Thursday, 23 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 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 Senator Ryan (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned showeth: (1) The Agreement between the United States of America and Australia concerning the Joint Defence Space Research Facility at Pine Gap can be terminated from 19 October 1986. (2) In the event of war between the United States and the Soviet Union, access by the United States to Pine Gap's facilities makes it a probable nuclear target. (3) Access by all nations to Pine Gap's capacity to monitor and verify compliance with existing and future nuclear limitations treaties could contribute to world peace and security. (4) The people of Australia are entitled to be consulted, through their Representatives in Parliament, on any extension or modification of the Agreement affecting their lives, security and welfare. And your petitioners humbly pray that: (1) Notice be given by 19 October 1986 that the Agreement between the United States and Australia concerning the Joint Defence Space Research Facility at Pine Gap be terminated by October 1987. (2) Public discussion and inquiry be instituted into the feasibility of negotiating a new agreement with the United Nations during the International Year of Peace offering the verification facilities of the Pine Gap base to all nations. (3) Any agreement concerning the future use of Pine Gap be referred to Parliament for ratification. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 45 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth; that we support your efforts to strengthen our family and community life particularly by increased penalties for ``drug pushers'' and distributors. We, however, wish to register our firm opposition to any legal changes which would increase or encourage the distribution or availability of so-called ``soft drugs'' such as marijuana. We believe such drugs to be harmful to the physical and psychological health of the individual and therefore to the interest of the community of which such individual is part. Although there is current controversy concerning the question of such harm it appears to us quite foolish to legalise and encourage the use of such drugs unless or until it be shown that such drugs are in fact harmless. The serious social problems of alcohol should provide sufficient warning to our society. Any efforts to legalise or decriminalise usage or distribution of such drugs will have the following results: 1. Encourage and inculcate a social acceptability towards such drugs. 2. Increase the volume of usage of such drugs in schools and the community by present users and by ``drug pushers'' through the proposed one ounce legal possession. 3. Extend the usage of such drugs to persons who would previously have abstained because of the legal sanctions. 4. Put pressure upon Parliament to establish and license imports, growth, manufacture and/or distribution of such drugs, that is, to regulate another destructive industry contrary to the best interest of the individual and society. 5. There would be probable temptation to tax such drugs as another source of Federal revenue. We urge the Government to increase the medical and counselling facilities for the assistance of drug users and to expand existing Drug Referral Centres and Clinics. We have general confidence in the existing law and its sympathetic implementation by the Police and Courts. Your petitioners therefore humbly pray that your honourable House will firstly take no measures that could extend the major social problem of drug usage and secondly will oblige those who are promoting marijuana and/or similar drugs to prove without doubt that such drugs are harmless before any legalisation or decriminalisation of use is introduced. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 17 citizens). To the Honourable the President and members of the Senate of Australia in Parliament assembled. This humble petition of the undersigned citizens of Australia respectfully showeth that: (1) The introduction of an administrative charge for annual enrolment will restrict access to higher education for a range of disadvantaged groups, particularly women, rural dwellers, and some low income earners. (2) Students will be deterred from study because of the probable escalation in future budgets, prohibit students ability to plan the long term costs of their education. (3) The introduction of an administration charge is contrary to the education provisions of the ALP-ACTU accord and ALP policy which states that the party ``will maintain the provision of free tertiary education''. Your petitioners therefore pray that the annual administrative charge for higher education students not be introduced and your petitioners as in duty bound, ever pray. by Senator Mason (from 288 citizens). To the Honourable the President and members of the Senate of Australia in Parliament assembled. This humble petition of the undersigned citizens of Australia respectfully showeth that: (1) The introduction of an administrative charge for annual enrolment will restrict access to higher education for a range of disadvantaged groups, particularly women, rural dwellers, and some low income earners. (2) Students will be deterred from study because of the probable escalation in future budgets, prohibit students ability to plan the long term costs of their education. (3) The introduction of an administration charge is contrary to the education provisions of the ALP-ACTU accord and ALP policy which states that the party ``will maintain the provision of free tertiary education''. (4) The overseas student visa charge and full cost tuition for overseas students is unfair and further that it adds to the case of those calling for the reintroduction of fees. Your petitioners therefore pray that the annual administrative charge for higher education students not be introduced and that both the visa charge and full cost tuition fees for overseas students be removed and your petitioners as in duty bound, ever pray. by Senator Mason (from 639 citizens). Petitions received. Senator DURACK(Western Australia) — I give notice that, on Wednesday, 12 November 1986, I shall move: That Regulation 4 of the Companies Regulations (Amendment), as contained in Statutory Rules 1986 No. 247 and made under the Companies Act 1981, be disallowed. Senator REID(Australian Capital Territory) —Pursuant to standing order 109a I give notice that it is my intention, at a later hour this day, to withdraw Business of the Senate Notice of Motion No. 2 standing in my name, for the disallowance of the Co-operative Societies (Amendment) Ordinance (No. 2) 1986. I seek leave to make a short statement. Leave granted. Senator REID —I have some questions about this Ordinance that have been answered by the Minister for Territories (Mr Scholes) but I think we will have to agree to disagree. It may be a matter that will be pursued later. I have an interest in the notice of motion that Senator Cooney will be moving at a later hour this day and I am hopeful that that will be resolved. I seek leave to have incorporated in Hansard a letter dated 17 October addressing this issue and written by the Minister for Territories to Senator Cooney as Chairman of the Standing Committee on Regulations and Ordinances. Leave granted. The letter read as follows- Senator B Cooney Chairman Standing Committee on Regulations and Ordinances Parliament House CANBERRA, ACT 2600 Dear Senator Cooney Thank you for your letter of 10 October 1986, in which you have expressed concern about a strict liability imposed on members of Boards of ACT credit societies who contravene the provisions of section 14g of the ACT Co-operative Societies Ordinance, introduced by the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 (No. 10 of 1986). It appears that the interpretation of section 14 set out in your letter may have overlooked some parts of the new section 14g. Sub-sections 14g (1f) and (1g) place percentage of value limits on credit societies' loans. However these do not operate to make directors of the society liable for a loss occasioned simply by a decline, after the advance is made, in the market value of land. Such a liability would not arise in any case, whether of a decline in value or an initial overestimate, where the directors acted bona fide, and on a valuation given by an approved valuer within three months before the advance, in lending funds up to the prescribed maximum limit. This is because in these circumstances the `value' of the land of which sub-sections (1f) and (1g) speak is defined as the `value' given in the valuation report, not the actual value: see sub-section (1j). The only circumstances in which a loss would be likely to involve liability under sub-section (1h) are where the directors acted without first obtaining a valuation report, or advanced more than the prescribed percentage of the value reported to them. In either case, even if the debt went bad immediately and completely, the directors would be liable for 10% at most, or, if mortgage insurance were obtained, 5% at most, of the loss. I do not think it unreasonable to impose such a liability. There is no statutory reserve fund for credit societies in the ACT, and the Government is not their lender of last resort as in the case of banks. I consider, therefore, that strict controls on the management of credit societies are necessary to secure the paramount policy objective of the Co-operative Societies Ordinance, the protection of societies' members. Indeed, provisions similar to section 14g already apply to building societies in the ACT and to building societies and credit unions in New South Wales. I understand that these provisions are not considered too onerous by the directors of these institutions, and that the risk of loss to the institutions is avoided by mortgage insurance. Yours sincerely GORDON SCHOLES Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that 23 October is the 30th Anniversary of the 1956 Hungarian uprising against Soviet oppression; (b) recalls that Australia vigorously supported the Hungarian cause both in the Commonwealth Parliament and in the United Nations, where the Australian delegate said in 1956 `The people of Hungary made themselves by their heroism the wards of the United Nations'; and (c) calls on Australians to support the commemoration of this day as a symbol of the struggle for freedom and justice for all the oppressed nations of Central and Eastern Europe. Motion (by Senator Harradine) agreed to: That the Senate notes that- (a) today, Thursday, 23 October 1986, is the 30th Anniversary of the spontaneous uprising of the Hungarian people, including students, farmers and workers, against the oppression of basic rights and freedoms by a pro-Soviet regime; (b) tens of thousands of refugees left Hungary and a significant number were accepted as settlers in Australia where they have contributed to the nation's progress and diversity; (c) many others were killed or transported to the Soviet Union when the uprising was brutally suppressed by Soviet troops; and (d) Hungary is still controlled by a pro-Soviet Communist regime which continues to deny basic rights and freedoms to its citizens. Senator LEWIS(Victoria) —by leave-On behalf of Senator Cooney, Chairman of the Regulations and Ordinances Committee, I amend Business of the Senate, Notice of Motion No. 1, standing in Senator Cooney's name, to read as follows: That section 4 of the Co-operative Societies (Amendment) Ordinance (No. 2) 1986, as contained in Australian Capital Territory Ordinance No. 10 of 1986 and made under the Seat of Government (Administration) Act 1910, be disallowed. Senator LEWIS(Victoria)(10.08) —On behalf of Senator Cooney I move: That Business of the Senate, Notice of Motion No. 1, standing in Senator Cooney's name for this day, as amended, for the disallowance of section 4 of the Co-operative Societies (Amendment) Ordinance (No. 2) 1986, be postponed till a later hour this day. The Regulations and Ordinances Committee has been corresponding with the Minister for Territories (Mr Scholes) requesting that a wide discretionary decision, the adverse exercise of which could affect the livelihood of individuals, should be made subject to review. Today is the last day for disallowance, but the Committee is still hopeful of obtaining agreement from the Minister and has written urgently to him again today about the matter. We anticipate that it will be finalised at a later hour this day. Question resolved in the affirmative. Debate resumed from 22 October, on motion by Senator Grimes: That the Bills be now read a second time. upon which Senator Messner had moved by way of amendment in respect of the Taxation Laws Amendment Bill (No. 3) 1986: At end of motion, add ``, but the Senate condemns the Government for- (a) its failure to control government spending to the point where it has broken its `Trilogy' commitment to hold taxation to no more than 25 per cent of gross domestic product and proceeded to tax Australians to the highest point in our history; (b) its contempt for ordinary taxpayers, illustrated by its decision to charge a $200 fee for appeals against the Tax Commissioner's rulings regardless of the size or complexity of the claim; (c) its incompetent handling of the withholding tax issue, whereby the Government changed the tax rules, caused a run on the dollar, and retreated 27 days later; and (d) its disgraceful treatment of the Defence Forces Reserves, by withdrawing the tax free status of reservists' pay, thereby causing a grave rundown of reserve forces and damage to their morale and effectiveness, and belatedly restoring the concession''. Senator SIDDONS(Victoria)(10.09) —When I was speaking earlier on the Bank Account Debits Tax Amendment Bill 1986 I pointed out various aspects of this Bill which showed the Government's inconsistencies in its economic strategy. For instance, under this Bill the Go-vernment will allow a tax deduction to Australian companies for payment to government for oil leases because it now says that oil resources in this country are falling into foreign hands. They have already fallen into foreign hands. But at the same time, in another piece of legislation which we will shortly be debating in this place, the Government in its Foreign Takeovers Amendment Bill is moving to reduce controls on foreign ownership of our resources. In the legislation before us the Government is shedding crocodile tears about our oil resources falling into foreign hands and in another piece of legislation it is lifting restrictions on the foreign ownership of our resources. These are absolutely contradictory government policies. Which one are we to take as the one that the Government really wants to happen, or does it want two contradictory policies to operate simultaneously? In the words of our Prime Minister (Mr Hawke), the Government is moving to internationalise the Australian economy. One can only assume that the Government means that it wants to lift all restrictions to foreign capital and foreign money markets in their operations in Australia. No doubt it also means that it is seeking to encourage at rock bottom prices the buying up of our national estate, our resources, our wealth producing industries, our minerals and our farm land. That is a great tragedy because it is the policy that has been pursued by various governments over the last 20 to 30 years, a policy that is now in disarray. We have not got sufficient of our estate left to sell to buy our way out of debt; we have to work our way out of debt. The sooner we face up to that reality, the better. We have to export; we have to stop selling off our resources and stop buying luxury imports which we can no longer afford. In the Government's taxing policy, which is what this legislation is all about, the Government has not shrunk from imposing additional hardships on the poor and the less well off while not imposing similar hardships on the wealthy and the foreign interests that operate in this country. The bank account debits tax, which this legislation increases, is a very good example of what I am saying. This tax impinges very heavily on small bank deposits and therefore bears more heavily on the less affluent people in our society, while imposing a much smaller tax on large bank debits. Just to illustrate the point, the tax at the lowest end of the scale represents a 15 per cent tax on bank debits and at the upper end of the scale where debits of $100,000 are involved, the tax represents only 0.002 per cent. Obviously this is very unfair; it is inequitable; it is far from a neutral tax; it will distort the money markets and it will impinge on the less well off. As an amendment in respect of the Bank Account Debits Tax Amendment Bill 1986, I move: Leave out all words after `That', insert: `The Bill be withdrawn and redrafted to provide for a tax at the rate of 0.5 per cent of all debit transactions, irrespective of their magnitude, in place of the current rates of tax, and that the additional revenue raised be used (a) to reimburse the States and Territories for the abolition of pay-roll taxes; and (b) to increase social welfare spending'. Just very briefly in the short time I have available to me, I will comment on that amendment. It will have this effect: A flat tax of 0.5 per cent on all bank debits will raise $5,000m. That could be used to abolish the present bank account debits tax which will raise $260m per year. It could also be used to reimburse the States' and Territories' payroll taxes. That would cost $3,971m per year. We would still have left over an amount of $769m which could be used for social security and welfare spending. The 0.5 per cent tax on debits would be a very important initiative, and it would be a very equal tax. It would have the effect of being equitable throughout the present system, it would be non-bureaucratic and easily administered and it would hit capital movements and speculation. If this amendment were supported, it would have a very beneficial effect. The second amendment I will move on behalf of the Democrats is in relation to the bank account debits tax. I move: At the end of the motion, add: ``, but the Senate-- The PRESIDENT —Order! You cannot move that amendment at this stage, Senator, because there is already another amendment before the Senate, moved by yourself. At the moment you have two alternative amendments, one to add words and the other to leave out words. I suggest that once your first amendment is disposed of, you can then move your second amendment. Senator SIDDONS —Thank you for that ruling, Mr President. I must have been misinformed, or misunderstood. I foreshadow that this amendment will be moved at the appropriate time. The words of our amendment are identical to those of an amendment moved by Senator Grimes in 1982 when debating this precise issue. The amendment reads: At the end of the motion, add: ``, but the Senate is of the opinion that the tax imposed by the Bank Account Debits Tax Act is inequitable and discriminatory because it is proportionately greater on small bank debits and therefore bears more heavily on less affluent persons''. The Government is flying absolutely in contradiction to an attitude expressed by Senator Grimes in 1982. I believe that it is incumbent on the Government to explain to the Senate and the Australian people why it has changed by 180 degrees the policy it firmly enunciated in 1982. Senator WATSON(Tasmania)(10.18) —The Senate is debating the Taxation Laws Amendment Bill (No. 3) and the Bank Account Debits Tax Amendment Bill. These Bills form part of a fairly large package of what the Government is trying to pass off to the Australian people as a package of tax reform or tax relief. The Government is trying to hoodwink the Australian people that it is embarking upon a lowering of the great tax rate burden. That is rather surprising, because one of the Bills before the Senate at the moment actually increases tax quite substantially. The other Bill-the Taxation Laws Amendment Bill (No. 3)-is really an omnibus Bill which contains a number of wide-ranging changes thrown into the taxation pot, again to try to hoodwink the people. Why, therefore, is it necessary to spend $2m in advertising revenue to sell this sort of package? I do not believe that the Australian people will have the wool pulled over their eyes. The Bank Account Debits Tax Amendment Bill will increase the general rate of bank account debits. The highest debit tax will be increased from $1.50 to $2, with other rates being increased by up to one half. These new rates will apply from 1 December this year. In effect, this is a straight tax increase which will bring the Government an additional $90m in revenue in a full year. The tax is yet another burden on Australian taxpayers. Extra payments will be made by individuals, both directly through their bank accounts and via increased charges made in the community due to additional costs which will be imposed on business. At this stage it is appropriate to comment on the suggestion of the Australian Democrats of imposing a very significant 0.5 per cent charge on all debit transactions irrespective of their magnitude. This would really cut the finance industry to tatters because it is a massive increase that the finance community, the business community, would have to bear. The increase in the legislation before the Senate is really only one of many imposts that the present Labor Government has quietly slipped into place while declaring to Australia how it has been bravely battling a cumbersome taxation system. This is just another example of the hypocrisy going on on the taxation debate. The Australian Labor Party would have us believe that its new Budget strategy is here to save us. But since 1983 the Government has increased the taxation burden dramatically. In fact, revenue from the tax take has increased by 61 per cent in only four years of economic mismanagement by this failing Labor Government. This Labor Government is the highest taxing government in the history of Australia, raising 25.5 per cent of gross national product in taxes and, I add, breaking yet another of its election promises in the process. The Taxation Laws Amendment Bill (No. 3) 1986, an omnibus Bill, incorporates a wide range of measures thrown up by the Government under the heading of taxation reform. Some of these measures are long overdue and some of them are really reversals of earlier decisions made by the Hawke Government that have been miserable failures. The Bill includes changes to the valuation of horses for income tax trading stock purposes. Fortunately, the Government did not proceed with a similar sort of valuation applying to sheep and cattle. I acknowledge its wisdom in backing down from that. The Bill includes provisions covering the Defence Force reservists. It also authorises deductions in respect of cash bids for off-shore petroleum exploration permits. It amends the income tax laws to provide for the calculation of 1986-87 provisional tax. It also makes various changes to the taxation arrangements made with the Netherlands and Austria. One of the amendments before us today concerns the reinstatement of full tax exemption for the pay and allowances of members of the Australian Defence Force Reserve. This change is long overdue. One could say that in some respects it is rather a case of shutting the stable door after the horse has bolted. When the Labor Government came to power in 1983, the Army reservists totalled 33,000. In the space of three years that number has plummeted by over 10,000-a virtual exodus from the reserve forces. Paul Dibb, in his review of the Australian defence capabilities, saw the reserve forces as instrumental in the defence of this vast country. The big downturn in numbers occurred when the Government removed the full tax exemption from the pay of reserve forces. That entitlement had operated for almost 20 years for the purpose of providing a degree of incentive to individuals of a high standard to join the reserve forces. The sort of people whom the reservists want to attract are those in civilian life who are probably paying fairly high rates of marginal tax. If their payments as reservists are to be taxed at this high rate, there is really little monetary reward for their sacrificing leisure hours to join the Reserve. The result of the Government's decision to tax reservists' pay has been disastrous. The years of effort taken to build up reserve forces to a decent size has been destroyed by this Hawke Government after such a few years in office. When the number of reservists began to decline sharply in 1984, nothing was really done to rectify the situation. No amount of advertising by the Prime Minister (Mr Hawke) in 1985 could buoy up the flagging morale of the Army reserves. Only now, when the damage has already been done, has the Government finally decided to try to patch up some of the problems. However, the road back to really restoring the effective strength of the reserves will be a long one and will not be an easy task for the Army. I believe the re-establishment of the tax exemption on pay is at least a step in the right direction. Another change that this Bill will introduce concerns the valuation of new horses for income tax trading purposes. The existing law allows livestock on hand at the end of the year to be valued according to various criteria such as the cost price, the current market price or at some other value depending on the circumstances. There are minimum prescribed limits that are generally lower than actual value. This measure allows tax to be deferred until disposal. But the Bill before the Senate today actually makes it obligatory for horse breeders to value foals when they are born at the cost of the service fee, and the tax will be paid on that sum in that year. So, in effect, horse breeders have been singled out in this instance, as they are deemed to be dealing in livestock which is generally of greater value than that of other stock breeders. In the second reading speech, the Acting Treasurer, Mr Hurford, stated that the measure reflects the fact that the tax deferral advantages are much greater for horse breeders and that the new tax arrangements would only apply in respect of service fees. Such a tax will raise an estimated $7m in revenue in 1988-89, although it is interesting to note that the gains after that date will be fairly negligible. The fact that these gains will only be made when the tax is first brought in reveals the nature of this latest move by the Government. So the levy is in effect a forward tax; it is another means by which the Government can raise revenue for the coming year and present a Budget deficit which is artificially lower than it is in actuality. Such practices, I believe, expose the Government's production of a reduced deficit as something of a sham. It is a one-off type situation which leaves the Government nowhere to go in the future. Another of the items dealt with by this Bill highlights, I believe, the mismanagement that this country has suffered under three years of the Hawke Labor Government. I refer to the revocation of the interest withholding tax, which was introduced initially earlier this year. An amendment in relation to interest withholding tax is being made to correct what proved to be a miscalculation of sizable proportion on the part of the Government. On 1 July the Treasurer (Mr Keating) announced the decision to remove the exemption from interest withholding tax that previously applied to individuals who had overseas securities and to government authorities with rollovers and extensions of loans. Such an ill-timed move illustrated the ineptitude of the Hawke Labor Government. Only 28 days after this tax was introduced the value of the dollar had fallen by about 6c. The Treasurer was then forced to make a quick about-turn decision on this latest impost. Not only did this fiasco have an immediate detrimental effect on our money markets, but also it served to undermine the confidence of the overseas investors in Australia. I think it also showed the inability of the Government to run the economy and government successfully. On a more positive note, I must actually applaud the Government's decision to make donations of the value of $2 or more to the Australian Academy of Technological Sciences and to the Australian College of Occupational Medicine tax deductible under section 78 of the Income Tax Assessment Act. Of course, these deductions will apply after 19 August 1986. The encouragement of research and development in Australia, as has often been said in this place, is extremely important to the future direction of this country. We all believe that industry, government and the scientific community must collaborate if Australia is to lift its export earnings in technology based goods and services. Otherwise, our hopes of becoming competitive will be delusions. Our export opportunities can only be realised by undertaking more research, more quality control and more marketing. I think industry has recognised that quality control, obviously, is more than just a person standing at the end of a production line. The development of the Australian economy of late has been based unfortunately on the exploitation solely of our natural resources. There has been little downstream manufacturing production using those natural resources. So for the main part our manufacturing industries have tended to be absent from world markets and our technological base has remained unchanged for 30-odd years. However, on the other side of the coin since the Hawke Government has come to power, Federal funding for science has decreased by 9.2 per cent in real terms. At least the concession before us, however minor, is a positive step towards promoting research and development in Australia and to stem the loss of our scientific talent to overseas. The legislation involves a great deal of complication and it is time the Government moved to simplify the calculation of provisional tax. The Bill's provisions are bewildering to the ordinary citizen and indicate more and more that rather than moving towards tax reform, we are moving towards tax complication. The provisions for the calculation of provisional tax in this Bill are not a move to the right direction, but will put more and more people into the hands of tax accountants to prepare tax returns. I believe that this whole package of measures must be condemned. The package includes the capital gains tax, the fringe benefits tax, and for ordinary Australian taxpayers these are the unintended consequences or this is unintended legislation so far as those people who voted the Hawke Labor Government into power, because these measures were not part of the election package that was put before the Australian people. Senator MICHAEL BAUME(New South Wales)(10.32) —As Senator Watson said, to an extent this package of Bills-the Taxation Laws Amendment Bill (No. 3) and the Bank Account Debits Tax Amendment Bill-corrects mistakes made by the Government. As he also correctly said, they are part of a package of tax measures which will massively increase the tax burden on Australians, even after taking into account the tax cuts promised for 1 December. Those tax cuts were supposed to have operated from September, but they were deferred in yet another breach of undertaking by this Government. This has made this Government the least reliable in Australia's history in breaking commitments given to the people at elections. We all know about the breach in respect of the capital gains tax, and so it goes across a whole range of activities, particularly affecting retired people, the aged of our nation. But let us recognise that this particular group of Bills in net form reduces marginally the tax burden, which is being massively increased under the package introduced in this legislation. We must recognise that this package of Bills was supposed to be the bribe in order to get a real and major reform of the Australian tax system. It was a bribe offered to the Australian Council of Trade Unions and others in order that the Treasurer (Mr Keating) could get what I believed to be a sensible alteration to the incidence of taxation by changing the proportion of personal income tax collected as a result of increasing the indirect tax base. That was directly in line with Opposition policy, which is different in only one respect from the Treasurer's attempted and failed policy of this score. Our essential difference is that it is primary in our tax approach that the total taxation burden be reduced because Government spending should be reduced. But within that framework we had further wanted to reduce the incidence of personal income tax and we presented this policy in the 1984 election. We wanted to make that reduction by increasing the share of tax revenues made up by indirect taxes. The Treasurer, Mr Keating, shared that part of the Opposition's policy which involved diminishing the personal income tax share but increasing the indirect tax share. Of course he failed to support the proposition, which is central to our approach to tax, that the total taxation burden should be reduced by cutting government spending. In any event, his attempts were defeated and these Bills before us today are part of the bribe that was offered to the ACTU and others to support the Treasurer's sensible attempts-attempts that were sabotaged by the Prime Minister (Mr Hawke) who met with ACTU leaders in a secret meeting in a hotel room in Canberra-to introduce major taxation reforms. All that is left now is the bribe and none of the substance of the taxation reform. To pretend that these Bills and this package are part of some major taxation reform, as the Government is doing, is to bend the truth in an extraordinary way. We are left with the bribe to the left wing, without the benefits that should have emerged from that taxation reform attempt which was sabotaged by the Prime Minister. As a result of that sabotage we now see something like an $800m burden being imposed, generally on the business community, and that will go a large part of the way towards paying for the tax cuts that the Government has tried to make so much of in political terms in recent weeks. Those tax cuts are being funded largely by increasing the burden on the Australian business community. That increased burden will not be suffered only by the business community because those businesses which do not go broke will be obliged to pass on the burden in higher costs or in reduced employment brought about by a cutting of their own costs. That means that this tax package will have an impact-and is having an impact-on levels of employment throughout Australia. In other words, the Government, by its own actions in the tax area, by seeking to make political gain, has brought about a negative impact on employment and is causing the loss of jobs and a reduction in the level of activity in the private sector which is so vital to get Australia out of the economic hole it is in. To demonstrate this I point out that the Budget figures reveal that income tax collections from individuals are estimated to grow by 12.2 per cent in 1986-87. This is the year in which we are supposed to have the tax cuts, including the cuts involved in the Taxation Laws Amendment Bill (No. 3) 1986. How can the Government pretend that it is easing the tax burden and how can it go around talking about taxation cuts when the total tax burden on individuals will increase by 12.2 per cent this year? That is an increase to a record level-the worst level of tax burden that this nation has ever had to wear and it is coming from the Government this year, despite all the talk about tax cuts. On top of that, as Senator Messner mentioned earlier, there is the additional immense administrative burden involved in this Government's whole approach to tax and in the measures we have been debating in this package. For example, this present package includes a reversal, as Senator Watson pointed out, of the interest withholding tax arrangements. That involves expense and inconvenience to the business community. Senator Watson —That marked the turning point of loss of confidence. Senator MICHAEL BAUME —As Senator Watson says, that marked the turning point following which there was a loss of confidence. But on top of that, there are massive administrative costs in collecting the other taxes that are a part of this package although they may be not specifically in this Bill. I refer in particular to the fringe benefits tax. Through our questions to Commonwealth departments affected by this tax package, the Senate has been informed of the enormous administrative costs they will face. Departmental employees will have to spend hours and hours at public expense working out how much money to take out of the Government's right hand pocket in order to put it into its left hand pocket. It is most arrant nonsense. Senator Watson —And the people are still quarantining in the private sector. Senator MICHAEL BAUME —Exactly. This nonsense, this administrative chaos, comes on top of the direct damage being done by this package, including these Bills. The interest withholding tax nonsense is a clear example of this Government not knowing what it is doing, not knowing where it is going, and not knowing how to do it or to get there. Another example of ineptitude, another mistake that is corrected in this specific legislation, concerns taxing the pay and allowances of the Defence Force Reserve. We opposed the Government when it introduced this tax last year. We said that it was nonsensical and a ridiculous thing to do; it was unfair, mean and damaging. As usual, the Government was contemptuous of the position we put, but now, of course, it has reversed that nonsensical decision. Let us see why. The reason is simple. This stupid decision was costing the Government far more in terms of the expense involved in trying to encourage more people to become members of the Reserve because its present members were leaving in droves. In particular, the strength of the Army Reserve is about 24,000. Over the last two years 15,000 people have left the Army Reserve. The Government can take the credit for that enormous turnover, for that enormous collapse. As a result, it set out on a $2m advertising campaign to correct the fact that people were leaving the Army Reserve. It had to try to encourage more people to join. Think of the enormous waste of training people at great length, at great expense, to be members of the Army Reserve, only to have them leave and then have to train more. Senator Messner —Who got the publicity value out of it? Senator MICHAEL BAUME —I am glad Senator Messner makes that point. The $2m campaign to encourage people to join the Army Reserve, to make up for the fact that so many reservists were voting with their feet on their confidence in this Government, had two significant elements. The first was that it did not work. After the campaign there were still something like 500 fewer people in the Army Reserve, even though it did succeed in replacing many of the people who had left. But how confident would the people who have come into the Army Reserve be about their future in the Reserve under a Government such as this, which is so clearly hostile towards the whole concept of reserve forces? The second element of this advertising campaign was that, basically, it was a free publicity stunt for the Leader of the Australian Labor Party, the Prime Minister of Australia, whose face appeared in all those advertisements and who got immense personal public promotion at taxpayers' expense in a $2m advertising campaign. This is part of the pattern of public relations instead of decent government that goes on under this Prime Minister and this Labor Government; $2m spent because the Government, through its stupidity last year, had withdrawn the tax exempt status of reservists' pay. The Government has now recognised that stupidity and has recognised that, even after spending $2m, it is still behind in its recruitment. As a result it is being forced to backtrack and recognise that it was wrong. If we go through previous legislation we see evidence all over the place of where this Government is admitting that it was wrong and where it is having to review things. Look at the fringe benefits tax. It is now reviewing that. Senator Watson —Another $2m is to be spent promoting it. Senator MICHAEL BAUME —As the honourable senator has said, another $2m is to be spent promoting that. I bet that we will not have the Prime Minister's face all over the fringe benefits tax advertisement. There is no way that the Prime Minister's face will appear in advertisements stating what a wonderful thing the fringe benefits tax is. It will be the poor old Australian Taxation Office. We might find a photograph of an officer from the Taxation Office into which people can stick pins or which they can put up on dart boards but we will not find the Prime Minister's face on advertisements stating what a wonderful thing the fringe benefits tax is. So here we have the hypocrisy, the double standards and the incompetence of this Government reflected in these tax measures. There is nothing new about that incompetence, there is nothing new about that hypocrisy and there is nothing new about those double standards. They have been with us ever since this Government came into office. We have seen it again and again. I suppose that the sort of backtracking involved in the legislation before us today is simply a recognition by some members of the Government that there will be political damage if they do not correct some of their mistakes. The current inquiry into the fringe benefits tax fiasco is all about the unintended consequences. The Government claims that it is making only administrative corrections. The points that have been pressed on this Government and the things worrying the Australian public are not simply administrative matters relating to the fringe benefits tax and other taxes in this whole package-they are fundamental to the taxes themselves. These unintended consequences are there because the tax law that this government has passed is defective. The fringe benefits tax and other taxes were passed with the support, the assistance and the connivance of the Australian Democrats. Let the Australian people never forget that. I simply conclude by saying that, no doubt, we will see many more examples of this Government coming into the Senate producing more of these withdrawals, more of these corrections and more of these admissions of incompetence. The tax Bill which is before us today is simply one of the many and growing number of admissions that this Government does not know what it is doing, that it cannot handle matters effectively, that under its control the Australian economy has been falling apart and that the whole tax burden is being imposed, particularly on the business community, in such a way that it is damaging our prospects of economic recovery, destroying incentive and playing a significant role in the nation's inability at this stage to get itself out of this mess and out of the hole that the Treasurer has dug for it. Senator WALSH(Western Australia-Minister for Finance)(10.55) —Once again Senator Michael Baume has proclaimed his fiscal infallibility. The only problem I have with that is that I have difficulty reconciling that with the fact that Patrick Partners went broke. I do not intend to delay the passage of the Bills, but I will make a brief comment on-- Senator Michael Baume —Are you going to make a coherent contribution or just personal abuse? Senator WALSH —Senator Michael Baume's past is so murky that he really is a very easy target. Senator Michael Baume —Mr Acting Deputy President, I raise a point of order. The word `murky', apart from being totally untrue, is offensive to me. It is part of a pattern of personal abuse by this Minister when he is incapable of responding to points of fact that I have raised. I suggest to you, Mr Acting Deputy President, that you should prevent him, when he sets off on this course, from continuing along it. The ACTING DEPUTY PRESIDENT(Senator Jones) —The honourable senator has said that the word is offensive to him, and I ask the Minister to withdraw it. Senator WALSH —Certainly, Mr Acting Deputy President, I withdraw it. The last thing I would want to do is offend Senator Michael Baume. Senator Michael Baume —You are simply offensive in yourself. Senator WALSH —Now he is being offensive. I am not as thin skinned as he is because I do not have the guilty conscience that he has. Senator Michael Baume —Mr Acting Deputy President, I take a point of order. I find it offensive that I would be accused of having a guilty conscience. Unlike the Minister, I have nothing to feel guilty about. The ACTING DEPUTY PRESIDENT —There is no point of order. Senator WALSH —I think it is on about page 192 of Cyril Pearl's Wild Men of Sydney where, in attempting to analyse the character of Patrick Crick, Pearl developed the concept of moral retardation. I suggest that Senator Michael Baume look at that. If he does not have a guilty conscience, it might help him to understand why. Two amendments have already been moved to the second reading motion and notice of a further amendment has been given, depending on the outcome of one of the earlier ones. Also the Australian Democrats, I understand, will be moving in the Committee stage an amendment to the Taxation Laws Amendment Bill (No. 3) 1986. The Government, of course, will not accept any of the amendments. I will make some brief comments about them. The amendment to be moved by the Opposition to the Taxation Laws Amendment Bill (No. 3) is, of course, the usual sort of grandstanding that we have come to expect from the Opposition. It is not worth taking seriously. The Democrats will be moving a more substantive amendment to the Bank Account Debits Tax Amendment Bill 1986, which is that a flat rate of tax of 0.5 per cent of the value be applied to all transactions. Senator Siddons, I am told, said that this would raise about $5 billion. The information which has been supplied to me, assuming that the volume of transactions remains as it now is, which is a fairly unrealistic assumption-nevertheless, it makes the point as to why this amendment is-- Senator Siddons —They were figures supplied by the Parliamentary Library as far as the total bank debits are concerned. Senator WALSH —I think the Treasury and the Australian Taxation Office are probably more reliable sources, with due respect to the Parliamentary Library. Assuming that the value of transactions remains the same, about $21 billion would be collected if it were applied. I suppose it would be nice to have an extra $21 billion in revenue in a sense but, to say the least, it would cause a significant amount of disruption on the financial market. The Government will not accept any amendments. I wish the Bill a speedy passage. (Quorum formed) The DEPUTY PRESIDENT —The Senate is considering together the Taxation Laws Amendment Bill (No. 3) and the Bank Account Debits Tax Amendment Bill. As there are separate second reading amendments to each of the Bills, I will put them to the Senate separately. With regard to the first, the original question was that the Taxation Laws Amendment Bill (No. 3) be read a second time, to which Senator Messner has proposed that certain words be added. The question is: That the words proposed to be added by Senator Messner's amendment be added. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 36 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. Knowles, S. C. Archer, B. R. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Baume, Peter Messner, A. J. Bjelke-Petersen, F. I. Newman, J. M. Boswell, R. L. D. Parer, W. R. Brownhill, D. G. C. Puplick, C. J. G. Carrick, Sir John Reid, M. E. (Teller)Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Harradine, B. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Withers, R. G. Aulich, T. McClelland, DouglasBlack, J. R. McIntosh, G. D. (Teller)Childs, B. K. McKiernan, J. P. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Morris, J. Cook, P. F. S. Powell, J. F. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. 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. Jones, G. N. Zakharov, A. O. Hill, R. Bolkus, N. Jessop, D. S. Robertson, E. A. Sheil, G. Macklin, M. J. Chaney, F. M. Button, J. N. Durack, P. D. Cooney, B. Question so resolved in the negative. The PRESIDENT —The next question is: That the words proposed to be left out by Senator Siddons's amendment be left out. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 59 —— Majority . . . . . . . . . 52 —— Haines, J. Powell, J. F. Harradine, B. Sanders, N. K. Mason, C. V. J. Siddons, J. R. Vigor, D. B. (Teller) Alston, R. K. R. Kilgariff, B. F. Archer, B. R. Knowles, S. C. Aulich, T. Lewis, A. W. R. Baume, Michael McClelland, DouglasBaume, Peter MacGibbon, D. J. Bjelke-Petersen, 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. (Teller)Cook, P. F. S. Reynolds, M. Crichton-Browne, N. A. Richardson, G. F. Crowley, R. A. Ryan, S. M. Devlin, R. Sheil, G. Elstob, R. C. Short, J. R. Evans, Gareth Sibraa, K. W. Foreman, D. J. Tate, M. C. Georges, G. 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. Zakharov, A. O. Question so resolved in the negative. Amendment negatived. Senator MASON(New South Wales)(11.08) —The Australian Democrats have a further amendment to the motion for the second reading of the Bank Account Debits Tax Amendment Bill 1986 which we believe the Opposition may find more to its taste and which we commend to it. I move: At the end of the motion, add: `, but the Senate is of the opinion that the tax imposed by the Bank Account Debits Tax Act is inequitable and discriminatory because it is proportionately greater on small bank debits and therefore bears more heavily on less affluent persons'. Senator SIDDONS(Victoria)(11.09) —The wording of the amendment is identical to the wording of an amendment moved by Senator Grimes in 1982 when debating similar legislation. I have not heard the Minister for Finance (Senator Walsh) explain to the Senate why the Australian Labor Party felt so strongly about this sort of tax being inequitable, unfair or impinging more on small deposit holders and hardly at all on large debit accounts. Therefore, it seems to the Australian Democrats to represent a complete change of policy on the part of the Government. The Government is now not only supporting this sort of tax, but also increasing it quite substantially-by about 50 per cent overall. I would be very pleased to hear from the Minister as to the reason for this change of policy. Senator MESSNER(South Australia)(11.11) —I rise on behalf of the Opposition to indicate that it will not support the Australian Democrats' amendment on this matter. I set out the reasons for that during the second reading debate. The chief reason, of course, is that this amendment attempts to make policy on the run. The Opposition parties will only make policy in a proper manner and we will release our policy when in fact we are ready to do so. We are not prepared to support the Democrats in some kind of irresponsible joyride by taking a horse and cart all over the tax legislation. Senator WALSH(Western Australia-Minister for Finance)(11.12) —Very briefly, in reply to Senator Siddons, any half astute observer of the political scene would have noted that from time to time major parties in Opposition indulge in a bit of populist grandstanding but, of course, there is a constraint on the degree to which major parties in Opposition can do that, because one day they might be in government and have to accept responsibility for the things that they have done and said. No such constraint applies to splinter parties. Question put: That the words proposed to be added (Senator Mason's amendment) be added. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 59 —— Majority . . . . . . . . . 52 —— Haines, J. Sanders, N. K. Harradine, B. Siddons, J. R. Mason, C. V. J. Vigor, D. B. (Teller)Powell, J. F. Alston, R. K. R. Kilgariff, B. F. Archer, B. R. Knowles, S. C. Aulich, T. Lewis, A. W. R. Baume, Michael McClelland, DouglasBaume, Peter MacGibbon, D. J. Bjelke-Petersen, 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. Reid, M. E. (Teller)Colston, M. A. Reynolds, M. Cook, P. F. S. Richardson, G. F. Cooney, B. Ryan, S. M. Crichton-Brown, N. A. Sheil, G. Crowley, R. A. Short, J. R. Devlin, R. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Georges, G. Vanstone, A. E. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Jones, G. N. Question so resolved in the negative. Original question resolved in the affirmative. Bills read a second time. TAXATION LAWS AMENDMENT BILL (No. 3) 1986 The Bill. Senator VIGOR(South Australia)(11.19) —I move: Page 8, after clause 19, insert the following clause: Losses and outgoings 19a. Section 51 of the Principal Act is amended by adding at the end the following sub-section: `(5) A deduction is not allowable under sub-section (1) in respect of expenditure for the purpose of the advertising or promotion of- (a) tobacco, substances containing tobacco, synthetic tobacco or any substance intended or designed for smoking; (b) cigarettes, cigars or other items intended or designed to be used for smoking; or (c) smoking pipes or any other accessories, items or devices intended or designed to be used principally for or in association with smoking.'. The amendment seeks to disallow as taxation deductions advertising and promotional activities associated with the tobacco industry. The wording is quite specifically aimed at the smoking problem, which the Better Health Commission says is the major preventable cause of premature death and disease in Australia today. There is just no reason at all why the pushers of tobacco, because they are corporations, should have virtually half their advertising and promotional costs-some 46 per cent-rebated by the community. This is particularly so in the light of the resolution which this Government successfully co-sponsored at the World Health Assembly in May 1986. The report of the National Health and Medical Research Council on passive smoking goes into this in some detail. The resolution recognises that tobacco smoking and the use of tobacco in all its forms is incompatible with the attainment of health for all by the year 2000. The resolution urges: . . . those member states which have not yet done so to implement smoking control strategies . . . to ensure that non-smokers receive effective protection, to which they are entitled, from involuntary exposure to tobacco smoke in enclosed public places, restaurants, transport and places of work and entertainment. We are making some progress towards cutting out smoking in the Public Service through the creation of smoke-free zones, but there seems no reason at all why the taxpayers should continue to subsidise this habit which is killing vast numbers of Australian each year. Basically that is what a tax deduction for tobacco promotion is. It not only promotes this kind of habit, but it also hits at very young people. The most effective way of attaining health for all by the year 2000 is to make the young people of this country immune to the deceitful blandishments of the pushers of tobacco. Part of that aim can be achieved by using examples of young people who are winners in their field and who have no truck with drugs of this type. We have seen the type of tactics tobacco companies use. This was brought to our attention at Question Time yesterday when Senator Peter Baume asked a question of Senator Grimes and they both agreed that the type of advertising being carried on by the tobacco companies was quite unethical. There is no reason why we should continue to subsidise this from the public purse. Another means of achieving our goal is to put tobacco virtually out of the economic reach of youngsters. Even if the cost of promotion goes on to the tobacco, we will raise the price of this commodity and, hopefully, put it out of the reach of youngsters. We know that more than 80 per cent of those who smoke become addicted before they are 20. This is the key age group on which we must concentrate-the teenage years. The pedlars of tobacco know that so they deliberately target their promotional and advertising strategies to hook the young because they are after victims for life. Recent activities in the United States Congress have been aimed at thwarting such behaviour. In fact, the House of Representatives this year held hearings to consider a ban on all promotions of tobacco products. In the United States Senate, Senator Bill Bradley has introduced a measure to eliminate the tax deduction for tobacco promotion as a business expense and to require tougher health warnings and higher excise on tobacco products. I believe that this is something that we should follow in Australia; it is a pity that we could not have been in the lead. Last year the National Advisory Council on Drug Abuse voted nine to one to recommend a total ban on cigarette advertising and promotion in the United States. In part this was based on government estimates that 350,000 Americans died as a result of their smoking habit. It emerged from the Council that cigarettes are the most widely advertised product in America with more than $US1,500m being spent for this purpose. This is an enormous waste of resources. In Australia we spend around $80m and we could save $40m from the public purse as a result of this amendment. Indeed, the Opposition should support this because it would thus be supporting both better health for Australia and more revenue. I believe that the Government, too, should support this. If these are hard times why should the tobacco industry get away scot-free? The situation in Australia is a bit harder to unravel because of the obsessive secrecy which pervades the tobacco pushing operations. The best figures I have relate to 1983 and apparently have the imprimatur of the Australian Chamber of Commerce. The figures for 1983 were: $54m on print, cinema and billboards; $15m on merchandising material; and $13m on sports and cultural sponsorship. That totals up to the $82m, roughly what I mentioned earlier. With the explosion in advertising rates and the further insinuation of tobacco interests into sporting and cultural activities, the figure could be well over $100m this year. That means that the Government would be forgoing $50m worth of revenue, and doing this at the expense of the health of the Australian community. The Tobacco Institute of Australian contents itself with a figure of around $80m, so we are definitely in the same ball park. That is the type of expenditure that the Government is throwing away. We could retain most of the social welfare measures that the Australian Democrats have been trying to maintain if we dealt properly with the tobacco industry. We could keep the Special Broadcasting Service independent of the Australian Broadcasting Corporation; we could keep the Institute of Multicultural Affairs. All of these involve very small amounts compared with the $40m minimum and probably $50m to $60m that one would hope to gain from this single amendment. The Prices Surveillance Authority made these comments in its 1985 report after it received applications for price rises: Advertising is a major form of non-price competition in the Australian cigarette market. For all companies, advertising constitutes a major cost item and hence is reflected in prices. It is employed to create and foster a brand image, and to tailor brands for a specific group of consumers, thus splitting the market into taste, style, packaging and price segments. We all know that the principal aim of such advertising is to hook young smokers for life. Honourable senators will recall that the Movement Opposing the Promotion of Unhealthy Products-MOPUP-fought for over 18 months to persuade the Advertising Standards Council that the market leader in cigarette advertising was abusing the voluntary code of ethics by pitching its message, successfully, at children. A lot of billboard advertising since them has clearly been aimed at the young female market, which is seen as a promising target group. Indeed, smoking has increased in this group. Such billboards tend to be retouched more quickly than others by the BUGA-UP network, a group of people called Billboard Utilising Graffitists Against Unhealthy Promotions. I believe that they are adding to the advertising costs of tobacco companies to some extent and, if this amendment were passed, they would be adding to government revenue as a result of the non-deductibility of cigarette advertising. The only way the tobacco interests can survive is to produce addicts out of beginners. This is one of the major problems that we are facing in Australia today. We have a real problem in the advertising of tobacco. Tobacco is known to cause cancer, emphysema and a number of diseases, not only diseases which kill but diseases which are completely debilitating. The net saving to the Australian economy through the amendment would be much greater than what can be obtained by this revenue measure alone. The revenue measure on its own will net $40m, but the long term saving in medical costs, which are highly subsidised by the state, will be enormous. I believe that it is extremely important that we handle the matter in this way. I would like particularly to mention a few points about the misrepresentations which are involved in some of these advertisements. I believe that it is relevant to do so because the Australian taxpayer is subsidising these advertisements. We recently had referred to the Trade Practices Commission an outrageous example where research carried out by the Institute of Cancer Research in the United Kingdom was falsely reinterpreted by the Tobacco Institute of Australia. I seek leave to have incorporated in Hansard the text of a letter sent to a newspaper by the Cancer Research Institute. Leave granted. The letter read as follows- Questionable smoking data SIR, You recently published advertisements inserted by the Tobacco Institute of Australia which contain misleading propaganda about the health effects of passive smoking. The Tobacco Institute, without authorisation, has used the name of the Institute of Cancer Research to support its proposition that passive smoking carries no significant increase in the risk of lung cancer, bronchitis or heart disease for non-smokers. We would like your readers to be aware that these conclusions have not been drawn by the institute. The study, carelessly referred to in the advertisements, was funded by the UK Tobacco Advisory Council, which represents the tobacco industry, and was undertaken by three researchers two of whom worked at the Institute of Cancer Research. The study which the Tobacco Institute claims to support its views in fact indicated an 11-per cent increase in risk of lung cancer in the non-smoking spouses of smokers. However, if the analysis of their data had been restricted to lung cancer patients whose spouses were also interviewed and therefore likely to provide more accurate information, the estimated risk increases to 33 per cent. Unfortunately the results of the study are not statistically significant because the survey included too few people. In our view, the risk to non-smokers of developing lung cancer as a result of living or working with smokers may be of the order of one in 1,000. ROBYN WEISS, JULIAN PETO, Institute of Cancer Research, London, UK. Senator VIGOR —I thank the Committee. The Trade Practices Commission seems to be having some difficulty in concluding its investigations of this matter. Last year there were some very interesting court battles after the Australian Broadcasting Tribunal clamped down on the practice of turning sporting events into major advertising features for cigarette companies. Cameras would linger for unusually lengthy periods just where the promotional material for cigarettes happened to be attached to the pickets or fences around the ground. The backroom machinations were exposed when the Full Bench of the Federal Court of Australia called for copies of contracts between the New South Wales Rugby Football League and the cigarette interests. It is quite clear that there was a commercial ruthlessness about the terms of those contracts. For instance, it was specified that hostesses could provide samples to the public at all competition matches and at all social and other functions organised and controlled by the League. The back cover of the official weekly publication was for cigarette advertising and the brand logo had to appear on the front cover. The brand flags were to be flown at all grounds where competition matches were played. The sponsorship was to be acknowledged on the front cover of the annual report and in the editorial piece. The brand's advertising theme was to be played at all fixtures. There were further requirements for the brand name to be mentioned in all advertising material, Press releases and interviews relating to the Sydney rugby league competition. The brand logo had to be on the playing surface for the finals and prominent advertising space was to be made available around the perimeter of the playing fields. On and on this went. The truly Faustian nature of the agreement was highlighted in a judgment which upheld the Australian Broadcasting Tribunal's actions. I would like to quote page 692 of volume 58 of the Australian Law Reports, which states: Clause 15 shows that the sponsorship arrangement was intended as an advertising opportunity rather than an act of sporting philanthropy. That clause makes the agreement subject to termination, with a pro rata abatement of the sponsorship fee, in the event of any requirement by a government or by a local `public authority' to remove and cease exhibition of any advertising and or to cease conducting the promotional activities contemplated by this agreement. I think this is absolutely disgusting. I believe that the taxpayer should not be forced to support this type of unreasonable and dishonest activity. I call upon the Opposition and the Government to put their money where their mouths are and to do the honest and decent thing and vote for this amendment which gives both money to the exchequer and does something towards stamping out a filthy habit in our community. Senator MESSNER(South Australia)(11.34) —I rise to indicate that the Opposition will not be supporting the amendment. Whatever one's views about the use of tobacco-I will certainly not engage in a long debate about that matter-the question really at issue here is whether this kind of device, in seeking to attach an amendment to a piece of legislation which has nothing to do with this matter, is proper. We in the Opposition have decided that, for those reasons, we will not be supporting this amendment. Senator SIDDONS(Victoria)(11.35) —I rise briefly to support my colleague Senator Vigor on this amendment. It was very disappointing to hear from Senator Messner that the Opposition is not prepared to support the Australian Democrats on this vital amendment which would have the effect of addressing some of the false advertising being targeted at the young in our community today. My office in Box Hill happens to be above a very busy railway station through which many young people pass on their way to various tertiary and secondary institutions. I am continually amazed that, almost to a person, these young students are smoking as they go to and from the station. It is the in thing for young people to do today. No doubt they have been influenced by very subtle and insidious advertising campaigns by the tobacco industry. I wonder why the Government will not support this amendment. I wonder why the Opposition will not support this amendment. Are they concerned that vested interests may withdraw funds from their parties? Are they concerned that vested interests may have some influence over our media that could adversely affect their ability to get political comment in the media? I know that we have been threatened with that by various representatives of the tobacco industry. The Democrats have been told that if they proceed with these sorts of amendments which attack the industry they will not get one inch of space in the media again. Senator Walters —You should report them. Senator SIDDONS —They do not do it in a way that enables us to report them; they do it through third parties. But their intentions are very clear. I ask: Why will not the Government support this amendment? Why will not the Opposition support this amendment? Senator Messner fools nobody by saying that this is not the appropriate place for such an amendment to be moved. We are talking about tax. Obviously, the tax allowance that the Government grants to the advertising of the tobacco industry is relevant. It is the right place to discuss this issue. Senator Messner —We had no notice of it and we had no chance of discussing it. Senator SIDDONS —The Opposition's comments are wearing a little thin. We are continually told that, in due course, the Opposition will come down with a policy decision and then presumably debates in this chamber will mean something. Presumably after the Opposition goes to the mountains it will come down with all the wisdom in the world, it will know what it is going to do, it will know what its policies are and then we can have a debate and find out where it stands. At present the Opposition has no policy on any issue as far as we can see and it is doing nothing other than supporting the Government. The Government has introduced initiatives that are obviously contradictory and it is not good enough for Opposition senators to say that they are supporting Budget measures. That is a straight cop-out. There are pieces of legislation which could be amended. Senator Walters —You promised that you would never go against money Bills and look what you are doing. Senator SIDDONS —I am glad that Senator Walters raised that matter because what the Democrats clearly undertook to do and will do is not to block Appropriation Bill (No. 1). We will not cut off money for the ordinary annual services of the Government as the Liberal Party of Australia did in 1975. It stopped the money to pay the bureaucracy. We have said that we will never do that. We will never precipitate a double dissolution. We have said that we will not block Supply. I hope that that means to the honourable senator Appropriation Bill (No. 1), which finances the ordinary annual services of the Government. Opposition senators are attempting to confuse the public by saying: `We cannot block a Budget Bill'. The vast majority of Bills that come before this place have something to do with money. To say that some of these Bills cannot be amended is just not true and Opposition senators are misleading the public in maintaining that point of view. The fact is that there has been some unholy alliance between the Government and the Opposition and the Opposition is saying: `We will support your legislation now and when you are in opposition presumably you will support us'. I do not know whether that is the deal, but obviously some deal has been worked out between the Labor Party and the Liberal Party, as well it might. Any difference between what the Liberal Party is advocating in relation to economic strategy and policy and what the Government is advocating certainly escapes me. Both policies are as far Right as they can possibly be. Senator Messner —You are far Left. Senator SIDDONS —We represent people; we represent the middle ground; we represent Australians owning Australia; and we represent government managing the economy. The Government and the Liberal Party want to sit back and let the market run this country. The CHAIRMAN —Order! Senator Siddons, you are getting rather far away from Senator Vigor's amendment. Senator SIDDONS —I thank you, Mr Chairman. I was making the point that it is a great pity that the Opposition has not been able to formulate its policy and operate constructively in the Senate which should be a House of review and which should take on the job of improving the legislation that the Government brings down. If that had been done, the impact on the Australian people of the Government's ill-advised economic strategy could have been lessened, and it would have been greatly to the benefit of all Australians. As it is now, there is little doubt in our minds that the Government's strategy will lead to a recession or a depression of monumental proportions. This could have been lessened to a very great degree if we had been able to get through this Parliament amendments which would have forced the Government to reconsider at least some of its policy initiatives. That has not been possible because the Liberals have not been able to make up their minds. This matter before us-the reduction of a tax rebate on the advertising of tobacco-would, as my Senate colleague pointed out, gain the Government revenue and, at the same time, redress a great evil in our society and a great expense in medical costs. That is not to be, unfortunately. We can do no more than stand our ground and advocate what we see as being right. We will continue to do that. Senator VIGOR(South Australia)(11.42) —Considering that the Opposition is not supporting us-it was given some notice of this-I would like to point out that some people in the Opposition-- Senator Messner —When, where? Senator VIGOR —About three weeks ago it was delivered to the Opposition, so I am surprised it has not been considered in its normal processes. Some discussion was even held with Senator Peter Baume, who I thought would be very sympathetic to this exercise. He has written a large treatise on the buying of Australia which deals with the enormous economic power of the tobacco companies and the misuse of power. I will be extremely disappointed if Senator Peter Baume does not cross the floor and vote with us on this matter on which he has been so vocal in this Senate on so many occasions. I believe he is right in looking at this scourge on the Australian community. Here is a chance of achieving a socially desirable effect through the taxation system. Here is a chance to stop young people becoming regular smokers in their teens because they are basically the people at whom advertising is aimed. Here is a chance for us to try to stop those companies using those types of fraudulent advertising and promotion techniques which Senator Peter Baume has mentioned in this chamber. Here is a chance for us to be able to do a very simple thing so that it will not be subsidised by the general taxpayer. If honourable senators believe the types of arguments that Senator Walsh puts forward about people with brown paper bags supporting the business lunch, they must believe that it is the Australian taxpayer who is supporting the evil habit of pushing this particular legal drug. I believe the Government, unfortunately, has no leg to stand on, and the Opposition certainly does not. I hope some of the honourable senators on both sides of the Committee who have spoken out against smoking and against cigarette advertising will be prepared to come forward and show their mettle by voting for a measure which is moving in the right direction, if not quite far enough. I would be quite in favour of banning advertising altogether. I believe it is really problematic that this Government and even the Prime Minister (Mr Hawke) seem to fulfil parts in these advertising arrangements. The Prime Minister makes customary appearances at rugby league grand final presentations and stands straight in front of the large-- Senator Messner —I raise a point of order, Mr Chairman. I draw your attention to standing order 421, which states that you have a privilege and right to rule on tedious repetition. I believe in these circumstances we are getting plenty of that. The CHAIRMAN —Order! There is no current point of order, but I ask Senator Vigor not to go on for too long on the same subject. Senator VIGOR —I feel that is quite an unjustified point. I had not mentioned the Prime Minister. I believe it is really a terrible problem that we cannot handle this type of process without having out of hand and out of place points of order. Obviously the Opposition is devoid of any other ideas. Senator Coleman —You tempt us very strongly. You would talk any supporter in this chamber out of supporting you. You had 18 per cent of the Hansard the other day. I wonder what your record will be after today's effort. Senator VIGOR —Eighteen per cent of Hansard-- Senator Coleman —That is just you, not other members of your Party. You had not said anything, but you had taken up 18 per cent of Hansard. Senator VIGOR —Eighteen per cent of Hansard includes two Bills-I did not put that statistic-which were incorporated in that particular Hansard. The actual speaking time was 20 minutes. I am representing six to eight portfolios in this place, and I believe I am doing a reasonable job for the Australian people. Particularly in this area, in moving this particular amendment, I am trying to protect young people against the ills of tobacco. I believe I am also trying to make available to the Government an extra source of revenue. I commend my amendment to the Committee. Senator WALSH(Western Australia-Minister for Finance)(11.48) —Very briefly, the Australian Democrats have convinced me that I should give up smoking again, but they have not convinced me that I should leave the Australian Labor Party by effectively voting against a Government Bill. Senator HARRADINE(Tasmania)(11.49) —I will be brief. I just want to indicate that the evidence that smoking is a cause of a wide range of maladies, some fatal, is overwhelming. This is particularly the fact when smoking begins at a young age and becomes a habit. The fact is that it is to the very young age group that the smoking advertisements are being directed. That is and must be of great concern to everybody in this chamber; I am sure it is. Whether this particular measure being taken by the Australian Democrats is the most appropriate way of dealing with that subject is another question. I have been giving this some consideration for some time now. I have observed that the message that surely must have been coming to the advertising agents and to the cigarette and tobacco industry from members of parliament from all political shades just has not been heeded. That message has been given by a number of people from the Australian Labor Party, the Liberal Party of Australia and the Australian Democrats-all sides of this Parliament-and it is not being heeded. I acknowledge that this may not be the way to go about it, but I intend to vote for the amendment just to indicate to the tobacco industry that there are a large number of other people in this chamber, in both major political parties, who feel very much as I do. I believe that the tobacco industry must heed the view being expressed by those responsible for the public interest. Question put: That the proposed new clause (Senator Vigor's amendment) be inserted. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 57 —— Majority . . . . . . . . . 50 —— Haines, J. Sanders, N. K. Harradine, B. Siddons, J. R. Mason, C. V. J. Vigor, D. B. (Teller)Powell, J. F. Alston, R. K. R. Kilgariff, B. F. Archer, B. R. Knowles, S. C. Aulich, T. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Bjelke-Petersen, 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. (Teller)Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. Devlin, R. 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. Walsh, P. A. Grimes, D. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Jones, G. N. Withers, R. G. Zakharov, A. O. Question so resolved in the negative. Bill agreed to. BANK ACCOUNT DEBITS TAX AMENDMENT BILL 1986 Bill-by leave-taken as a whole, and agreed to. Bills reported without amendment; report adopted. Bills (on motion by Senator Walsh) read a third time. Debate resumed from 21 October, on motion by Senator Walsh: That the Bill be now read a second time. (Quorum formed) The ACTING DEPUTY PRESIDENT(Senator Coleman) —I call Senator Messner. Senator Siddons-No more repetition, Senator. Senator MESSNER(South Australia)(12.02) —Senator Siddons has drawn my attention to a very good point about repetition. He will get plenty of it during this debate. There will be a very long debate on the Appropriation Bills because the Opposition has many points to make in respect of the Government's handling of the economy. It has now been drawn to our attention, by virtue of the release of the consumer price index figures today, that the latest quarterly increase in the consumer price index is 2.6 per cent. That is the highest quarterly increase in the consumer price index since-- Senator Walsh —Since John Howard was Treasurer. Senator MESSNER —That is exactly right-since John Howard was the Treasurer; since this Australian Labor Party came to power. Quite in contrast to the arguments that have been put by the Government that the economy is undergoing some kind of recovery due to the effect of its so-called J-curve and because the Budget is supposed to be sound, logical and right for the time, we now have the highest level of inflation ever in this country as a result of the Government's policies. Having been advised this morning that the Government has the highest rate of inflation since it came to office in March 1983, that gives us very real concern as to the direction of this Government's policies. Clearly they are going awry. Clearly we are in for higher bouts of inflation, higher taxes and more and more debt. It is the question of debt on which I would like to focus later in the debate. It is important to realise that the Budget, which was supposed to be designed to show a very substantial decrease in the Government's deficit on its own spending and thereby to cause a fall in interest rates, has now been followed by the inflationary result for the first quarter to the end of September which shows that interest rates will again rise. Clearly, while inflation remains at those very high levels, suggesting an overall inflation rate for the year of in excess of 10 per cent, we can expect only more and more increases in interest rates. The consequences of that are obvious. We will have fewer and fewer housing starts and young people trying to buy homes will find it more and more difficult to do so. People who want to buy cars on hire purchase will find it more and more difficult to do so. The motor vehicle industry is predicting already that the industry will be down by over 150,000 units this year, and that is expected to continue for at least the next two years. That figure is a direct result of this Government's action. It is due not only to very high interest rates but also to the introduction of the fringe benefits tax, the capital gains tax and other taxation measures such as the new sales tax rates on luxury motor cars. All of those things have had their effect upon the car market, which sooner or later must be reflected in job losses in that industry. That is the unfortunate consequence of the Government's policies in respect of the total economy. Clearly it is starting to show up as being totally out of the Government's control. I am concerned that the Government still fails to grasp the fundamental problem with the Australian economy; that is, simply, a lack of competitiveness with the rest of the world. Our inability to sell our goods on the world markets and the inability of our domestic markets to compete with imported goods coming from cheaper cost countries overseas are becoming endemic. We have a situation where every month we are having to find $1.5 billion in order to meet the shortfall between our exports and imports. That can be found only from increased borrowings from overseas. When this Government came to power the total overseas debt to the rest of the world was about $35,000m. Today it is nearly $100,000m and rising. I would like to dwell on that point for a moment, because I am reminded of a speech given recently by Sir Arvi Parbo, the Chairman of Western Mining Corporation Ltd. Sir Arvi is well known in the business community for his views on the affairs of the nation generally and the problems of the country. Sir Arvi pointed out during his speech that the monthly current account deficit on our balance of payments will continue to run at approximately $15,000m a year. When that is boiled down, it amounts to an increasing debt of approximately $30,000 for every minute that business is conducted in this country. The situation as envisaged by Sir Arvi Parbo is that we are probably looking now, because of the inexorable rise of this debt each year, to a figure of $150,000m worth of overseas debt by the beginning of the 1990s. It is something of a shock to all of us in the Senate when we realise that this huge rise from $35 billion to $100 billion since this Government came to power is only the start. In fact, we are now looking at a level of $150 billion within the next few years. What is that Government doing about it? Of course, the problem is compounded with an increasing deficit on our balance of payments every month of $1,500m that has to be found by borrowing overseas. It seems that the only way we can encourage people to bring in money from overseas is to keep our interest rates so high that money is brought in at the expense of other nations. The simple fact is that interest rates in this country are about twice as high as those of the countries with which we trade. Senator Peter Baume —Outrageous. Senator MESSNER —As Senator Peter Baume points out, it is outrageous. It has a detrimental effect upon the whole of our economy and as a result costs Australians jobs. Clearly, the solution to Australia's economic problems lies in increasing the incentive for investment, encouraging more and more companies and new enterprises to invest in Australia, encouraging Australians to work in them and creating more and more jobs. But who will take the risk of putting their money into a risky investment, a new industry, with all of the risks associated with dealing with the trade union movement and with the taxes imposed by this Government, such as the fringe benefits tax and the capital gains tax, when they can put their money into the short term money market and get 19 per cent interest on it? Who will put their money into risky ventures when they can get such interest rate returns? Clearly that is the problem that this country faces. The incentive to take the risk, to establish a new industry and create new jobs for Australians, just does not exist. This is a direct result of this Government's policies of keeping interest rates at the highest level ever in this country. Senator Walsh —That is not true. Senator MESSNER —They are the highest ever in real terms. We should listen well to the words of Sir Arvi Parbo; he is not the only person who has spoken on this matter. In the last few days we have seen statements on the same point. The statement from the Economic Planning Advisory Council, the Government's own independent economic advisers, which was released last week showed that the level of debt in this country will continue well into the 1990s. It is hoped by these advisers that we will be able to stabilise that debt figure at about 40 per cent of gross domestic product in the 1990s. If that is so, we are talking about a level at least as high as the present level of $100,000m applying right through the 1990s. So it is quite feasible that Sir Arvi Parbo's figuring of $150,000m is quite within the realms of possibility. It is a staggering figure and one that must concern all Australians. It is important to realise that 80 per cent of Australia's export income comes from two sources-mining and agriculture. Only 20 per cent of our exports come from other sectors such as manufacturing or services. That is a very small proportion. Yet, while recognising that problem, it is true that in the past a far higher proportion of our export income came from manufacturing. At one stage we were a significant exporter of motor vehicles to the Pacific, to South Africa and to many nations all over the world. But today we export only components to other parts of the world. Of course, I am thinking of the very big effort made in recent years by General Motors-Holden's Ltd in selling four-cylinder motor engines overseas. Nevertheless, while in the past we have been a manufacturer and an exporter of manufactured products, we are simply not meeting our obligations into the future. What is the potential for us to do that in the future? That remains an enormous challenge. We certainly have the markets around this area of the world. We could attempt to get involved in selling more and more manufactured exports to countries such as India and developing giants such as China. We have the opportunities to do that in those countries, which have potential for enormous markets. But, in order to do that, we need new investment in this country. We need investment in new plant; we need new ideas and know-how so that people will be prepared to work hard to develop those markets, to produce more and more goods manufactured in this country, which can be sold in that part of the world, and thus provide jobs for Australians. While disincentives, such as the very high interest rates that I have already mentioned, plus of course the taxes introduced by this Government in recent times, such as the capital gains tax and the fringe benefits tax remain, we will not have the kind of activity so desperately needed in this country to generate jobs for Australians. The survey released by the Bureau of Industry Economics only yesterday shows that our pessimism about manufactured exports is substantiated. Indeed, there is not very much good news in that report about the future development of exports of manufactured goods to world markets. In fact, after reading the report, one becomes quite depressed about the outlook. One hopes that the situation will change. To sum up, the situation is that we face an enormous challenge to try to develop new industries that can employ Australians in the manufacturing sector. Exports must be the key to the development of those industries. How to do that remains the challenge to this Government. We do not have the leadership that is needed from this Government. Clearly, we do not have the policies that ought to be developed. In fact, all of the economic evidence at the moment points in the opposite direction. We have an inflation rate which now runs at 20 times higher than that in Japan, with whom we do business. The average inflation rate of the Organisation for Economic Co-operation and Development countries in Europe and of America and Japan is only one-fifth of the inflation rate in this country. This Government cannot say that the inflation rate is improving because clearly it is getting worse. The inflation rate for this last quarter is at its highest level since this Government came to power. I will make a few other points about debt and investment. Clearly, there are many people with money to lend and to invest in this country but they simply are not doing so. The reason is that they get far better returns if they put their money off-shore, in other countries, or even invest on the New York, Tokyo or London stock exchanges, than they could get by investing in new enterprises in this country. Even some of our largest financial institutions such as the life insurance companies and the superannuation funds-even the Government's own superannuation fund-are putting their current available moneys off-shore at an unprecedented rate. The average figure generally quoted is that 40 per cent of current investable funds from such large financial institutions is finding its way into other financial markets overseas. That money should be used for the development of Australian industry; but that is not happening. The reason it is not happening is that there is simply not the return or the incentive available in Australian investment to encourage them to do so. Those institutions have an obligation to their policy holders and to their members to invest in the best available investments, overseas or wherever, in order to ensure that people who need those funds in retirement will get the best possible return on their money. The institutions have a fiduciary obligation to do that and they cannot be coerced or forced in some other way to put their money into non-profitable investments in this country. So those institutions are doing the right thing by their investors. The problem is that right at the centre of this matter is the Government's economic policy. We must turn that around in order to encourage such organisations to put their money into Australian investments and create jobs for Australians. Just recently statements have emanated from the Australian Council of Trade Unions. It is seeking to establish some forced way of grabbing money from superannuation funds and ensuring that it is used for particular investment in Australian industries. I have never heard anything more short-sighted than that kind of idea. For one thing, it is talking about grabbing 25 per cent of the investment incomes of superannuation funds and then putting it under its own control so that it can be put into investment in Australian industries as it judges best. If 25 per cent of the investment funds of superannuation bodies were to be taken out in that manner, it would mean that the final return that would become available to people when they eventually retired would be significantly reduced. This is the money that builds up over the long period of a person's employment in order to provide a substantial sum of money on which to rely in retirement. Such a measure could mean that those people end up coming back to the social security system rather than being able to cash in their superannuation and have sufficient funds to live upon in their retirement. That is the kind of nonsense consequence that could result from the ACTU's proposal. It could put in jeopardy the retirement income of many thousands of Australians. The ACTU says: `The Government will pick up the tab because everybody will be able to get money out of the social security system if it is needed'. That is the sort of nonsense that is being perpetrated by the ACTU in that particular proposal. It is an inward looking kind of policy. But the motive is really far more sinister than even that which I have just outlined. The ACTU, of course, is about making sure that the money which would have been accumulated in superannuation funds is in fact put into the hands of unionists so that it can be controlled for their particular purposes and objectives. That is what it is all about. It is about control over the huge amount of money that is available in superannuation funds. It is not about the proper management of those funds; it is not about getting the best possible return for money contributed; it is about controlling those funds so that that money can be distributed in what ever way the union determines. This has been a point of issue in the Senate now for about two years, ever since the trade union movement started to take an interest in superannuation funds. The Opposition has continually pointed out that the concerns of the unions in this area are not about getting the best possible return for the members, the retired people of Australia; they are about grabbing control of literally hundreds of thousands of dollars, hundreds of millions of dollars and, in some cases thousands of millions of dollars in order to direct that money according to the unions' wishes. This proposal is about the gradual control of investment in this country. The latest submission and ideas that have come to the Government from the ACTU are obviously exactly in that mould. They are so inward looking and so small minded that I think they would throw into question, and some jeopardy, the whole investment potential of this country if indeed such ideas were to be followed through I turn to some of the other issues with regard to debt that are becoming more and more evident these days. We have seen for some time overseas evidence of the growing debt problems between some Third World countries and some banks in the United States of America and other parts of the world. In fact, many American banks have been put under threat as a result of the debt repayment problems of some of the Third World countries, particularly some of those in South America. I am not suggesting that anything like that kind of problem is developing in Australia, but it is clearly of concern to pick up the report of the Commonwealth Banking Corporation this year-which came out only last week-and, looking back, compare, over a period of five years, the total amount of loans by the banks with the actual deposits in the banks' hands. One sees that the ratio of loans to deposits has risen very substantially over that time. I would just like to cite some percentages because, looking back to 1982, we can see that loans as a percentage of deposits amounted to only about 70 per cent. That proportion has risen, almost inexorably, to a figure for 1986 of 97.9 per cent. I was interested enough to look at this a little further. Unfortunately, I do not have comparative information, but it seems that the ratio of advances to deposits for all banks in Australia is indeed rising very substantially. I note that the National Australia Bank Ltd is up to about 100 per cent; the Australia and New Zealand Banking Group Ltd is 95.2 per cent; Westpac Banking Corporation is 87.3 per cent; and the Commonwealth Banking Corporation is just under 97 per cent. I am not suggesting that there is anything to be concerned about in this but, indeed, a pattern of a growing level of debt is arising in our banking system. Clearly this is contributing to some concern in the community generally about the amount of borrowings that this country is undertaking overseas. Looking at an article by Christopher Jay which appeared in this morning's Australian Financial Review under the headline `Debt build-up putting many firms at risk'-quoting an economist-one has to be concerned about our long term direction in light of the level of debt as a proportion of the total capital used by companies in Australia. It is interesting to note that, in the period of the last 20 years, the ratio of debt to equity, or shareholders' funds, in Australian companies taken as a whole has gone up from 70 per cent to over 120 per cent. So in fact we are seeing an enormous rise in the debt level of companies and, correspondingly, by all accounting tests and objective advice, a relative fall in the ability of companies to meet those debt repayments from their own equity arrangements. This means that there is a growing reliance on more and more debt in order to repay debt and this, consequently, raises concern about the long term viability of Australian companies. I think this aspect of our corporate and banking areas is certainly very much a feature of this Government's administration. We have seen, as I mentioned earlier, that Australian debt overseas has risen from $35,000m when this Government came to power to over $100,000m today. Returning to the point that Sir Arvi Parbo made, to which I referred a little earlier, that debt has to be repaid some time. The money has to be found from the export income of Australians as they sell goods overseas. Yet we find a falling amount of money coming to us from that source. Indeed, at this stage there is a shortfall on our exports compared with our imports to the tune of $1,500m per month. As I said earlier, that works out to $30,000 per minute for the rate at which we are accumulating debt overseas. We have to face up to these problems, and certainly the way in which the Government is attacking them does not give us confidence that it is meeting them by attacking them at the root. In fact, all the measures that have been taken by the Government in dealing with the trade union movement, such as the so-called accord, have only contributed quite obviously to higher and higher rates of inflation in this country. This is not to speak of taxation, to which I shall now turn. Clearly taxation is having an impact in driving up the cost of living and of lowering living standards of all Australians. The infamous fringe benefits tax, the capital gains tax, the disallowance of entertainment expenses legitimately incurred for business purposes and many other forms of taxes that have been introduced even in this Budget, have led this Government to be the highest taxing government in the history of Australia. Now 25.5 per cent of our gross production goes to taxes for the Federal Government. This flies in the face of the solemn promise given by the Prime Minister (Mr Hawke) before the 1984 election when he clearly stated in his policy speech that there would be no increases in taxes over and above the taxation applied in the previous year. In his first year in office he succeeded in breaking that promise, along with a heap of others, as we have all come to know too well so often occurs with that particular gentleman. There were statements before the 1983 election that there would be no lump sum superannuation tax, and of course we got it. We also heard that there would be no assets test on pensions, and of course we got it. We also heard that there would be no increase in the Medicare levy-this was said before the 1984 election just two years ago-and of course we got that in this latest Budget as well. Clearly this is a Government of broken promises which has not at heart the real interests of Australia. Problems are building up on the horizon and we doubt whether the Government has a grip on them. Certainly the Budget represented by this legislation has not come to terms with the fundamental problems of the Australian economy. The Government's attempt in the Budget of August 1986 to pull the wool over the eyes of the Australian population has not convinced the financial markets, has not solved our fundamental problems, and has not convinced the trade union movement because it is in dispute with the Government over the kind of wage system that should apply for the next few years. This Government is in terrible straits. Senator Sheil —They will be selling off their assets. Senator MESSNER —That could well be the next line in this disaster, because clearly while borrowing continues to build up at more and more expense to the Budget, the fact is that we are now paying 10c on every dollar of taxation just to pay our interest bill overseas. That has an enormous impact on our Budget and lowers our capacity to be able to pay more for social security or defence or for other normal government purposes. Senator Maguire —Some of that is interest on State government debt. Senator MESSNER —No; that is the charge on our Budget-10 per cent of our Budget goes to meet Commonwealth debt servicing. The impact of that is that $7,000m a year comes out of the Budget for that purpose. That is more than our vote for health, more than we spend on defence, and more than we spend on education. It is becoming such a huge factor in Australia's total financial affairs that it is of concern to us all. I conclude by drawing attention to the fallaciousness of this Budget. It has not fooled anybody. While this Government remains in power and fails to address the real issues that are concerning all Australians, it will remain as unpopular as apparently it is now in the gallup polls. It is time that the Government woke up. We need a change; we need a mini-Budget to address the problems associated with the latest inflation figures. It is time that the Government started taking determined action rather than waiting for the rest of the world to sell us down the gurgler. Senator MAGUIRE(South Australia)(12.35) —This afternoon we are debating jointly the Appropriation (Parliamentary Departments) Bill, the Appropriation Bill (No. 1) and the Appropriation Bill (No. 2). Collectively these Bills comprise the Commonwealth Budget for 1986-87. Appropriation Bill (No. 1) funds from the Consolidated Revenue Fund the ordinary annual services of government. The new amount of money appropriated over and above that in the Supply Bills is $11.3 billion. Appropriation Bill (No. 2) seeks new authorities for some $2.6 billion and essentially the funds in that Bill finance the capital side of the Budget, such as public works, buildings and the new policy initiatives of the Commonwealth Government. Significantly the Appropriation Bill (No. 2) also funds grants to State governments under section 96 of the Australian Constitution. Before I go on to my substantive remarks, I feel it is important to answer some of the nonsensical claims made by Senator Messner on the economy and on financial matters. I wish first to take up the question of taxation. The Liberals parrot in every speech in this place about the Australian Labor Party being a high tax party. The announcement of substantial and wide-ranging tax cuts in the Press today is made at the very time when Senator Messner is claiming that we are a high tax party. I also take up his claim that the share of taxation from gross domestic product is high under the Labor Party. The fact is that in the period of the Liberal Government in the 1970s and early 1980s, the share of GDP going to taxation rose. In fact, at the time Mr Howard was forced from the Treasury in 1983 by the will of the Australian people, the share of Australia's gross domestic product going in taxation was 1.7 percentage points above the position at the beginning of his tenure as Treasurer. That is one of the very important facts that must be borne in mind-that throughout the life of the Fraser-Howard Government the taxation share of GDP rose from a smaller figure at the beginning of that period to a substantially higher figure at the end, an upward trend in taxation. Senator Messner also claimed that 10c in every dollar of taxation went in public debt interest. I would have thought that Senator Messner, a former Federal Minister and a man who has been in this place for many years, would know that through the Commonwealth Budget substantial payments of interest are made in respect of debt incurred by State governments. That includes the conservative governments that exist temporarily in Queensland and Tasmania. Senator Messner should have known better than make such an outrageous claim that the interest bill going through the Commonwealth Budget was entirely interest on Commonwealth Government debt. It is not and that argument is fallacious. At the 1983 National Economic Summit Conference the Hawke Government pledged to fight the country's economic problems, to create new jobs and to reduce inflation. Within the first three years of office of this Government, 500,000 extra jobs were created and the Prime Minister (Mr Hawke) made that promise at the 1983 election. Mr Howard, Leader of the Opposition, and the Liberals scoffed at the idea that so many jobs could be created within three years. Of course, Mr Howard had no right to feel optimistic, because presumably he was basing his comments on his own record as Treasurer. The fact is that in the last 12 months that Mr Howard was Treasurer 186,000 Australians were thrown out of work and were on the industrial scrapheap as a result of his policies. The Hawke Government created 500,000 extra jobs by February of this year-within the three years as promised. Since the National Economic Summit in April 1983 more than 650,000 extra jobs have been created in Australia. That figure is well ahead of the pledged figure. Despite all the claims, carping and knocking by the Liberals, it is interesting to note that the great majority of those jobs were in the private sector. The Liberals repeatedly claim that all the jobs being created in Australia are band-aid, make work jobs or community employment program jobs. That is far from the truth; the great majority of the new employment positions which have been created are in the private sector. Those are some of the facts. This morning Senator Messner claimed that the consumer price index of 8.9 per cent was `a disaster'. He said that it was the highest figure recorded in Australia for some time. Of course it is. But what Senator Messner did not say was that the last time it was higher, the last time that prices in Australia rose by more than 8.9 per cent, the last time that inflation, as measured by the consumer price index, was more than 8.9 per cent, was when the present Leader of the Opposition, Mr Howard, himself was Treasurer. That is a fact and it cannot be erased from history. When Mr Howard was Treasurer inflation was not 8.9 per cent, as it is today. Neither was it 9.9 per cent nor 10.9 per cent. In fact, it was 11.5 per cent. That was the record of Mr Howard as Treasurer and it was the highest figure since the Korean War boom. Senator Messner also said that the 2.6 per cent rise in the consumer price index published today was the highest for some time. It was the highest for some time-in fact, the last time that CPI in Australia rose by more 2.6 per cent was in the December 1982 quarter. We all know who was the Treasurer in that period. It was Mr Howard. In the December 1982 quarter inflation was not on a par with today with a rise of 2.6 per cent; it was in fact 3 per cent. The Liberals have the gall to criticise this Government over the current inflation rate, but their entire political strategy is based on the hope that the electorate has a short memory. That is what it boils down to. Yesterday in this place the Opposition moved a motion accusing this Government of breaking its promises; today it is criticising an 8.9 per cent inflation rate when its own inflation rate was 11 1/2 per cent. The Opposition left the Labor Government with double digit inflation. The entire political strategy of the Liberal Party is to assume and hope that the electorate has a short memory. That is the way it has always been in Australia; the Liberal Party works on that premise. It hopes that the electorate will not remember that the Liberals in government had double digit inflation and double digit unemployment. That was the record of Mr Howard in his years as Treasurer. After three years of strong growth this Government has made a readjustment to its economic policy. The reason for that has been pointed out in this place before; it is the classic balance of payments constraint faced by the Australian economy. This is not entirely new; it has been documented since the 1920s and 1930s. It was written about again in the 1950s. Now in the 1980s once again the balance of payments has become a blot on the Australian economy and it is holding down rates of growth in the domestic economy. There has been a massive decline in the terms of trade. That essentially measures an index of export prices divided by import prices. It measures the relative movements in average prices for exports compared with imports. In the last financial year, 1985-86, the terms of trade declined by more than one-tenth. There was a one-tenth reduction in the average prices received for our exports compared with our imports in one financial year. That compares with the long term decline in terms of trade of about one per cent per annum; so there is a tenfold effect there which in one stroke wiped something like $4,000m to $5,000m off Australia's national income. The lower prices for our principal exports endorse the point that Australia's national income will fall. The decline in terms of trade is outside the Government's control. Depressed international commodity prices are to blame, and I regret that these will not improve in the near future. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Gareth Evans) agreed to: That, unless otherwise ordered, till 2 p.m. this day matters of public interest may be discussed by senators, provided no senator shall speak for more than 15 minutes. Senator JONES(Queensland)(12.45) —One of the reasons I rise to speak today is the problems that exist in Queensland and the very clear corruption within the Queensland National Party Government, corruption that one would have to believe is organised and institutionalised. No one seriously suggests that the Queensland Premier's massive $400,000 defamation payout from the Bond Corporation was anything other than a political sling. It was, as a number of people have commented, a conveniently tax-free payout. Senator Peter Baume —Madam Acting Deputy President, it is with some reluctance that I draw your attention to standing order 418, which states, inter alia, that all imputations of improper motives and all personal reflections-that is, regarding Federal or State members of Parliament-shall be considered highly disorderly, and I simply ask that that standing order be implemented. The ACTING DEPUTY PRESIDENT(Senator Coleman) —I would draw the Senate's attention to that particular standing order and ask that honourable senators be aware that they are in the hands of the Chair. Senator Jones, I was distracted at the time that you were speaking, but perhaps you will recall that standing order when you resume your speech. Senator Gareth Evans —Madam Acting Deputy President, on the point of order: I would remind you that generalised expressions in relation to other forums and politicians therein have not been regarded as infringing that particular standing order in the past and nor should they be at the moment. There is a difficulty when one refers to particular individuals, but not in the generality. The ACTING DEPUTY PRESIDENT —Yes, Minister. I am simply drawing the honourable senator's attention to the standing order and suggesting that he take note of it when he resumes his speech. Senator JONES —Thank you, Madam Acting Deputy President. I suppose there could be a debate over whether it is a political sling. It is certainly true to say that $400,000 was paid to the Premier. For what reason I can leave to other members of the Senate to decide for themselves, as I believe the public will eventually decide. A number of people have commented that it is a conveniently tax-free payout under what has been cynically called `the Bond Corporation contributory superannuation scheme'. When I say `Bond' I mean `bon'. There is no difference between the sort of payout received by the Premier or by the National Party Government and the payout received by Norm Gallagher and the action that was taken following any payout to Norm Gallagher or the BLF. Money was received; it was suggested that that money was for industrial protection and as a form of commission and there were charges laid. We have now a similar situation in the State of Queensland where members of the National Party Government are receiving money which would appear to be for favours and for successful tenders and for anything that one likes to put his mind to. It is not my opinion; it is the opinion of Sir Roderick Proctor, who is a National Party trustee. Last night in an interview he said that on a number of occasions tenders have been called when it was fairly obvious that it was only a charade, that it had already been decided who was to be granted the contract. Sir Roderick Proctor said: `I am now speaking out, to a degree, because I am trying to be honest.' That is a member of the National Party, a trustee of the National Party, making those comments. They are not comments that the Labor Party is making; they are being made by the National Party itself. I believe that, with the corruption rife in Queensland today, the thought of a minority National Party government getting back for another three-year term is almost frightening for the people of Queensland and for the people within the Commonwealth of Australia. We can go through some of the happenings in Queensland. Some of the actions point out very clearly that there is corruption within the Government in Queensland. There is the Bond defamation sling that I have just mentioned; Senator Peter Baume drew my attention to the standing order in relation to it. But I still stand by the points that were made and the fact that those points have been reinforced by a National Party trustee, Sir Roderick Proctor. Let us go through some of the happenings in recent times in Queensland. I have mentioned already the Bond defamation sling. I come to the $145,000 loan handed out to the National Party's Northern Director, Michael Behan, against the advice of bankers and other people who handle the money within government departments. One hundred and forty five thousand dollars was paid out, $85,000 belonging to the Commonwealth; $145,000 which the Premier termed a lousy loan. I suppose one would have to consider that the payment of $145,000 is nothing more than a sling to Michael Behan, another leading light within the National Party. We have seen Judith Callaghan, the wife of one of the Premier's closest aides, jailed for fraud through betrayal of a position of trust she held within the Government; money was misappropriated by her. Her husband is yet to face trial and I will not mention anything about that at this stage, but it was the same sort of venture. The Auditor-General in Queensland made a statement that there had been a misappropriation of some $200,000. Charges have been laid for a mere $45,000. Two hundred thousand dollars has been misappropriated according to a statement by the Auditor-General in Queensland. I turn to the case of the brother of a former National Party member for the State seat of Mourilyn being paid $2.4m compensation under the Burdekin River scheme. The person laying down the valuation of that land made a clear valuation of $1.2m. When questioned on it in the Land Court he said that he had brought down a valuation of $1.2m. A former National Party member's brother received $2.4m, twice the amount that the valuer said the land was worth. I do not believe that I need to say anything further. One needs only to lay out the facts and let people make up their own minds. I do believe that when business has a valuer draw up a valuation in accordance with the factors laid down to govern that valuation, and that valuation is $1.2m, it is quite wrong that a National Party member should receive twice the amount that the valuer says the land is worth-$1.2m to $2.4m. We can talk about the Premier's minder. I am not sure whether Senator Peter Baume will call a point of order on this. Sir Edward Lyons, a former TAB chairman, had been credit betting at the TAB, breaking the law by credit betting. When he was winning he was gathering the funds; when he was losing he was placing it on credit, up to the sum of something like $300,000. I might say that since the credit betting episode he certainly has resigned, but it was not long after he resigned that we found that he was appointed to the board of East-West Airlines. Then there was an attempt by East-West Airlines and by the Premier to change the standing of a national park, Lindeman Island, and transfer it into a position where East-West Airlines with its new chairman, Sir Edward Lyons, the minder of Sir Joh Bjelke-Petersen, could develop land and sell off Lindeman Island. It was only through the outcry of the conservationists, the Opposition and the public generally that the Premier of Queensland pulled back and East-West Airlines, because of the pressure put on it by the Federal Minister, decided to pull out of the deal. We could go further and look at Russell Hinze, the Local Government Minister, the Minister in charge of main roads, the Minister in charge of racing. He has a racing complex at Oxenford; he has an hotel at Oxenford; on the main road to Oxenford they have built a flyover very close to the hotel, which enhances the value of the property very greatly. Continuing with Russell Hinze, he has a gravel quarry which supplied the road gravel. They re-routed under his direction a road to that quarry so that gravel could be taken out for sale, so millions of dollars could be gathered by the Hinze companies. I am not saying that there is anything wrong; I am not saying that they are crooks; I am not saying that they are using public money. I am just putting down the facts and allowing people to make up their own minds in relation to them. I think it is very, very clear that there is corruption within the State Government when people like Sir Roderick Proctor decide to make a public statement-he is a trustee of the National Party-and lay out very clearly some of the very doubtful action that has been taken by the Government itself. Let us look through the list of some of the things that have happened under this Government. There is the TAB scandal, and I have just talked about that in relation to Sir Edward Lyons; the proposed sale of Lindeman Island to East-West Airlines; the Toowong development and redevelopment; the Jaldale rezoning of the Gold Coast where the Minister again wrote to the Gold Coast authorities and said that they should give another allocation or allow that land to be redeveloped in a particular way to suit someone who again was very high within the National Party; the Film Corporation or the Callaghan affair, with misappropriation of some $200,000 as Mr Doyle, the Auditor-General, said in his report; the Queensland Day Committee misappropriation of $44,000; a former secretary of the Premier being charged with misappropriation of $17,000; the loan to Mr Behan, former National Party Senate candidate, of $145,000 at 4 per cent, $85,000 of the money in that $145,000 belonging to rural reconstruction; the high payout to the Premier by the Bond Corporation for a settlement of $425,000-information that would not come to light until it was continually raised at the hearing of the licence for one of the television stations; and the rerouting of a road by a National Party Minister. We continue: The statement by the Minister misleading Parliament over his company's involvement; the sale of land at a higher than market value; the Commissioner of Water Resources-a brother of a former member of the National Party Government-receiving twice the valuation of a valuer who was employed by the Water Commission; and the list goes on. It just goes on and on and these are things that have been happening. Do not take my word for the fact that there is corruption. I think we have to take the word of Sir Roderick Proctor. But let us go a little bit further. Let me, Madam Acting Deputy President, give a couple of quotes-first, the allegation that `corruption seems to have become the norm in Queensland public life under Sir Joh Bjelke-Petersen's Government'. That is a quotation of John Moore, President of the Queensland Branch of the Liberal Party, which appeared in the Australian Financial Review on 1 September 1986. He is not a member of the Labor Party, not someone who wishes to see the Government destroyed, but the President of the Liberal Party within Queensland. On 26 August he said that he had never seen such a sustained period of allegations concerning corruption. Another Liberal Party member asked: `What has happened to our basic right of freedom of speech?' That is Senator MacGibbon, a senator of this chamber. Again, Senator MacGibbon, defending his State President, John Moore, said: `The State Government could not suppress comments by serving writs which represent an abuse of political power'. He said very clearly that there was corruption in the Queensland Government, that there was a series of allegations that needed to be answered. I only hope that those allegations are answered at the next election by the people of Queensland. Madam Acting Deputy President, there is so much corruption in Queensland that one would have to expect that the National Crime Authority would look at some of the action being taken by the Queensland Government and its supporters. Senator Sir JOHN CARRICK(New South Wales)(1.00) —In most recent weeks a number of major events have occurred affecting the peace, security and defence of the world at large and, indeed, of Australia. One very happy event was the Navy Week celebrating the seventy-fifth anniversary of the Royal Australian Navy; I wish to refer to it. The other was the very significant meeting of the two super-powers in Iceland. First, let me make some comments about the seventy-fifth anniversary of the Royal Australian Navy. There was, in that week, a coming together of the navies of the allies within the Western alliance, the keepers of the free world defence. There was in Sydney port a sail-past, signifying the nature and quality and close co-operation of the Western alliance and a reminder to all Australians of our part in that alliance and that the defence of the free world goes farther than continental defence. It was a reminder to us of the proud history over 75 years of the Royal Australian Navy and of its present state of quality and preparedness. I pay great tribute to those who organised the whole event; I pay tribute to those who, locally in Sydney, such as Rear-Admiral David Martin, had the detailed planning. It was a magnificent spectacle and a spectacle which must have made all Australians proud. Whilst on that subject, I point out that in May of this year during the debate on the Appropriation Bills I had cause to make, amongst other remarks regarding defence and the Defence Department, some critical remarks about the attitude which I described as a 9 a.m. to 5 p.m. attitude of defence. Quite properly, the Chief of Naval Staff, Vice-Admiral Hudson, wrote to me and indicated to me that if, indeed, that was so of others, it was not so of the Navy. I want to read to the Senate the letter that he wrote to me, which I accept fully and I think every Australian should know of. He said to me in his letter that he would tell me at a point of time what the Navy was doing, not 9 to 5, but 24 hours a day. He wrote: A summary is produced for me each day to show the disposition of our ships at 1200 Greenwich Mean Time, that is 10 p.m. local time. At that time on 28 of May HMA Ships, Stalwart, Flinders, Brunei and Betano were on passage to the Solomon Islands to assist in relief operations following Cyclone Namu. Success was off Jervis Bay conducting first-of-class flying trials. Also in the area were Parramatta and Otama, involved in anti-submarine exercises. Darwin, Sydney, Onslow and Ovens were off Pearl Harbour taking part in the multi-national exercise, RIMPAC '86. Vampire was in Suva and Perth and Canberra were alongside in Singapore; all these were at immediate notice for sea. Hobart was at sea in company with Derwent. Otway was also at sea. Launceston was on patrol off Darwin, Ipswich off Townsville, Geraldton off Broome and Bunbury off Geraldton. Gladstone was in the Fitzroy Island area and Townsville was off Cairns. Geelong was in the Bass Strait on oil rig patrol. Whyalla was in Sydney about to sail the following morning. Moresby was working in the survey grounds off Port Hedland. Swan, Cooke, Fremantle, Orion, Warrnambool, Bendigo and Gawler were alongside in ports around the country, undergoing maintenance but at 24 hours notice for sea. All these ships were manned, armed, stored and fueled for war or any lesser operational eventuality. The RAN is a 24-hour, 365 days a year going concern; we are anything but a 9 to 5 organisation. It probably sounds corny to many Australians (most of whom were safely at home at 10 p.m. on 28 May), but the Navy never sleeps-ashore or afloat, at home and abroad, all day and every day, your Fleet is ready. Some of our sailors may be cold, wet and miserable-and even sea sick and home sick-but they are all ready. I acknowledge and admire the quality of that letter and may I also acknowledge the final paragraph, in which he writes: I wish someone would read that into Hansard. I am privileged to command 15,415 men and women (some of whom aren't even of voting age) whose one desire is to serve this country. A little Parliamentary recognition is small recompense. I think it is a most delightful and very pertinent letter in this, the seventy-fifth year of the Navy service. I am very proud to say that my reference to a 9 to 5 attitude of defence was certainly not a reflection upon the Navy and I am very proud that we have, in this country, people of the quality of Admiral Hudson, and his own colleagues, officers and men of the Navy who really serve us very well indeed. I want now to move towards the Iceland meeting. Since that meeting a number of comments have been made around the world. In the last 24 hours a most significant series of comments has evaluated the Iceland meeting. The particular comments came from a full meeting of the North Atlantic Treaty Organisation allies on their consideration of the President Reagan submissions in Iceland and his actions throughout those negotiations. It is important for this Senate to understand that NATO responded unanimously in saying that it fully supported the approach and the decisions of President Reagan and of the United States of America. That is a statement of unity of the free world. It is a statement which signifies that the free world fully understands why President Reagan would not accept the terms of Mr Gorbachev's offers and why in fact he would not be willing to concede the withdrawal of the strategic defence initiative. There are two matters of great importance that have to be considered. One must understand that NATO itself would have a very real concern should a part of the Russian offer have emerged and been implemented. That part of that offer was of course the suggestion that there should be the withdrawal of intermediary weapons from Western Europe, whilst some should be retained in Asia. The fact of the matter is that that would mean that the Cruise and Pershing missiles would be withdrawn from Western Europe and a certain number of SS20 missiles withdrawn from Eastern Europe facing the west. It would not in fact, take away all INF missiles in the world. It would not prevent the redeploying of the SS20s towards Western Europe and fundamentally it would expose Western Europe to the terrible dangers that lay before it, prior to the installation of the Cruise and Pershing missiles. One must understand that in Europe the Warsaw forces are together in one area of land in the east and capable of immediate deployment as a unit. On the other hand, the NATO forces are dispersed throughout the world-America, Canada, the United Kingdom-and cannot be brought together except in a very long period. Also, numerically the NATO forces are weaker than the Warsaw Pact forces and the NATO people have over the years worried very greatly that they could be overrun in conventional war if the Warsaw Pact should move. The great obstacle to such a movement would be if there was a power for retaliation by the West. The West has always taken the view that Russia might take such a move because without Pershing and Cruise missiles the only way that the West could retaliate would be from submarines deployed around the world's seas. It might be a fair bet by the Russians that they could act and act with impunity without the Americans involved, because it would bring an attack on the American mainland if the Americans should intervene from their submarine missiles. But once the Cruise and Pershing missiles were so deployed, that altered the whole situation and gave a stability to the situation. The important situation is that what is called the MBFR talks-the mutual and beneficial force reduction talks-should go on so that the conventional forces should be reduced in Europe. That is of immense importance. It is a matter that the coalition fully supports. The breakdown of the talks on the basis of the strategic defence initiative produced some controversy throughout the world. Sadly, and quite wrongly, the media and indeed some elements of politics, have tried to present a picture that the action of the SDI was a primary initiative by America; that America was going into high density light beams, laser beams, and particle beams research and development on its own; that it would be ahead of Russia; and that Russia had everything to fear from this because it would create an imbalance in the deterrent. America, of course, having great skills in her technology, would be ahead in scientific development. The tragedy is that the world has not been told and should be told most forcibly that for the last 17 years-and I repeat, the last 17 years-the Russians have been carrying out not only research into high density light beams, laser beams and particle beams, but also the actual development of an anti-missile system throughout the Russian mainland. Indeed, the Russians have an anti-missile system defence around Moscow. They have at a place called Krasnoyarsk in central Russia a radar array that is generally conceded is a breach of the anti-ballistic missiles treaty and is part of the strategic defence initiative philosophy. The fact of the matter is that America was not doing something to destabilise. At the very most it was doing something to be in parallel with what Russia was doing. What is more, President Reagan has said emphatically that he is willing to supply to the Russians, step by step, over the whole course of the research of the strategic defence initiative, the information that the Americans have, so that the two of them are in parallel in their development. The Americans have offered a three-stage disarmament. It is very important to understand that what looked like an initial major initiative of Gorbachev in Iceland was in fact part only, an echoing in some substances alone, of what the Americans have been offering now for something like five years in START-the strategic arms reduction talks-that were in fact cut off by the Russians. The willingness to halve the number of strategic missiles, and on America's part to wipe out all intermediate missiles, was part of the strategic arms reduction talks. The fact of the matter is that the Americans have offered in terms of the strategic defence initiative a simple principle. They have said: `Let us abolish all nuclear weapons throughout the world. Let us take away the aggressive nuclear offence system which creates the deterrent and put in its place a non-nuclear defence system. We are willing to do this in three stages; we are willing to share our knowledge with the Russians; we are willing to cut down our missiles at the same time as we increase our non-nuclear defence system'. The important thing to understand is that we are being outsmarted by propaganda from the Left. It is important for the people of Australia and the world to understand that what America is doing is striving to wipe out all nuclear missiles from the world, totally, and to put in its place a defence system which is non-nuclear. Nothing could be more admirable. Senator VIGOR(South Australia)(1.15) —I rise this lunchtime to follow up some matters which came out of the research which I did in looking at an amendment to the taxation Bills which were dealt with earlier this day. I refer particularly to the shocking situation which came to my notice concerning smoking amongst young people. I believe this is a sufficiently important area to bring to the notice of the Senate so that we can actually think about legislative proposals to solve the problem. The Better Health Commission Report, Volume I, `Looking Forward to Better Health', makes a few statements which, I think, are very illuminating in this area. It says: . . . smoking is most prevalent among members of the lower socio-economic groups. That is one point. Point two says: . . . girls are taking it up in greater numbers than boys. That is an interesting discrimination which is happening through the process of advertising. Thirdly we are told that lung cancer among women will soon be the leading cause of cancer death in women-the rates have, in fact, risen by 30 per cent between 1980 and 1984. I managed to get some statistics which were supplied by the Australian Association of Cancer Registries and I seek leave to incorporate a table. I have shown it to both sides of the House. Leave granted. The table read as follows- MORTALITY FROM LUNG CANCER IN AUSTRALIAN FEMALES, 1950-1984 (Australian Association of Cancer Registries: G. Giles, 1986) Mortality from Lung Cancer in Australian Females, 1950-1984 Years Standard rate Standard error Per cent change Confidence interval 1950-54... 3.24 0.11 15.7 3.02-3.46 1955-59... 3.30 0.11 1.9 3.08-3.52 1960-64... 3.88 0.11 17.6 3.66-4.10 1965-69... 4.93 0.12 27.1 4.69-5.17 1970-74... 6.77 0.13 37.3 6.51-7.03 1975-79... 8.68 0.14 28.2 8.40-8.96 1980-84... 11.32 0.16 30.4 11.00-11.64 Projections 1985-89... 15.50 36.9 1990-95... 20.00 29.0 Senator VIGOR —The Better Health Commission goes on to comment later that taxation increases discourage children most and children have the lowest per capita cigarette consumption rates. Currently, advertising is still having an effect on young children, despite laws in various States which stop the selling of cigarettes to young children. There is still consumption by young children and many are apparently addicted to cigarettes by the time they reach the age of 18. This is a real indictment of our system. I would bring to the notice of the Senate, but not go any further, an admirable presentation-the sixteenth Leonard Ball oration at the Royal Women's Hospital in Melbourne-which was delivered by Senator Peter Baume, who is here today. I would commend him for his analysis of the problem. I would hope that we can co-operate in trying to get this particular scourge wiped from the face of Australian society. I believe that we should look very closely at how this can be done. The Prices Surveillance Authority, in its `Inquiry in relation to the supply of cigarettes', published on 26 November 1985, says that the elasticity of demand for cigarettes is very low. It is higher for light smokers than for heavy smokers and overseas evidence puts teenagers' price elasticity as very high. Teenagers may, in the first instance, switch to cheaper brands but in the long term they will actually stop smoking if they are priced out of it. I believe we should consider massive hikes in cigarette prices as one possible means of stopping this particularly obnoxious habit, which harms not only the person who is smoking, but also those who take in sidestream smoke. Currently, I wish to bring to the notice of the Senate, we are spending around $400m on hospital bed days each year because of cigarette-caused illness. We can tackle the public health question in probably two different ways simultaneously: First, we can go after the advertising and promotion activities of the dealers who are pushing this particular process. We could ban it, as the Australian Medical Association has proposed. Secondly, we could put tobacco further and further out of the reach of the most vulnerable; that is, the young and the people who are currently being affected by the massive advertising and promotion campaigns which are being run in sporting areas where young people are the main participants. There is a very interesting section in the report of the Better Health Commission which talks about the prerequisite for getting more data on smoking. I believe that it is extremely important to know what we are up against when we are dealing with a problem of this type. According to the Better Health Commission, we do not have suitable and satisfactory statistics sufficient to be able to make sensible policies in this area. I seek leave to incorporate in Hansard from the Better Health Commission's report the section dealing with the type of statistics that it believes we should be collecting if we really are serious about tackling this problem. It has been shown to both sides. Leave granted. The section read as follows- In their plan for `a national strategy on tobacco smoking control', outlined in June 1981, the National Health and Medical Research Council singled out the following areas for data collection: epidemiology of tobacco-related diseases; total per capita consumption of tobacco and cigarettes; tar-weighted cigarette consumption; past and present smoking habits of the population; costs to the economy of tobacco smoking and related illness; real costs of tobacco and cigarettes-related to wages and the Consumer Price Index; smoking habits of certain target groups-for example, pregnant women; smoking habits of exemplar groups-for example, doctors and teachers; measurement of all media usage in relation to tobacco information, education and advertising, direct and indirect. The gathering of survey data on smoking attitudes and behaviour in adolescents is also vitally important because tobacco smoking is usually begun during the teenage years. Systematic data of this kind are not available in Australia. Senator VIGOR —The report points out that, unlike the United Kingdom and the United States, Australia has no systematic population-based statistics. It goes further to remind us of the national strategy on tobacco smoking control outlined in June 1981 by the National Health and Medical Research Council. Among the items we need to collect data on smoking habits are, in fact, the smoking habits of certain target and exemplary groups. The Council has stressed the importance of evaluating the cost to the community of tobacco smoking and related interests. The importance of the information, which is included in the report and which I commend to everybody, is that it does give the basis if we had the information in a hard form of showing exactly what the costs of smoking are to the community. This must spread a lot further than just the straight medical costs. The report also deals with the area of subsidising, of absentees from work, and extra cleaning expenses in places where smoking is carried on. I believe that we can learn something from looking at this type of information as it has been gathered in the United States. In the United States, the Congressional Quarterly gives an estimate of $US22 billion as how much the United States health care system needs each year to treat smoking-related diseases. Of course, they have a lot more people than us. The indirect cost of lost productivity due to smoking-related diseases in 1985 was put at around $US43 billion, around twice the amount for treatment. In fact, of the cost per packet, health care alone was between 70 and 80 per cent of the price paid by the victims who smoked a particular brand. I believe that if we apply the same type of statistics in Australia, we could save from our medical areas-from our absenteeism figures, from all the areas of importance in the community which are affected by smoking-sufficient to be able to make massive tax cuts, of the order of around 10 per cent at least, on income tax. I believe we should be endeavouring to do this type of thing. However, in Australia we just do not have the information available to us. The best that we have is information based on hospital bed-days in Western Australia and that gives, multiplied for the whole of Australia, an estimate of $400m nation-wide; that corresponds to the $US22 billion figure in the United States. If we included the other figures, we would arrive at about three times that amount as the sum that could be saved if we could eradicate this particular problem from the community. I would like to remind the Senate of recommendation 51 of the Standing Committee on Social Welfare in its 1977 report, `Drug Problems in Australia-an Intoxicated Society?'. Recommendation 51 was as follows: That excise policy be one tool used to reduce the consumption of tobacco. When the Government responded to that report, 2 1/2 years later, it did so in a completely unenthusiastic manner. In fact, its response was that tax rates on tobacco products are matters to be determined in a budgetary context and that the Government would take health considerations into account in setting those rates. I believe that the health considerations should come first. In fact, when we examine the 1985 annual report of the Australian Tobacco Board we find that the excise on cigarettes was increased only twice during the course of the Fraser years in office. There was a rise of just over 27.5 per cent in August 1978, just after an election, and a rise of 20 per cent in August 1982, just before an election. But that was not known at the time. These long intervals meant that the price of cigarettes did not keep up with inflation and that the price deterrent was not working at all. In fact, the Australian Medical Association made this point strongly to the inquiry of the Industries Assistance Commission into the Australian tobacco industry in 1982. The following measures, amongst others, were proposed: That any future reference on the tobacco industry include consideration of the cost to the community attributable to tobacco-related diseases. Secondly, that a penal duty be applied universally to all tobacco leaf and manufactured cut tobacco imported into Australia. Thirdly, that the excise tax on cigarettes and on other tobacco products be increased by a minimum of 50 per cent in the 1982-83 Budget and that it be automatically indexed to movements of the computer price index. The Fraser Government, in fact, went for only a 20 per cent increase. Treasurer Keating has now tied the excise movements to the consumer price index. But there was a further period of increase between 1982 and the time when he did this of the order of 5 per cent. I believe it is shameful that this Government has not at any stage made a major catch-up adjustment similar to that which several States have done recently on their licensing fees. A major increase, I believe, would discourage enough young people from smoking to make that well worthwhile and would be a much better measure than some of those which have been brought in in the Budget. I commend to the Senate a policy of strongly discouraging drug taking. Tobacco is one of the most dangerous drugs that we have got, despite the fact that it is a legal drug. I would commend to the Senate that we should immediately consider what type of measures can be put into place to make our society much healthier and to save an enormous amount of suffering and ill health within the community. The way of doing this is to take seriously the problems of smoking within the community, particularly amongst young people who are now the main target of the tobacco moguls. Senator COLSTON(Queensland)(1.30) —It is not the usual practice in this place to make criticisms of the judiciary and I hope that the comments that I make are taken in that way, because this afternoon I want to make some constructive comment. It is about a matter which came before the Supreme Court of Queensland not so long ago. In the Courier-Mail on 2 September of this year there was an article which was headed `Unlimited liquor supply at Mission worry: Judge'. The first paragraph of this article reads: A Supreme court judge yesterday said he could not understand or come to grips with the idea that Aboriginals in areas such as Doomadgee mission in the Gulf of Carpentaria, had unlimited access to liquor. When I read that I was surprised because quite often people come before the courts, not only in Queensland but elsewhere in Australia, whose offences have been due to over-indulgence in alcohol. It seems to me that this happens not only to Aboriginals but to non-Aboriginals as well. This article in the Courier-Mail seemed to indicate that this particular judge was criticising the fact that this person, as an Aboriginal who lived at Doomadgee mission had an unlimited access to liquor. In other words, he had an access which was similar to that of non-Aboriginals. I took the trouble to obtain a copy of the actual judgment because articles like that in the newspapers are sometimes misleading. I would like to read the relevant part from the judgment which the article in the Courier-Mail referred to. His Honour Mr Justice Moynihan said, in part, when sentencing this person: Lorraine, you have pleaded guilty to unlawful killing. It occurred in circumstances which are only too common, for people in your position, that is where there has been an excessive consumption of alcohol, and a dispute arose which you seemed to regard as capable of resolution only by violence. The next paragraph is perhaps the relevant one to the matter that I am referring to this afternoon. It says: As I say, in this Court, people in your position are increasingly finding themselves charged with such offences. How it is right that people in your position should have unlimited access to liquor is something which I can't really understand or come to grips with but that is what seems to happen. That is probably a little different from the construction that was placed upon it in the Courier-Mail article, but the message seems clear, namely, that the judge was saying that this person should not have had the same access to liquor as people who are not Aboriginals. I do not want to go into the argument about whether people should have access to liquor or not. That is a different matter altogether. But it seems to me that in Australia it should not matter whether one is of European descent, comes from some other area of the world, or of Aboriginal descent in having access to alcohol. I would suggest that the judge's statement is probably bordering on being a racist comment. I would just ask the judge, and those who are connected with the justice system in Queensland and elsewhere, to remember that Aboriginals are Australians and we should not distinguish between them and non-Aboriginal Australians when we are talking about their access to alcohol, access to other commodities or rights or privileges that people have if they are not of Aboriginal descent. The matter is serious enough to raise it here and I hope that in future we will not see any similar occurrence of this type of discrimination entering into judgments in Queensland. Sitting suspended from 1.35 to 2 p.m. Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to the fact that today's consumer price index figure takes the annual inflation rate to 8.9 per cent, more than 5 1/2 times the average of the major Organisation for Economic Co-operation and Development nations. Does he believe that the Budget decision to seek a 2 per cent discount at the next national wage case remains adequate in light of this larger than expected quarterly increase? Given the findings of the Bureau of Industry Economics report released yesterday, to which the Minister referred in Question Time yesterday, that costs have offset the advantages of devaluation, does the Minister believe there is now a need for a tighter clamp on wages and deferral of the union superannuation campaign which, if successful, will add significantly to industry costs? Senator BUTTON —The CPI increase announced today was quite within the range expected by the Government following the devaluation of the dollar. Opposition senators-Ha, ha! Senator BUTTON —Any honourable senators who have been reading the papers or serious journals would not have expected a very different result. That follows the further devaluation of the dollar which occurred particularly in June and July of this year and, as I have said, the increase is within the expected range. Senator Chaney asks whether that makes the annual inflation rate in the order of five times that of the average OECD rate. I am unable to answer that precisely but I take his point that that inflation rate on an annualised basis is considerably higher than the OECD average rate. I simply make the point that a number of factors have led to that average OECD rate, in particular so far as European countries have contributed to that average. Of course, the main factor is the dramatic fall in oil prices. By giving that answer, I am not seeking to suggest that some countries have not had a better inflation performance than Australia anyway, but it is a significant factor to be taken into account when making those comparisons. Senator Chaney then asked me whether in the light of the 2.6 per cent inflation figure for the quarter the Government would reassess the 2 per cent discounting of wages which was referred to in the Budget Papers. I am not quite sure from recollection what the anticipated inflation rate for 1986-87 was in the Budget Papers, but it certainly was not one which we could say with great joy compared favourably with that of other OECD countries. Senator Peter Baume —It is very serious. Senator BUTTON —Yes, and so is the honourable senator. As to whether that leads to the Government changing its position in respect of wages, negotiations are currently taking place with the Australian Council of Trade Unions and a number of business organisations regarding the wage fixation system and an appropriate wage environment for our current economic circumstances. All I can say is that in all those negotiations the Government will be advancing the position that any wage changes have to take account of the overall economic position, and we will be adopting a very stringent position in respect of those matters consistent with the view expressed at the time of the Budget, having regard to the economic outlook then. I am asked also about superannuation claims. That is also the subject of discussion between business organisations and the ACTU. Until those discussions are complete, I am not in a position to say anything about that matter. I think they are positive and constructive discussions, and that is what the Government is seeking. Senator CHANEY —Mr President, I ask a supplementary question. I thank the Leader of the Government for his reply. I note with some concern his acceptance of the 2.6 per cent quarterly inflation rate as being within the range expected. I add that the $1.4 billion trade deficit, on last month's figures, might also have been within the range expected. But I ask the Minister: In light of the current figures the Government is receiving in respect of inflation, the trade deficit and so on, is the Minister saying that the policy settings which were laid down in the August Budget are still satisfactory and do not require alteration? Senator BUTTON —I was trying to say that all these matters have to be taken into account. I understand the Opposition's desire to put the trade deficit figure together with the inflation figure in an attempt to talk the dollar down. Senator Chaney —Fair go. Good heavens, I did not mention the dollar. Senator BUTTON —It has been mentioned outside this place. I apologise to Senator Chaney if that was remote from his mind when he asked the question. Let me get back to the point. Senator Chaney keeps pursuing me as to whether any further adjustment is considered necessary as a result of this inflation figure. I really cannot add anything to what I said in the earlier part of my answer. The Government has to be concerned about obtaining adjustments in the wages area, particularly, but until we finalise our position on the question of the two-tier wage structure and so on, matters which are the subject of negotiation, I do not think it would be beneficial for me to make any further comment. I was not in any way trying to be sanguine about the high inflation rate. It is the highest inflation rate for any one quarter Australia has had since John Howard was Treasurer, and that is a matter of considerable concern, given the current economic circumstances. Senator BLACK —Has the Minister representing the Treasurer read the highlights of the address by the Chairman of MIM Holdings Ltd, Sir Bruce Watson, to shareholders at the company's annual general meeting published in the Australian Financial Review this morning and the transcript of an interview with Sir Roderick Proctor, a trustee of the Queensland branch of the National Party, on the Carleton-Walsh Report last night? If so, given Sir Bruce Watson's comments about the implications of Federal taxation policy and Sir Roderick Proctor's comments about Queensland rail freight charges, can the Minister give an indication of the relative implications of Federal taxes and State charges on the cost structure of Mount Isa Mines? Do the results of this comparison confirm Sir Roderick's views expressed last night about the Bjelke-Petersen National Party Government's management of the Queensland economy? Senator Chaney —Mr President, I rise on a point of order. The early part of the question is probably within the Minister's competence but the latter part, which merely calls for a comment on the affairs of another government, seems to go beyond the province of Question Time and I ask you to rule it out of order. The PRESIDENT —Order! The first portion of the question is clearly in order and it is on that basis that I allow the Minister to answer. I know that the Minister has been told over and over again that he shall not debate matters and I know that he has heeded that advice and will continue to do so. Senator Chaney —I appreciate your ruling, Mr President, and I am not canvassing it, but my point was that the latter part of the question was beyond the Minister's responsibilities and I was suggesting that that part of the question, whether debated or not, was not in order. The PRESIDENT —We will listen to the Minister's response. Senator WALSH —I will deal with the first two parts of the question and observe in passing that Senator Chaney is again swimming against the tide of the Liberal Party by trying to protect the corrupt National Party Government in Brisbane whereas senior Liberal Party officials in Queensland are passing on the message that if this Government can dig up some dirt on the Queensland Government, they would like to get a piece of it. Senator Button —Senator Chaney does that because Senator Boswell is standing over him. The PRESIDENT —Order! The point of order taken by Senator Chaney has been determined. I ask the Minister to respond to Senator Black without debate. Senator WALSH —Certainly, Mr President. In response to the first part of the question, I have not read the transcript of Sir Roderick Proctor's comments but I have heard extracts from it. I understand that, since then, Sir Roderick has, to some extent, backed away from what he said. I can only speculate as to why that is so. Perhaps he has heard about what happens to other people who argue with officials of the National Party of Australia. They sometimes get a hard hit on the back of the head. More significantly perhaps, Sir Roderick's comments were endorsed on a Macquarie radio program this morning by another Queensland knight, Sir Robert Mathers, who said: . . . I might say that I agree wholeheartedly with the sentiments Sir Roderick expressed. He went on: I think one of the big things is the cronyism. That is, one of the big things in the election campaign is the cronyism. In response to the second part of the question I have figures on the payments by Mount Isa Mines Ltd to the Queensland Government and to the Commonwealth Government. Sir Roderick also made a statement which was directly relevant to this. He said: . . . Queensland is an extremely high taxed State. The high taxes on the coal mining industry which are gathered in the guise of rail freights are exceedingly high. It also has many other high State taxes such as the tax on the new Gold Coast Casino which at 20 per cent is, we believe, the highest in the world, certainly the highest in Australia. That was said by Sir Roderick Proctor. I deal now more specifically with the highlights of Sir Bruce Watson's report to the annual meeting of Mount Isa Mines. In the last financial year Mount Isa Mines paid a total of $7.6m in Federal taxes, which comprised $2m in sales tax, $4.2m in excise duty and $1.4m in company tax. In the same year MIM paid $54.9m in direct State taxes to the Queensland Government. Senator Button —That's terrible. Senator WALSH —Yes. That included payroll tax of $11.8m, land tax of $300,000, royalties of $42m, stamp duty of $100,000 and mining lease rents of $700,000. So MIM paid direct taxes of $54.9m to the Queensland Government and $7.6m to the Commonwealth Government. Then, of course, there is the question of rail freights which Sir Roderick Proctor addressed. MIM's rail freight charge-this is for coal alone-was $83.3m in the last financial year, of which just over $61.2m was a hidden State tax. It was not a charge for a service but a State tax which was hidden. The rail freight charge from the Mount Isa mine-which is distinct from coal of course; it is not a coal mining operation-was $65.2m, of which Mount Isa Mines estimates that some $27.7m was a hidden State tax and not a charge for a service delivered. So, in total, taxes paid to the Queensland Government by Mount Isa Mines, hidden and unhidden, were $145.8m as against $7.6m paid to the Federal Government. To the extent that taxes are a problem for Mount Isa Mines, it is very clear where the source of that problem is-it is in Queensland and not in Canberra. Bearing that in mind, I expect that it will not be very long before Sir Bruce Watson joins the revolt with the other Queensland knights, Sir Robert Mathers and Sir Roderick Proctor, and calls for the removal of the Bjelke-Petersen Government. Senator BOSWELL —My question, which is addressed to the Minister for Industry, Technology and Commerce, concerns Federal matters, which is slightly different from what we have been experiencing over the last three weeks. Is the Minister aware that certain oil companies, before renegotiating new leases under the Petroleum Retail Marketing Franchise Act, are demanding an extra payment which is called a premium lease payment? As the lessees are entrenched in these businesses and are not in a strong position to disagree with these extra charges, can the Minister advise whether these payments are contrary to the intention of the Petroleum Retail Marketing Franchise Act? If so, will the Federal Government take action to protect the lessees against these extra payments which are demanded before a new lease is signed? Senator BUTTON —I do not know what certain oil companies are demanding on this issue. I will find out and give the honourable senator an answer as soon as possible. Senator AULICH —My question, which is addressed to the Minister representing the Minister for Employment and Industrial Relations, refers to the dismissal with 30 minutes notice of 300 employees at Besco Batteries in Sydney last Friday. Does this action by a subsidiary of Peko-Wallsend Ltd provide any insights into the type of alternative industrial relations system being advocated by the New or extreme Right in this country? Senator WALSH —I am not sure what the answer to the last part of the question is. I would hope that the answer is no, but I suspect that it is yes and that this is a fair sample of the sort of industrial relations practice that members of the extreme Right would implement should it get its puppet political party installed in power. We hear a good deal about freedom from members of the New Right or, as it is more accurately described, the extreme Right. A taste of the sort of freedom which would prevail should it achieve the political dominance it seeks is the freedom to sack anybody at 30 minutes notice. I think it is worth while commenting on or drawing attention to the fact that even the Sydney Daily Telegraph which, to say the least, is not a paper which normally adopts a sympathetic editorial line either to the Australian Labor Party or to the trade unions, said: But it cannot be right to callously and contemptuously put 500 workers on the dole with only 30 minutes notice. So Mr Copeman and those who sail with him have gone much too far even for a newspaper such as the Sydney Daily Telegraph, which is traditionally hostile to the Australian Labor Party and to the trade union movement. Indeed, this action demonstrates that, in what is seen as the utopia sought by some members of the H. R. Nicholls Society and supported by their lackeys in the Commonwealth Parliament, such as the Leader of the Opposition and the Deputy Leader of the Opposition, there will be two classes of people-those who do the sacking and those who get the sack. Finally, as with the earlier attempt by Mr Copeman and Peko-Wallsend to provoke industrial strife in the Pilbara, the action here is clearly politically motivated. It is not taken in the interests of the shareholders at Peko-Wallsend, the national economy or in the national interest. It is another provocative attempt by the extreme Right, supported as it is by the present leadership of the Liberal Party of Australia, whatever outright hostilities Steele Hall and other people have about it, and the motivation is not to best serve the interests of the company shareholders, the Australian economy, or the people of Australia in general. The motivation is clearly political. Senator HAINES —My question is directed to the Leader of the Government in the Senate. Given the intense public interest that the women's peace camp and last week's Australia-wide anti-nuclear demonstrations have engendered on the issue of the renewal of the Pine Gap agreement, I ask the Minister: Has a delegation from the peace camp sought a meeting with the Prime Minister, the Foreign Minister and/or the Defence Minister? If such a meeting has been requested, have these Ministers agreed to meet with that delegation? If not, why not? Finally, irrespective of the answers to these questions, what is the Government's intention with regard to the Pine Gap agreement? Senator BUTTON —I am unable to answer the first part of the question which relates to a delegation from the peace camp seeking meetings with the Prime Minister, the Foreign Minister and the Defence Minister. I will endeavour to obtain an answer, if I can, to that part of the question by the end of Question Time, or certainly as soon as possible. With regard to the last part of the question, I think that issue was dealt with in a pretty explicit answer given by my colleague Senator Gareth Evans to a question asked by Senator Vallentine yesterday and I draw the honourable senator's attention to the Hansard record of that answer. Senator GILES —Can the Minister for Education confirm that the latest edition of Telecom's telephone directory for Perth lists an organisation called the Curtin University of Technology which apparently is located at Kent Street, Bentley, Western Australia? Can the Minister advise the Senate whether the so-called Curtin University is in fact the Western Australian Institute of Technology? If so, is the Minister aware which responsible officer authorised this apparent renaming of the Institute? Can the Minister confirm that the Western Australian Institute of Technology is constituted pursuant to an Act of the Western Australian legislature, which specifically provides that the name of the Institute shall be the Western Australian Institute of Technology? Finally, can the Minister comment on the legal implications of what appears to be the unilateral renaming of the Western Australian Institute of Technology? Senator RYAN —It is true, I have been advised, that the latest edition of the Perth telephone directory, September 1986, contains an entry for the Curtin University of Technology, an institution which, as far as the Commonwealth is concerned, does not exist. It is worth noting that the same directory also contains a full list of entries for the Western Australian Institute of Technology, including its various components. Discussions with the Director of the Western Australian Post-Secondary Education Commission, the Western Australian body that deals with higher education matters, indicate that the entry would have been arranged by the Institution itself. Further checking with Telecom revealed that the request from WAIT would have been treated as a request for an additional entry and that, provided the request was in writing, it would have been processed in the routine way. The Western Australian Institute of Technology, including its name, is authorised under the Western Australian Institute of Technology Act 1966 of Western Australia. That Act includes the name, powers and functions of the Institute. The Western Australian Minister for Education has publicly announced his intention to change the name of WAIT to the Curtin University of Technology. This change will require an amendment to the WAIT Act. Such amendments have not been introduced into the Western Australian Parliament. The WAPSEC advises that it is likely to happen before the end of the year, but it has not happened yet. Presumably the amendment to the WAIT Act would include the powers and functions appropriate to the Institute to be named the Curtin University of Technology. As far as the Commonwealth is concerned, we have no powers with regard to the naming of those institutions, but I have made it clear to Bob Pearce, and indeed to Premier Burke, that the unilateral name change, which legally the State Government is entitled to make, will not carry with it any implications for increased funding as far as the Commonwealth is concerned. In conclusion, I hope that the Western Australian Government will reconsider its intentions with regard to the name change. The Western Australian Institute of Technology is a very successful institution. It has a very good national reputation and, indeed, a growing international reputation. Senator Chaney —It is very entrepreneurial. Senator RYAN —It is very entrepreneurial, as Senator Chaney says. It is an institution that has moved very quickly into the field of export of education services, with our Government's support and encouragement. In my view, it has no need to seek a name change or a change of prestige. It has the prestige it has earned by its performance and, in our view, it ought to continue in that fashion. Senator HAMER —My question is directed to the Minister representing the Treasurer. Is it a fact that a meeting was held last Friday to discuss with the Government the so-called unforeseen consequences of the fringe benefits tax? Have there been any subsequent meetings; if so, when? Who was present at these meetings to represent the interests of those unreasonably hurt by the fringe benefits tax? What recommendations for change to the fringe benefits tax came out of these meetings? Senator WALSH —I am sure that Senator Hamer cannot seriously expect an answer to all those questions. If I did have answers to them-but I do not-I would divulge little, if any, of it anyway. He specifically asked whether a meeting was held last Friday. I do not know. If a meeting were held on that subject I was not there, nor was I at any of the other meetings that Senator Hamer alleges were held. I will pass on that question to the Treasurer to see whether he wants to supply any information. Senator SIBRAA —Is the Minister representing the Minister for Foreign Affairs aware of a proposed trial of Mr Doan Quoc Sy, a Vietnamese author, by a people's tribunal in Ho Chi Minh City for alleged crimes against the state? Is the Minister also aware of Amnesty International reports that Mr Sy has been held in detention for the past two years without trial and prior to his arrest had applied for, and was granted, a visa to Australia where his son and daughter now reside? Can the Minister inform the Senate what steps the Australian Government can take to secure the fair treatment of Mr Sy? Senator GARETH EVANS —The case of Doan Quoc Sy is one of two that have been brought to the attention of the Minister for Foreign Affairs in recent days and is one of a number of instances that have been giving rise to some concern about the human rights situation in Indo-China generally, and Vietnam in particular. Vietnam acceded to the International Covenant on Civil and Political Rights on 24 December 1982, which gives Vietnam clearly defined obligations to observe human rights principles. Mr Hayden took up human rights issues against that background with the Foreign Minister, Nguyen Co Thach, during the Vietnamese Foreign Minister's visit to Australia in March 1984 and again during Mr Hayden's visit to Vietnam in March 1985. He took these opportunities to raise a number of specific human rights cases. During his visit in 1985 he gave Mr Thach a letter which confirmed our understanding of Vietnam's undertakings on the matters discussed and requested further details on specific cases. The Australian Ambassador in Hanoi has been actively engaging in a continuing exchange on this issue with Vietnamese justice and foreign affairs ministry officials. In recent days, as I have said, the Government has had two cases in particular brought to its attention-that of Chu Van Tan who is reported to be under threat of execution and the case that Senator Sibraa has raised of Doan Quoc Sy who, it is reported, is to be tried at the end of this month. The Australian Embassy has made inquiries about these two cases on a number of occasions and has been instructed to make further inquiries as a matter of urgency. I should say, finally, that we have no illusions about the extent of our influence in this area, but we feel we have established a basis for seeking some information from Vietnam. Mr Hayden has explained to the Vietnamese that one necessary condition of a satisfactory bilateral relationship is the need to be able to respond to Australian domestic concern on these issues in a factual and credible way. Senator LEWIS —My question, which is directed to the Minister representing the Minister for Territories, is about the Trading Hours Ordinance of the Australian Capital Territory. I refer the Minister to, and congratulate the Government on, its decision not to prosecute stores which opened until midnight in Canberra last Thursday. When will the Government change the Ordinance so that these stores do not leave themselves open to prosecution by a union for so opening? Senator GIETZELT —From time to time honourable senators, particularly the shadow Minister and Senator Reid, ask me questions about matters relating to the Australian Capital Territory. In recent times I have had to advise them that I am not adequately briefed on these matters. So that I can answer questions properly according to the honourable senators' requirements, it would be useful if they were to give me some advance notice, not of the actual questions on which they seek information but of the issues that they want to raise. As I indicated to Senator Reid several days ago, this subject is not listed among the 27 matters before me, and all I can do is either take it on notice or refer it to the Minister for Territories. Senator FOREMAN —Has the attention of the Minister for Finance been drawn to an article in Tuesday's Melbourne Herald reporting on a proposal by the Opposition spokesperson on local government and administrative services, Mr Wilson Tuckey, to sell off and lease back Commonwealth properties? If so, can the Minister indicate what would be the financial implications of this proposal if it were implemented? Senator WALSH —I have seen the article in which Mr Tuckey is reported as having obtained a list of 22,000 Commonwealth properties which he has given to the Real Estate Industry Association. It includes communications stations, rifle ranges, telephone exchanges, car parks, light- houses and so on. I do not know whether the Opposition, should it become the government, intends to sell off all those things, but it will have to do something like that, of course, in order to offset the irresponsible taxation and expenditure policies that its Leader has been peddling. Either it will have to get a one-off gain of the order of $6 billion by flogging off lighthouses, car parks, Army camps and so on, or it will come in with a $10 billion deficit as Mr Howard was about to do when he was last booted out of office. The proposition does have disturbing similarities, though a more extended proposition, to what came out of South Australia last year. The Leader of the South Australian Opposition, Mr Olsen, promised during the 1985 State election campaign that he would sell off the South Australian Oil and Gas Corporation Pty Ltd for three times its market value to pay for the rest of his program while at the same time saying he could retain control of the SAOGC in government hands and expand its oil and gas exploration activities. Senator Foreman of course would be well aware of that undertaking given by Mr Olsen and the arithmetic sleight of hand that underpinned it. He would be equally well aware of the way it was received by the South Australian electorate. But Mr Tuckey proposes to go much further than that, so he says, apparently to obtain about $6 billion. The fact that the South Australian electorate passed judgment on Mr Olsen and his proposition in the way that it did and that the present Federal Opposition Leader is willing to tolerate in silence Mr Tuckey's proposition to expand greatly on that policy is a sign of the political acumen of the present Leader of the Opposition. There is, of course, a sound case for property to be sold off for which the Commonwealth no longer has a use or is unlikely to have any use, and this Government has done so in every Budget since we have been in government. But to sell off the comprehensive list of Commonwealth property of the type identified by Mr Tuckey would be totally irresponsible. It is the sort of thing that one expects from Mr Tuckey. It is the sort of thing one expects to be sanctioned by the Leader of the Opposition, as it has been sanctioned by the Leader of the Opposition-- Senator Button —Flogging assets to pay for the abolition of the assets test. Senator WALSH —Yes, flogging off government assets to pay for the abolition of the assets test. It further justifies, if any further justification was needed, the action that the Labor Party in Western Australia will take-that it is going to remove Mr Tuckey from the Parliament at the next election by directing Labor preferences against him. Senator ARCHER —Is the Minister representing the Minister for Science aware of the concern expressed earlier this week by Mr Colin Norris, the Australian Government Analyst, on the imported food inspection program when he said that it was naive to believe that the States and the Territories could adequately cope, given their present resources, with the work which, up until recently, had been carried out by the Government analytical laboratories? Can the Minister advise whether adequate inspections are being carried out, whether the fears expressed by many people can be put to rest and whether the efficiency of the testing programs has been put at risk? Senator BUTTON —I have not seen that complaint by Mr Norris. I do not have answer to the question. I will seek one from the Minister as quickly as possible. Senator COLSTON —I direct a question to the Minister for Education. I refer to an article in today's Courier-Mail headed `Tertiary places up 560 but State's share cut'. Has the Minister noted the inconceivably negative way in which the newspaper has been critical of the Federal Government's efforts in providing new tertiary places in Queensland, even though the facts are that the 20 per cent of the new places Queensland will receive in 1987 is in excess of its proportion of the Australian population? Is it correct that, in the area of tertiary places, the Hawke Government has been discriminating in favour of Queensland? If so, should not a newspaper such as the Courier-Mail be positively highlighting this fact? Senator Chaney —Mr President, I rise on another point of order. I find it very strange that a question should be addressed to a Minister asking her for her opinion as to the way a newspaper should be presenting information. I suggest that that is drawing a very long bow indeed and is wasting the time of this Parliament. It has nothing to do with information that this Minister can give. She can merely give her artistic opinion or her sub-editorial opinion-call it what you will. I think this is a gross abuse of Question Time by a Deputy Chairman of this place who should know better. Senator Colston —Mr President, speaking to the point of order: I think the point of order is not worthy of a person who is supposed to be the Leader of the Opposition in this place. The PRESIDENT —Order! The response is clearly within the purview of the Minister. The question is in order. Senator RYAN —Mr President, I think it is very important that Senator Colston has raised this question in this place at this time because the facts concerning our positive approach to higher education places in Queensland need to be restated. Unfortunately they need to be re- stated many times because it is the case that the Courier-Mail, for reasons that I cannot pretend to understand, repeatedly misrepresents the facts regarding the Hawke Government's provision of higher education places in Queensland. Those facts, as Senator Colston's question pointed out, are very favourable. It has been our policy since we first came into government to act to overcome the backlog in the shortage of places for higher education places in Queensland. When we came into government Queensland certainly was dragging behind other States in the number of higher education places it had available. But in each of our decisions allocating the extra higher education places that we have created, we have given Queensland more than its per capita share of places. It is our policy, often stated, to continue to do that until Queensland has caught up. In the legislation that was introduced yesterday, for example, Queensland will get 560 of the new 3,000 places which will be available for students throughout Australia next year-a very favourable outcome for Queensland. It it one we are happy about but, of course, we would be even happier if the Queensland Government and the Courier-Mail acknowledged the progress that we are making. It is also true that one of the reasons for lower participation in higher education in Queensland than in other States is that it is a very decentralised State and it is difficult for students to travel from all over Queensland to higher education institutions. Acknowledging this difficulty, again we have acted in co-operation with the Queensland Government to provide higher education places in Cairns and Mackay. Places in Cairns will be provided next year in co-operation with the James Cook University and places in Mackay will be provided in co-operation with the Rockhampton Institute of Higher Education. We are acting generously towards Queensland. We wish to do so. Any examination of the allocation of places in each of our budgetary years will show that Queensland has more than its per capita share. We will continue to do this because we recognise that when we came into government, Queensland was a long way behind. We are perfectly happy about this policy. Senator Colston is right to draw attention to it. We only hope now that the Queensland State Government and the Courier-Mail will acknowledge the facts of the matter. Senator VIGOR —Is the Minister representing the Special Minister of State aware of a circular-No. 86/5-to all senators and members from the Department of the Special Minister of State concerning the use of official office telephones in which we are reminded that official telephone lines in electoral offices are for voice communication only and not for any other data transmission? What are the reasons for this direction being given to all senators and members? Do they include cost factors based on any experience within electorate offices or elsewhere? Can the Minister advise the Senate of any studies done to assess the efficiency of using telephone lines to transmit data? If so, what are the findings of those studies, including findings relating to comparative costs of communicating data by electronic means and normal voice communication? Would the Minister agree that this type of decision reflects a lack of familiarity with and understanding of senators' and members' requirements and might therefore more appropriately be the responsibility of the Parliament rather than of an Executive department? Senator GARETH EVANS —I am aware of the circular in question because Senator Vigor pressed it breathlessly into my hand just before Question Time. Beyond that I am afraid I will have to take his question on notice. Senator DEVLIN —My question is to the Minister representing the Minister for Immigration and Ethnic Affairs. What interest has been shown by Hong Kong businessmen in taking advantage of the Federal Government's business migration program? Is there any possibility of Tasmania's deriving any benefit from this scheme? Senator GRIMES —As honourable senators will know, considerable interest has been shown by Hong Kong and other business men and women-in particular business women; I understand that the most important immigrant under the business migration program has been a woman-for many factors, among them being the desire of people to move out of that area and to live under stable and good government in this country, and the economic future of this country. For some months I have been watching with interest the development of a specialist clothing factory, in fact a swimwear producing factory, in Launceston, Tasmania. The Shun Man company has been developing a factory and bringing in machinery. It looks as though it will employ in excess of 100 people when the factory is in full production. It is due to open next month. Mr Bill Cheung, who came out under the business migration program, obviously has considerable faith in the economy of Australia and in the work force in Tasmania. He was Hong Kong's third largest specialist swimwear manufacturer. It is interesting that at a time- Senator Newman —He chose a Liberal State, Senator. Senator GRIMES —He chose a fine country, and he chose a very good senatorial office with which to deal when he came out here. Senator Vanstone —He used you. Senator GRIMES —I do not mind being used to set up a factory in Launceston which will employ over 100 people. I think that is a very good way to be used. He and his family are coming to Launceston. I am sure that they will be welcomed by all people-including all honourable senators from both sides of this place, who I am sure will all turn up to the opening. It is interesting that at a time when some people are preaching doom and gloom around the place, a manufacturer from a place such as Hong Kong comes here with the confidence not only that he will be able to produce specialist swimwear here but also that he will be able to export it from this country and therefore benefit the country considerably. Senator WALTERS —My question is to the Minister for Veterans' Affairs. I refer the Minister to his attack on me, published in the Hobart Mercury, claiming that I had misrepresented a Budget decision relating to war widows' service pension entitlements. I remind him that he later told me privately that the departmental information that he incorporated in Hansard, and on which I based my statement, was wrong and that he would publicly apologise to me in the Senate. Given that all I have received is a gobbledegook `Sir Humphrey' letter claiming that he was right all along, when can I expect the promise to be carried out? Senator GIETZELT —In the Budget documents as they related to war widows' entitlements, the Treasurer made it very clear that no war widow would suffer a reduction in her pension as a result of the decisions of the 1986 Budget. It was never the intention that the Budget measures freezing payments of social security pensions for which some war widows are eligible, would result in any war widow suffering a reduction in her service pension. Of course, Senator Walters interpreted a document which I tabled in the Senate on the day on which a question was asked of me-I think it was the day after the Budget-as affecting about 200 war widows who in their own right were service pension beneficiaries as well as war widows. She believed that the freeze on the social security component of the war widows' additional benefit somehow would affect their service pensions. I thought I pointed out, in a letter which I think she received in the last 24 hours, that no such intention was involved in the Budget, and nor was it possible on a proper interpretation of the tabled document that those people would suffer a reduction. However, I do concede that Senator Walters interpreted the document in the way she did. However, she interpreted it incorrectly, as I pointed out in the letter that I sent to her yesterday. By that interpretation, she caused some reaction amongst a group of war widows. I make it clear that if she had read the Budget document, she would have read the Treasurer's assurance and undertaking that no person would have any benefit reduced as a result of the 1986 Budget. Senator Walters having addressed a supplementary question to the Minister for Veterans' Affairs- The PRESIDENT —Order! That is not a supplementary question. I suggest to the honourable senator that after Question Time she seek leave of the Senate, not the Minister, to incorporate the documents. Senator COOK —My question is to the Minister representing the Treasurer. Has the Minister seen an article in last Saturday's West Australian newspaper reporting criticism of the Burke Labor Government's State Budget by a former State Under-Treasurer, Mr Les McCarrey? Can the Minister provide an assessment of these comments by Mr McCarrey, bearing in mind the analysis that Mr McCarrey did of the Federal Budget, which was reported in the West Australian newspaper of 26 August last? If Western Australia has any financial difficulties, to what extent are these attributable to policies implemented when Mr McCarrey was Under-Treasurer? Is Mr McCarrey's performance akin to that of another conservative Treasury permanent head who left the Public Service after the election of a Labor government? Can he thus rightly be regarded as a Stone clone? Senator Chaney —I take a point of order, Mr President. We are continually being told that the frequent abuse of private citizens in this place is not subject to any limitation under the Standing Orders. But I believe that this further question, which simply asks for a comment, obviously of an abusive kind, about a citizen, has nothing to do with the Minister's administration and I believe that that latter part of the question should be ruled out of order. Quite frankly, I think it is pathetic that Question Time is used in this way to traduce anybody who dares to criticise this Government. The PRESIDENT —Order! The first portion of the question is clearly in order and within the responsibility of the Minister. But I do not think it is the responsibility of the Minister to comment on how a State public servant administers the affairs of a State department, bearing in mind that the Minister is the Federal Minister for Finance, and I rule that portion of the question out of order. Senator WALSH —I was about to say that I am not sufficiently aware of the detail of the Western Australian Budget to give an informed critique of Mr McCarrey's assessment of it. I was also asked by Senator Cook to what extent Western Australia's financial difficulty is attributable to Mr McCarrey. The answer to that, of course, is that it is to a very considerable extent, because it was Mr McCarrey who, as Under-Treasurer, presided over that disastrous take or pay contract for North West Shelf gas which, even after the extraordinarily generous concessions made by the Commonwealth Government, will leave Western Australia with a deficit of well over a billion dollars by the end of the century. That is the direct cause of a very considerable financial problem for the Western Australian Government. In respect of Mr McCarrey's article on the Commonwealth Budget, which was published in the West Australian on, I think, 26 August, I want to make these comments: He said that there was an implicit deficit for 1987-88 of between $8 billion and $9 billion. That is absolutely incorrect. Among the many conceptual errors in McCarrey's analysis were four major ones, which I will enumerate. Firstly, he failed to take into account the effect on revenue of what economists call fiscal drag. He counted as one-off items some items in the Commonwealth Budget which were, indeed, one-off and a number of others which were not. He neglected to take into account that in every Budget-every one with which I have been associated, anyway, and that is, the last four, and, I expect, every Budget since the beginning of the Federation-there have been savings against Forward Estimates due to one-off savings on expenditure, deferrals of programs and slippage of programs. Finally, he grossly underestimated the sorts of profits that were likely to come from the Reserve Bank of Australia. In other words-and, in particular, bearing in mind from whom this analysis came-Mr McCarrey's analysis of the Commonwealth Budget was a very shoddy piece of work which displayed either professional incompetence or intellectual fraudulence. Although Mr McCarrey currently holds a position with the Institute of Public Affairs, he has a long-standing record of being a hired gun for assorted Tory causes. In that capacity he did some of Sir Charles Court's political dirty work, which included such things as ringing up loan underwriters who had been critical of the State Government and had caused it embarrassment and threatening them with the withdrawal of State Government business. The PRESIDENT —Order! The Minister is clearly out of order. Senator TOWNLEY —My question is addressed to the Minister representing the Minister for Health. Is the Minister aware that families which have chronically ill members are usually families which are also under great financial strain, and that the new prescriptions scheme that is due to start shortly will place extra strain on such families because they will have to finance the first 25 prescriptions at an expected average cost of $7.30 before paying nothing more? Does the Minister agree that, in a case where a family expects to need 25 prescriptions in a year, that family will be much worse off under the new scheme? Will the Minister examine what can be done to ease the burden in these cases? Will the Minister confirm that children 16 years and older who are not full time students will be regarded, under this new scheme, as a separate family unit and, therefore, even if they are living at home, will be responsible for their own first 25 prescriptions? Why did the Government choose 16 years instead of 18 years, which is the legal age to become an adult? Senator GRIMES —In response to the latter part of the question, I believe that the children between 16 and 18 who will be treated in that way will be children who are working and receiving an income. I see no reason why they should be treated differently under those circumstances. Because it is so long since the Budget was brought down, I do not have the detailed brief on the new pharmaceutical benefits scheme. I will get exact details for Senator Townley later, but I will say this now: This scheme was produced with the co-operation and approval of the Pharmacy Guild of Australia. In most and, I believe, in all cases low income people will in fact be better off under the new scheme than under the old scheme, particularly people who need over 25 prescriptions a year, because they will receive the concessions that are available under the scheme. I will get a detailed reply from the Minister, but it is the first time since the Budget-except for a short period after the Budget during which I remember there were some misconceptions about the scheme-that this matter has been raised with me. It is not fresh in my memory. So rather than mislead the honourable senator I will get details from the Minister. Senator ZAKHAROV —My question is addressed to the Minister for Community Services. Pensioners in New South Wales and other States are very concerned at recent increases in nursing home fees. When does the Government intend to increase assistance to nursing homes to relieve the pensioners' financial difficulties? Senator GRIMES —As can be seen from questions raised in this place, there has been concern, particularly in New South Wales, about recent increases in nursing home fees, a concern which has been aggravated by the unscrupulous activity of some private nursing home proprietors in New South Wales who have been telling people in New South Wales that the Government intended to freeze the nursing home benefit in certain States. In fact, on 13 November this year-the usual time for such an increase-the nursing home benefit will increase in all States in Australia. The increase will be substantial. For instance, in New South Wales it will be $46.20 a week, or $6.60 a day; in Queensland it will be $17.50 a week, $2.50 a day; Western Australia, $1.45 a day; South Australia and the Northern Territory, $3 a day; Tasmania, $2.20 a day; and Victoria $5.10 a day. The weekly sum, of course, is obtained by multiplying those daily amounts by seven. What this means, of course, is that not only are we increasing the benefit to take into account increasing fees in each of those States, but also in Victoria and South Australia we have partially lifted the existing freeze on benefit levels in non-government nursing homes. We have done this because in both those States the State governments have agreed to join a working party with the Federal Government to see whether we can reduce the extremely high costs, compared with the other States, and they have also agreed not to change their conditions in those States without consulting the Federal Government. The increases in the States other than Victoria and South Australia-and also in the Northern Territory, which follows South Australia-are based on an established formula. The benefits are set at a level which, together with the statutory minimum resident contribution, which is 87 1/2 per cent of the standard rate of pension and rent assistance, covers the fee charged for 70 per cent of the beds in those particular States in non-government nursing homes approved under the Act. The additional benefit for those residents whose frailty and other disabilities require extensive care will in fact remain at the $42 a week which it is at the moment. So the Government has, as has every other government, increased the benefits from November this year, as we intended to do. I hope this will put the lie to the activities of the New South Wales nursing home proprietors. Senator CHANEY —My question is addressed to the Minister for Finance as Minister representing the Treasurer. I ask whether the Minister recalls the Prime Minister, Mr Hawke, saying a week before the 1984 Federal election: We expect inflation will be less than five per cent in the year ahead, and we are determined to keep it below five per cent. I ask whether the Minister recalls the Prime Minister saying in Tokyo on 16 May of this year that the Government's policies are `expected to produce a sharp decline in our inflation rate in coming quarters, beginning with the current June quarter'. I also ask whether the Minister recalls the Treasurer saying recently, indeed, on 25 July: We believe that the Australian inflation rate will continue to decline as the Government's policies take their effect in the economy. Is it a fact that the inflation rate in Australia has risen in each of the last three quarters, is now running at an annual rate of 8.9 per cent and is continuing to rise, and is five times higher than that of our major trading partners? When will the Government adopt policies to reverse this disastrous trend rather than fuelling it as its current policies are doing? Senator WALSH —The assertion in the last part of the question is absolutely wrong. It is not Government policies which have caused the Australian inflation rate to increase. The direct cause of the increase in the inflation rate is the devaluation of the Australian dollar which, in turn, has been caused by the collapse of export prices. Opposition senators interjecting- Senator WALSH —It is evident that there are still some members of the Opposition who are sufficiently ignorant to believe that inflation in Australia is being driven by wages. The fact is that in Australia real wages have declined in recent years because of, firstly, the Medicare effect and, secondly, an explicit wage discount. If the Government's objectives set in this Budget are achieved, real wages will decline again this year. We have the paradox where real wages in Australia are falling, and the consumer price index rate of increase has accelerated, it is true. A number of other countries have had massive real wage increases-like the United Kingdom, for example, which practises the industrial relations policy which the Opposition supports, in spite of an unemployment rate above 13 per cent. There have been real wage increases in excess of 10 per cent in the last three years; whereas in Australia, with high rates of growth and falling unemployment, in the same period real wages have fallen. They needed to fall because the wages explosion that occurred in the last two years that John Howard was Treasurer had to be cancelled out. As to what I said in 1984, that I expected the inflation rate to come down below 5 per cent in the coming year-I think it did come down to 5 per cent-it has accelerated since then. The cause, as I said before, has been the devaluation of the Australian dollar, caused in turn by the collapse of export prices. It is regrettable, but it is true, that the CPI increase for this quarter is the highest quarterly CPI increase since John Howard was Treasurer, and that the annual rate for the quarter ended September has reached 8.9 per cent, which is regrettably high, as the Government concedes, but very much lower than the 11.5 per cent which it was when John Howard ceased to be Treasurer. Senator CHANEY —I thank the Minister for his Pontius Pilate answer, but I ask a supplementary question. He listed a whole series of circumstances which he said put this all beyond the Government's control. I ask him. In what way have circumstances changed since 25 July this year when the Treasurer said: `We believe that the Australian inflation rate will continue to decline'? What changes have occurred since that time to cause the Treasurer's prediction to be proven so grievously wrong? Senator WALSH —The Government did not foresee two years ago the devaluation of the Australian dollar which has subsequently occurred. We did not foresee that because we did not foresee the collapse in commodity prices. Perhaps we should be held culpable for not foreseeing the most disastrous collapse in commodity prices and Australian export prices which has happened since World War II. If we are culpable for not foreseeing that, well, so be it. As for the Treasurer's comments in July, I think that the context in which they were stated was an annual rate of inflation and not a quarterly rate. Senator ELSTOB —Could the Minister for Energy and Resources inform me whether there have been any discussions on reducing the price of liquefied petroleum gas? If so, what is the outcome of those negotiations? Is there any possibility of a reduction in the price of liquefied petroleum gas for customers in Australia? Senator GARETH EVANS —I am pleased to be able to advise Senator Elstob that the Government has concluded its review of LPG pricing policy which I announced back in August and has decided today to introduce new pricing arrangements. I shall announce the details later this afternoon, but I can say in outline that they will ensure that domestic LPG prices more closely follow international prices, and will result in an immediate price reduction from 1 November this year of $53.23 a tonne, or nearly 3c a litre at the wholesale level. That represents a 22 per cent drop in the present wholesale price of LPG of 13.64c a litre. I would say by way of further explanation that approximately 800,000 tonnes of LPG is now consumed annually in Australia, of which just three-quarters is subject to this price determination, the balance being petrochemical feedstock, which is commercially negotiated. Of the price determined consumption, and thus subject to the price reduction I am now announcing, approximately 43 per cent is for industrial and commercial use, which is mainly space heating by small and medium size businesses; 40 per cent is for transport uses, involving about 50,000 vehicles, again largely small and medium size businesses; and 17 per cent is for residential use, involving some 400,000 households predominantly in rural areas. It will be appreciated that this represents a major and significant consumer price reduction and the benefits will be widely felt throughout the community. Senator BUTTON —Earlier today in Question Time Senator Haines asked me a question about the peace camp delegation on the lawns opposite Parliament House. I said that I would endeavour to obtain an answer as to whether representatives of the peace groups had approached three Ministers for a meeting or some other discussions, and I said that I would try to get an answer. The answer is as follows: An approach was made to the Prime Minister's office and there was an indication that the Prime Minister would not be available to meet a delegation. However, a senior member of staff was made available to receive a petition from some of the peace groups. No response came back from the peace groups to that piece of information provided by the Prime Minister's office. In respect of the Minister for Foreign Affairs, Mr Hayden, a phone call was made to his office at 10 a.m. today seeking a meeting. The people making the request were asked to ring back within a few hours. Mr Hayden agreed to see a delegation of three. This message was not passed on to the group as the members did not ring back in accordance with the prior arrangement. A meeting was requested with the Defence Minister, Mr Beazley. The answer to that request was no, and that answer was communicated by Mr Beazley's senior private secretary, without discussion with the Minister. Senator RYAN —Yesterday Senator Macklin asked me a question concerning higher education institutions requiring students to pay the $250 administration charge by the end of November and advising students that non-payment of the charge would incur a late payment penalty. I undertook to provide further information, which I now do. Some institutions are in the process of making offers of enrolments to applicants for external studies places in 1987. The applicants are required to respond to the offers by nominated dates, in some cases by the end of November 1986. As part of the normal enrolment procedures of institutions, provision is made for a late fee if the response is made after the due date. I understand that some institutions had requested payment of the $250 administration charge as part of the enrolment process. Institutions which have adopted this procedure and which have now been drawn to my attention have been contacted by my officers. They have been made aware that the enabling legislation has not been passed by the Parliament and have withdrawn the request to students to pay the administration charge. It should be stressed that the late fee is in no way connected with the request to pay the administration charge. Students may be reassured, therefore, that there is no requirement to make early payment of the administration charge for 1987 enrolments. Further details of dates by which payment of the charge will be required in 1987 will be advised by institutions. A working party, comprising representatives of the Education portfolio, the Australian Vice-Chancellors Committee and the Australian Committee of Directors and Principals, on issues related to the processes associated with the introduction of the charge, has been set up. Following the meeting of the working party detailed advice on the operation of the charge will be provided urgently to institutions. Senator BUTTON —On 24 September Senator Sheil asked me a question relating to the Taillon drug importation case and in my answer I indicated that action was being taken in respect of that matter. I now wish to elaborate on that answer. Drug traffickers travelling through with drugs in their possession are liable to arrest and severe penalties, including life imprisonment on conviction. As part of the Government's drive to combat the drug trade and particularly to ensure that Australia does not provide an opportunity for those moving drugs into other countries, I will introduce legislation in the current sittings to extend the scope of the Customs Act 1901. That will be amending legislation to get over the effects of the High Court decision. Those amendments will make it an offence to bring or cause to be brought to Australia narcotics and it will also extend the offences of conspiracy and of aiding and abetting that activity. Penalties up to life imprisonment will be possible for such offences. Senator GARETH EVANS —Yesterday Senator Reynolds asked me, as Minister representing the Special Minister of State, a question relating to the peace camp exercise across the road. I reply to that question as follows: The matters of explosions near the camp and the assaults on women in the peace camp, which were raised by Senator Reynolds, are being investigated by the Australian Federal Police. With regard to the senator's question about acceptable levels of intoxication, I point out that drunkenness is not an offence in itself in the Australian Government House, but of course the police would act if any offence took place or a breach of the peace were threatened arising from drunkenness. Senator GIETZELT —On 8 October 1986 I answered a question from Senator Sibraa concerning reports that two domestic jet aircraft nearly collided over the Great Australian Bight. I said at the time that it appeared one of the aircraft had requested and received permission from air traffic control to alter its original track to save fuel. I am now advised that information I was given on the incident and which formed the basis of my answer to Senator Sibraa, had been in error in suggesting that the change of track by one of the aircraft had been initiated by its crew. This change was in fact initiated by air traffic control staff in Adelaide. As I said in response to Senator Sibraa, the incident was promptly investigated by Bureau of Air Safety Investigation and Department of Aviation staff. An air traffic controller was suspended from duty pending further investigation, and instructions were issued to all traffic controllers to obviate a repetition of the circumstances which led to the normal standards of separation of aircraft not being fully observed. The Department of Aviation is continuing its investigation of the incident and will take any additional steps necessary to ensure there is no repetition of events such as I described. Senator WALTERS(Tasmania) —I seek leave to incorporate in Hansard a copy of extracts from the statement by the Minister for Veterans' Affairs (Senator Gietzelt) on dual entitlement to war and defence widows' pensions and service and social security pensions; an extract from my letter to the Editor of the Mercury, Hobart; an extract from the reply of the Minister for Veterans' Affairs which appeared in `Letters to the Editor' in the Mercury; and the letter written to me by the Minister. Leave granted. The documents read as follows- Extract from the Minister's statement (c) War Widows pension granted after 1 November 1986 to a service or social security pensioner The rate of service or age pension will be reduced to $60.05 a week if already being paid at a higher rate, otherwise pension will continue at the lesser rate in payment. Extract from Senator Walters's letter to the Editor of the Mercury, Hobart The war widow who is a veteran in her own right will not only have her service pension frozen, but indeed from the 1st November newly eligible war widow veterans will lose $42 of their service pension and will receive the same total pension as a war widow who is not a veteran. Extract from the Minister's letter to the Editor of the Mercury, in reply to Senator Walters's letter I can also assure your readers that, contrary to Senator Walter's comments (Mercury, September 9), newly eligible war widows who are service pensioners in their own right before November 1 will not lose any part of that pension. Both Senator Walters and Mr Hodgman MHR have criticised the budgetary provisions relating to my portfolio, yet have also publicly called for the Government to further reduce expenditure while gathering less income in the form of taxes. That sort of inconsistency and political opportunism at the expense of war widow's and veterans' peace of mind should be roundly deplored. (Senator) A. T. GIETZELT Minister for Veterans' Affairs, Canberra Letter from the Minister for Veterans' Affairs to Senator Walters Dear Senator Walters, I understand that you spoke last week to an officer of my Department concerning war widows' service pension entitlements after 1 November 1986. I am advised that during that conversation you said that you considered the terms of example (c) in a minute I have tabled in the Senate to be at odds with other statements I have made. These were to the effect that women who before 1 November 1986 are in receipt of service pension in their own right as Veterans, will not have them reduced (other than as a result of the income/assets test) below their 1 November entitlement as a result of a subsequent grant of war widow's pension. These statements are not at odds with the tabled minute. You are apparently of the view that example (c) refers to a case where a war widow's pension is granted and payable from 1 November 1986 and that, therefore, the widow could only have been in receipt of service pension prior to that date. This would be true if the circumstances you describe were possible. However, it is not practical to grant a war widow's pension on the same day as the application is lodged. There must always be a period allowed to enable the necessary investigation and processing, during which time it is possible for a service pension to be claimed and granted. Therefore, the normal expectation in respect of payment of war widow's pension with effect from 1 November would be that the actual decision would be made some time after that date. If a decision was made on 1 November, the effective date for payment of war widow's pension would be some time prior to that date; in which case examples (b) or (d) would apply, depending on the effective date of grant of service pension. I hope this clarifies the matter for you. Yours sincerely, (A. T. GIETZELT) Senator M. S. Walters, GPO Box 760H, HOBART. TAS. 7001 Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I move: That the Senate- (1) Resolves that United Nations General Assembly Resolution 3379 (XXX) which equates Zionism with racism- (a) has been unhelpful in the context of the search for a settlement in the Middle East; (b) is inconsistent with the Charter of the United Nations; (c) remains unacceptable as a misrepresentation of Zionism; and (d) has served to escalate religious animosity and incite anti-semitism (2) Recommends that the Government lend support to efforts to overturn Resolution 3379 (XXX) in the United Nations. I seek leave to have the accompanying speech incorporated in Hansard. Leave granted. The speech read as follows- I move this Resolution from a conviction, which I believe will be shared by all Australians who value truth, fairness and tolerance, that the equation of Zionism with racism is profoundly wrong, disruptive and unacceptable. United Nations General Assembly Resolution 3379, adopted in 1975, which sought to make this equation, has been regarded by successive Australian Governments as unacceptable. In moving this Resolution in the Parliament, the Government hopes for bi-partisan support so that the voice of Australia can be added to those of others in the international community who wish to see this deeply regrettable expression of United Nations opinion overturned. Madam Speaker To suggest that Zionism is racism is, first of all, a blatant distortion of the truth. This is not the place to give a history of the development of Zionism. I would, however, refer all Honourable Members who wish to inform themselves on this to the outstanding address by my colleague, the Minister for Foreign Affairs, to the Zionist Federation of Australia on 13 April under the title, ``Israel: A Contemporary Democratic Socialist Perspective''. Mr Hayden outlined the idealism and the enlightened, emancipatory principles which went into the foundation of the State of Israel. As well, he referred to the terrible impact of the Holocaust on the Zionist movement. In the month in which the award to Elie Wiesel of the Nobel Peace Prize has reminded us all of the monstrous racial oppression suffered by the Jewish people less than 50 years ago, the characterisation of Zionism as racism is a particular offence to decency and logic, not only to our Jewish community, but to all Australians. Apart from its distortion of reality, Resolution 3379 has become an obstacle to the search for a settlement in the Middle East, difficult as that already is. In a region where insecurity and suspicion are strong, where barriers between peoples have proved difficult to break down, it is highly counter-productive to insult the guiding philosophy of a people, especially one whose consciousness has been seared by the scourge of anti-semitism. Resolution 3379 has not advanced the interests of those who promoted it. It has done nothing to solve the plight of the Palestinian people. Successive Australian Governments have believed that there can be no peace in the Middle East until the Palestinian problem is resolved justly and peacefully and with the agreement of all those involved. This Government's support for the overturning of Resolution 3379 is based on our continued desire to see a peaceful, just and lasting solution to the Middle East dispute. Diversions such as Resolution 3379 serve only to distract and disrupt efforts towards this end. The Resolution has done very real damage to the relations between States. It has also harmed the credibility and reputation of the United Nations. The United Nations was intended to promote peace and harmony between the peoples of the world. It has the primary task of maintaining international peace and also promoting the goal of encouraging respect for human rights. Resolution 3379 was clearly not an attempt to further those purposes and principles. It had the effect of unfairly isolating a member state of the United Nations and, in so doing, was contrary to the spirit of the Charter. There is no country which is more committed to upholding the reputation and effectiveness of the UN than Australia. Our performance as a member of the Security Council over the past two years is the most recent evidence of this commitment. Along with other countries, we have fought to maintain international support, including, very importantly, financial support, for the United Nations and its Specialised Agencies-the ILO, UNESCO and others. Our task has been made immeasurably more difficult in view of the disaffection felt for the UN in recent years by such countries as the United States. The passage of Resolution 3379 was an important factor in producing this disaffection. Over the past two years or so, increasing international attention has been given to the question of removing this unacceptable Resolution from the United Nations record. President Chaim Herzog, the widely respected President of Israel, who will pay a State visit to Australia next month, has been a leading figure in this process. The Australian Jewish community has consulted closely with the Government, particularly the Minister for Foreign Affairs, on the matter in recent months in order to determine what influence Australia might bring to bear. Realistically, we must acknowledge that it would be counter-productive to initiate a move in the United Nations at this stage to overturn Resolution 3379. There still would not be the support necessary to ensure the success of such a move. Indeed, the opposite result might be achieved: countries which may have come to question their original position on the Resolution might be forced once again to line up behind it. Nevertheless, the world political climate is changing and there are grounds for belief that an expression of the Australian Parliament's view, along the lines I have outlined, could contribute to that change. In taking this step, Madam Speaker, it is, I believe, important to emphasise that the Australian Government's position on the Middle East remains unchanged. As I have indicated, we believe that a resolution of the Palestinian question is central to any Middle East settlement. The Government acknowledges the right of self-determination for the Palestinian people, including the right, if they so choose, to independence and the possibility of their own independent state. We recognise that whatever arrangements are finally settled upon will depend on decisions involving the participation and agreement of all parties concerned. We remain fundamentally committed to the security of Israel and its right to exist within secure and recognised boundaries in accordance with Security Council Resolutions 242 and 338. It is in the interests of helping to achieve a peaceful, just and lasting solution to the Middle East dispute, one which has the acceptance of all sides, that I commend the resolution I have introduced to the House. Question resolved in the affirmative. The PRESIDENT —I have received a letter from Senator Michael Baume proposing that a matter of public importance be submitted to the Senate for discussion, namely: The failure of the Government's steel and car plans to bring about the changes in industrial relations attitudes and practices necessary to ensure the health and long-term survival of Australian industry. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator MICHAEL BAUME(New South Wales)(3.16) —This motion strikes at the very heart of the Government's major failures. The Government has boasted of its record of lowering inflation, of bringing about strong economic growth and rising employment and lowering the number of industrial disputes. The Government has also claimed that its steel and car plans have been evidence of its outstanding success in a similar way. The reality is totally different. For example, today we have had further evidence that this lower inflation rate that has been promised and boasted about has not eventuated and today's figures confirm that Australia's relative inflation rate compared with those of our trading partners is the worst ever for which we have records. It is the worst ever, relative to our trading partners. That is a great `success' for this Government and we see a similar sort of `success' when we look at a whole range of the Government's empty boasts and its disgraceful promises all of which have been broken. The Government boasted about rising employment but now we are seeing massive and continuing increases in unemployment. What about lower levels of industrial dispute? Today figures released by the Australian Bureau of Statistics reveal that the number of working days lost in the 12 months to July of this year is the highest in a 12-month period since the 12 months ending March 1984-in other words, in this Government's first year in office. So industrial disputation is on the way up. Across the whole range of its promises this Government has made a mess of things. What mess has it made in the steel and car plan? That mess is basically the same as the mess it has made across the whole range of its promises because that mess depends on the Government's inability to face up to the union leadership. It has been caused by a subservience to certain key members of the industrial wing of the Australian Labor Party. Of course, the ALP is the political wing of the Labor movement and it receives its instructions from that industrial wing. Because of that subservience, the Government has given in over a whole range of areas and this has resulted in its failures. When the going gets tough the Government, which is led by a former President of the Australian Council of Trade Unions, always gives in to the present President of the ACTU. In the steel and car plans we can see again this failure to bring about the basic fundamental changes in industrial relations attitudes, without which there can be no success for either of these industry plans and therefore no ultimate success for either of these industries, both of which depend on the Australian taxpayers for their support. They need government assistance for their particular schemes to help them through difficult periods. These plans could have worked and in fact at one stage they looked as though they were working. The steel industry plan was going very well, productivity was rising and industrial unrest was falling. Profits were going up in the steel making industry. Now this is all being put at serious risk by industrial disruption, by a refusal to give up outdated and ludicrous work practices. Steel and Car Plans The same situation exists in the car industry. This industry may have been saved by the Government's car industry plan had it not been for the Government's own activities in other areas, along with growing industrial unrest. The car industry plan was sabotaged by this Government itself, with its nonsensical anti-business taxes which have hit the car industry probably harder than any other. A confidential report on the automotive industry forecasts that vehicle production in Australia this year will fall to just over 328,000 units. It states: This is the lowest level since the 1961 recession when production fell to 231,000 . . . On current production rates the industry faces layoffs. Here we have it. The car industry is in crisis not because of the car industry plan but despite it; it is in crisis because of the Government's other actions, because of its other deliberate policies which attack the motor vehicle industry. To make matters worse, we have the current superannuation claim involving strike action by unions. That has prompted General Motors-Holden's Ltd to say that the future of the motor vehicle industry is being jeopardised by the industrial action of unions over superannuation claims, and as a result 2,500 workers have had to be stood down. What was the response of the Minister at the table, the Minister for Industry, Technology and Commerce (Senator Button), when this matter was raised yesterday by Senator Messner? He said he very much regretted the fact that General Motors had to stand down workers as a result of superannuation. He said, quite correctly: It is the sort of thing . . . that this country cannot afford in the future. For his advice, it cannot afford it now, either. He continued: The Government has been having a series of negotiations with the Australian Council of Trade Unions and with others to try to bring about a resolution of the superannuation issue. So here we have an admission from the Government that its existing arrangements cannot and have not worked in providing the sort of industrial relations climate in which the industry can get itself out of trouble. It is having to have further talks with the Australian Council of Trade Unions to see what it is allowed to do. The same thing applied when Senator Button responded to Senator Chaney yesterday on steel. Senator Chaney pointed to the dramatic increase in industrial disruption. At the Port Kembla steel works alone it rose by 680 per cent in the second half of the last financial year. Senator Button's response to Senator Chaney's question on what action the Government would take was: . . . it is basically a matter for the companies and the work force to address . . . Senator Button —Is that right or not, Senator? Do you say that it is not right? You do not know what you are talking about. Senator MICHAEL BAUME —I am glad the Minister interjects. Here we have a situation where the Government has never had such powerful clout in bringing about a reasonable industrial relations climate, and it cannot use that clout effectively because it is so subservient to the ACTU leadership. I shall quote from the Steel Industry Authority report. It states that the Government has arranged an `accord'. I use that terrible word; it is the Minister's own word. The report says: In the Accord between BHP and the Unions it was agreed that both parties would comply with established dispute settlement procedures to reduce the incidence of disruption leading to the loss of wages and production. How did this accord come about? It came about because the Government sought an accord as a condition of its assistance. It seems to me that when the Minister protests in the extraordinary way that he did just now, he is forgetting that there is no point in the Government trying to bail out the Broken Hill Proprietary Co. Ltd, the car industry or anyone else by protecting them if under that protection all that happens is that the unions demand a bigger slice of the cake and continue with the industrial disruption which has destroyed the competitive advantage and economic stability that the Government has been seeking to give to this industry at public expense. I think the figure last year for bounties totalled $21m. I am certainly not opposed to the steel industry plan; on the contrary. The Government's failure was not in trying to do the right thing; it failed because of its spineless approach to industrial relations and because of its continual subservience to the ACTU leadership and the leadership of some of the more left wing unions. In fact, that left wing is strong enough to have pushed one of its more outspoken leaders on to the Senate ticket in Victoria ahead of the Minister at the table. That subservience to union pressure is undoing the specific benefits that should have come to this industry, and saved it, from schemes that did at one stage have quite a lot going for them. I commend the Minister at the table for his efforts in creating the steel industry plan. As he knows, a large amount of input came before he was the Minister, but he picked up the ball that was passed to him very well. While I commend the Minister for his efforts in getting this industry back on its feet, I say to him that the Government of which he is a party, and which he supports, by its own actions is undoing that good. Let us have a look at the reality of what has happened. The steel industry report which was tabled in the Senate this week has revealed that in Port Kembla, in particular, where more than half of Australia's steel is produced, worsening industrial disputes, inadequate productivity and unsatisfactory management and work practices could put the Government's steel industry plan in jeopardy. Let us remember that a former President of the ACTU, Cliff Dolan, is one of the members of that Steel Industry Authority. The slap at management practices as well as work practices in that report is clearly an endeavour to be what could be described as even-handed. How remarkable it is that the same management does not have this level of industrial unrest, does not have this falling productivity at the Newcastle steel works. Why does Port Kembla? Has it got different management practices, or is the reality the simple fact that the Federated Ironworkers Association in Port Kembla is a left wing branch run by left wingers, whereas the union overall in New South Wales is a much more moderate and responsible one? It will be interesting to see whether the membership of the ironworkers union in Port Kembla at its elections next month decides whether it wants to go down this crazy track of industrial disruption and falling productivity, as has occurred in Port Kembla, or whether it wants to follow a far more responsible attitude which will guarantee the security of jobs, as has been the case at Newcastle. That is basically the very point that emerges out of the Steel Industry Authority's report. In today's Illawarra Mercury the local Federated Ironworkers Association branch secretary, Mr Lelli, complained bitterly that I had somehow gained access to these figures before he had. In other words, he was complaining that the truth had been released in the Steel Industry Authority's statement before being presented to the union, the ACTU or anyone else, and could not be censored the way other material has been censored when it has gone to the Economic Planning Advisory Council and subsequently has not been released because of the imposition of control over information. Fortunately, Mr Lelli's hope that he would be advised of this first have been defeated. The Steel Industry Authority made its report, and it is a damning one. The report reveals that industrial disruption at Port Kembla increased by more than 680 per cent in the six months to June this year. This lifted total man hours lost at Port Kembla to 124,774 in the latest six months. That is about four times the level at the Newcastle steelworks. It means that man hours lost per employee have increased at Port Kembla by 211 per cent between June 1984 and June 1986, lifting the total to 10.9 hours per employee. This rise in man hours lost is six times as large as the average increase in man hours lost per employee in the overall metal manufacturing industry. Its present level of 2.7 man hours lost is only about a quarter of the size of the loss at the Port Kembla steelworks. The Steel Industry Authority, in its report, describes the increasing trend of industrial disputes at Port Kembla as alarming and it says that the agreement under the steel industry plan to comply with established dispute-settlement procedures `has not been followed over the last six months of the year, particularly at Port Kembla'. As a result the Authority stated that it: . . . sought the intervention of the ACTU and drew the attention of the unions concerned to their obligations under the Steel Industry Plan. I say to the Minister, Senator Button: There is the response. The Steel Industry Authority itself says that the unions have an obligation under the steel industry plan to behave responsibly. The Minister's own Authority clearly states-- Senator Button —I have said it myself in here. Senator MICHAEL BAUME —If the Minister has said it himself in here, why does he bother interjecting in that asinine way when I am making the point that there is a responsibility on this Government to ensure that industrial relations proceed in a proper and coherent way? There is no point in the Minister going back to the bad old days and saying: `Under your Government it was worse'. That is the only response that this Government ever makes. The question is: Is it realistic for the Minister to claim success for this steel industry plan when the key element of that plan, which is increased productivity, is now being hit by industrial disruption? Senator Button —Quote the figures for productivity. Senator MICHAEL BAUME —I certainly will. I am glad that the Minister asked me to quote the figures for productivity. I thank him for his dorothy dix role in this matter. Let us have a look at the productivity figures. As I said earlier in my speech, initially they began to improve. What happened at Port Kembla in the six months to June this year as against the six months to December? Productivity had increased to 291 tonnes of raw steel per employee per annum and it then fell to 266 tonnes. That represents an increase over the whole of the steel industry plan of less than 3 per cent. The 3 per cent increase in productivity at Port Kembla is a dramatic success for Senator Button. No wonder he is blushing and looking down at his papers. What a nonsensical claim for the Minister to make! There has been a fall from 291 tonnes to 266 tonnes of raw steel per employee per annum in the last six months, yet Senator Button feels confident and happy about the great success of his steel industry plan in Port Kembla. The reality is that productivity has increased in Newcastle where there are better industrial relations. The dramatic difference is that where one has decent industrial relations, one gets increased productivity. In Newcastle, the productivity, which had been much lower than in Port Kembla back in June 1984-it had been 238 tonnes as against Port Kembla's 259 tonnes of raw steel per employee per year-has risen in the latest two months of this financial year to just under 350 tonnes per worker per year, which is the target set by the Minister's plan. The significance, and the whole thrust of this debate, is that where there are proper and reasonable industrial relations, one can achieve these targets. Where there is failure, one cannot. The failure relates directly to industrial relations and outmoded work practices. The whole thrust of this debate is that the Government's failure was not in terms of the scheme; the Government's failure has been in bringing out an appropriate industrial relations climate in which success can take place. The extent to which this failure is damaging has only begun to be seen. As the company has come out with increased profits, there will be increasing pressure on it for higher wages. We will see more and more industrial unrest as the steel plan goes on-it has 2 1/2 years to go-and I believe that we face a worsening problem particularly as there will be an 8 per cent fall in domestic sales of steel in the current financial year. The sorts of problems that we are having in the steel industry and in the car industry can be directly attributed to the subservience of the Government when troubles arise relating to union activities, to work practices in particular, and to irresponsible industrial unrest. These plans could have worked; that, I believe, is the tragedy. As I have said, the Government has no better opportunity to impose the concept of an accord than it has now. Even in this situation, where it controls the purse strings, it has been unable to do so. The ACTING DEPUTY PRESIDENT(Senator Jones) —Order! The honourable senator's time has expired. Senator SIDDONS(Victoria)(3.36) —The Australian Democrats do not support the Opposition's matter of public importance concerning the car and steel plans. Our assessment of the plans is that they have worked reasonably well. They may not be the ultimate in industry planning but we believe that they are enlightened attempts by the Government to come to terms with the problems in the industry. I say to Opposition senators that the steel industry plan in particular has been successful. Steel was the problem area of the Broken Hill Proprietary Co. Ltd in the early 1980s and it is set next year to be the company's largest profit-making sector. It is beyond doubt that the steel plan has been successful. BHP is now the second most profitable steel company in the world. The Australian Financial Review, not a paper that is noted for applauding government interventionist policies, said: The steel plan is a big success. I speak as chairman of a company that runs one of the only two steel mills outside BHP. I believe that I have some inside knowledge of what goes on in the steel industry. I hasten to say that our company has received no help whatsoever from the Government in the running of its steel operation, nor has it sought it; I mention it only to alert the Senate to my intimate involvement in the steel industry. Senator Michael Baume criticised the Government essentially on three points. He raised the question of inflation. I do not know what that has to do with the steel plan that we are debating. He then got on to the question of disputes, and he cited a few figures-very unfairly. Let us have a look at the dispute problem in the steel industry. There is no doubt that there have been some industrial relations problems of late; however, we see that disputes are still at a very low level if we look at the figures objectively. The drop in disputes in the last financial year relates mainly to the day of protest earlier this year when the national wage case was delayed. There have been some problems at Port Kembla, which Senator Michael Baume concentrated upon. It is unfortunate that the Federated Iron-workers Association of Australia ignored the dispute settling procedures incorporated in the steel plan, and this is to be deplored. However, as to the strike figures at Port Kembla, I believe that Senator Baume's figures were very stilted because they went back only two years. In the year to May 1986 there were only 0.66 per cent of shifts lost, whereas in the year 1980 the figure was 2.77 per cent of shifts lost. There has been a dramatic improvement over what was the norm in the industry when the Liberals were in government. Senator Michael Baume —You have to look at it per employee. Senator SIDDONS —The number of employees has dropped significantly, so that factor would not alter substantially the figures that I have just quoted. The Democrats support the concept of a steel industry plan. We think it is the right way to go with industry assistance, and we would like to see this type of assistance extended to other industries. It is, we believe, a very enlightened approach. The debate on industry protection in this country has been hopelessly narrow. We hear of free trade versus protection; tariffs or no tariffs has been the issue. This, I would say, is very largely the result of ideologues and free marketeers who wish to ensure that their ideas retain dominance in the Government and in the bureaucracy. They wish to ignore the policy initiatives of creative intervention by governments. They want the Government to focus purely on the question of whether there should be tariffs. The argument is much more complicated than the simple question of tariffs versus free trade. In fact free trade does not exist in the modern world; it never has existed. We must protect our industries, and we must encourage them by whatever means is appropriate if we are not to be swamped by subsidised imports. That is a fact of life. I do not believe it is open to reasonable dispute. The important question is: What sort of protection should we give out industries? It is around that which the debate should be revolving. The free traders have the upper hand at the moment, principally because of the inappropriate protection that industry has been given over the last 45 years. Our system of protection could better be described as patronage. It has not really been protection at all. Successive governments have built up tariff barriers around an inward looking Australian industry-largely an inefficient manufacturing industry. We have not had the political will or clout to do anything about it until this time. We built up tariff walls with no regard to what went on behind them. Once internationalisation of the world economy took over, particularly in the late 1960s, our antiquated, inefficient industrial infrastructure could not cope. Our geographical isolation was no longer protecting us, and our industries were so inefficient that even massive tariff protection could not really protect them. Foreign firms closed their subsidiaries in Australia and started to import from highly efficient plants in Asia and Europe, and our local industries just went to the wall; they were closed down. Tariffs by themselves have failed to protect our industries. The argument about free markets and dropping protection has largely been propagated by the transnational corporations which are trying to push their own barrows, to tear down the tariff barriers and let industry stand or fall on its own merits. That, of course, is a disastrous course of action to adopt. Unfortunately, there are very many elements in the Government, the bureaucracy and the Opposition which seem to be hell-bent on this course of tearing down all protection for industry. The textile, clothing and footwear industries are likely to be the next victims of the free market dogma. However, we want to give credit where credit is due. The Democrats, and I in particular, believe that the steel plan is the most innovative piece of industry policy ever introduced in this country. I cannot praise what has happened more highly than that. The plan does not just give protection to BHP. It sought commitments from BHP to increase productivity and to increase investment. That surely is the way to go when we are trying to develop our industries. In moving to assist industries, the Government should seek to ensure that increases in productivity and investment are also made as consideration for the help that the Government would afford an industry. In addition, the BHP bounty protection will guarantee it 80 per cent of the Australian market. Particularly, there was a fast track system of protection from dumping. I would like to see that sort of approach applied much more generally-where there is a quid pro quo between government and industry, where there is co-operation between industry and government and where government seeks commitments from unions to change work practices. BHP, for its part, made a commitment to invest $800m over five years. This figure looks like being very well and truly overrun. The investment, undoubtedly, will be higher than that. Pledges were made on increasing productivity, and they will be easily achieved also. The unions have been asked to make commitments on work practices and to follow different dispute procedures and pay demands. These very largely have been agreed to. In effect, the Government has said: `We will give you some protection on the basis that the company and the workers give a commitment on productivity'. It is not a one way street and it has led to a dramatic success in Australia in the steel industry. If the free marketeers had won the day, and all sorts of help, government assistance and intervention in the steel industry had not been forthcoming, and if there had not been the creative intervention, our industry would not have been able to expand at a time when the Japanese, Koreans, Americans and Europeans are all cutting back on their industries. There is still a long way to go. The unions have not attacked some of the hard-core work practices yet. Let us hope that will be achieved in the years remaining in the plan. I believe the success of the steel industry plan has demonstrated what can be achieved if there is a willingness to intervene in the management of industry in this country and if management, government and the unions create a co-operative structure. From the Opposition we heard nothing but criticism. I wonder what its steel plan would be. I wonder what it would have done to help the steel industry if it had been faced with the problem in 1980. The Opposition continually argues that governments should not intervene in the market-place; let the market forces reign supreme and everything will come right. On the industrial relations front, the Opposition has the hero-worship of Mr Charles Copeman and other industrialists who are champions of confrontation. I wonder what sort of steel industry we would have now if the Opposition's policies on industrial relations and non-intervention had been the order of the day in dealing with the problems in the steel industry in the early 1980s. I turn now to the car industry. In talking about that plan, which has not yet been as successful as the steel industry plan, I go to section 9 of the Government's motor vehicle policy. It says: The Government desires to see greater Australian participation in ownership and control in all sectors of the industry . . . This is about the only reference I have seen-I am sorry that Senator Button is not in the chamber at the moment-by the Government to the desirability of Australian ownership in industry. It is a great pity that it has not acted on these sentiments. Last year we saw further domination by foreign interests of the car industry when the New Zealand interest, Ariadne, took over Repco, which was a very important supplier to the automotive industry, and then proceeded to split it up and sell off the assets. This would not have happened if the Government had been prepared to stand by its statement of its desirability for a greater degree of Australian ownership in the car industry. However, in concept the plan is good. Remarkably, it followed a plan that I outlined on behalf of the Democrats some four or five years ago and for which I was criticised roundly in the South Australian Parliament. The car plan has four aims: To give industry time to modernise and restructure, and we would have to agree with that; to increase its efficiency, certainly; to hold down prices; and to reduce job losses in the short term. It says bravely-I give Senator Button full credit for this-it wants cut down the number of models from 13 to six. That is only common sense. That was the aspect of my suggestion for the car industry that was so roundly criticised in South Australia. The Government is prepared to allocate $150m over five years for an Australian design and research. My only criticism of that would be that it is a meagre amount if the Government is really serious about getting an Australian designed car off the ground. It is certainly moving in the right direction. It wants a gradual reduction in tariffs. Certainly the protection that the motor car industry has at the moment is unsustainable. It has quota protection of about 80 per cent and over 50 per cent tariff protection. That is unsustainable and indefensible by any standards. The Government is planning to phase out quota protection by 1992; encourage exports with import credit systems; and guarantee a local content of 84 per cent. These are good initiatives. I believe they are steps in the right direction. It is a very difficult industry because it has been fragmented and it is foreign dominated, but the Government's aims are in the right direction. I believe they need to be more aggressively pursued. The Government needs to put the hard word on industry to do something about work practices and to do something about efficiency in return for, perhaps, greater assistance from the Government. That is the enlightened approach to industry protection today and the one that should be pursued. Most of the strikes in the automotive industry have been related to superannuation. It is regrettable that the Government's superannuation initiative has got off on the wrong foot. It has created a lot of industrial problems and will create more unless the Government moves to do something about bringing in legislation to ensure that the guidelines it laid down are adhered to. There was a big strike at Borg Warner (Australia) Ltd earlier this year which resulted in 7,000 workers in the industry being laid off. It showed that unions and management must be able to co-operate if they are to adopt the just in time production methods that have been so successfully used in Japan and the Japanese car industry. General Motors-Holden's Ltd is starting to export motors successfully from Australia and Toyota is exporting engine parts to its plant in Japan. Moves are taking place. The industry is working in the right direction, but I believe the Government has got to have a stronger will and a firmer hand in moving the industry to efficiency more quickly than has happened in the past. Let us contrast the industrial relations problems in Ford Motor Co. of Australia Ltd with General Motors-Holden's, for instance. I have often advocated in this place the importance of co-operation between management and the workers. I need to quote only one figure to illustrate how important this is to the Japanese industry. In 1986 Toyota received 1.9 million suggestions from its employees-that is about 100 employee suggestions per employee per year and 95 per cent of those 1.9 million suggestions from employees were acted on by management. Any organisation that can embrace co-operation with employees where they are prepared to use their brain power in the eight hour working day to improve the efficiency of the industry in which they are working-if it can get that environment going in this country-will win every time. To its credit, the Ford Motor Co. has attempted to do this. My criticism of what Ford is doing is that it is introducing these schemes but it is not, at the same time, introducing profit sharing schemes. So the suggestions and the co-operative attitude it is trying to engender are, in fact, also moving to the point where the rewards, the dollars, are being shared with the work force. I believe if Ford does not do this it opens itself up widely to the criticism by the unions that it is introducing cosmetic schemes to get the workers to help and co-operate, but its workers are still missing out on sharing the rewards. That is a criticism that I think will be levelled in Australian industry and in the automotive industry unless there is a move by the manufacturers to share the dollars and to bring in some sort of incentive scheme. I believe that we do have in the steel industry and automotive industry the most enlightened industry policy that we have ever seen in this country. My only fundamental criticism is that it is not moving quickly enough; it is not moving with enough effort, and the Government is not putting enough resources behind the initiatives that have been laid down. We have got to get away from saying that we just need tariffs and quotas. The Government has got to move to make sure that our industries are internationally competitive and are as efficient as any in the world. If the Japanese can do it, why cannot Australians? Why cannot Australians have an automotive industry that can export all around the world? Why can we not design and produce motor cars in this country that are world leaders in their class? There is no reason at all. It is just that we have got to have the will, but we must have co-operation with industry, with government and with management. Our work practices are critical to this. Our work practices will only be reformed by co-operation. The confrontation that Senator Michael Baume so warmly advocates as a supporter of the New Right will never, ever succeed in reforming our work practices in this country. It cannot succeed; it will not succeed. It is not a new idea. It is not the New Right; it is the old Right, if you like, coming up with ideas that were around this country 100 years ago, dressed up in new clothing. That is not the way to go. Co-operation is the way to go. Creative intervention by governments in industry policy is what has to happen. We have got to get away from the dogma of the radical free marketeers. We should not sit back and let market forces run our country. That will not work. It is a recipe for disaster. Unless we have more of the creative intervention that at least these two plans sought to implement-very successfully in the steel industry and potentially successfully in the car industry-our industries will never be internationally competitive and never earn the export dollars they must earn if our country is to be saved from bankruptcy. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.56) —I thank honourable senators for their contribution to the debate. Senator Michael Baume, who introduced this matter of public importance, has so much interest in it that he left the chamber as soon as he had finished speaking. Senator Kilgariff —He'll be back. Senator BUTTON —The honourable senator is trying to frighten me. He will be back, will he? I hope he comes as soon as possible because I would like him to hear a thing or two. What Senator Michael Baume is advocating in this place about industrial relations is the sort of view which was expressed by one of the great heroes in the Liberal Party of Australia, Mr Charles Copeman, who spent last weekend in the company of John Howard watching a fashion parade when Liberal Party wives acted as mannequins. It was a fashion parade of imported fashions. Mr Copeman was sitting next to Mr Howard a day after he had sacked 550 people without notice from the Besco Battery factory in Sydney owned by Peko-Wallsend Ltd. That is the sort of regime which is being sought by the Liberals in this place. I do not want to spend much time on what Senator Michael Baume had to say. I will come back to that. His speech reminded me very much of a conversation burped out over a long tax deductible lunch at Patrick Partners. That is not the sort of thing which contributes to constructive debate in a place like this. I want to talk about what Senator Siddons said because he made some very constructive contributions. I would like, if I may, to correct him on one or two points regarding the automotive industry plan. It is true, as Senator Siddons said, that the Government expressed a view about Australian ownership of motor vehicle companies at the time of the introduction of the car plan. That is still our view. Senator Siddons said that the only thing that happened was that Repco, an Australian company, had been taken over by a New Zealand company and that was a very unfortunate thing. Senator Siddons —New Zealand interests, I said. Senator BUTTON —New Zealand interests, yes. At a certain point, I would have agreed with the honourable senator about that. But those New Zealand interests then went on to sell their major automotive component divisions of Repco to a company called Automotive Components Ltd. It was a management buy out by a very good, competent group of Australian managers. Senator Siddons —That is one section of it only. Senator BUTTON —A very substantial section. There is not much left in the old Repco empire. That new company has had a very good first quarter. It is a company committed to the industry and the industry is very glad about the changes which have taken place. I am not saying we can take credit for them, but all is well that ends well, I suppose, and one can be grateful for that. Last night I met with the Federated Automotive Component Manufacturers at their annual conference in Canberra. The component sector of the vehicle manufacturing industry was at loggerheads with the manufacturers when this plan was put in place. There is an enormous improvement in morale, in outward orientation and in attitudes to technology. I do not have to say those things. They were all said last night by people other than me. That is a very encouraging sign. Senator Siddons also referred to design money. It is not just for vehicles; it is also for components. Awards of design money have been made to a new technology steering wheel company in Sydney and other component manufacturers. It is a very good catalyst for change. I just remind honourable senators that it is true to say that the automotive industry in Australia-Toyota, Nissan and so on-has experts not only of engine components; in 1988 the Ford Motor Co. of Australia Ltd will export 30,000 vehicles from Australia. That will be the first major export of vehicles from Australia since 1965, and it is something that is very much welcomed. I return very briefly to Senator Michael Baume's speech which, if I may say so, was founded on ignorance. The things which stick in Senator Baume's craw are those which have provoked this rather flatteringly worded matter of public importance. The Liberals are saying in this MPI that the steel plan and the motor vehicle plan have been eminently successful, as their spokesmen have said month after month in this place; they have admitted it. But Opposition members now say: `Hurrah! There have been a couple of industrial disputes and now we can condemn those plans on the basis of industrial disputation. Joy oh joy! Industrial disputes are a gift and a great thing to the Liberal Party'. That is the bottom line of the matter of public importance, for goodness sake. What sticks in Senator Baume's craw is that the level of industrial disputation in this country is 40 per cent of the level that existed when the Opposition was in government. That was a disastrous period in Australian history for Australian manufacturing. Now the level of industrial disputes is 40 per cent what it was when these benches were occupied by members of the present Opposition. Senator Baume said that the Government boasts about the lowest level of inflation, rising employment and so on. In some ways we do. In spite of two enormous devaluations of the Australian dollar, the inflation rate has not reached the record level set by the previous Government in 1981 and 1982. Senator Michael Baume —What about relative to our trading partners? Senator BUTTON —The honourable senator can recycle that as much as he likes. What I just said is a fact: The inflation rate, even for this quarter, is not as bad as it was under the leadership of John Howard in 1982. We do talk abut rising employment. A total of 600,000 jobs have been created under this Government. As for unemployment, even with the most dire predictions, we have not yet reached anywhere near the level over which the previous Liberal Government presided in 1981-82. In 1981-82 the previous Government presided over extraordinary conditions. Of course, in that regard, the honourable senator's speech was very flattering. What did the Liberal Government do in 1981-82 when the steel industry in Australia faced its greatest crisis? Senator Michael Baume —We appointed a commission that gave you the answers-the IAC report. Senator BUTTON —No. The honourable senator does not even know. It had nothing to do with the report from the Industries Assistance Commission. What did the Liberal Government do? When the steel industry was going out backwards and when Port Kembla and Newcastle were on the verge of shutting down, the previous Government appointed an advisory committee on steel. That is all that the Liberal Party Government did in 1981-82. Senator Michael Baume —Whose recommendation did you act on? Senator BUTTON —Senator Baume was not here at that time; such is his interest in the debate. The wording of the matter of public importance is very flattering to me because what the Liberal Party is saying is: `At last we have found a few industrial disputes. That is terrific for the Liberal Party of Australia. We have found some industrial disputes and we are able to condemn things that we have never been able to condemn in the past'. They are things which have been praised conceptually and in terms of their operation by the Opposition Leader, John Howard, and by the shadow Minister for In- dustry, Technology and Commerce, Senator Chaney. Yet the Opposition says: `At last we have found a couple of industrial disputes. Throw your hats in the air and leap for joy. At last we have found something to hang our hats on!' That is the essence of Senator Baume's matter of public importance. As I said when Senator Baume was not in the chamber, his whole speech had the flavour of one burped out over a long tax-free lunch at Patrick Partners. That was the flavour of his speech; it had no substance. It was nitpicking and absurd in the extreme. Let us look at some of the figures. One of the things to which Senator Baume attaches great importance is profits. So do we. The steel division of Broken Hill Proprietary Co. Ltd is now the second most profitable steel company in the world. Senator Baume did not mention that. Senator Michael Baume —I said that-- Senator BUTTON —He did not mention it. That is the sort of thing that sticks in his craw and this Government will make sure that it sticks in his craw for a very long time, because that is precisely what is happening. Senator Michael Baume —You were not even listening. Senator BUTTON —The honourable senator has had a long go; he should let me have a go for a minute. I will talk about Senator Baume's great moment of joy when he found a high level of industrial disputation in the steel industry over a few months. In the first quarter of 1986, the steel industry had a bad record of industrial disputation; that is true. But, even with that bad record on an annualised rate, it is nowhere near the rate of industrial disputation that existed under the Fraser Government. At the same time, under the Liberal-National Party Government in 1981 the number of stoppages in the steel industry totalled 91. In the first half of 1986 the figure was 23. That is the sort of relative performance of industry plans under this Government and non-industry plans under the previous Government. At the same time, productivity increases are reflected in the figure of 219 tonnes per man hour in 1983, the first year of our Government-it was less than that in 1982-moving to 288 tonnes per man hour in May 1986. That is the average for the steel industry. In Port Kembla, which was Senator Baume's favourite whipping boy in the points that he was trying to make, the figures were 230 tonnes in May 1983 and 275 tonnes in May 1986. Productivity and profits have increased. The work force morale has increased. Levels of disputation are down. All of these things have occurred under this Government yet Senator Baume plucks a straw out of the wind in order to try to illustrate a petty, silly little point. I turn to the motor vehicle industry to which, of course, Senator Baume devoted very little attention. I just want to make a couple of points. Senator Siddons said it all about the automotive industry. But Senator Baume did not have the courtesy to be here and to listen to him. The Automotive Industry Authority, in its first state of the industry report, made the comment that the industry has suffered relatively less from industrial disputes in recent years than has manufacturing as a whole. There have been two exceptions to that-a stoppage at Borg-Warner (Australia) Ltd and a stoppage at a company which affected the car industry at General Motors-Holden's in the last couple of days. Senator Baume takes great delight in those exceptions. After all, those two stoppages have given him the opportunity to bring up this matter of public importance in the Senate. But the point is that the industrial relations situation in the car industry in this country has changed dramatically to the point where it has introduced, with union agreement, a just in time system. There have been six steps forward and one step back. Senator Baume picks up the step back. Those are the general parameters of this matter of public importance, and I really do not wish to take the issue much further, except to say: Look at the alternative, Senator. The honourable senator was not here when I talked about this earlier. The honourable senator's leader last Saturday sat at a fashion parade of imported fashions next to Mr Charles Copeman who, on the Friday before, sacked 550 people without notice. That is the alternative which people in Australia would have to face up to if-may God forbid it-honourable senators opposite were ever elected to government in this country. That is the sort of thing we do not want, and that is why this matter of public importance is a whole lot of rubbish. Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill. Senator RICHARDSON(New South Wales) —I table additional information received by Estimates Committee A. Senator McINTOSH(Western Australia) —On behalf of Senator Giles, I table additional information received by Estimates Committee B. Senator CHILDS(New South Wales) —I table additional information received by Estimates Committee C. Senator REYNOLDS(Queensland) —I table additional information received by Estimates Committee D. Senator McINTOSH(Western Australia) —I table additional information, together with two attachments, received by Estimates Committee E and an errata sheet relating to the Committee's report. Ordered that the errata sheet be printed. Senator ZAKHAROV(Victoria) —I table additional information received by Estimates Committee F. Senator ELSTOB(South Australia) —I present the seventeenth report of the Senate Standing Committee on Publications. Report-by leave-adopted. Senator Dame MARGARET GUILFOYLE(Victoria) —I present the 259th report from the Joint Committee of Public Accounts entitled `Department of Community Services-Proposal to Acquire Computing Facilities'. Ordered that the report be printed. Senator Dame MARGARET GUILFOYLE —by leave-Report 259 presents the findings of the Committee's examination of a proposal by the Department of Community Services to acquire a distributed computing capability. The proposal was referred to the Committee under the terms of its standing reference to investigate and report on proposed acquisitions of Automatic Data Processing facilities by Commonwealth departments and authorities staffed under the Public Service Act 1922. The proposal by the Department of Community Services was estimated to cost approximately $20m for hardware and system software over 3 years and a further $6.1m per annum for other costs. The Committee identified several major areas of concern in the Department's initial submission which were not allayed by the Department's supplementary submission, sought by the Committee to address these matters. The Committee's primary concerns continue to relate to: First, the definition of the system requirements. The individual applications proposed to be automated have not been examined for their cost effectiveness and have not been assigned priorities, and the estimate of computer capacity requirements appears excessive. Secondly, in respect of options for meeting system requirements: The Department has given serious consideration only to its preferred option of a distributed computing capability; insufficient consideration has been given to a range of options between the centralised and distributed options which might meet the Department's requirements at less cost; and no serious consideration has been given to less ambitious but potentially more cost effective options which exclude automation of low priority applications. Thirdly, with regard to option costs: Costs appear to have been understated for all options, particularly for the preferred option of a distributed computing capability; the understated costs have biased the proposal in favour of a distributed system; and should the Department proceed to acquire a distributed computing capability of the capacity proposed there is a likelihood of cost over-runs. The Committee concluded that the Department's preferred option has not been satisfactorily justified on cost effectiveness grounds. The Committee concluded that there are several other less ambitious, less costly and potentially more cost effective options which the Department should seriously evaluate in greater detail before finalising its procurement proposals. The Committee's consideration of this proposal by the Department of Community Services has differed from the scrutiny given other proposals under the Committee's standing reference in that it did not include a public hearing. The Committee has in its review of previous ADP acquisition proposals found that repeated attempts to elicit satisfactory answers and information from proponent departments have generally not justified the associated time and effort expended by the Committee. The Committee will in future be taking the view that if initial submissions are not satisfactory, and the subsequent communication of the Committee's concerns to the proponent department does not elicit a satisfactory response, the Committee will report its views to Parliament without further delay. The Committee has decided in this case to present its views in a short report to Parliament to enable the Department of Community Services to respond promptly to the concerns raised by the Committee in a further submission to Cabinet. The Committee considers that Cabinet funding approval should not be given to the Department to acquire computing facilities until the detailed studies recommended in this report have been completed, and the Department has demonstrated to Cabinet that it has selected the most cost effective means of meeting its information requirements. In May 1985 the Committee issued its initial guidelines for the content of submissions to the Committee under its standing reference, and invited comments from departments on these. It has to date received no comments. The Committee itself has identified some areas of deficiency and of potential improvement. It now intends, with the benefit of its experience of the four inquiries it has now completed under the reference, to issue revised guidelines which will assist departments to prepare submissions that will meet the Committee's needs and therefore expedite the process of the Committee's inquiry and report. The Committee continues to welcome any comments that interested departments and agencies may wish to make on the guidelines. I commend the report to honourable senators. Senator GEORGES(Queensland) —by leave-I wish to draw the Senate's attention to part of this report. It is on page 9 under the heading `General Issues'. I believe that what is contained in this section of the report should be part of the Hansard record on this matter. The Committee said: General Issues 36. The Committee has concerns about a general presumption in the Department of Community Services' submission that it has a right to an `autonomous' computing capability simply by virtue of its existence as a department. The proliferation of separate departmental systems could lead to increasing effort, cost and frustration in transferring computing equipment and software from one departmental system to another. Such a situation would arise, for example following a decision by Government to reallocate departmental responsibilities. There may also be substantial continuing costs associated with the transfer of computer-based information between departments and agencies with common or related information needs. 37. These costs could be reduced by departments with closely related functions and/or the need to exchange substantial amounts of computer-based information, agreeing to establish a common computing `environment' or computing architecture. There would of course be other important considerations and costs associated with such an initiative including the consequent restriction of choice on open tendering in subsequent computing acquisitions by these departments. 38. The Committee notes that the Department of Community Services has commissioned an Information Sharing Feasibility Study, the results of which are not yet available. The purpose of the study is to determine the viability of sharing common data holdings between DCS and other Commonwealth, State and Local Government and non-Government organisations. The Committee understands that the study commenced with an examination of the program objectives, strategies and data requirements of Victorian Government departments. Compatibility with Commonwealth Government departments appears not to have been accorded a high priority. The Committee concludes that there may be benefit in departments with related responsibilities and information needs having computing facilities with a common computing `environment' or systems architecture; the Department of Community Services is examining the feasibility of sharing information with other Commonwealth, State and Local Government organisations, but appears to have accorded a higher priority to compatibility with State and Local Government organisations rather than related Commonwealth Government departments and agencies. The Committee recommends that the Public Service Board, in consultation with the Departments of Finance and Local Government and Administrative Services undertake an examination of the cost effectiveness of establishing a common computing `environment' or systems architecture to enable a high degree of systems compatibility between departments and agencies with closely related responsibilities and information requirements; and future submissions by departments to the Committee for computing capability should take account of the need for arrangements to facilitate systems compatibility with the computer systems of related departments. We believe that the subject raised under `General Issues' is a matter for important consideration, having in mind that from time to time governments alter ministerial arrangements. Some departments are divided, some are consolidated, and in such arrangements a deal of wastage and cost can be involved. Past executive and administrative decisions have led to some problems in paper work. They have led to considerable wastage in the printing of letterheads and other matters. They were only minor considerations, but when it comes to installation of computer systems one should take account of what could happen when departments are rearranged. For that reason the Committee decided to report on the general issue of establishing compatibility within an environment in which certain organisations and departments have a part. I commend the report, and I thank Senator Guilfoyle for her chairmanship of the sessional committee, and also the staff for their dedication and application in preparing the report, especially those who were seconded to the Committee. Debate resumed from 16 October, on motion by Senator Powell. That the Senate take note of the paper. Senator VIGOR(South Australia)(4.23) —I commend this paper to the Senate. World-wide, developing countries are enduring an economic crisis of massive proportions. The people in these countries are suffering from poverty and unemployment and their development programs are suffering setbacks as commodity prices plummet on world markets. Australia is suffering like the rest of the world, but here the cities are insulated from the worst effects. However, many of our country people are facing desperation as they struggle to keep their land and their hope, while their families undergo humiliating poverty in an attempt to meet rising costs with an income a fraction of what is needed to cover these costs. It is time to implement a new world economic order. A parallel and associated problem for developed nations is the threat of failure of the world banking system. Developing countries can no longer meet their interest payments on foreign debt. The consequence for lending nations is the imminent collapse of their major banks. Those countries also are desperate for a new world economic order. The time is ripe, probably for the first time since the end of colonialism, for the developing nations to unite in negotiating new terms of trade and international finance. Peru, Mexico and the Philippines have already made a stand individually and proved the readiness of the banking nations to negotiate. This is all dealt with to some extent in the report on page 8, although it is very much understated. I welcome the Government's initiative in calling preliminary talks in Cairns between developing countries, to agree on a united approach to the round of multilateral trade negotiations just beginning. However, this is only one aspect of the current breakdown in world trade. We also need to renegotiate the basis for international economic justice. Peru's initiative in tying its loan payments to the prices it receives on international sales of its commodities is an example of what could be a just basis for a new world economy. I look for the Government's initiative for Australia to take the lead in bringing developing and under-developed nations together with the main banking nations and developed countries, to resolve the problems of economic injustice which plague us all. If hunger, poverty and injustice are ignored, if countries such as Indonesia, the Philippines, Brazil, Chile, Argentina, Mexico, Peru and Australia are pushed over the brink of despair, this may well trigger a new world war of disastrous proportions. The time is ripe to establish a new world economic order, and I believe that the Government should be doing all it can to encourage this. Within Australia we also have a crisis looming. Our cotton farmers, wheat farmers, sugar farmers, vignerons and orchardists are facing international price cuts as the European Economic Community, the United States of America, and developing countries desperate for foreign exchange in trying to pay their debts, dump surplus stocks of subsidised produce on our traditional markets. This type of dumping is the type of thing that the trade negotiations are trying to get over. The Government has no plan in place to support our farmers and their families through this crisis. There are no alternative industries which can generate work or alternative opportunities for these farmers. The Government is ignoring the farmers' plight, leaving them to the fate of bankruptcy or at the mercy of their banks. Instead, the Government continues to protect non-exporting foreign-owned manufacturing industries and so continues to tax exporting industries, including farmers. It thus generates very high unemployment and high costs for consumers. I believe that we have a very serious problem on our hands. I urge the Government to act and urge the Senate to press the Government, in all possible forms, to do exactly this. The ACTING DEPUTY PRESIDENT(Senator Coleman) —I make the point that I have made from the Chair on a number of occasions: Standing order 406 simply states that no senator shall read his speech. I would ask senators to take note of that. Senator Vigor, you are a classic offender, and I would ask that you speak from the hip rather than from the paper. Question resolved in the affirmative. Debate resumed from 16 October, on motion by Senator Puplick. That the Senate take note of the paper. Senator VIGOR(South Australia)(4.28) —I commend this paper to the Senate. Madam Acting Deputy President, I have highly detailed material to assist me dealing with these reports, and I believe that it is an insult to the people who spend hours and hours writing these reports to shoot from the hip in the five minutes that we have to deal with these matters. That is the reason I have notes which contain the details and figures, the names of countries, and so on-notes that I use. This report is the fourth report of a series dealing with remote commercial television services, particularly in the Northern Territory and South Australia, the latter of which I represent. There have been two applicants for the RCTS licence, one of which was Imparja Television Pty Ltd which has a major input from CAAMA-the Central Australian Aboriginal Media Association. This group has been successful in obtaining the licence. However, there is a real problem in this area in that the granting of the licence has been challenged by the other applicant and the Northern Territory Government. The second applicant was Television Capricornia Pty Ltd which is a wholly owned subsidiary of Territory Television Pty Ltd which holds the Darwin commercial licence. In the course of the hearings it indicated that there would be an issue of 25 per cent of its shares to United Australian Television Pty Ltd which was to be a family company comprised of Aboriginal shareholders. Thus we have two companies, one of which is mainly owned by a public broadcasting operation called CAAMA, with some backup from the Federal and State governments, and the other, Television Capricornia, which is mainly made up of commercial television interests with some backing from the Northern Territory Government. Both applicants were sent away by the Australian Broadcasting Tribunal in its preliminary hearings because the Tribunal felt that neither qualified for the granting of the licence. The Tribunal had serious reservations about the financial backing of Imparja because the Federal Government was very lax in coming up with the type of support that was necessary for such an organisation. It also had very grave doubts about the adequacy of the service proposed by Television Capricornia. Further hearings were scheduled in March in Alice Springs. At the time this happened I was able to ask the Government a number of questions, some without notice and some on notice. I was trying to move the Government into allocating some money to the Imparja group if it were successful. Indeed, I believe that it was because of those questions I submitted that Imparja eventually got a guarantee of $2.5m and I am very proud that this occurred. However, after that there was an appeal against the Tribunal's decision and that appeal is now being heard. I really believe that Imparja has an excellent record in this area. It was the only group that took notice of South Australia and actually negotiated with the South Australian Government and South Australian communities about matters concerning the South Australian part of the footprint. I commend both the report and the people of CAAMA for the work that they have done in getting the Imparja footprint proposal off the ground. At the same time I wish to congratulate the Aboriginal communities at Ernabella and Yuendumu which are planning to use these facilities, together with local programs which they have set up of their own volition-as the first example of public television in Australia-and which serve their communities excellently. Senator PUPLICK(New South Wales) 4.34)-I rise to speak briefly on the fourth report of the Australian Broadcasting Tribunal on remote commercial television services. This report is about the fourth licence to be issued for remote commercial television service broadcasting. Whereas in the previous three cases there has been little or no dispute about the award of the licence, on this occasion there has been a very significant dispute. It gives me no great pleasure to say that a large amount of that dispute goes not to the question of the viability of the successful tenderer, Imparja Television Pty Ltd, but goes very directly to questions which turn upon the fact that the station is primarily Aboriginal in terms of its philosophy and ownership. This is not a broadcasting issue; it is a racial issue. No one can stand back from that judgment. The Australian Broadcasting Tribunal, in deciding to award a broadcasting licence, takes account of seven criteria. These criteria are: Whether the applicant has a good association and involvement with the region; whether the applicant is well informed about the needs of the region; whether the applicant's programming proposals are adequate; whether it proposes to deliver an adequate and comprehensive service and whether it has financial capabilities; whether it has technical capabilities and whether it has management capabilities. In each of these seven areas Imparja was pitted against Television Cap- ricornia Pty Ltd, the other bidder for the licence. Imparja was locally based, being associated with broadcasting station 8KIN, Alice Springs, and with the Central Australian Aboriginal Media Association, known as CAAMA. Television Capricornia has its links with channel 8, TTV Darwin. Of the seven criteria it was found that, in terms of technical and management capability, both applicants were equal; in terms of financial capability, Television Capricornia was better placed; but in terms of association and involvement in the region, information about the region, programming proposals and the adequacy and comprehensiveness of proposed services, Imparja was the better qualified. If one wishes to take a very crude score, of the seven points, Capricornia scored one, Imparja scored four and the other two were regarded as equal. On this basis Imparja was awarded the broadcast licence. Senator Peter Baume —On merit. Senator PUPLICK —As Senator Peter Baume says, it was awarded on merit. There is no doubt about that. It is certainly true that there are some questions about Imparja's financial structure. It is receiving $1.8m from the Aboriginal Development Commission and $2.5m from the Australian Bicentennial Authority under somewhat strange circumstances, let it be conceded. Nevertheless, despite this very large amount of financial involvement being provided out of the public purse-as indeed those two grants are-in all respects Imparja appears to be the better qualified of the two applicants. It is certainly true that it proposes to do some broadcasting in Aboriginal community languages. I welcome that rather than criticise it. Imparja, in its programming proposals which it put to the Tribunal, indicated that this would be a fairly small part of its broadcasting-only a couple of hours a week. The issues in this are well summarised in an editorial in the Australian Financial Review of 1 September 1986 headed `A television issue in black and white'. I seek leave to have that editorial incorporated in Hansard. Leave granted. The editorial read as follows- The howls of dismay from rival commercial interests and the Northern Territory Government over the Australian Broadcasting Tribunal's decision to grant Australia's fourth and final remote commercial television service licence to an Aboriginal body are hardly surprising but are misguided. The licence entails responsibility for providing a commercial television service, as well as some radio broadcasting, to an area extending from the Gove Peninsula in the most northerly part of the Northern Territory, to Kangaroo Island, off South Australia. In terms of area, this is about 30 per cent of Australia's total land expanse. The service will not include major population centres such as Darwin or Adelaide. Its nearest approach to an ``urban'' population will be Alice Springs. The total population to be served is about 120,000. Within the area to be served it is estimated that about 27 per cent of the population is Aboriginal. The license (valid for seven years in the first instance) has been awarded to Imparja Television Pty Ltd, of which the major shareholder is the Central Australian Aboriginal Media Association. CAAMA has operated a multi-dialect broadcasting service (including video) for the past two years and is therefore not completely new to the broadcast field. The predictable reaction of both the Northern Territory Government and the rival applicant for the licence, Darwin's NTD-8 Television Capricornia, was that the decision had been influenced by ``social engineering'' considerations and by an element of reverse discrimination in favour of Aborigines. In a broad sense there is probably some truth to this. But ``social engineering'' has not yet become an accepted pejorative term, and there is surely a strong case to be made in specific instances for some positive discrimination favouring our Aboriginal population. Indeed, in political entities such as the Northern Territory where there is powerful evidence that a small and aberrant political structure leads to severe anti-black discrimination, or even oppression of Aborigines, countervailing policies could be seen as an inescapable duty of national government. Technology, culture and financial reality all combine in this instance to support a case for an Aboriginal licensee. The ABT, to its credit, has been willing to take a gamble on an innovative move which is certainly not assured of success (even more certainly, no licence to print money) but which seems to have a reasonable chance. Satellite technology is what has made it possible to consider remote area television. For thousands of people who have had no television or local radio, no daily mail deliveries and very little contact with the rest of the country, let alone the outside world, there is now the prospect of access not only to television and radio but also associated telecommunications services such as facsimile and telephone. The very nature of outback society suggests that most of these benefits will flow primarily to the white population. But the real key to the ABT's decision lies in two other factors. First, the issue of the cultural destruction of the Aboriginal-already well advanced by indiscriminate and undiscriminating contact with European civilisation. The introduction of conventional commercial television, with its general emphasis on superficially projected Western values such as greed, violence and materialism can hardly in itself be expected to do much to help Aboriginal societies come to terms with white Australia. Even white Australians are constantly expressing their concern about the submergence or subversion of their own culture by imported television material. Aboriginal programming in local dialects can provide some kind of counterbalance to a flood of conventional television fare although it will be confined to about three hours a week. Second, the best safeguard of the interests of non-Aboriginal viewers is quite simply the fact that this is a commercial licence-even though it seems that up to $5 million of public money will be required (and has been committed) to get the project off the ground. The programming will have to be as conscious of ratings as that of any city television station, particularly among the more affluent section of its viewership. This clash of interests will provide some interesting days at Imparja TV and it will only work effectively if it is made apparent quite sternly from the beginning that the Federal Government is not looking to any more turtle farms or other examples of socio-economic engin- eering gone wrong. On the whole, in the present economic climate, it seems unlikely that any Government money other than that already committed to get the project started will be forthcoming. But the question does raise another, closely related issue. There is a certain inconsistency about the Government's decision to fund what is in effect a new ethnic broadcasting service at the very time that it has determined (at some political cost) that its greatest experiment in this field, the SBS, is no longer affordable and must be merged with the ABC. Of course, the difference between the SBS and the Imparja television licence is that one was wholly funded by the taxpayer and the other is supposed to pay its own way through advertising and other telecommunications revenue. Why, then, was the SBS not given the alternative of funding itself through advertising revenue (with the same kind of statutory ethnic responsibilities applying to Imparja)? A commercial SBS network would have been an excellent dry run for the day when the ABC will have to accept advertising (which cannot be far distant now) and would have given that network an opportunity to pursue the potentialities denied it by bureaucratic interference. The immigrant ethnic communities have every justification for being upset by the Government's lofty, unimaginative tactics towards SBS. It can only be hoped that the Aboriginal ethnic community will not be similarly disappointed. Senator PUPLICK —I thank the Senate. I conclude by saying that although this is a risky business and although the Tribunal has embarked on a bold and certainly potentially risky decision in awarding this licence to Imparja, I believe that Imparja was the better qualified of the two applicants. It went through all the necessary procedures, the tender was looked at and the licence was fairly awarded. I hope that Imparja will make a great success of this project and that a new dimension will be added to broadcasting in Australia. The normal range of Australian Broadcasting Corporation, commercial, ethnic, public and CB broadcasting is now complemented with Aboriginal broadcasting. I think that that can only enrich the whole Australian community. Question resolved in the affirmative. Debate resumed from 16 October, on motion by Senator Archer: That the Senate take note of the paper. Senator VIGOR(South Australia)(4.39) —I seem to end up talking on a lot of these papers, simply because I spend a fair amount of time reading them. I commend the 1985-86 annual report of the Insurance Commissioner to the Senate. The year 1985-86 was a year of considerable further changes in the Australian insurance industry. Increasingly large pay-outs for personal damages by courts continued to erode the profitability of insurance in workers compensation and liability insurance of all types. State governments have continued to change requirements for compulsory liability insurance and have continued moves to make State government-owned insurance companies the sole insurers for third party motor vehicle insurance and workers compensation insurance. The Victorian Government has introduced a quite revolutionary workers compensation insurance scheme which other States are now considering. These moves to rationalise compensation payments should take considerable pressure off private industry and private companies, leaving them with the relatively profitable areas of business in which they can expand and, hopefully, they can move into some overseas coverage of risk. The Insurance Commissioner suggests that it is desirable for public insurance companies to submit to the same accounting procedures as private insurers. I believe that is something we should be supporting. This would give us a full and consistent picture of the needs of the Australian insurance industry. Private insurers increased their volume of business by 7 per cent during the year, while the underwriting deficit increased from 9.8 per cent of premiums earned last year to 12.7 per cent of premiums earned this year. The public sector, however, suffered enormous underwriting losses, even more than the private sector. Compulsory third party motor vehicle insurance contributed mainly to this loss, because of the lack of coverage and the failure of our various programs to mitigate injury in car accidents. Overall, the profitability of private insurers continued to improve while that of the public insurers continued to deteriorate. The Commissioner warns that the growing pool of liabilities to be met by these public insurance companies may catch up with them at a later date. We should be conscious of this problem. Fire insurance is an area where private companies are operating at an overall loss. A major reason for this is that fire service levies are charged out of premiums for this type of business. This puts us at a disadvantage compared with overseas companies which currently may sell insurance directly in Australia. This insur- ance is not guaranteed by the Insurance Commissioner. It is extremely important that we should ensure that overseas insurers are not given an overall advantage. The fire service levy should be removed. More and more multinational companies are insuring overseas in order to avoid these costs and the local insurance market is being hit. This is one of the reasons why we have such a large invisibles debt. Governments, both Federal and State, are responsible for this particular matter. It would help to make Australian insurers competitive in world market terms if the fire service levy were removed or collected in another way. I believe that it should be collected directly from overseas insurers as well. Stamp duty is another problem for local insurers. I believe that this matter should be looked at by the State people. In this report the Commissioner has again raised the problem of standards and the determination of real viability in the local insurance industry. The Commissioner details the areas where suitable accounting standards are needed and suggests that his Office undertake a process of reform through consultation with the industry. I commend this particular action to the Treasurer (Mr Keating). I believe that we should take a lot more notice of insurance in trade and industry and should introduce a reinsurance market in Australia. I have a Bill available for this in the Senate if either the Government or the Opposition wish to pick it up. Question resolved in the affirmative. Debate resumed from 16 October, on motion by Senator Peter Baume. That the Senate take note of the paper. Senator VANSTONE(South Australia)(4.45) —There are four small points I wish to make with respect to the Qantas Airways Ltd annual report 1985-86. The points are small in the sense of the number of words I intend to use, but I believe that they will be substantial in their content. The first two points relate to Qantas's refusal to show the anti-drug film prepared by the Department of Foreign Affairs and, secondly, its very cavalier attitude to the carrying of health warnings on the packets of cigarettes sold on the airline. Those two points can be grouped under the subject heading of corporate morality. Qantas's activities with respect to both of those points show that it has a corporate morality which is not consistent with it calling itself the spirit of Australia. The Government should be doing everything it can to pressure Qantas to lift its game in this regard. The anti-drug film, which I have seen, is an excellent film. It serves as a warning to all Australians travelling overseas of the dangers not only against getting involved in drugs but also in relation to luggage. For example, it warns people of the trouble they can get into if they carry packages for friends through airports. It is a very good film which is articulately presented and one that is being shown by Cathay-Pacific, which deserves to be congratulated for showing the film. The morality of Qantas can be highlighted easily by pointing out that on the one hand it says that the film is unsuitable to show on international flights because it will frighten passengers, but on the other hand it says that if it were given $80,000 or $90,000 a year the film might be suitable. Inconsistent claims have been made about the involvement of Qantas in the production of the film. The Minister for Resources and Energy (Senator Gareth Evans) who in this chamber represents the Minister for Foreign Affairs (Mr Hayden) told this chamber that Qantas was involved, or at the very least consulted, throughout the production of the film, yet Qantas says that because the Government put the film to it on a take it or leave it basis, it now has to produce its own film. These are inconsistent reports and I intend to pursue those matters. None of these matters is mentioned on page 12 of the report under the heading `Community Relations', nor has Qantas identified exactly how much it spends on community relations. I believe that Qantas should be spending more money to get its act together with respect to its refusal to show this film and the non-placement of health warnings on cigarette packets carried on the airline. Qantas was pursued in this regard by Senator Peter Baume at the hearings of Estimates Committee F. I will make only a few comments about this matter because he may wish to make some comments himself. The basic answer that came from Qantas was: `We do not show health warnings because we do not have to'. To my way of thinking, that is a totally inadequate answer. Lots of us do things that we do not have to do because we perceive them to be the appropriate things to do. Qantas was asked also whether it had done a contra deal with Philip Morris Ltd to produce carry bags for people to put the duty free goods in that they buy on Qantas aircraft. Qantas said that it had done a contra deal with Philip Morris and people from Philip Morris get travel up to the cost of the bags produced. One wonders why Qantas has not done a contra deal with some other body such as the Australian Tourist Commission, or the Buy Australia campaign. One does not need to be bright or imaginative to think of a wide range of bodies other than Philip Morris with which Qantas could have done a contra deal. The other point to which I refer is the inability of Qantas to carry international passengers on domestic sectors. I believe that something should be done about that. The Chairman of Qantas has referred to that matter in his report. I believe that is a very sensible request which the Government should take up. The final point relates to the nine directors of Qantas, five of whom have been appointed since the election of this Government. All of the directors, including the five appointed by this Government, are male. I am not sure whether that is a reflection on the needs of Qantas or the sincerity with which this Government pursues its policy of placing women on boards, but I refer that matter to the Government to be looked at. Senator PETER BAUME(New South Wales)(4.50) —I wish to follow the remarks made by my colleague Senator Vanstone, though I will not rehearse them. It is worth pointing out to the Senate that Senator Gietzelt, the Minister representing the Minister for Aviation in this place, did tell us a couple of days ago that following the pressure applied by Senate Estimates Committee F, of which Senator Vanstone is a member, Qantas Airways Ltd has decided to change the cigarette packets it will sell once current stocks are sold. So the Estimates Committee has achieved something. I want to use this occasion to refer to the sequence of events that surrounded the questioning itself-the process of questioning and the unsatisfactory way in which the Department of Aviation has behaved in response to questions put to it by the Estimates Committee. First, advance notice was given to the Department of Aviation that some questions were to be put concerning Qantas Airways. No officers from Qantas were present at the examination of the estimates, and this was referred to by the Estimates Committee in its report when it said that the questions were not properly addressed at the hearing as no representative of Qantas was in attendance. I put it on the record that the attendance of an officer from Qantas had been requested. A letter subsequently received from the Chairman of Qantas indicates that this problem will not arise again. Secondly, questions asked at the Estimates Committee relating to the sale of cigarettes had to be taken on notice. Eventually a response was obtained from the Department of Aviation after the time properly allowed for the Department to answer, and that occurred only after Senate Estimates Committee F had gone back to the Department asking where its responses were. An answer to one of my questions was not received, a Mr Moffatt for the Department saying: . . . the response to Senator Baume's questions concerning Qantas . . . is not attached. Qantas is involved in investigating questions of law with the Department of Health. A response will be forwarded as soon as it becomes available. Not unnaturally as a result of this, Estimates Committee F had some rather harsh things to say about Qantas Airways, and in a report put before the Senate it took Qantas to task. A letter was written subsequently to the Chairman of Qantas asking for answers to the questions forthwith. It now transpires that Qantas had provided the answers requested well in advance of the answers being received by the Senate from the Department of Aviation. It appears that the answers had gone to the Department of Aviation and it was the Department, not Qantas, which was seeking legal advice, and that the Department of Aviation in its letter to the Estimates Committee of 15 October had misled the Estimates Committee and misled the Senate when it suggested that a response had not been received from Qantas Airways Ltd. A letter was subsequently received from the Department of Aviation saying that the answer it gave was not completely correct. It certainly was not completely correct. We have here one more example of a second rate department attempting to deal other than completely openly and honestly with a Senate Estimates committee in response to what are really perfectly innocuous questions-questions of fact which go to matters within the Department's administrative responsibility. It is simply not good enough that it did not have officers there to answer the questions when it was given advance notice. It is not good enough that, having taken the questions on notice, it did not provide answers within the time allowed. It is not good enough that, when it did respond to the Committee, it did not tell the truth and in fact attempted to suggest to the Committee, in the response signed by J. F. Moffatt for the First Assistant Secretary of the Resources Division, that no answers had been received, and it was only when Qantas itself was taken to task and when Qantas itself wrote to the Committee saying that answers had been provided that the Department of Aviation advised that in fact the answers it had given to the Estimates Committee had not been completely correct. I suggest to the Department of Aviation that we are far from satisfied. If this is the degree of efficiency which the Department exercises in answering simple questions from Senate Estimates committees, one wonders how it can fulfil its other tasks which may require rather more subtlety in administration or rather more responsibility in management, and I for one will be watching very closely what the Department of Aviation does in its next and future appearances before Senate Estimates committees. Question resolved in the affirmative. Debate resumed from 21 October, on motion by Senator Chaney: That the Senate take note of the paper. Senator MICHAEL BAUME(New South Wales)(4.55) —Earlier today we debated various matters relating to industrial relations and the steel industry. In that debate a report of the Steel Industry Authority was referred to particularly by me to demonstrate the concerns being expressed about the future of the steel industry. The Minister for Industry, Technology and Commerce, Senator Button, responded that I was clutching at straws, that I was objecting to the seven steps forward and one step back that he claims to have taken place in this industry. I asked him repeatedly by way of interjection whether he was prepared to accept or reject the findings of the Steel Industry Authority. Of course he selectively chose not to respond to those interjections-as is his right. However, this is an important question that this Government had better face up to. Does it believe in this report signed by Mr Dolan, the former President of the Australian Council of Trade Unions, or does it not? Will it do something about it, or will it rest on tawdry comparisons with the level of industrial unrest that existed back in the 1970's and early 1980's before the steel industry plan, which involves the expenditure of public moneys, was introduced in order to save the steel industry and save jobs and which carries with it an obligation on the unions involved to stick by what was then called an accord in this industry, imposed on it by the Government as a condition of this public funding. The report says, quite clearly, that this accord has been breached. It says: The Authority is concerned that the success of the Plan might be jeopardised by single groups pursuing individual interests against the greater good of the industry. That is not me talking; that is the report. It states: . . . the Authority sought the intervention of the ACTU and drew the attention of the unions concerned to their obligations under the Steel Industry Plan. That is not me talking; it is the report. The report noted: In the Accord between BHP and the unions it was agreed that both parties- of course that accord was produced as a result of the Government requiring it as a result of its contribution of large amounts of public moneys, $21m in bounties this year, as well as tariffs and other protective devices- would comply with established dispute settlement procedures to reduce the incidence of disruption leading to the loss of wages and production. The report concludes: There is strong evidence to suggest that this part of the Accord had not been followed over the last six months of the year, particularly at Port Kembla. The Minister did not seem to care about that; he did not want to respond to it. He did not want to say whether or not he was concerned about the report; all he was concerned with doing was making cheap political points. One knows darned well that whenever the name Patrick Partners is introduced into a debate by a Government senator the Opposition has scored a telling point in terms of fact and Government senators have no response other than personal abuse. That is exactly what happened again today. We received no response from the Minister to this statement on work and management practices in the report: In this regard there appears to be a direct correlation between the increase in man hours lost and the more difficult nature of the work and management practices being addressed. If this pattern of industrial disputation continues, it does not augur well for the success of the industry over the remainder of the Plan and, consequently, for the longer-term security of employment. This is the report speaking; it is not me, as the Minister said, allegedly clutching at straws. This is a major report of major concern. The Minister has no concern or involvement in doing anything about it. He simply made cheap political points. The report says: . . . if action is not taken to eliminate them- that is, these work and management practices- the industry could be overtaken by competitive pressures and-enforced retrenchments may well result. That is the report speaking. The report also says: . . . there was an alarming increase of man hours lost through industrial disputes leading to a loss of production and wages . . . at Port Kembla . . . In general, this report is a damning indictment of the Government's inability to control the union movement and to maintain the increases in productivity that this plan was bringing about which are now being sabotaged by continual industrial unrest. The report continues: The Authority strongly urges the parties to abide by their commitments and to reverse this trend- of industrial unrest- over the remaining life of the Plan. Otherwise, as it properly notes, overall, the future of this industry is in jeopardy. Question resolved in the affirmative. Debate resumed from 22 October, on motion by Senator Peter Baume. That the Senate take note of the paper. Senator POWELL(Victoria)(5.01) —I commend the report of the Commonwealth Tertiary Education Commission to the Senate and wish to draw attention to specific concerns expressed in the report surrounding the Government's introduction of a $250 so-called administrative charge which, in all senses, is actually a fee on tertiary students. The Commission has expressed some concerns. While the report notes that certain groups are to be exempted, and they are listed, it expresses concern about a considerable group of people who will find themselves just beyond the means test limit of eligibility for the Austudy allowance. Very often that group finds itself between a rock and a hard place in our society. It is suggested that, because of the introduction of this fee, access to education will be limited for quite a considerable group of people who fall into that category. It is of some concern that the report notes that there will be new demands, as a result of this imposition, on the special assistance for students scheme. It notes that by 1987, $11m will have been made available to institutions. The report states: It is the Commission's intention that these funds be used by institutions to help students whose enrolments may be in jeopardy because of the administration charge. I think this smacks rather of robbing Peter to pay Paul. The Commission calls quite strongly for monitoring of the effect of the imposition of this $250 fee and says that it will be fairly clear early next year what the impact is but that the monitoring must continue beyond the beginning of next year to ensure that any anomalies and undesirable outcomes are identified and corrective measures are taken. It is already possible to determine some considerable anomalies. If the Opposition, although expressing its outrage about the imposition of this fee, votes for the legislation in this House, as it has done in the other place, we will have this fee. We suggest that anomalies are already identifiable. The fact that part time students should be paying $250 just the same as full time students is certainly inequitable if not anomalous, as is the fact that single subject and external students will be doing the same. Outrage has been expressed both in the Parliament and outside. I draw attention to an article in today's Adelaide Advertiser which states that the legislation introducing the fee has been passed-which, of course, is inaccurate; it has not passed the Senate yet-and that the Opposition spokesperson on education expressed this outrage and identified external and part time students as possible victims. We suggest that if the Opposition cannot bring itself to join us in opposing the legislation to ensure that this fee is not introduced, the very least that it could do is support the Australian Democrats' amendment to remove those anomalies before they come into play. The Commission does say in its report that the adequacy of that $11m special assistance student payment next year will be really at risk because of the very anomalies which are identifiable now and which would be addressed in this chamber when the legislation comes before us. It is interesting that one of the points made also by the Opposition spokesperson is that students can expect a massive rise in the charge in future years. One would imagine that he is probably referring to what appears to be a non-existent policy-it is certainly one that is not admitted by the Opposition-for the imposition of fees for tertiary education in the event that the Opposition should be in a position to do that-in government rather than in opposition. Question resolved in the affirmative. Consideration resumed from 22 October, on motion by Senator Peter Baume: That the Senate take note of the paper. Question resolved in the affirmative. Debate resumed from 22 October, on motion by Senator Brownhill. That the Senate take note of the paper. Senator WATSON(Tasmania)(5.06) —Since the Economic Planning Advisory Council's role is to act as a vehicle for community participation in the development of government economic policy, I accept the challenge that that mechanism provides, together with the occasion of the presentation of this annual report to the Senate. The Council, as we know, is briefed on current economic conditions and outlook by the Treasurer, Paul Keating, at each meeting and Council members also receive comprehensive briefings on the labour market and on trends in prices and incomes by the Minister for Employment and Industrial Relations (Mr Willis). Despite the Government's close liaison with the Council and subsequent advice from a body specialising in the economic affairs of the nation, I believe that the Government has been tardy to act or it has failed to act on information tendered by its advisory body, or it may be that it has mishandled the implementation of its economic policies. According to the 1985-86 annual report, Council members have expressed concern that without sustained high rates of economic growth, unemployment will remain a serious problem for some considerable time. If we look at the current economic situation, we see a climate of high inflation, rising interest rates and climbing unemployment. On 3 September 1986 an article in the Australian newspaper stated: . . . rising unemployment is now unavoidable, as the rapid increase in interest rates has virtually destroyed the strategy of the August Budget and is squeezing business. We read in today's Press how mounting debt is causing massive problems to the viability of many companies operating in this country. The balance of payments has become a focal point of the Council as it is seen as a major constraint on economic growth. The Director of EPAC stated in the report that Australia's economic growth performance could be improved by a number of factors, including managing the economy in such a way as to maintain an optimal level of capacity utilisation and expanding productive performance. So a guide is given. It is not really known whether the Government has been taking heed of this advice, but it certainly does not appear at this stage to be taking steps to implement policies which will achieve the objectives outlined by the Council. At this point I question the wholly independent nature of the Economic Planning Advisory Council. The report states that one of the functions of EPAC is to act as a major forum for discussion between government bodies and representatives of the community on economic conditions and appropriate policies for Commonwealth governments to adopt. However, if one looks at the membership of this Council, one sees on page 1 of the report that there are three high-ranking government representatives-the Prime Minister (Mr Hawke), the Treasurer and the Minister for Employment and Industrial Relations. Furthermore, there are four other government representatives, mostly from State Labor governments and, in addition, four union delegates. So EPAC is designed to be representative of the community but it is clear that, instead, it is representative of narrow, factional interests. The Council gives little consideration to outside submissions and it is, therefore, limited in its ability to function as a forum for community participation. In addition, the Council is subject to a number of internal constraints. The Chairman of the Council is the Prime Minister, Mr Hawke, and the Deputy Chairman is the Treasurer, Paul Keating. So the Chairman determines the general view of EPAC and seeks responses from the Council on particular issues. In most instances the Government presents the submissions for discussion by the group, and only those areas on which the Council has consensus are released as reports. There is another big constraint on its credibility. A further constraint is the Government's insistence that policy objectives are consistently framed in terms of the conditions of the accord. It is the accord, therefore, that dictates the Government's policy directions. Given that the aim of EPAC is to advise the Government on feasible and desirable targets for the Australian economy, I am by no means convinced that the Council is either properly equipped or sufficiently independent to function in its intended role. At this point it is apparent, I think, that EPAC is no more than a tool with which the Government can mobilise consent for its policies. I believe it is therefore merely a token gesture. Its other failing is that it is prone to coming to dramatic conclusions. Senator BROWNHILL(New South Wales)(5.11) —I hope the Senate takes note of this annual report of the Economic Planning Advisory Council because I think it comes at a very opportune time. At the same time as this annual report is being released EPAC has released a critical analysis of the present balance of trade situation. It is interesting to reflect that one of the functions of EPAC, according to its annual report, is: Undertaking professionally independent and objective economic research and analysis, to assist the Council and the broader community in arriving at judgments on economic and policy issues. It also states: Media coverage of the Council Papers series stimulated considerable public interest and debate. I will mention the composition of this Council in a moment. This Council has the ability to talk up the economy and to bear down on the economy. I hope some of the eminent persons on that Council are not just being used as political tools. I think we should look again at its composition, to which Senator Watson has already referred. There are three Australian Labor Party members of the Federal Parliament, who are all ex-trade union representatives, Mr Simon Crean and three other trade union representatives. That makes a total of seven out of the 18 members of the Advisory Council from the trade union movement. Throw in as well two Labor Premiers, to whom Senator Watson has already referred, and we have what I would probably call a hung council. I wonder how independent this Advisory Council really is. It is really the Labor Government being advised by the trade union movement and getting credibility for some of the things with which the Planning Advisory Council comes down. This Advisory Council has cost the taxpayer $2.429m, according to page 12 of its annual report. I wonder whether the taxpayers in the community are getting out of it the value that they would like. The outlook paper which was published recently-I could quote from it as well-gives very grim warnings to the Government about what it should be doing. I make the point that it is advising itself on its own advice. It is probably quite embarrassing to think that while the Treasurer (Mr Keating) was away trying to talk up the economy a report was published which says: . . . the necessary conditions for the desired turn- around in the trade and debt position include: Reasonable stability in the terms of trade. No further deterioration in real interest rates. A sustained switch in demand from foreign goods to Australian products. An increase in the domestic savings rate. Appropriate supply responses from industry . . . That is what EPAC is advising the Government to do. I ask: Is the Government taking any notice of its own advisers, even though it is advising itself? The fact that this grim picture has been painted and that we will have this terrible outlook for 1990 has fallen on deaf ears as far as the Government is concerned. I think we must ask ourselves: What sort of advice is EPAC giving to the Government? Is the taxpayer really getting value for his money from this Advisory Council? Senator MICHAEL BAUME(New South Wales)(5.15) —This latest annual report of the Economic Planning Advisory Council says on page 5: . . . Council members have expressed concern that without sustained high rates of economic growth, unemployment will remain a serious problem for some considerable time. I draw the Senate's attention to that sentence simply because economic growth is, of course, collapsing under the Government's present economic policies. The Budget forecast that domestic economic growth would be reduced to about 0.5 per cent has now apparently been revised in private talks overseas by Dr Barry Hughes, the economic adviser to the Treasurer (Mr Keating), to no growth whatsoever in the internal economy. Yet the Treasurer is quite content to continue maintaining this quaint fiction that there will be something like a 2 1/4 per cent growth in gross domestic product over the financial year, and that will arise totally, he says, from the net external balance. It is extraordinary that, having identified the problem, the Economic Planning Advisory Council is now being totally ignored by the Government. That might explain why the Government is running it down so significantly. We recall that in the past, when EPAC was providing information with which the Government did not agree, that information was censored and EPAC was then prevented from undertaking projections relating to the consequences of the movement of various variables in the economy-for example, wage rises and so on-because particular members of EPAC, and the ones I have in mind were the trade union representatives, objected so strongly and, as usual, the Government acquiesced. Another point that the EPAC annual report makes is: . . . more recently the balance of payments has emerged as a major constraint on economic growth and has been a focus of attention of Council. That is particularly interesting, as is its next point: . . . employment outlook over the medium term is an important issue for further EPAC work and will be a major research theme in 1986-87. That is in line with the first quote I read about Council members expressing concern about unemployment. It is quite clear that, as economic growth will not be sustained, unemployment will rise. In that context, it is educational to read what Mr Keating had to say on Monday, as reported in the Australian Financial Review on Tuesday of this week: . . . an analysis of the balance of payments by the Economic Planning Advisory Council accorded with everything that the Government had said. He continued: Basically the rise in our external indebtedness comes firstly from a shift away from equity to debt in the 1970s. While it is all very well for EPAC to be telling the facts, as it sees them, of the economy to the Treasurer, it is extraordinary that the Treasurer would then so distort these facts and so misrepresent what EPAC is telling him that he can come out with this kind of arrant nonsense. His attempt to mislead the Australian people is clear from this statement: . . . the rise in our external indebtedness comes firstly from a shift away from equity to debt in the 1970s. That impression is as to significance rather than to time. Let us recall that so far under the Hawke Government the net indebtedness of Australia has trebled. When it came to office in 1983 that debt was about $23 billion; by March it was $62.2 billion and rising; and it is expected to reach something like $85 billion by the end of the year. This nonsensical sort of response by the Treasurer particularly in the face of the latest report, which Senator Brownhill referred to, is a matter of serious consequence to us. The report from EPAC basically underlined that Australians must accept continued high unemployment, tough wage restraint and a string of tough Budgets just to stabilise the soaring foreign debt. It is extraordinary that in the circumstances of EPAC's annual report, which warns of these disturbing things-the latest report on the economy-Mr Keating can continue to mislead this place. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator VIGOR(South Australia)(5.20) —I rise to speak on the report of the Economic Planning Advisory Council. I wish to support some of the things that have been said by the Opposition about this. I basically see EPAC as being a `Mirror, mirror on the wall, who is the fairest of them all' type of exercise. It is not answering in the right way these days, so it is being cut back and punished. That is the picture that we have got. EPAC was established in a flourish of enthusiasm after the National Economic Summit in 1983. The report states: In essence, the Council's role will be to act as a vehicle for community participation in the development of Government economic policy. Why should the Government seek to cut back EPAC at this crucial stage in Australia's economic adversity unless it is a `Mirror, mirror on the wall' type of activity? The report continues: The Treasurer made it clear, however, that EPAC's functions extended beyond communication and participation in policy formulation, to include the development of new knowledge on economic policies and economic prospects. Surely we need new ideas and better understanding when old measures have lead us, in fact, to the current disastrous economic state we are in? The report continues: An important feature of EPAC referred to by the Treasurer in his Second Reading Speech is its independence. Provision has been made for the council to provide its advice `freely and without unwarranted influence'. While EPAC is required to consult with the Commonwealth Government in deciding which matters it should consider, it is not bound by the Government's views. As Senator Brownhill has said, although there are nine members on the Council who have come from the Commonwealth or State Labor governments or the trade unions, according to the legislation the Commonwealth members on EPAC are not allowed to vote. The representative nature of the Council ensures two way communications with major community groups affected directly by economic decisions. The proposal to cut back funding to EPAC must be considered together with the whole of the Government's current policy in this area. We have seen a complete turn about in terms of the Government's provision of information to the community. It has completely abandoned its lip service to community participation in decision making and it is closing down or effectively castrating all the bodies which provide an interface between the Government and the people. It has actually done this in the area of the Advisory Council for Inter-government Relations where local government has, in fact, lost faith in Federal consultation; it has done it in the case of the Australian Institute of Multicultural Affairs and the multicultural community has lost faith in that area; and it has done it in Canberra with the Australian Capital Territory House of Assembly, and now EPAC has been halved. Senator Grimes —Cut it out. You did it. You are responsible for it. Senator VIGOR —Not at all. The Canberrans have lost faith in the Government because it has not fulfilled its promise of bringing on that so-called self-government legislation for debate. EPAC has been halved because it was telling the Government things that the Government did not want to hear. That is really a problem. We have a Government that will not listen and it is getting more and more into difficulty. The more it gets into difficulty the more it plugs its ears, closes its eyes and ignores the mirror on the wall that is actually telling it the truth. The DEPUTY PRESIDENT —Order! The time allowed for consideration of Government papers has expired. Senator VIGOR(South Australia)(5.25) —I move: That the Minister for Finance (Senator Walsh) prepare and bring in a Bill for an Act for the purpose of ensuring that Australian suppliers are given maximum opportunity to compete for Commonwealth contacts for the supply of goods and services, that authorities entering into contracts on behalf of the Commonwealth give proper consideration to Australian suppliers, and that such contracts are awarded to Australian suppliers unless there are cogent reasons for awarding them to non-Australian suppliers, in accordance with the following outline: PROPOSED COMMONWEALTH CONTRACTS (AUSTRALIAN SUPPLIERS) BILL 1986 Outline of Provisions 1. Purpose of Bill: The purpose of the Bill is to ensure that Australian suppliers are given maximum opportunity to compete for Commonwealth contracts for the supply of goods and services, that authorities entering into contracts on behalf of the Commonwealth give proper consideration to Australian suppliers, and that such contracts are awarded to Australian suppliers unless there are cogent reasons for awarding them to non-Australian suppliers. 2. Application of Bill: The Bill is to apply to all Commonwealth authorities, that is, Commonwealth Departments of State, Parliamentary Departments, statutory authorities and companies owned or controlled by the Commonwealth. 3. General requirement: The Bill is to impose upon Commonwealth authorities a general requirement to ensure that Australian suppliers are given maximum opportunity to compete for Commonwealth contracts, that proper consideration is given to Australian suppliers, and that contracts are awarded to Australian suppliers unless there are cogent reasons for awarding particular contracts to non-Australian suppliers. 4. Australian suppliers: The Bill is to define an Australian supplier in accordance with the following criteria- (a) for persons other than companies, the persons are to be residents of Australia; and (b) for companies: (i) a prescribed percentage of the shareholders is to consist of Australian companies or residents of Australia, or (ii) a prescribed percentage of the goods to be supplied is to be manufactured in Australia, and (iii) a prescribed percentage of the profits of the company have been invested in Australia. 5. List of Australian suppliers: The Department of Finance is to compile and maintain a list of Australian suppliers, and collect information to assist Commonwealth authorities to determine whether persons and companies are Australian suppliers. 6. Tenders and quotations: Where the value of contracts is more than a prescribed amount, tenders are to be invited and the invitations to tender are to be directed to the attention of known Australian suppliers. Where the value of contracts is less than that prescribed amount but more than a lower prescribed amount, quotations are to be sought from known suppliers. Exemptions from these requirements may be granted by the Minister for Finance in cases of urgency or exceptional circumstances, and any exemptions are to be laid before both Houses of the Parliament. In submitting tenders or quotations suppliers are to indicate whether they are Australian suppliers, and penalties are to be provided for any false statement. 7. Award of contracts: The award of contracts and the terms of contracts are to be published, together with a statement indicating whether the suppliers are Australian suppliers. 8. Statement of reasons: Where a contract is awarded to a person other than an Australian supplier, the publication referred to in paragraph 7 is to be accompanied by a statement of reasons for the award of the contract to a non-Australian supplier. This statement is to be laid before each House of the Parliament and forwarded to any Australian suppliers who tendered or quoted for the contract. Those suppliers are to be furnished with additional information relating to the reasons for their failure to gain the contract, and any further information relating thereto which they request. 9. Advance notice of contracts: Commonwealth authorities are to give advance notice of invitations to tender for contracts with a value above a prescribed amount, indicating the technology requirements involved in the contracts. As honourable senators are doubtless aware, centralised purchasing by the Commonwealth has enabled the Commonwealth to achieve considerable price concessions through bulk purchasing and has, in fact, saved a great deal of money to the taxpayer. However, it has resulted in centralised purchasing from overseas a lot easier. Centralised purchasing has allowed strict purchasing guidelines to be established, tighter control procedures to be followed, and tighter procedures for quality and price control. Another outcome has been the high level of accountability of the Australian Public Service in this area. However, the consequential buying clout which the Commonwealth has achieved has been a two-edged sword. It has left the Commonwealth with an enormous responsibility to act wisely and not to the disadvantage of the Australian people. A major problem is that even though a Bill in 1980 was put before the Parliament-it was called the Procurement of Goods, Works and Services Bill; it was renamed in this Parliament the Preference to Australian Goods (Commonwealth Authorities) Bill-and passed through both Houses, that particular legislation has never been proclaimed. The legislation that was put forward in 1980 has been lying about and nothing has been done about it. This does not augur very well for the types of proposals that I am putting forward now. Hopefully, we are in a very different situation now. We are in a situation where Mr Hawke is appearing on television and in the media, saying to private industry and to the people of Australia that they should buy Australian. Yet we have a Public Service which is not necessarily buying Australian. We have enormous buying power in the Department of Defence, in telecommunications and, in fact, over the whole of the Public Service. They are buying at the cheapest price rather than following the guidelines which would make it much more comfortable for them to buy Australian. One of the reasons for this is the cultural cringe which we have about Australian goods. We believe somehow that something which comes from overseas must be better, particularly technology. I appeal to two people within the Australian community not to give in to this cringe, particularly public servants. I think we should make it easier for public servants not to give in. We should make it more difficult for them to buy foreign goods. The proposals of this Bill are aimed at making the tendering process easier for Australian companies and slightly more difficult or painstaking for the public servants when they wish to do something else than buy Australia. We want to make it the norm for the buying process to buy Australian. Firstly, the proposed Commonwealth Contracts (Australian Suppliers) Bill 1986 provides the ability for a list of Australian suppliers to be kept. It provides for a tender process to be used for larger contracts but that the tender process may be by-passed and a quotation system on the local market introduced for smaller purchases. This will make it easier for small business in Australia to tender for government contracts and not to be totally daunted by the fact that the Commonwealth's requirements may represent a very large component of their output. Contracts awarded on the basis of a tender or a quotation must be published with a statement to indicate which of the suppliers are Australian. It is extremely important for people who are overseeing the process of purchasing to be able to see what contracts go overseas and what the actual cost in foreign currency is for that export of jobs. Where contracts go to overseas suppliers, publication must include a statement of the reason that the contract has been allotted to an overseas company. That is a very important deterrent for people in the Public Service who might take the view that, as the biggest firm in the world is producing something, it must be the best product, instead of taking the trouble to look at a local Australian alternative. It is extremely important that we have this type of accessibility to the reasons why contracts go overseas, so that we can correct it at source. Part of this process is that in the Bill outline we also provide for Australian suppliers to be given at least a year's notice of any large contracts coming up in an area. Large contracts are to be defined within the Bill. These are the main provisions; they are very simple. They in no way force the public servants to buy Australian. They do not infringe any of the General Agreement on Tariffs and Trade arrangements. What they do is to make it very uncomfortable for people to buy overseas for the wrong reasons. Many wrong reasons are used currently for buying overseas. Indeed, it is not necessarily in the best interests of Australian industry that the Commonwealth buys the cheapest goods available, especially if those cheapest goods are imported. If the Commonwealth is the largest customer of an Australian supplier, the loss of a regular Commonwealth contract could in fact force that supplier out of business. So we also need an ability for the local contractor to have some degree of continuity for his product in terms of Commonwealth contracts. On the other hand, a supplier may not bid for Commonwealth contracts because for him to supply the required volume may require an enormous investment in new equipment. A guarantee of continuing supply must be necessary in order to enable the supplier to tender without leaving himself exposed to overall loss of the contract. It is a disadvantage to Australian suppliers to deal with a centralised Commonwealth purchasing operation. It gives cartel powers to the Government since the total market in Australia is small and the Commonwealth's requirements are an enormous slice of that market in some cases. It is very difficult for an Australian company to take up the total amount of a contract. So one must encourage the Commonwealth purchasing area to have more than one Australian supplier available for a given product so that it can spread the risk-not only the risk to the Commonwealth of that supplier going out of business, but also the risk to the supplier of the Commonwealth changing its mind and leaving a supplier in the lurch. This will make tendering for the Commonwealth a lot more attractive. Provisions have been made in government purchasing practice to take account of some of these difficulties. There is already in place a buy Australian policy for government purchasing, with guidelines. The policy is patently not working, nor is there any centralised monitoring of the procedures involved. I have tried to get statistics on this through questions on Estimates committees, direct questions and questions on notice. Basically, I have not been able to obtain any sensible, comprehensive up-to-date statistics on the buying patterns in the various departments, despite continued questions at Estimates committees. The major problem with these current guidelines is that they are guidelines and they are co-ordinated through the Department of Local Government and Administrative Services. This really produces some problems for the individual departments in terms of buying the particular product that they need. The recent problems with the computer purchasing for the Department of Employment and Industrial Relations, which was the subject of a report from the Joint Committee of Public Accounts, is testimony to this. The measure that we have currently in place, the Australian preference policy, states that a leeway of 20 per cent is available for public servants to call upon to justify why they have bought Australian. But that is the wrong way round. There is also the notional duty policy which is in place, and the offsets program which has worked to some extent in trying to bring industry into Australia. But, basically, what it does is bring label engineering exercises into Australia. I will explain about label engineering. Computer companies bring in computers from overseas, put them through a factory, change the label on them and put up the price by 50 per cent. This does not involve any transfer of technology; it does not bring us into the area of having our own industry. The offsets program in this and in the motor car industry has basically not worked effectively. There has also been a system of pre-tender assistance that has worked slightly better in organisations such as Telecom Australia and the Overseas Telecommunications Commission. I will talk about that a little later in this presentation. However, we still have a major problem. That problem is known as dumping. Since overseas suppliers are prepared at times to sell at any price to get into the Australian market, and specifically into the Commonwealth market which gives them a leg in for private industry, it is sometimes insufficient just to have the 20 per cent minimum price advantage for Australian firms. What is more, if the overall actual difference would result in an extra cost to the taxpayer of $200,000 or more, Ministers have the discretion to decide whether the margin should apply. So the 20 per cent is not a real 20 per cent. If Ministers do not want to spend the money, they will agree to export the jobs. I believe Ministers should review all purchases valued at more than $100,000 where preference margins still do not give the contract offer to the highest Australian content. We should reverse the onus. We should actually be saying: `Why are you buying overseas?' Instead we say: `Why are you buying Australian?'. In these circumstances the Minister has the authority still to accept the highest Australian content tender on the advice of an interdepartmental committee. However, the very centralisation of Commonwealth purchasing favours overseas suppliers which already have large market outlets and to which the Commonwealth contract is relatively small beer, although they are prepared to cut down their price for the prestige of a successful tender. Thus, while it is to the advantage of the taxpayer that the Commonwealth buy at the lowest possible price, in practice this means that the Commonwealth buys from overseas suppliers rather than from Australian suppliers. That means basically that we are getting into more and more foreign debt. In consequence, Australian suppliers are at a considerable disadvantage should they wish to expand production for export. Most countries throughout the world operate preferential purchasing schemes whereby local suppliers are given preference over overseas suppliers if they can supply at all-not just this arbitrary 20 per cent rule. If an Australian company tries to export without being able to cite Australian Government contracts, it is assumed that that company has not been able to meet the Australian Government's standard and therefore it is not considered a good risk in a lot of countries where this particular preference policy operates. It is very difficult to break into those markets because people do not realise that our Government does not really give any preference to local purchase. It is for the same reason that overseas suppliers find Australian Government contracts sufficiently prestigious for them to be prepared to cut their price and dump their product on our market. Since it is assumed that Australia operates a preferential buying system for Australian manufacturers, the overseas supplier to the Australian Government is assumed to have something that is much better than the local manufacturers, and hence the overseas supplier gets more kudos in its own country. Again, just because we are not willing to take into account the psychology of other people's markets, we are disadvantaging local suppliers. This is a real problem. Australia in fact loses from the centralised buying policy in two ways. Firstly, our local industry loses a considerable local market share to overseas competitors and it is even further disadvantaged by the small size of the home market which is available to them in Australia. The volume advantage of supplying to the Government is lost because of the lack of security of government contracts. This means that a lot of the local manufacturers do not go for that particular option. Secondly, our trade balance suffers in two ways. It suffers, first, directly through payment from the Australian Government for its purchases overseas, which increases our total imports and, secondly, because of the disadvantage of Australian exporters who are competing for orders with a slur against their name because they have not been able to get government contracts, even though they have quoted for them. We must match the types of terms and conditions that exist inside other countries with which we compete. Let us look at our current trade balance and compare it with government purchasing overseas. I would like to add at this point that, while we have been able to define very closely what Australia's overall imports and exports are and the exact trade deficit, it has proved almost impossible to obtain similar statistics on government purchasing. The estimates of the total government purchases last year varied from $5,000m to $8,000m. I would assume that the higher figure is correct, as this seems likely in view of the uncertainty and the fact that I can assume that the lower figure is incomplete. When trying to obtain estimates of how much of this amount was attributable to imports, we again have even more uncertainty. It seems that a few departments supply their figures only to the Department of Local Government and Administrative Services, which manages the centralised system. There is absolutely no monitoring by DOLGAS of this overseas content-or at least there is no reporting of it in a form that is available to parliamentarians, even on considerable probing. It seems probable that the Australian content is usually considered to be irrelevant in assessing tenders and therefore that the information is not of primary importance. This, again, suggests that the guidelines are not being followed. The Department of Defence and the Department of Communications and its satellites are apparently the largest of our overseas buyers. DOLGAS reports that the Department of Defence and Telecom Australia together account for around 70 per cent of total government imports and that around 30 per cent of total government purchases are sourced from overseas. From this we can deduce-although with how much accuracy no one can be sure-that last year the Government imported around $2.4 billion worth of goods and services. Of course, a lot of this amount may be attributed to defence contracts which could not be met locally. But at least it would be nice to be able to get this information in the form of sensible statistics. The total retail sales last year amounted to $52 billion. Government purchasing represents 15 per cent of retail sales in the whole of Australia. The total imports last year amounted to $35,616m. Government imported purchases amounted to around $2.4 billion, or approximately 7 per cent. That is only an estimated figure, because of the reasons I have given. The trade deficit last year amounted to $3.3 billion. Government purchases overseas amounted to 73 per cent of this total trade deficit. Thus, it is obvious that a much more positive buy Australian requirement on the Commonwealth Public Service could have a considerable effect on the Australian economy overall. Assuming that we could halve the Government's purchases of imported goods, this would result in a lowering of our trade deficit by more than one-third. Of course, increased Australian purchases in the equipment field will not necessarily decrease our imports by the same amount. Australia has almost no components industries, so that the Australian content of Australian manufactured equipment is in fact fairly low. Taking this into account, the total Australian content purchased by the Commonwealth can be seen as pretty low. We have to move out of this particular trap. We must take some technologies, develop components industries, develop such technologies from their infancy through all the stages that are necessary and then get the Australian private sector to co-operate with the public sector in developing ideas and moving ourselves into new areas of technology in which we can beat the world. Unless we do this in a few areas we will just become the type of banana republic which our Treasurer (Mr Keating) has said we already are. Senator Archer —Has made us. Senator VIGOR —Yes, which the Treasurer has made us. Our major difficulty is that we are not really tackling the problem. We have materials scientists who have some magnificent ideas, such as partially stabilised zirconia. Senator Crichton-Browne —Such as what? Senator VIGOR —Partially stabilised zirconia, which has been developed by the Commonwealth Scientific and Industrial Research Organisation's Division of Material Science. It is a type of ceramic which has some very interesting properties, both structurally and electrically. Senator Crichton-Browne —Bathroom tiles. Senator VIGOR —Bathroom tiles that can pump oxygen in and out if electrical potential is put across the surface. I believe that such exciting ideas should be developed and handled. We should take those ideas and hand them over to local industries-not just to branch offices of foreign companies-and develop them over time. Again, we have some magnificent ideas that have been developed locally, such as the Winnin project. That is a decoy system that has been developed at the Defence Research Centre in my own State of South Australia. Out of this project can come a number of technologies that can be extremely useful in other areas. Also, we can make money exporting that type of decoy to countries that wish to acquire protection against Exocet missiles and the like. I believe that we should get involved, as was intended with that project, with a local manufacturer and produce the item locally, and then the Government should get involved in promoting the export industry that is associated with it. We have got to be more imaginative in the way we use our industries. We must use our purchasing power to produce an industrial base on which to build an export industry. The Government's policy seems to be based on offsets and many offset commitments are still unfulfilled. A thorough review of the offsets program is required and the Bill's provisions will ensure that offset programs will be examined at the outset instead of after the proposals have been made. I draw attention to the 1984 efficiency audits of the administration of the offsets policy and the administration of the Australian industry participation program on overseas procurement. The Government has tightened up since then, but the problem was often attitudinal and it is doubtful that these attitudes can be changed overnight, especially if no encouragement is given to public servants. This Bill gives encouragement to public servants to buy Australian. The Audit Office identified major shortcomings in all aspects of the offsets project, yet we still cannot be sure that anything has come forward in the form of effective remedial proposals. Policy guidelines were very unclear and created uncertainty and inconsistency in interpretation of significant purchases, and this led to a number of problems. There was little evidence of comprehensive examination of offsets proposals. There were substantial shortcomings in the recording, monitoring and reporting of offset obligations, and in their fulfilment. Basically, the system was a bit of a charade and there was neither the administrative nor the political will to make sure that obligations were properly assessed and chased up. For instance, the Audit Office found during a limited study that contacts involving more than $176m had not been recorded for offsets considerations. The mind boggles at how much was lost to Australian industry because proper resources and procedures were not used to monitor offsets. No real effort was put into trying to make the offsets program work. There was an almighty shambles over the Leopard tank episode, which led to a large number of continuing problems. In defence, only $300m of the $1,600m spent on major projects last year was spent in Australia. This information was provided six months after the question was taken on notice in Estimates Committee E in April. On top of the $300m, there is some flow-back because of offset obligation and other placement orders in Australia by overseas equipment manufacturers, but again we could not get any type of assessment. Of expenditure last year on the specific line item for weapons, armaments, ammunition and explosives, 65 per cent of the orders were placed with the Government Factories, 3 per cent with private Australian contractors, and 32 per cent with overseas sources. Again this information was produced six months after the relevant Estimates Committee had finished sitting and had reported. I commend the `Buy Australian' Bill. Basically I am suggesting that the Minister for Finance (Senator Walsh) should be asked to draft a Bill based on the criteria set out in my motion. Debate (on motion by Senator Grimes) adjourned. Senator VIGOR(South Australia)(5.55) —I move: That the Sessional Order of 22 February 1985 relating to the consideration of Government papers be amended by adding after paragraph (2) the following new paragraph: ``(2a) Where a statement by a Minister is presented and a motion is moved to take note of that statement in accordance with paragraph (1), the time taken by debate on that motion shall be disregarded for the purpose of the limitation of time provided by paragraph 2 (b).'' The motion is aimed at making certain that the type of manipulation of the Senate Notice Paper in which the Government has been indulging recently does not happen in future. The Australian Democrats have discussed this matter at some length with members of the Opposition, and I would like to bring to the notice of the Senate the provocation that led to this motion. Since I started looking at this problem, on 13 February this year, I have discovered 17 occasions on which ministerial statements have been given first, second or another place on the list of papers. Some were significant ministerial statements deserving of a lot more discussion than they received-discussion that they would have been given if they had been debated in government time. However, the time for discussion of government papers allows five minutes' debate per senator. I believe that the Notice Paper has been somewhat manipulated through this technique and that senators have been asked to debate a number of issues in a much shorter time, and in a much less constructive way, than would have been the case if ministerial statements had been brought down in the normal way. I discovered that on 11 days such statements appeared at the top of the list. This matter was brought to the notice of the Senate on the last six or seven instances by most senators who took part in the debate. Such ministerial statements, include a statement by the Minister for Primary Industry (Mr Kerin) on the Primary Industry Statutory Marketing Authority, the Government's response to a report on bush fires, a major statement on Aboriginal land rights, a statement on appointments to the Parliament House Construction Authority, one on the Prime Minister's visit to Japan-a major statement on trade-and statements on the Australia Card. I could go on. Virtually all of those statements were put at the beginning of the Notice Paper and have had the effect of masking off some very important statements, such as follow-ups of statements from the Auditor-General concerning various statutory bodies, and reports of very important organisations within the Public Service, which senators have not been able to debate because there has not been time to do so. I commend the motion. Senator SHEIL(Queensland)(6.00) —On behalf of the coalition, I indicate that we will support the Australian Democrats in this motion. Senator GRIMES(Tasmania-Manager of Government Business)(6.00) —I am perfectly capable of counting, Mr Deputy President, but I still wish to make a few remarks in this debate. I was interested to hear the official Opposition-the Liberal and National Parties-say that it agrees to this motion. In doing so it is supporting the changing of a sessional order without its going to the Standing Orders Committee or being considered by anyone with any experience in this place. I hope that Opposition members who have been Ministers have been consulted on this matter. Quite frankly I object to Senator Vigor's coming into this place in his usual manner and accusing me of manipulating the Notice Paper. If anyone manipulates this place and if anyone gets a fair go in the Senate it is Senator Vigor. He stands up and talks endlessly; he almost invariably takes his full time-- Senator Coleman —And reads his speeches. Senator GRIMES —Yes, he reads his speeches and he bores us to tears. He has every right to do so but what he wants now is the chance to do it again. I warn the Opposition that that is what it is giving him-the opportunity to do this ad infinitum. Many of the statements that Senator Vigor spoke of today were not even read in the House of Representatives, where they originated. They were tabled there. They were not read and they were not debated; they were tabled. Now we will have to debate `important' statements on matters such as who the hell we appoint to the Parliament House Construction Authority. We will spend hour after hour after hour on things like that in this place because Senator Vigor believes that he has the right to come in here and bore us in the way that he does. I am being judgmental about that, but I do not think that too many people in this place will argue with me. The simple fact is this: In this House-as many people on both sides have said on many occasions-we have more opportunities for general discussion and General Business through the Thursday afternoon General Business debates, the adjournment, matters of public importance, the debates on tables that are put down, than any parliament in the world. The problem is that some senators in this place abuse that. They stand up and drive us mad with endless discussions. I think we have had as many as 26 speakers on the most trivial issues, yet if I bring in a social security Bill that will spend one-third of the Budget we sometimes have to scratch around to find senators to speak. But people such as Senator Vigor will get up here and give us half an hour, as he has just done on his proposed Proposed Commonwealth Contracts (Australian Suppliers) Bill. He will go on for half an hour saying something that could have been said in five minutes. If this is what is to happen in future we will need to sit not only many more days but also many more hours. I do not want to hear bleats from the Australian Democrats about how tired they are getting at night. I do not want to hear the complaints which I have already heard today about the possibility of sitting on Wednesday nights during the next few weeks. I do not want to hear the complaints about sitting four weeks in a row. I do not want to hear them say: `We must go home, we have to get our rest'. Yet they come in here and bore us all-- Senator Sanders —You don't have to worry about re-election. Senator GRIMES —I am not accusing you, Senator Sanders. In fact, you do not come in here and speak endlessly and you do not take your full time in the way your colleague does. On a couple of occasions I will admit that statements that should have been introduced and debated in this chamber were not, and I have apologised for that. However, I do not believe that it has happened in recent times. What I have done is what Managers of Government Business have done in this place for ages-they have made a judgment about what is important and what is likely to be debated and what is not. When this sessional order is passed all these statements will be brought in here-and I do not care, it does not worry me-presented and debated endlessly. All this is to do with the desire of one individual senator who, I am sure, gets more than his fair share of talking time in this place, to introduce a change to the sessional order which has not been considered by the Standing Orders Committee or anyone else. We have difficulties in this Parliament because we have backlogs of legislation. I accept that. We also have difficulties because the legislation comes in too late and I accept that we must do something about that. But we also have difficulties in that we do not have sufficient time to debate some of the big issues of the day. Neither do we have time to debate some of the legislation properly because we spend too much time on trivia. We waste General Business time-and I say `we' advisedly-on the greatest load of rubbish one has ever heard. Obviously this motion will be passed, and that is fair enough. I have no argument with that. But do not let me hear the Australian Democrats bleat about having to sit at night, even when they have the luxury of clearing off, as they do, before the Senate rises. Do not let me hear them bleating about having to sit a few extra weeks or a few extra days, as they do, and as one of them did today, when they clutter up this place the way they do. I suppose that Senator Vigor will not be here for too long; so, therefore, he has to make the most of his time. However, if this is the way we go on it will not help the sensible functioning of this place. Senator SANDERS(Tasmania)(6.07) —I will not delay the Senate for very long. I just wish to point out that it is not the time spent on papers that uses up the time of the Senate; it is Opposition senators and often senators on the Government side who speak at great length. If we want any major change here we should probably vote for this motion and then reduce all speech times to 15 minutes. If one cannot say what one has to say in 15 minutes, one should not speak. Also, I think it was a bit unfair of the Minister for Community Services (Senator Grimes) to single out Senator Vigor in this respect. Senator Vigor has a tenacious mind and a bulldog grasp on issues and he follows them to the end-sometimes to the embarrassment of those he is researching. He is a good and willing worker for the people of Australia and I think it was a bit shabby of Senator Grimes to launch a personal attack on Senator Vigor simply because he is on the losing side of this debate. The ACTING DEPUTY PRESIDENT(Senator Coleman) —I point out to Senator Sanders that the Standing Orders provide for the times of speaking for senators. If he wishes to have those changed he has the right to put the proposal before the Standing Orders Committee. Senator MASON(New South Wales)(6.08) —I think it is a little extreme of the Minister for Community Services (Senator Grimes) to make this sort of irate attack. There is no real justification for it. It is always the desire of governments to have no opposition. It boils down to that. The Minister would prefer to have a situation in which the Government created wonderful legislation that went through without anybody ever doing anything about it. I think that he would really like the situation in the Senate to be the same as that in the House of Representatives where, if the Government wishes to gag a debate for any reason whatsoever, it can and will do so. The Government must understand that some of what it feels to be undue debate in this place, from the Australian Democrats and others, is caused by its behaviour in the House of Representatives. It is very bad for the people of this country and very bad for the country at large if a huge pile of legislation is railroaded through in a few hours at the end of the session. That has happened previously and I am sure it will happen again this time. That does not allow time for proper media commentary on the legislation or proper time for public consideration. It also begs the very awkward question for the Government-and this has been borne out by a number of things that have happened this session-that the Government prefers to bring up legislation when it will not be discussed in the Parliament or debated freely, when it will come on at a time when it knows perfectly well that the media are less likely to give it good coverage, as has happened with a number of important Bills recently, and when it is generally trying to evade the consequences of its actions. The purpose of this place is not, as Senator Grimes seems to think, to ram through Government legislation. A very good argument could be made that we have too much legislation. The Government ought to stop bringing in new legislation and should try to draw up some rescinding legislation to reduce the legal clutter in this country. For honourable senators to say that there should not be free debate on matters of importance-ministerial statements are matters of importance-is quite ridiculous. Anything presented to this Parliament is presented for its scrutiny. That is our purpose-to discuss and scrutinise in this place. To say that that should not happen is reducing the value of this place as an institution to zero. I agree with the comments of Senator Sanders. I am well aware that these matters should go to the Standing Orders Committee. I hope that the Standing Orders Committee from time to time takes some notice of debates in the Senate. The Standing Orders Committee certainly should look at the matters raised by Senator Grimes on behalf of the Government. We do have difficulties with the amount of speaking time. If one looks at the amount of time devoted to legislation and papers, which are the real world, compared with the interminable time taken up with matters of public importance and urgency motions, many of which are not of great significance, do not have any substance and do not affect the conduct of this Government one whit when they are passed, that might well be an area at which we should sincerely look when we consider how as a group we can make more effective the speaking time in the Senate. It is of not much use coming to us and saying that our people should not speak on ministerial statements and papers when at the same time we have an arrangement for supposed matters of public importance. They are not that at all, they are purely matters brought up to engage in debate, often with complete futility. This is a matter which has to pass and it is right and proper that the Government should look at any consequences and should cast the beam out of its own eye before it seeks to remove the mote in ours. Senator RYAN(Australian Capital Territory-Minister for Education)(6.12) —I seek to move an amendment to Senator Vigor's motion. I move: Leave out all words after `be' (first occurring), insert, `referred to the Standing Orders Committee.'. Senator MESSNER(South Australia)(6.12) —The comments made by Senator Grimes on this matter, the obvious haste with which it is being dealt with by the Senate and the points which have been raised in the course of the debate by Senator Sanders and Senator Mason indicate that this matter needs a little more detailed discussion by those who are directly involved in this area. Consequently, the Opposition believes that the suggestion from the Minister for Education (Senator Ryan) is worth supporting and we will support her amendment. Senator VIGOR(South Australia)(6.13) —In principle, I would be quite happy for all of these matters to be referred to the Standing Orders Committee. My understanding, from the short time that I have been here and looking back over the history of the Standing Orders Committee, is that referring a matter to the Standing Orders Committee is like referring it to oblivion. That is what the Minister for Education (Senator Ryan) is proposing. Senator Ryan —No, it is not. It is for further consideration. Senator VIGOR —I do not believe that it should be referred for further consideration. I would be quite happy if a timescale were specified for the Committee to report back to the Senate on the matter. I believe that to send a matter to the Committee and not to give a timescale for it to report back on it is quite unreasonable. I would be very happy for the matter to be considered by the Committee if the Committee had to report back to the Senate by, for example, the first day of the next group of sittings. Then we could consider the Committee's report in a debate, if we had an undertaking from the Government to do that. I believe that is extremely important. We have discussed this with the Opposition. The running of this chamber depends upon co-operation from all people here. I would be quite happy to co-operate with the Minister's proposal if she were willing to put that type of deadline in her amendment. I hope that the Opposition will support it. The ACTING DEPUTY PRESIDENT(Senator Coleman) —Senator Vigor, I want to clarify the day you referred to by which time you would want the Committee to report back to the Senate. Senator VIGOR —The first day of the February sittings. Senator RYAN(Australian Capital Territory-Minister for Education)(6.15) —I believe that, in referring the matter to the Standing Orders Committee, the Senate can expect a report, but I am not willing to put a date on it at this stage because I am not aware of the Committee's work load or what priorities it may have. It would be inappropriate for me on the spur of the moment to make a requirement of the Standing Orders Committee to report at any particular time, but my intention is that the Standing Orders Committee would report as it sees fit to the Senate. Question put: That the words proposed to be left out (Senator Ryan's amendment) be left out. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 53 Noes . . . . . . . . . . . 5 —— Majority . . . . . . . . . 48 —— Alston, R. K. R. Lewis. A. W. R. Archer, B. R. McClelland, DouglasAulich, T. MacGibbon, D. J. Baume, Michael McIntosh, G. D. Baume Peter McKiernan, J. P. Bjelke-Petersen, F. I. Maguire, G. R. Black, J. R. Messner, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Newman, J. M. Coates, J. Parer, W. R. Coleman, R. N. Ray, RobertColston, M. A. Reid, M. E. Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crichton-Browne, N. A. Ryan, S. M. Crowley, R. A. Sheil, G. (Teller)Devlin, R. Short, J. R. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Jones, G. N. Zakharov, A. O. Knowles, S. C. Haines, J. Sanders, N. K. Mason, C. V. J. Vigor, D. B. (Teller)Powell, J. F. Question so resolved in the affirmative. The PRESIDENT —Order! The question now is: That the words proposed to be inserted by Senator Ryan's amendment be inserted. Question resolved in the affirmative. Original question, as amended, resolved in the affirmative. Senator COONEY(Victoria) —I seek leave to withdrawn notice of motion No. 1 standing in my name for this day of sitting relating to the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 without giving notice under standing order 109a. Leave granted. Senator COONEY —Pursuant to the notice of intention given earlier today I now withdraw Business of the Senate notice of motion No. 1 standing in my name for disallowance of section 4 of the Co-operative Societies Amendment Ordinance (No. 2) 1986. I seek leave to make a short statement. Leave granted. Senator COONEY —Senator Lewis raised this matter this morning. I am indebted to him for doing my job when I was not here; he did it very efficiently. The Minister for Territories (Mr Scholes) has agreed to make the discretion in question subject to review. I have only now received the Minister's written undertaking. As is the Committee's usual practice, I seek leave to incorporate in Hansard for the information of honourable senators and others the Committee's correspondence in this matter. Leave granted. The documents read as follows- PARLIAMENT OF AUSTRALIA THE SENATE Standing Committee on Regulations and Ordinances 4 Sep. 1986 The Hon. Gordon Scholes, M.P. Minister for Territories Parliament House CANBERRA ACT 2600 Dear Minister At its meeting on 21 August 1986, the Committee considered the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 (A.C.T. Ordinance No. 10 of 1986 tabled in the Senate on 3 June 1986). The Committee seeks your advice on the reviewability of a discretionary administrative decision under the Ordinance. Section 14g deals, inter alia, with loan limits and securities to underwrite them. New sub-section 14ga (1) provides that a registered credit society shall not employ a person to value property tendered as a security unless the person has been approved by the Registrar of Co-operative Societies. The Registrar has a statutory discretion under sub-section 14ga (2) to approve a person ``subject to such conditions . . . as the Registrar thinks fit''. It would appear that appointment as a valuer could be an important commercial asset to a person in business as a valuer. Equally an unjustified exercise of the discretion not to appoint a particular, otherwise eligible, person could be a serious blow to a valuer's commercial standing and reputation. The Committee is inclined to the view that the exercise of this discretion should be subject to some form of control, possibly involving merits review by the Administrative Appeals Tribunal, in order to guarantee its preservation from the possibility of arbitrary or capricious influences. The Committee would welcome your comments and advice on this matter. Yours sincerely, BARNEY COONEY Chairman Parliament of Australia THE SENATE Standing Committee on Regulations and Ordinances 10 October 1986 The Hon. Gordon Scholes, M.P. Minister for Territories Parliament House CANBERRA ACT 2600 Dear Minister, At its meeting on 9 October 1986 the Committee gave further consideration to the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 (A.C.T. Ordinance No. 10 of 1986) about which it wrote to you on 4 September 1986. The Committee would appreciate having your views on another aspect of the Ordinance which is of some concern to the Committee under its Principles. New sub-section 14gh (1) provides that if a registered credit society suffers loss by reason of the society making an advance in contravention of this section, the members of the Board of the society who authorised the advance are jointly and severally liable for the loss. This provision places a very strict burden on the members of the Board who authorised an advance. The requirements of the section must be strictly observed in every case notwithstanding that, in so far as valuations of land and securities are concerned, the requirements of the section may not be capable of precise and certain identification before a loan decision is taken. This may be so since professional opinions as to the market value of freehold land or other securities may reasonably differ or be radically affected by sudden changes in the financial environment that are completely beyond the anticipation and control of the Board. It may be that the absolute and unchangeable value of land cannot be determined in advance. It may therefore, be extraordinarily difficult for Board members, personally and collectively, to carry a strict liability, regardless of any criminal wrong-doing, civil negligence or reasonable misjudgment for the total loss arising from a technical failure to comply with those sub-sections of the Ordinance referring to percentage relationships between the value of land or security and the amount of an advance (sub-section 14g (1f) and (1g)). It may lead to the gross undervaluation of land and securities and the over securing of advances in order to restore a more reasonable level of liability-risk for Board members. The Committee recognises that there may be compelling policy reasons for providing that certain co-operative societies, like credit unions, should be subject to very stringent controls in order to ensure that the assets of the members of those societies are very fully protected and that the actions of the Board are made very fully accountable. On the other hand, it is clear that members of Boards should not be subjected to potential legal liability which is unfair and unreasonable. The Committee seeks your views on whether the sub-section goes too far in imposing tight controls. The Committee asks whether there should not be some adjustment to provide a degree of immunity where the requirements of the sub-section are, in the first instance, strictly complied with. Such immunity might be reasonable where because of some unforeseen fault or change in the valuation of land or securities, compliance is rendered technically nugatory. In such a situation is it your intention that the members of the Board should individually and collectively carry the full loss? The Committee would appreciate your comments and advice on this aspect of the Ordinance as well as the question of review rights already raised with you. Yours sincerely, Barney Cooney Chairman MINISTER FOR TERRITORIES HON. GORDON SCHOLES, m.p. MEMBER FOR CORIO 17 October 1986 Senator B Cooney Chairman Standing Committee on Regulations and Ordinances Parliament House CANBERRA ACT 2600 Dear Senator Cooney, Thank you for your letter of 10 October 1986, in which you have expressed concern about a strict liability imposed on members of Boards of ACT credit societies who contravene the provisions of section 14g of the ACT Co-operative Societies Ordinance, introduced by the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 (No. 10 of 1986). It appears that the interpretation of section 14 set out in your letter may have overlooked some parts of the new section 14g. Sub-sections 14g (1f) and (1g) place percentage value limits on credit societies' loans. However these do not operate to make directors of the society liable for a loss occasioned simply by a decline, after the advance is made, in the market value of land. Such a liability would not arise in any case, whether a decline in value or an initial overestimate, where the directors acted bona fide, and on a valuation given by an approved valuer within three months before the advance, in lending funds up to the prescribed maximum limit. This is because in these circumstances the `value' of the land of which sub-sections (1f) and (1g) speak is defined as the `value' given in the valuation report, not the actual value: see sub-section (1j). The only circumstances in which a loss would be likely to involve liability under sub-section (1h) are where the directors acted without first obtaining a valuation report, or advanced more than the prescribed percentage of the value reported to them. In either case, even if the debt went bad immediately and completely, the directors would be liable for 10% at most, or, if mortgage insurance were obtained, 5% at most, of the loss. I do not think it unreasonable to impose such a liability. There is no statutory reserve fund for credit societies in the ACT, and the Government is not their lender of last resort as in the case of banks. I consider, therefore, that strict controls on the management of credit societies are necessary to secure the paramount policy objective of the Co-operative Societies Ordinance, the protection of societies' members. Indeed, provisions similar to section 14g already apply to building societies in the ACT and to building societies and credit unions in New South Wales. I understand that these provisions are not considered too onerous by the directors of these institutions, and that the risk of loss to the institutions is avoided by mortgage insurance. Yours sincerely GORDON SCHOLES MINISTER FOR TERRITORIES HON. GORDON SCHOLES, m.p. MEMBER FOR CORIO 17 October 1986 Senator B Cooney Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA ACT 2600 Dear Senator Cooney, I refer to your letter of 4 September 1986 concerning the Co-operative Societies (Amendment) Ordinance (No. 2) 1986 and the Registrar of Co-operative Societies's control of valuers employed by credit societies. The new section 14ga replicates section 14c, which has controlled building societies' choice of valuers since 1956. The Registrar's decisions in this area can conceivably involve highly subjective judgments on a valuer's professional competence, work record, and quality of service. The question is not whether someone should be allowed to practise as a valuer, but whether societies should be allowed to retain a particular valuer's services. The choice of a valuer is a society's commercial decision, subject to Registrar's sanction, which, I believe must be final; his position would be seriously weakened if it were not, as his power of supervision would effectively be transferred to the reviewing body. Before considering amending this Ordinance to provide for an appeal to the Administrative Appeals Tribunal against the Registrar's decisions under both sections, I would be grateful if the Committee would reconsider its attitude to this provision. It is my view that such an amendment would seriously jeopardise the Registrar's powers to protect the interests of the members of credit societies. I believe this is essential in order to maintain the proper level of authority of the Registrar. Yours sincerely GORDON SCHOLES Parliament of Australia THE SENATE Standing Committee on Regulations and Ordinances 23 October 1986 The Hon. Gordon Scholes, M.P. Minister for Territories Parliament House Canberra, ACT 2600 Dear Minister, At its meeting this morning the Committee considered your two letters of 17 October 1986 concerning the Co-operative Societies (Amendment) Ordinance (No. 2) 1986. The Committee thanks you for the attention you have given to these matters. The Committee is happy to accept your explanations concerning the drafting of section 14g of the Principal Ordinance which imposes certain obligations on members of the Boards of A.C.T. credit societies. The Committee acknowledges that your letter has allayed its concerns and we thank you for that. On the question of the Registrar's powers to approve the employment or retention of a valuer for the purpose of valuing securities, the Committee continues to feel some concern about the absence of any appeal right. A right of appeal against a refusal to approve a valuer or against the imposition of unfair conditions, could represent an important legal guarantee that approval decisions would always reflect and be seen to reflect the Registrar's high standards of competence and propriety. Indeed, as far as both the Societies and the registrar are concerned, a right of appeal to a public forum could add to, not diminish, the quality of nomination or approval decisions which are taken to protect societies. It would also, of course, protect the rights of valuers to be dealt with fairly on their professional merits. An alternative proposition discussed by the Committee was to remove completely the Registrar's discretion and simply provide that only professionally accredited valuers may act for societies. This suggestion arose from the analogy with solicitors, accountants and auditors who, as long as they remain accredited members of their respective professional associations, may be retained by societies on the basis of commercial judgments not usually liable to administrative approval. Implementation of this proposal may, of course, go beyond what you wish and the Committee would be happy to see an appeal right if this can be agreed. The Committee notes from your letter that you might be prepared to facilitate the Committee's concern in this matter. Yours sincerely, AUSTIN LEWIS Deputy Chairman MINISTER FOR TERRITORIES HON. GORDON SCHOLES, M.P. Member for Corio Senator Austin Lewis, Deputy Chairman, Senate Standing Committee on Regulations and Ordinances, Parliament House, Canberra, ACT 2600 Dear Senator Lewis, Thank you for your letter of today's date regarding the Co-operative Societies (Amendment) Ordinance (No. 2) 1986. I do not accept your premise that a right of appeal against the Registrar's powers to approve the employment or retention of a valuer necessarily improves the quality of this Ordinance. In fact, I would suggest that such a right of appeal materially weakens the Registrar's position and could conceivably work to the detriment of co-operative society members. That said, I will agree, under protest, to the inclusion of such a right of appeal. I would, however, be seeking as soon as possible to ensure that the Registrar is clearly dissociated from the actions of any valuer who is appointed by means of an appeal process which overturns the Registrar's initial decision in the matter. Yours sincerely, GORDON SCHOLES 23 October 1986 Senator REID(Australian Capital Territory) —Pursuant to notice of intention as given earlier this day I now withdraw Business of the Senate notice of motion No. 5 standing in my name for the disallowance of the Co-operative Societies (Amendment) Ordinance (No. 2) 1986. This relates to the same matter Senator Cooney has just addressed. I spoke briefly on it this morning. Debate resumed from 29 February 1984, on motion by Senator Haines: That the Bill be now read a second time. Senator MASON(New South Wales)(6.26) —Mr President, I had hoped that we would have had a little more time to debate this very important Bill, the Trade Practices Amendment Bill. It sounds dry enough to begin with but in fact it is a Bill brought forward by the Australian Democrats, through Senator Haines, some years ago which is designed to give some recourse to people who are sold cars which are lemons. In other words, from time to time in the ordinary process of the manufacture of motor vehicles, cars come off the production line containing a large variety of faults. Very few people in the community have not had the experience, or do not have friends who have had the experience, of owning a car which through its guarantee phase caused interminable trouble, which was taken back to the agents again and again and then at the end of the guarantee phase was still a bad vehicle with which the owner had been lumbered. The purchase of a new motor vehicle is an expensive business for the people of this country and the Democrats think it is time this Bill was brought to its conclusion. I am sorry we will not have time to debate it fully today. We should do what the Connecticut legislature in the United States has done and provide for a definite recourse so that when a major motor manufacturer, which after all would not be an organisation short of money, sells someone a lemon it should be required to do something about it. In the terms of Senator Haines's Bill manufacturers would be required to give these people a new car or make a payment of an amount equal to the transaction when the consumer first acquired it, possibly taking into account some depreciation, if on no less than four occasions an authorised service agent has been given the job of fixing some mistake in the car, something which is wrong with it, and that defect has not been satisfactorily remedied. That is the first condition. The second is when the vehicle has been out of service for more than 30 days, whether a continuous period or not, by reason of any defect or defects to which the warranty is applicable during its warranty phase. We think they are very reasonable propositions. It is something which the people of this country want, and which they have every right to require. Unfortunately this country has produced in the past some of the worst, most expensive and dangerous motor vehicles in the world. Even now it is impossible to guarantee that an example of a good model will be a good machine because it takes only some sort of error or difficulty, or maybe even just one incompetent or inexperienced worker along the production line, to have a quantity of motor cars coming out with defects which cost the unfortunate new owners thousands of dollars after the guarantee has expired. At present they have no recourse whatsoever. The Bill has another important function. While the present situation exists, the motor industry can afford to be lazy, it can afford to be incompetent and not care too much so that when these poor unfortunate people come back the agent can say with impunity that the cars all make that noise, that it does not make the noise when he drives it, that it will go away soon or that the owner should either change his driving habits or ignore it. That is not good enough and we feel the industry should be compelled not to allow it to happen. Those involved are not doing it voluntarily. It is essential that this Bill come on for debate again as soon as possible. I seek leave to continue my remarks later. Leave granted; debate adjourned. The PRESIDENT —Order! It being 6.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 6.30 p.m. until 2 p.m. on Tuesday, 11 November 1986. The following papers were tabled: Audit Act-Regulations-Statutory Rules 1986 No. 297. Australian Federal Police Act-Regulations-Statutory Rules 1986 No. 299. Banking Act-Regulations-Statutory Rules 1986 Nos 302, 303. Excise Act-Regulations-Statutory Rules 1986 No. 295. Extradition (Foreign States) Act-Regulations-Statutory Rules 1986 Nos 294, 304. Dried Vine Fruits Equalization Levy Act-Regulation-Statutory Rules 1986 No. 298. Judiciary Act-Rules of Court-Statutory Rules 1986 No. 2 No. 290. National Gallery Act-Regulations-Statutory Rules 1986 No. 296. Navigation Act-Regulations-Statutory Rules 1986 No. 300. Protection of the Sea (Prevention of Pollution from Ships) Act-Regulations-Statutory Rules 1986 No. 301. Seat of Government (Administration) Act-Ordinances 1986 No. 6- No. 63-Legal Aid (Amendment). No. 64-Police (Amendment). No. 65-Nature Conservation (Amendment). Veterans' Entitlements Act-Statements (2) by the Minister under sub-sections 91 (2) and 105 (2), dated 8 October 1986 and 9 October 1986. The following answer to a question was circulated: (Question No. 1437) Senator Morris asked the Minister representing the Minister for Social Security, upon notice, on 14 October 1986: What provisions will apply under the proposed Child Support Agency Scheme (a) when a parent having custody of a child gives actual custody (whether lawfully or not) to another person not being the other parent; and (b) when custody of the child is disputed. Senator Grimes —The Minister for Social Security has provided the following answer to the honourable senator's question: The Government will not be making final decisions about the child support scheme until its consultations with the community are completed. As the honourable senator may be aware, many social security benefits and pensions such as family allowance and supporting parent's benefit, are paid primarily on the basis of who has the daily physical care of the child. The Government is considering whether this would be an appropriate basis for the entitlement to child support.