament. The Moody's spokesman stressed that the political analysis of Australia was not part of last month's credit review but was a separate document still in the draft stages. The time available to me has expired. I have no hesitation at all in supporting the motion moved by Senator Michael Baume. Question put: That the motion (Senator Michael Baume's) be agreed to. The Senate divided. (The Deputy President-Senator D. J. Hamer) Ayes . . . . . . . . . . . 28 Noes . . . . . . . . . . . 39 —— Majority . . . . . . . . . 11 —— Alston, R. K. R. MacGibbon, D. J. Archer, B. R. Messner, A. J. Baume, Michael Newman, J. M. Bjelke-Petersen, F. I. Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Reid, M. E. Carrick, Sir John Sheil, G. Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Kilgariff, B. F. (Teller) Watson, J. O. W. Lewis, A. W. R. Withers, R. G. Aulich, T. McIntosh, G. D. (Teller)Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. 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. Evans, Gareth Ryan, S. M. Foreman, D. J. Sanders, N. K. Georges, G. Sibraa, K. W. Gietzelt, A. T. Siddons, J. R. Giles, P. J. Tate, M. C. Grimes, D. J. Vigor, D. B. Haines, J. Walsh, P. A. Harradine, B. Zakharov, A. O. Jones, G. N. Hill, R. Bolkus, N. Knowles, S. C. Colston, N. A. Jessop, D. S. Button, J. N. Baume, Peter McClelland, Douglas Question so resolved in the negative. The DEPUTY PRESIDENT —The time allotted under Sessional Orders for consideration of General Business having expired, the Senate will proceed to the further consideration of Government Business. Debate resumed. Senator ZAKHAROV(Victoria)(5.42) —Before the debate was interrupted earlier I was speaking about the benefits which will be available to young people through the student assistance legislation we are debating today. A further benefit will be that Austudy will also be available to homeless students under the age of 16 years but above the minimum school leaving age, which in my State, Victoria, is 15 years. Eligibility for such students to receive assistance will be determined under the same conditions as for the young homeless allowance, another major reform which this Government initiated earlier this year. This legislation is an integral part of the Labor Government's scheme of financial support for young people. From 1988 there will be three basic sets of age-related rates of Commonwealth support for young people over 16 years. First, there will be a common basic rate for 16- and 17-year-olds whether they are in secondary education, tertiary education or unemployed and the rate will be indexed for movements in the consumer price index. A relatively small number of eligible 16- and 17-year-olds will continue to receive a living away from home allowance and secondary and tertiary students in that age group will be able to qualify for an independent allowance under identical conditions. There will be a common rate for unemployed 18- to 20-year-olds, for students over the age of 18 years and for tertiary students living away from home. The unemployment benefit rate for 18- to 20-year-olds will subsequently be indexed annually and the student independent or living away from home rate will be made equal to the unemployment benefit. From 1989 there will be a common rate for secondary students 18 years and over and for tertiary students who live at home. The real value and relativity of these rates will be maintained by setting them at 63 per cent of the 18- to 20-year-old unemployment benefit rate from 1988. There has been a lot of comment in the Press and in the community in recent years about the retention rate of students, particularly secondary students. For example, in yesterday's Age Professor Aitkin, a professor of political science at the Australian National University, claimed that the proportion of the relevant age group enrolled in Year 12 is only about half the proportion enrolled in some other developed countries. This is certainly a cause for concern and this Government has done a great deal to address this problem in the last 3 1/2 years. Retention rates to Year 12 level have increased since Labor came to office, from 36.3 per cent in 1982-just before we came to office-to 46.5 per cent in 1985. That is an increase of over 10 percentage points. Of course many factors are involved in influencing retention rates but the financial assistance available to students in the lower socio-economic groups in particular is one of the most significant. In 1985 the Commonwealth Department of Education put out a summary report entitled `Patterns of Retention in Australian Government Schools', which states: Of those students receiving the SAS allowance, some 16 per cent considered the allowance was very important in their decision to return to school, 14 per cent indicated it was fairly important, 23 per cent said that it was slightly important, and 47 per cent said that the allowance was not important. Even though the scheme did not generally appear to be a strong influence on a decision to return to school, it did appear to be important for some groups of recipients. It was more important for recipients of lower socio-economic background and for students who at the end of Year 10 had not planned to return to school. I suspect that if the parents of those students had been asked they would have rated the importance of financial assistance even more highly. The report further states: Other things being equal, the higher the socio-economic level of the school population the higher the retention rate. I think it is reasonable to expect that increasing assistance to students of lower socio-economic background will have a marked effect on school retention rates. I return to my earlier point about the importance of the elimination, as far as possible, of the disincentives to remaining in education or training. My experience in working in schools has led me to believe that it is not possible or even desirable for all young people to remain in education to the end of the secondary level. There is a need for changes to training schemes in particular, changes which our Government is now addressing, before we reach a retention percentage level in the high 90s. Nor am I in favour of a form of educational compulsion that has been advocated recently by those who envisage raising the school leaving age to 18 years. I emphasise that there must be a real choice for students who have reached the age when they are no longer required by law to be at school. I now pay tribute to the schools and teachers that have expanded those choices through curriculum change, creative time-tabling, removal of sex discrimination, information and advice-provided particularly by school counsellors and careers teachers-and, perhaps most importantly, personal encouragement. None of these things can solve the problem of the student who, because of the financial resources of his parents, cannot afford to remain at school. Leaving school means at least obtaining unemployment benefit and at best obtaining a job, even if that job turns out to be not permanent or to offer a less satisfying future than the person would have wished. That problem has now been realistically addressed by this legislation. I appeal to schools, teachers, teacher organisations, parent organisations and departmental officials-who have improved their information giving and its timing over recent years-to give maximum publicity to this very positive contribution to education and so maximise the take-up rate of the allowance. The future of our young people and the future prosperity of the nation are dependent to a significant extent on access to quality education and training. I hope that State governments also will take steps to dovetail existing assistance schemes that they have in place with this legislation and that it will encourage those States which do not assist secondary students in this way at all at the moment to look to their needs. I am proud to have taken part in the prolonged discussions and consultations which have led to this major step forward for young people. Because I have participated in that process, I know it is a well researched initiative and its consequences have been foreseen as far as possible. This Bill rates very highly in the Budget initiatives, and I look forward to its implementation bringing major benefits to young people. Senator MACKLIN(Queensland)(5.50) —We are debating the Student Assistance Amendment Bill 1986. The Australian Democrats broadly support this Bill, particularly those parts which seek to streamline the current diverse systems of education and training allowance support which are being provided in Australia. The present arrangements, as other senators have said, have undoubtedly had undesirable effects. I refer particularly to the differences between education allowances and the unemployment benefit. I think there is a growing awareness-this Bill represents part of that awareness-that those anomalies must be overcome. I suppose we would all like them to be overcome immediately, but the reality is that they will be overcome progressively, provided that the shift that is now taking place-that shift occurs partly in this Bill-brings those various items in line with one another. This matter is, indeed, part of the general community debate at the moment, particularly with regard to the recent proposals by the Australian Council of Trade Unions for working for the unemployment benefit. I think we are addressing an area that has not been taken seriously in the past. Unfortunately, we have now moved into an area where, essentially, the debate is on the wrong foot. For nearly 10 years the Australian Democrats' policy with regard to youth has been that we believe that there ought to have been instituted at that time-we think it is even more urgent now-an education-work guarantee for young people, similar to that which is used in a number of other countries. After all, if we see our young people as being the emerging citizens of this country, as being those people who will carry this country forward, we have an obligation to them to give them an induction into the society which is not one of unemployment, which is not one of psychological destruction, and which is not one of no future to look forward to, but is one which in any way would give them security and the ability to partake in those things that this society so abundantly has to offer. That is what we have done until now. Seemingly, we have been willing to do it. The debate which is now taking place in the community about working for the unemployment benefit, I believe, approaches the issue from entirely the wrong direction. We should not be talking about the acceptance of unemployment for young people; rather, we should be talking about the fact that all young people should have a right to receive from this society, as they are being inducted into it, either education or work, or a combination of both. If one wants to raise the issue of cost, which is raised time and time again in this area, why cannot one count the costs on the other side, of the destruction of young people and the waste of talents to this society? Why must we count only the costs that we can grasp in our hand? We do not do that in other areas. What about the vigorous debate in the community concerning mining, and the cost that will be borne by the community if we leave minerals in the ground? Seemingly, it is all right for mining executives to harangue us time and again about those matters, but when one dares to raise the loss to this community of the talents of so many young people, that, seemingly, is not to be counted; it is not to be put on the ledger. The only things that are to be put on the ledger are the actual costs that are borne in dollar terms for education or the unemployment benefit. That seems to me to be an absurd type of debate. It wipes off as of no account the lives of those young people and what they have to offer us. It seems to me to be an incredible way of debating such a vital issue. Yet that is what is going on in our newspapers and in halls around Australia. It is being fermented and driven up by people who, after all, have a great deal of wealth, who have luxuries, who have all the good things that this community has to offer. To me, it is utterly disgusting that these people who have all of those good things have the audacity to lecture everybody else about young people who have nothing and who have none of those possibilities of looking forward into the future, of being able to enjoy those types of things. Yet they lecture those people about what they owe to the community. Those young people at that stage are owed something by the community. They are still at the stage of being formed. It is a cliche, but true, that they did not ask to be born. As parents and as a community we have a responsibility for those young people. That responsibility does not end when they reach 15 years of age. It ends when they are inducted into the community in such a way that they are given an opportunity of earning a living, contributing to the community and taking their share of the responsibility for this society. That is when it ceases. That is when they are on their own. Most parents do not cease to support their children just because they have reached the age of 18 or 21, or even because they have married. Most parents in Australia would still believe that they have a responsibility, that they are there to assist their children to the extent that they are able. So I do not think that our community in general should believe that just because a child reaches the age of 15 and, in most States, has reached the end of his compulsory schooling, somehow or other, miraculously, the community can now wash its hands, and that person can become unemployed, destroyed psychologically, and have no future to look forward to with equanimity; yet somehow, that is nothing to do with us. We are looking at the whole debate in the wrong way. The debate should be about what we owe to the community, not what those young people should or should not be doing in terms of the unemployment benefit. We have an obligation to them; we should fulfil our obligation; we have not been fulfilling our obligation. I hope we would see it as a natural course that every young person growing up in Australia would have educational opportunities, developmental opportunities, or work of a productive kind. If that were so, we would not need to have this rancorous and divisive debate about working for the unemployment benefit. I think that the more we concentrate on that angle, the less we will concentrate on the productive and effective side. We know, by studying other countries' mistakes-although we do not tend to learn terribly well from other countries' mistakes-that when one has endemic unemployment amongst people, it destroys their capacity for future employment. When those young people who have been out of work-the Northern Ireland experience certainly bears this out greatly-reach the stage of ever getting a job, they cannot keep it; not because they do not want to work, but because they have been destroyed inside. When we look at reforms in this area we should bear in mind where we want to go. We should hope that every one of these measures is a step towards that goal. I think this Bill ought to be judged in terms of how well it makes the step towards where we want to go. In itself it is a small step. But if it is not a step forward, we should not even take that step. As I say, I think it is a step forward in that it acknowledges that we need to bring together, at least in monetary terms, the benefits that are available-be they unemployment or education benefits. That is the first step and we have a long way to go, of course. This legislation deals only with the lower end of the spectrum and, even in the last Budget allowances in other areas were still getting further apart. This legislation is certainly only a small step forward but in as much as it is, it has our support. I also make the point that income support schemes of themselves do not necessarily make young people more eager to undertake non-compulsory education and training. For some reason that has not got home yet there is a difference between participation in education and training and mere retention. It is true that the Government's policies have increased retention. I would argue that they have not increased participation by anywhere near the same extent. I have no firm evidence for saying that because it is an item about which it is very difficult to get firm evidence. My evidence is only anecdotal in terms of talking to teachers, people in technical and further education and people at the work face, as it were, and who deal with young people. Time and again I keep hearing back from them that lots of people in our schools and educational institutions do not want to be there. They are making life hell for other people who are there and are making it very difficult for the teachers-the educators-to provide educational opportunities for those people who wish to partake of them. There is still a very large number of people in our schooling system who are merely being retained there; they are not participating. I am not criticising the Government for that. Ultimately, it is not something over which the Government can have much control. It can only make sure that its general social policies are consonant with its education policies because if its social policies are out of kilter with its education policies they will counteract them and work against them. In education many problems end up in the popular media as educational problems and they are nothing of the sort; they are social problems. They are problems which are still in our society. For example, malnutrition stops a lot of kids in early grades in primary school from being able to learn. That is not an educational problem and there is very little that most educational institutions are able to do about it although they are trying. Basically that is a social problem and the extent that problems exist comes down to the level of poverty in our society. The amount of assistance that is provided in this legislation is still inadequate to meet the declared purposes of overcoming financial disadvantage which forces children to seek unemployment benefits or to work when they have the talent for further education. I do not believe, although it is a start, that this legislation will do terribly much in that area. The major costs of retaining anybody within the education system are never those that the education system generates; they are simply the living costs, the major costs that have to be borne. The costs of housing, accommodation, transport and clothing are all far and away higher costs than any costs directly related to education such as costs for books, specific instruments and the like. If a family finds itself unable to support the child, pressure will not be on the child to stay at school, as much as the parents may like that, but rather for that child to seek some type of work so that he or she can bring some income into the family that is in difficulties. The Bill has a number of problems and I do not intend at this point to go through those I see in some of its clauses except to sketch in briefly the problem, as I see it, with regard to the way the Government has chosen to treat 16-year-olds and not adopt the non-compulsory schooling approach. The difficulty is borne out by the Bureau of Statistics figures with regard to 15-year-olds in years 11 and 12. If I can just run down the figures I think honourable senators will be able to see very clearly where the problem arose. However, I would not think that the Senate could take this type of approach easily. Let me give some figures for July which apply to Year 11 students. About 2.5 per cent of kids in Year 11 in Victoria were 15 years old on 1 July; in the Australian Capital Territory the figure is about three per cent; in New South Wales it is about 4 per cent; in Tasmania it is 9 per cent; in the Northern Territory it is 36 per cent; in Queensland it is 43 per cent; and in South Australia it is 54 per cent. Senator Teague —Western Australia? Senator MACKLIN —I thought I gave the figure for Western Australia. The figure for Western Australia is 43 per cent. This Bill seems to have been drawn up by people who live in the Australian Capital Territory, New South Wales or Victoria. However, the situation in other States in our federation is somewhat different. I admit that the education Ministers have agreed that children going to school as of last year will be aged 5 years, so this problem will solve itself in time, but that will be some time down the track. At the moment we have a lot of 15-year-olds in year 11. The Government has chosen to start paying the increased allowance to students aged 16 years to bring it into line with the unemployment benefit. As I have said, I think that is reasonable but the only thing we have to bring into line is the amounts. For some reason the Government has chosen to bring not only the amounts into line but also everything else. Since the unemployment benefit is paid to persons aged 16 the Government wants this allowance to be paid to people aged 16. The educational rationale for that does not mesh in any sense because the educational rationale is to make sure that students go from the compulsory year to the non-compulsory year. If we tell them that they will not get paid anything until they are 16-there are still quite a lot of 15-year-olds in year 12; I am not quite sure how they manage it-- Senator Teague —Some 2 or 3 per cent. Senator MACKLIN —In Australia the total number is quite small but some still manage to get there. For example, 136, 15-year-olds are still in the middle of year 12. They must be pretty precocious individuals but they have made it there. Overall 11,618 15-year-olds are in year 11. I would like the Minister for Education (Senator Ryan), when replying to the second reading debate, to give the projections of the percentage of kids who are likely to get these allowances. They are means tested; so not everybody will get them. We are looking at the percentage. Senator Teague —About a third. Senator MACKLIN —I would have thought something similar to the tertiary education assistance scheme would be appropriate because we are operating on roughly the same figures. So we would be looking at 22, 23, or 24 per cent. If it is a third, that would be a higher percentage. I can see that there are some reasons why it might be higher. I would be very interested if the Minister would give us those figures. But even so, 2,000 or 3,000 kids will not be getting any benefits in that first year, and that does not seem to me to be the type of arrangement that is required. There are a number of ways out of this problem. One is to combine the age and the non-compulsory schooling elements, because, oddly enough, the Government will be paying quite a number of people in grade 10 who attend school on a compulsory basis. Again, in this respect, there is a difference across Australia. Students in Western Australia have to complete the year they are in, although they may turn 15 during the year. In every other State and Territory a student can leave once he turns 15. However, the Government proposes to pay some people in grade 10 and not to pay people who are in grade 11. I would have thought that in terms of what we are attempting to do-that is, to encourage the transition to grades 11 and 12; not simply pay students to stay in grade 10, but to get them to go beyond the compulsory school years-we should make sure that anyone who goes into grades 11 and 12 and who falls within the framework in terms of means testing is assisted. In terms of the financial implications, possibly a very small number of students will be involved. Roughly 19 per cent of students fall into that category on an Australia-wide basis. On the other hand, about 15 per cent or so of 16-year-olds are in grade 10. In terms of the Government's rationale, I should have thought it made much more sense to pick up the 15-year-olds in grade 11 than the 16-year-olds in grade 10. I am quite happy to pay the 16-year-olds in grade 10 if the Government can find the money; but I think that in terms of any rationale, we would have to opt first of all for the 15-years-olds in grade 11 to get continuity of educational operations. We certainly should make sure that those people in the lower socio-economic structures are not, by the dint of not having the resources, forced out of school to seek a job on the employment market. The other matter which is the subject of the Opposition amendment is the way in which benefits are to be paid. Again, I would suggest that that proposal falls down exactly on the point I have raised. The Government, in seeking to bring the student benefits and the unemployment benefit together, has chosen to cover all topics. Quite frankly, the Opposition's amendment does not seem to me to be based on a great matter of principle. But it does raise an important point inasmuch as if one only brings together the amounts involved, it seems to me perfectly reasonable that this allowance should continue in terms of a schooling situation to be paid to parents or guardians. After all, in the vast majority of cases people at school are living at home. Of course, if they are not living at home they fall under the independent living allowance. If they are living at home-as are the vast bulk of school students-their parents pay for their accommodation, provide their food and clothes and so on. I would suggest that there is a difference between secondary schooling and tertiary education, even for children of the same age. There is a psychological difference. There is a difference in the way in which our society considers the matter. I do not see any reason for moving away from the present position of paying these allowances to parents or guardians, as is suggested in the Opposition's amendment. When we come to the tertiary sector-be that TAFE, in which case many of the students would be of the same age as the school students, or the colleges of advanced education or universities where the students, of course, would be of a higher age-the allowance would be paid directly to the students. I think the community has a general understanding of the difference between these students. At least one of the differences between secondary education and tertiary education is that those in tertiary education are treated in a much more independent vein. In fact, the whole educational system operates quite differently in a secondary school for a person of an identical age from the way in which TAFE operates. TAFE operates on the basis that a student coming into the system works independently. The obligation is placed on students to do the study. There is a lot of input from teachers in secondary schools in coaxing, urging and getting people to engage in work. So even the whole education system approaches students in a different fashion. It seems to me that society does also and, therefore, it would be appropriate that the Opposition's amendment should be supported on that basis. I think the rationale behind the Opposition's amendment flows from exactly the same thinking behind my amendment, and that is that there is no need to put education allowances and the unemployment benefit together except in money terms, because it is the amount of money that is causing the disincentives. I hope that at the Committee stage we shall be able to find out from the Government whether it has any other reasons for approaching the matter in this fashion. My amendment essentially disregards age. I think there is a mid-way between the position outlined in my amendment and the Government's position-that is, we could have both age and a non-compulsory schooling or non-compulsory course requirement. In other words, students of that age who are undertaking compulsory or non-compulsory schooling would be eligible for the allowance. That would pick up the 15-year-olds who are in grade 11. That would seem to me to be a reasonable compromise if the Government feels that in terms of the costs involved, which are absolutely minuscule in terms of the whole education budget, it cannot pick up the total amount. In recent years we have seen some significant changes in our whole economy impact on the education system, particularly the schooling system, in an extremely detrimental way. One need only talk to teachers to know that the problems that pupils are having relate to their perceptions of what is going on and what there futures are. This is greatly affecting their educational achievements. It seems to me that while messing around and making sure that the unemployment benefit and student allowances are considered together is a step forward, I do not think that this measure will appreciably alter the perception held by students-`Why work hard now if all that is going to happen after all of this hard work is that I will be unemployed?' That is the sort of thing that filters down. This is one of the major disincentives that have operated in the Aboriginal area. Apart from the other factors that operate in our society in regard to the employment of Aboriginals, we know that this sort of thinking has prevented many Aboriginal students from completing their studies. Not only Aboriginal students suffer from this disadvantage. Right across the board kids opt out. While they may be physically in a school, they are opting out, because they say: `No matter how hard I work, the quotas are on at the universities, and there are no jobs, so why bother?' They throw up their hands and give up before they reach their goals. So the psychological problem outside the schools has a far greater effect than the matters we are dealing with here. While we are putting some emphasis on these measures, I would not like people to think that I believe that in any way they will be responsible for a massive change in the psychology of how students approach their task. Their task is a very hard one in our society. Secondary school students are asked to work hours that would make any union official blush. They work the type of hours that we work in this place. They have to work in school. When they go home they have very little time to themselves if they are studying hard, and they have to work late into the night, sometimes for five days a week. Sometimes they also have to work at the weekends just to keep level. It is very important to realise that when we are looking at the induction of young people into our society through the education system, we have to give them hope. Therefore, the strength of the economy is a vital ingredient-probably more so than the amounts we are playing about with here. Senator TEAGUE(South Australia)(6.19) —The Student Assistance Act has operated for 13 years. This year, allowances payable under the Act will exceed $500m. The amending Bill which is before the Senate-the Student Assistance Amendment Bill 1986-seeks to extend the allowances payable under the Act to include secondary students. Until this time, the Act has provided for post-graduate awards and for tertiary allowances payable to students in universities, colleges of advanced education and technical and further education institutions. The Bill is only three pages long, and it establishes the principle of the extension to secondary students. Much of the debate so far-and to some extent I will be involved in this-is about the foreshadowed regulations that will bring in the provisions for Austudy that were announced at the time of the Budget. The Opposition welcomes the extension of the Student Assistance Act to secondary students and welcomes the principle that seeks to remove the disincentives from study, whether at the tertiary or secondary level, that have arisen in recent years because of the higher rate of payment to those receiving unemployment benefit compared with those receiving student allowances. The Opposition recognises the findings of the Beswick Report on Studies of Tertiary Student Finances, the Organisation for Economic Co-operation and Development review of youth policy in Australia and various papers from the Social Welfare Policy Secretariat, along with the work which has been done in various States and which has been put to our parties towards the concept of the youth allowances, towards the more sensible integration of education allowances, the family allowance, the unemployment benefit and training allowances; indeed any benefit that comes from the taxpayer in respect of young Australians after they have left school, including even at the interface when they are in the last couple of years of school. We welcome the principle of removing disincentives for those students who would be inclined to apply for the unemployment benefit because there is a greater financial benefit for them by doing so. But we are not happy about several matters. Senator Peter Baume has referred to them and Senator Macklin has spoken along very similar lines. There is general agreement, as I see it, on the concepts that we are putting forward in urging the Government to accept our amendments, particularly the one in relation to the operation of secondary allowances under the Austudy scheme. We see the goal of Austudy, as it relates to secondary students, as widening the participation of students in years 11 and 12. Our policies in opposition, as well as during the period of the Fraser Government, have sought to help the achievement of greater retention at the year 11 and year 12 level and every year that retention has increased. There has been a higher percentage every year for the last 12 years in the proportion of students who are in year 11 and year 12. We have noted that the introduction of secondary allowances has been a substantial help for parents who are paying for the education of their children or paying the costs of their accommodation while one or more of them undertakes year 11 and year 12 studies. I make one other general reference, and that is that there ought to be a wider range of school curricula, of school structures and of training possibilities for year 11 and year 12 students. Senator Peter Baume —Why did the Government abandon PEP, then? Senator TEAGUE —It is a great pity that the participation and equity program has been abandoned by the Government. I think it was ill-conceived in its abandonment but it was also not properly thought through in the way it was implemented, but it was certainly aimed at this important transition area. The whole idea of transition education remains an important one and it should not be seen as temporary. The interface between secondary and tertiary education should be seen as permanent. Six years ago the Senate Standing Committee on Education and the Arts conducted a national inquiry into the relationship between unemployment and education. One of the matters that have strangled the innovation that ought to have been more developed in Australia is the concept that the comprehensive school is some kind of unassail- able god, that all schools must be comprehensive. I believe a range of options at year 11 and year 12 ought to be available to students, and certainly one of the options must be a comprehensive school. I do not wish to encourage 14- and 15-year-old students to cut off their options; they should keep them as open as they can. But many do not want an academic finish to their secondary schooling. One model is the Port Macquarie vocational school which was developed five or six years ago and which has a marvellous record. A former primary school, conducted by the Catholic church, became redundant because the population of Port Macquarie grew so much that a new primary school was built. The century old building was then refurbished and organised as a year 10 and year 11 vocational school with a different lifestyle and organisation of the way in which students conducted themselves in the school and, of course, a different curriculum for the school. It was very much geared to the employment opportunities that were in the district of Port Macquarie. There are similar schools in other cities. For instance, there are technical schools in Melbourne that have survived the comprehensive onslaught when all the other schools, many of which had real qualities, were submerged within a comprehensive structure. Thankfully one or two survived and one in Melbourne continues to serve very well those who take its courses. In this achievement of higher retention rates at year 11 and year 12, I believe there ought to be encouragement from the Commonwealth towards more innovation, to a wider range of options that are mostly in the hands of the State governments, and for the way in which Year 11 and year 12 classes are structured. The Commonwealth training schemes are appropriately structured to take 16-, 17- and 18-year-olds and their training is geared directly towards employment. This range of options in the transition from secondary to tertiary education, I believe, can still be greatly extended. It is not only through the education allowances that we see under Austudy that we will gain that better outcome but also through innovation and extension of the working models that ought to be there beside the comprehensive schools. I come to two or three matters that the Opposition is unhappy about in this legislation. The first concerns the shift from the status quo of giving secondary allowances on the basis of enrolment in the year of study, namely year 11 and year 12, to giving the allowance only on the basis of age, that is, to students aged 16 and 17 years. We believe that that is not the best way to go; it is over-simplified. We are still searching for a way in which we can achieve an outcome that involves both categories, year 11 and year 12 and students aged 16 and 17 years, in a coherent way but which does not, by our amendment, lead to further expenditure by the Government. The Opposition wishes to be seen-and we are-as responsible by not adding to the elected Government's Budget expenditure announced in the first week of our sittings. We saw that to add all 16-year-olds to those who are otherwise provided for in this Bill, the additional expenditure would apparently be some $35m. We do not believe that amending this Bill to include them is a responsible way for us to go. Sitting suspended from 6.30 to 8 p.m. Senator TEAGUE —Before the dinner break we were debating the Student Assistance Amendment Bill 1986. The Opposition supports the principle of removing disincentives for young people who opt for employment rather than continuing with education or training. We have sought to put in place policies that would increase participation by Australia's young people in education and training, and in particular see an increase in retention at years 11 and 12 in our schools. I urge that we look not only to financial incentives to gain that greater participation and retention, but also to a wider range of school structures, training options, and curriculum contexts that will genuinely meet the needs of 16- 17- and 18-year-old young Australians. The Opposition is not happy with several features of the Bill and with the foreshadowed regulations that will put in place Austudy, as it has been defined by the Government. I had just begun to refer to one feature before the dinner break, and that is the shift in the Government's policy for secondary educational allowances being determined on the basis of age rather than on the basis of a mixture of age and year of study. Until this time, secondary allowances have been paid to eligible students, on a means test basis, who are enrolled in years 11 and 12. As the Government proposes to give these allowances to all 16- and 17-year-old secondary students it will pick up a considerable number of year 11 and 12 students, but it will omit a large number of 15-year-olds undertaking year 11 study. It is the view of the Opposition, and of the Australian Democrats, as expressed by Senator Macklin in his speech on this measure, that the purpose for which these allowances have been put in place, is to provide the means for young Australians to continue to years 11 and 12, but this will in fact not be available for 15-year-olds in year 11. So the incentive for them will fail. In fact, it is a regressive measure because many cohorts of the 15-year-olds who are now going into years 11 and 12 will no longer receive the allowance that they have been receiving until this point. I also understand-the Minister can correct me if I am wrong-that any student who is now 15, or who will be 15 next year, and who is in receipt of a secondary allowance, will not have that allowance denied him. I am concerned about the cohorts of 15-year-olds who next year would have received an allowance had the present provisions continued. The Opposition's reluctance to find an amendment to achieve our view of an appropriate mixture of year of enrolment and age in determining eligibility for secondary allowance is because we wish to be responsible in relation to the elected Government's Budget and we do not want to see any additional expenditure arise from an amendment we might move. The Opposition and the Democrats are concerned about this matter and at the Committee stage we will be asking specific questions of the Minister for Education (Senator Ryan) in order to see the dimensions of the problem. We hope that there may be some resolution by amendment even in the course of this debate. However, if there is not, and if there is not the time to think that through, certainly by the time we see the regulations under the Act, we will be applying the principles we have alluded to in this second reading debate at the Committee stage. The Student Assistance Act has operated for 13 years. From the beginning the regulations have been voluminous and the Act rather slim because the operation of these allowances is as defined, very precisely, in the regulations. I refer to an example in South Australia, the State I represent. I have a letter from the headmaster of St Michael's College who refers to the bad effect that this measure will have upon the students he has enrolled at Henley Beach. Mr Acting Deputy President, you are familiar with this college. Brother Paul Rogers, the headmaster, has written to set out the facts. These measures will clearly lead to many students, who are now receiving the secondary allowance in year 11 as 15-year-olds, losing the allowance. Of the cohorts who will go to year 11 next year there will be many who will not be receiving the secondary allowance. The letter states: St Michael's College had 141 year 11 students at the commencement of this school year. Of that group 120 were 15 on 1st February (i.e. 85 per cent). None of the 85 per cent would be eligible at that point for the secondary allowance under this new proposal. The letter continues: . . . 87 were still only 15 on 1st July (62 per cent). I believe that these statistics are characteristic of South Australia. I will not bore the Senate by referring to the many other letters I have from South Australians which set out very similar statistics to this. Senator Macklin in his speech this afternoon set out the proportion in the various States. In Victoria of all year 11 students only 2.5 per cent are still 15 years old; 3 per cent in the Australian Capital Territory; 4 per cent in New South Wales; and 9 per cent in Tasmania. In the Northern Territory the corresponding figure is 36 per cent; in Queensland and Western Australia it is 43 per cent; and in my State it is 45 per cent. That is the overall situation of which the Saint Michael's College case is an example. The headmaster then looks at those year 11 students who receive the secondary allowance and states: Further, 25 students at the College receive the Secondary Allowance in Year 11. Under your proposal- it is a letter addressed to the Minister- 22 (i.e. 88 per cent) would not be eligible on 1st February 1986, 18 (i.e. 72 per cent) would still be ineligible on 1st July, and 3 students would still be 15 when they commence Year 12 studies in 1987. That is nearly three-quarters of the students who are in the cohort of year 11 students receiving the secondary allowance would be ineligible even in the middle of the year. This is a problem. I am speaking purely on the basis that resources that have been given to that cohort in the past, will be denied to South Australia, Western Australia and the Northern Territory. I am concerned about the disincentive effect on year 11, 15-year-olds to continue with their studies. If the financial assistance is of material benefit it must be of material benefit to these 15-year-olds. We in the Opposition-I know I speak for the Democrats in this matter-are concerned about the problem. A simple solution would be to add all year 11 enrolments to the provision for 16-year-olds, but the trouble is that that would cost $35m. Therefore, I have the problem that we cannot add to an expenditure item in the Government's Budget. In considering the various reports that have led to the principle that we should take away the disincentive of the unemployment benefit being of more monetary value than the encouragement to stay on at school and gain the benefits of that education, a principle with which we agree, we have a dilemma that the first option of continuing with only year 11 and 12 students involves the problem that many 16-year-olds in year 10 would have the disincentive that the unemployment benefit which would be available to them would be greater than the benefit that would be denied them in year 10 and that they would receive only in year 11. Option 2, of giving the secondary allowance to everyone now receiving it but also to all 16-year-olds, would invoke an additional cost of $70m. It appears that the Government has said: `That is too much money. We cannot afford $70m. We will settle for $35m extra by giving the allowance only to 16-year-olds'. In considering the options, I agree that there has to be some sensible borderline but I do not believe that the proposed borderline is sensible. There will still be disincentives for those 15-year-olds. We should look at the whole matter again and come up with an expenditure neutral alternative that nevertheless directly meets the situation that the Headmaster of St Michael's College, along with many others in South Australia, Northern Territory and Western Australia, are pointing to. The problem ought not to exclude the possibility that all 18-year-olds who are involved in full time education could be directly eligible for Austudy given all the other criteria for its award. That would pick up all adult enrolments in secondary school courses purely on an age basis. I am saying that we do not want to stay entirely with the status quo of the secondary allowance going only to those students enrolled in years 11 and 12. Particularly for those who are aged 18 and above it is right that they have the higher rate of allowance that is set out in the Austudy tables. Before I move on to a second area of concern I need to refer to the disincentive in comparison with the unemployment benefit and the secondary allowance. About 45,000 16- and 17-year-olds receive unemployment benefit. When the present Government was first elected it was very concerned that the rate of unemployment benefit for 16- and 17-year-olds was only $40. Over the last three years this sum has been increased. The Government has increased the unemployment benefit for 16- and 17-year-olds to $50. In November 1983 it was increased to $45, in November 1984 to two levels, $45 and $50-the $50 a week being available to those who had been unemployed for more than six months-and in November last year the sum for all 15- and 16-year-olds receiving unemployment benefit was $50. This year there has been no change. Next year it is projected that this amount will be indexed. Perhaps it will be $53.50. Part of the problem is that in trying to solve the problem of disincentives caused by the comparison of the unemployment benefit with the education allowance the Government has moved too quickly to increase that allowance. If there had not been such a rapid increase there would be less of a problem and we would not have, for example, the bottom line of the $35m to which I referred earlier. We could have had the same rates of allowance at a lower level and allowed both the education allowance and the unemployment benefit to rise together. The other aspect is that in overcoming this disincentive for the 40,000 Australians who are 16- and 17-years-old and receiving unemployment benefit we still overlook too much that we should make the unemployment option the last possible option for those young Australians. Clearly, the best three options are enrolment in education, work and training. Senator Peter Baume —They should make a choice. Senator TEAGUE —They should choose freely among those three options, but the system should be so well structured in providing education, work and training that no one should be left to languish in the fourth option of unemployment. We talk about working for the dole or the proposal by the Australian Council of Trade Unions that nobody aged 16 or 17 should receive unemployment benefit; they should receive only a training allowance, and unemployment benefit for those under 18 should be banned. I certainly agree with the principle that we should do everything possible to structure a free choice for anyone under 18 among the options of education, work and training. I move very quickly to the second item which we will explore in the Committee stage. We will seek an amendment that the payment for secondary students be paid to parents who are responsible for providing education for their dependent children rather than its being paid directly to the students. We do not wish to see the Government intervening between a parent and a dependent student child. If a student is enrolled in tertiary education it is correct for the allowance to be paid directly to the student but the Opposition believes that it is appropriate to take the dividing line at age 18 or enrolment in tertiary education. The Minister in reply may refer to some tax disincentives but we wish to endorse the principle that family relationships ought to be protected and not weakened. Finally, I refer to the incidentals allowance. In the half-minute available to me I note that there will be time when we discuss clause 11 of the Bill to point out that the incidentals allowance is being abolished by this Bill. To that extent there is a short-changing of students on allowances who have been promised that the Austudy allowance will rise to the level of the unemployment benefit with the assumption that the incidentals allowance would be paid on top of that. But the Government has chosen to abolish the incidentals allowance. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator RYAN(Australian Capital Territory-Minister for Education)(8.19) —in reply-I thank honourable senators for their contributions. I will comment on two major concerns that have been raised during the debate. The first concerns the payment of the allowance to 16-year-olds rather than to 15-year-olds in year 11 as was the case under the previous secondary allowances scheme. There seems to be some confusion on the part of Opposition senators who have argued that this move to an age-related allowance will cause a disincentive for young people who wish to remain in the education system. I would like to make very clear that this is not the case because unemployment benefit, which is the competing payment for the age cohort, is not payable to 15-year-olds. So the 15-year-old who goes into year 11 and has to wait until he or she turns 16 to get Austudy will not accrue any benefit by dropping out and entering the labour market because that student will not get unemployment benefit. Senator Macklin —They may get employment. Senator RYAN —The opportunities for untrained 15-year-old school dropouts to get employment are very few. Where that opportunity arises, the award paid to a 15-year-old would still be greater than the 16-year-old Austudy benefit anyway, so it is an irrelevant point. What we are trying to do-I acknowledge that the Opposition and the Australian Democrats have recognised this-is to bring all the opportunities for young persons at certain ages into alignment so that there is no financial incentive for them to opt for one or the other. The argument that we should continue to pay the new allowance to 15-year-olds who have gone into year 11 overlooks the fact that if those 15-year-olds opt to go out into the labour market they are not eligible for unemployment benefit. So there is no competition between Austudy and unemployment benefit for the student who has not turned 16. Neither is payable. I make that very clear to the Opposition because some of the comments made suggested that there was some assumption that 15-year-olds could get unemployment benefit. They cannot. Senator Macklin —Who made that suggestion? Senator RYAN —It was suggested during the remarks I heard when I came into the chamber. So there is no competition as far as 15-year-olds are concerned. They are eligible neither for Austudy nor for the unemployment benefit. The point was made-it is one that the Government acknowledges-that 15-year-olds in year 11 will be in different and poorer circumstances than will 16-year-olds in year 11. I certainly acknowledge that point. However, I remind honourable senators that the 15-year-old in that circumstance still attracts for his or her parent a number of benefits which disappear when that student turns 16. First, he or she is eligible for family allowance, which averages about $6.40 a week. Secondly-we are talking about low income students, the same group which will be eligible for Austudy-the students' parents are eligible for an additional $17 a week if they are pensioner beneficiaries or for the family income supplement if they are in the work force. So the same 15-year-old student who has gone into year 11 will attract for his or her parent in the vicinity of $24 a week which is not as much as the new Austudy benefit. But certainly the Commonwealth is not leaving unassisted that group of young persons. Senator Peter Baume —But they get that with or without the educational benefit. Senator RYAN —They would get it with or without the education allowance but they would not get it if they dropped out and went on to the labour market. They would get it only if they were dependent. So there is Commonwealth assistance for the 15-year-old who goes into year 11 which would amount to about $24 a week. It is not as much as Austudy, but there is still $24 which phases out, or disappears. Senator Macklin —That is the maximum. Senator RYAN —We are talking in maximum terms. The family allowance is the same. Austudy is also means tested and will be on a sliding scale. So not every student getting Austudy will get the maximum benefit. I am not arguing that the 15-year-old in year 11 is in the same circumstances as a 16-year-old in year 11 under our scheme-- Senator Macklin —He is in a worse situation than the 16-year-old in year 10. Senator RYAN —That is true, because the 16-year-old in year 10 could opt out of education and get the unemployment benefit. The whole thrust of the new package is to ensure that there is no incentive to go into unemployment benefit. Whatever reservations honourable senators may have about the scheme they must accept that we have removed the incentive for young persons to go on to unemployment benefit. I have acknowledged that there is some difference between the 15-year-old and the 16-year-old in year 11. To overcome that would be a major problem. It would cost $35m in a year to overcome it. Not only that, there is the question of time constraints. If this legislation is held up by the insistence of Opposition senators on their amendment we will have to return it to the House of Representatives and so on and so forth. The ultimate effect will be that the new system of payment will be delayed at least until March. That is not a result which any honourable senator would like to see. We are concerned to know what the effect of moving to an age-related allowance would be. I give honourable senators my assurance that we will be very closely monitoring what happens to 15-year-olds who go into year 11 and have to wait for some time before they are eligible for Austudy. If there are problems of the extent which Senator Macklin or Senator Teague have suggested, certainly we will attempt to take them up in next year's budgetary allocations. Overall, as a result of the scheme, all 16-year-olds and above will receive significantly increased benefits. In terms of total numbers, many more students in Western Australia, South Australia and Queensland will come into the scheme by virtue of its being age-related than would have been in the scheme if we had not moved to the age-related basis. So there are overall benefits for individual students and for students as a group. The 15-year-old in year 11 will certainly get less benefit than the 16-year-old in year 11, but that will change during the year. I should also point out that in many States there is State assistance for students under the age of 15, such as bursaries, book allowances and things of that kind. I am currently negotiating with States to try to point out to them the benefits to students of rationalising their State assistance in a way that complements the age-related scheme. If there is a scheme under which there is a payment to all students from, say, 15 years and upwards, perhaps a State could consider concentrating that benefit on 15-year-olds so that poorer students would get a benefit from the State when they were 15 and, when they turned 16, pass on to the Commonwealth benefit. That would be the most rational arrangement. I am having discussions with the States to that effect. I remind honourable senators that we are talking about considerable increases targeted at the most vulnerable group, that is, 16-year-old school students who have the option of opting out and going on to the dole. I think we would all agree that that group of students is our major concern and that we have dealt with that disincentive to continue in school or technical and further education as a result of this scheme. Another concern, which I understand very well, has been expressed during the debate, and that is that under the Austudy scheme the benefit will be paid directly to the student and not to the parent. Under the old secondary allowances scheme the benefit was paid to the parent. When the Government first contemplated moving to an age-related scheme we considered continuing to pay the benefit to the parent because there are arguments in favour of doing so. I accept that. There still are. But when we looked closely at the taxation effects of that benefit on the amount of the benefit and what the family as a whole would gain we realised that it was too much of an imposition to place on, for example, the supporting mother living on the pension. Under our arrangement that mother will not suffer any diminution of benefit, even though her son or daughter may receive $40 a week in allowance. If the benefit is payable to the parent, the supporting mother would lose considerably because that amount is taxable. We considered that the overall benefit to the family would be greater if we allowed the full amount to go to the mother-or to the father as it may be, but it is usually the mother-and the full amount to go to the student child. We were trying to maximise the government payment to that family. Our scheme certainly does that. Of course, questions arise as to whether 16, 17 or 18-year-olds will use that money responsibly and whether there will be an appropriate relationship between parent and child so that the income is of proper benefit to the family. We did look very closely at that, but we believe that there is really almost an overwhelming case that that is the most rational way to do things. We have done that in many other schemes and have had no complaint as a result. For example, for many years it has been the case, and it still is the case, that the 16-year-old who undertakes a TAFE course and who receives a training allowance or receives a payment under the tertiary education assistance scheme, gets that payment himself or herself. That has been the case for a long time and we are not aware of any particular family difficulties that have arisen as a result of that. It is also the case that if the 16-year-old drops out of education or training and goes on to the dole, that dole payment is also made to the young person. We have already had in place for a number of years direct payments by the Commonwealth to 16-year-olds, even when they are living in a family arrangement, and there does not seem to be any overwhelming evidence that that has been a negative arrangement for the family. There are those, too, who would argue from a philosophical standpoint that a 16-year-old ought to be learning responsibility about his or her support, responsibilities to the family and so forth. That is a philosophy that has some attraction to me. But leaving aside the philosophical argument, first of all I remind honourable senators that the poorer parent, particularly a pensioner, would lose considerably if he or she received the benefit. Secondly, we really do not have any overwhelming body of evidence from TEAS payments to TAFE students or from unemployment benefit payments to 16-year-olds on the dole that suggests that this is a course we should not follow. I thank honourable senators for their overall support of the scheme. Obviously, there is a very widespread understanding that what we are attempting to do with the scheme is the right course of action-namely, to assist students from poorer families to remain students and to remove any financial disincentive for them to go on to unemployment benefit. I think there is agreement about that. There is concern about the two matters I have raised. The Government will not accept the amendments proposed, for the reasons I have just set out, and I hope that honourable senators will bear in mind that we are now starting upon a major social reform and that any disruption of the legislation at this stage will really have a very unsatisfactory outcome for the recipients. I commend the Bill to the Senate and at this stage I also table an explanatory memorandum relating to the Student Assistance Amendment Bill 1986. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MACKLIN(Queensland)(8.33) —The first item I wish to raise is with regard to the report of the Senate Standing Committee for the Scrutiny of Bills in respect of clauses 4 (a), (c) and (e). With regard to the Student Assistance Act, I wonder whether the Minister might explain the type of undertaking or proposition she made to me on 9 October-in answer to a question in which I used the Bond university as an example-when she said that the Government's view was that it would not provide any funding for such institutions, including funding for students attending them. How does the Government propose that such an institution will be excluded when the definitions in this Bill are so broad? After all, that is the substance of what the Committee for the Scrutiny of Bills is talking about. I quote from the Committee's report: The term `educational institution' is defined to include any educational institution or any other educational institution, authority or body in Australia that, under the regulations, is to be treated as such. What intrigues me is that if, for example, the proposed Bond university were established, I would imagine that it would probably be established under a Queensland law on a par with Queensland University, Griffith University or James Cook University. I presume that the Queensland Government would establish it under some type of statute. I would have thought that in any normal meaning of the term, the courts would find that this was a university. How is the Minister going to distinguish Commonwealth policy on that particular item? Senator TEAGUE(South Australia)(8.36) —I ask whether the Government has in mind any particular institutions that will be precluded from the definition of `university' or `any other educational institution'. Is it correct that the existing definition in the Student Assistance Act or the new definitions are a necessary but not sufficient description of an institution at which a student might be enrolled and in which there is eligibility for the allowance-that is, that the regulations, in any event, preclude certain universities, theological colleges or certain educational institutions? Whilst I am also concerned about the report of the Senate Standing Committee for the Scrutiny of Bills with regard to paragraphs 4 (a), (c) and (e), I understand that the regulations provide the power to exclude certain of these institutions anyway. But I ask the specific question first. Senator RYAN(Australian Capital Territory-Minister for Education)(8.37) —Both honourable senators have asked questions about the definition of `university' from the point of view of Commonwealth payment of allowances. The amendment of the definition of `university' will permit that term to be confined to those institutions specified as universities in the regulations. Of course, that will be a Commonwealth Act and will not have regard to any unilateral decisions the States may have made. In turn, the regulations will limit the definition to those universities listed in the Commonwealth Tertiary Education Commission Act. This will mean that assistance under Austudy will not be provided to students at universities that are not Commonwealth funded. We will have two tiers. We will have the regulations and we will have the Commonwealth Tertiary Education Commission list of universities. Senator Teague asked who will be excluded. Obviously, that will be a matter for Commonwealth decision, and our Government has already announced that it will not support private universities such as that proposed by Mr Bond. Senator Teague asked whether our exclusion would be merely necessary and not sufficient. It will be both, because in this respect we are talking about Commonwealth allowances paid to Commonwealth approved courses. The Commonwealth, on the advice of CTEC, will make those decisions. An institution may be called a university under State legislation but if it is not on the CTEC approved list, its courses cannot come up for approval for payment under Austudy. Senator MACKLIN(Queensland)(8.39) —I move: Page 3, clause 5, after proposed new section 10, insert the following section: ``Age of students to be disregarded ``10A. Where a person is undertaking, or proposes to undertake, a course of study or instruction, or a part of a course of study or instruction, that is a secondary course or a tertiary course, or part of a secondary course or of a tertiary course, for the purposes of section 10, the age of the person shall not be taken into account in determining whether the person is eligible for benefit under Education Assistance.''. This amendment raises the issue of the age situation across Australia. I listened carefully to the points that the Minister for Education (Senator Ryan) raised and I understand the thrust the Government has in regard to this item. As I said during the second reading debate, I feel that the Government-it is a laudable objective-in bringing together the unemployment benefits and the education benefits, which is something I have been urging for a long time, has actually also brought together all of the other items. It seems to me that the only item that does need to be the same is the amount of money. The Government has chosen two other major items: One is the eligibility age and the other is the form of payment. They have both been canvassed already in this debate. The difficulty I have with the explanation of the Minister is that the intent that the Government gave for this measure is directly to assist those people who are financially disadvantaged to continue their studies. If that is the educational objective and there is no overwhelming necessity to have everything exactly the same as with the unemployment benefit, under this proposal people who live in the Australian Capital Territory or in New South Wales or Victoria will probably, by and large, be better off. The difficulty is, as I stated, that the percentage of students in year 11 who are 15-year-olds in the middle of the year is 9 per cent in Tasmania, 36 per cent in the Northern Territory, 43 per cent in Queensland and Western Australia and 54 per cent in South Australia. According to the Australian Statistician, on 1 July 54 per cent of students in year 11 in South Australia are 15-year-olds. Senator Teague made the same point. I must say in response to what he said that on a number of occasions I have heard him say that this is a States House and presumably as a senator from South Australia he will not vote on party lines but vote in the best interests of his State. I will watch that in the later stages of the debate. This is a pertinent matter for this chamber because the different laws and regulations which have applied in the past have resulted in this disparity among the States and Territories. This has actively disadvantaged the Northern Territory, Queensland, Western Australia and South Australia in particular. Senator Haines —It discriminates against the residents. Senator MACKLIN —That is right. Overall, the figure is about 20 per cent. At 1 July 20 per cent of students in year 11 are 15 years of age. As I said in my speech at the second reading stage, some students even in year 12 are 15-year-olds. They are precocious individuals; nevertheless, there they are. It seems to me that if the intent of the measure is an educational one-that is, to get children from the compulsory school years to the non-compulsory school years-we should not be putting any disincentives in the way. I think the Minister has hung her arguments on the fact that 15-year-olds are not eligible for unemployment benefit. I must admit that I did not hear all of the debate but I had not heard anybody mention that 15-year-olds get unemployment benefit. I am not sure where that notion came from. Everybody acknowledges that they do not. Senator Haines —But they do not in any State. Senator MACKLIN —That is right. Statistics available to us show that considerable numbers of 15-year-olds leave school to seek work even though they are not eligible for unemployment benefit. The application of these payments will operate, I presume, with the same type of rigour as is currently applied to tertiary education assistance scheme payments. The Government has been at great pains, even in terms of legislation, in recent months to tighten conditions in such a way that people who are receiving unemployment benefit do not receive TEAS allowance or other payments, to try to make sure that there is no overlap. In cases of financially disadvantaged people seeking to leave school to go into employment, I would have thought we needed not to ensure that there is no disincentive but to provide an incentive. These are the people about whom we are concerned. Accepting the Government's educational argument concerning disadvantaged families, I think we need an incentive for students to stay on at school. I know there is already a massive incentive for them to leave, whether they receive unemployment benefit or not. There is an incentive for them to leave school to seek work because of the economic pressures on their families. Very large numbers of them succeed in finding work at 15 years of age. This is shown by the figures of the Australian Bureau of Statistics. Presumably what we are about here-I think this is what the Minister is about too-is trying to even up in some way the opportunity for, the incentive for and the ability of those children who belong to disadvantaged families to go on in secondary schooling. The Minister used a number of arguments which I do not think are really plausible or all that pertinent. I wonder whether the Minister is able to provide the percentage coverage because we have not had those figures yet. Senator Ryan —Percentage coverage of what? Senator MACKLIN —What percentage coverage is expected in terms of the secondary schooling population? What are we looking at? Senator Ryan —Eligibility. Senator MACKLIN —No, we know the eligibility criteria but the Government presumably has made some type of projection of the percentage coverage that it expects. We have had a variety of goes at it. The Government presumably has some figures on it. Once we know those figures we can probably get a better lever on what absolute numbers of people we will be looking at, the number of 15-year-olds in year 11. We have to give those kids in disadvantaged families the benefit of being able to continue in education. After all, the Government has been willing to give the benefit in the compulsory school years for 16-year-olds. I remind the Minister that in Western Australia not only is there no disincentive but also the students legally cannot leave school if they turn 16 years in the final year of the compulsory school period. So in at least one State of the Commonwealth there is absolutely no reason why the Commonwealth should be paying any money to the 16-year-olds in year 10 because they cannot leave if they turn 16 years in year 10 anyhow. I readily admit that that situation does not occur in any other State. The Minister is saying that we will pick up the 16-year-olds because they happen to be 16 years but we will not pick up the 15-year-olds despite the fact that they are trying to make that transition to the non-compulsory school years, which is a very important transition. If we can provide the sorts of families about which we are talking with some money when they are hovering, under pressure, not very much above and possibly below the poverty line, when they need that advantage, we may influence their decision. The Minister interposed that there may be a family allowance payment of $5.70 a week per child and if the family income is no more than $12,000 the family will get the supplement of $17 a week. As the Minister said, we are looking at $22 to $23 a week. For those types of families there is a lot of difference between that amount and $40 a week-an enormous difference. Children in such families, because the family needs to be able to live may-not through any ill will but through necessity-feel pressure to leave school to get work to try to bring some income into the family. I think it is the Minister's intention to assist those families to make sure that those kids have as good a chance as we can give them compared with other children in our society to make that transition between compulsory and non-compulsory schooling years. I wonder whether the Minister might be able to look at even some medium way of picking up those 15-year-olds who are in the non-compulsory schooling years. I do not know whether that is possible under this Act. I looked at it, and I do not think it is. But the Minister may have some avenue of discretion in that regard. I could not see any under this Act, but there may be such a discretion for the Minister under another Act; I doubt it. In looking at the history of the various schemes, I noticed that there was absolutely no legislative base for the previous payments that were being made, anyhow. So presumably the Minister would be quite capable of continuing those payments because they did not have a legislative base to date, and this is the first time that they have had such a base. I suppose the Minister could carry that extra load. I realise that there are costs involved, although, of course, if one were looking only at the compulsory schooling years there would also be savings involved. I am not terribly interested in trying to cut it out for those 16-year-olds in year 10. But I am concerned about the 15-year-olds in years 11 and 12. I will be interested to hear, in the Minister's response, what type of incentives she sees that we might be able to give to kids who the Minister has said she wishes to assist to undertake additional schooling, so that they can be given the opportunity to do so. Senator RYAN(Australian Capital Territory-Minister for Education)(8.51) —Senator Macklin, essentially, has reiterated the point he made during the second reading debate. I will respond to that point again. But he has asked some questions in support of his amendment, and I will attempt to answer those. He asked what proportion of 16-year-olds we expected to be eligible for the scheme. The answer is about 24 per cent. He also pointed to the fact that some 15-year-olds do get employment if they drop out of school and that there is support from the Australian Bureau of Statistics for that view. Of course, there is, but I think Senator Macklin should look at the proportion of 15-year-olds who are in part-time or casual employment, which is the most common form of employment for students in that age group. Of course, many such students are also full-time secondary students. In fact, when we are talking about 15-year-olds-- Senator Macklin —Of those who are in any work, the majority are in permanent work; twice the number-11,000 to 5,200. Senator RYAN —My advice is that, in the case of 15-year-olds, a majority are in part-time work-- Senator Macklin —The Statistician must be wrong, then? Senator RYAN —We will have to look carefully at his definitions. In any event, I remind Senator Macklin that part time and casual work is available and is taken up by many 15-year-olds from poorer families, and also by 15-year-olds from not such poor families. We are not looking here at the only source of available income to a 15-year-old. There is the possibility of part time casual work. Of course, there is the family allowance, the family income supplement, or an additional pensioner benefit. So we are not looking at leaving 15-year-olds without any form of support. Senator Macklin asked: Is there a medium way? There could be medium ways but they all cost money. I remind Senator Macklin that we are trying to bring in a major social reform that redistributes public revenues very significantly to students from poorer families, at a time of enormous budgetary constraint. If one has more money, of course, it is possible to improve the scheme. But we do not have more money, and any suggestion either of continuing to pay the allowance under the secondary allowances scheme-of course, there would be administrative costs in running two schemes at the same time which would add to the cost of paying a benefit-or if we extended it to 15-year-olds in year 11, we would be up for major costs. In the case of the latter suggestion we would be up for $35m. The Government does not have $35m to add on to-- Senator Macklin —Where did that come from? You have not given us the figures yet. How can you possibly get $35m in that particular exercise? What are you looking at-100 per cent, 20 per cent, or what? Senator RYAN —I did answer Senator Macklin's question. I think he was somewhat distracted at the time. I said that the proportion of 16-year-olds who would be eligible for the scheme is estimated to be in the vicinity of 24 per cent of all 16-year-olds. So I assure Senator Macklin that the figure of $35m has been very thoroughly investigated by the very competent officers of my Department, and that would be the cost of extending the scheme to 15-year-olds in year 11. That is a cost that the Government cannot take up at this stage and, in any event, if we did, although it would mean that some of those students would have additional income, it would not really reinforce the basic aim of the scheme, which is to remove the disincentive to drop out and go into the work force. I can only repeat that point. Finally-I hope that Senator Teague will pay close attention to this-the amendment that has been moved by the Australian Democrats goes well beyond the kind of minor concern that has been expressed. I remind honourable senators of its wording: Where a person is undertaking, or proposes to undertake, a course of study or instruction, or a part of a course of study or instruction, that is, a secondary course or a tertiary course, or part of a secondary course or of a tertiary course, for the purpose of section 10 . . . This, of course, brings in all secondary education and the cost blow-out would be extraordinary. It would be well beyond the $35m mark. I do not think Senator Teague would really be in a position to support an amendment of such far reaching dimensions. It would extend the payment to anyone undertaking even a part of a secondary course. So the cost would be enormous. I think it would certainly be a gross change to the Budget, and therefore, I believe, it would be unacceptable not only to the Government, but also to the Liberal Party, which has already expressed an attitude of responsibility in regard to Budget Bills. Senator MACKLIN(Queensland)(8.56) —I thank the Minister for the points she has raised. The $35m, I suppose, works on the basis of about 3,000 students, because overall in Australia, at least in terms of the latest figures I have, as at 1 July, there were 11,618 15-year-old students in year 11. Senator Ryan —No, it is much more. Senator MACKLIN —What figures is the Minister looking at? Can she give me the basis for that figure? Senator RYAN(Australian Capital Territory-Minister for Education)(8.57) —There are currently 26,000 15-year-olds in years 11 and 12. So we are looking at a much larger group. Senator MACKLIN(Queensland)(8.57) —That is an interesting figure. I am reading from table 8 which sets out the number of full time students in Government schools in Australia. The Minister is saying that there are twice that number in private schools. Only 25 per cent of the school population attend private schools and 75 per cent attend state schools-- Senator Ryan —But private schools have a higher participation rate to year 11. Senator MACKLIN —They do, but they also have a far higher income, in which case we are looking at the percentage that will attend government schools. The Minister has argued on many occasions that the vast proportion of government school pupils come from the lower paid sections of our society, except in the Catholic school system-- Senator Ryan —But the Catholic school system is the biggest system. Senator MACKLIN —I know that it is the biggest system, but it does not have the highest retention rate. Senator Ryan —They have a much higher rate than state schools. Senator MACKLIN —Not much higher; a bit higher. It is not as high as the private schools. So the total figure that the Minister is working on is-- Senator Ryan —Twenty-six thousand would qualify. Senator MACKLIN —Twenty-six thousand 15-year-olds who would qualify? Senator Ryan —Yes, 26,270 would qualify under the income test in years 11 and 12. Senator MACKLIN —I find that an extraordinary figure. I would certainly like to see the calculations for that. But there does not seem to be the time in which one would be able to press it now, in considering the factor of the percentage in private schools and the percentage in government schools. I have no idea how we manage to arrive at a figure of 26,000, considering the fact that in the whole of Australia, in government schools there are only 58,000 in total in year 11. Senator Ryan —I was referring to years 11 and 12. Senator MACKLIN —In terms of 15-year-olds in year 12, there are 136 in the whole of Australia in government schools. So I hardly think they will increase the percentage in any way. Senator Ryan —I think you have problems with your statistics. Senator MACKLIN —We may well have. The Statistician probably does. I do not know what figures the Minister is working on. It would have been useful to have them at the second reading stage so that I could have made some calculations. Has the Minister or the Department had any advice with regard to the constitutionality of the exercise? I refer, in particular, to section 117 and discrimination between States as a result of this exercise? Senator RYAN(Australian Capital Territory-Minister for Education)(9.00) —The Department of Education has not sought that advice because there is no discrimination. We are paying the allowance to students in each State on the same basis, namely, that they have turned 16. Senator SHEIL(Queensland)(9.01) —From listening to the Minister tonight, am I to understand that it is quite competent for a State government to legislate to establish a university in that State-such as the Queensland Government with the new Bond University-and that university would be free of Commonwealth subsidy for its establishment, staff or students? Would the university be free of all Commonwealth regulations regarding its facilities, its buildings and the contents of its buildings? Would it be free of Commonwealth control over its curricula, accreditation and recognition of terms, conditions or qualifications of staff? Would it be free of recognition of the qualifications of graduates? Senator RYAN(Australian Capital Territory-Minister for Education)(9.02) —Senator Sheil shows an admirable grasp of State powers. A State can establish any body as a university, call it a university and, if the Commonwealth does not recognise it, the Commonwealth has no involvement along the lines suggested. Under those circumstances it would be regarded as a private university. Senator TEAGUE(South Australia)(9.03) —The Opposition has carefully followed the answers given by the Minister with regard to the matters Senator Macklin raised. The matter most in our mind was coming to grips with the precise dimensions of the additional expenditure required to give secondary allowances to 15-year-olds in years 11 and 12. I understand from the facts that the Minister has given that 26,000 15-year-olds are in years 11 and 12, that 24 per cent of those could be expected to be eligible for the-- Senator Ryan —That figure was the total who would qualify. Senator TEAGUE —That is already 24 per cent of the whole number. As the Minister has said, clarification has still to be reached on this matter. We understand that 26,000 15-year-olds in years 11 and 12 would be eligible for Austudy allowances, and that represents around 24 per cent of all 15-year-olds in years 11 and 12. So something like 100,000, 15-year-olds are in years 11 and 12. Is that correct, Minister? Senator RYAN(Australian Capital Territory-Minister for Education)(9.04) —I just clarify these statistics because I think the Australian Democrats are under serious misapprehensions and I would like to assist them. We are talking about the estimated numbers of secondary students who will receive Austudy allowances in 1987. In 1987 the number of years 11 and 12 students who will qualify under the income test and who will receive an allowance for more than half a year-that is, they will not have turned 16 at the beginning of the year-is 15,870; the number who will receive an allowance for less than half a year is 7,500; and the number who will not receive an allowance at all, that is, those who do not turn 16 before the end of the year, is 2,900. So the total years 11 and 12 students who will qualify under the income test is 26,270, and that is about 24 per cent of the entire age cohort. Senator TEAGUE(South Australia)(9.05) —Whatever the arithmetic, the bottom line, in terms of additional expenditure, is estimated by the Government to be $35m. That is the figure we understood when we began this debate and that relates to the reluctance I have already mentioned in my speech at the second reading stage as well as when I first spoke in the Committee stage. I have one further question to ask the Minister. In summing up the second reading debate she spoke of States making available allowances to 15-year-olds in year 11. Presumably this would be schemes especially in the Northern Territory, South Australia and Western Australia. I did not hear clearly what amount of money the Commonwealth might be providing to those two States and the Northern Territory in this respect. Senator RYAN(Australian Capital Territory-Minister for Education)(9.06) —We would not be providing any money in respect of assistance to 15-year-olds. However, we are now paying this greatly increased amount to 16-year-olds on. For example, in Western Australia the total number who will receive a benefit under our scheme is much larger than the total number who would have received it under the old scheme. Western Australia as a State is receiving a substantial increase in terms of student allowances and it should look to targeting the allowance it gives-it gives an allowance in the vicinity of $100 a year per kid 15-year-old and on-to all 15-year-olds so that 15-year-olds who go to year 11 get a substantial benefit from the State and then phase into the Commonwealth benefit when they turn 16. In that way the two schemes would dovetail and the benefit to the 15-year-old would be larger because the amount of money the Western Australian Government would have would not have to be spread right up to 18-year-olds. It could concentrate on the 15-year-olds. I am not sure that at this stage the Western Australian Government will respond immediately to that suggestion, but this is the kind of step we are taking with the State governments. We are pointing out to them that their student population as a whole is benefiting and that we are really making a substantial improvement to the 16-year-old and upward age group. We are suggesting that the states should concentrate their benefit, regardless of what form it is in, on the 15-year-old. This is the type of dovetailing we are working towards. As I have said, we have not reached an outright agreement but in the case of Senator Teague's State I must say that we have always had most harmonious relationships with the State Government. We are hopeful that we will achieve a dovetailing of this kind. Senator TEAGUE(South Australia)(9.08) —In what I think will be the final time I rise on this matter, I welcome those marginal benefits that may be gained through discussions with the States. Of course there is a great discrepancy between the eastern States' advantage in this matter over Western Australia and South Australia. I also note that with family allowance and pensioner supplements in respect of dependent student children there is a maximum of $24 available to some 15-year-olds in year 11. I also acknowledge that 15-year-olds are not competing with an option of receiving the unemployment benefit. However, the Opposition is not convinced that the present approach to this solution by the Government is entirely satisfactory. The principles we set out in the second reading debate still hold. We will need to examine this matter between now and the time the regulations may be established and the Senate may look at disallowing any of those regulations. The crunch of the question is this: The whole purpose of this measure is to remove a disincentive to those secondary students who have a $15 disadvantage per week against those receiving the unemployment benefit-that is, a $35 allowance as it now is as against a $50 unemployment benefit. This measure introduces a new disincentive of $40 in the case of a 15-year-old in year 11 as opposed to a 16-year-old in year 11, both students being in that quarter of students who are eligible for the Austudy allowance. I still believe that that amount is a substantial disincentive. That cohort of students of 15 years of age entering year 11 will not be eligible for the $40 that they have been receiving up until this year and will have the incentive to go and find work and not continue with years 11 and 12. In other words, the $40 a week benefit that has been available up to this point will not be available to them. They will not receive anything except the $24 maximum from the family allowance, pensioner benefit and maybe some payment from a State scheme. I still believe that this substantial penalty will drive 15-year-olds to undertake work. I come now to the Australian Democrats' amendment. I am required, on behalf of the Opposition, to note-and this is my conscientious view-that this amendment is too general and sweeping in its terms. It refers to tertiary students as well as secondary students. I think the reference to `tertiary' is inappropriate. The amendment would place in the Act a requirement that there be no discrimination between students on the basis of age when all along the Opposition has argued that there ought to be a sensible mix that takes into account age and year of study. Because the amendment proposed by the Democrats is in those terms, the Opposition is unable to support it. Senator MACKLIN(Queensland)(9.12) —The Minister for Education raised a number of questions in respect of Western Australia. I heard her say that $100 a year was given to someone. I am not quite sure what that is actually going to do for someone who is trying to look after a kid in Australia today. I suppose $2 a week is of some use to somebody or other, but I am not quite sure, given the-- Senator Ryan —It is a one-off payment at the beginning of the year to buy books. Senator MACKLIN —It certainly will not feed anybody, Senator. Senator Ryan —It is not meant to. Senator MACKLIN —I am not quite sure why the Minister dragged this into the debate. I thought we were talking about some sort of support for low income families, not $100 to be used to feed and clothe somebody. I am just wondering what discussions the Minister has had with the South Australian Government in particular, because I would like to put to her an extreme case involving students in grade 11 attending government schools. As at 1 July 8,142 15-year-olds out of a total of 14,935 in government schools were in grade 11. What is proposed should be done in respect of South Australia in which as at July over half of the grade 11 students were 15 years of age? Will the Minister make any special arrangements in regard to South Australia, because it seems to me, as a result of previous State decisions, that that State will now be massively disadvantaged compared with other States, and certainly compared with the Australian Capital Territory which has a minute number of 15-year-olds in grade 11, as do Victoria and New South Wales. South Australia has a very large percentage of such students. It seems to me that those students are being actively discriminated against in terms of the decision that the Government has made. Senator RYAN(Australian Capital Territory-Minister for Education)(9.14) —At this stage we are having discussions with South Australia. We hope that that State will find some way of focusing assistance on 15-year-olds. We still have to sort that out with South Australia. However, we do not have any particular proposal at this stage to change the age-related nature of the structure. We are talking about amounts of money which, of course, are considerably increased for 1987. Of course, in 1988 we will be paying allowances up to the level of the youth unemployment benefit which will mean an overall increase in the amount of money going by way of education allowances to students in South Australia. Question put: That the words proposed to be inserted (Senator Macklin's amendment) be inserted. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 56 —— Majority . . . . . . . . . 49 —— 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. Lewis, A. W. R. Archer, B. R. MacGibbon, D. J. Aulich, T. McIntosh, G. D. Baume, Michael McKiernan, J. P. Baume, Peter Maguire, G. R. Bjelke-Petersen, F. I. Messner, A. J. Black, J. R. Morris, J. Boswell, R. L. D. Newman, J. M. Brownhill, D. G. C. Parer, W. R. Carrick, Sir John Puplick, C. J. G. Childs, B. K. Ray, RobertCoates, J. Reid, M. E. Coleman, R. N. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Robertson, E. A. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. (Teller)Devlin, R. Short, J. R. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Gietzelt, A. T. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walsh, P. A. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Jones, G. N. Withers, R. G. Kilgariff, B. F. Zakharov, A. O. Question so resolved in the negative. Senator TEAGUE(South Australia)(9.23) —by leave-I move: (1) Page 2, clause 5, proposed new section 10, leave out ``to a person'', insert ``in respect of a person''. (2) Page 3, clause 5, proposed new section 11, leave out ``to a person'', insert ``in respect of a person''. (3) Page 3, clause 5, after proposed new section 11, add the following section: ``12. Benefit under Education Assistance granted in respect of a person is payable- (a) in the case of a person who is undertaking, or proposes to undertake, a course of study or instruction, or a part of a course of study or instruction, that is a secondary course, or a part of a secondary course, for the purposes of section 10-to a parent or guardian of the person, or, in circumstances prescribed by the regulations, to a person in accordance with the regulations; and (b) in the case of a person who is undertaking, or proposes to undertake, a course of study or instruction, or a part of a course of study or instruction, that is a tertiary course, or a part of a tertiary course, for the purposes of section 10-to the person.''. The amendments all relate to the recipient of the benefit for secondary student enrolments. The Student Assistance Amendment Bill provides that for the first time secondary education allowances will be paid to the student rather than to the parent who is responsible for that student's education. The Opposition does not support that change and accordingly has moved that the words `to a person' be changed to `in respect of a person'. The substantial amendment is the third amendment. This provides that the benefit granted to an eligible student enrolled in a secondary course may be received by a parent or guardian. We believe that this benefit should assist parents who have the financial and other responsibilities to provide education for their dependent secondary school children. I do not believe the Government should come between parents and their children in these financial arrangements. Next year the allowance for a 16-year-old secondary school student will be $50 and in 1988 it will be $53.50. That arrangement has the potential to be a lever to give financial independence to students. If a disagreement developed between a student and his parents the Commonwealth's financial assistance, in the way it is proposed to be used, would act as a lever to disrupt and weaken the family. We believe that the appropriate division in terms of the receipt by a student as against his parents is enrolment in a tertiary education institution or reaching the age of 18 years. It is already acknowledged by everyone that there is a means test on the family, on the parent's income, that determines whether any allowance is payable in the first place. There is no provision for 16- and 17-year-olds living away from home as it is assumed that the allowances for them will be payable only in respect of secondary school students at home. There is provision in the Bill for tertiary enrolments and 18-year-olds. There is also a second rate of allowance for students living away from home. So that distinction, in terms of the living away from home allowance, is already in the Act and is extended by this Bill. Until now the parent has always received the benefit of the secondary education allowances and we believe that this situation should continue. It has never been suggested that education allowances of any kind should be received directly by students under 16 years instead of by parents. We do see a danger, at a time when we are trying to remove a disincentive arising from the unemployment benefit, in introducing a second and equally odious disincentive that would break down family relationships. We have therefore come to the view that the right point of demarcation is 18 years of age and enrolment in a tertiary institution. I therefore urge the Australian Democrats to support the Opposition's amendments. Senator MACKLIN(Queensland)(9.28) —As I indicated in my speech during the second reading debate, the Australian Democrats have a great deal of sympathy with the Opposition's amendments on the payment of allowances to parents. As I suggested then, there are considerable differences between the secondary school and the tertiary sectors, despite the fact that many of those children are of the same age. The Minister for Education in fact referred to that when she spoke about technical and further education students who could be of identical age to those in secondary schools. In her reply to the second reading debate she raised a point that was very important to us, and I would like some clarification on it because it will certainly influence the way we are going to vote on this issue. She mentioned that many families-after all we are talking about low income families and trying to get support to them to enable their children to continue their education-would be much better off because the tax system is such that if the money were paid to the parents it would be counted in with their income for taxation purposes; whereas if it were paid to the student, the student would still come under the taxation threshold and hence it would not be taxed. I suppose one's immediate response to that is: `Why not make this non-taxable?'. If it is a means-tested operation we could hardly do that. Does the Minister have any figures on this? We would certainly be inclined not to support the Opposition's amendments if the Government were able to show that those low income families would be better off by allowing the money to be paid to the student. After all, I suggest that in the majority of homes the exercise is a nominal one, particularly in homes, in my opinion, that are working well. It would make no difference whether the allowance were paid to the parents or to the student because it would be considered by the student to be paid via the parent anyhow. It is probably only those families where there is tension that this type of thing might arise. What we are about is getting the maximum benefit to those low income families. I admit that the Minister's statement is very important. Senator TEAGUE(South Australia)(9.30) —I have also taken careful note of the Minister's remarks about these allowances being taxable. But I can remember very well when such allowances were not taxable in the hands of the recipient. I believe that by a simple amendment to the Income Tax Assessment Act-I understand that it may be section 6 of that Act-we may revert to the situation that obtained a few years ago when such allowances were not taxable in the hands of the recipient. An exemption could be made that is quite specific for allowances paid in respect of enrolments in a secondary school. So the receipt of post-graduate awards and tertiary allowances could still continue as they have in recent years. In that respect all of the principles and the advantages which the Minister has already referred to in summing up on the second reading debate would still flow on. The arguments that I have put forward would be put in place. The good arguments that Senator Macklin put forward would be achieved by simply amending the Income Tax Assessment Act to revert to the situation of some years ago. Senator RYAN(Australian Capital Territory-Minister for Education)(9.32) —I will respond to Senator Macklin's questions first. I place on record my appreciation of his recognition of what we are trying to do in this provision under discussion and that is to maximise benefit to the low income family. I also agree with Senator Macklin and we have worked out our calculations on this basis: In most families there is a harmonious relationship and the question of who actually receives the allowance is not a problem, but of course, there are some families in which it is a problem and we have addressed those circumstances very carefully over a long time to try to get the best possible result. We believe that what we are proposing is the best possible result. Senator Macklin asked for some specific figures on the effects of low income families should the benefit be paid to a parent rather than to the student. If the benefit were paid to a non-working mother in a low income family, the reduction of the dependent spouse rebate to the breadwinner-the father in that case-would be $449 per annum. If it were paid to the breadwinner, the father, it would be a larger reduction-over $600. But the circumstance of the type of family over which Senator Macklin has most concern, the pensioner family, would be even worse. We would be moving them into a poverty trap because the amount of the payment is such that the marginal rate of tax would be 80c in the dollar. The actual per annum income depends on what other income the pensioner has available to him or her. It is obviously a very severe poverty trap. I ask Senator Macklin to consider those effects. We certainly considered them and have arrived at this position. Senator Teague has attacked the problem laterally by suggesting that we could amend the tax Act to make the benefit non-taxable, regardless of who received it. That would be moving against the whole trend of our Government's taxation policy which is to try to introduce consistency in the treatment of income, to try to treat all income in a similar way. Although there might appear to be an immediate benefit in Senator Teague's eyes in excluding this particular part of income, many of the anomalies that have grown up in the taxation system over the years have arisen from governments having policies that allowed income from different sources to be treated differently. We have given very great consideration to all of the matters raised by Senator Macklin and Senator Teague. The matter is not straightforward. We did not leap immediately to this conclusion. In fact, earlier on in our consideration we looked at maintaining the practice whereby the payment was made to the parent. If one looks at what we are trying to do overall, and that is to increase the capacity of the poor family, to keep the students in education, one will see that we want to maximise the benefit and our proposal will do that. I recognise the seriousness of the matters raised by both honourable senators, but I hope that they will give consideration to supporting the provision as we have set it out and thus maximise the benefit to low income families. Senator TEAGUE(South Australia)(9.35) —I note that there is substance in the arguments put, but a judgment has to be made. I still believe that the Opposition's amendments ought to be supported by the Committee. The Income Tax Assessment Act can be amended so as to revert to the situation of some years ago. I have taken fully into account what the Minister has just said. Senator MACKLIN(Queensland)(9.36) —I indicate that the Australian Democrats, on the basis of the Minister's response, will not be supporting the Opposition's amendment. As the Minister pointed out, I am particularly concerned about pensioner families. The changes to the Income Tax Assessment Act would not assist those families because they do not pay tax. We would have to go into a rather complicated mechanism to change the pensions in regard to this. It would be an incredibly complicated problem to exclude this particular item. As we know, there are growing numbers of kids in schools from full pensioner families. That is something that could not be addressed by Senator Teague's lateral solution. Pensioner families are not in a tax bracket. They are outside the taxation system, yet they would actually meet and fall into that system by this very operation. It does not add to the taxable income. It, in fact, adds to their pension and takes them into the taxable income. Senator Teague would need a few more amendments than the one he is suggesting. We would have to go through a number of Acts. It is unfortunate in some ways that it has to be done this way, but if that harmony is not present there is not likely to be much incentive for the kid to go to secondary school. There has to be some support. If the rapport is there between the kids and the parents, paying the allowance to the child will not create massive family disruption as has been suggested by some people. The Democrats will be supporting the Government's clauses on this matter. Amendments negatived. Senator TEAGUE(South Australia)(9.39) —I refer to page 3 of the Bill. Does not the Minister acknowledge that, in removing the 13-year standing incidentals allowance, there is a shortchanging of students in the expectations they have had? In lifting the educational allowance to the unemployment benefit level it was assumed all along that the incidentals allowance was on top of the rate of tertiary allowance or secondary allowance as is appropriate at each age level. I want to hear the Minister's acknowledgment that in removing the incidentals allowance to ease the financial burden of lifting the education allowance to the same level as the unemployment benefit up to 1989 there is a short-changing of students. Senator RYAN(Australian Capital Territory-Minister for Education)(9.41) —Senator Teague is correct in pointing to the fact that the incidentals allowance will no longer be part of our students assistance scheme. It has been absorbed into the new allowances, but the increases for most students are such that they are well ahead in any event of where they would have been under the old TEAS plus incidentals allowance. There is still an overall benefit to students. I am not sure what individual student's expectations were of the outcome of the rationalisation process. It has been a very long, technical and complex process, but students will know when they receive their increased allowances that they are doing better than they were-and that is what we all want. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Ryan) read a third time. Debate resumed from 9 October, on motion by Senator Grimes: That the Bills be now read a second time. (Quorum formed) Senator MESSNER(South Australia)(9.43) —The Senate is debating cognately the Income Tax Bill 1986, the Taxation Laws (Miscellaneous Provisions) Bill 1986 and the Income Tax Rates Bill 1986. After more than 13 months since the announcement of the tax reform package by the Treasurer (Mr Keating) we have now come to the critical point of seeing what the Government intends to offer the people of Australia by way of tax cuts. Before we discuss the nature of these income tax arrangements that will apply from December this year, and further in July next year, it is important that we understand what people will have to face in taxes in the new year. First, we have to recognise that since September 1985 we have seen the introduction of a new system whereby there has been a disallowance of legitimate business expenses incurred in the hospitality industry. We have seen the introduction of a fringe benefits tax, which has caused enormous concern and confusion in the community because of the Government's lack of understanding as to what it intends, and a new capital gains tax which is the most savage in the world and which imposes taxes at the highest marginal rates. It fails to meet the Treasurer's obligations when he committed the Government to saying that assets held before 19 September 1985 would not be taxable, when in certain circumstances they are taxable, and changes which occur in circumstances of transactions fundamentally change the taxation liability of taxpayers. Collectively, those things are intended, together with other measures, to raise some $1,500m from the taxpayer over two years. The Government would have us believe that the so-called tax cuts, by virtue of the Bills before us now, are likely to occur in December and July of next year and that these new taxes, having come into force, consequently are of benefit in terms of equity and fairness to the average taxpayer. The truth is quite different. The extra $3 billion which is represented in terms of these Bills as being some kind of tax cut really comes only from inflation. Taxpayers will be getting back in their hands the money which they have already contributed to the Government through inflation and by the Government forcing them into a higher tax bracket. Senator Watson —This is how they brought down the deficit. Senator MESSNER —Yes, that is so. All the measures in this latest Budget, introduced just two months ago on 19 August, clearly were designated only to get over an immediate political hurdle which the Government saw before it, and clearly the Government had no long term goals in mind for the economy. An extra $1,500m was raised by taxation in the August Budget. It contributed to a reduction of some $2,200m in the Budget deficit to try to impress on the financial markets that this Government had the economy under control. The fact is that the Government does not, and the obvious extra taxation which has arisen from the Budget legislation will only just help to pay back to people what they have lost already through inflation. I will return for a moment to the events of 1984, just prior to the election. We remember full well how our Prime Minister (Mr Hawke) promised sincerely and solemnly that the people of Australia would have tax reform via the so-called tax summit which he intended to call after his election to office. Subsequently that happened. But the Prime Minister promised that we would have tax reform according to nine fundamental principles, which he laid down in the election campaign. Let us remember a few of those. First was the promise that during Labor's term of office there would be no increase in the overall tax burden as measured by the share of gross domestic product taken by the Government in tax revenue. That was the first promise to be given and the first to be broken, along with the other promises about how he would not have capital gains taxes, taxes on lump sum superannuation and assets tests on pension. We were given the extra promise that there would be no increase in the tax burden. What happened in the 1986 Budget? We have the highest proportion of gross domestic product going to taxes of any government since Federation-25.5 per cent of taxes goes to the Federal Government through this Budget. That figure is greater than that in the previous year and represents a breach of the fundamental, very sincere and solemn promise given by the Prime Minister. Compared with 1985-86 there has been a substantial increase in the total tax revenue gained to gross domestic product. Let us consider some of the other principles which were enunciated by the Prime Minister before the 1984 election. He said that any reform must simplify the tax system so that all Australians can understand it more easily, making avoidance and evasion more difficult. Everybody would agree with that. But what has this Government done? It has introduced the most complex legislation-625 pages of legislation in the last few months-for a new capital gains tax which absolutely defies interpretation. It has introduced a fringe benefits tax that has caused and is continuing to cause very difficult problems, not only for the practitioners in the industry, but even for the back bench members of the Australian Labor Party. Senator Watson —And the Ministers. Senator MESSNER —Senator Watson is wise to remind us of that. During the debate on the legislation some six months ago in this very chamber the points that are now being raised by Labor Party back benchers were raised by the Opposition senators on this side of the chamber. We could not get any answers at all from Ministers as to what the fringe benefits tax legislation was all about. Ministers did not know what they were doing and certainly Labor Party back benchers had no understanding whatsoever of the nature of the law that was passed in this House. Senator Watson —You cannot even get answers now. Senator MESSNER —They are only just waking up now. We can get no answers from Ministers as to what is intended by a review of the fringe benefits tax. We can get no answers at all as to what is meant by the unintended consequences of the Act. Government Ministers cannot tell us. Officers from the Australian Taxation Office tell us that they have not been told what the unintended consequences of the legislation are to which they are supposed to be reacting. Senator Watson —We have 130 pages of rulings. Senator MESSNER —Senator Watson is doing very well in reminding me that 130 pages of rulings have now come out of the Taxation Office about the fringe benefits tax on top of all the legislation, the video tapes featuring Richard Carleton that are hopeless and all the kind of nonsense which the Government is trying to tell us is a good thing. Worst of all, the Government has now committed itself, apparently, to $2m worth of advertising to tell us how good the fringe benefits tax is for all Australians. This sum has been committed before the Government has even determined the outcome of the review it is supposed to be undertaking. So we have no idea what the original law is which it is trying to sell us. It has not yet determined it, yet it is prepared to commit an extra $2m of taxpayers' dollars to telling us how good the tax is for us. What kind of law is that? All of this comes under the heading of the Prime Minister's commitment to simplicity in the tax law, something he promised us before the 1984 election. Let us try to understand a little more about this set of amendments. The failure of this Government to deliver the tax cuts that were promised on 1 September this year means that a person on average weekly earnings, which are currently $480, will pay $110 more in tax this year. That is the result of the Government's broken promise, and it is even after all these tax cuts are applied. That person will still be paying $110 more. On the same day as the delayed cuts are to become effective, 1 December, the Government is to raise the Medicare levy by 25 per cent. So instead of paying one per cent, we will now pay 1.25 per cent. Honourable senators might remember that the Prime Minister made us another promise during the 1984 election campaign that there would be no increase in the Medicare levy. So another broken promise is chalked up to the Prime Minister. The Medicare levy has been increased substantially, by 25 per cent. A single breadwinner in a family with one income and two dependent children will be $23.50 worse off than he was before the 1984 election. He believed what the Prime Minister said during the election campaign. The Prime Minister promised us that there would be no assets test on pensions. He promised us that there would be no Medicare levy increase. He promised us reduced taxation, not higher taxation. But what do we find? We are $23.50 worse off. This comes on top of the increases in the petrol excise, which has already gone up from 6.1 cents to 19.7 cents-multiplied by 300 per cent since the 1984 election. That represents an extra cost of $6 per week to the average family. Let us go back a little further to the commencement of the period in office of the Hawke Labor Government-March 1983. Let us again take the case of a person on average weekly earnings. In 1983 the marginal tax rate, that is, the rate of tax payable on the next dollar of income to a person on those earnings, was 30 per cent. 30 cents on the next dollar would be paid in tax. What is the rate after all these grand tax cuts this Government is to give us on 1 July next year? Instead of 30 per cent we will pay 40 per cent, an increase of one-third since this Government came to power. That is what the Hawke Labor Government is about. We have seen the highest taxes from this Government in the history of Federation. Contrary to the impression the Government is trying to create in the community that it is reducing taxes, taxes will be rising very substantially. To make the point even clearer, let us consider the average amount of tax paid by a family on average weekly earnings. In March 1983 when the Fraser Government went out of office, the average amount of tax paid was 17.5 per cent. But even after the tax cuts in this legislation, the Government will be taking 20.5 per cent from the average weekly earner, an increase of something like 20 per cent. It would take an additional income tax cut of $8 a week on top of the two stages of tax cuts in this legislation to bring the average taxpayer back to the same level he was on in March 1983, three and a half years ago. Clearly, the Government has no answers and is not addressing the points which are of importance to the average Australian. It is interesting to note that even after 1 July 1987, when the second stage of these tax cuts comes into play, two million taxpayers will have moved out of the 29 per cent tax bracket that is being provided by this legislation and into the new 40 per cent tax bracket as a result of the natural flow of wage increases and the consequent flow into higher tax brackets-a very substantial increase. The disincentive effects of that are tremendous. There will be enormous problems as people decide to drop out of the work force or not to work as hard or to work only four days a week instead of five, and give up working for the Hawke Labor Government on that extra day. It is a very substantial increase on the marginal rate of tax, and it will hit the economy hard when it finally comes to fruition. Let us turn to the rate structure that will apply under the Government's new proposal. These rates are to apply from 1 December this year. The Government is trumpeting about how well it is doing by getting the top income tax rate down below 60 per cent. It talks about income earners earning more than $35,000 who were previously paying 60 per cent on the extra dollar. In the period up to June of next year, the rate is going to drop by a tremendous amount-down to 58.25 per cent; a colossal saving, by any standards, of 1.775 per cent! According to this Government, that is some great achievement. That rate is made up of a 57.08 per cent rate of income tax and a Medicare levy increase of 1.145 per cent. That is a tremendous effort. I congratulate the Government on trying to bring about what it claims is some great achievement. In reality, of course, it represents nothing more than some kind of mouse-like change in the community. Let us look at those who earn between $28,000 and $35,000. The rate that will apply from 1 December until next June is 47.975 per cent and the rate that presently applies under the present legislation is 48 per cent. That is a drop of 0.25 per cent. This is absolutely absurd. This Government is trying to kid us that it is achieving some great tax reform by reducing tax rates by 0.25 per cent. Similarly, with the rate applying to salaries from $19,500 to $28,000, the rate which will apply from 1 December is 45.395 per cent, which compares with 46 per cent under the current arrangements. We are seeing a situation where there is a very minimal drop in the level of tax rates, and it is so on down the scales. Obviously, this Government has laboured mightily to produce a mouse. Clearly, it will not be able to achieve anything like the ambitions that it is now putting about. Another issue on which the Government has paraded itself as being a great achiever is the great attack it has taken to the tax avoidance and evasion industry. Everybody understands the fundamental point that the major cause of tax evasion and tax avoidance in Australia is our very high marginal rates of tax. That is not an issue between us. Senator Giles —You should be ashamed, really. Senator MESSNER —That is what your Treasurer said, Senator Giles, and he has repeated it in the White Paper. It is clearly his understanding that it is a major incentive for tax avoidance. I agree with that. I believe that those very high and steep progressive rates of tax are a great problem for the tax avoidance industry and stimulate it. This Government has recognised that, but what it has sought to do is to say: `Okay, all the blame is with the John Howards and the Malcolm Frasers of the past'. The Government says that it has done more in three years to smash the tax avoidance industry than anybody else. But this Government has done nothing to smash the tax avoidance industry. The people who smashed the tax avoidance industry were the members of the Fraser Government, particularly Treasurer John Howard, now the Leader of the Opposition, by two very important strokes. The first stroke was the Crimes (Taxation Offences) Act amendments back in 1980, and the second stroke was the amendment to the taxation Act which introduced Part IVa of that Act to deal with sham transactions in a way that they could not have been dealt with under section 260 of the former law. Those two changes absolutely destroyed the tax avoidance industry from 1980 onwards and anybody who has anything to do with the taxation industry will tell honourable senators the same thing. Practitioners know full well that the industry was stopped dead in its tracks in 1981 as a result of the actions of John Howard. The tax avoidance industry has not changed one iota under this Government. That is the truth of the matter, and that is where this Government is so dishonest in its approach to tax avoidance, because it claims that it is the paragon of virtue whereas the actual deeds were done under the stewardship of John Howard as the Treasurer in the Fraser Government. Senator Maguire knows that. He is fair enough to understand those things and he knows that from reading the law. He only has to look at the historical part of the Act which spells that out. Senator Robertson —When you believe your own propaganda, that is the worst possible situation of all. Senator MESSNER —Senator Maguire knows it, Senator Robertson. Senator Robertson does not have to explain it to him. He knows the truth. Senator Robertson knows that all those canards that honourable senators on the other side come up with from time to time to blame us for tax avoidance are wrong. If he does not know that, Senator Maguire does, because he is intelligent. He has had experience in these things and he knows the situation precisely. Finally, I make the point that in the last few days the Commissioner of Taxation has made some comments in connection with the fringe benefits tax. This has been a matter of great concern to many people, because on two occasions now the Commissioner of Taxation has entered into political areas. Back in May, in advance of the law on the fringe benefits tax being passed, a document was issued which sought to obtain information from taxpayers about their affairs, without the authority of the law. That created great concern in the community at that time. In the last day or so, the Commissioner of Taxation has made disparaging statements about unnamed people, but he has clearly made the point that the fringe benefits tax is somehow something which has been brought to people's attention but that no action has been taken. I believe that it is absolutely outrageous for the Commissioner of Taxation to take such action in the situation we face in this country. I believe that a political action is being taken by an officer of the Public Service entering the fray in a political matter and putting an interpretation on events and on current debate within this country which stems from his personal involvement and background in this area. I believe that the statements of the Commissioner of Taxation in the last few days require to be commented upon. They certainly bring concern to all of us in the community. If the Commissioner's statements in his speech yesterday are being wrongly interpreted, I believe he ought to say so. I hope that he will do that. But the situation remains that it is unusual for a Commissioner of Taxation or any other public servant-it is certainly wrong in principle-to get involved in political debate, especially with an issue as hot as the fringe benefits tax, or matters of that kind. Senator Siddons —Why don't you make clear what the Opposition will do on fringe benefits? Senator MESSNER —Wait and see. Senator Siddons —We have been waiting a long time. Senator MESSNER —Senator Siddons will have a very clear statement of that when our tax policy is released. Senator Zakharov —When might that be? Senator MESSNER —It will be made clear to everybody in Australia at the appropriate time. I hesitate to talk of those matters but they have been raised in the public arena and deserve comment from those in the Parliament representing the people, in light of our constitutional background and history. I believe it is a problem which needs to be addressed and which ought to be addressed by this Government. Finally, in relation to the Income Tax Rates Bill, I move: At the end of the motion, add: ``, but the Senate is of the opinion that- (a) the Government's taxation policy, in particular its fringe benefits and capital gains taxes, is causing damage and confusion to business and farmers; (b) the Government's failure to deliver tax cuts on 1 September 1986 as promised in 1985 has caused additional hardship to families; and (c) this Government is the highest taxing Government in history, with tax receipts estimated to reach 25.5% of GDP''. In relation to the Medicare Levy Bill, I move: At the end of the motion add: ``, but the Senate- (a) condemns the Prime Minister for breaking his promise that for the term of Labor's next Government, the Medicare levy would not be increased; (b) notes with concern that the Government continues to perpetuate the myth that the levy pays for Medicare health services when in fact it only pays approximately 40% of the cost of Medicare with the balance being funded out of general revenue; and (c) condemns the Government for its total failure to take action to contain the massive blow-out in Medicare health costs''. Senator MAGUIRE(South Australia)(10.13) —This evening we are debating the Income Tax Rates Bill, the Income Tax Bill, the Taxation Laws (Miscellaneous Provisions) Bill and the Medicare Levy Bill cognately. The Bills introduce the cuts to the marginal rates of income tax in the Australian tax system and they increase the taxation threshold. These moves are the final element of the Hawke Government's tax reform package concerning income tax. It is the most far reaching reform of the Australian taxation system ever. The aim of the reform is to restore fairness and equity, to reduce the burden on the ordinary pay-as-you-earn personal income tax payer in the community-a burden which got greater and greater under the Fraser-Howard Liberal Administration. Contrary to what Senator Messner claimed earlier this evening, the tax reform package will not raise the overall level of taxation in the community. It is a reform package. It redistributes. The revenue that is collected in the tax initiatives in the package are paid back again as personal income tax cuts and as reductions in other taxation. It is a redistributive package. It does not lift the overall level of taxation in the community. Senator Siddons —It does not reduce it either. Senator MAGUIRE —It is a reform package, as I said. Unfortunately, in carrying on the debate on this package in the community the Opposition has tried to create the fiction that overall taxation is rising as a result of the package. That is the fiction that this Opposition has been attempting. It is absolute nonsense. The tax package will raise some $1,500m in revenue but will return to the community some $4,500m. I regret to say that under the old Australian taxation system which was operated by the Fraser- Howard Liberal Government high income earners were able to avoid or minimise their taxation liabilities. That was the name of the game. That is what happened repeatedly under the taxation system that was operated by the Fraser-Howard Liberal Government. That income tax system was full of loopholes and rorts. Some examples are the disguising of otherwise taxable income in the form of tax free capital gains. There were negative gearing arrangements. Although the Opposition has been crying crocodile tears about the change in negative gearing arrangements having an effect on the rental housing market, the fact is that negative gearing was not engaged in to help rental housing anyway; it was purely a taxation avoidance device. It has nothing to do with boosting the stock of rental housing in the community. Negative gearing arrangements were designed sheerly to shelter the taxpayer's principal income from personal exertion from taxation obligations. That is what it was all about. I turn to fringe benefits. The other day I referred to the misnomer of the `company car'. All of us paid for company cars as deductions from company tax. We paid for the purchase of those cars which were made available often exclusively for private use of employees because those motor vehicles were 100 per cent deductions from company tax. So they were subsidised by the general taxpayer for private use. There was a whole range of other so-called fringe benefits such as the payment of fees at private schools by employers. That is what was going on in the community. In some cases these so-called fringe benefits represented 40 per cent of the total remuneration of top executives in Australia. When so-called fringe benefits reach that level they are no longer remuneration at the margin. The concept of calling such things fringe benefits is absolutely nonsensical. Under the Fraser-Howard Government there were free lunches at taxpayers' expense. At about this time last year we heard an incredible array of claims about the impact on the restaurant industry of our moves to disallow entertainment allowances as tax deductions. Senator Messner made claims. Various sections of the National Party and the Liberal Party made claims about the potential impact on that industry of our disallowing entertainment allowances as tax deductions. The system was abused. We had examples of people taking their families out to lunch in expensive restaurants on Sundays and booking it up to the taxpayer. That is what was going on under the Fraser-Howard Government and we cleaned it up. These rorts were costing the community tens of millions of dollars annually. Pay-as-you-earn taxpayers, the ordinary personal income tax payers in the community, were forced to shoulder an ever-increasing share of the Australian taxation burden. Yet income tax essentially became an optional tax for the rich in Australia. It became a voluntary tax under the Liberals. Senator Robertson —Tax avoidance was an industry. Senator MAGUIRE —No responsible government could tolerate a tax system which forced low and average income earners to subsidise the lurks and perks of the rich. Before I was elected to the Senate I can recall hearing Liberal politicians going round the country saying that there was no such thing as a free lunch. That was the slogan of the day in the 1970s to con the community into making sacrifices to help Mr Howard's economic policies to work. We were told repeatedly that there was no such thing as a free lunch. The Liberals and the Nationals in this place 12 months ago fought tooth and nail to retain tax subsidised lunches for very well to do people in the community. Yet they operated under that slogan that there was no such thing as a free lunch. Mr Howard, as Treasurer of Australia, tolerated and perpetuated that very blatantly unfair and regressive taxation system. He had five years as Treasurer of this country, from 1978 to 1982. He did nothing to clean up those abuses. In fact tax evasion and tax avoidance were among the very few growth industries under the Fraser-Howard Government. As Senator Robertson pointed out a few moments ago by interjection, tax avoidance grew into a major industry in this country while Mr Howard was Treasurer of Australia. One of the great growth industries of the 1970s was the tax avoidance industry. Mr Howard, as Treasurer, was prepared to license the great Australian tax rip-off. I heard Senator Messner claim this evening, in a Stalinist re-write of history, that the Liberals had acted to clean up tax avoidance in Australia, that it was their initiative under that wonderful, squeaky-clean government that we had in the 1970s under Mr Fraser and Mr Howard, that acted to clean up tax avoidance and tax evasion in Australia. I have been in this place for some three and a half years. I can remember on a number of occasions in that period being on the losing side when we tried to get tax evasion legislation passed in this place. Repeatedly the Liberals, in the three and a half years that I have been in this place, have voted to destroy tax evasion legislation. Senator Messner —How many Bills were put up by you lot? Which ones were they? Tell us about them. Give us the name of the Bills. Senator MAGUIRE —That is the record. Senator Messner can try to perpetrate another fiction, but in that period, on every occasion the Liberals voted to destroy this Government's vital tax avoidance crack down legislation. The Opposition says that the tax system in Australia should encourage incentive. But we are entitled to ask: What incentive did the old system encourage? It was the incentive to cheat and to fraud. I think that they are the qualities that the Opposition still wants to foster in this community. The tax reform package which is enabled by this legislation, I am pleased to say, will close loopholes and eliminate rorts. The fringe benefits tax, the capital gains tax and the disallowance of entertainment expenses will ensure that for the first time in many years high income earners in this country will pay their fair share of taxation. I point out to Senator Messner that the capital gains tax was very strongly supported at the National Taxation Summit last year. For example, the Victorian Chamber of Manufactures-hardly an affiliate of the Australian Labor Party, hardly a socialist organisation-very strongly endorsed the capital gains tax. It was also endorsed by the chief executive of CSR Ltd. The investment manager of the AMP Society, the largest investor in this country, endorsed the concept of a capital gains tax. This evening Senator Messner said that Australia's capital gains tax was the most punitive in the world, the toughest capital gains tax in the world. Senator Messner —It sure is. Senator MAGUIRE —I wish it were. But I point out that whilst Senator Messner claims that it is a very punitive tax, in fact it is about the only capital gains tax in the developed countries which fully adjusts the capital gain for inflation. Senator Messner —You don't adjust good will. Your house can be taxed. Prior to 19 September property can be taxed. You just don't know your law. Senator MAGUIRE —There is full indexation of the capital gain before taxation is applied, so there is no inflation element in the tax. The capital gains tax is a tax on real gains, and that is most unlike the capital gains taxes in the other developed countries. From that point of view, I hope that Senator Messner has learnt something this evening. I regret to say that our capital gains tax is not the toughest in the world. The revenue raised by the disallowance of the tax-subsidised lunch, the taxation on fringe benefits and the introduction of the capital gains tax will finance this Government's income tax reductions for many Australians. That is the key point to be borne in mind. We could not have these income tax reductions for the vast majority of pay as you earn personal income tax payers in Australia if we did not have the fringe benefits tax, if we did not have the capital gains tax, and if we had not cracked down last year on the subsidised lunch. The revenues from those items-over $575m in a full year from the fringe benefits tax, over $330m in a full year from the crackdown on the tax subsidised business lunch, and the revenue over and above that from the capital gains tax-are vital components in the financing of this Government's taxation package. We cannot have cuts in personal income tax without the capital gains tax, the fringe benefits tax and the disallowance of entertainment expenses. The Government's tax reforms are part of a package. The Opposition, day after day and week after week, chooses to ignore this. It seizes upon part of the package. It tries to create the impression that the Government is raising taxation. Of course, nothing is further from the truth. The Government is simply closing loopholes, eliminating rorts and redistributing revenue in the form of tax cuts. The Government is easing the tax burden on honest taxpayers by taxing the evaders, the avoiders and the cheats. The Liberals, by opposing the fringe benefits tax and the capital gains tax, in effect, are trying to sabotage the personal income tax reductions for the ordinary Australian. That is what it comes down to. They are working with groups in the community to deny us revenue which we can pay back, as personal income tax reductions, to the great majority of ordinary Australian taxpayers. That is what it is all about. The tax cuts which will occur in about six weeks' time, on 1 December, follow on from the income tax reductions which we introduced in November 1984. At that stage we introduced phase one of our reforms of income tax. At that time, in November 1984, taxpayers with taxable incomes of between $240 and $530 a week received an income tax reduction of $7.60 a week. At that time that $7.60 a week reduction in income tax partly reflected the changes in the tax rates. For example, the standard marginal tax rate at the time was reduced from 30c in the dollar to 25c in the dollar. That was of major benefit to low and middle income earners. From 1 December this year we will raise the tax free threshold-that is, the exemption on the first dollars of taxable income-from $4,595 to $5,100, a tremendous increase in the tax free threshold. Members of the Liberal Party should eat their hearts out because they never achieved a tax free threshold of over $5,000. Under this Government it will be $5,100. The best that Mr Howard could do as Treasurer was to have a tax free threshold of $4,595. Senator Siddons —But they did index it for six months. Senator MAGUIRE —Then they got rather sick of it. We are going beyond reductions in the tax free threshold. We will reduce marginal income tax rates as well, so there will be a two-fold effect in reducing the income tax burden on average Australians. Marginal tax rates will be reduced throughout the tax scale. In fact, we will compress the current five income tax brackets system to a tax system which has four brackets. For example, the current marginal rate of 48c will go down to 40c in the dollar, and the 46c rate will also go down to 40c in the dollar. The bottom marginal rate will go from 25c, which I referred to a moment ago, down to 24c. At the top of the income range, the highest income bracket, the marginal rate will be reduced from 60c in the dollar to 49c in the dollar. Of course, the average tax rates are well below those marginal tax rates. That is one of the other great fictions that the Liberal Party tries to create in the community. It tries to con people into believing that marginal tax rates are synonymous with average tax rates-the rates which are paid on all dollars of income. Of course, the average tax rates are well below those marginal rates-the rates which apply to the last dollars of income. As a result of the finance derived from the fringe benefits tax, the capital gains tax and the crack down on the free lunch, the tax cuts will be quite significant. For example, a taxpayer on a taxable income of $400 a week will receive a reduction of $5.10. So when one combines that with the $7.60 reduction in income tax that this Government introduced in November 1984, that gives a weekly reduction in personal income tax of $12.70. That is a $12.70 reduction in personal income tax in just two years. For a person on a taxable income of $300 a week, the reduction in income tax on 1 December will be $3.75, making a total of $11.35 a week in the two years since November 1984. Debate interrupted. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Order! It being 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Senator CROWLEY(South Australia)(10.30) —This afternoon I spoke to a discussion paper entitled `Child Support-A Discussion Paper on Child Maintenance'. In my comments I replied to an interjection by Senator Walters and then continued. When Senator Vanstone rose to speak after I had spoken, she commented about what I had to say which made me take the time to look at the `pinks' when they became available. I see what I am accredited with saying the following after an interjection from Senator Walters. The `pink' reads: Senator Walters —That one has been done to death. Senator CROWLEY —Thank you for that contribution Senator Walters. If only death would overtake the honourable senator. I want to amend the Hansard record to say what I intended to say and that is: If only death would overtake the honourable senator's contributions. If there is any misunderstanding that I had intended to wish death upon Senator Walters, I take this opportunity of apologising for that sentiment being conveyed in the chamber. Senator Walters and I have established in my very short time as a senator that we are quite clearly sparring partners. I think that is known both within the committees on which we serve and in this chamber. I seek the Senate's indulgence to make that amendment to Hansard and hope that it will be acceptable, in particular, to Senator Walters. Senator REID(Australian Capital Territory)(10.32) —I do not wish to appear to be complaining but on 24 September I asked a question which was directed to the Minister for Veterans' Affairs (Senator Gietzelt). He was not present in the chamber but the question was dealt with, by request, by the Leader of the Government in the Senate (Senator Button). He said in answer that he would have to direct the question to the Minister and obtain an answer as soon as possible. I have not yet had an answer. I gave a copy of the question to the Minister for Veterans' Affairs on 9 October and I am raising the matter tonight to find out when I will get an answer. The question, in relation to the Australian War Memorial, was: Did the Government cause Mr Des Corcoran, the former Labor Premier of South Australia, to be told yesterday- that being 23 September- that he was not to be reappointed to the Council of the Australian War Memorial? Did the decision reverse a previous decision that he was to be reappointed? Why was the decision made not to reappoint Mr Corcoran? Why was he informed only 24 hours before he was due to take his place at a meeting of the Australian War Memorial Council today? A lot of matters with respect to the War Memorial have caused many people great concern. That is only one aspect of it. I think we are entitled to an answer to at least that much of the quandary. People are beginning to wonder why the War Memorial was transferred to the Department of Veterans' Affairs from the Department of Arts, Heritage and Environment. I am sure the matter will come up again especially when the report of the inquiry is available. However, at least I would like to know when I will get an answer to that question asked on 24 September. The answer must be known to the Government. It just seems that it is not prepared to give it to the Senate. Senator WALSH(Western Australia-Minister for Finance)(10.34) —I do not know anything about that matter and the Minister for Veterans' Affairs, Senator Gietzelt, is not here. However, I will see whether I can get an answer. Question resolved in the affirmative. Senate adjourned at 10.34 p.m. The following papers were tabled: Public Service Act-Determinations 1986 Nos 66, 67. Seat of Government (Administration) Act-Determination under the National Memorials Ordinance, dated 10 October 1986. The following answers to questions were circulated: (Question No. 1026) Senator Jones asked the Minister representing the Special Minister of State, upon notice, on 17 April 1986: (1) What action, if any, was taken in each case and are any prosecutions being contemplated, in light of allegations made by Channel TVQ O on its program of 18 March 1986 and subsequent programs and during Australian Federal Police investigations in 1984 and subsequently, into allegations of an international crime ring engaged in importation of drugs through Brisbane, industrial espionage, disclosing silent telephone numbers for money, eavesdropping on the conversations of racing identities to sell tips, and deactivating phone connected burglar alarms to facilitate robberies. (2) Have the Telecom technicians named in a police telex dated 10 August 1984 been employed in or had access to, at any time since March 1984, in Telecom local engineering, operations, processing, analysing (Leopard) centres or other Telecom positions which could facilitate such activities and, if applicable, did any of them cease working in such positions or have their access terminated, pending investigation; if so, for what reason. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) With regard to allegations of an international crime ring engaged in the importation of drugs through Brisbane, I am advised that the Australian Federal Police (AFP) and Queensland Police conducted a joint investigation in August 1984. Three people who were subjects of this investigation, were arrested by the NSW Police in September 1984. With regard to the other allegations, I am advised by the AFP that these matters are currently under investigation. (2) The Minister for Communications has provided the following information in answer to this part of the honourable senator's question, based on advice from the Australian Telecommunications Commission: One of the officers referred to in the alleged police telex dated 10 August 1984 was employed briefly in a Telecom local engineering, operations, processing, analysing (Leopard) Centre during the period referred to. Neither officer was employed in any other positions which could facilitate the activities alleged. Telecom has indicated that the circumstances in which the officer returned to the Leopard Centre temporarily resulted from the need to restrict the number of people who could be made aware of the investigations, and management changes. Consistent with the wishes of the Australian Federal Police, staffing changes involving officers were limited initially. Neither officer is employed with Telecom now. (Question No. 1145) Senator Morris asked the Minister representing the Minister for Arts, Heritage and Environment, upon notice, on 4 June 1986: What projects have been funded within New South Wales under (a) the National Estate Grants Program; and (b) the Community Employment Program, for projects related to restoring and preserving our Australian Heritage where such projects are also tourist attractions. Senator Ryan —The Minister for Arts, Heritage and Environment has provided the following answer to the honourable senator's question: (a) The National Estate Grants Program began in 1973-74 and during the thirteen years to 1985-86, about $35m has been provided for some 2700 projects. New South Wales accounted for approximately 440 of those projects with a total value of $3.5m. I have only provided details of the National Estate Grants Program for the last 3 years from 1983-84 to 1985-86. The lists of projects for each financial year has been shown in full because virtually all projects can be said to have a tourism aspect or component. NATIONAL ESTATE PROGRAM GRANTS FOR 1983-84 $ State Government Conservation of Aboriginal Carved Trees-National Parks and Wildlife Service... 12 000 Mootwingee Conservation Plan-Royal National Parks and Wildlife Service... 30 000 Sydney Basin Aboriginal Heritage Study-Rock Engravings Sites Stage 1-National Parks and Wildlife Service... 20 000 Fortification Research and Documentation of Sydney Harbour-National Parks and Wildlife Service... 10 000 Conservation Study of Camden Park-The Gardens and Grounds including Nursery Area-Department of Public Works... 15 000 Willandra Lakes-Continuation of Archaeological and Geomorphological Study-Western Lands Commission... 25 000 Willandra Lakes-Study of Natural Vegetation-Western Lands Commission... 25 666 Lord Howe Island-Conservation Study-Lord Howe Island Board... 19 000 Restoration of Hyde Park Barracks Clock-Museum of Applied Arts and Sciences... 6 500 Mint and Barracks Site-Statement of Archaeological Findings-Museum of Applied Arts and Sciences... 10 000 Local Government Bodies Bankstown Heritage Study-to include Aboriginal Component-Bankstown City Council... 10 000 Dungog Shire Historical Study-to include Aboriginal Component-Dungog Shire Council... 4 000 Restoration of former Headmaster's residence for George Street Public School Museum, Deniliquin-Deniliquin Municipal Council... 15 000 Development Control Guidelines-Gaskill Street-Canowindra-Cabonne Shire Council... 3 000 Evans Shire Heritage Study-Evans Shire Council... 15 000 Historical Brickworks-Glen Innes Technical and Management Study-Glen Innes Municipal Council... 5 000 Quambi House-Internal Restoration-Great Lakes Shire Council... 5 000 Aboriginal Sites Planning Study-Lake Macquarie Municipality-Lake Macquarie Municipal Council... 8 000 Lorn Conservation Study-Maitland City Council... 4 000 MacIntyre/Barwon Rivers Archaeological Planning Survey-Moree Plains Shire Council... 6 000 Wyong Shire Aboriginal Sites Protection Planning Study-Wyong Shire Council... 10 000 Uralla Heritage Study-Uralla Shire Council... 12 000 North Entrance Peninsula-Fire Management and Weed Control-Wyong Shire Council... 6 000 Liverpool Heritage Study-Liverpool City Council... 14 000 Mudgee Heritage Study-Mudgee Shire Council... 13 000 Burwood Heritage Study-Burwood Municipal Council... 13 000 Non-Government Bodies Conservation Study of Circular Quay Areas-University of New South Wales Graduate School of Built Environment... 7 500 Education Pamphlets on Aspects of Natural Areas-Environment Centre... 3 000 Structural Investigations of Prince Alfred Bridge-Gundagai Prince Alfred Bridge Committee... 5 000 Development of Historic Landscape-National Trust... 10 000 South Maitland Railway Study-National Trust... 10 000 Cemeteries-Additional Survey Work-National Trust... 20 000 Port Stephens Landscape Conservation Study-National Trust... 6 000 History House-Restoration of Interior-Royal Australian Historical Society... 14 000 Restoration of Historical Museum Building-Rylstone and District Historical Society... 12 000 Restoration of Carcoar School of Arts-Trustees of Carcoar School of Arts ... 25 000 Protection of Aboriginal Site-Walgett-Walgett Aboriginal Consultative Committee... 3 000 Classification of Landscapes-Selected Areas-National Trust... 15 000 1984-85 State Government Mungo Keeping Place for Human Remains-National Parks and Wildlife Service... 10 000 Regional Aboriginal Heritage Study-North Coast and Northern Tablelands-National Parks and Wildlife Service... 15 000 Biological Survey of Mid-North Western New South Wales-National Parks and Wildlife Service... 12 500 Management Study of Aboriginal Burial Sites in South-Western New South Wales- National Parks and Wildlife Service... 35 000 Local Government Seminar on Aboriginal Sites-National Parks and Wildlife Service... 5 000 Willandra Lakes World Heritage Region-Vegetation Study Supplement-Department of Environment and Planning... 15 000 Willandra Lakes World Heritage Region Study of Feral and Native Grazers-Department of Environment and Planning... 20 000 Willandra Lakes World Heritage Region Aboriginal Attitudes Study-Department of Environment and Planning... 30 000 Camden Park Estate-Garden Restoration-Department of Public Works... 7 500 Local Government Bodies Albury Central Area-Heritage Study- Albury City Council... 7 500 Bellingen Main Street-Heritage Study- Bellingen Shire Council... 5 000 Blacktown Aboriginal Site-Survey-Blacktown City Council... 5 000 Former Dubbo Gaol Complex-Restoration-Dubbo City Council... 15 000 Esk Bank House-Lithgow-Greater Lithgow City Council... 5 000 Junee Heritage Study-Junee Shire Council... 7 500 Maclean Aboriginal Site Survey-Maclean Shire Council... 7 500 Colonial Cottage-Merriwa-Restoration-Merriwa Shire Council... 3 000 Mosman Heritage Study-Mosman Municipal Council... 15 000 O'Neill Residence-Narromine-Relocation and Restoration-Narromine Shire Council... 5 000 Shepherd's Hill Project-Newcastle- Newcastle City Council... 10 000 St Stephen's Anglican Cemetery-High Street-Penrith-Conservation-Penrith City Council... 3 500 No. 3 Plunkett Street-Nowra-Restoration-Shoalhaven City Council... 5 000 Singleton Heritage Study-Singleton Shire Council... 14 000 Development Control Plan and Conservation Brochure, Braidwood-Tallaganda Shire Council... 2 000 Walcha Pioneer Cottage-Restoration- Walcha Shire Council... 3 000 Non-Government Bodies Country Women's Association Rest House, Barellan-Restoration-Country Women's Association of New South Wales... 3 000 Dundullimal Homestead, near Dubbo- Stabilisation-National Trust... 15 000 Hunter Heritage Centre-Old Police building-Hunter Street-Newcastle-Restoration-National Trust... 20 000 Saumarez Homestead and Outbuildings- Armidale-Conservation-National Trust... 25 000 Natural Environment Documentation- Nature Conservation Council of New South Wales... 7 000 Study of Extending the National Estate in South East New South Wales-The Wilderness Society-New South Wales... 20 000 Seminar on Wetland Management-Total Environment Centre... 10 000 Sugarloaf Creek Bush Regeneration- Willoughby-Total Environment Centre... 10 000 Urban Park Bushland and Small Natural Areas Study-Total Environment Centre... 13 000 Wetland Environment Protection Plans- Total Environment Centre... 10 000 Shortland Wetlands Centre Project-University of Newcastle... 5 000 Survey of Rainforest Stands-Southern Foothills-Barrington Tops-University of Newcastle... 20 000 Archaeological field Project-University of Sydney... 20 000 Cataloguing and Conservation of the Sir John Sulman Papers and Drawings-University of New South Wales... 9 000 1985-86 State Government Observatory Hill-Conservation and Management-Public Works Department... 10 000 Hyde Park Barracks and Mint Building- Museum of Applied Arts and Sciences... 10 000 Lord Howe Island Regional Environmental Plan-Premier's Department... 20 000 Regional Aboriginal Site Survey of South East NSW-National Parks and Wildlife Service... 15 000 Sydney Basin Aboriginal Site Survey, Stage II-National Parks and Wildlife Service... 14 000 Old Great North Road, Stabilisation- National Parks and Wildlife Service... 10 250 Lake Victoria Plan of Management- National Parks and Wildlife Service... 27 000 Local Heritage Study Review-State Heritage Register Preparation-Department of Environment and Planning... 8 000 Local Government Bodies Candelo Heritage Study-Bega Valley Shire Council ... 5 000 Broken Hill Heritage Study-Broken Hill City Council... 7 500 Canterbury Heritage Study-Canterbury Municipal Council... 2 000 Hawkesbury Heritage Study-Hawkesbury Shire Council... 5 000 Windsor and Richmond Main Street Studies-Hawkesbury Shire Council... 4 500 Kiama Heritage Study-Kiama Municipal Council... 7 500 Manly Heritage Study-Manly Municipal Council... 5 000 Tamworth Heritage Study-Tamworth City Council... 7 500 Bellingen Main Street Study-Bellingen Shire Council... 2 000 Dungog School of Arts Building-Conservation-Dungog Shire Council... 1 000 Mechanics Institute Building-Moruya-Restoration-Eurobodalla Shire Council... 12 000 Forbes Town Hall-Restoration-Forbes Shire Council... 10 000 Lithgow Blast Furnace-Survey-Greater Lithgow City Council... 5 000 Wingham Urban Conservation Area Study-Greater Taree City Council... 4 000 Bishops Lodge-Hay-Acquisition-Hay Shire Council... 60 000 Merriwa Cottage-Merriwa-Restoration-Merriwa Shire Council... 12 000 Old Wentworth Gaol-Conservation Plan-Wentworth Shire Council... 2 900 Willoughby Heritage Study-Willoughby Municipal Council... 9 500 Mudgee Shire Heritage Restoration Fund-Mudgee Shire Council... 10 000 Hargraves Court House Building-Restoration-Mudgee Shire Council... 10 000 Non-Government Bodies Conference on Woodchipping in New South Wales-Total Environment Centre... 10 000 Murray River Red Gum National Park Feasibility Study-Nature Conservation Council of NSW... 10 000 Evaluation of Natural Areas for the Register of the National Estate-Nature Conservation Council of NSW... 10 000 Bexley School of Arts-Restoration-Bexley School of Arts Management Committee... 1 300 Brewarrina Court House-Restoration-Brewarrina and District Historical Society... 5 000 Darlington Point Police Station Complex-Restoration-Darlington Point Advancement and Historical Association... 2 000 House at 103 Dowling Street-Dungog-Restoration-Dungog Information and Neighbourhood Centre... 5 000 Survey Assessment of Urban Parks-National Trust ... 8 750 Study of 19th Century/20th Century Trading Wharves in Sydney-National Trust... 8 000 Eveleigh Railway Yards Study-National Trust... 8 000 Assessment of Water Board Sites in Sydney-National Trust... 6 000 Revision/expansion of the Industrial Sites List-National Trust... 4 000 South Grafton Main Street Study-South Grafton Businessmen's Association... 5 800 Chaff Cutting Shed adjacent to McCrossins Mill-Uralla, Restoration-Uralla Historical Society... 10 000 Hastings District Aboriginal Sites Survey-Birpai Local Aboriginal Land-Council... 10 000 Coffs Harbour Area Aboriginal Sites Survey-Coffs Harbour and District Local Aboriginal Land Council... 13 000 Aboriginal Sites Protection Handbook- Co-operative for Aborigines Ltd... 4 000 Koonadan Aboriginal Site-Rehabilitation-Leeton Local Aboriginal Land Council... 20 000 Gillenbach Travelling Stock Route Campsite-Protection-Narrandera Local Aboriginal Land Council... 2 500 Maloga, Yulpa Island and Dora Burial Grounds-Protection-Yota Yota Local Aboriginal Land Council... 2 000 Brewarrina Fish Trap-Restoration-Brewarrina Local Aboriginal Land Council... 2 000 Alfords Point Rock Shelter-Protection-Western Metropolitan Regional Aboriginal Land Council... 1 450 Toomelah and Old Toomelah Burial Ground Project-Toomelah Progress Association... 2 200 Sappa Bulga Ranges Site Survey-Narromine Local Aboriginal Land Council... 1 600 Quirindi Area Aboriginal Sites Survey-Nungaroo Local Aboriginal Land Council... 5 000 (b) The Community Employment Program is administered by the Department of Employment and Industrial Relations which has provided my Department with the following information of heritage projects funded under CEP in New Souh Wales from inception up to May 1986. All projects could be said to have a tourism aspect. COMMUNITY EMPLOYMENT PROGRAM GRANTS $ Landscaping Port Hacking Campsites... 40 258 Painting Rathane Telford Campsites-Anglican Youth Department... 13 814 External Painting Town Hall... 18 516 Folk Museum Maintenance Assistant-Armidale City Council... 6 997 Municipal Buildings-Maintenance and Repair-Ashfield Municipal Council... 66 044 Heritage Update-Australian Heritage Commission... 35 674 Rural Environmental Study-Bega Valley Shire Council... 38 690 Restoration of Historic Paving-Blayney Shire Council... 23 736 Restoration of ``Macaria''-Camden Municipal Council... 36 026 Church Street Historical Precinct-Canterbury Municipal Council... 40 470 Bundagen Flora Reserve-CYSS Bellingen... 20 842 Dalwood Restoration Project-Dalwood Restoration Association... 58 380 Dark's Common Restoration Program-Dark's Common Trust... 34 788 Camden Park Development-Department of Agriculture... 559 735 Bush Regeneration-H. J. Reid Reserve-Department of Environment and Planning... 58 132 Adelong Showground Improvement... 8 638 Heritage Walk East Maitland-Department of Local Government and Lands... 5 513 Restoration of Historic Home-Department of Technical and Further Education... 50 699 Stage 2-Grey Street Project-Glen Innes Municipal Council... 44 640 Australiana Village Restoration Project-Hawkesbury Shire Council... 165 024 Housing Estates Mobile Resource Unit-La Perouse Community Development Project... 15 870 Lachlan Loco Works-Lachlan Valley Railway Society Co-operative Ltd... 36 976 Public Buildings Renovations-Maitland City Council... 91 600 Aboriginal Site Protection and Interpretation-Nowra District... 21 000 Administrative Support and Visitor Information-Blue Mountains District... 75 565 Amenities Facilities Maintenance-Warrumbungle National Park... 8 538 Building Maintenance-Yathong Nature Reserve, Cobar... 7 192 Camping Area Restoration-Blue Mountains Forestry District... 89 507 Cattai State Recreation Area Restoration Historic Homestead and Grounds... 41 208 Landscaping and Restoration-South Head Sydney Harbour and Park... 46 872 Park Fire Trail Maintenance-Coonabarabran... 10 382 Park Walking Track Maintenance... 12 376 Pest Control Animal and Plant-Blue Mountains District... 126 223 Plan of Management-Blue Mountains Forestry District... 42 756 Public Access Roads-Blue Mountains Forestry District... 139 785 Stage 1 Quarantine Station Conservation... 1 017 777 Stage 2 Quarantine Station Conservation-National Parks and Wildlife Service... 464 223 Restoration of Woodford Academy... 200 888 Riversdale Garden Project-Southern Tablelands Regional-National Trust... 7 829 Botanical Specimen Mounting... 117 026 Computerisation of Gardens... 8 411 Garden Development Vaucluse House... 12 572 Production of Informational Leaflets... 60 450 Production of Informational Leaflets... 40 966 Providing Education Programs for Historic Houses... 40 966 Thematic Development... 121 641 Travelling Exhibition-Historic Houses Trust... 7 355 Wolloomooloo Bay Restoration-Premier's Department... 52 988 Richmond School of Arts Further Restoration-Richmond Literary Institute... 20 008 Completion of Laurel Hill Chapel-Rotary Club of Tumbarumba... 54 121 Southern Highlands Community Centre-Southern Highlands Community Centre... 35 550 St Peters Historic Cemetery Restoration-St Peters Anglican Church... 14 341 Redecking Historic Paddle Steamer ``Ruby''-Wentworth Rotary Club... 16 718 Replica Steamship for Bicentenary-William the Fourth Project Ltd... 85 721 Heritage Assistant-Administration-Wollongong City Council... 22 297 Repairs to Dunbar House-Woollahra Municpal Council... 14 832 (Question No. 1327) Senator Michael Baume asked the Minister representing the Minister for Foreign Affairs, upon notice, on 20 August 1986: What arrangements have been made for dispossessed former residents of Eastern Bloc nations to make compensation claims against the present governments of those nations in respect of the assets expropriated. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: Many hundreds of Australian citizens claim that they have had property nationalised or taken into State control by foreign governments since about 1939. Few have had any success in pursuing their claims on an individual basis. Many had only limited ties with Australia at the time the actions complained of were taken. In 1984 I asked that an interdepartmental working group consider what can be done to facilitate a proper settlement of these claims. I expect that the ideal solution would include comprehensive official action to invite and assess the validity of claims made by Australian citizens. Compensation would then ultimately be paid out of funds provided following the negotiation of government-to-government agreements between Australia and the other countries concerned. However, achievement of this ideal solution requires the full cooperation of the latter countries, and this will need to be established. The work of the interdepartmental group is proceeding as resources allow. The legal and administrative issues involved are complex and it is expected that final resolution of this matter will take some considerable time. Senator Ryan —On 10 October 1986 (Hansard, page 1193), Senator Newman asked me a question without notice regarding removal costs for Government employees. I undertook to provide her with an answer to her question as soon as possible. I can now provide the following answer to the honourable senator's question: I am informed that no distinction is drawn on the basis of marital status in determining entitlements for servicemen and servicewomen when they are reposted. Different entitlements do of course apply to those serving members with family, and those without. Family is defined to include spouse or defacto spouse of the member, a child of either, under 21 years and normally resident with the family, a parent of either member or spouse or defacto spouse normally resident with the family.