Tuesday, 11 November 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That there is a need for an Independent and Multi-Cultural Broadcasting Corporation to give a firm legislative and financial basis for the SBS Network. Your petitioners most humbly pray that the Senate, in Parliament assembled should pass Senator Vigor's Bill with all expediency. And your petitioners as in duty bound will ever pray. by Senator Haines (from 16 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: 1. That over 67,000 men, women and students enjoy the pursuit of their sport and recreation every year at the Anzac Rifle Range at Malabar and have done so since 1967. 2. The people of Sydney through their membership of 41 clubs headquartered at the Anzac Rifle Range together with a number of other community, school and commercial groups, the police and armed forces will lose this community facility if the Federal Government proceeds to sell the Range to private developers. 3. The Australian Bicentenary Fullbore Rifle Championships are to be conducted at the Anzac Rifle Range in April 1988 as part of the celebration of Australia's Bicentenary. Your petitioners most humbly pray that the Senate in Parliament assembled should ask the Federal Government to retain the Anzac Rifle Range for the continued use and enjoyment of the people of Australia. And your petitioners as in duty bound will ever pray. by Senators Sir John Carrick (from 217 citizens), Gietzelt (from 248 citizens) and Sibraa (from 186 citizens). To the Honourable the President and members of the Australian Senate in Parliament assembled. We, the undersigned residents of Western Australia, object strongly to the fringe benefits tax which is a further and unnecessary burden on the average working person. We your petitioners humbly pray. by Senator Withers (from 2,752 citizens). We, the undersigned concerned Australian citizens hereby petition the Honourable Senators to totally reject the current proposals for an I.D. Card and the proposed Data Protection Agency. We believe that they represent potentially undesirable interference in the lives of honest Australians. Provisions for protection of individual privacy cannot be guaranteed as Statutes are easily altered by future Governments. We believe that there are more efficient methods to prevent fraud in the areas of taxation and social security without the use of these two proposals, which go well beyond the reach of the true role of democratic government, i.e. That citizens may live quiet and peaceable lives. The I.D. Card and Data Protection Agency have strong potential under this or future administrations to interfere with the quiet and peaceable lives of its subjects. We your humble petitioners in duty bound ever pray. by Senator Haines (from 18 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned, wish to protest about the guidelines set by the Department of Community Services and approved by Senator Grimes, as quoted in The Sun newspaper on 1st October 1986, inter alia: `In a September 16 letter to Mallee MP Mr Peter Fisher, Senator Grimes said: ``I have recently approved guidelines which state that food vouchers should not be endorsed in any way which restricts the client's freedom of choice (e.g. No Alcohol, No Cigarettes, No Pet Food). Only in exceptional circumstances and with the express approval of the Commonwealth Department of Community Services will such practices be sanctioned.'' ' We believe the guidelines distort the true aim of the food voucher, the issue of which as emergency relief surely is to ensure the provision of food for human consumption for a person in necessitous circumstances. To enable the drugs of nicotine and alcohol to be provided must be detrimental to the health of that person and the welfare of any dependents and we believe that taxpayer's money should not be used to increase the drug problem in the community. We urge the Government to support those Agencies providing food vouchers and to revise these guidelines so that such vouchers will be for the provision of food only. Any person has freedom of choice to accept or reject such a voucher. by Senator Grimes (from 72 citizens). To the President and members of the Senate in Parliament assembled. The petition of the undersigned Australian citizens respectfully showeth: That we are vigorously opposed to the Governments intention to double the cost of prescriptions from $5.00 to $10.00. This will cause extreme hardship to a great many Australians already struggling to meet the high cost of medicines and medical services. We request that you seek revenue elsewhere and leave the cost of prescriptions at an affordable cost to every Australian. And your petitioners as in duty bound will ever pray. by Senator Coleman (from 56 citizens). To the President and honourable members of the Senate of Australian Parliament assembled. The petition of the undersigned residents of Australia respectfully showeth: By cutting ESL funding and eliminating funding for community languages and multicultural education you have attacked tens of thousands of Australian children. You have condemned these children with limited English to gross educational inequality and very dim prospects for their future. On behalf of these children we call on your to remove this new discrimination which your budget has guaranteed by immediately restoring ESL and Multicultural education funding. by Senator Sibraa (from 171 citizens). Petitions received. The PRESIDENT —For the information of honourable senators I table correspondence I have received concerning a petition relating to the social and educational needs of all Australians, which was presented to the Senate on 8 October 1986. Copies of the correspondence may be obtained from the Senate Table Office. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act relating to the payment of subsidy in respect of certain fertilisers. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to provide for the payment of bounty on the production, by way of repair, of certain ships. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to amend the Navigation Act 1912. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: That the Senate expresses its condemnation of the Australian National Gallery for planning the opening of a bookshop, officiated over by Mr Gough Whitlam, a previous Prime Minister of Australia, at 11 a.m. on 11 November 1986-the time which is reserved for the remembrance of the Australians who died in the service of their country in the 1914-1918 war. Senator GRIMES(Tasmania-Minister for Community Services) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act relating to the provision of services for persons with disabilities. Senator GRIMES(Tasmania-Minister for Community Services) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to enact certain transitional provisions and make certain amendments in consequence of the enactment of the Disability Services Act 1986, and for other purposes. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) recognising that petrol sniffing in some Aboriginal communities is reaching epidemic proportions, supports the special task force, comprising Federal and State government representatives, in its decision to take immediate action to combat this problem; and (b) in the interests of fostering informed and useful discussion of the means of dealing with petrol sniffing in Aboriginal communities, urges the Federal Government to bring on for debate the motion, of which Senator Kilgariff gave notice on 13 February 1986, that the Senate take note of the report of the Senate Select Committee on Volatile Substance Fumes, and at that time, give the Federal Government's response to the Senate Select Committee's report. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Tax Expenditures Statement-together with the text of a statement relating to the document. 2. Policy Co-ordination Unit-annual report 1985-86. 3. Snowy Mountains Council-annual report 1985-86. 4. Papua New Guinea Superannuation Scheme-annual report 1985-86-pursuant to section 21 of the Papua New Guinea (Staffing Assistance) Act 1973. 5. Review of the Australian Atomic Energy Commission-report. 6. Reconditioned automotive engines-Industries Assistance Commission report. 7. Interim report on citrus fruit-Industries Assistance Commission report. 8. The rice industry-interim report-Industries Assistance Commission report. 9. Outlook for the aviation industry-information paper. 10. Accident statistics for the 1985-86 financial year-Australian National Railways Commission document. 11. Community Law Reform for the Australian Capital Territory: Second report-loss of consortium and compensation for loss of capacity to do housework-Law Reform Commission report-pursuant to section 37 of the Law Reform Commission Act 1973. 12. The human rights of Australian-born children whose parents are deported-Human Rights Commission report-pursuant to section 30 of the Human Rights Commission Act 1981. 13. National Debt Commission-annual report 1985-86-pursuant to section 18 of the National Debt Sinking Fund Act 1966. 14. Price Surveillance Authority-annual report 1985-86-pursuant to section 44 of the Prices Surveillance Act 1983. 15. Primary Industry Bank of Australia Limited-annual report 1985-86-pursuant to section 10 of the Primary Industry Bank Act 1977. 16. The training of skilled workers in Singapore, Malaysia and Negara Brunei Darussalam-report of the Australian tripartite mission to study the training of skilled workers in the metal and electrical trades. 17. Australia's population trends and prospects 1986-report. 18. Australian Federal Police-annual report 1985-86-pursuant to sub-section 67 (2) of the Australian Federal Police Act 1979. Senator CHANEY —Does the Minister representing the Treasurer agree with Senator Graham Richardson that access to low interest loans by Commonwealth Bank employees has compensated them for the fact that the average salary of $18,000 a year is below the level of average weekly earnings? Is Senator Richardson correct in saying that the current wage regime does not permit pay increases which would make up for losing such a loan; that is, if the bank were to cash out the benefit? Will the Government, as urged by Senator Richardson, do something about these employees who are suffering from the fringe benefits tax and yet, as he points out, are at the lower end of the salary scale, or does the Minister lump these workers in with those he describes as the `bleaters, whingers and former tax evaders', whom he claims are the only real opponents or victims of the fringe benefits tax? Senator WALSH —I heard the Treasurer answer a question like that on the Australian Broadcasting Corporation news last night and I have nothing to add to what the Treasurer said. Senator ELSTOB —Has the Minister for Industry, Technology and Commerce seen a report in the Australian today which refers to comments made by the Chairman of Austec International Ltd, Mr Leslie McNeill, about comparative taxation rates in Australia and the United States of America? Does the Minister agree with Mr McNeill that the much higher corporate and personal taxes in Australia mean that shareholders are losing out on benefits that could be obtained if the company moved its operations to the United States? Senator BUTTON —The remarks made by Mr McNeill have been drawn to my attention. In fact, as the Press reports indicate, I had a discussion with Mr McNeill some time ago about these matters. But I would like to use the opportunity of his public comments to correct some misapprehensions. Australia's business tax regime compares favourably with those of other industrial countries. Taxation paid as a proportion of gross operating profit is 18 per cent below the Organisation for Economic Co-operation and Development average of 21 per cent. A major reform of the Australian taxation system is being introduced, which includes new measures to encourage productive investment. This reform has enhanced Australia's attractiveness to foreign investors at a time when other countries, such as the United States and Canada, are taking away tax concessions currently enjoyed by business. This Government is responsible for the most significant reform in taxation in Australia-company profit tax. State and local governments in Australia impose only minor charges compared with what is charged elsewhere, particularly in the United States. The most significant of those is State payroll tax based on salaries of employees. Australia's corporate tax rate will, of course, be increased next year to a flat rate of 49 per cent but the overall burden of taxation on the corporate sector will fall with a number of factors accompanying that increase to 49 per cent. Those factors are: Firstly, the introduction of an imputation system to abolish double taxation of company profits; secondly, the abolition of a 15 per cent withholding tax on dividends repatriated overseas; and thirdly, the abolition of branch profits tax. These reforms offer particular benefits to overseas investors. Other attractive features are an extremely generous 150 per cent research and development taxation concession, and favourable depreciation allowances providing a write-off for most plant and equipment over five years, with that being accelerated in respect of certain equipment, such as computers, where depreciation has accelerated to three years. The overall impact of the Australian system is highly attractive for investments in manufacturing industry and the results of a hypothetical investment case study comparing the taxation regimes of Australia, Japan, Canada and the United States show that, under existing arrangements, Australia ranks second to Canada. With the introduction of planned changes to the tax system, of all the countries, Australia takes the top position. I put those matters on the record because, as I say, they have been a matter of public comment by Mr McNeill. I will certainly write to him in relation to the matters which I have dealt with in this question. Senator COLLARD —I refer the Leader of the Government in the Senate to comments by the Treasurer on Australian Broadcasting Corporation radio in Perth last week when, after claiming that the Government had made all the changes it thought necessary to the fringe benefits tax, he said: But if there were some issue to come up which we have not seen in this review and have not seen in the original design of the thing, well of course, like any other piece of law, we're prepared to amend it. Has the Government completely closed the door on the prospect of further change or modification to the fringe benefits tax, as the Treasurer's thumbs down to Senator Richardson's comments seems to indicate, or is the situation as described by Mr Keating in Perth; that is, if further unintended consequences are identified, the Government will be prepared to consider change? Senator BUTTON —The emphasis on what the Treasurer has said at all times is on the expression `unintended consequences'. In his answer given in Perth the Treasurer was probably referring to the fact that in reviewing the fringe benefits tax the Government revitalised a review body which was established, I think, for the first time in 1984 and which is a consultative mechanism between tax consultants and accountants representing the peak bodies of those professions and the Australian Taxation Office. That is an ongoing mechanism to review details of tax administration and so on. I think that is what the Treasurer was referring to. Anything the Treasurer said on Thursday of last week-I think that is the date the honourable senator referred to-cannot in any way be assumed as involving the Government in a review of the principles of the fringe benefits tax in any way. Senator MAGUIRE —Has the attention of the Minister Assisting the Prime Minister for Public Service Matters been drawn to comments on administrative reform by the present Leader of the Opposition over the weekend at his poorly attended and totally inappropriately named `Preparing for Government' conference at Thredbo? If so, can the Minister provide an assessment of the economies which could be achieved if Mr Howard's proposals for an economic super- ministry were implemented? Was it in fact the Fraser Government which split the then Department of the Treasury into the Department of the Treasury and the Department of Finance? Senator WALSH —I have seen the comments referred to. Senator Maguire is, of course, correct that when the previous Labor Government was in office there was a Treasury department which encompassed all the functions which Mr Howard now proposes that four Ministers altogether should deal with. When the Fraser Government was elected, the functions previously performed entirely within Treasury were divided into Treasury and the Department of Finance. I gather from Mr Howard's half-baked proposals which he released at Thredbo last weekend that he proposes to double that number again. At that rate we would have 1,000 economic departments after another nine new Liberal governments had been elected, but I expect it will take a very long time for one new Liberal government to be elected, let alone nine. I think it is worth noting that the policy which Mr Howard was floating in a half-baked form, which is typical of most of the policies which the Opposition has or does not have, was obviously not very well thought through. He said there was going to be an economic supremo who I presume will be Mr Carlton-it is difficult to imagine Mr Carlton as the commanding officer of any battalion but apparently that is what he has in mind-with three other Ministers, a Minister for expenditure, a Minister for taxation and a Minister for, would you believe, other bits and pieces. What the other bits and pieces are is a matter on which anybody can speculate for his own satisfaction, but it demonstrates just what a half-baked proposition the beleaguered Leader of the Opposition produced for the two-thirds of his troops, or whatever it was, who turned up for the Thredbo weekend. I certainly hope that the group which Mr Howard has working on his version of the fringe benefits tax has thought through its policy position somewhat more coherently than he obviously has on public administration and the administrative orders. It can be presumed that Mr Carlton will be the commanding officer of this little squad of economic Ministers, and I suppose that Senator Messner will be one of the sergeants-that is, unless Senator Michael Baume manages to displace him from the front bench before that happens. I do not think there is really much more that I need to say. I think the point is made quite adequately out of Mr Howard's mouth; that is, he envisages setting up as one of the sergeants in this little squad, of which Mr Carlton will be the CO, a ministry for looking after bits and pieces. I think that really says it all. Senator SANDERS —My question is directed to the Minister representing the Minister for Arts, Heritage and Environment. Given the fact that National Estate listed, environmentally sensitive forest areas near Jackeys Marsh, Tasmania, are being logged at this very moment, I ask: Firstly, will the Government take immediate action to protect this part of the environmental heritage which belongs to all Australians? Secondly, if not, when will the Government take action? Thirdly, what action will the Government take? Fourthly, how will it implement this action, that is, through the courts or by other means? If it is done through the courts, on what grounds? If by other means, what are they? Senator RYAN —The memorandum of understanding on Tasmanian woodchip exports establishes a process of consultation designed to promote the conservation and development of forests, ensuring that the industry operates efficiently while recognising proper environmental concern. On 21 October this year the Australian Heritage Commission announced its decision to list Jackeys Marsh-Quamby Bluff on the National Estate register. This important decision triggers consideration of how National Estate values will be taken into account by the Tasmanian Forestry Commission. This point is acknowledged by Mr Gray in his telex to the Minister for Arts, Heritage and Environment on 7 November in which he refers to steps taken by the Tasmanian Forestry Commission under clause 27, namely, that the Forestry Commission has sought further advice on registered values. The fact is that the Tasmanian Forestry Commission did not seek that information until logging had recommenced in Jackeys Marsh. The Tasmanian Government, therefore, has authorised logging and the possible destruction of National Estate values before the process of discussion on how those values might be protected has had a chance to take its course. The Tasmanian Government's action is pre-emptive and highly provocative, and shows a blatant disregard for the environment. The National Estate values identified by the Australian Heritage Commission include great diversity of plant communities, rare threatened plant species, outstanding aesthetic value, archaeological sites and rainforest. These are the criteria that need to be explored. Mr Cohen has called upon Mr Gray to stop logging in the area until the process of consultation has been allowed to take its full course. That is the first step we have taken. The Commonwealth's Advisory Committee on Tasmanian Forestry Operations is due to report on Jackeys Marsh within three weeks, and the Australian Heritage Commission is expected to complete its detailed work on National Estate values within two weeks. In the view of our Government, Mr Gray should cease logging in this area while the process of consultation and dispute settlement outlined in the memorandum of understanding takes its course. Senator Sanders's question concerned itself at some length about what further steps we would take. At this stage I will say that I have outlined our position on it, and we hope that now Mr Gray will respond to our requests to cease logging and to have the proper process of consultation which is provided for in the memorandum of understanding and which is required as a result of the area being declared a part of the National Estate, and that it will not be necessary for the Federal Government to take further steps of a legal kind outlined in Senator Sanders's question. Senator SANDERS —I ask a supplementary question. Might I take it, then, that the Federal Government will not intervene to save the trees at Jackeys Marsh today, tomorrow or in the near future? Senator RYAN —Nothing in the answer I gave should leave Senator Sanders with the conclusion that we would do nothing, but at this stage we believe it is still possible to have the appropriate discussion, to receive the reports, to establish what the National Estate values are and then to proceed to agree on what logging, if any, can take place within the framework of those National Estate values. We have not got to that stage yet, but I hope that we will be able to resolve this matter in a co-operative fashion. Senator McKIERNAN —I refer the Minister for Education to the implementation of the higher education administration charge. I ask: Is the Government making any attempt to assist in the implementation of the charge so as to avoid disruption to institutions and students? Secondly, can the Minister advise the Senate what steps have been taken by the Government to assist needy students, and is it true to say that any students unable to pay the charge will be denied access to an institution? Senator RYAN —Yes, the Government has taken a number of steps to ensure that the introduction of the administration charge and its administration are handled with minimum effect on students, particularly those who are required to pay the charge. That is not all students, of course, but some students will be required to pay the charge. We hope that the administration of the charge will be such as to minimise the impact on them. My Department and the Tertiary Education Commission have had discussions with the Australian Vice-Chancellors Committee and the Australian Committee of Directors and Principals in Advanced Education, following which guidelines have been developed and forwarded to all higher education institutions to assist them in the smooth introduction of the administration charge. In particular, institutions have been informed of the fact that they should not take any steps to collect the charge until the legislation has passed through both Houses of Parliament and has received royal assent. It was necessary for us to instruct the institutions in that fashion because some institutions had, in a pre-emptive fashion, started to require the charge. They cannot do that until the legislation is passed and has received royal assent. The legislation does not specify any timing for the payment of the charge, so I am encouraging institutions to defer collecting the charge from students who are eligible for Austudy until they have received their Austudy payment with the $250, which will be probably February for continuing students and March for newly-enrolling students. There is, as far as I can see, no reason why institutions cannot defer the levying of the charge until that point. This would certainly assist all of those students who are in fact needy enough to have the $250 given to them in their Austudy payment. It is also important that honourable senators know that I have informed institutions that the legislation will not prevent them from providing a refund where a student has enrolled and has subsequently withdrawn or transferred to another institution. As well as that, I have informed the Senate on a number of occasions-and, of course, the institutions are very well aware of this-that the institutions have received from the Commonwealth quite substantial loan funds, about $11m in all, covering higher education institutions, and we have asked them to make loans available to needy students who are eligible to pay this charge but who are not able to get the $250 together at the beginning of the year. In this way, if the institutions co-operate with this measure, there should be no real obstacle in the way of any student enrolling in a course for which he or she is eligible. Senator MESSNER —I refer the Leader of the Government in the Senate to the two recent admissions by the Treasurer that the Government did not impose the fringe benefits tax directly on those who received the benefits because it feared the response of unions to such an action. How can the Government justify imposing the tax directly on small businessmen, farmers and other self-employed people when it declines to do so for the vast bulk of wage and salary earners? Senator BUTTON —I have not seen that comment by the Treasurer, and it would be helpful if Senator Messner could draw my attention to where it appears. In respect of most large employers, the administrative difficulties which would be encountered with the fringe benefits tax would be encountered even if the tax were imposed directly on the employee. It is the most satisfactory method of collecting the tax in the case of large employers. In regard to small business, as a result of the review of the tax and the ironing out of the so-called unintended consequences, which lifted the ceiling from $200 to $500 in respect of matters which had to be taken into account, I believe that the burden on small business is probably considerably alleviated. Insofar as it is an administrative matter, as I indicated in answer to an earlier question, the Government will continue to monitor the position. Senator COLEMAN —I direct my question to the Minister for Veterans' Affairs. It relates to the confusion in the minds of some members of this Parliament, and, if the correspndence being received in my office is any indication, in the community as well, relating to Budget decisions regarding defence force retirement and death benefits. Will the Minister outline the changes announced in the Budget to the defence force retirement and death benefits pension and to the service pension and what steps he is taking to minimise the concern of recipients now and in the future? Senator GIETZELT —It is true, as Senator Coleman suggested, that there is a degree of confusion about the terminology relating to service pensions and I have drawn this to the attention of the Armed Forces Federation as well as some ex-service bodies. The confusion often arises when statements are made on defence force retirement and death benefits, which come under the Minister for Defence and not under the Veterans' Affairs Department, because of the somewhat casual use of the words `service pension' in Press statements and generally in the media. This occurs from time to time when changes are made to defence force retirement and death benefits payments which the media may refer to as reductions or increases in service pensions. Confusion then arises about the service pension which is paid by my Department to some 400,000 people. They are, of course, two separate pensions. Confusion is created and alarm and anxiety result from the use of the words `service pension'. As a result of an examination of problems that have occurred recently, I have discussed with the Secretary to my Department whether service pensions paid by my Department should be referred to as war service pensions to distinguish them from service pensions paid to servicemen who have retired from peacetime service. There is confusion in the area. Of course, the service pension is related to war service and is paid only to those persons who have faced hostile forces. Consequently, perhaps there is a need to define the term more clearly. We are now examining the possibility of changing the terminology in the legislation so as to define my service pension, which is still growing, as a war service pension as distinct from the service pension paid under the DFRDB legislation. Senator WATSON —My question is directed to the Minister representing the Minister for Primary Industry. I refer to the appendix in the memorandum of understanding signed by the Tasmanian Premier and the Minister for Primary Industry concerning the conditions of approval for woodchip export. I specifically refer to the section which covers the Jackeys Marsh-Quamby Bluff area in these terms: Forest operations will be in accordance with management guidelines as indicated in the environmental impact statement on woodchip export and in the Jackeys Marsh-Quamby Bluff EIS. In its dispute with Tasmania over logging at Jackeys Marsh, does the Commonwealth Government claim that operations are not being carried out as stipulated in the EIS? If not, why does the Prime Minister claim that the memorandum of understanding is being breached? Senator WALSH —Senator Ryan has already given a pretty comprehensive answer on this question. On the actual specifics of what is in the memorandum of understanding, I do not think that it will surprise anyone to hear that I am unable to recite that from beginning to end. Therefore, I do not know what is in the particular section to which Senator Watson refers. If there is anything to add to the answer that Senator Ryan has already given, I will contact the Minister for Primary Industry and ask him to supply it. Senator FOREMAN —My question is directed to the Minister representing the Minister for Trade. No doubt he is aware of the results of the United States elections which have given the Democrats control of the Senate. Amongst the newly elected senators there appears to be a strong sentiment for trade protection and subsidy which could be very damaging to Australia. What steps will this Government take to point out to the United States Government and the Senate the effects that such policies will have on allies such as Australia? Does the Government believe that a renewed effort must be made in the light of the United States elections? Senator BUTTON —It is true that a conclusion which can be drawn from the United States election is that it is likely that the United States Congress will, for the time being at least, become more protectionist as a result of the Democrats having control of the Senate. This is a view which is held by the Australian Government, although it is too early yet to say whether legislation in support of these policies will emerge. It is a view which is also held by the Japanese Government and which was conveyed to me last week when I was in Japan. Having said that, I should point out that it is probably too early to rush to a judgment on these issues. For example, the United States textile and clothing industry Bill, which was brought into the House I think 18 months ago, was dealt with in May of this year for the second time. Since that measure was last before the Congress, the new version of the multi-fibre agreement has been ratified internationally, which may well offer some comfort to the United States industry and may result in that Bill not being pursued. It is too early to make a judgment on a number of issues relating to these matters. Senator Foreman points out in his question that Australia has a lot at stake in the trade policies which the United States Congress adopts. We, as a government and as a people, will have to remain very active and vigilant and try to maintain as high a profile as possible in Washington in order to ensure that our trading interests are taken into account as much as possible. The Minister for Trade will visit the United States again in February, particularly in relation to the wheat question, and there is a program for an inaugural meeting of the proposed Australia-United States ministerial consultations on trade which will be held in Australia in March. By that time we should be in a better position to judge the future direction of United States trade policy and the policies which might be adopted to counter any moves that are contrary to the interests of Australia. As well as direct problems in our bilateral trade with the United States, we have the general long term objective to moderate United States agricultural trade policies by negotiation of effective international rules governing agricultural trade. Then we would hope to see an end to the farm subsidies war between the United States and the European Economic Community, which is having such an adverse effect on world prices and on Australian commodity prices in agriculture generally. The meeting of trade Ministers at Punta del Este in Uruguay was in a sense a step in the right direction in terms of trade liberalisation generally. In summary, let me say that, while there is ground for concern as a result of the United States elections, it is probably too early to make a definitive judgment about the directions that the United States will follow. In the meantime, the Government and industries in Australia have to keep a very close watch on what is taking place. Senator NEWMAN —My question is also directed to the Leader of the Government in the Senate. Is the Government considering a change to the eligibility criteria for the Tasmanian freight equalisation scheme? Is the Government looking at ways of using the scheme as a lever on Associated Pulp and Paper Mills Ltd, as suggested by Minister Kerin and currently being investigated by Minister Morris and Attorney-General Bowen? Does Senator Button not agree that this must lead to great uncertainty and instability for all investment and all employment in Tasmania? Will eligibility in future depend upon the political pliability of applicant companies to the will of the government of the day? Senator BUTTON —The answer to the last part of the question is no. The answer to the earlier parts of the question is that I do not know; I will make some inquiries and provide an answer as soon as possible. Senator COLSTON —I direct a question to the Minister representing the Minister for Communications. Is the Minister aware of an article entitled `Queensland Government woos the outback with TV', published in the Australian Financial Review of 28 October, in which the Queensland Government outlined its plans to spend $250,000 on a currently illegal plan to provide a commercial television service to outback Queenslanders? Does the Minister agree with comments made in this article by the Queensland Minister for Northern Development, Mr Katter, that the Federal Government might meet half of the cost of the $500,000 project? Can the Minister explain why the proposed project would not meet Federal Government legal requirements? Further, does the Minister regard this project as feasible or does he agree with the assumption made in the article that the proposal is nothing more than meaningless electioneering? Senator WALSH —The answer to the last line of the question is yes; it was clearly a piece of election stunting by Mr Katter. I heard him directly a couple of weeks ago at Kununurra pulling the same stunt. But no submission has been received by the Government on this issue; so any answer given presupposes that the report in the Australian Financial Review was completely adequate and accurate. With that caveat, I am advised by Mr Duffy that the article suggested that the Queensland proposal is illegal. Of course, the Federal Government would not have anything to do with illegal activities, whatever the Government of Queensland might do. I am sure that Senator Colston is aware that the remote areas of Queensland will soon be served by a remote commercial television service provided by the Aussat satellite; that is, a properly licensed broadcasting service. The licensee, Queensland Satellite Television, is expected to commence transmissions about the middle of next year. Queensland Satellite Television has already lodged planning proposals for the rebroadcasting facilities that will be established in some 25 locations. The remote commercial television service will be available to all people in remote areas of Queensland, including those homesteads and stations. In addition to those towns that will be provided with rebroadcasting facilities by the RCTS licensee, other communities may establish their own licence facilities under the Government's self-help broadcasting reception scheme. Whilst the proposal described in the article is technically feasible, I am advised by Mr Duffy that he has not received a proposal from the Queensland Government and that, therefore, he is unable to comment on it in any more detail. I do not expect, actually, that he will receive a proposal. Senator BJELKE-PETERSEN —I direct my question to the Minister for Industry, Technology and Commerce, who is responsible for the Australian Customs Service. I draw his attention to the Australian Customs Service proposal to centralise Customs clearances at Sydney and Melbourne at the expense of the port of Brisbane. Is the Minister aware that, if the proposal for importers to clear cargo in Sydney goes ahead, total job losses of some 405 personnel will occur in the Brisbane port region? Does he appreciate the fact that such a proposal would prove a serious threat to the long term prospects of the Brisbane port facilities at Fisherman Island and the Hamilton wharves? What are the Minister's comments on suggestions that the move would cause a serious cost and trading threat to Queensland industry through unacceptably long delays in the movement of cargo ex-Sydney as the level of congestion in that port escalates? What is the Government's intention in this very important matter? Senator BUTTON —I am fully aware of the proposals relating to the integrated cargo control and clearance system. I am also aware of all sorts of wild allegations that have been thrown about on this issue by Customs agents in Brisbane. I can only utter a word of caution about relying on the figures which are in Senator Bjelke-Petersen's question. The purpose of the integrated cargo control and clearance system is to enable Customs and Customs agents to process goods coming through the ports of Australia much more quickly than they have ever been able to do in the past. It is to enable advance notice to be given by shippers, by telex or other electronic means, of goods coming through ports, and to enable the clearances to be made very quickly on a more centralised basis. When I say `a more centralised basis', that does not mean that the centralised port will necessarily be Sydney, for example, as alleged in the question. In fact, it is quite likely that it will make no difference to ports such as Brisbane, and so on. I understand that, as with any change to a system such as this, which is, in the Government's view and in the view of a committee which has examined the question, of great significance to Australian industries as a whole in improving our competitive performance, nonetheless there are fears and concerns about the introduction of a changed system. I would also add that, because of these concerns, nothing will be implemented in any great haste. Indeed, the Australian Customs Service will be providing all interested organisations with a discussion paper and an opportunity to comment on that paper before any further steps are taken along the course which has much to recommend it in terms of the services which can be offered to Australian industry generally. I summarise my answer to the question by saying that there are many concerns which I believe to be misplaced and many concerns in relation to which there will be time to work matters out and these will be expressed in the course of comments on the discussion paper regarding this matter which the Customs Service will distribute. Senator ZAKHAROV —I direct my question to the Minister for Community Services. It relates to nursing home benefits payable in Victoria. Has the Minister's attention been drawn to an organised campaign being conducted in Victoria, in which nursing home patients and their families are being urged to put pressure on the Government for an increase in nursing home benefits? Is there any justification for such a campaign? Senator GRIMES —I have received a copy of the material which has been circulated in the last couple of weeks to residents of Victorian nursing homes and their families. The material urges patients and their families to send form letters to me and to other Ministers and members of parliament. I do not believe that the campaign has any relevance; I do not think it ever had any relevance, but certainly it has none now. It is almost three weeks since I announced in this place an increase in the nursing home benefit payable in Victoria. That nursing home benefit in Victoria is the highest in Australia. Apart from the fact that I disapprove strongly, and I think most honourable senators would, of elderly people in nursing homes being used in campaigns of this type, having one's campaign so badly organised that the material does not go out until at least a week and in some cases two or three weeks after the end one is trying to achieve has been achieved seems to be a little strange and a little stupid, and it demonstrates the incapacity of those organising the campaign. As I have said before in this place, it is absolutely routine for governments to review the nursing home benefit in November of each year and to increase it. This year that review resulted in a substantial increase. The review was based on a thorough examination of all factors affecting the costs of operating a nursing home, and that included in Victoria the fact that as a result of budgetary activity last year we had a freeze on the nursing home benefit. The freeze has now been lifted in part, in recognition of the fact that the Government in Victoria has co-operated with the Commonwealth in developing more cost efficient nursing home care in that State. We have announced increases in fees in Victoria. They have risen by in excess of $5 a day, or $35 a week. The net benefit in Victoria remains the highest for any State, despite the freeze. One may say that the campaign actually succeeded before it started. To continue putting this sort of literature around and expecting these sorts of form letters to have an influence on government policy making, no matter who the government is, is a little naive and a little stupid, apart from being quite heartless in the way it affects residents of nursing homes. Senator SHEIL —My question is directed to the Minister for Education. I am pleased to see that she finds the National Party colours becoming to wear. I remind the Minister that in 1985 the Government ratified the United Nations Educational, Scientific and Cultural Organisation Regional Convention on the Recognition of Studies, Degrees and Diplomas in Higher Education in Asia and the Pacific, and this recognition was extended to the European region in 1986. The Department of Foreign Affairs advised the session Secretary-General: The instrument of acceptance does not incorporate any qualifications in the terms of Australian acceptance. Will this allow holders of degrees from universities with inferior standards to practise in Australia? Does the Minister agree that by ratifying this Convention the Government would be in a position to use its powers under an external treaty to force its will upon doctors or, for that matter, any professional organisation which disagrees with it? Senator RYAN —Apart from dissociating myself from the imputation that I am wearing National Party colours-- Senator Grimes —You had better get it off. Senator RYAN —I will not take Senator Grimes's advice. I am surprised that Senator Sheil has asked in such suspicious and negative terms a question about our recognition of the UNESCO Regional Convention on the Recognition of Studies, Degrees and Diplomas in Higher Education in Asia and the Pacific and the extension of its recognition to the European region. In my view it is a great step forward in our relationships with the region that we have actually acceded to this Convention, and certainly it is one of the more important achievements of former Ambassador Whitlam during his period as Australia's Ambassador to UNESCO. The kinds of fears that Senator Sheil articulated in his question are quite unjustified. The process of reaching the recognition was one carried out after thorough consultation with the States, which in turn had consulted with various professional boards and so forth. A statement was made at the time of accession which referred to the shared responsibilities of the Commonwealth and the States under the Constitution and these are certainly being taken into account in implementing the treaty. The statement also refers to the responsibilities in Australia of higher education institutions, registration boards and professional associations, such as doctors' associations, for determining the qualifications that they will accept. Commonwealth authorities will transmit the text of the convention to those bodies. Australian accession to the European convention should assist students and graduates from Australian institutions who want to work and study further in Europe-I hope that that is something Senator Sheil and all other honour- able senators accept-and it should improve the assessment of Australian qualifications in Europe. It should also benefit migrants from Europe to Australia and those wishing to come to Australia to study. Ratification of the European convention complements Australia's accession in 1985 to the UNESCO Regional Convention on the Recognition of Studies, Degrees and Dip- lomas in Higher Education in Asia and the Pacific. In conclusion, in no sense will any Australian standard be undermined by this, nor will any inferior standard degree from the region or the European region be given equivalent recognition to an Australian degree. Rather, we have set up processes so that overseas degrees can be properly assessed and, reciprocally, Australian qualifications can be appropriately assessed. Certainly there will be no lowering of standards by this process. Indeed, I think all participants will benefit from the conventions. Senator SIBRAA —My question is directed to the Minister representing the Minister for Foreign Affairs. Is it a fact that a recent Qantas Airways Ltd flight to London was denied entry into Syrian air space, therefore disrupting the scheduled service? If this is so, what steps are being taken by the Australian Embassy in Damascus to ensure that there is no repetition of these events? Senator GARETH EVANS —My brief on this matter is in the following terms: Qantas has advised the Department of Foreign Affairs that its flight QF10 from London to Australia was initially denied entry into Syrian air space on 9 November. The aircraft diverted and intended to use Egyptian air space but was refused entry there too. It again sought and was granted entry into Syrian air space. As a result of these manoeuvres the aircraft then made an unscheduled stop at Bahrain to take on fuel. It does seem that the denial of entry into Syrian air space was only of short duration. Denial of entry to Egyptian air space may have been caused by a misunderstanding on the clearance procedure. Clarification of these matters is being sought by the Department of Foreign Affairs in co-operation with the Department of Aviation. If any further information comes to hand I will be happy to pass it on to Senator Sibraa. Senator HAINES —Is the Leader of the Government in the Senate aware of media reports that the Remembrance Day poppies worn by honourable senators today were manufactured overseas despite every effort on the part of the Returned Services League to find an Australian company willing to make the poppies here? Can the Minister say whether these reports are correct? If they are, can the Minister say whether the apparent lack of interest in this entrepreneurial activity indicates a lack of patriotism by some Australian companies? Further, can he say whether this attitude is likely to diminish the value of the Government's buy Australian campaign? Senator BUTTON —I do not accept, and I will not start accepting now, responsibility for the commercial decisions of a whole range of Australian companies. I was not aware that the Remembrance Day poppies were made overseas; so I am unable to say whether that claim is correct. The honourable senator asked: If that is so, does it mean that there is a lack of interest by Australian companies in making Remem- brance Day poppies? The answer to that question appears to be yes. The honourable senator then asked whether this was a blow to the buy Australian campaign. I think the answer to that question is no. Senator ROBERTSON —My question, which is directed to the Minister for Veterans' Affairs, relates to the alleged desecration of Australian war graves in the Kanchanaburi war cemetery in Thailand recently. It was reported on the Australian Broadcasting Corporation news that human remains were exposed during some work in the vicinity of the cemetery. If this is a fact, what steps are being taken to rectify the situation and to ensure that this unfortunate incident does not occur again? Senator GIETZELT —It is true that in the Asian-Pacific region there are war graves in a number of countries, some of which come under the jurisdiction of the Australian War Graves Commission and others which come under the responsibility of the Commonwealth War Graves Commission, of which we are a part, but for which the responsibility lies principally with the organisation in London. I am specifically aware of the desecration of war graves that took place recently in Kanchanaburi in Thailand. The Government views this very seriously. Consequently Mr Clarke of the Australian War Graves Commission immediately contacted the Commonwealth War Graves Commission in London, which is responsible for the maintenance of the war graves in that country, and it was notified of Australia's very genuine concern about what was taking place. We have been advised that the remains that were disturbed have now been replaced and the area has been completely refurbished. I am assured that the Commonwealth War Graves Commission war cemeteries throughout the world-I had the opportunity to look at them last year in the European scene-are meticulously cared for, with appropriate reverence for those who lie in them. It is a matter of regret that the remains were treated as they were in Thailand in recent times. This particular incident was very unfortunate. It occurred during the upgrading of the cemetery without sufficient care being given to the fact that it was a very important and sacred piece of ground. Our concern has been expressed to the authorities in Thailand. I assure those Australians who have expressed their considerable disquiet with what has taken place that it will not happen again and that the maintenance of those war graves is being constantly kept under review by the Commonwealth War Graves Commission. Senator KNOWLES —I direct my question to the Minister representing the Minister for Health. In view of the massive incidence of acquired immune deficiency syndrome among the general population of certain African nations, is the Minister able to advise the Senate of the degree of monitoring progress of AIDS in foreign countries and whether it is proposed that short term visitors from badly affected nations should undergo some form of screening before being allowed entry to Australia? Senator GRIMES —As Senator Knowles has said, I am aware that AIDS is endemic in some African countries, but it is not necessarily exactly the same virus as we have here. I certainly am aware that the two committees set up by the Minister for Health and the Minister and his Department are monitoring the development of AIDS in overseas countries and the incidence and developments occurring in this disease in overseas countries. I will get some details from the Minister for Health as to exactly what plans are afoot in this area. I point out in answering the question that AIDS is not a disease which is readily communicable under normal circumstances. It would be wrong to suggest-I hope Senator Knowles is not suggesting this-that we should take any drastic measures to inhibit the passage of people from countries where AIDS may have a bigger incidence than ours on the grounds that it is easily communicable. This is not so. As I have said in this place many times before, it is a public health problem which so far we have managed to cope with very well in this country and without the hysteria which is associated with it in some other countries. I will get the details sought by Senator Knowles and give them to her as soon as possible. Senator McINTOSH —Has the attention of the Minister representing the Treasurer been drawn to an article in Monday's Sun newspaper reporting the Leader of the Opposition as saying that a coalition government's priorities in its first six months of office would be to abolish the capital gains tax, the fringe benefits tax, the tax on lump sum superannuation and the assets test and that it would also introduce changes to industrial relations legislation, change Medicare to allow people to opt out and abolish bulk billing? Has the Minister any idea of the cost of these measures? Senator WALSH —Only one of those high priority items that Mr Howard identified would not have a significant and direct budgetary consequence-the consequence of blowing out the deficit, a task for which Mr Howard trained himself well in that period in which he was Treasurer. Indeed, when he left that office he had blown out the deficit to almost $10 billion, and apparently-- Senator Michael Baume —Rubbish. That's not true; that's a lie. Senator WALSH —I struck a raw nerve there. He had blown out the prospective deficit to almost $10 billion, so he is well trained to implement the sorts of policies which he says he would implement were he to become Prime Minister. The only one which would not have an adverse and direct budgetary consequence is the proposed industrial relations legislation. That would have an indirect budgetary consequence because if we had a free-for-all on wages outcomes out there in the industrial jungle, which Mr Howard wants, there would be so much industrial strife that gross domestic product would fall and taxation, of course, would fall with it, and the Budget deficit would blow out again. Senator McIntosh referred to four items. At this stage the abolition of the capital gains tax would probably cost about $25m; the abolition of the fringe benefits tax at this stage would cost about $520m; abolishing the lump sum tax on superannuation payments at this stage would cost about $80m; and the abolition of the assets test would cost about $150m at this stage. What any of those measures would do to address the country's paramount economic problem-that is, the size of our current account deficit-is a complete mystery. None of those things would in any way address it. More importantly, or equally importantly probably, is the fact that the cost of the abolition of those items-in particular, the fringe benefits tax-would grow rapidly in subsequent years. If, as Mr Howard said, a coalition government were to abolish the fringe benefits tax lock, stock and barrel, the green light would then be given to every employer in the country to evade as much tax as possible by converting to the maximum degree possible income that is presently or prospectively being paid as wages into income paid in kind, thereby evading taxation; that is, unless Mr Howard is to accept the policy of Mr Sinclair, reiterated again last week, which is to enforce section 26 (e) of the Income Tax Assessment Act and require employers to provide all the details of the fringe benefits that they pay to their employees but make the employee directly responsible for the payment. If a coalition government were to adopt Mr Sinclair's policy as distinct from Mr Howard's policy, which policies appear to be completely contradictory on the surface, that then raises the question of for what period a coalition government would strictly enforce-it claims that it believes it can be enforced-section 26 (e) of the taxation Act. If a government were to go down that course, on the presumption that section 26 (e) can be effectively enforced, it should be enforced retrospectively for a considerable period. That is a very big slug that the wage earners of Australia can count on getting from a coalition government, should one be elected. I note also that the Leader of the Liberal Party of Australia in Western Australia said that the Liberal Party is totally opposed to the fringe benefits tax legislation because it is immoral and evil that one person should have to pay tax on payments that he makes to another person. Precisely that has been done with payroll tax for the last 40 years or so, so one must presume that if a coalition government were to be elected payroll tax would be abolished and the pay as you earn taxpayers would be hit with another $4 billion a year slug to cope with the revenue losses. The other specific item to which Senator McIntosh's question referred was Mr Howard's half-baked proposal for people who choose to take out private insurance to opt out of the Medicare levy. That is about as well thought through as his ministerial arrangements and the establishment of a Minister and ministry for bits and pieces. If that were to be done, it could be reasonably assumed that the taxpayers with taxable incomes above $22,000, which is about 39 per cent of all taxpayers, would opt out and the levy collection would be reduced by some $938m. The final effect of that policy would be not to lead to any savings, of course, but to induce a large extra dollop of non-funded expenditure. The direct effect in the first year of his capital gains tax, fringe benefits tax and lump sum payments measures and the abolition of the assets test would be $775m. That sum would balloon very rapidly should those policies be implemented and in no time at all the coalition government would be back to the same sort of $10 billion deficit that the last coalition Government left this Government with. Senator GIETZELT —On 23 October Senator Lewis asked me a question in respect of the Trading Hours Ordinance in the Australian Capital Territory. The Minister for Territories has provided me with the following response: The Government, the retail industry and the relevant unions have made substantial progress in discussing changes to the Trading Hours Ordinance 1962. However, the Minister for Territories has agreed not to introduce amendments to the Ordinance until he has examined a decision just handed down by Mr Justice Macken, Chairman of the Retail Trade Industrial Tribunal, which addresses the issue of working conditions for employees in the retail industry in New South Wales. The Minister's Department will be providing him with advice on this matter shortly. The Minister is confident that, once the parties and the Government have considered the Macken decision, agreement will be reached on amendments to the Ordinance. The PRESIDENT —I inform the Senate that I have received the following letter, dated 11 November, from Senator Archer: Dear Mr President Pursuant to Standing Order 64, I give notice that today I propose to move- ``That, in the opinion of the Senate, the following is a matter of urgency: The need to uphold the Memorandum of Understanding between the Commonwealth and Tasmanian Governments on forestry operations in Tasmania which is being overridden by the Prime Minister who is ignoring the bipartisan opposition to his cynical political grandstanding from both the Tasmanian Premier Robin Gray and the Leader of the Opposition and former ALP Federal President, Neil Batt.'' Yours sincerely (BRIAN ARCHER) Senator for the State of Tasmania Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator ARCHER(Tasmania)(3.13) —I move: That, in the opinion of the Senate, the following is a matter of urgency: The need to uphold the Memorandum of Understanding between the Commonwealth and Tasmanian Governments on forestry operations in Tasmania which is being overridden by the Prime Minister who is ignoring the bipartisan opposition to his cynical political grandstanding from both the Tasmanian Premier Robin Gray and the Leader of the Opposition and former ALP Federal President, Neil Batt. The debate we are now having is not a conservation debate. The debate that we are having is about the politics and the intergovernmental relations, not about conservation. It is a classic piece of Hawke's political grandstanding. The Prime Minister (Mr Hawke) has deliberately lit this political fire in the interests of his Government, obviously to arrest its declining popularity. The Government has become just as good as anybody else at reading the figures in the papers. It knows what its mail is full of; it knows what everybody in the electorate is saying; so it has decided that it has to try to do something about it. In searching around for an issue it thought it ought to go to the popular issues. Senator Richardson was good enough to produce a list of those popular issues. Amongst other things, of course, he spotted the Tasmanian hat stand, as I would call it. He said: `We have to give the young people and the women something in the conservation area to hang their hats on'. I do not see Tasmania as just a political hat stand, but that is the way that he sees it. In looking for this hat stand it was decided to go for Tasmania. The Government thought: `We cannot lose any seats in Tasmania; we have none to lose. So what can we trump up?' The Government also tried to gain a bit of cheap publicity at the same time. What a miserable mistake it made. If the Government had bothered to read the agreement, to check the facts, to take a simple step such as that, things might have been different. This was a classic Whitlam era `crash through or crash' approach-another stupid, useless, heavy-handed, belligerent move. The Prime Minister or any of his staff who had been around him for four or five months-I realise that he has had trouble with his staff, nearly all of whom have gone of late-would surely have remembered the arrangement that had been made. But no, there is nobody like that, and nobody on his staff can read. The position is perfectly clear. The actions taken by the Prime Minister clearly demonstrate what happened. When he wanted to get something flaring, he wrote to the Premier. If he had bothered to get anybody to glance at the legislation, he would have found that that is not the way to go about things if there is a problem. The problem-solving mechanism is clearly laid down in the memorandum of understanding. It says nowhere in that memorandum that the Prime Minister should go off half-cocked and write to the Premier. The memorandum says that the matter shall be dealt with between officers, and should the officers be un- able to get an agreement it should fall into the hands of Mr Kerin, specifically named, representing the Commonwealth, and Mr Ray Groom, Minister for Forests, representing the Tasmanian Government. That is fairly simply and straightforward. Anybody who reads the document could clearly follow clause 30. The document also goes on to state specifically that there is no place for gratuitous and unjustified threats and the use of coercive powers by either the Commonwealth or the States. As there are no coercive powers, how is it that on 3 November we saw the leaking of a letter from the Minister for Primary Industry (Mr Kerin) asking for advice regarding the use of the Tasmanian freight equalisation scheme as something that the Government could hold over those miserable Tasmanians to make them do something it wanted them to do that was outside the agreement? The Government looked to see how it could cut off the freight equalisation scheme, but found that that course did not look very good. Then the Government considered revoking export licences. Where is that covered in the gentleman's agreement, this memorandum of understanding, this dealing between two governments at the highest level? Is this not a great way to go about it? It certainly seems coercive to me and is a clear breach of the agreement. Clause 30 does not provide that that is the way one goes about trying to solve a problem if one believes a problem exists. Tasmania was a party to this memorandum of understanding and it has upheld its terms. The ink is barely dry. The agreement has been around only since 12 June, and already the Federal Government has forgotten what the document said or has not been able to find somebody to read it. It is hardly out of date, but the Prime Minister's advice on it has been bad. Perhaps it is just that he has lost all his senior staff and cannot find anybody else about at the moment, but one would have thought somebody would have straightened him out after his first mistake, except that he has gone on repeating it. If he would get out of it, we might discover that there is no problem and that both parties up to this time are still satisfactorily following the memorandum of understanding. Mr Gray is a little perplexed. First, he is not a party to the agreement nor to the problem solving, but he has had to come into this and has deliberately written to the Prime Minister pointing out the facts, making sure that there will be no further problems. I wish to quote parts of a letter that passed between these two gentlemen: The Jackeys Marsh Quamby Bluff area was, at the time of the signing of the Memorandum of Understanding on 12 June 1986, already subject to current operational planning within the meaning of clause 27 of the Memorandum of Understanding. Indeed, the harvesting of logs has been taking place in this area for some years. In his very fragmented advice, the Prime Minister was not told that clause 27 has proviso clauses in it. It specifically mentions that clauses 23 to 26 do not apply where certain other things have occurred. The quotation continues: The current operations represent a scheduled resumption of logging under the 5-year Plan of Operation in conformity with the Working Plan for the Crown Forests of North and North-East Tasmania, 1983. Logging operations will comply with the special conditions for protecting the environment set out in the ``Proposed Forest Operations in the Jackeys Marsh Quamby Bluff area EIS'' reprinted in August 1984. Clause 27 of the memorandum of understanding provides that clauses 23 to 26 specifically list those conditions. If we continue from there and start to look in the appendix, we find that this particular area is listed in the appendix as being accepted by the parties as complying with that particular set of circumstances. What more can we have than that? Yet the Prime Minister still goes on about the matter. The Tasmanian Premier has absolutely no desire to get into an argument over an issue which is a non-issue in the first place. I do not see, any more than the Premier does, why Tasmania should be a staging ground for a losing government in Canberra just so that it can try to win a few cheap votes somewhere else. It is not as if the comments that are being made have all been put forward from one side. Let me quote from yesterday's Australian Broadcasting Corporation program The World Today in which the following comment was made: Yes, but let me say that on this particular issue the Federal Government are wrong and there is no point in being in politics unless you are prepared to speak the truth. The truth on this occasion is that the Federal Government are wrong and I intend to say so. I did not say that; Premier Gray did not say that. Those comments were made by Mr Batt. Mr Batt is a former President of the Australian Labor Party and he held that position when many honourable senators were members of the Party. They know that on an issue such as this Mr Batt can at least read a document. We come back to that point. Mr Batt was asked by the interviewer a question about the attitudes of conservationists. He said: The logging there ought to continue for three reasons. One is because it was part of the agreement that was signed previously between the Commonwealth and the State and therefore logging was, of course, seen in that. The second reason is that the logging proposal is part of a management plan which preserves environmental values. And the third reason is that forestry has been going on there for some time and in particular, for the last four years. I am not saying that; Mr Gray is not saying that. Those were the comments of the State Leader of the Opposition. That is the view of the Labor Opposition in Tasmania-the people who are there to oppose, to try to get rid of, the Tasmanian State Government. What are they doing? They are saying that the Tasmanian Government is right. Let us look at the local Press, which does not have the problem of having to oppose. In the Hobart Mercury on 5 November there was this headline: `State Labor blasts federal forestry ploy'. On 7 November that same paper ran this headline: `Batt slams Hawke's ``cavalier approach'' '. This is the sort of thing that is going on. How can anyone here defend the Prime Minister when he goes on in this way? The National Times on Sunday ran an article under the heading `Skin deep as a greenie, that's Hawke', in which Robert Haupt made this comment about the electorate: They are not going to be convinced by pictures of Hawke in the Kakadu or a stand against the Tasmanians that cost his Government nothing, for they have memories. That is the voters that he is talking about-not the forestry people or the townies. He is referring to the voters in general. He also stated that Mr Hawke had said: I would have serious reservations with any proposal that would result in the imposition of a more restrictive framework on political mineral exploration development . . . That is a quote from the same article. He refers to the Prime Minister holding up Kakadu as the ultimate. But only a week or two earlier the Prime Minister had written to Mr Barry Cohen saying that the nation's current account deficit was the reason that he did not want a no-mining clause. It is just extraordinary how a couple of weeks later the deficit was no longer supreme and heritage had been notched up the list. When the statements are so blatantly shallow and so consistently inconsistent, how can we take them seriously? The agreement covers a very wide range of issues and was prepared jointly. It was done by agreement; there was no coercion. It covers a range of matters such as land use management and the Commonwealth's export powers. It mentions with pride the competency of the Tasmanian Forestry Commission. It covers sustained yield harvesting, regeneration, rare and endangered species and so on. Senator Richardson was trying to be helpful when he made his suggestions but clearly he also had not read the agreement. It was unfortunate that he made the suggestions that he did, which put the Prime Minister out on a limb and led him to state things that were incorrect. With the Attorney-General (Mr Lionel Bowen) also involved, it is fairly difficult to try to keep the facts straight. I noticed that one of the editorials referred to the memorandum of understanding and stated that it was very clearly being dealt with specifically as a memorandum of misunderstanding and that the Federal Government could certainly be accused of doing everything possible to make sure that the facts did not come across. I have already quoted the Attorney-General. An editorial in the Examiner of 7 November stated: There is a growing suspicion that the whole confrontation has been politically orchestrated by the Federal Government in an effort to win back the conservation vote which it has alienated by its policy on Kakadu national park and the export of uranium to France. Senator Chaney —I am sure that is right. Senator ARCHER —It surely is right. The editorial in the Mercury of 7 November quoted the memorandum of misunderstanding and stated: In this instance, it appears that most of the misunderstanding emanates from Canberra. The light of recognition that such a blunder may have been made appears to be shining now on the Prime Minister, Mr Bob Hawke. On Wednesday, Mr Hawke, in a most presumptuous manner, ordered the State Government to halt logging at Jackeys Marsh. Yesterday, the Federal Government was more circumspect, far more conciliatory. Instead of orders, it was suggesting that in a spirit of co-operation, its Minister of Primary Industry and the Tasmanian Minister for Forests meet under the auspices of the Memorandum of Understanding . . . At last they got around to reading the document. When all else fails, read the instructions: That is a famous maxim that has held good for a long time and I recommend it now to the Government. We have to wonder when we hear talk about agreements and memoranda. Over the last few years we have had all sorts of agreements, undertakings and understandings. We had an agreement on land rights. We had an agreement and an undertaking on the sale of uranium to France, and in fact on uranium mining. We have had undertakings on student fees. We even had an undertaking about capital gains tax-`In words that even members of the Opposition can understand, there will be no capital gains tax'. We have had these sorts of undertakings, and so on. but what is the value of undertakings? How can we cope with a government that produces a memorandum of understanding and then tries to read into it something that just is not there? The whole thing is absolutely clear. One of the things that worry Tasmanians a bit is that a funny mixture of drop-ins and drop-outs turns up there from time to time. They usually stay for a short while or even for a year or two, and then they do what is best-that is, ultimately, they leave. In the meantime, they presume to tell us how to run Tasmania. We Tasmanians know more about Tasmania than they do. No State in Australia has a greater appreciation of, or places greater value on, its natural gifts than does Tasmania. No State has a more active parks regime or a greater concern for the beautiful things than Tasmania. No State goes to the trouble that Tasmania does to balance its natural values with its community needs. We do not need the sort of `help' that we get from more and more of these people, because it just gets worse and worse. As I say, the best thing, fortunately, is that most of them leave before too long. We must also remember that one in seven of all Tasmanians derives his living from forests and forestry. They are the true conservationists. Without conservation, they have no livelihood. The reafforestation taking place at present is vastly ahead of forest use, and the future of the State depends very heavily on keeping it that way. That is the way in which people are working at present in Tasmania. The agreement was made to work. It can work provided that the Government in Canberra does not try to renege on it. Let is go ahead with that agreement. That is the thing to do. Senator RYAN(Australian Capital Territory-Minister for Education)(3.27) —It is very unfortunate that Senator Archer has brought this motion to the Senate today in the terms in which he moved it. In the Government's view, it concerns a serious matter. The question of the preservation of the natural heritage in Tasmania or, indeed, in any part of Australia is important and an appropriate matter for debate by honourable senators. But the particular terms in which Senator Archer has chosen to cast his motion demonstrate that he is interested not in the conservation of the natural heritage of his State nor in the legitimate needs for employment of Tasmanians, but rather in some sort of garbled, petty, party-based point scoring. I listened very closely to what Senator Archer said, but I found it most unconvincing. I could not be convinced even of his basic seriousness in raising this matter here today. He really seemed to want to make derogatory comments about the staff of the Prime Minister (Mr Hawke) and a few matters such as that and generally to waste the time of the Senate. That is unfortunate, because the issues of the conservation of our environment and heritage are of compelling concern and interest to most honourable senators. Certainly they are so to our Government. Perhaps I may respond-although it is almost not worth doing so-to the suggestions in Senator Archer's comments that somehow the Prime Minister has just discovered the environmental issue, or somehow our Government has, whimsically and erratically, taken up an interest in this fashion. I find it absolutely extraordinary that these claims can come from Liberal Tasmanians, since surely they will remember, as the rest of Australia remembers, and as the environmental movement remembers very well, that one of the first acts of the Hawke Government was to take dramatic steps to fulfil an electoral promise, which was to save the Gordon and Franklin rivers and the wilderness area in South West Tasmania. It seems incredible that that event could have slipped the minds of Opposition senators. They were very raucous-as they are being today-and very vociferous in their opposition to that course of action, which we took, as I have said, as one of our first major acts on being elected to govern Australia by the people of Australia. We saved the wilderness in the south-west of Tasmania; we saved the Gordon and Franklin rivers; we prevented the building of an unnecessary dam that would have had a destructive effect not only on the wilderness area but also on the overall economic development of Tasmania. So any suggestion that we are Johnnies-come-lately in these issues is incredibly wrong and silly in the light of our record. The issues, relating to the conservation of our environment and heritage are of importance, but it is most unfortunate and regrettable that Senator Archer has chosen to pursue them in such a sniping, irrelevant and quite disorganised fashion. In relation to the issue of logging in the Jackeys Marsh area and the memorandum of understanding covering it, both in terms of its role as an area that has been nominated and recorded as part of the National Estate and as part of the logging industry in Tasmania, let me make one basic point as firmly as I can: The Commonwealth Government is not overriding the agreements reached with the Tasmanian Government. Senator Watson —That's news. Senator RYAN —It is news to Senator Watson, and I think he should pay attention to this because he is a serious senator, unlike some of his colleagues. I think he does take quite seriously the employment and environmental issues affecting his State. Let me explain the matter to him. Logging in the Jackeys Marsh area is governed by the Commonwealth-State memorandum of understanding and by subsidiary environmental impact statements. We are simply asking that the procedures and requirements set out in those agreements be adhered to, and they have not been. Senator Watson —So are we. Senator RYAN —At least Senator Watson is paying attention. Last month Jackeys Marsh was listed on the National Estate register as the result of the independent decision of an independent body-the Australian Heritage Commission. The decision was taken without any interference or influence from our Government. The decision to list Jackeys Marsh has logical and legal consequences. The Commonwealth and the State are meant to discuss the heritage value of the area. That is one of the main elements of the memorandum of understanding. Senator Walters —Would you tell me where? Senator RYAN —Let me be more specific, since there is a great deal of ignorance on the other side of the chamber. The process of consultation is outlined in the memorandum of understanding, in particular in clause 27, which states: . . . the Forestry Commission will advise ways in which registered values have been taken into account and, if planning so allows, will take account of comments from DPI. Of course, that process has not occurred, owing to the pre-emptive action of the Tasmanian Government. Clearly there is now disagreement between the two governments. The Commonwealth Government therefore draws attention to clause 30 of the memorandum of understanding, which states: In the event that any dispute arises over matters concerning forest operations and other export related matters which cannot be reconciled at officer level, the two relevant Ministers will meet and discuss the problem with the intent of reaching a mutually acceptable solution. Senator Watson, who is following my argument, agrees. It is clear that those talks have not taken place. They ought to take place and we stand ready to have our Minister involve himself in those talks. We have not as yet been able to arrange such talks, although I am pleased that it appears that they will take place. They are an essential requirement of the memorandum of understanding and any delay in the holding of those talks has not been as a result of any defects in the performance of the Commonwealth; it has been as a result of a problem with the Tasmanian Government. Senator Walters —It's only because you backed off. Senator RYAN —Mr Acting Deputy President, I know that Senator Walters is unable to contain herself but I am making a serious argument and I would appreciate some lessening of her constant babbling. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! There are far too many interjections and I ask that they cease. Senator RYAN —Thank you, Mr Acting Deputy President. It is an important matter, as I have said, but unfortunately one Tasmanian senator is prepared to treat this as just another opportunity for grandstanding. The memorandum of understanding requires that we should hold those talks. The Commonwealth wishes to hold them, and indeed it now appears that they are imminent. Until those talks are held the outcome in terms of the extent to which, if any, logging can continue in the Jackeys Marsh area compatible with the requirement to preserve the National Estate values cannot be determined. We are willing to hold talks as soon as possible and we are accelerating our own consideration of the issue. To that end I can assure the Senate that our advisory committee on the Tasmanian forestry operation will report on Jackeys Marsh within three weeks, and the Heritage Commission will complete its work on the National Estate values of the area within two weeks. I repeat those deadlines: Three weeks and two weeks. That is not a long time to wait; that is not a heavy imposition on the State Government, on the Tasmanian Forestry Commission or on the logging workers at Jackeys Marsh. The brief delay we have proposed will give the Commonwealth and Tasmania time to discuss the issues concerned. We will have time to follow due process; we will have time to meet our obligations and commitments; we will have time to make a responsible decision. In order that these matters can proceed, logging should cease now and the issues should be properly discussed. I know that is a particular concern of Senator Sanders. All we ask for is the cessation of an action which should not have been undertaken pre-emptively until due process can be followed. Unilateral decisions, pre-emptive strikes, media campaigns, from any source, and motions such as Senator Archer's motion simply do not assist the resolution of the issues concerned. Senator Watson —But why did you make the threats to woodchip licences and to freight equalisation? Senator RYAN —There have been no threats on the part of the Commonwealth but there has been confrontationist behaviour on the part of the Gray Government, and that confrontation will only delay the resolution of our differences. It will only divert our attention from the wider issue of the conservation of the heritage involved. I remind the Senate that that is the Commonwealth Government's interest in this matter. Our attitude is not divisive or provocative. We simply want to weigh up the matters concerned and make a considered judgment, and we want that judgment to be made as quickly as possible. The Commonwealth policy does not in any sense at all reflect fundamental opposition to the logging and chipping industry in Tasmania. We recognise the vital importance of that industry for employment, for investment and for economic growth. We on the mainland recognise that we depend on products of that industry. We have seen the ways in which Tasmania is developing its forest industry. That industry, for example, is now the basis for a remarkable revival in Tasmanian crafts and design. The products of that revival are second to none in their quality and their value for export. The wood carving and turning industry in Tasmania is an example to the rest of Australia in relation to the refinement of our industry, the exploration of new products and techniques and making sure that we add value to what we produce. I mention the forestry industry in that sense because I believe that we need to take account of the full range of issues before us today. We want to help accelerate and facilitate economic development in Tasmania. We also want to help encourage the preservation of Tasmania's environment and heritage. That environment and heritage is one of Tasmania's and Australia's greatest natural treasures. It is also one of Tasmania's most tangible and substantial economic assets, an asset which produces enormous revenue in tourism and related trades and industries. That revenue is also essential to the continued economic health and prosperity of Tasmania. Let us then look at the full range of issues at stake here, which is something that Senator Archer has conspicuously failed to do. Let us go on to implement our agreements with Tasmania-fully, formally and fairly. That will not take long to do and it is a sensible and straightforward way to proceed. Senator Archer's motion has quite different intentions and motives and ought to be rejected by the Senate. Senator SANDERS(Tasmania)(3.41) —I find it difficult to support this urgency motion. I certainly support the first part of the motion, which states: The need to uphold the Memorandum of Understanding between the Commonwealth and Tasmanian Governments on forestry operations in Tasmania . . . But I simply cannot agree with the second part of the motion, which states: . . . which is being overridden by the Prime Minister who is ignoring the bipartisan opposition to his cynical political grandstanding from both the Tasmanian Premier Robin Gray and the Leader of the Opposition and former ALP Federal President, Neil Batt. I was thinking of amending this motion but it is a long and convoluted process to amend an urgency motion; so I think I will be forced simply to vote against it when a vote is taken. Senator Archer mentioned the gentleman's agreement between the Prime Minister (Mr Hawke) and Mr Robin Gray. The difficulty is, of course, that Robin Gray is no gentleman. He never was and never will be. The Feds will have to be hard-nosed in this matter, because Robin Gray has proved over the years that he will take whatever political advantage he can, personal or otherwise. The man is a demagogue. He has noted through history that the way of staying in office is to create a despised group and then to set the community against it. Throughout history all despots have done this. He has learned his lesson well. He is not a quick learner but he has learned that. So he created the greenies at the time of the Franklin Dam debate and he was successful in stirring up hatred, splitting families and splitting friends in Tasmania for his personal political gain. He created scars, some of which have not healed to this day. Of course, lots of acrimonious statements were made at that time, but in retrospect historians will look back at Robin Gray's performance as strictly one of a self-seeking political manipulator. Incidentally, another person who was active in that area was Harry Butler. He came out against the dam at the time he was working for the State Government. We see that he is now doing the same thing as a biostitute, a biological prostitute, in working for the Northern Territory Government as a consultant and saying that Kakadu stage 2 should not be listed. So a lot of people in that day and age were seen to be less than sincere then and they are less than sincere now. Let me go on to the second part of the motion, which states: . . . bipartisan opposition . . . from . . . Premier Robin Gray and the Leader of the Opposition . . . Neil Batt. What about Neil Batt? Neil Batt has always been a creature of the forestry industry of Tasmania. He has been owned lock, stock and barrel by the forestry industry of Tasmania. We need look no further than at a letter from David Bills, General Manager of Associated Pulp and Paper Mills Ltd, Forest Products, Norton House, 190 Charles Street, Launceston, Tasmania 7250, which is dated 15 April 1986 and is addressed to Mr R. C. Bannister, Secretary of the Australian Timber Workers Union, 249 New Town Road, New Town, Tasmania 7008. The letter states: Dear Cec, Press reports recently have indicated that your union is withdrawing support from the Australian Labor Party because of the disappointing showing of the Tasmanian Parliamentary Labor Party over forestry issues in the past twelve months. I trust you will take my comments as following in the right spirit. I think we have to appreciate the difficulty of the Tasmanian PLP- that is, Parliamentary Labor Party- in dealing with an issue which involves their colleagues in Canberra on `the other side'. Inevitably they had to give a public impression of reasonableness-of consultation-rather than the Tasmanian Government, which could show considerable aggression towards a Canberra government of a different colour. Nevertheless in my dealings with Dr Amos, Michael Field and latterly, Neil Batt, I can assure you they have been staunch supporters of the forestry cause. They and Senators Aulich and Tate opened doors for us in Canberra and gave us continual feedback on the `state of play' there. They listened carefully to our comment on the State Labor Party forestry policy, and many of our comments were incorporated. I have always made it clear to your members at our plants that we- that is, APPM- were never in any doubt as to the support for our cause within the Parliamentary Labor Party in Tasmania. I trust that in the near future the differences can be resolved and a better understanding of the position of the PLP can be obtained, once again enabling you to give your support. I have sent a copy of this letter to your stewards at our mills so that they can see our viewpoint. Yours sincerely, David J Bills, General Manager. Obviously Bills and Batt have done a deal: Batt supports APPM and Bills gets the ATWU to reaffiliate. Soon after this letter the ATWU did reaffiliate. As I have said, the ATWU is the Australian Timber Workers Union. So we see that Neil Batt is actually in the pocket of the timber industry. So there was not really bilateral opposition to this; there was unilateral opposition by the Liberals in Tasmania. The Federal Australian Labor Party has seen increasingly clearly that there are two Liberal parties and no Labor parties in Tasmania. If we look further into the history of Neil Batt and the forest debate we see an article written by Andrew Tilt in the Launceston Examiner of 20 July 1978. Andrew Tilt is now one of the chief advisers to Robin Gray. The article is headed `Government axes forestry industry probe' and it states: A major investigation of the State's forestry industry-the Everett Board of Inquiry into forest royalties and charges-has been abandoned by the State Government. The Premier, Mr Lowe, announced yesterday that the Government would now examine the forestry industry using information from woodchip companies and other timber-based industries. The State Cabinet made the decision two weeks ago. It was strongly opposed by the former minister in charge of forestry and the HEC, Mr Lohrey, and is the real reason for his removal from the portfolios. . . . . It is understood that a new study of the forestry industry by the Treasurer Mr Batt-replacing the Everett Board-will be a much softer investigation. . . . . The Everett inquiry was appointed earlier this year to look specifically into forest royalties and charges. . . . . The Opposition Whip, Mr Pearsall- who is now the Deputy Premier- described the circumstances surrounding the abandoning of the Everett inquiry into forestry royalties as a sham. Senator Archer —How long ago was that? Senator SANDERS —That was in 1978 and Neil Batt has not changed because a leopard does not change its spots. Much has been said about interference by the Federal Government in the affairs of Tasmania, as if Tasmania is in control of its own destiny. What utter rubbish. Let us see whom we are talking about. Who is APPM? It is Associated Pulp and Paper Mills, which is owned by North Broken Hill Holdings Ltd-that is not a Tasmanian firm-and is sending its profits back to the mainland. Tasmanian Pulp and Forest Holdings Ltd is also-- Senator Newman —Go home, Yank. Senator SANDERS —I just heard a senator say `Go home, Yank', which I take to be an ethnic slur. I demand that she retract that statement. The ACTING DEPUTY PRESIDENT(Senator Elstob) —I think the honourable senator should withdraw that. Senator Newman —Is that an insult? The ACTING DEPUTY PRESIDENT —Senator Sanders has taken offence at that statement and I ask the honourable senator to withdraw it. Senator Newman —Mr Acting Deputy President, if he is a senator for Tasmania, perhaps he could go home. The ACTING DEPUTY PRESIDENT —Order! The honourable senator must withdraw unconditionally. Senator Newman —I withdraw. Senator SANDERS —Thank you, Mr Acting Deputy President. I think it is time we recognised that we have here people from all over the world. Although it may be a joke to those who consider themselves to be native born Australians, those of us who come from elsewhere are sensitive about these issues. The Adelaide Steamship Co. Ltd owns 50 per cent of Petersville Industries Ltd, which owns Forest Resources, another Tasmanian woodchipping company. Therefore, the Liberal Party of Australia, and I suppose the National Party of Australia, should really look further than their own statements if they want to see exactly who controls Tasmania. It is certainly not Tasmanians; it is people on the mainland and the transnationals overseas. What about the overall consideration of who actually controls the resources? The national parks in Australia should be truly national parks. National Estate areas should have control exerted by a Federal government because it is patently obvious that local governments are incapable of rational land use decisions. They are too easily influenced by big money and too easily bought off. Giving the local bodies control over a valuable national resource or a valuable national environmental area is a bit like handing over the crown jewels to a bunch of gorillas. The local politicians simply have no idea of the true value of these areas. Senator McIntosh —Don't you reckon they are the best that money can buy? Senator SANDERS —Yes. If we need to look at an example of this it is useful to draw attention once again to the Franklin Dam. The State governments of the day-there was really no difference between the Labor Government and the Liberal Government-wished to dam the Franklin. They said: `We need the power. We must have it. We must have the power or else Tasmania's development will come to a halt'. A few years later we find that the dam was not needed after all, that the Government was influenced by the Hydro-Electric Commission which had overinflated its demand curves, as we had said, by some 18 per cent. It will be worse in the future. It has no new power contracts and is not able to sell the power out of the Pieman scheme. The Hawke Government, to its eternal credit, intervened and saved the local government from a tremendous financial disaster as well as an environmental disaster. The Federal Government stopped a scheme which was patently unnecessary. In the same way the Federal Government will be taking action-soon, I hope-to stop the woodchipping of the National Estate areas of Tasmania, which would be a similar disaster not only financially but also environmentally. It would be a financial disaster because the forests are not being regenerated as was claimed earlier. The forests are being neglected. The Legislative Council of Tasmania, which is not one of the more radical organisations, was quite critical of the actions of Associated Pulp and Paper Mills Ltd in regenerating land. It indicated that from 1972 to 1982, 7,961 hectares were regenerated on its freehold land while only 4,532 hectares were regenerated on its public concession land. The Council was concerned about what appeared to be far greater regeneration on freehold land as opposed to concession land or government land. The APPM made some excuses, but the Council nevertheless felt that `this variation exposes a weakness in forest management under a concession act'. It is imperative that the Federal Government does act to preserve these areas from woodchipping. I would like to see this action extended. Other areas in Australia are threatened by woodchipping-the Errinundra plateau in Victoria, the area around Eden in New South Wales and the area around Manjimup in Western Australia. I sincerely hope that the action which is to be taken soon by the Hawke Government in stopping woodchipping in the sensitive areas around Jackeys Marsh will be extended to other areas where the forests are threatened and that the Government will make this an ongoing process. The Federal Government must act soon and decisively to protect Tasmania from the rip-off artists who presently control the Tasmanian Government. Senator WALTERS(Tasmania)(3.54) —I will start by quoting Mr Batt, the Leader of the Opposition in Tasmania. He is the leader of the Australian Labor Party in Tasmania. He is quoted in a newspaper article which stated: . . . the Hawke Government was `clearly acting outside the MOU signed by the two Governments' by taking unilateral action over Jackeys Marsh. The article previously stated: . . . Mr Neil Batt, said the Jackeys Marsh area clearly was listed in a Memorandum of Understanding as an area which could be logged subject to proper management . . . `It must be made clear that we strongly oppose what the Commonwealth is attempting to do in relation to our forest operations . . . The article stated that Mr Batt objected to Mr Hawke's cavalier approach. It also reported Mr Batt as saying: . . . there is no way that the Commonwealth can justify intervention . . . In a nutshell, that is what all Tasmanians believe; not just the Liberal Party but both parties in Tasmania. Why has Mr Hawke taken this action? We have been told very clearly that Dr Brown, MHA, had a meeting with Mr Hawke about forestry in Tasmania just a couple of weeks ago. No doubt he said to Mr Hawke that this was a good issue for him to take up seeing he had lost the conservation vote over his uranium sales to France, over the Daintree Rainforest approach that the Government took in Queensland and over the decision that Kakadu National Park ought to be mined in stages 2 and 3. Remember when the Prime Minister was overridden in Cabinet on that matter? That is why Mr Hawke has taken this action. Dr Brown told him that it was a good way of attempting to get the conservation vote back. Senator Richardson made it very clear when he made a list of areas that the Labor Government should concentrate on to get its traditional vote back that conservation was one of the main areas. While the Prime Minister was at Kakadu he made this idiotic statement that deeply embarrassed the Minister for Primary Industry (Mr Kerin). This is very obvious by the fact that the Minister for Education (Senator Ryan), who has nothing to do with primary industry and nothing to do with the department that signed the memorandum of understanding, is in charge of this debate and not the Minister who should have been in charge of it. Senator Walsh has completely backed off and gone out of the Senate chamber altogether because of Mr Kerin's embarrassment. It was Mr Kerin who signed the memorandum. I find Senator Ryan's speech most enlightening. She followed directions very clearly. In her answer to Senator Sanders at Question Time today she left him so confused that he said: `Can I take it that the Government is not going to do anything?' Senator Ryan has indeed played it down well. An editorial in the Mercury stated: It seems someone may have read the Memorandum, and realised that the ground Mr Hawke was standing on was not quite as firm as first believed. Let us look at that memorandum of understanding. I think it is important that the memorandum, which is what the matter of urgency is about, should be discussed. It certainly was not discussed by Senator Sanders in his speech. Let us look at the appendix to the memorandum. That is the area that Jackeys Marsh and Quamby Bluff come under. On page 15, under the heading `Type 3', it is stated: Export licences will include a condition that . . . The condition for the Jackeys Marsh-Quamby Bluff area states: Forest Operations will be in accordance with management guidelines as indicated in the EIS on woodchip export and in the Jackeys Marsh-Quamby Bluff EIS. Nothing at all in the memorandum states that any logging in the Jackeys Marsh-Quamby Bluff area could be prevented, so long as those conditions are abided by. The Forestry Commission has taken great pains to follow this environmental impact statement and to monitor it. It will ensure that it is well abided by. Senator Ryan said that it existed in the appendix but that things had altered now that the Jackeys Marsh-Quamby Bluff area had been listed in the register of the National Estate. I asked the honourable senator: Where does it say in that memorandum that, should an area be listed in the register of the National Estate, the situation would alter? The Minister was unable to show me where in that memorandum it is stated that, should an area be listed, the memorandum would be altered. Senator Coates —Haven't you read clause 23? Senator WALTERS —I draw type 3 to Senator Coates's attention. He really is the epitome of the Labor senators from Tasmania. He would no more stand up for his State than any of them. He is a hardline Left senator who will never stand up for any employment in his State. Of course, the other Tasmanian Labor senators have been out of the chamber during the debate. All the Tasmanian senators on the Liberal side have been here during the debate, but on the Labor side there is one senator who is renowned for never standing up for his State. Let us get back to type 3 because I believe it is terribly important. Senator Coates —Mr Acting Deputy President, I raise a point of order. I take offence at Senator Walters's accusations about my attitude to employment in Tasmania and standing up for my State. I ask her to withdraw them. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Senator Coates has taken exception to Senator Walters's statement about him. Senator WALTERS —Mr Acting Deputy President, can I talk to the point of order, please, because it is very important-- The ACTING DEPUTY PRESIDENT —I have ruled, Senator. You should withdraw. Senator WALTERS —It is very important that parliamentary language be brought into this. The ACTING DEPUTY PRESIDENT —Senator Coates has taken exception-- Senator WALTERS —That is not fair. The ACTING DEPUTY PRESIDENT —It is fair. Senator WALTERS —No, it is not. It is dreadful. The ACTING DEPUTY PRESIDENT —Order! I am sorry, Senator Walters, but you must withdraw. Senator Coates has taken exception. Senator Archer —I wish to speak to the point of order. I suggest that Senator Coates may well have a point of personal explanation if he wishes to speak on the subject, but clearly there is no point of order. None of the items in the Standing Orders concerning points of order is covered. I suggest that at the conclusion of the debate Senator Coates may well be able to make a personal explanation and demonstrate where Senator Walters is wrong. The ACTING DEPUTY PRESIDENT —Senator Coates, do you find what Senator Walters said offensive to you? Senator Coates —Yes, I did. That is what I said, Mr Acting Deputy President. Senator Sanders achieved a withdrawal. The ACTING DEPUTY PRESIDENT —According to the Standing Orders, Senator Walters, I must ask you to withdraw. Senator WALTERS —I withdraw, Mr Acting Deputy President. Obviously in this place anyone at all can take exception to anything and have it withdrawn from now on. That has set a precedent in this place, and it is absolute nonsense. Let us get back to the type 3 export licence. With regard to the Jackeys Marsh-Quamby Bluff area it is very precise. Let us look at the other areas. The forestry operations at Douglas River have to have the views of the Minister for Primary Industry taken into account. The operations on the Tasman Peninsula have to have the views of the Minister for Primary Industry taken into account, as does the Tooms Lake conservation area, but the Jackeys Marsh-Quamby Bluff area does not have to have the Minister's views taken into consideration. It is very important that we understand exactly what the memorandum of understanding is. As I said, it has placed Mr Kerin in a dreadful position. The Prime Minister has made threats to Tasmania that he will remove the benefits of the freight equalisation scheme from any company that logs in the areas that he wants left untouched. What a disgraceful situation that is. Companies wanting to set up business in Tasmania have hanging over their heads this threat that, should the Prime Minister of the day dis- agree with something they may do, he will withdraw their right to the freight equalisation scheme. That does not apply only to logging; that applies also now to every other area of industry in the whole of Tasmania, and it is really nothing more than blatant blackmail in the worst possible degree. It is, I believe, stupid and arrogant and a sinister way of going about it. This has all happened while representatives of the company are preparing to depart for Japan for negotiations in regard to Japan's purchasing wood pulp. Australian Paper Manufacturers Ltd is anxious to build a new pulp mill in Tasmania and is negotiating for Japan to purchase that wood pulp. There is now only one way in which that wood pulp mill will be set up; that is, if the climate is right. At the moment all we need is the right climate for a guarantee of resources. Because the value of the dollar is so low, all is ideal for the mill to be set up and our exports could be taken advantage of. It is an ideal time, the value of the dollar being what it is, for this to happen, yet we need very desperately the security of supply. The company has already received expressions of concern regarding the likelihood of the guarantee of continuity of its exports, and we find that the Prime Minister has now ruined that negotiating ability of the representatives of the company who are setting off for Japan. Mr Hawke is acting against two things: He is clearly acting against the memorandum of understanding, and he is clearly acting against the recommendations and the general thrust of his own Forestry and Forest Products Industry Council. The Labor Government set up that Council to advise Senator Button and Mr Kerin, and its members are from unions, industry management and, indeed, the departments. That Council has advised the Government, firstly, that Australia has a future for pulp export and, secondly, that there is a need for reliability of resources. The Prime Minister has now put at jeopardy those two things on which his Ministers personally have been advised by their Council. Their Council has advised the Government that Australia's future is in this area, but the Prime Minister has put that at risk. Indeed, I hope that the editorial in the Mercury is true and that someone has now read the memorandum to him and said to him: `You do not have a leg to stand on'. The blackmail by this Government is underlined not only by Mr Gray but also by Mr Batt, by Mr Field, who is the forestry spokesman, and by every Liberal senator and member. The ACTING DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator COATES(Tasmania)(4.09) —I oppose the motion of urgency in view of the fact that it contains a lot of nonsense about the Prime Minister (Mr Hawke) overriding the memorandum of understanding. Of course, I agree with the first part of the motion about upholding the memorandum of understanding. It is a pity that Mr Gray has not done that. The State Liberal Government does not appear to be willing to uphold that MOU, and obviously neither does the Opposition here. They opposed this whole agreement in the first place. Mr Gray fought against it for months on end last year and earlier this year. Mr Kerin, the Minister for Primary Industry, tried for months to get agreement with the State Government. Mr Gray refused time and again until he finally, reluctantly, agreed to sign. Now, of course, he is in a position of not wanting to go along with all the procedures. It is just part of Mr Gray's blatant disregard for the environment. Senators will recall that he cancelled meetings that were arranged in the hope of finalising the agreement for some specious reason-that he thought some newspaper report about his backing down had been placed by Mr Kerin. Throughout the whole negotiations leading up to the signing he just wanted to be confrontationist and capricious about the whole matter. Mr Gray-and now the Opposition in this place-has continually used the forestry issue to promote his excessively strong pro-States rights attitude. He says such things as `If the Federal authorities try to intervene in the future of Tasmania's forests they will have a fight on their hands', and other such confrontationist nonsense. Tasmanian newspapers, I know, say that the Federal Government should stay out of Tasmania's domestic affairs. But, of course, they are perfectly happy for the Federal Government to intervene when it suits them. Mr Gray does not mind the Federal Government providing money for the freight equalisation scheme, road developments and the redevelopment of the Launceston General Hospital, and for so many other projects which the Federal Government funds in the State. He does not object to that. The Commonwealth involvement cuts both ways. Mr Gray cannot accept one aspect and then jump up and down about States rights issues over logging. Mr Gray, the Liberals in this national Parliament and the National Party of Australia in particular are just reverting to their true position of opposing any Commonwealth involvement in anything. They have a basic opposition to the Federal Government's performing its duties and responsibilities under the Constitution. They would like to deny that the Commonwealth of Australia exists. They would like to deny that there is any such Commonwealth responsibility as making decisions on export permits, which of course is how the Commonwealth must be involved in the Tasmanian forestry issue because export permits are involved. Those opposite would also like to deny that it is reasonable for the Federal Government to take environmental issues into account in making such decisions. Mr Gray and those opposite express no real concern for the environment, no feeling that they ought to care for it and no acceptance of the responsibility to take action to protect that which deserves protection. They fight against any such consideration tooth and nail. They fought against the Commonwealth's legitimate involvement in protecting the wilderness area of South West Tasmania and they went to the barricades over the proposed dam on the Franklin River-and they lost. Mr Gray, then and since, has been interested only in creating confrontation and maintaining a reactionary States rights attitude for his own narrow political purposes. It is Mr Gray who is the political grand- stander on this matter. He is only trying to emulate Sir Joh Bjelke-Petersen in his unrelenting attack on the Federal Government. He attacks the Federal Government whatever its colour, but especially a Federal Labor government. Mr Gray suggests that it is anti-Tasmanian to disagree with him, and that is just as offensive as the sort of comment which Senator Walters made to me earlier and which I asked her to withdraw, because of the extreme and absolute nature of it. I come now to the memorandum of understanding which is the subject of this motion. The memorandum of understanding establishes a process of consultation. What happened in this area of Jackeys Marsh-Quamby Bluff is that the Tasmanian Government authorised logging before there was full investigation and consultation. The Prime Minister called on the State Government, through a letter to Mr Gray, to stop in view of the Australian Heritage Commission's listing of the Jackeys Marsh-Quamby Bluff area in the register of the National Estate. That triggered certain clauses of the memorandum of understanding which provide for consultation, as per clause 27, and I am pleased that Mr Kerin will raise the matter with Mr Groom, the State Minister for Forests, this week. Following that, there are dispute settling procedures provided for in clause 30 of the memorandum of understanding, which should also be allowed to take effect. Their purpose is so that National Estate values can be protected. The reason why Mr Gray and those opposite are unwilling to go along with these procedures is that they basically do not believe in upholding National Estate values. Senator Walters —I take a point of order. I found the remarks made by Senator Coates very offensive against the Premier of Tasmania. As he is not allowed to make offensive remarks about the Premier of another State, I take this point of order. Senator COATES —I would like to speak on the point of order, Mr Deputy President. I did not make any unparliamentary remarks about the Premier and there is no need for me to withdraw. Senator WALTERS —I didn't say that. I said `offensive'. Senator COATES —That is right, and it was not offensive against you personally. The ACTING DEPUTY PRESIDENT(Senator Elstob) —If it was offensive to Senator Walters, I ask you to withdraw it. Senator COATES —If that is necessary, I will withdraw, Mr acting Deputy President. Senator Grimes —A gracious act. Senator COATES —I will get on with explaining the position to those opposite, and I appreciate the acknowledgment of my withdrawal by Senator Grimes. Senator Walters raised the question of the appendix to the memorandum of understanding which mentioned the area. But that appendix, in part 3, only sets out the conditions which will be included on the export licences for certain areas, including Jackeys Marsh. But one needs to look at clause 23 of the memorandum of understanding, which I will quote. It states: Where any extractive timber operations (including but not limited to Forest Operations) are to the knowledge of the Forestry Commission planned for forests all or part of which are places listed on the Register of the National Estate, the Forestry Commission will advise the DPI. The procedures go on from there. They include the responsibility of the Department of Primary Industry to get the Australian Heritage Commission's advice and so forth so that National Estate values can be taken into account. The Heritage Commission, as Senator Ryan said in her speech, is to report on those values and it expects to do so in a couple of weeks. There is also the advisory committee which is going to report in two or three weeks. The advisory committee was envisaged at the time of the signing of the memorandum of understanding and was appointed recently. Again on the details, Senator Archer raised a quibbling point about the fact that the Prime Minister had written to the Premier and not to the Minister for Forests as is specifically stated in the MOU. The Opposition, of course, would be completely upset at what it would say was the Prime Minister's lack of courtesy and non-observance of traditional procedures if he wrote to anyone other than the Premier. Of course the Prime Minister wrote to the Premier. To revert to the advisory committee, the fact that the advisory committee was to be established was announced by Mr Kerin on the day that the memorandum of understanding was signed, 12 June this year. Mr Kerin said that he believed the memorandum and the export licences: . . . provide a means of ensuring that the issues raised by Mr Cohen in his assessment of the environmental impact statement on Tasmanian woodchip operations will be covered in a practical and effective manner. As I said at the time of the decision, the Government's approach is to seek an appropriate balance between the interests of workers, industry and the environment. The Memorandum enables industry and employment to be maintained, while the environment is protected and subject to continuing review. ... ... ... Now the document has been settled I will be looking to quickly put in place the necessary supporting mechanisms including research arrangements and a consultative committee. That consultative committee was announced on 15 October, and I shall remind the Senate of the members of the committee. The Chairman is Professor Henry Nix, Director of the Centre for Resource and Environmental Studies at the Australian National University, who has extensive experience in environmental and natural resource matters. Before his appointment to the Australian National University this year, he held a senior position within the Commonwealth Scientific and Industrial Research Organisation's Division of Water and Land Resources. He has had a long association with the CSIRO and has been heavily involved in government research programs. The other members of the committee include representatives from the environment portfolio, the Australian Heritage Commission, and the Department of Primary Industry; an environmentalist in the person of Mr Jonathan West, who used to be on Mr Cohen's personal staff and is now associated with the Wilderness Society; Dr Murray Cunningham, who has extensive experience in Tasmanian forestry management and who used to be a commissioner of the Tasmanian Forestry Commission; and Professor Ian Ferguson, who has been appointed to advise the committee on resource economic issues, is currently with the University of Melbourne, and has a strong background in forestry and land use issues. The State Government has said that it will have nothing to do with that committee and does not even recognise it, yet it was envisaged in the memorandum of understanding that the committee would be appointed at the time the document was signed. It is a legitimate means for the Federal Government to obtain balanced advice to help it make decisions. I remind the Senate that even the conservative Mercury in its editorial on 13 June welcomed the memorandum of understanding. That editorial referred to the memorandum in these words: . . . the very stuff of a modern democracy. The document is a compromise. It allows no clear winners, no clear losers. The editorial continued: Of course, the document does infringe on States rights insofar as it does not give the Tasmanian Government unlimited control over what are Tasmanian assets. But the Premier, Mr Robin Gray, knows that the major victims in a full-scale States rights battle would have been the forestry industry, its employees, and the Tasmanian economy. That comment indicates that Mr Gray finally gave in on this. As a matter of interest, the editorial also pointed out: If breaches of the memorandum of understanding are detected, they should be reported to Canberra for Federal Government action. That is what is happening in this case. Mr Gray on this whole issue has no credibility. His position is one of wanting to develop at all costs and he does not want to take a balanced approach to employment. He and his Ministers continually object to the whole issue of National Estate listing. Mr Groom was quoted in one of today's newspapers as again attacking National Estate listing procedures where decisions could be made at the whim of a few members of the Heritage Commission in Canberra. The procedures under the Heritage Commission listing involve the State and local governments being aware and advised of what is proposed. The nomination of this area was made months ago. They have an opportunity to put their opinions to the Heritage Commission, to object and to make sure that their view is heard. It is not a question of this being at the whim of a few members of the Heritage Commission. I defend that Commission in that it is a body of experts independently advising on what should be listed in the National Estate. It gives advice for Federal Ministers to take into account when making decisions, as they are obliged to do under Federal legislation, such as in approving export permits. The Jackeys Marsh-Quamby Bluff area, a beautiful area of our State, was nominated months ago and listed by the Heritage Commission, which triggered the application of clause 23. The State and anybody else can object to that listing if they wish. The timber industry is important to Tasmania, and will continue to be. I am always offended by the suggestion that if one takes a position against, for instance, logging a particular area one is somehow or other against all forestry operations in the State and is being disloyal, anti-employment and so on. Of course that does not follow. One has to take a balanced view. Of course one must support the industry, but one must seek to ensure that the National Estate values are taken into account. So I reject that sort of notion. I return to the point that the memorandum of understanding provides a process of consultation which the Federal Government is willing to undertake but which Mr Gray apparently has ignored. Even if the State thought that it was within its rights to go ahead with logging at Jackeys Marsh in the first place, it should have responded to the Prime Minister's request by stopping logging pending consultation and the dispute settling procedures under the memorandum of understanding. Those procedures should be allowed to take their course before further logging of this area. I oppose the motion. Question put: That the motion (Senator Archer's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 28 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. Knowles, S. C. Archer, B. R. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Baume, Peter Newman, J. M. Bjelke-Petersen, F. I. Parer, W. R. Boswell, R. L. D. Reid, M. E. Brownhill, D. G. C. Sheil, G. (Teller)Carrick, Sir John Short, J. R. Collard, S. J. Teague, B. C. Crichton-Browne, N. A. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Jessop, D. S. Watson, J. O. W. Kilgariff, B. F. Withers, R. G. Aulich, T. McIntosh, G. D. (Teller)Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Powell, J. F. Cook, P. F. S. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Robertson, E. A. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Sibraa, K. W. Foreman, D. J. Siddons, J. R. Gietzelt, A. T. Tate, M. C. Giles, P. J. Vigor, D. B. Grimes, D. J. Walsh, P. A. Haines, J. Zakharov, A. O. McClelland, Douglas Hill, R. Bolkus, N. Puplick, C. J. G. Richardson, G. F. Messner, A. J. Morris, J. Chaney, F. M. Jones, G. N. Durack, P. D. Button, J. N. Question so resolved in the negative. Senator WATSON(Tasmania)(4.33) —I move: That the Senate take note of the papers. The tax expenditures statement argues that revenues forgone through tax expenditures-that is, the current system of exemptions, deductions and rebates within the confines of the Income Tax Assessment Act, et cetera-are significantly less than the cost of direct outlays. I think that this is quite an interesting observation. While acknowledging that it is so, I must point out that it creates tax shelters. I find it strange that the Government supports such a statement in view of what is happening in the United States of America, which is trying to remove tax shelters. Whenever one provides a special exemption or deduction under income tax legislation to a special class of taxpayers, other people can take advantage of that and a tax shelter is created. In view of the recent emphasis on the need to eliminate tax rorts, it is rather surprising to see a Treasury statement taking this form. The fact remains that expenditures by this Government are very high. This presupposes that there must be very high revenue to support those expenditures. Nevertheless, the fact remains that the Government's current taxation regime is the most punitive in Australia's history. In fact, I believe that 25.5 per cent of our gross domestic product is raised by taxation. We all know that since the Hawke Labor Government came to power the tax burden has increased quite dramatically-in fact, by 61 per cent over four years. On pages 15 and 16 of this statement, paragraphs 60, 64 and 65 highlight the fact that social security and welfare in particular, and superannuation and retirement benefits, make the large contribution to revenue forgone. I remind the Senate that when the Hawke Government first came to power its first attack was on superannuation lump sum benefits paid on retirement. This Government attacks any wealth creating scheme. While other countries in the Pacific region are trying to create wealth, this Government is interested in wealth redistribution to the detriment of any creative activity within the Government. This document is really an apology of a document. I quote from page 1, where it says: While tax expenditures can be identified, their costing is either not feasible or not currently available. So what is the purpose of producing a document when it cannot be substantiated in those terms? What is the worth of this statement when it is based on such uncertain figures and such constraints that operate within this domain? I think that the document has limited appeal and limited worth and I find very little to commend it. Senator MICHAEL BAUME(New South Wales)(4.36) —I seek leave to continue my remarks on this paper later. Leave granted; debate adjourned. Senator POWELL(Victoria)(4.37) —I move: That the Senate take note of the paper. I wish to draw attention in particular to one or two sections of this paper, the 1985-86 annual report of the Policy Co-ordination Unit. It is interesting that almost halfway through its report the Unit makes a reference to the social security system and expresses the view that its initial concern is poverty alleviation and the reduction of income inequalities. While one cannot disagree with that objective-it has been the basis of the system in this nation-it is quite clear that that goal is really not being met in current circumstances. Perhaps one could say that it has never really been met. It is also evident from this report that some specific areas need particular attention. To back up those remarks, I point out that poverty alleviation has not occurred and in particular in recent years the position and numbers of people in poverty have worsened. For example, since March 1983 unemployed young people under 18 have dropped to a level of 60 per cent plus below the poverty line. These people are 6 per cent worse off than they were when this Government came to office. A married couple with four children who were below the poverty line have fallen 3 per cent further and perhaps, most significantly, single parent families are falling further and further below the poverty line. Their position has worsened by 2 to 3 per cent in the past three or four years. So it can be readily seen that, while the goal of the social security system might be the alleviation of poverty, the goal is certainly not being achieved. One of the major factors there has been the increase in unemployment. The report goes on to a section which is headed `Rationalising tax and social security'. That section pays a great deal of attention to some of the inequities and makes some suggestions about potential rationalisation. On the issue of inequities, we have seen recently in the Senate actions which have served to increase those inequities. Those actions do no credit to the Parliament, in particular the Senate. They have reduced the marginal tax rates for those people in employment, in comfortable circumstances, and in particular those at the highest level of income in our society. At the same time they have ignored the position of people who, as is clearly outlined in this paper, have fallen further and further below the poverty line to the point where, as a chart in the report shows, some people on pensions are now paying an effective marginal tax rate of up to 75 per cent. These are all issues that need to be addressed. When the Australian Democrats address these issues, which we so often do, it is often suggested that we are being irresponsible. That is not a worthwhile response when we are talking about people on very small incomes or with no income. It is not that the Australian Democrats do not have an approach to taxation which would cover some of the proposals that we have made. As I have said, taxation levels for people on high incomes have been reduced. In the recent Budget the Government could have done something to allow people to get out of poverty and to allow more to be done for the people mentioned in this report but it did not do so. We have estimated that the abolition of negative gearing for company takeovers could have brought in well over $1 billion, for instance. We have suggested that the Government could impose a duty on luxury imports for those people who can afford them. That would bring in roughly half a billion dollars. The elimination of transfer pricing is another of our suggestions. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator Powell —I seek leave to continue my remarks later. Leave granted: debate adjourned. Senator CHANEY(Western Australia-Leader of the Opposition)(4.43) —I move: That the Senate take note of the paper. I do not wish to debate this report for even the five minutes permitted to me. The Industries Assistance Commission report on reconditioned automotive engines recommends that imports of used and reconditioned engines be dutiable at a general rate of 15 per cent. My reason for speaking on the report at this stage is that I have had the unusual experience of having received a number of representations on this report hot on the heels of its having been brought down. What is unusual is not that I received representations but that those representations were in support of the IAC position. The representations came from people engaged in both the importation and the reconditioning of engines. In each case the people making representations were concerned that the Government would be put under pressure to ignore the Industries Assistance Commission's report and to grant a greater level of tariff protection than that recommended. I thought it was worth putting on record the fact that there are those concerns about and the belief that some of the major companies which are concerned with the reconditioning of engines might seek to follow that approach, and perhaps to put those people on notice that there is an active concern in that regard. Certainly on the basis of the facts as set out in the IAC report and the facts which have been put before me by those who have chosen to come to me and who are making representations also to the Government, it appears that there is a reasonable situation with respect to the importation of engines and that the measured decline in the domestic reconditioned engine market is in part accounted for by factors beyond the importation of engines from Japan. As I have said, I do not wish to debate the report now. I simply put on record the fact that there is some industry concern that the Government will not follow the IAC recommendations. I look forward to seeing whether the views which have been predicted, asking for much higher tariff protection, eventuate. I mention it because there is a general view in the community that we should avoid any level of tariff protection which is unnecessary, because any section of industry that is protected tends to raise the costs of other sectors of industry that use what is being imported as an input. The Opposition is concerned, as is the Government, I believe, to try to ensure that tariffs are kept at as low a level as is reasonable for the Australian industry participants. I seek leave, Mr Deputy President, to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia)(4.46) —I move: That the Senate take note of the paper. The report underlines in poignant terms the crisis which is facing many of our rural industries. World-wide, there is an economic crisis which is affecting developing countries, and the people of those countries are suffering poverty and unemployment. The development programs which are being offered are suffering enormous setbacks, and commodity prices are plummeting under this regime. Australia is suffering like the rest of the world, but here the cities seem to be somewhat insulated from the worst effects of this type of depression. Just imagine the mutiny from unions if wages were cut by 50 per cent or by 75 per cent! That is exactly the type of thing that is happening to our rural producers. That is the sort of drop in income which is now being suffered by citrus growers, after deduction of the costs of picking and various other costs which arise in connection with fuel and marketing. Many of our country people-citrus growers, cotton growers, sugar growers, and wheat farmers, particularly in Western Australia-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 those costs. It is a disgrace. The Government's policies are in large part the cause of this great rural depression. The costs of the world trade wars are being carried unfairly on the shoulders of a minority of Australians-namely, those in the export industries. Tariff protection of our import-replacing manufacturing industries becomes a cost on the whole of the community, but more than half of this cost ends up directly on the backs of exporters. Tariffs on imports are equivalent to taxes on exports. For this reason, I support the Government's efforts to cut tariffs, replacing tariffs with bounties on domestic production wherever there is a necessity for such help to the industry. However, the Government appears to be reluctant to pay bounties because bounties are a direct cost to the exchequer, whereas tariffs come directly into the Government's coffers. The other great impost on our exporters is the Government's encouragement of foreign investment. This brings `money'-or paper money, capital, in the form of loans and guarantees-into Australia, and it forces up our exchange rate above the level at which our exports can compete on world markets. It seems to me reasonable and fair that importers and foreign investors should pay the costs of bounties to compensate exporters and domestic manufacturers for the damage that they cause to our export economy. A tax on moneys leaving the country could actually handle this problem and could be converted into bounties in relation to industries which are providing our local market and which could then develop into export industries. The IAC has proposed that tariff protection of the citrus industry should be progressively reduced according to the 1982 plan, but it has failed to produce any realistic alternative solution. Australia is wide open to large scale currency manipulation and to foreign takeovers. The people who are paying the price are the exporters. The burden falls most heavily on our rural exporters, who are, for the most part, individual operators without any large financial reserves. In this report the IAC coldly recommends that they be `adjusted' out of business rather than receive the support they deserve, the support owed to them by those who prosper from tariff protection and by those who speculate in Australian dollars and make it impossible for them to compete on world markets. It is important that we should consider our farmers. It is important that the Government should act to develop a new world economic order and to put pressure on other countries to support that economic order. In the meantime, the Government needs to give realistic support to our citrus industry, and that is what I urge it to do, rather than follow the wishy-washy type of proposals set out in this report. Senator PETER BAUME(New South Wales)(4.51) —I seek leave, Mr Deputy President, to continue my remarks later. Leave granted; debate adjourned. Senator PETER BAUME(New South Wales) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory)(4.53) —I move: That the Senate take note of the paper. I wish to speak briefly on the September outlook paper for the aviation industry. These papers, which are very useful, have been produced on a regular basis since 1982. I see from the foreword that this is the sixth to be published. When one looks at all of the facts and figures, graphs and tables, the picture that emerges of the aviation industry is a complex one which has become even more complex in recent times due to alterations to aviation administration and charges and to Australia's economic problems. At the end of the paper on page 37 there is a summary of the outlook for the industry. I will focus on the conclusions reached regarding the domestic aviation industry, and in particular the future for the commuter segment of the industry. The paper notes that, in spite of provisional data indicating an increase of 7.8 per cent in passenger uplift in 1985, performance in this sector is very uneven, with most east coast operators recording small declines or, in some cases, only modest growth. The paper states: With current cost pressures (including recent large increases in air navigation charges) facing the commuter segment and the short term outlook for the rural sector, at best, only modest aggregate growth is likely to be achieved in 1986 . . . The paper concludes: With the slowing down of the Australian economy and the continued depressed conditions prevailing in the rural economy, the prospects for growth in general aviation activity are not encouraging. While this does not augur well for commuter aviation services across the board, it will have a particularly detrimental effect upon the industry in the outback, where light aircraft and commuter services are heavily relied upon by many remote communities. The additional impost of the increased aviation charge, the cost recovery scheme, may be too much for the small commuter services to bear or they may be forced to pass on the increase in costs to consumers, which in turn brings about resistance from their clients and so a dwindling turnover. Financial viability then comes into question. This would not be such a bitter pill to swallow if it were not for the fact that in the Northern Territory, for example, the airport facilities for which the charge is supposed to pay do not exist, or exist in a very minor way. The poor state of the two major airports at Darwin and Alice Springs is well documented. But they are not the only ones that are in bad shape. The Fokker Friendship service to Tennant Creek has been threatened-in fact it has gone now-by the fact that the main runway is in such a state of disrepair as to be unable to support the landing or taking off of aircraft. That airstrip was also unusable by all aircraft earlier this year when heavy rains produced extensive damage. This damage was eventually patched up, only to recur with the next tropical downpour. So the facilities that this levy is supposed to pay for are difficult to identify at a number of Territory airports and airstrips. The burden that the increased levy imposes on private aircraft operators is even more onerous than that on commercial operators who at least have the option of passing on the increased costs to passengers and other customers, if those passengers and customers can afford it. A private pilot who flies for a hobby or who relies on his or her aircraft as a means of transportation from a remote station to the larger urban centres is hit very hard by this impost. Aircraft are used to fly to remote settlements and homesteads and are used for mustering, in mining fields, on Aboriginal settlements and for tourist air charter operations. Recently I received a letter from a private pilot in Darwin who has a Victa Air Tourer; he has had it for some 12 years. His aircraft is based at Darwin Airport. He flies a maximum of 40 to 50 hours per year on average. In the past 12 months he flew for only 20 hours. His account for air navigation charges for the next 12 months is over $600, which represents an increase of 17 per cent on the previous year's account. His cost per flying hour in air navigation charges is $30, which is more than its costs to buy enough fuel to fly the plane for one hour. This pilot has pointed out, quite reasonably, that in return for that charge he receives very little. At Darwin Airport there are no special facilities available for private aircraft other than a parking spot and some degree of security. This applies also to Alice Springs where aircraft have to park on a gravelled area, causing damage to spinning propellors and to the skin of the aircraft. As with most other government airports the facilities, such as they are, are provided for commercial aviation. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator Kilgariff —I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator SHEIL(Queensland) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MICHAEL BAUME(New South Wales)(4.59) —I move: That the Senate take note of the paper. This Prices Surveillance Authority annual report includes on page 101 a direction from the Treasurer (Mr Keating) in relation to unit costs. It is appropriate to recall what he wrote about one year ago to the Chairman of the Prices Surveillance Authority. He wrote: . . . in the context of a buoyant economy and the induced price effects of depreciation, the Government will seek price restraint . . . I draw to the attention of the Senate the extent to which the Treasurer was setting an outline which has now been established to be total nonsense. There is in fact no buoyant economy and internal growth has been destroyed. It might be as well to note in that context the impact of the Prices Surveillance Authority itself on the decline in profitability that has taken place. As evidence of this decline in profitability I quote from the report, which states on page 29: . . . the latest available information . . . suggests that profit performance has deteriorated in the second half of the year. That is, 1985-86. It further states: The turnaround in general demand conditions in the second half of the year has seen profits subject to a downturn and to generally conservative expectations for 1986-87. Declines in second half profitability appear to have occurred in the Retailing Textiles and Clothing, Electricals and Durables, Automotive, Miscellaneous Services, and Food and Household sectors. The downturn is also likely to be reflected strongly in the Finance and Investment Services, including Banking, sectors. The report refers to the impact of falling world commodity prices on profits and to the depreciation of the Australian dollar, which has had an adverse effect on profits in those industries heavily dependent on imports, including merchants and agents, the media-particularly television series costs-transport, automotive and high technology sectors, and some companies in the electrical and durables and light engineering sectors. It talks about the impact of record interest rates on costs and therefore on profits, and it also mentions that the announcement of the fringe benefits tax appears to have affected sales in the automotive section in the latter half of 1985-86. Of course that impact has continued. It is striking, in an environment of falling profits, that we find this statement: The second full year of the Authority's operations was marked by a very substantial expansion of its activities. By year's end, the scope of surveillance had effectively doubled. . . We have falling profitability and economic difficulty, and yet the activities of this organisation are doubling, while instruction from the Treasurer is that his direction to the Authority is intended as a general guideline and `is not intended to inhibit price adjustments in individual cases where profit margins are inadequate or where increases in profits will serve to attract additional resources into investment and employment'. The Treasurer himself is conceding there that profit is not a dirty word, that profit brings employment and investment, and that, partly as a result of the doubling of the activities of this organisation and its campaign against profitability, profits have been reduced. As a result we are facing the reduced levels of investment and employment, with rising unemployment, which are marring our economy at this stage. This is one of the reasons why this Authority will be disbanded by a Liberal government. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator VIGOR(South Australia)(5.04) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator ARCHER(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. The DEPUTY PRESIDENT —In accordance with section 121 (3) of the Commonwealth Banks Act 1959 I present the annual reports and financial statements of the Commonwealth Banking Corporation, the Commonwealth Bank of Australia, the Commonwealth Savings Bank of Australia and the Commonwealth Development Bank of Australia, together with the Auditor-General's report thereon, for the year ended 30 June 1986. Assent to the following Bills reported: Australian Institute of Sport Bill 1986 Australian Institute of Sport (Consequential Provisions) Bill 1986 Remuneration and Allowances Alteration Bill 1986 Social Security and Veterans' Affairs (Miscellaneous Amendments) Bill 1986 Student Assistance Amendment Bill 1986 Income Tax Rates Bill 1986 Income Tax Bill 1986 Taxation Laws (Miscellaneous Provisions) Bill 1986 Medicare Levy Bill 1986 Freedom of Information Laws Amendment Bill 1986 Taxation Laws Amendment Bill (No. 3) 1986 Bank Account Debits Tax Amendment Bill 1986 Bills received from the House of Representatives. Motion (by Senator Walsh) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Walsh) read a first time. Second Readings Senator WALSH(Western Australia-Minister for Finance)(5.06) —I move: That the Bills be now read a second time. I table the explanatory memoranda for the Bills and seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- STATES GRANT (TERTIARY EDUCATION ASSISTANCE) AMENDMENT BILL (No. 2) 1986 In the Budget Speech and in a statement issued by me on 19 August 1986 details of the Government's tertiary education policies for 1987 were announced. The Government will maintain the momentum of its policies including the maintenance of growth, provision for disadvantaged groups, the development of stronger links with industry and the maintenance of rational steady planning as the basis for decision making. To support continued growth in the system increased resources are required and as a result of budget decisions funds available to tertiary education institutions will increase by 2.6% in real terms in 1987. In the budgetary circumstances outlined by the Treasurer, however, the Government has decided to introduce an administration charge of $250 per higher education student per annum from 1987 as a contribution towards the administrative costs of institutional budgets. This Bill gives effect to the Government's decision in respect of higher education students in institutions in the States and Northern Territory funded by the Commonwealth. The charge will apply equally to all full-time, part-time and external students undertaking award courses or courses which could form part of an award at a university, college of advanced education or other institutions where the Commonwealth funds higher education places. Institutions will be required to collect the administration charge at the time of each enrolment or annually where students formally enrol only once in a course that may extend over more than one calendar year. For each institution the Commonwealth general recurrent grant payable for a given year will be reduced by an amount equivalent to 90 per cent of the revenue estimated to be derived from the charge. The remaining 10 per cent of revenue (estimated at $9.306 million for the States and the Northern Territory in 1987) will be retained by the institutions for expenditure within the institutions for their own purposes. The Bill provides for an appropriate adjustment to be made to payments in the following year where the reduction in grant does not match 90 per cent of the actual administration charge revenue. The charge will be indexed on an annual basis according to CTEC processes for adjusting administrative (non-academic) salary costs. The Bill provides for exemption from the charge for institutions' own award holders, full fee paying overseas students and both full-time and part-time students who are pensioners and beneficiaries in the categories eligible for an education allowance for full-time studies. Beneficiaries under the age related education allowance scheme (incorporating TEAS), Post Graduate Awards Scheme (PGA) and ABSTUDY grants, who are liable for the charge, will have their benefit increased by the value of the charge. Similarly the Overseas Student Charge applying to subsidised overseas students will be reduced by the amount of the administration charge. Under these arrangements the Government estimates gross revenue collections by institutions in the States and Northern Territory at $93.064 million in 1986-87 of which the institutions will retain $9.306 million for their purposes. Adjustments to student assistance benefits and the Overseas Students Charge will cost $27.700 million. Revenue from the charge is therefore estimated at $56.057 million in 1986-87. Consequential changes in respect of Commonwealth institutions are being made in other Bills being introduced today. I commend this Bill to the Senate. AUSTRALIAN NATIONAL UNIVERSITY AMENDMENT BILL 1986 The purpose of this Bill is to amend the Australian National University Act 1946 to provide for the imposition of the higher education administration charge by the University as announced in the 1986-87 Budget. The charge is to apply to Commonwealth institutions from 1987 on the same basis as will apply in the States, with the payment of the charge as a condition of enrolment. The Bill also provides for the exemption of certain categories of student from the charge as outlined in my statement of 19 August 1986 on Tertiary Education and the 1986-87 Budget. Under these arrangements the Government estimates the gross revenue collection by the University in 1987 at $1,579,000 which will result in the recurrent grant for 1987 being reduced by $1,421,000. I commend the Bill to the Senate. CANBERRA COLLEGE OF ADVANCED EDUCATION AMENDMENT BILL 1986 The purpose of this Bill is to amend the Canberra College of Advanced Education Act 1967 to provide for the imposition of the higher education administration charge by the College as announced in the 1986-87 Budget. The charge is to apply to Commonwealth institutions from 1987 on the same basis as will apply in the States, with the payment of the charge as a condition of enrolment. The Bill also provides for the exemption of certain categories of student from the charge as outlined in my statement of 19 August 1986 on Tertiary Education and the 1986-87 Budget. Under these arrangements the Government estimates the gross revenue collection by the College in 1987 at $1,540,000 which will result in the recurrent grant for 1987 being reduced by $1,386,000. I commend the Bill to the Senate. MARITIME COLLEGE AMENDMENT BILL 1986 The purpose of this Bill is to amend the Maritime College Act 1978 to provide for the imposition of the higher education administration charge by the College as announced in the 1986-87 Budget. The charge is to apply to Commonwealth institutions from 1987 on the same basis as will apply in the States, with the payment of the charge as a condition of enrolment. The Bill also provides for the exemption of certain categories of student from the charge as outlined in my statement of 19 August 1986 on Tertiary Education and the 1986-87 Budget. Under these arrangements the Government estimates the gross revenue collection by the College in 1987 at $69,000 which will result in the recurrent grant for 1987 being reduced by $62,000. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Walsh) read a first time. Senator WALSH(Western Australia-Minister for Finance)(5.08) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- On 6 June this year the Minister for Housing and Construction announced that the Government would introduce legislation to terminate the receipt of applications under the Fraser Government's Home Deposit Assistance Scheme. That scheme only applied to homes purchased between 18 March 1982 and 30 September 1983 and is now effectively obsolete. Only a small number of late applications have been received over the past 12 months. Honourable members will recall that the previous government abruptly terminated The Home Savings Grant Scheme in a harsh and draconian manner which left hundreds, perhaps thousands, of people disadvantaged by its insensitivity. This Government has taken a more enlightened approach in terminating the outgoing Home Deposit Assistance Scheme. When we introduced the First Home Owners Scheme in 1983, we undertook not to wind up the Home Deposit Assistance Scheme immediately. This was in order to allow sufficient time for people purchasing in the relevant period to lodge their applications. More than three years have passed since the scheme was superseded by the First Home Owners Scheme. The Bill now before the Senate provides that 31 December, 1986, will be the last day on which an applicant can deliver a valid application under the old scheme. Very few applicants, if any, will miss out on assistance because of the length of time we have allowed for lodgment of their applications. Applications are now being received at the rate of only four or less each week. In the interests of administrative efficiency, governments must set end dates for lodgment of applications under superseded schemes such as this. Savings in terminating the Home Deposit Assistance Scheme, which are largely administrative, will amount about $150,000 in the first full year. The Bill also provides that 1986-87 will be the last financial year requiring an Annual Report to Parliament on the operation of the Act. As the Act currently stands, the 1985-86 Annual Report was the last required. However, for the sake of completeness we propose an additional report for 1986-87. The sensible way this Government has handled the termination of this scheme is one more indication of the priority we give to housing generally. That priority is exemplified in our First Home Owners Scheme. Almost $1 billion has been approved by the Labor Government under the scheme since its inception in October 1983. $210 million has been allocated under the scheme this financial year which will assist more than 41,500 low and middle income earners in buying or building their first home. This will bring to 245,000 by the end of 1986-87 the number of First Home Buyers helped under the scheme since it was introduced. Unlike the Home Deposit Assistance Scheme, the First Home Owners Scheme realistically meets the financial needs of applicants through the choice of payment. Recipients have three choices about the way they receive assistance under the first home owners scheme. Over a five year period, recipients can choose to receive a monthly interest subsidy, a lump sum plus a monthly subsidy, or a larger lump sum with a smaller monthly subsidy. The total benefit under the scheme is up to $6,000 depending on income and the number of dependent children. The first home owners scheme is only one example of the high priority this government gives to housing. We are committed to providing affordable and adequate housing for all Australian households. Almost 500,000 Australians are employed in the housing and construction industry and the government's policies in this area make a major contribution to the nation's wealth. Since this government came to office in 1983, federal funding for public housing has been increased by almost 130 per cent. This indicates the priority we place on alleviating housing related poverty. In 1986-87, a record $1275.9 million will be provided from this government to the states for public housing. This is being provided under the Commonwealth-state housing agreement and as low interest loans under loan council nomination arrangements. The Bill now before the Senate continues this government's real efforts in helping many thousands of Australians realise their home ownership aspirations. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Walsh) read a first time. Senator WALSH(Western Australia-Minister for Finance)(5.09) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill contains Budget measures that will amend the Aged or Disabled Persons Homes Act 1954, the National Health Act 1953 and the Nursing Homes Assistance Act 1974. These measures will begin the process of redistributing resources for care of aged people away from nursing homes to alternative forms of residential care as part of the Government's objective to increase the range of both residential and community care services. In recent years there have been a number of Reports, in particular, from the Senate Select Committee on Private Hospitals and Nursing Homes (the Giles Report), the House of Representatives Expenditure Committee (the McLeay Report) and the Auditor General, which have identified significant problems associated with the provision by the Commonwealth of aged care services. Prominent among the criticisms was that Government intervention in residential care programs for the aged had been largely unseen, unplanned and unco-ordinated and that there was an inappropriate mix of services between and within institutional accommodation and home and community care programs. In addition, there has been an inordinate increase in the cost of nursing home accommodation in the past 13 years compared to increases in the consumer price index and average weekly earnings. Against this background, I commissioned a Review by my Department with the objective of developing a strategy for change. The Report of the Nursing Homes and Hostels Review, which I tabled in the Senate on 14 April 1986, made recommendations for the development of a restructured residential care program within the framework of four basic philosophical goals: Aged and disabled people should as far as possible be supported in their own homes, in their own communities. Aged and disabled people should be supported by residential services only where other support systems are not appropriate to meet their needs. Services should be provided in an atmosphere and using processes which promote as far as possible rehabilitation and restoration of function. The manner in which services are provided should develop and enhance personal freedom and independent functioning of all residents. Services should be based on a recognition that for many people, discharge to a residential service providing a less intensive form of care or to a community-based support service will be a possible and desirable outcome. The Review made recommendations over the whole range of issues relating to the Government's programs for the provision of residential care for the aged, including assessment and rehabilitation, program structure, growth control, standards, funding issues and the need to promote innovation and flexibility. When tabling the Review, I stated that the Government endorsed its broad philosophy, directions and strategy for change. Since April, the Commonwealth has undertaken extensive consultations on the strategy for change with State Governments, the nursing homes and hostels industry, consumer and other welfare groups and professional and staff organisations. A number of important matters were raised in the consultations which have influenced the overall strategy of changing the emphasis of the program from nursing homes to hostels, and indeed now form part of the basis of the decisions taken by the Government in the recent Budget process. These matters include: ii(i) the requirement for flexible planning, which provides for monitoring, evaluation and changes where necessary, including more integration with community services; i(ii) a publicised and better resourced hostel sector so that hostels can care for increasingly dependent aged people; (iii) the extension of residential care services beyond hostels to other forms of accommodation such as group housing arrangements; (iv) the expansion of community services to assist those elderly people most at risk of premature and inappropriate institutionalisation; and (v) the importance of carefully developing the process of assessment so that it will gain support from consumers, professionals and service providers. This Bill will implement decisions concerning two of these matters, namely, the need for a more flexible and integrated planning approach to the provision of residential services and a better resourced hostel sector. The other three matters are being addressed outside the context of this Bill. While Australia overall has a very adequate provision of nursing home accommodation, its community care and domiciliary services have been traditionally underdeveloped, as have its facilities for hostel care. In order to redress this imbalance, there is a need to moderate the historical largely uncontrolled growth in the nursing home sector and encourage further development of hostel accommodation for the aged. This change in emphasis must be implemented now because the current system, which emphasises the provision of the more intensive institutionalised care services provided by nursing homes, is not producing the range of care options which elderly people want and does not respect their drive for independence. It is also encouraging a significant level of inappropriate admissions of up to 25% of current nursing care residents. Furthermore, it will be difficult to sustain rapid growth in expensive nursing home beds in a climate where there is a rapidly ageing population, both in terms of numbers and as a proportion of the total population. In seeking to change the system there is a need to develop a total aged care policy with an expanded range of options that will achieve improved quality of care within residential institutions and will better match individuals' needs and the care provided. On 17 September 1986, I tabled in the Senate a Statement on the Care of Aged People announcing the Government's planning strategy for the provision of residential care services over the next three year period. The strategy is to maintain growth in new services on the basis of the current national ratio of 100 residential care places per 1000 people aged 70 or over, and within this national ratio to limit the rate of growth of numbers of new nursing home beds to a maximum of 10 per cent of new approvals. This Bill amends the National Health Act 1953 and the Nursing Homes Assistance Act 1974 to implement this strategy by introducing new growth control arrangements over the approval-in-principle and approval mechanisms for nursing homes. The new provisions will enable the maximum number of nursing home beds which can exist at any time during a financial year in each State and Territory to be specified. The maximum number of ordinary beds which may exist in a region in a State or Territory and the maximum number of special needs beds which may exist in a State or Territory will also be specified. The Bill also provides that the sum of the regional maxima in a State or Territory and the special bed maximum for that State or Territory will not exceed the relevant State or Territory maximum. The State, regional and special needs maxima will each comprise the number of existing approvals-in-principle and approvals, plus the number of new beds to be approved during the financial year in each category. These maxima will be determined by a Gazette notice, and may be revoked or varied by later notices published in the Gazette. This gives the flexibility to vary the allocations between States, regions and special needs groups, whilst remaining within the national ceiling determined by Government. Approvals-in-principle, however, will only be granted if they are consistent with the State, regional or special needs maxima in force under a current Gazette notice. In my Statement on Care of Aged People, I announced that the Government plans to approve 2750 new places in 1986-87, 4730 in 1987-88 and 5400 in 1988-89-12,880 additional places overall, of which up to 1295 places over the three year period will be for nursing homes and the balance for hostels. In line with needs based planning principles, the allocation of resources within the State and Territory maxima to both regions and special needs groups will be determined on the basis of supply and demand data, and appropriate consultative processes. I am currently seeking the advice of relevant bodies in each State and Territory, and will both announce and gazette the regional and special allocations of beds later in 1986-87. In future years, new Aged Care Advisory Committees in each State and Territory will be providing me with planning advice so that State, regional and special needs allocations can be announced at the start of each financial year. The Bill will introduce a mechanism to enable the approval of beds in relation to special needs groups. At this stage it is envisaged that special needs groups could include Aboriginals, ethnic communities and the aged disabled, including the deaf and blind aged. This is consistent with other Government initiatives in the Budget context, such as the introduction of funding of up to 100 per cent of the capital costs of projects for financially disadvantaged groups. This Bill will also apply uniform conditions of approval to both government and non-government nursing homes. The existing provisions of the National Health Act 1953 exempt government nursing homes from statutory conditions which relate to the number of beds in an approved nursing home and the approval of patients for admission to a nursing home. However, government nursing homes have in practice been subjected to restrictions on the approved number of beds since 1981. The practice is formalised in this legislation, for both new government nursing homes and additional beds in existing government nursing homes. It is intended that assessment procedures will also apply in government nursing homes. The new planning arrangements will mean that from now on there will be a limited number of nursing home beds available and the administration of the program will move from a submission-based unplanned approach with discretionary decision making on the selection of service providers, to a more needs based planning approach supported by a tendering process for the selection of service providers. Under existing provisions of the National Health Act 1953 and the Nursing Homes Assistance Act 1974, we have the ridiculous situation whereby interested persons may be invited to apply for a certificate of approval-in-principle only where a person applies to have persons invited to so apply. This approach effectively prevents the needs based allocation of resources. This Bill accordingly omits these provisions. In future, advertisements would be placed inviting tenders for a certificate or certificates of approval-in-principle in a region, where the regional maximum allows, or for special needs beds, where the special bed maximum allows. The change in the existing balance between providing intensive care through nursing homes and providing appropriate community services and hostel options will be gradual. It is essential that implementation does not affect residents who are already in nursing homes and that it is carefully monitored, evaluated and where necessary, adjusted. The introduction of the new growth control arrangements is estimated to result in savings of $4 million in 1986-87 and $27.7 million in 1987-88. The Bill will also make a number of minor amendments to the National Health Act 1953 and the Nursing Homes Assistance Act 1974. These amendments will correct some minor drafting defects, up-date provisions and substitute a notice mechanism in the Acts for some of the regulations under the Acts. None of these measures have expenditure implications, although some will result in small administrative savings. Key elements of the Government's revised residential care program for the aged are to provide alternative residential care services to nursing homes in the form of hostels and to strengthen the role of hostels in the care of the more frail aged. The consultation process has confirmed the problem of hostels being under-resourced. In the recent Budget and in response to concerns expressed by the hostel industry and consumer groups, the Government decided that steps should be taken now to provide a firm commitment to maintain the real level of hostel subsidies over time and to increase assistance for the care of more frail aged people. The Bill therefore will amend the Aged or Disabled Persons Homes Act 1954 to provide for: an increase to the hostel care subsidy, respite care subsidy and personal care subsidy beginning 22 October this year-the hostel care subsidy will increase from $1.80 per day to $1.95 per day, the respite care subsidy will increase from $7.00 per day to $7.50 per day and the personal care subsidy will increase from $7.80 per day to $8.40 per day; and an additional increase of $2.60 a day in the value of the personal care subsidy, to $11 a day from May next year to assist the hostel industry provide more adequate levels of personal care for dependent elderly people. The Bill will also provide a mechanism for annual automatic increases in the subsidy rates for hostel care, personal care and respite care. These measures will cost $5.6m in 1986-87 and $24.7m in 1987-88. In addition the Government recognises that increased numbers of hostel beds will necessitate a significant strengthening of the resources available for capital funding. In particular, it has sought to address problems being faced under the current legislation by some financially disadvantaged groups. Under the Aged or Disabled Persons Homes Act 1954, the Commonwealth makes grants to eligible organisations towards meeting the capital cost of homes for aged or disabled people. The amount of a grant may not exceed 80 per cent of the capital cost of the home under the Act. Some eligible organisations which represent financially disadvantaged groups in the community experience difficulty in raising matching funds. The Government, in this Bill, is introducing flexibility in matching arrangements to allow for up to 100 per cent of Commonwealth funds for special groups, including ethnic communities, Aboriginals and other disadvantaged groups. This measure is estimated to cost $500,000 in 1986-87 and $2.8m in 1987-88. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Debate resumed from 22 October, on motion by Senator Collard: That the Kakadu National Park Plan of Management, prepared under the National Parks and Wildlife Conservation Act 1975, and laid before the Senate on 18 September 1986, be disallowed. Senator ALSTON(Victoria)(5.10) —Why is it that 150,000 tourists go to the Kakadu National Park each year? The answer clearly lies in its breathtaking sandstone escarpments, its majestic falls, its spectacular Aboriginal rock galleries, its wonderful wetlands, the breeding grounds for all manner of native fauna and its exquisite ecosystems. The unique beauty of stage 1 is well known; it was established by the Ranger Uranium Environmental Inquiry. The first plan of management quite properly proposed that it be placed on the World Heritage List and indeed it falls squarely within the requirements of Article 2 of the World Heritage Convention. Accordingly, stage 1 was declared a national park by the previous Government in 1979 and it was listed as a World Heritage site in 1981. Stage 1 must remain inviolate. To date, Australia has had an honourable history in this area. Stage 1 covers some 6,144 square kilometres. It is an area of priceless significance. In August 1974 Australia became one of the first countries to ratify the International Convention for the Protection of the World Cultural and Natural Heritage, known as the World Heritage Convention, it having been adopted by the General Assembly of the United Nations Educational, Scientific and Cultural Organisation in 1972 and having entered into force in 1975. It has now been signed by some 85 countries. The Convention aims to ensure international co-operation for the safeguarding of the globe's irreplaceable heritage against the pressures of population explosion, resource scarcity, technological change, industrialisation and the changing of national boundaries. To date the World Heritage List includes some 216 places-such world famous tourist resorts as the Grand Canyon, with its fossil evidence of the beginnings of life on earth, and great national parks such as Yellowstone in the United States of America, Serengeti in Tanzania and Sagarmatha in Nepal, which includes Mount Everest. Kakadu National Park takes its place as a worthy member of this exclusive club. Entry to the club has hitherto not been easy. Professional and respected non-governmental organisations are commissioned to assess each place and to make recommendations to the World Heritage Committee. The criterion of outstanding universal value is very stringent. Currently in Australia five World Heritage properties are listed on the register of the National Estate and, therefore, are protected under the Australian Heritage Commission Act 1975. These are: The Great Barrier Reef, the Lord Howe Island group, the Willandra Lakes region, the western Tasmanian wilderness national park and Kakadu National Park. They have been declared by regulation to form part of the World Heritage pursuant to the World Heritage Properties Conservation Act 1983. Proposals are forwarded to the Secretariat of the World Heritage Committee and the 21 members of the Committee of experts assess each application. Currently, Australia is represented on that Committee. When a state becomes a party to the Convention it recognises an obligation to ensure: . . . the identification, protection, conservation, preservation and transmission to future generations of the cultural and natural heritage situated on its Territory. The Convention provides for buffer zones which should be determined through technical studies. A protracted procedure is specified. It is not to be undertaken lightly or quickly. Indeed, Annex 1 to the Convention sets out the operational guidelines, which require each party to submit tentative inventories of properties which it intends to nominate during the following five to 10 years. It is, therefore, a slow process. Paragraph 21 of the Convention makes it clear that a site must be wholly exceptional, that it must be `an outstanding example'; that it must contain `superlative natural phenomena', or areas of `exceptional national beauty' or `outstanding universal value'. As I have said before, hitherto it has been a leisurely process, somewhat akin, perhaps, to the path to beatification and sainthood in another arena. The five Australian sites were nominated in 1980 and 1981 and, in each instance, at the request of the State government concerned. It needs to be a very selective pro- cess. Otherwise these places of outstanding significance can very quickly become tourist meccas and the currency can be very quickly debased. The first management plan expired in December 1985 and there was no great urgency to replace it with a second management plan. All was going along at a leisurely pace, with the preparation of a further draft management plan well in prospect, until 14 September last. That was a date of some significance. It was shortly after the decision to sell uranium to France had hit the fan. The Government was very much under pressure. The National Times on that date reported that the Prime Minister (Mr Hawke) had written to Mr Cohen, the responsible Minister, or, as I will suggest later, the irresponsible Minister. The Prime Minister expressed concern about the absence in the draft management plan of `any provision for the possible future recovery of minerals within the park'. Of course, that was in defiance of the Australian Labor Party National Conference decision in Hobart in July 1986. But the Prime Minister nonetheless went on: Given Australia's present current account deficit I would have serious reservations with any proposal that would result in the imposition of a more restrictive framework on potential exploration or development within Kakadu. One might have thought that that was a perfectly proper and reasonable allocation of priorities. But, of course, the letter was leaked, not by hapless Hawke. Perhaps it is pretty obvious who was responsible. The Cohen plan was dramatically tougher than the Fraser plan had ever been. As I have said, that expired in December 1985 and it would have allowed general mining in the park. The new plan that we are currently considering restricts mineral activity to `pre- existing interests'. These were interests that were granted by way of leases before 1975, when the national park was first announced, and there are only 14 granted leases that fall within that category. Understandably and responsibly, not only the Prime Minister but also Senator Gareth Evans, Senator Walsh, Mr Keating and Mr Dawkins all opposed that position of Mr Cohen. Nonetheless, in the atmosphere of panic that prevailed on that day, Senator Evans's proposals simply went out the window. Mr Cohen wanted to declare all of stages 1, 2 and 3; Senator Evans wanted to have an assessment of the resources of the existing national park and he was certainly quite relaxed about mining in stage 3. But on 16 September the Prime Minister caved in. The Caucus compromise resulted in a ban on all new mining and exploration in stage 1 and stage 2 but left open the way for mining in stage 3. It was agreed that immediate steps would be taken to nominate stage 2 of the park, to enlarge the boundaries, including the Gimbat and Goodparla pastoral leases, and perhaps to allow mining at a later time, with the minimal concession that Coronation Hill, with its extensive gold and platinum reserves, the mining of which was already under way, should be excised. Otherwise the three-mine policy of the Labor Government was to be retained, with only Peko's Ranger mine, the Queensland Mines Ltd mine at Nabarlek and the Roxby Downs mine in South Australia being allowed to continue with uranium mining. The rationale was incomprehensible. It was clearly a classic, shabby, political compromise. Of course, there is now very widespread dissatisfaction, and I will deal later with the respectability of that dissatisfaction. Suffice it to say that, until 16 September this year, the Government was prepared to acknowledge the validity of the findings of the Department of Resources and Energy which had assessed that at least one-third of stage 3 was highly prospective for minerals, especially for gold and platinum. By contrast, it has not assessed stage 2 other than to say that it was highly prospective for uranium but it was probably only moderate for gold, platinum and base metals. Of course, in the ideological fervour that recurrently grips the Australian Labor Party, that was sufficient for it to ban all forms of mining in stage 2, irrespective of the merits. Senator Evans's position is on the record. We know that he wrote to Mr Copeman, a key figure of the demonology of the Labor Party in this area, in these terms: It is my view . . . that it would be premature to pursue the World Heritage listing of Kakadu Stage Two until related questions about mineral activity in the Kakadu region have been addressed by the Commonwealth. You can be assured that I am following these issues carefully with the long-term objective of establishing a multiple land use policy in the region . . . Of course, that is now a complete anathema to the Government. No doubt Mr Hawke would throw in the word `obscenity' if he got half a chance. Of course, Senator Evans had to concede his position in those classic words of the Nixon Administration, that it was `no longer operative' and that he `no longer held that long term objective'. Let us revert to 16 September, which I suggest in this debate is a day of infamy. It was the very day when, at 8.30 in the morning, the Cabinet meeting had cobbled together a thoroughly dis- honourable and discreditable compromise. It involved the agreement to seek World Heritage listing as soon as possible. Indeed, the documentation was sent to the World Heritage Committee the following day nominating stage 2 for inclusion in the World Heritage List. It is not at all clear whether that documentation is in the appropriate form or that it was accompanied by the necessary data and report. In that regard I refer to the evidence of a public servant who appeared before Estimates Committee D on 7 October last. He was asked about the position and he said he thought the letter had been signed before the disgraceful Press release, which we will come to shortly. He stated: The National Parks and Wildlife Service has prepared, in effect, information along the lines of a new nomination, although it is not regarded as a new nomination, and that has been transmitted to Paris. . . . . We have had an acknowledgment from the World Heritage Committee. This information has been examined . . . and it will be considered at the World Heritage Committee in November. It is my submission that that process is in flagrant violation of the requirements of the Convention and the guidelines. It is therefore an illegal attempt to secure World Heritage listing. In fact, the requirements under the Convention are that any listing that is forwarded after 1 January must be considered only in the following calendar year. This was submitted shortly after 16 September. It will be brought before the World Heritage Committee in mid-November. Quite clearly it is in breach of the guidelines and is all part of the disgraceful haste that has led the Government into its present predicament. I suggest that it is also an illegal act and that any application to seek an injunction to restrain the Government from proceeding would have a very good prospect of success. It is clear that the action was undertaken without any consultation with the Government of the Northern Territory. That was also a flagrant breach of the Government's own guidelines and, more importantly, of the terms of the undertaking which had been contained in the Minister's letter. It is not dated. I do not suppose that is deliberate but, nonetheless, the wording in the letter is unequivocal. The Minister for Arts, Heritage and Environment (Mr Cohen) writing to the Minister for Mines and Energy, Mr Coulter, stated: In relation to the possible inclusion of Kakadu Stage 2 on the World Heritage List, procedures for nominating possible future Australian sites for World Heritage listing were agreed at the July 1984 meeting of the Council of Nature Conservation Ministers (CONCOM) and included, inter alia, a commitment by the Commonwealth to full consultation with State and Territory Governments. Should the Commonwealth decide to pursue World Heritage listing on the former Stage 2 area, your Government will be consulted in accordance with the CONCOM agreement prior to any approach being made to the World Heritage Secretariat in Paris. That is an unequivocal commitment and it flies in the face of the disgraceful, deceitful and dis- honourable statements made by the Minister subsequently in the House of Representatives. In my submission it amounts to conduct rendering him unfit to retain his office. It has brought the Parliament into disrepute and there is absolutely no justification at all for doing what has never been done before. In every other instance the State or Territory government has been consulted prior to any attempt at listing and its consent has been obtained. In this instance that procedure was to be followed again. It deliberately was not followed. That in itself is bad enough, but the equivocation of the Minister is beyond belief. The shabby attempts to blame others and to pretend that somehow that commitment does not exist does the Government no credit at all and those who retain the services of the Minister likewise have a lot to answer for. If that letter had been sent before 8.30 in the morning, why was there not a subsequent public statement or private explanation, at the very least, to the Territory Government detailing why the events of the morning had rendered that letter inoperative? It is an instance of monumental cowardice. If the letter was sent after the shabby deal, it contained a deliberately false and deceitfully misleading assertion. The Minister has pleaded no contest. He does not deny that he wrote the letter on 16 September in the terms I have just recited, or that he put out the Press release in flat contradiction on the same day. At one stage he made a very squalid and sordid attempt to suggest that he had consulted with others. That emerged-it was not plucked out of the air-from the evidence of a Mr Kerr before Estimates Committee D. He stated: The question of the incorporation of stage 2 in the existing World Heritage list was one of several matters raised. The letter that Mr Cohen sent to Mr Coulter represented the Government's position in terms of consultation. One might have thought that that offered the Minister, who was desperately seeking some way out, the opportunity to explain that somehow or other he had the consultation which the letter clearly committed him to having. If it were not for the fact that others were present at the meeting I suppose he would have been faced with saying: `Well, it is my word that there were consultations. It is the Chief Minister of the Northern Territory's word that there were not'. I seek to incorporate two statutory declarations from very courageous Northern Territory citizens. Terence Robert McCarthy, who is a member of the Legislative Assembly, was present at that meeting. On oath, he stated: World Heritage listing . . . was not discussed whilst I was in attendance at the meeting between the Chief Minister of the Northern Territory, Hon. Steve Hatton, the Federal Minister for Arts, Heritage and Environment, Hon. Barry Cohen . . . However, listing in respect of Uluru National Park was briefly considered. Perhaps a more courageous person yet was a public servant by the name of Alan Gregory Morris, who has also deposed to the fact that he was present at that meeting. He stated: The matter of possible World Heritage listing for Kakadu National Park Stage 2 was not raised between the Ministers while I was present at this meeting. The possible nomination of Uluru National Park for World Heritage listing was briefly raised. One might have thought that that was sufficient to blow the Minister out of the water. He has not since tried to resort to that shabby explanation. What he has done is almost as bad because if one looks at his answer to a question in the House of Representatives on 9 October, when it was suggested to him that he told a deliberate lie-the questioner was asked to withdraw-his answer was: . . . it was intended by the previous Government that Kakadu stage 2 would eventually become part of the park and would be an addition to the World Heritage listing . . . He stated that Uluru National Park had been discussed with Mr Hatton. He continued: However, in this particular case it was intended to be merely an addition to the existing park. He is saying that there was no need to have that further consultation. Quite clearly that is wrong. It is quite apparent that a requirement was undertaken voluntarily by the Government, an undertaking that would be consistent with the obligations of the World Heritage Committee. To pretend that somehow there is any such animal in law as an extension to an existing application is quite fictitious. There is simply no provision in any of the international requirements that would countenance such an arrangement. Once Kakadu National Park had been put on the World Heritage List it remained there. There is no provision at all for an extension. A further application would need to be made in respect of stage 2 and that was always the Government's intention. Again, the Minister has resorted to subterfuge and verbal legerdemain that is quite beyond the bounds of propriety in this Parliament and which renders him quite unfit and unreliable in this matter and presumably in others. He has let down those public servants who were prepared to trot out a couple of excuses before the Estimates Committee. He has then given his own feeble excuse. The end result is that he stands condemned for a flagrant breach of an undertaking and for even shabbier attempts to disown his own dishonesty. There are a number of areas in stage 2 that are of particular conservation value. Many areas are not. More than two-thirds of stage 3 is either bare rock with no vegetation or simply sandy soil supporting heath-like scrub or spinifex-the classic clapped out buffalo country that we have heard so much about. What is required is a sober assessment of the cost benefits of the area and a realistic appraisal of whether it is possible to mine without permanently destroying the natural environment, whilst retaining the integrity and beauty of these unique areas. This does not mean a Swiss cheesing. With the rapid advances in technology, it may well mean that what was not possible at the time of the Fox Ranger Inquiry in 1977 is now eminently possible. Perhaps the most disgraceful performance of this whole shabby episode has been the conduct of the Minister, who has a great deal of explaining to do. In the absence of a pretty compelling explanation to the Parliament, he ought to resign for conduct unbecoming a Minister of the Crown. Either his code of ethics or his standard of honesty is beyond repair. At the meeting of conservation Ministers in July 1984 the guidelines were agreed. They required full consultation by the Commonwealth with the relevant State and Territory governments, as has always been the case. It is perhaps not coincidental that Mr Cohen's letter of 16 September was responding to a letter of some three months earlier. It is therefore again very difficult to understand why there was a need for such haste. It can only have been a product of the panic that beset both the Cabinet and the Caucus on that fateful day. The operational guidelines, as I have already indicated, draw no distinction between extension and new listing. The concept of an extension is mentioned nowhere, and it does not exist, as the Minister well knows. His letter shows the need for a fresh application. The tragedy is that, in this whole debate, emotionalism and a desperate effort to pander to anti-uranium forces have seen logic, common sense and the national interest go out the window. There are, I suggest, a number of environmental Pol Pots in this country who are more interested in preserving the pristine beauty and quality of areas, to the exclusion of human beings. To take that position is simply to defeat the very purpose of the declaration of national parks and to ignore the very real reason for trying to preserve the environment. It is for the benefit of those who live in and visit those wonderful areas. Until that historic day of infamy when the pusillanimous Cabinet decision was made there was some prospect of a rational resolution, but there is now no prospect of any reasonable approach being adopted. The concept of multiple land use, one would have thought, was a sensible position to adopt, but it is certainly not capable of being adopted by the Government with its present attitude. I now turn to some of the statements that take issue with the whole concept that underlies the plan of management. In particular, there is a proposal that the impact of aircraft on the park environment be specified. The plan does not explain why there is a need for that; it simply throws it in. No doubt someone suggested that overflying might loosen a few rocks or might scare away a few water fowl. Good enough! It goes into the plan of management! It is not just me; it is not just a few rednecked miners and it is not just a few anti-environmental troglodytes, but really the plan of management that is ideologically blinkered. Who says that? It is not just Harry Butler and not just Professor Mellanby, who today have said that 75 per cent of stage 2 is not worth listing. They have made a film which flatly contradicts some of the assertions in the plan. They will be presenting that evidence to the United Nations Educational, Scientific and Cultural Organisation committee. If this Government has any gumption and honour, it will facilitate the presentation of that material before the committee instead of taking every step to frustrate its presentation. The concept of natural justice involves the right to be heard. The Northern Territory Government has a very good case, and it deserves not only to be heard but also to be encouraged by the Federal Government. Quite clearly the Federal Government will do the opposite. By hook or by crook, it will suggest that somehow it has complied with all the requirements, that somehow this extension constitutes a new application, that somehow it is not required to abide by the time limits and guidelines and that it can simply do what it thinks might be in the short term political interest of saving its own skin to the ultimate detriment of not only the national interest but also the sensible use and preservation of the park in a state of integrity. I return to one other critic who cannot be dismissed lightly; that is, Professor Slatyer, a former Ambassador to UNESCO and a world-renowned scientist. He is not a pettifogging lawyer; he is not a redneck miner. What does he say in his submission to Professor Ovington? It is a scathing condemnation of fuzzy thinking. He accuses those responsible for the plan of action of having ill-thought-out priorities. That is really a very charitable interpretation. He says: Because of the vague way in which a number of activities are specified and because of the lack of staffing and other resource details, it is difficult to gauge the degree to which the objectives are likely to be achieved. Again, it is pretty charitable stuff. Senator Townley —He is at the ANU, isn't he? Senator ALSTON —He is; he is a well-respected academic. Senator Crichton-Browne —Not a troglodyte? Senator ALSTON —He is no troglodyte. Indeed, he is a very respected environmental scientist. What does he say about the plan's management objectives? He says: This chapter is imprecise, particularly the `key management objectives'. No priorities are set for implementation. Under the sub-heading `Specific sections', he says: The categories of management objectives . . . therefore are not adequate, and not particularly useful. Key objectives: many of these are imprecise, using vague or general terms. And again: 1. What are `Park values'? If the aim, for example, is to protect the natural (and cultural) environment of the Aboriginal inhabitants (and visitors?) . . . Why not say so? He continues: What does `whilst developing an Aboriginal perspective for management' mean? He goes on: Will these resources be preserved, conserved or merely `protected'? What will they be protected from? What actually is the aim? Again, . . . what are the adverse consequences of fire, or environmental change? In relation to zoning, he says: This chapter provides the barest of introductory remarks about zoning, arguably the most important tool of management . . . This is a most inadequate attempt to address the practicalities of zoning. When he comes to `Wilderness zones', he says: This contains perhaps the most cowardly definition . . . of wilderness yet published! Do honourable senators know what the definition was? It was that `wilderness is difficult to define'. It highlights the inadequacy of the plan of management, the plan which has led this Government in panic to rush off to UNESCO to seek World Heritage listing despite the absence of any feasible assessment of its mineral or environmental worth and despite the fact that very many renowned scientists in this country are prepared to take the Government head on and are not got in by a three-day public relations jaunt to the Northern Territory by St Paul, who not so long ago was writing to Mr Cohen that he was very concerned that mining was to be excluded but who now throws around the word `obscenity' whenever it suits him and whenever he thinks there might be an opportunity for political milage. It is a shabby, sordid episode. It ignores the realities and the practicalities; it is not in the national interest. The attempt at listing is illegal; the Minister's conduct is disgraceful. There are those in the environmental movement who are doing their own side a substantial injustice by overplaying their hand and by encouraging governments to think that the majority of the population will be seduced by the green vote. They are doing everyone in this community a grave disservice. This is a sorry tale. The Government should reconsider its position. It should not squander public money on seeking to pursue the listing further. It should acknowledge the validity of the complaints of the Northern Territory Government. It should withdraw the plan from the listing application. It should go back to square one and assess the very real benefits that might derive to the national interest from the assessment that has been made to date by the Bureau of Mineral Resources and the very real opportunities that exist to get us out of our current account deficit hole by honourable means. Instead it seems that the Government is prepared in a very shabby and sordid manner to seek political mileage from throwing a few bones to members of the conservation movement. I hope that they are not fooled. I hope that they realise that the coalition parties are interested in the preservation of the environment, are prepared to take responsible decisions in the national interests, in fact have a very good track record in their eight years of conservative government and can be relied upon in future to make sensible, objective decisions, not subjective, emotional, political, vote seeking decisions, and ultimately to present a much more sensible and healthy alternative for this nation. I seek leave to incorporate in Hansard two statutory declarations. Leave granted. The documents read as follows- AUSTRALIA STATUTORY DECLARATION I, TERENCE ROBERT McCARTHY of 59 Pinarro Crescent Batchelor in the Northern Territory of Australia, Member of the Legislative Assembly do solemnly and sincerely declare that World Heritage listing for Kakadu National Park Stage II was not discussed whilst I was in attendance at the meeting between the Chief Minister of the Northern Territory, Hon. Steve Hatton, the Federal Minister for Arts, Heritage and Environment, Hon. Barry Cohen, myself and officers held on 4 September 1986 in the Chief Minister's office. However, listing in respect of Uluru National Park was briefly considered. I make this solemn declaration by virtue of the Statutory Declarations Act 1959 as amended and subject to the penalties provided by that Act for the making of false statements in statutory declarations, conscientiously believing the statements contained in this declaration to be true in every particular. Declared at DARWIN on 17th October 1986 before me, S. M. WOODS Commissioner for Oaths Northern Territory AUSTRALIA STATUTORY DECLARATION I, ALAN GREGORY MORRIS, PUBLIC SERVANT OF 4 GOTHENBERG COURT, STUART PARK, N.T. do solemnly and sincerely declare that I attended the Office of the Chief Minister of the Northern Territory, the Honourable S. P. Hatton on Thursday, 4 September 1966 for a meeting between the Chief Minister and the Federal Minister for Arts, Heritage and Environment, the Hon. Barry Cohen. The matter of possible World Heritage listing for Kakadu National Park Stage 2 was not raised between the Ministers while I was present at this meeting. The possible nomination of Uluru National Park for World Heritage listing was briefly raised. I make this solemn declaration by virtue of the Statutory Declarations Act 1959 as amended and subject to the penalties provided by that Act for the making of false statements in statutory declarations, conscientiously believing the statements contained in this declaration to be true in every particular. Declared at Darwin on 17th October, 1986 before me, A. Barrett Commissioner for Oaths Senator CRICHTON-BROWNE(Western Australia)(5.40) —We are debating a motion for disallowance of the Kakadu National Park plan of management, and quite properly so. Looking at this motion one is reminded of the debate that took place a little earlier today in the Senate in respect of Jackeys Marsh. This is the second matter to arise today which is inextricably and intrinsically tied to the political fortunes, at least as the Government perceives them, of this Government. The decision to place stage 2 of the Kakadu National Park on the World Heritage List and the content of the plan of management are nothing more and nothing less than a coldly calculating, cynical, political decision based purely on the premise which is attracting currency in the Australian Labor Party at present that there is a significant leakage and drifting of the conservation vote away from the Labor Party towards the more lunatic Left groupings. As a result of that assessment which was made recently by the hard heads of the Australian Labor Party, there has been a significant change in direction in respect of matters relating primarily to conservation. As I said, earlier we saw a case of the Federal Government, contrary to the wishes of the Government of Tasmania and the Australian Labor Party Opposition in Tasmania, seeking to impose its views, wishes and judgment on the logging of Jackeys Marsh. For the same reasons the decisions in respect of Kakadu National Park have been made. What better, more gross, crude and unattractive example is there of this than the Prime Minister (Mr Hawke), at short notice, making a flying visit to be seen standing on the top of Obiri Rock and visiting the more beautiful parts of the park, which will become common to many people when they see the movie Crocodile Dundee. Of course, the Prime Minister was not viewed or photographed looking at the other parts of Kakadu, which in many respects are a reflection only of the typical landscape of northern Australia which encompasses thousands upon thousands of square miles. The decision to disallow mining in stage 2, for instance, but to allow mining in stage 3 is nothing more and nothing less than a political decision based, as I said, on the premise that the Government is losing votes from the conservation group. More particularly in respect of that matter, it is to prevent the division that cast itself into the Labor Party in respect of uranium mining. It is interesting to look at the sequence of events. When it was announced in the Budget Speech that uranium would be sold to France there was an enormous uproar, convulsion and imbroglio within the Australian Labor Party. At that time the Government, particularly the Prime Minister, was committed to selective mining or multiple land use in stage 2 of Kakadu National Park and that, I have no doubt, included uranium mining and mining for whatever other minerals and metals were found in due course. However, the moment that Budget decision came to light it became obvious to the conservation lobby within the Government that the decision to mine in Kakadu National Park would go ahead. So, of course, the Department, or office bearers of the Minister for Arts, Heritage and Environment (Mr Cohen), promptly leaked a letter written by the Prime Minister to Mr Cohen which put the view that there ought to be mining within stage 2 of Kakadu National Park. That, combined with the uproar that had taken place following the decision to sell uranium to France, was more than the Government could cope with politically; so, in consequence of that, the decision was made that there would be no mining in stage 2. The essence and significance of that is that stage 2 is perceived-no more than perceived-to be a major area of significance and potential for uranium mining and is not identified in the same way as stage 3 is, as having the potential for other minerals and metals. The problem was solved simply by saying that there would be no mining in stage 2 at all. That appeared at least to satisfy those who wanted no uranium mining without cutting off the prospect of exploiting other minerals and metals in the park area, because it provided that there could be mining in stage 3. The other significance of that is that there is very little in the way of identifiable uranium resources in stage 3 but there is an already well established and identified resource potential at Coronation Hill for gold, platinum and molybdenum. So the Government, rescuing what it could of the resources of Kakadu National Park, allowed for mining within stage 3. That all came about, of course, as a result of the leaking of the Prime Minister's letter to his Minister Mr Cohen, whose position was quite clear right from the outset: He had set his face against the Cabinet and the Prime Minister. His position was that there should be no mining of any nature in stages 1 or 2. That left the Minister for Resources and Energy, Senator Gareth Evans, in an intolerable situation. He had to extract the best he could. He and his Department pored, no doubt at great length, over the maps seeking to find out where the potential resources of uranium and other metals and minerals were and finally came down with the poor, weak, pathetic compromise that we finally have. It is in no way bound by logic; it is in no way set upon a premise of common sense; it is simply an arbitrary decision which seeks to placate the conservation vote and those in the Labor Party who will not tolerate uranium mining. My view is that mining and tourism can take place side by side in parts of the park. I refer to stages 1, 2 and 3, but not necessarily stage 1 or stage 2. I do that for a very good reason-the enormous size of the area. It ought to be remembered that the three stages comprise approximately 19,000 hectares and that the first two stages represent something like 13,000 hectares. The truth of the matter is that the ideal solution for the conservationists is to maintain the whole of the park, stages 1, 2 and 3, in its wilderness state, untouched not only by mining or tourism but also by any human activity. The conservationists certainly have an ongoing prejudice against any form of mining and, to a lesser extent, against tourism. I do not refer to all conservationists; I just do not have time to categorise them. I am referring to the group which, as Senator Zakharov will clearly understand, has been before our Committee. Their preference, if there is to be one, is for tourism, not for mining. One could question why that is so. I can only imagine that the reason is that it is easier to create emotion and set prejudice against mining than it is to do so against tourism, which embraces all sections of the community. Yet it is interesting to note that in the evidence taken by the Senate Standing Committee on National Resources, if my memory serves me correctly, the preference of the two, tourism or mining, is for mining over tourism. From the point of view of the Aboriginal community, of course, a great deal more damage can be done to the park by tourism than can be done by mining. This is for two reasons. First of all, there is the simple size of the area involved in tourism and the areas that it can lead people to, people who can trample, damage and desecrate parts of the park and areas of significance to the Aboriginal community. Let me remind the Senate of the extent of mining in the park. The total surface area of Ranger represents some four square kilometres; Jabiluka would be less. In fact, if all the known mining areas were exploited, they would represent slightly less than one per cent of the total area of the park. It is not without significance to note that the conservation groups are particularly antagonistic towards mining, and slightly more tolerant towards tourism. Yet the conservation groups have expressed concern, as has the Department of Arts, Heritage and Environment, that the concerns of the Aboriginal community be considered. That should be a paramount concern in any deliberation, yet their own private and public views fly in the face of the wishes-perhaps one might put it as highly as the aspirations-of the Aboriginal community. The Aboriginal communities are not opposed to mining per se. In their view, the whole area is of significance, but in fact they support mining provided that it does not interfere with areas of real significance to them. The Northern Land Council, for instance, is not opposed to mining in the park and put that proposition to us. Its view in many respects seems to be parallel to that of the Aboriginal community, and it put that view in evidence to the Standing Committee on National Resources inquiry into the resources of the park. We took evidence from the Sacred Sites Authority, which had a different view, namely, that there should be no mining at all. What I find unnerving about that is that its charter is to protect and preserve areas of significance and sacred sites in the Aboriginal community and to do it accurately. Yet one finds that its view is contrary to that taken by the people it purports to represent. It never ceases to amaze me that the Aboriginal community is articulate, competent and capable enough to put its own point of view, and does it well; but invariably its point of view is quite different from that put by its white advisers, by the monolithic institutions we seem to be forever setting up to protect and represent Aboriginal interests. Almost without exception, there is a contradiction between the two, and that is true of the present case. The truth is that these people are not representing Aboriginal communities, but put forward their view of the world and how they would like the world to be. One has to have grave concern about this plan of management because it has been prepared without consultation with people with major experience and interest in the park, not the least of them being the Northern Territory Government. Professor Ovington has indicated that there have been close, co-operative, ongoing negotiations with the Northern Territory Government. The Northern Territory Government says as a statement of fact that there has been no consultation, no co-operation, and almost no communication. Therefore, I find it remarkable that Professor Ovington and his Department are putting it to the community that the plan of management results from close co-operation with concerned people, not the least being the Northern Territory Government. As a member of the Senate Standing Committee on National Resources, which has as a term of reference given unto it by the Senate that it shall inquire into the potential of the park, I have always refrained from expressing a personal or private view as to the ultimate outcome of its findings. To the same extent I find myself constrained in putting my view in this debate. What is disheartening is that the sort of evidence we have been receiving appears not to have been accepted, or at least acknowledge, as in part a framework to be used in arriving at judgments on the management of the park. Professor Ovington called for an inventory of the mineral and metal resource potential of the park. I do not know how he could have imagined that could be done when he totally opposed the plan of management and dismissed out of hand any mining at all. How did he imagine that one could take an inventory of the natural resources of the park? In view of the park's geography and the nature of the terrain, such an inventory cannot be undertaken by aerial magnetic survey. Such an exercise must be done on the ground. It cannot be done without some sort of drilling program, and drilling can be done without damaging the park. We have this altruistic call for an inventory, yet at the same time the plan of management says that there shall be no mining-in other words, no exploration. It is an absurd proposition. Perhaps that was just a throw-away line to placate those who might have superficially read the report and taken a view about mining. The report is equally absurd and vague in regard to tourism. It is imprecise and has no definitions. It is not indicative of how tourism should take place and in no way justifies its position on tourism or sets out the reasons for limiting tourism. As I said at the outset, it is simply a political document. Professor Ovington said that it is a reflection of the view of the government of the day, or more particularly of the Minister's view. It does not involve assembling, assessing and distilling the best evidence, the best knowledge and the best understanding of the position, but is a reflection of the views of the Government and the Minister. That makes it a political document, nothing more and nothing less. It ignores the facts that should have been contemplated. Kakadu does have some areas of great beauty which deserve to be protected at any cost. They are part of Australia's heritage to be preserved now and for future generations. It must not be forgotten that stages 1 and 2, Gimbat and Goodparla, occupy nearly 20,000 square kilometres, yet the plan of management does not even attempt to address the matter of prospecting or mining within any areas of the park at all. It does not for a moment stop to contemplate the prospect of multiple land use. It seems to me that the underlying golden philosophic thread that runs through the report on the plan of management involves locking up stages 1 and 2 from mining. That would inhibit even managed and controlled tourism, and in stage 3 it would very much limit mining activities in that area. That is a tragedy. The plan of management does not address those matters. I believe it is a great pity that it has not looked at the ramifications or implications of multiple land use. This might well have been a unique opportunity, a blueprint for addressing all the options, but that opportunity has been lost. The truth of the matter is that the very vastness, the very beauty and the very uniqueness of parts of the park-the Jim Jim Falls, Twins Falls, Obiri Rock, all the places that Crocodile Dundee visited; beautiful spots which are, in many respects, unique-should be preserved. Yet there are vast areas and large tracts of the part that are no different from the majority of the northern parts of Western Australia. Now that I have seen that stage 3 is proposed to be made part of the park, I really wonder what will happen to the northern part of Western Australia, from the Pilbara right through the Kimberleys. There is no difference in the country. The areas are identical. Senator Zakharov —They are not part of the catchment, are they? Senator CRICHTON-BROWNE —Of course they are not part of the catchment, but there are vast parts of stage 3 that are not part of the catchment either. There is no reason why, because there is a catchment area in the northern part of stage 3 and running through stages 2 and 1, it necessarily means there is no capacity to have mining and tourism. Senator Zakharov appears to be working on the premise that, because there is a catchment area, that area will catch up any mining that takes place in the park at all. I would not have thought that that was necessarily the case. One only needs to look at mining technology these days. Since Fox put down his report we have realised that there is skill and technology which makes it possible to extract minerals and metals from parts of the park which, by definition, can be considered fragile, without in any way endangering the uniqueness or the beauty of the park. It is a great pity that the park was not looked at other than from a political point of view. This really could have been a unique opportunity to consider and contemplate all aspects of the issue. Criteria could have been set down as a watershed for the future preservation of parts of Australia for their natural beauty. Because of the beauty and the size of Kakadu National Park we must accept that it will attract more and more tourists every year. If my memory serves me correctly, there were 140,000 tourists in the park last year. Those people visited the park in very poor conditions. The roads are dreadful and inhibiting-I suspect in many cases they are meant to be inhibiting-and the accommodation is almost non-existent except in two areas, Cooinda and the South Alligator River region. Other than that there is virtually no accommodation. If one wants to visit Jim Jim Falls, one must take a four-wheel drive vehicle. The journey takes a day and when one arrives there is nowhere to stay and there are no facilities. It is quite impossible. The park is being locked up from tourists. Then, of course, we must look at the mining side. How long can mining be ignored? Of course, as long as the Prime Minister is happy with our current account deficit figures-and he appears to be happy with the last lot-the present situation might go on forever. However, when one looks at the potential of the park in respect of mining-although part of the assessment is only indicative, it has been put by responsible people and supported, I suspect, by the Department of Resources and Energy-one realises that it has the potential of approximately $70 billion worth of revenue to the taxpayers of this country. Let us remember that in the Northern Territory in 1983-84 alone mining generated $872m. That is $590m more than the amount generated by tourism. Yet the Government is saying that if it has a preference it will have a bit of tourism but no mining. Of that $872m, $18m went to support Aboriginal communities. Part of that went to the 250 Aboriginals who are spread throughout this massive area of 13,000 square kilometres of stages 1 and 2. Senator Townley —Was that figure for tourism that you mentioned just for the Northern Territory or for the whole of Australia? Senator CRICHTON-BROWNE —It was just for the Northern Territory. In my view that is indicative of the resource potential of the park and I suspect that in time it will not be ignored. As I said at the outset, I find it disappointing that this document, this report, this plan of management that we are now seeking to disallow did not address itself sensibly, with some sophistication and responsibility, to all the matters that confront all Australians so that we would be in a position to move forward in a sensible way in the future. I commend the proposal for disallowance of the plan. Senator VIGOR(South Australia)(6.06) —I rise to support the need for a plan of management in the Kakadu National Park. As has been stated by previous speakers in this debate, the Australian Democrats will not support the disallowance. The Kakadu National Park is important, both to Australia and to the world. It is important for the diversity of its flora and fauna and for the large number of rare and endangered species of both plants and animals that can be found there. These are not necessarily spectacular plants, but they are plants that probably contain a fair amount of the genetic potential which is necessary for use to recapture a reasonable environment in the tropics. Stage 1 of the Kakadu National Park was proclaimed in 1979 and is on the World Heritage List. All the wetlands of stage 1 have been included in the list of recognised areas under the international convention on wetlands of international importance, especially as water fowl habitats. Stage 2 of Kakadu was proclaimed in 1984 and is now likely to be added to the World Heritage List. We are pleased about that process, unlike Senator Alston. Stage 3 has not yet been proclaimed, although public notice was given in March 1984 of a proposal to include the Gimbat and Goodparla pastoral leases in Kakadu National Park. The wetlands, the escarpment and the Aboriginal drawings have been particularly noted for their intrinsic beauty, but a national park is not foremost a place of beauty; it is a place set aside because it is of importance to preserve natural attributes which include not only scenery but also, much more importantly, the plants, animals and features of the region. I wish to concentrate on one area which has not been mentioned in any detail by my colleagues and that is the preservation of the world genetic pool, which I consider to be one of the most important aspects of national and world heritage parks. For this reason Kakadu is important to the world. Stages 2 and 3 of the park are very important for their natural resources of undulating woodlands and for the large numbers of rare and endangered species of plants and animals. Whilst Kakadu contains natural mineral resources as well as animal and plant resources, it is indeed important to weigh the future advantages of conservation against the opportunity lost by keeping those minerals in the ground at this stage. I wish to point out to those people who assume that most of the minerals are under the Kakadu park that only 3 per cent of the Pine Creek geosyncline, which is the main mining prospect in that area, is in Kakadu territory. According to the Northern Territory Chamber of Mines, 97 per cent of the Pine Creek geosyncline is outside Kakadu, even if one includes in Kakadu the stage 3 area. While minerals within the national park are effectively locked up for the foreseeable future, they still remain an Australian resource. They are still there and conserved along with the rest of the national park. If, as Senator Crichton-Browne has said, we can ever find methods of mining these effectively without affecting the environment, which I currently doubt, there may be a possibility of doing something. But there is no need to do it. I do not believe that they should be mined now. My experience is that the environment will be damaged and that valuable natural resources may be lost forever, particularly in the form of specific plants which as yet may not even have been classified or recognised by botanists. Senator Crichton-Browne —How do you know they are there then? Senator VIGOR —Senator Crichton-Browne asks how I know that they are there. There have been a number of discoveries of individual plants in the area that are known to survive under very strange and stringent conditions. From discussions with members of the Commonwealth Scientific and Industrial Research Organisation Division of Wildlife and Rangelands and the Australian National Parks and Wildlife Service, I have indications that particular sub-species of plants exist in some areas of the park in environments where they would not be expected to survive. This may give us an opportunity to enable those species to survive in areas that are very inhospitable to them elsewhere and to diversify the genetic pool for some of our main food crops, for example, or maybe for some of our drug-producing or fibre-producing plants. Senator Crichton-Browne —Do you mean grow marihuana? Senator VIGOR —I am not suggesting that type of drug. I do not believe that mining should be carried out now. Mining is essentially a destructive operation. It destroys, extracts and uses up a mineral resource and often destroys the land associated with the minerals. It also affects all life forms. Some of the run-off from mining areas and the side-products from the extractive processes can be terribly damaging to the environment. I know of no overriding national interest that requires that these minerals within Kakadu National Park be mined, especially as there are many times those deposits of minerals outside the Kakadu area that could be mined. I do not know of any overriding national interest or world interest to justify going in there and ripping out a few minerals, which may have a terrible effect on valuable genetic material, whose future value could be incalculable and may well be millions of times more than the value of the physical mineral wealth of the region. Already modern techniques of molecular biology allow us to manipulate genetic material, to take a gene from a plant that grows in only one exotic place and to transfer it to another plant or animal, or even to a bacterium. In this way scientists hope to find cures for a large number of the diseases that affect people, plants and livestock. This will allow us to increase and improve the natural genetic inheritance, to overcome deficiencies and to provide extra genetic capacity to resist various diseases. Other uses that the new genetic manipulations are being put to are to transfer genes for production of rare drugs to organisms that can be easily and plentifully grown and to so reduce considerably the price of medical treatment. A whole new era of technology is now opening up in front of us that 20 years ago was barely dreamt of and in which new uses of exotic genetic material are economically solving other problems of diverse kinds. It is this type of genetic pool that is held in wilderness areas and in our national parks under the types of conditions that exist in those parks. That is why we need a mosaic of national parks throughout the whole of our nation to protect these natural resources. Once an animal, plant or micro-organism has died out, its complete genetic inheritance, the product of complex evolutionary mechanism, is lost to the world. In fact this may happen in some cases well before we have any idea of the future value of what we are destroying. It is essential that we have a full catalogue of the plant resources in these areas. That has not been developed properly at this stage and we certainly need to protect samples of all areas until this catalogue and a full database has been set up. It is essential to maintain the national parks so that it is possible to grow these various plants in a number of different climatic and ecological landscapes so as to maintain the fullest and most diverse genetic pool for the future generations of man and also for the continuance of life on earth. National parks are also important for preserving other natural features of our inheritance. We cannot afford to preserve only areas that look good and that people like to visit for picnics and barbecues. It is not only the tourist areas that are important. The educational aspects of national parks are also of major importance. They are the main way in which we preserve areas that reflect our historical heritage, our natural heritage and our geological heritage. The Kakadu National Park is paramount in preserving some very different parts of the Northern Territory in one integral area. We have a real opportunity there. I hope that the plan of management will be strengthened in the future so that we make certain that we do not lose any of these advantages. The park has enormous value in teaching us and future generations about our past and the changes that have occurred in other areas through the impact of both natural and human processes. If we can keep wilderness areas, we can learn something about the long term effects, even of our remote cities, on these areas by observing them scientifically. In this way we can learn from our past and have areas that are free from the destructive and wasteful processes that are happening in and near our cities. It is for this reason that the International Union for Conservation of Nature and Natural Resources has included education as well as recreation as the main uses for national parks that must be managed on a controlled basis. The IUCN calls for `the protection of natural and scenic areas of national or international significance for scientific, educational and recreational use'. The IUCN report states: The area should perpetuate in a natural state representative samples of physiographic regions, biotic communities and genetic resources and species in danger of extinction to provide ecological stability and diversity. While stage 1 of Kakadu consists predominantly of flood plains and escarpment country, stage 2 comprises for a large part wetlands, with regions of rainforest and open woodland. The undulating woodlands of stages 2 and 3 are very important environmentally since they contain a greater species diversity than any of the other regions, including a large number of rare and endangered species. This is a very different type of country from what is the popular view of Kakadu. It is ecologically of great significance to Australia and to the world. Stage 3 of Kakadu contains the headwaters of the Alligator Rivers, especially the South Alligator River. Already there is great concern in the National Parks and Wildlife Service that erosion caused by pastoral activity in this stage 3 region is increasing the turbidity of South Alligator River, so causing a detrimental impact on the existing park. Mr Acting Deputy President, I seek leave to continue my remarks later today. Leave granted; debate adjourned. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs) —I table the report of the Inquiry into the Australian War Memorial conducted by Mr K. N. Jones, AO, CBE. I seek leave to move a motion relating to the report. Leave granted. Senator GIETZELT —I move: That the Senate take note of the paper. I seek leave to incorporate in Hansard the report and a letter from me to the Chairman of the Council of the Australian War Memorial. Leave granted. The documents read as follows- REPORT OF THE INQUIRY INTO THE AUSTRALIAN WAR MEMORIAL Australian War Memorial Canberra, A.C.T. 2601 INQUIRY INTO THE AUSTRALIAN WAR MEMORIAL 10 November 1986 Dame Beryl Beaurepaire, DBE Chairman of Council Australian War Memorial CANBERRA Dear Dame Beryl, I submit my report on the Inquiry into the Australian War Memorial which the Council commissioned on 1 October 1986. Mr Ian Hansen, of the Office of the Public Service Board, has assisted me greatly throughout and we have had effective support from Ms P. Collins and, in the final stages, also Ms K. Luby. I express my appreciation for the friendly co-operation I have received from the people of the Australian War Memorial. Yours sincerely, K. N. JONES INQUIRY INTO THE AUSTRALIAN WAR MEMORIAL Contents Page no. Terms of Reference... (i) Summary of Conclusions... (iii) Chapter 1 Procedures for the Inquiry... 1 Chapter 2 The Australian War Memorial... 4 Chapter 3 Background to the Inquiry... 6 Chapter 4 Examination of matters concerning administration of the Memorial and its affairs... 8 Matters referred by the Minister- Item 1 Acquisition of warehouse... 8 Item 2 Parliamentary Question-The Eastern Staircase... 12 Item 3 The Eastern Staircase and NCDC... 14 Item 4 AWM Top Structure... 17 Item 5 The 1984-85 Annual Report... 19 Item 6 The Change in the AWM's Bankers... 21 Item 7 Ordering and Delivery of Commemorative Port... 24 Item 8 The Director's September 1985 Overseas Visit... 25 Item 9 VEA Proclamation Ceremony/Staff Bulletin... 27 Item 10 Private Use of AWM facilities... 29 Item 11 Publication and Reproduction of TEE EMM... 30 Item 12 The Aircrew Reunion... 32 Item 13 The Karen Rush Investigation... 33 Item 14 Declaration of the Director's Pecuniary Interests... 35 Item 15 Chilean Embassy Ceremony 1986... 36 Item 16 Garden of Remembrance Replanting Project... 36 Item 17 Information for the Minister... 37 Item 18 Inadequate Information to Council or a Committee... 38 Item 19 Irregularities in Making Staff Appointments... 38 Item 20 Irregularities in Distribution of Sections Among Branches... 38 Item 21 State of Morale Among Staff... 38 Item 22 Acquisition and Disposal of Aircraft and Historical Material by the Australian War Memorial... 42 Item 23 Letter to Canberra Times Mr J. R. Heaton... 44 Other matters raised in the interim O'Connor report- Item 24 The painting of No. 77 Squadron... 46 Item 25 Eternal flame project... 47 Item 26 Parliamentary Question-Remuneration of Members of Council... 48 Matters raised by Internal Auditors-Arthur Young report... 49 Business requiring Council Ratification... 49 Powers of Committees... 49 Form and Content of Agenda, Minutes and Resolutions... 50 Private Authorship... 51 Matters Raised by the Auditor-General... 52 Item 27 Purchase of B52 Mitchell Bomber... 52 Item 28 AWM Kiosk Licence... 53 Item 29 Australian War Memorial Foundation... 54 Other matters in the Auditor-General's Report... 55 TERMS OF REFERENCE 1. The Council of the Australian War Memorial here- by appoints Kenneth Norman Jones, A.C., C.B.E., to investigate and report to it on: (a) concerns relating to the management of the Australian War Memorial including personnel, financial and general administration; (b) any deficiencies that you might identify in the management of the affairs of the Memorial including whether the Memorial administration has properly informed the Minister for Veterans' Affairs and the Council about the affairs of the Memorial; (c) any other matter relating to the management of the affairs of the Memorial which may be referred to you by the Council or notified by the Minister for Veterans' Affairs by letter to the Chairman of Council; and (d) any deficiencies in your view in the relevant legislation as it affects the management of the affairs of the Australian War Memorial and the relationship between the Director, the Council, and the Minister for Veterans' Affairs. 2. In conducting your investigation you are to take account of such earlier reports and material including the O'Connor report, the Auditor-General's report, the Arthur Young report and other relevant documents as are available. 3. For the purposes of your investigation you may with approval of Council obtain such legal advice as you may consider necessary. 4. In conducting your investigation you are to ensure that the Director and any other member of the staff of the Australian War Memorial be given a fair opportunity to be heard on and respond to any matters relating to them. In particular no adverse finding will be made against the Director or any other member of staff unless such person has first had an opportunity to consider any specific allegation, to examine documentation relating to it and to respond in detail either orally or in writing. 5. It is not intended that there be public hearings. 6. The Council of the Memorial has resolved that the Director shall subject to appropriate security and supervisory arrangements have access to the records of the Australian War Memorial during the period of his absence on special leave. Similar access will be granted to any other member of staff on your recommendation. 7. Your report to Council shall include a summary of evidence, the conclusions you drew from it, and any recommendations concerning the management of the Australian War Memorial that you may see fit to make. 8. Your report is to be presented to the Council, through the Chairman, which has resolved to make a copy immediately available to the Minister. 9. The inquiry should be concluded within one calendar month but recognising that there may arise unforeseen circumstances you may apply to the Council for an extension of time to properly allow you to carry out the inquiry. 10. Such administrative support as is necessary for the purposes of carrying out the inquiry will be provided by the Australian War Memorial. 1 October 1986 SUMMARY OF CONCLUSIONS The Terms of Reference are not directed primarily at criticism of action by the Director. Nevertheless a large number of items put before me, some of which are anonymous in origin are of that character. I have faced a difficulty in reconciling the general nature of paragraph 1 of the Terms of Reference with the process for arriving at adverse findings about an individual. (para 5.2) I conclude that there are serious weaknesses in the management performance of the present Director. This represents a value judgement by me and is a considered view, arrived at in accordance with the Terms of Reference as discussed at the beginning of this chapter. (para 5.26) Nevertheless, the Director is entitled to respect from the Memorial staff at all levels for his authority and responsibilities. This has not always been forthcoming to the extent that it should have been, even in the face of differences or difficulties. (para 5.28) I conclude that in a number of cases, insufficient or misleading information has been given to the present Minister, but not so as to cause him serious embarrassment in the public arena. It has given the Minister serious cause for concern and grounds to lack confidence in the advice he receives from the Director. (para 5.29) I cannot conclude from this Inquiry that there exists misbehaviour by the Director in the terms of Section 24 (1) of the AWM Act as I understand that provision. I do not find a deliberate intention by the Director to transgress in carrying out his duties. Rather in some situations I have concluded that the Director has displayed a less than satisfactory level of competence and a carelessness in expression where the circumstances demanded truthfulness. (para 5.32) In the interest of the Memorial and its staff, it is essential for the Council to approve a set of principles governing outside employment in all aspects with particular reference to research and research-related publications. Such principles should recognise the interest of the Memorial in advancing the professional standing of its staff and in promoting research into and understanding about Australian military history. (para 5.43) . . . similar considerations apply to instances of private practice by say, conservators, and to the use of workshops and other facilities other than for official purposes. In each of these cases, guidelines should be stated clearly, channels of approval should be known, and instances of approval documented. (para 5.44) The present arrangement (for publications policy and procedure) should be reviewed between the Research and Publications Committee and the Research and Publications Branch so that proposals can be developed for final consideration and decision by Council. (para 5.49) The Memorial is not a Commonwealth Department and the Council has independent status. Even so the relationship between the principal parties-the Council, the Minister and the Director-is not limited to the formal structures. A fruitful and harmonious relationship can exist only where there are regular exchanges and meetings, at least between the Chairman and the Minister, and, on day to day matters which need reference to the Minister, between the Minister and the Director. The Director should advise the Chairman about matters to be taken up with the Minister by the Chairman and should keep the Chairman informed about exchanges between the Director and the Minister. A healthy relationship cannot be preserved if interaction is limited to crisis situations. (para 5.53) The development of on-going co-operation among all of these parties-the Minister, the Chairman and Council, the Director and the Departmental Head-will be a significant factor in restoring the management of the affairs of the Memorial and the discharge of the Memorial's responsibilities to a satisfactory level. (para 5.61) In my view, in most cases where an authority has been created to exercise a trustee role on behalf of the nation-which I believe to be the case with the AWM Council-it is undesirable that there be a statutory power for general or specific directions by the Minister. However, that view needs to be seen against the general policy objectives of the present government for ordinary statutory authorities. One has also to weigh up whether the present difficulties in relationships among the Minister, the Council and the Director are such that changes need to be made to the statutory provisions. No doubt it will be generally accepted that if there is to be such a power, its application should involve written directions and specific reference in the Annual Report to that circumstance and to the governing body's response. (para 5.71) . . . the Minister's proposal for a specific (statutory) power to demand information is unnecessary, given his constitutional rights in that regard. Furthermore, against the background of the conclusions I have arrived at on other matters within the Terms of Reference, I am not persuaded that a statutory power of direction is essential to correct present difficulties and I would see the addition of either of these proposed powers as appropriate only in the context of the Parliament's approval of a comprehensive approach from the Government following confirmation of the thrust of its proposed policy guidelines which are now out for public discussion. (para 5.77) The proposed (legislative) changes in measures for determining threshold figures for which ministerial approval is required, are sensible and non-controversial and I support them. (para 5.75) I do not support the redesignation of the chief executive officer's position to `Director General'. (para 5.76) I do not support the Minister's proposal for the appointment of the Secretary of his Department to the Council in the form in which it has been put forward. (para 5.78) . . . I would prefer any officer from the Department of Veterans' Affairs appointed to the AWM Council to be a senior officer, not the Secretary, and for any such appointment to be made from among the number of ordinary members. (para 5.80) I believe it would be appropriate for the Memorial to seek the co-operation of the Public Service Board in mounting a Program Management Performance Review. (para 5.90) It is critical to the success of such an operation that it have the support and direct involvement of the chief executive officer. Against the background of the current upheaval surrounding the Memorial, it is desirable that this activity be taken up promptly. It follows that there needs first to be a clearing of the air and the creation of a working environment which will foster the pursuit of common purposes between management and staff. (para 5.92) Chapter 1 PROCEDURE FOR THE INQUIRY 1.1 I commenced on 2 October having had the previous day a discussion with Council, in the presence of the Minister and advisors, about the Terms of Reference which were then being settled finally. 1.2 I gave an early opportunity for each of the Minister, the Chairman and the Director to have a general discussion about the events leading up to my Inquiry and the matters under consideration. In the case of the Director I checked that he had a copy of the basic documents. 1.3 I issued a circular to staff conveying the Terms of Reference and inviting those who wished to do so to discuss any relevant matters with me. 1.4 Subsequently I had a series of meetings with individuals and some groups among the staff at their request. I have also invited some other members of staff to speak with me to ensure that I have received representative views on attitudinal questions which touch on intra-Memorial work relationships and morale. I have had discussions with a number of officers about administrative procedures and have consulted files and Council and Committee records. 1.5 I have had discussions also with some members of Council, with some former members, with the previous Director, and with heads of departments whose ministers are now or were recently responsible for the Memorial. In a few cases these discussions have been conducted by telephone. 1.6 I have had a number of telephone conversations and two meetings with the Director. My purpose was to keep him informed of the course of the Inquiry and of the procedure I was following. I passed to him the list of matters provided by the Minister on 2 October within the provisions of Paragraph 1 (c) of the Terms of Reference. On 20 October I gave him the advice I had received from the Minister dated 16 October about specific circumstances in which he believed the Director had provided him with inadequate and misleading advice. 1.7 In my exchanges with the Director I explained that as a first step I was investigating the long list of matters put before me and would then narrow my examination to consideration of issues and identification of specific allegations about the conduct of individuals. At one stage I pointed out to the Director the desirability of him consulting files before answering written questions, and nominated a point of contact in the Memorial where access would be arranged in terms of Paragraph 6 of the Terms of Reference. 1.8 I have addressed some written questions to the Director and received answers in the course of the initial investigation. I followed this with notifications on 28, 29 and 30 October of the specific allegations that I was pursuing in respect of him and invited responses to those allegations together with some further questions of my own. 1.9 In these exchanges I nominated a time for reply, usually one week. 1.10 I have put written questions to other members of staff. 1.11 I have had discussions with the Chairman from time to time and a further discussion with the Minister. All concerned have co-operated with me. 1.12 I have had access to the O'Connor working papers, some of which were produced after the interim report, to the Young Report, to the Rush papers and to the Auditor-General's Report to the Minister and prior exchanges between Audit and the Memorial staff. 1.13 On 21 October the Director's solicitors wrote to me challenging my refusal to allow him to be present when evidence was being given that might adversely affect his reputation and to allow him or his legal representative the right to cross-examine witnesses. They saw this as a clear denial of natural practice. I was requested to accept information in accordance with the Rules of Evidence and preferably with evidence on oath. The letter foreshadowed an approach to the Council to consider altering the Terms of Reference unless I gave them a favourable response. 1.14 I replied on 22 October pointing out that I was proceeding with my task under the Terms of Reference, that I had kept the Director informed on matters which had been put to me and had provided him with copies of the associated documents and invited his responses and put some written questions to him. It was my intention to continue on that course and before I arrived at conclusions or findings to give him an opportunity to respond to specific allegations. I also stated my understanding that the Terms of Reference made no provision for the cross-examination of witnesses, the taking of evidence on oath or the application of the Rules of Evidence. I indicated that it was open to the Director to make any submission to me as to the weight that I should attach to any of the material made available to him in the course of my Inquiry. 1.15 I provided the Chairman of Council with copies of this exchange. On 24 October the Chairman conveyed to me the views of Council's solicitors on the matters raised by the Director's solicitors. 1.16 As outlined at the beginning of Chapter 5, on 4 November a difference of view crystalised between the Director and me as to the action I should take on particular matters to satisfy paragraph 4 of my Terms of Reference. Having stated my position to the Director I proceeded to complete my investigation and prepare this report. 1.17 Earlier I had sought and obtained the Chairman's approval to obtain legal advice from Commonwealth sources. I have done so. 1.18 On 23 October I made a formal request to the Chairman of Council under Paragraph 9 of the Terms of Reference for an extension to give me sufficient time to provide an opportunity for answers to be given to specific allegations before I reached any conclusions. I nominated 10 November as the expected date for presentation of my report, but drew attention to possible delays arising from the representations from the Director's solicitors. On 27 October the Chairman informed me that Council had agreed to extend the date for completion of the Inquiry accordingly and had suggested to the Director that he seek leave until 14 November. I understand he did so. 1.19 The Terms of Reference address matters of general principle together with a range of specific matters of concern. Consideration of some of these matters rests on a determination of the facts, while others require value judgments to be made. I have had to decide what weight should be given to particular submissions I have received. I have taken my examination of the events and situations put before me as the basis for my conclusions, together with the general understandings I have developed about the Memorial and the conduct of its affairs. I have drawn on my knowledge and experience in Commonwealth administration, with particular reference to relations between a minister, a statutory authority for which he is responsible, and his department. 1.20 Time and circumstance has not permitted me to pursue every item to finality, but I am satisfied as to the conclusions. Chapter 2 THE AUSTRALIAN WAR MEMORIAL 2.1 The Australian War Memorial (AWM) is a great cultural institution with a well-deserved international reputation. It is a national shrine to the sacrifice of those Australian men and women who died serving their country in time of war and of those who served with them abroad and at home. At the same time the Memorial is a museum and art gallery with an extensive, rich and varied collection. It has developed as a centre of research into Australian Military history. 2.2 The Memorial has been undergoing a major renovation program of its premises in association with the refurbishment of the galleries. Construction has commenced on a separate administration building to provide more appropriate accommodation for staff and to free substantial gallery space in the main building for its intended purpose. In the suburb of Mitchell the Memorial owns a repository and conservation complex together with a nearby warehouse. 2.3 The Australian War Memorial Act 1980 lays down the functions of the Memorial as- (a) to maintain and develop the national memorial referred to in sub-section 6 (1) of the Australian War Memorial Act 1962 as a national memorial of Australians who have died- (i) on or as a result of active service; or (ii) as a result of any war or warlike operations in which Australians have been on active service; (b) to develop and maintain, as an integral part of the national memorial referred to in paragraph (a), a national collection of historical material; (c) to exhibit, or to make available for exhibition by others, historical material from the memorial collection or historical material that is otherwise in the possession of the Memorial; (d) to conduct, arrange for and assist in research into matters pertaining to Australian military history; and (e) to disseminate information relating to- (i) Australian military history; (ii) the national memorial referred to in paragraph (a); (iii) the memorial collection; and (iv) the Memorial and its functions. The Memorial shall use every endeavour to make the most advantageous use of the memorial collection in the national interest. 2.4 A Council of part-time members, made up of the Chiefs of Staff of the three Services and from eight to ten people chosen for the knowledge and experience that each can bring to the task, is responsible for conducting and controlling the affairs of the Memorial and for determining its policies. A Director, who is not a member of Council, is the Memorial's chief executive officer and manages its affairs under the general directions of the Council. Staff of the Memorial are members of the Australian Public Service and the Director has, for the purposes of administering the affairs of the staff under the Public Service Act, equivalent powers to those available under that Act to a departmental secretary. 2.5 The Council may appoint committees to assist it and may include non-members of Council among the members. At present the Council is functioning with three committees drawn from its own members together with the Director who, like the Chairman of Council, is a member of each committee. These are a Gallery Committee, a Research and Publications Committee, and a Buildings and Grounds Committee. 2.6 The staff of the Memorial under the Director is organised into Branches responsible for Programmes and Collections, Research and Publications, and Resources Management, together with an Executive Secretariat and a Public Relations section. The Australian War Memorial Bookshop forms part of this administrative structure. 2.7 The Council has set as its corporate objective `to maintain and develop the Memorial and its collections and exhibits as a fitting tribute to the sacrifice of Australia's war dead, as a reminder of the cost of war and as a record of Australian military history, and to conduct and further research into that history'. 2.8 The resources available to administer the Memorial have been expanded significantly in recent years. Whereas at the end of 1979/80 there was a staff of 102 and a level of financial activity of $2.5 million, at the end of 1985/86 the number of staff had risen to 207 and the level of financial activity to $10.1 million. This expansion has involved not only the physical changes mentioned above, but also the development of professional curatorial, conservationist and historical activities, together with added emphasis on extended services to groups and individuals including students. 2.9 At present the Council consists of twelve members, there being one vacancy. The present Chairman was elected by her colleagues on 8 August 1985 and the present Director was appointed on 25 November 1982 for a term of five years. Chapter 3 BACKGROUND TO THE INQUIRY 3.1 The Inquiry had its genesis in the Minister's concern about the quality and reliability of advice he was receiving from the Director, and in some cases from the Council through the Chairman. Some of these matters involve information from the Minister to the Parliament and he was particularly concerned that his should be accurate. 3.2 The series of events commenced with a letter to the Canberra Times on 8 October 1985 by Mr J. R. Heaton, a former curator, who alleged, among other things, that the top management of the Memorial had allowed staff morale to fall to a critically low level, as demonstrated by a rapid staff turnover. Events came to a head with an item in an internal bulletin about a function at the Memorial linked with public criticism by the Opposition spokesman of the Minister over that event, and linked also with the circumstances in which that spokesman came to possess related documents. The matter became public with the statement presented to Senate Estimates Committee F by the Minister on 18 September 1986 about the circumstances in which he had been obliged to have a senior officer of his department undertake an inquiry to settle any allegation of impropriety or less than prudent or efficient administration. 3.3 Over the period from October 1985 to September 1986, the Minister had expressed his concern to the Chairman and also to the Director about particular matters. As early as the Heaton letter event, he had sought advice from the Chairman about a suitable form of management review in the context of possible management and staff morale problems. That issue became interwoven with a Council request for the Minister to endorse a proposed reorganisation of the top structure of the staff; with the Minister's wish to see more cost-effective operations within the Memorial in response to a general government policy objective; with amendments to the AWM Act proposed by Council to change the designation of the position of Director and to upgrade certain fund limits at which the Minister's approval is required; with the Minister's own proposed amendments to the Act to specify a power to the Minister to give directions and to request information, and to have the Secretary of the Department of Veterans' Affairs appointed to the Memorial's Council. 3.4 The record of exchanges shows the Council as slow to respond, due in part to the schedule for meetings in February, May, and August of 1986. It appears also that the Council was apprehensive about possible undue involvement of the Minister of the day in the conduct of Memorial affairs. The Minister continued to press his concerns. 3.5 Underlying these exchanges were largely anonymous representations to the Minister about particular events involving actions of the Director and about inadequate communication and poor morale among groups of professional officers in the Memorial. 3.6 On 15 August 1986, the Minister directed a senior officer of his department, Mr G. O'Connor, to investigate certain allegations relating to competence and propriety in the administration of the Memorial; circumstances of the compilation of part of the staff bulletin and a leak of material and information to the Shadow Minister about a ceremony at the Memorial on the occasion of the proclamation of the Veterans Entitlements Act; and the provision of advice to the Minister. The Director had agreed to these arrangements and offered his co-operation and the Chairman was informed. 3.7 Previously, on 13 June 1986, the Director had instructed an officer of his Secretariat, Ms K. Rush, to make a comprehensive review of all Council and Committee resolutions since the passage of the 1980 Act, with particular attention to the years 1983-86; and to review all finance matters, particularly the operations of the bookshop. In issuing the instruction the Director noted the Council's consideration of the Minister's suggestion for a review of the Memorial's organisation and its legislation, and stated that he himself had been the victim of malicious innuendos as to his management of the Memorial and his personal conduct. 3.8 At that time, the Director was hoping to use the results of Ms Rush's investigations to report to the scheduled August meeting of Council. However, subsequently the Rush inquiries were subsumed into an investigation which the Director commissioned from the internal auditors of the Memorial, Arthur Young, on 1 August to confirm that Council decisions and directions had been carried out, with particular reference to expenditure from the Fund. The results of the investigation was also intended to be available to the August Council meeting, but it was not able to be completed until 18 September. 3.9 Mr O'Connor presented an interim report on 21 August and copies were made available to Council members for their meeting on 22 August which the Minister attended. No formal action was taken then. 3.10 A special Council meeting on 8 September considered the interim O'Connor report, together with a written response from the Director, and determined that there was no prima facie case of misbehaviour against the Director with respect to that inquiry. It appointed an executive committee to act forthwith in examining aspects of the Memorial administration which Council believed required urgent examination. At a further Council meeting on 24 September, the executive committee was disbanded against the background of further exchanges with the Minister and of a decision then to have an independent inquiry conducted by a person acceptable to the Minister and to Council and with Terms of Reference endorsed by them. 3.11 At a meeting of Council on 1 October, with the Minister present, my Inquiry was commissioned and its Terms of Reference settled. The Director has been on leave throughout the inquiry. Chapter 4 EXAMINATION OF MATTERS CONCERNING ADMINISTRATION OF THE MEMORIAL IN ITS AFFAIRS 4.1 In this Chapter I address the various matters referred to me, including the contents of the other reports mentioned in the Terms of Reference. This account constitutes a summary of evidence and information. Matters Referred By The Minister Item 1: Acquisition of Warehouse Matters for Consideration 4.2 Circumstances relating to the preparation by the AWM of a proposal to Cabinet for acquisition of warehouse. The steps taken by the AWM to ensure that the Fyshwick site was suitable in terms of access, security, size, price and lack of encumbrance. The lack of reference in material provided to the Minister or Cabinet regarding the continued existence of a sublease on the warehouse beyond the date of proposed acquisition. Action by the AWM to secure tenure of the warehouse after Cabinet's approval of its acquisition became known to the AWM. The response to the Minister's request for information subsequent to discovery of the difficulties with the Fyshwick proposal. Background 4.3 On 8 February 1985 the Director forwarded to the Minister a New Policy Proposal (NPP) for the purchase of a warehouse in Fyshwick. The purchase price was $1.32 million. The proposal mentioned that acquisition of the warehouse would accommodate the Memorial's warehousing needs until the turn of the century. 4.4 At the time the proposal was developed, the AWM had a five-year lease over 1300 square metres of the warehouse. That lease was due to expire on 30 June 1986. The remainder of the warehouse (2230 square metres) was being leased by the Indoor Cricket Association (ICA) and that lease from 1 August 1984 for five years with a further five-year option. 4.5 The first reference in AWM records to the proposed purchase is a minute dated 10 January 1985 from the then Buildings Project Officer to the Director. (AWM records show that the Director was on leave at that time and that Dr McKernan was acting as Director. Dr McKernan has stated that this recollection is that although the Director was on leave, he continued to work from home on this particular matter in consultation with the Buildings Project Officer.) In his 10 January minute the Buildings Project Officer mentioned that he had spoken to the owner of the warehouse who had confirmed that it was for sale at $1.1 million. It is not clear how that figure increased to $1.32 million when the New Policy Proposal was put forward just over a month later, although the then Assistant Director, Resources Management, who was ultimately asked to prepare the New Policy Proposal, stated during a discussion with Mr O'Connor in September 1986 that his overriding instruction was a clear direction from the Director that the AWM was proceeding to buy the Fyshwick facility for $1.32 million. 4.6 Cabinet approved the New Policy Proposal on 13 May 1985 and the records show that the Director became aware of the Cabinet decision during the first week of June 1985. 4.7 In a note for file dated 20 August 1985, the Office manager has recorded that the previous day the owner of the Fyshwick building had `confirmed that the Indoor Cricket Area (ICA) lease at Fyshwick was renewed for a period of five years from September 1984'. 4.8 On 30 October 1985, the Director advised the Minister that the Fyshwick building was no longer suitable for purchase `as a further five-year sublease has been let for the the other half of the building'. The Director's minute went on to say that NCDC had identified a suitable block of land close to the Mitchell Annexe on which a warehouse of 3000 square metres could be built within the approved funds of $1.32 million. 4.9 On 7 November 1985, the Minister gave approval to proceed with the Mitchell building on the condition that: the cost (including the Project Manager's fee) did not exceed $1.32 million; there was no forward financial obligation carried into 1986-87; and the Memorial worked in close co-operation with the Departments of Veterans' Affairs and Finance. In that minute the Minister also asked the Director to let him know when the `new' sublease for the Fyshwick warehouse was let; whether negotiations for purchase were begun immediately following Cabinet's approval; and whether the new circumstances had arisen because of a failure to move promptly or because of a change of heart either by the vendors or the Memorial. The Minister also made the point that the advice which had been given to him and Cabinet was that the need for storage was both urgent and unavoidable. He said that the handover date of June 1986 (for the Mitchell building) did not appear to fit squarely with the case for urgency which had previously been put forward, and sought the Director's comments on this point. 4.10 When responding to the Minister on 13 November 1985, the Director said that approval for the purchase was received in a letter dated 21 August 1985 from the Department of Veterans' Affairs and negotiations with the vendors had been initiated the previous week, anticipating formal advice of the allocation of funds. The Director's minute went on to say that during this period the owner also advised that under the terms of an existing sublease, the lessee of the half of the building not occupied by the Memorial was entitled to remain in occupancy even if the building was to be sold; he (the Director) said that this effectively meant that the warehouse could no longer meet the Memorial's requirements. 4.11 On 29 November 1985, Council was given the following advice: `. . . . Just prior to receipt of advice of approval of the proposal (to purchase the warehouse) the owner advised that he had renewed a five-year sublease of the other portion of the building and the sublease would continue in the event of the Memorial making the purchase. As this was unsatisfactory, efforts were made to locate another suitable building and the possibility of the Memorial constructing a new building was also `explored'. 4.12 It is of interest that the owner of the Fyshwick warehouse recently informed this Inquiry that the purchase price for the building was always $1.5 million. He said that he had at no stage put a price of $1.1 million on the building and that while there may have been some discussion about a figure of $1.32 million, he had never at any stage agreed to sell at that price. He also said that it was his clear understanding that all AWM staff with whom he discussed the matter were well aware that the ICA were sub-leasing part of the building. Comment 4.13 On the basis of the information available (working papers concerning the development of the proposal to purchase the warehouse could not be located in the AWM) this matter appears to have been handled very badly. There is no evidence that a proper assessment of the suitability of the Fyshwick warehouse was ever undertaken by the AWM or by any other agency acting on their behalf (although it is noted that the Department of Local Government and Administrative Services did offer to assist in this regard); there is no indication of how the purchase price of $1.32 million was determined-indeed, the only figure mentioned in AWM records up until the time the New Policy Proposal was put forward was $1.1 million; and despite the fact that it was evident that a substantial part of the warehouse was being used by the Indoor Cricket Association (ICA), there appears to have been no thought given to the possibility that the ICA may have had a continuing sub-lease on the area that they were using. 4.14 The Director's minute of 30 October 1985 to the Minister informing him that the AWM did not want to proceed with the purchase of the Fyshwick warehouse was both untimely and misleading. The Director was aware by at least 19 August 1985 that there was an encumbrance on the building and given that Cabinet had approved the purchase of it in May 1985, it would seem that, even as a matter of courtesy, the Minister, who had been responsible for putting the proposal to Cabinet, should have been informed as soon as the changed circumstances became known. When the Minister was informed on 30 October 1985, the advice conveyed to him was that `. . . the building is no longer suitable for purchase as a further five-year sublease has been let for the other half of the building'. The Minister interpreted this as meaning that a new sub-lease had recently been entered into by the owner. This interpretation would seem reasonable by any standard. It would also seem reasonable to conclude in retrospect that the words used by the Director were misleading. 4.15 When the Minister sought further information from the Director on 7 November 1985, the response that he received just under a week later did not really answer the questions which he had asked. In his response the Director implied that the delay in commencing negotiations for the purchase was attributable to the fact that approval for the purchase was not received until 21 August 1985. While it is correct that formal written advice was not received until that date, the fact remained that the Director had been aware of the approval in early June and AWM staff could reasonably have been expected to commence work on the purchase, particularly given the purported degree of urgency involved. The Director's response to the Minister did not in any way address the Minister's questions concerning the timing of what the Minister referred to as the `new' sublease. 4.16 When responding to questions put to him during the course of this Inquiry, the Director mentioned that he was on leave in January 1985 when the New Policy Proposals were produced by the acting Director. He pointed out that the proposal forwarded to the Minister on 8 February 1985 was prepared by the then Buildings Project Officer and that he (the Director) did not recall any discussion with that person concerning the lease of that proportion of the Fyshwick premises which was not occupied by the Memorial. He also said that he did not know how the Buildings Project Officer had arrived at the price of $1.32 million. Given that the Director signed the New Policy Proposal on 8 February 1985 and that he is the chief executive officer of the AWM, it is considered that he should have made it his business to be better informed about a matter which was being put to Cabinet and which involved substantial expenditure. 4.17 The Director has also confirmed to this Inquiry that neither he nor Memorial staff were aware of the existence of the Indoor Cricket Association lease. Again, common sense suggests that given the ICA's occupancy of almost two-thirds of the warehouse, the possibility of a continuing sublease should have been considered. 4.18 When asked why he did not notify the Minister in August that it had become clear that a sublease existed, the Director said that there would have been little point in taking the matter up with the Minister or Council at that time as no firm alternative had yet emerged and it was not yet possible to recommend a definite course of action. This rationale is difficult to understand. 4.19 The building of the Mitchell warehouse was, in the final analysis, a better outcome from the Memorial's point of view than what might have been achieved at Fyshwick. However, the fact remains that the proposed Fyshwick purchase was very poorly handled by the AWM. As chief executive officer of the Memorial and sponsor of the New Policy Proposal, the Director must accept ultimate responsibility for this. For the reasons mentioned above, it is considered that the Minister was not properly informed about this particular matter and there seems little doubt that the responsibility for this also rests with the Director. Item 2: Parliamentary Question-The Eastern Staircase Matters for Consideration 4.20 The advice given to the Minister to enable him to respond to the Parliamentary Question regarding the Memorial's eastern staircase and the circumstances leading to provision of that advice. Background 4.21 On 11 February 1986 Mr Tim Fischer, Shadow Minister for Veterans' Affairs, asked the following Questions on Notice in the House of Representatives (PQ 3126): 1. What total exhibition space is it anticipated will be available in the Australian War Memorial at 1 June 1986? 2. What was the cost of providing safe staircases to facilitate access to and operation of the exhibition areas? 3. Has initial design work caused increased costs; if so, will the War Memorial charge the National Capital Development Commission for the additional costs incurred? 4.22 On 25 February 1986, the Director provided a draft response in which he said, inter alia, that the cost of the new staircases was not available to the Memorial as they formed a part of the overall refurbishment program which was the responsibility of the National Capital Development Commission (NCDC). 4.23 On 14 March 1986 the Minister wrote to the Director seeking further information including the cost of the staircases as determined by the NCDC and particulars of the circumstances in which the eastern staircases had been assessed as being unsafe. The Minister also sought an explanation of why it was not intended to charge NCDC if, as he had inferred from the Director's earlier draft responses, the increased costs were as a result of faulty work by the Commission. Given that the Shadow Minister's request related to the operation of the NCDC and the Department of Housing and Construction, the Minister also sought an assurance that any suggested reply had been prepared in consultation with and had the agreement of these organisations. 4.24 When responding to the Minister on 8 April 1986, the Director explained that there had been an almost complete breakdown in communications between the AWM and the NCDC. He said that the relations had become progressively worse throughout the period of the AWM refurbishment program. He pointed out that it was the Memorial's view that the NCDC did not properly assess the requirements for the staircase while the NCDC claimed that the structure satisfied the brief received. In his minute the Director said that it would seem inappropriate for one government body to action to recover funds from another government body and that a demand for reimbursement in respect of the stairs would rekindle the dispute and endanger the rapport which has developed since the appointment of the new NCDC Commissioner. In answer to the Minister's question about assessment of the safety of the staircase, the Director said that this judgment had been made by the Council following an inspection of the area after its meeting of 12 November 1984. When referring to the revised response to the Parliamentary Question (which was attached to his minute and which included the estimated cost of the staircases) the Director said: `The answer has been prepared in consultation with the NCDC and the Regional Office of the Department of Housing and Construction.' 4.25 On 17 April 1986, the Minister again wrote to the Director expressing concern about the information being provided to him in relation to the Parliamentary Question. He enclosed with his minute a revised draft response and asked the Director to let him know as a matter of urgency whether or not the redraft was factual and accurate in every detail. The Minister also asked the Director to confirm that NCDC agreed with the text or a revised version of it. He stressed that it would not be sufficient to say that that organisation had been consulted. 4.26 When responding to the Minister on 2 May 1986, the Director returned a slightly modified redraft which he advised had been provided to NCDC for comment. He said that `the Commission again endorses the reply'. 4.27 The answer to the Parliamentary Question was published on 20 May 1986. Comment 4.28 The first draft response to this Parliamentary Question was deficient in several ways: having answered the question in relation to total available exhibition space, it provided further figures which did not add up to the total specified; it did not answer the question concerning cost, even though, as subsequent events showed, that information was available from the NCDC; and it did not answer, in a direct way, the question concerning poor initial design work. 4.29 The second draft response was said to have been prepared in consultation with NCDC and the Regional Office of the Department of Housing and Construction. Despite a specific request from the Minister for an assurance that the reply had also been agreed to by those organisations, no such assurance was given. Subsequent advice given to this Inquiry by the AWM Administrator has confirmed that no agreement was in fact reached between the AWM and the NCDC in relation to that draft. In his reply to a specific question on this point, the Director has informed the Inquiry that `the Administrator personally cleared the draft minute with NCDC before dispatch to the Minister. (The Administrator) submitted two drafts to (NCDC) and the final approved draft was submitted to the Minister.' The Administrator has confirmed that he submitted two drafts to the NCDC one of which was finally `endorsed' by the Commission, but has stated that this was not until after the Minister had sent his third query to the Director which was accompanied by the draft prepared in the Minister's Office. 4.30 The third draft response which, as mentioned above, was prepared in the Minister's office, was amended and returned to the Minister with a covering minute which stated, inter alia, that `. . . The Commission again endorses the reply'. Since the NCDC had not agreed to any previous draft response, it is not clear what this advance was intended to convey. 4.31 The records relating to this matter show that the Minister had a good deal of difficulty obtaining clearly-worded and factually complete information with which to respond to this Parliamentary Question. In the circumstances, it would have to be said that the Director's advice in relation to this matter was both inadequate and misleading. Item 3: The Eastern Staircase and NCDC Matters for Consideration 4.32 The circumstances relating to the original approval of the eastern staircase, the alteration in plans for the staircase, the need for the alterations, the additional cost involved in these alterations (including the demolition and reconstruction) and the NCDC's views on the AWM's involvement in this and other construction projects. Background 4.33 An examination of AWM and NCDC records indicates that the origins of the dispute concerning the construction of the eastern staircase can be traced back to a meeting held on 3 August 1983 between NCDC and AWM officials, the Project Manager and the Design Consultant. The minutes of that meeting indicate the following agreement regarding the eastern staircase: `. . . BSM (the designer consultants) are documenting Stair 1-design to be simpler than Stair 2.' These minutes were endorsed by the AWM's then Building Project Co-ordinator in a letter to the NCDC dated 10 August 1983. 4.34 A memorandum from the NCDC dated 17 August 1984 following the emergence of the dispute over the eastern staircase, states that: `it was agreed at that meeting (i.e. the meeting of 3 August 1983) that the stair need not be as wide as the western stair and that the design should be simpler. At that stage it appeared to be the Memorial's intention that the stair would serve essentially as a fire escape rather than as a general means of circulation.' 4.35 NCDC has indicated that a complete set of working drawings, which included details of the eastern staircase, were delivered to the AWM with a covering letter dated 14 October 1983. It appears from annotations to the AWM copy of the NCDC letter that drawings enclosed with the letter were received and examined by the AWM's Building Project Co-ordinator. An internal NCDC minute dated 23 August 1984 confirms that NCDC were never provided with any comments from the AWM concerning any inadequacies in the set of drawings which they sent to the Memorial on 14 October 1983. 4.36 During an interview with Mr O'Connor on 22 September 1986 the former AWM Building Project Co-ordinator said that the Director had decided that the eastern staircase would be a fire exit only. He (the Building Project Co-ordinator) said that he had received a clear direction from the Director regarding the changes to the eastern staircase. 4.37 It would seem that construction of the eastern staircase took place in the first part of 1984. It was on 9 May 1984 that the AWM indicated to NCDC that requirements for the eastern staircase had changed and that a considerably wider staircase would be required which would involve demolishing the newly built staircase. 4.38 Following the AWM's letter of 9 May to NCDC seeking changes to the staircase, NCDC arranged for preparation of a revised design. While the AWM supported this new design, it would seem that when it reached the Chief Architect at NCDC he voiced strong objections to the proposal. Senior management within the NCDC were also concerned about the prospect of demolishing the existing staircase and constructing another before the completion date for stage 1. They were also concerned that such additional work could not be accommodated within the budget for the building project. 4.39 In correspondence from August 1984 onwards, NCDC indicated that it intended to complete the eastern staircase and that any redesign of the area would need to be considered as a separate project. The NCDC were of the view that the staircase should be evaluated following a period of use by the public before any alterations were made to it. 4.40 In a letter to the NCDC dated 13 November 1984 the AWM Building Project Co-ordinator advised that the Council of the AWM had directed that the stairs be demolished and rebuilt under Memorial control. It was stated in that letter that in view of the anticipated crowds during the Christmas period the Council considered that this action was necessary in the interest of public safety. Minutes of the Gallery Committee meeting of 26 February 1985 indicated that NCDC relinquished the task and that the Department of Housing and Construction had undertaken to rebuild the staircase at a cost of $36,000. Subsequent records show that the total cost paid by the AWM to the Department of Housing and Construction was $46,000. 4.41 It is of note that the NCDC Commissioner wrote to the then Chairman of the AWM Council on 22 November 1984 regarding the dispute over the eastern staircase and the Council's decision to demolish the stairs. The Commissioner also mentioned his concern about other instances of waste which he believed had occurred because of changes requested by the Director. He said that additions and alterations to the works had caused the overall cost to increase from an initial figure of $1.87 million to $2.85 million and that of the roughly $1.0 million increase, about $450,000 had resulted from additions and alterations asked for by the Director. When commenting on the staircase, the Commissioner said that he found it hard to see how the Memorial Council could justify such a waste of public money without any attempt to ascertain in practice whether or not the stairs would cope with pedestrian traffic. He said that as far as the Commission was aware, no evidence had been provided by the Director or his staff, beyond that of mere contention, to show why the stairs were considered to be a threat to public safety. When responding to the Commissioner the then Chairman addressed the question of the overall number of changes which had been requested by the AWM and said that those changes had been made to ensure that the Memorial provides substantially increased facilities for the public, not only in terms of visitor comfort and safety, but also in the Memorial's approach to exhibitions and exhibition technique. On the question of the eastern staircase he referred to a letter which he had sent to the Commissioner earlier that month. In that letter the Chairman said that `. . . In terms of public safety and convenience, the stairs provided on the eastern side are inadequate. Comparisons between original and existing stair widths have previously been made together with our need for adequate communicating links between floor levels. These issues are of such importance that the stairs, in the present configuration, cannot be accepted.' Comment 4.42 From the information available to this Inquiry, it would seem that the decision that the eastern staircase be built as a fire exit rather than as a main public thoroughfare was agreed to by the then Building Project Co-ordinator during discussions with NCDC staff in August 1983. As noted above, he has subsequently stated that the Director decided that the eastern staircase would be a fire exit only. He has also stated that he was present with the Director at the eastern staircase soon after its completion when a visitor to the Memorial demonstrated that he was able to hold the railings of both sides of the staircase at once. He said that it was at this point that the Director changed his position as to the suitability of the stairs. 4.43 AWM records show that the Memorial subsequently endorsed in writing the changes which were agreed to during the 3 August 1983 meeting with NCDC staff and that plans which were subsequently sent by NCDC to the AWM were not in any way questioned. In view of this, the Director's comment in a letter dated 1 February 1985 to the then Chairman that `the Memorial had neither the staff nor reason to examine just one of the hundreds of drawings received' would seem unsatisfactory. Whether the assertion by the former Building Project Co-ordinator that the decision to change the stairs was made by the Director is correct or not, there is no doubt that the AWM did request and endorse the initial changes to the eastern staircase and, as such, responsibility for the additional costs which were subsequently incurred rests with the management of the AWM. Item 4: AWM Top Structure Matters for Consideration 4.44 The advice provided to the Minister regarding the PSB's attitude to the proposal, raised in November 1985, to upgrade the AWM's management structure. Background 4.45 On 8 November 1985 the Chairman wrote to the Minister seeking his endorsement of a proposed revised top structure for the AWM. The Chairman's minute contained the following statement: `The case for upgrading the Assistant Director Resources Management has been well made in the report and subsequent correspondence to the Public Service Board. A copy of the relevant correspondence is attached.' A copy of the Director's letter to the Board of 29 August 1985 seeking agreement to the revised structure was included in the attachments. That particular letter focused on the question of the proposed reclassification of the Assistant Director Resources Management from Level 1 to Level 2. However, what was not attached, was earlier correspondence from the Board to the Director (dated 5 August 1985) in which the Board said it `. . . would have some difficulty in supporting reclassification of the Resources Management position to Level 2'. 4.46 On 13 March 1986 the Chairman again wrote to the Minister seeking his urgent consideration of the proposed revised top structure. That correspondence made no mention of the fact that on 19 November 1985, in response to the Director's letter of 29 August 1985, the Board had said `. . . we remain unconvinced that the position would stand up to L2' and `. . . these concerns lead us to conclude we cannot endorse your proposal from that viewpoint'. 4.47 When asked to comment on these matters during this Inquiry, the Director said that he completely denied that the Chairman's minute of 8 November 1985 to the Minister had any intention of conveying a false impression. He said that with hindsight the Chairman could have mentioned the Board's opposition to one element of the Memorial's proposal, but pointed out that the very purpose in writing to the Minister was to gain his support based on the Memorial's case so that the Board and the Department of Finance could be favourably influenced. The Director said that the Chairman's subsequent minute of 13 March 1986 was an attempt to get the Minister's support so that the Memorial's management might be improved. Comment 4.48 As mentioned above, the Chairman's minute to the Minister of 8 November 1985 did not refer to the fact that the revised top structure proposal had not been agreed to by the Public Service Board. Given that the minute included a copy of the AWM submission to the Board, it might reasonably have been expected that it would also have included a copy of the Board's letter of 5 August 1985 to the AWM, or at least some reference to the fact that the Board had at that time expressed concern about aspects of the proposed new top structure. 4.49 AWM records show that the Chairman's minute of 8 November was prepared in draft form by the Director. The records also show that his covering note to the Chairman did not make it clear that the Board had already stated that it had some difficulty supporting the reclassification proposal. In subsequent correspondence with this Inquiry, however, the Director has stated that at the time of drafting the minute he did inform the Chairman of the terms of the Public Service Board's advice of 5 August 1985. He has also stated that he discussed `in depth' with the Chairman the actual choice of words used in the minute. He said that the views expressed were intended to convey to the Minister that the AWM had so far been unsuccessful in negotiations with the Board or Finance although it was believed that the Memorial's case was valid and logical. He mentioned that copies of the correspondence with the Board were attached to the Chairman's minute of 8 November 1985. He also said that he had recommended the precise terms of the Chairman's further minute to the Minister of 13 March 1986 and confirmed that at that time he had informed the Chairman of the Board's views as expressed in their letters of 5 August and 19 November 1985. The Chairman has subsequently confirmed that the Director did discuss with her the circumstances of the Public Service Board's attitude on each occasion. 4.50 It is considered that the advice which was conveyed to the Minister in the Chairman's minute of 8 November was selective and, as a consequence, misleading. It did not mention that the Public Service Board had already expressed concerns about reclassification of the Resources Management position; it did not (according to the Minister's Office and contrary to the Director's assertion) have attached to it a copy of the Board's letter of 5 August 1985; and it conveyed the impression, by not including this information, that the Board endorsed the proposal. 4.51 The Chairman's letter of 15 March 1986 to the Minister is also selective in that it makes no reference to the Board's further correspondence of 19 November 1985. 4.52 On the basis of the information made available to this Inquiry the Minister would have good reason to believe that he was given inadequate and misleading information in relation to this matter. Item 5: The 1984/85 Annual Report Matters for Consideration 4.53 The advice provided to the Minister regarding the delay in submitting the AWM's 1984/85 Annual Report. Background 4.54 Under the Acts Interpretation Act the AWM is required to submit its Annual Report to the Minister within six months of the end of the period to which the Report refers. The Report must include the audited statements of accounts for the AWM. The Memorial's 1984/85 Annual Report was due for presentation to the Minister on 31 December 1985. 4.55 On 22 November 1985 the Director wrote to the Minister seeking his approval for an extension of the period allowed for submission of the Report. In that minute, the Director conveyed the following advice to the Minister: `It is a requirement of the Australian War Memorial Act 1980 that the financial statements be submitted to the Auditor-General before they are submitted to the Minister. Most statutory authorities have the same provisions and as such the Auditor-General must certify financial statements for over 100 statutory authorities. It therefore takes some time to obtain the necessary certification and this inevitably causes delays in tabling the annual report.' The Director also mentioned that the financial statements had been completed by 30 August 1985 and forwarded to the Auditor-General. 4.56 When responding to the Director's minute on 12 December 1985, the Minister said that while on the face of it he was prepared to approve an extension of time, before doing so he wanted to raise with the Director some matters which were of concern to him, particularly as the request for an extension of time would need to be tabled in Parliament. The Minister said that the clear inference which he had drawn from the Director's minute of 22 November was that the delay in certifying the Memorial's financial statements was attributable to the Auditor-General. He made it clear that the Director's reference to the Auditor-General's workload in having to give certification to over 100 statutory authorities, and to the fact that delays inevitably occurred, had led him to this conclusion. He pointed out, however, that he had since learnt that the financial statements were not completed by 30 August 1985 (although he acknowledged that statements may have been sent to the Auditor-General at the end of August) and that revisions had to be sought by the Auditor-General. He said that he understood that those revisions had resulted in a final draft being submitted by the AWM in the middle of November. The Minister asked for urgent advice from the Director about these matters and said that he would be prepared to consider a request for an extension if he could be assured that the Director's advice accurately reflected the true position. 4.57 In a minute which reached the Minister's office on 23 December 1985, the Director said that in drawing the Minister's attention to the need for the Auditor-General to certify the Memorial's financial statements, it was not intended that the Auditor-General be accorded any blame. He said it was intended to highlight the fact that the requirement for the financial statements to be audited prior to their submission to the Minister inevitably caused delays in producing the Annual Report. He said that in the course of the audit following submission of the financial statements, some queries were raised by the Auditor-General's office and subsequent amendments were made to the statements. He assured the Minister that every effort had been made by the AWM to ensure that the Annual Report was produced within the statutory period. 4.58 AWM records show that while the financial statements were submitted to the Auditor-General on 30 August 1985, further draft statements were also submitted on 11 and 28 October and 11 November before a final draft was submitted on 18 November and certified by the Auditor-General on 29 November 1985. 4.59 The AWM's 1984/85 Annual Report was ultimately delivered to the Minister's office on 5 February 1986. Comment 4.60 The point at issue in relation to the 1984/85 Annual Report is whether or not the Director provided the Minister with inadequate or misleading information in relation to this matter. 4.61 In response to questions put to him during the course of this Inquiry, the Director said that he had no reason to believe that the contents of the minute of 22 November 1985 were anything other than factual or correct. He said that the request for an extension of time should have been a straightforward administrative matter which could have reasonably been left to the acting Executive Officer. He mentioned that similar requests for such an extension of time had been made in previous years. (It is noted that the 1983/84 Annual Report was also delayed.) He also pointed out that the Commonwealth Auditors had not raised all their queries in the first instance and referred to an attachment (recently signed by the person who was acting Finance Manager at the time) in which it is mentioned that the matters referred to by the Auditor-General were raised separately and on different occasions over a period of several weeks by different members of the Auditor-General's office. 4.62 Despite the Director's observations about the difficulties encountered with the Auditor-General's office between 30 August and 29 November 1985, the fact remains that the wording of his minute to the Minister of 22 November 1985 clearly implied that the delays were attributable to the Auditor-General. Subsequent inquiries have revealed that the draft was prepared in good faith by staff of the AWM Secretariat and that it was signed without amendment by the Director. While the wording may have been inadvertent it nevertheless resulted in the Minister concluding that the cause of the delay was the Auditor-General's office rather than the AWM. The Minister's assertion therefore that he was given inadequate and misleading advice is not unreasonable. Item 6: The Change in the AWM's Bankers Matters for Consideration 4.63 The circumstances surrounding the change in the AWM's bank from Commonwealth to Westpac, including Council involvement in that decision and the considerations taken into account in making it; whether advice to the then Minister in respect to an answer to the Parliamentary Question on Notice from Mrs R. Kelly was accurate. Background 4.64 The relevant events occurred towards the middle of 1983 when the Minister for Home Affairs and Environment was responsible for the War Memorial. On 13 April 1983 by minute the Director requested the Minister to seek approval of the Treasurer for Westpac Banking Corporation to be deemed to be an `approved Bank within Section 63 (j) of the Audit Act in respect of the Australian War Memorial'. The Director stated as reasons that confusion by the Bank between the two accounts had caused administrative problems, and investment advice from the CTB resulted in less than optimum returns from investment funds. The Bank referred to was the AWM's existing bank, the Commonwealth Trading Bank. 4.65 That particular matter was finally settled on 12 December 1983 when the Minister assisting the Treasurer approved the Westpac Banking Corporation as requested. 4.66 Formal action to transfer AWM bank accounts to Westpac commenced on 1 June 1983 when the Director told his senior administrators that following discussion with the local Manager of Westpac he intended to transfer the bank accounts to them. He said in his minute, `I do not intend to go to Council with this until after the transfer is made when I will seek ratification.' The following day the Assistant Director, Resources Management responded with a detailed minute which, among other things, challenged the statement that the Commonwealth Trading Bank had not provided adequate service, reminded the Director of earlier advice that there were four reasonable alternative Banks including the Commonwealth and Westpac, and suggested that each should have been given the opportunity to bid for the business. There was a recommendation for the matter to be raised at an approaching meeting of the Executive Committee. There is no indication on the file of consideration of that minute. 4.67 Subsequently on 14 June 1983, the Manager of the local Westpac Branch wrote to the Director indicating the services they could make available. The minutes of an Executive Committee of Council meeting on 16 June 1983 state, `The Director informed the Committee that the Memorial was changing its bank accounts from the Commonwealth Trading Bank to the Westpac Corporation. The Committee noticed this action.' 4.68 There is a letter of 1 July 1983 from the Manager of the Commonwealth Bank which had carried the business, expressing his disappointment at the decision and indicating a willingness to continue to quote from AWM investment needs. 4.69 On 19 October 1983 Mrs R. Kelly. M.P. asked the Minister a Question on Notice about the transfer of the Memorial's bank accounts to Westpac and in particular for reasons as to the change, information about the investigation made of the services of the various banks, as to how many banks were invited to tender, and the reasons for the selection of Westpac. 4.70 On 28 October 1983, advice went from the Memorial to the Minister on a suggested reply. The draft reply included statements that `discussions were held with trading banks concerning their services' and `the facilities offered by Westpac were considered to be most advantageous to the War Memorial'. On 8 December 1983 the Minister replied to the Question (No. 636 House of Representatives Hansard page 3647). The reply included the words that the transfer to Westpac had been made `. . . . following discussions with several banks concerning their services, because its facilities were considered to be most advantageous to the War Memorial. Tenders were not invited.' 4.71 There is no record of any approach to any banks other than Westpac or of any comparative assessment of the services available from them. Comment 4.72 The Inquiry has asked questions of the Director to ascertain why the change was made, why he had not acted on the advice of the Assistant Director or recorded his reasons for not doing so, and about the circumstances in which he or some member of his staff had approached the banks, which presumably was the basis for the advice given to the Minister about the reply to the answer to the Parliamentary Question. 4.73 In reply the Director has linked the decision to transfer the bank accounts to dissatisfaction with the circumstances in which urgent action had to be taken about reinvestment of a sum of money from the AWM investment portfolio which was lodged with the Commonwealth Bank. He said he was not familiar with the Parliamentary Question referred to, but identified Branch names and Managers' names for local branches of each of the four banks with which he had had discussions. The Inquiry felt obliged to check this statement in respect of the three banks other than Westpac, and made oral enquiries of two of the three people nominated, each of whom is now retired, and also of the managers in succession of each of the three people. Each reported no record or recollection. This outcome was reported to the Director together with the fact that there appeared to be no reply to the Assistant Director's advice of 2 June 1983. The Director was then asked to respond to the propositions that in respect of this matter: (a) You were deficient in carrying out your duties by not responding to specific advice from a senior officer or not recording the action you took following that advice; (b) you gave false information about approaches to the four banks to the Executive Committee; and (c) you gave the Minister for Arts, Heritage and Environment false information on the particular question of consultation with the banks which he subsequently related to Mrs Kelly and the Parliament in his written reply to the question on notice. 4.74 His answer was that his listing of the names of the Bank Managers in an earlier written answer was not intended to imply that he had had discussions with those individuals, rather he had personally visited the four major banks deliberately not identifying himself, and discussed with counter staff investments and bank charges and counter services. He regretted his misleading answer to the Inquiry, referred to the pressures of current circumstances, and was glad of the opportunity of correcting this answer. His answers to the propositions were: (a) That he had little confidence in the Assistant Director and had taken the matter out of his inefficient hands and any reply to his minute would have been verbal. Action taken was documented in the papers of the Executive Committee and this was after approval by the Committee. (b) He did not give false information about the approaches to the four banks, which were as set out in his reply. (c) He did not give false information to the then Minister as there had been discussions with the banks in accordance with the sequence of events he had set out. 4.75 The Inquiry's examination of this matter shows that the propositions it put to the Director have been substantiated. (Note the reference in 4.74 (c) should have been to the Minister for Home Affairs and Environment.) Item 7: Ordering and Delivery of Commemorative Port Matters for Consideration 4.76 The circumstances surrounding the ordering and delivery to the Memorial of bottles of commemorative port, including action decided on by the Council when the matter was brought to attention and how that action has been represented by the Director: why a letter to Lieutenant-Colonel McCann from the Director is apparently not on AWM files and the circumstances in which that letter was written. Background 4.77 Over the period end 1984 to the beginning of 1985 discussions took place between members of the AWM staff, including the Director, and a Canberra firm of wholesale wine merchants about the sale of specially labelled commemorative port bottles in the AWM shop. During January 1985 six cases were delivered to the shop out of a total consignment of one pallet (64 cases) ordered by the merchants. 4.78 There were protracted exchanges between the wine merchants and the Memorial over such matters as the approval of the reproduction of the specially designed label, the nature of packaging, the size of the order and whether there had in fact been an order. There was also uncertainty about the legal capacity of the Memorial to sell liquor on its premises. In the course of these events the Director declined to accept delivery of any port and returned the six cases. 4.79 Finally Council took action at a meeting on 26 April 1985. It admonished the Director over the difficulties which had arisen while acknowledging the intention of the Director and certain staff to increase Memorial funds. Council decided to handle the matter itself from then on with a view to a settlement with the wine merchants. 4.80 On 29 August 1985 a cheque for $2250.67 was sent to the wine merchants with a letter from the new Chairman in settlement of the dispute without prejudice. That letter went under cover of a letter of 3 September 1985 from the Director, in a personal vein, to Lt. Col. McCann, a director of the company. In response to the Inquiry, the Director has described that letter as a demi-official one to thank Lt. Col. McCann for providing information which helped to prevent a possible legal problem for the Memorial. In fact the letter was also critical of the action taken by the Council under the previous Chairman. Comment 4.81 This matter had a number of unsatisfactory features and was dealt with by Council. This Inquiry has not sought to pursue it further. It has noted elsewhere the Auditor-General's comment, in respect of this episode, that the AWM's practice of ordering goods without proper documentation contributed to the confusion. That general question is a matter for the administration to pursue. Item 8: The Director's September 1985 Overseas Visit Matters for Consideration 4.82 The Director's September 1985 overseas trip, including the advice provided to the Minister regarding the cost and/or itinerary of the trip, the Director's entitlements and his wife's entitlements. Background 4.83 With the Minister's approval, the Director attended the 16th Annual Conference of the International Association of Transport Museums in Nuremburg, Western Germany, from 7 to 13 September 1985. His wife accompanied him at official expense. A draft itinerary and a cost estimate of $10,000 formed part of the material from the Director when the Minister's approval was sought in July. 4.84 Travel was arranged through National Australia Bank Travel, not through Qantas. The itinerary for the outward journey as put to the Minister was Sydney-Munich-Nuremburg, but the actual route taken was Melbourne-Hong Kong-Frankfurt-Nuremburg with a 50 hour stopover in Hong Kong. The actual cost for both the Director and his wife was in the vicinity of $20,000. 4.85 In response to the interim O'Connor report the Director stated, in answer to criticisms, that: He and his wife were entitled to first class travel. The travel clerk had chosen National Australia Bank Travel as offering the best package and had made the usual request for Qantas to be used as a carrier where feasible. The variations to the itinerary reflect information on flight availability closer to the travel date and involved no extra cost. The rest period in Hong Kong (50 hours compared to 24 hours) had not been excessive. The cost covered both the Director and his wife whereas the sum of $10,000 mentioned to the Minister was intended to cover the Director only, his wife's travel was a separate proposal taken up later in the minutes to the Minister. Some unauthorised payment for allowances had inadvertently been made to Mrs Flemming and a sum of $294.08 had been repaid. Comment 4.86 The bookings should have been made through Qantas in order to comply with the Finance Directives which have been adopted for the AWM Council. 4.87 The changes to the itinerary and stopover time should have been reported to the Minister together with an explanation. This could have been done on a for information basis, particularly if the Director had no doubt about the interpretation of the cost figures. 4.88 No reasonable person could have been expected to interpret the minute to the Minister as indicating a total cost of $20,000. 4.89 The principal question is whether the Director and his wife were entitled to first class travel for an official visit. The experience and understanding of the Inquiry is that the Director would be entitled to the same class of travel and rate of travel allowance while overseas as a Senior Executive Service (SES) Level 4 officer which is his salary classification. The entitlement is to business class air travel. 4.90 The fact that approval of an overseas visit by the chief executive officer of a statutory authority has to be approved by the Minister and reported in advance to the Prime Minister, as is also the case for Departmental Secretaries, is not a ground for assuming that the chief executive officer's entitlement to class of travel overseas is the same as a Departmental Secretary, which is first class. 4.91 However investigation by the Inquiries has shown the position to be unclear and suggests that the lack of clarity is shared by a number of other chief executive officers of statutory authorities. 4.92 The Remuneration Tribunal has determined the salary and domestic and overseas travel allowance for the office of Director of the AWM at levels equivalent to SES. This determination does not extend to the question of the class of travel, which is a matter beyond the Tribunal's jurisdiction. Therefore the class of travel is a condition of employment which could be set within the provisions of the AWM Act, that is by the Executive Council. To the knowledge of the Inquiry no such determination has been made. 4.93 Advice from the Department of Prime Minister and Cabinet is that there is likely to be a number of Authorities for which no such determination has been made. While there is a presumption that, in the absence of a formal determination, the SES level of business class for overseas air travel should apply, the situation is uncertain. The Department has told the Inquiry that attention is being given to appropriate steps to clarify the position. 4.94 In this situation the Inquiry accepts that it was not unreasonable for the Director and the AWM staff to assume that he and his wife were entitled to first class travel. Item 9: V.E.A. Proclamation Ceremony/Staff Bulletin Matters for Consideration 4.95 Circumstances under which `ministerial direction' reference was included in bulletin the advice the Director initially gave to the Minister concerning his not being involved in the preparation of the bulletin the delay in advising the Minister that the advice to the Minister was incorrect circumstances under which Mr T. Fischer, MP, obtained a copy of the bulletin. Background 4.96 The AWM staff bulletin of 21 May 1986 mentioned that `as a result of a Ministerial direction' the Department of Veterans' Affairs would be holding a small function in the Memorial's sculpture gallery on 22 May 1986 at which the Minister would introduce the new Veterans' Entitlement Bill which was due for proclamation that day. The function was to be attended by representatives of a number of veterans' welfare organisations. 4.97 During Question Time on 22 May 1986, Mr Tim Fischer, MP, asked a question without notice concerning the use of the AWM for what he referred to as `a political function'. He also asked whether the function was taking place as a result of an `absolute ministerial direction' (See H of R Hansard P. 3754). The same day, Mr Fischer issued a press release to which he attached a copy of the staff bulletin which had the words `Reverse Leak' and `With compliments, Tim Fischer M.P.' written across it. In an AAP interview that day, Mr Fischer is reported as having said that senior officials at the War Memorial had told him that they had been used and pressured by the Veterans' Affairs Minister into holding the function. (It is noted that in a radio interview on 24 September 1986 Mr Fischer is recorded as having said that he did not know where the leak had originated from and was not aware that it was from either senior or junior staff management). 4.98 On 29 May 1986 the Minister, when responding to a question without notice said, inter alia, that the Department (of Veterans' Affairs) had made the decision that the suitable place for the proclamation ceremony would be the AWM (see Senate Hansard, p. 2981). 4.99 On 30 July 1986, at the Minister's request, the Memorial's Public Relations Officer, Ms James, met with the Minister and his Senior Private Secretary. At that meeting Ms James informed the Minister that the words `Ministerial direction' had been included in the bulletin as a result of an instruction from the Director in the form of an annotation by him on a minute which she had written him on 13 May 1986. (It is noted that on 19 May 1986 Ms James also cleared the relevant wording for this part of the bulletin in writing with the Director). Ms James has confirmed that at no stage did she inform the Director of her meeting with the Minister and his Senior Private Secretary. 4.100 At a meeting in the Minister's office on 31 July 1986, the Minister asked the Director whether he could shed any light on the matters raised by Mr Fischer in his parliamentary question and press release of 22 May 1986. The Director said that he had no idea; he said that he felt it was entirely proper and appropriate for the ceremony to be held at the AWM. He mentioned that the Public Relations Officer at the Memorial writes the bulletin and that he does not vet it. 4.101 In a minute dated 1 August 1986 the Director advised the Minister that, after checking AWM records following his discussion with the Minister the previous evening, he found that he had in fact cleared he draft of the bulletin which included the words `as a result of a Ministerial direction'. The Director said that he had not recalled this at the time of his meeting with the Minister. The Minister's office records show that this particular minute was not received in the Minister's office until 3.33 p.m. on 4 August 1986. 4.102 At a further meeting in the Minister's Office on 12 August 1986, the Director was advised by the Minister that a handwriting expert had stated that the words `Tim Fischer M.P.' appearing on the copy of the bulletin obtained from Mr Fischer's office, were consistent with having been written by the Director. (It is noted that the advice from the handwriting expert also mentioned that the lack of a significant number of individual characteristics in the printed entry `REVERSE LEAK' precluded him from taking the matter any further than saying that it is similar to the limited amount of printing attributed to the Director.) The Director denied categorically that it was his handwriting. On at least two subsequent occasions (in the Parliament and on radio) Mr Fischer has stated that the handwriting was his own. He has also confirmed this in writing to this Inquiry. 4.103 In response to questions put to him in the course of this Inquiry, the Director has stated that, after reading the contents of his minute (to the Minister) of 1 August 1986 to the Chairman of Council, he personally delivered it to Parliament House at 9.00 a.m. that day and left it with the Security Officer in the right side office at the top of the main stairs. He has stated that the Security Officer agreed to contact the Minister's office for delivery of the letter. The Chairman of Council has confirmed that he read the minute to her on the morning of 1 August and his acting secretary has stated that she recalls him leaving the office to deliver the minute. Comment 4.104 It seems clear that, despite contrary advice given orally by the Director to the Minister, the Director was not in favour of holding the VEA Proclamation Ceremony at the AWM. It is also clear that the inclusion in the staff bulletin of the words `as a result of a Ministerial direction' was at the Director's request. There is no evidence, however, that the words `Reverse Leak' or `With compliments, Tim Fischer M.P.' were written by the Director. Indeed, given that the advice of the handwriting expert is not unequivocal and that Mr Fischer has stated and is prepared to attest to the fact that it is his handwriting, it would be difficult to conclude that the writing is that of the Director. In response to a specific question concerning this matter, the Director has stated that he did not nor did anyone acting under his direction provide Mr Fischer with a copy of the staff bulletin. 4.105 It has been noted that a minute dated 22 April 1986 from Ms Cynthia Martin of the Minister's office to the Deputy Secretary of the Department of Veterans' Affairs states that `He (the Minister) would like a ceremony arranged at the War Memorial'. This would suggest that even if the Minister did not personally direct that the function be held at the AWM, the advice emanating from his office certainly indicated that this was his wish. Mr Stewart, Director (Public Relations) D.V.A., also confirmed during a discussion with Mr O'Connor on 19 August 1986 that the decision to hold the function at the AWM was not taken by the Department, but by the Minister's office. In the circumstances, the conclusion by the Director and his staff that the function was being held at the Memorial as a result of a Ministerial direction does not seem unreasonable. 4.106 On the question of the Director not recalling his request that the words `as a result of a Ministerial direction' be included in the staff bulletin, it is noted that over two months had elapsed by the time he was asked to comment on it by the Minister. At the same time, however, it is noted that in addition to annotating Ms James' minute of 15 May 1986, he also cleared a specific draft paragraph put to him by Ms James on 19 May 1986. Notwithstanding the elapse of time, it seems improbable that he would have forgotten that the words were included at his request, particularly as he did not make a practice of editing the staff bulletin. Item 10: Private Use of AWM Facilities Matters for Consideration 4.107 Circumstances relating to any private use of War Memorial facilities, including the workshop and photographic facilities, the authority given for that use and, if so, any outside employment which required approval. Background 4.108 The interim O'Connor Report considered a specific instance in which a member of the workshop staff used the Memorial facilities in his own time to fabricate material for the Director's home. There was a further case of the present Building Services Co-ordinator having used the facilities of the workshop in his own time to construct a piece of furniture for use in his home. This latter activity was noted by Commonwealth auditors during their visit to the Memorial. 4.109 In response to the O'Connor report the Director stated that in both cases the use of Memorial facilities had been in accordance with policy and with guidelines set out in the Personnel Management manual. There have been conflicting statements about the nature of the specific approval given by the Director for the Building Co-ordinator's activity. 4.110 The Rush papers draw attention to possible cases of the use of photographic reproduction facilities for private purposes, and the follow-on work of Arthur Young drew attention to possible cases of private authorship by Memorial staff without prior approval. 4.111 The Auditor-General's report to the Minister commented on private use of the AWM workshops and expressed the view that there needed to be formally documented and promulgated policy. Comment 4.112 The Inquiry sees the need for clarification of policy and practice in respect of private use of Memorial facilities and outside employment by Memorial staff across the range of Memorial staff. Once they are agreed there needs to be promulgation of these arrangements and appropriate measures for monitoring them. This matter is taken up further in Chapter 5. Item 11: Publication and Reproduction of TEE EMM Matters for Consideration 4.113 The circumstances surrounding the commissioning of the publication TEE EMM. Background 4.114 During World War 2 the Royal Airforce published in magazine form a monthly memorandum on training known as TEE EMM. On 14 March 1984, a former RAF officer now living in Australia wrote to the Assistant Director, Research and Publications proposing the publication of a reproduction of the collected editions of TEE EMM. On 2 April 1984, the Director annotated that letter with the following note to the Assistant Director, Research and Publications: `. . . We will proceed with this. Please take appropriate action.' In a minute to the Assistant Director, Research and Publications dated 9 October 1984, an officer of the Editorial and Publications Section indicated that certain routine actions needed to be taken before TEE EMM was published. These included: assessment of the historical importance of the work; copyright permission; and referral to the Research and Publications Committee in view of the limit of $5,000 per volume set by that Committee for facsimile publications. When responding to the issues raised in that minute, the Director made the following points in a minute to the Assistant Director, Research and Publications dated 23 October 1984: the publication should be regarded as a textbook for specialist consumption; it was probable that all World War 2 pilots would like to obtain a copy; the publication should be treated as a special case and sold at a price which just covered expenses; there was no need to further assess suitability for publication-this had already been decided; copyright permission from the Minister for Defence had been obtained; and he (the Director) would consider how the Research and Publications Committee was to be approached should he consider it necessary. 4.115 In a letter to the Director dated 16 August 1985 the former RAF officer who had made the original suggestion to publish TEE EMM, stated that a survey had been conducted among original subscribers and ex-service associations and that the response to an offer to purchase TEE EMM at $50 to $60 had been more than disappointing. In the circumstances, he said that it had been concluded that it would not be viable to proceed further. 4.116 In October 1985 the Director asked the Assistant Director, Research and Publications to prepare a submission to the Research and Publications Committee to produce 4,000 copies at a total cost of $56,000. The Director indicated that the books could then be sold at a very reasonable price, particularly to the 1200-strong Aircrew reunion which was to be held in Queensland in June 1986. Although the submission to the Research and Publications Committee recommended publication of 4,000 sets of two volumes, during the course of the meeting the Director recommended that 2,000 sets of two volumes be produced. The minutes of that meeting show that the Director advised the Committee that revised costings for the proposed publication indicated that should 2,000 sets be produced, the likely cost would be no more than $50,000 and the retail price per set would be approximately $28.00. The Committee subsequently approved the facsimile republication of 2,000 two volume sets at a total cost of `not more than $50,000 . . . to be met from the Fund'. 4.117 In late October, the Director approved an exemption from tender for the publication and subsequently a Purchase Order and production advance of $20,000 to John Ferguson Pty Limited was arranged. The retail price for the aircrew reunion in June 1986 was later set at $27.00 per set. 300 sets of TEE EMM were taken to the reunion and 116 copies were sold. Subsequent to the reunion a number of sets were sold by mail order and as at 24 September 1986 a total of 317 sets had been sold. Comment 4.118 With the benefit of hindsight, it seems clear that this publishing venture was not viable. Although it is reported as being the second most expensive publication ever produced by the AWM, very little attention seems to have been paid to the potential market for it. Indeed, the records show that advice which was passed on to the Director from the Editorial and Publications Section in October 1984 was that while the concept was still being evaluated it would be unwise to make an early commitment to proceed further with the publication. Notwithstanding this advice, the Director informed the Assistant Director, Research and Publications in a minute dated 23 October 1984 that he (the Director) `. . . would like this treated as a special case' and that he did `. . . not wish to make a Memorial profit of any consequence'. In that same minute the Director stated that there was no need to assess suitability as this had already been decided. 4.119 When commenting on the O'Connor Report, the Director said that in June and July 1986 the books easily outsold any other AWM publication (other than posters) and that sales had been maintained steadily. He also mentioned that enquiries from Canada and England had been received and bulk sales could be expected. The fact remains, however, that as at 24 September 1986 only 317 sets had been sold and of these 116 had been sold at the Aircrew Reunion. 4.120 On the basis of the information available to this Inquiry, it would seem that the Director's decision to proceed with the production of TEE EMM against clear advice from his staff that he should not do so without first fully evaluating the concept, resulted in a publication which on current indications is unlikely to sell in sufficient numbers to recoup costs. Item 12: The Aircrew Reunion Matters for Consideration 4.121 The circumstances surrounding AWM sponsorship of, and staffing involvement in, the Aircrew Reunion on the Gold Coast in June 1986. Background 4.122 In December 1984 the convenor of a proposed Commonwealth Airforces Reunion wrote to the Director with details of the reunion to be held on the Gold Coast from 2-6 June 1986. The letter requested the AWM to take up sponsorship of the reunion and indicated that a minimum of $1,000 was being requested from each sponsor. In a handwritten note of the same date from the convenor, the Director was invited to be a guest speaker at the reunion. That same letter indicated that after discussing the matter with the Director, the convenor had taken the liberty of including the War Memorial as a sponsor. In a letter dated 15 July 1985 the Director accepted the invitation to speak at the reunion and for the AWM to become a sponsor. A cheque for $1,000 was enclosed with the letter. 4.123 In a letter dated 27 August 1985, the Director sought the views of the convenor of the reunion on the possibility of establishing an AWM bookshop at the reunion. The Director indicated that he would bring his bookshop staff and that copies of the TEE EMM reprint would be available for sale at that time. 4.124 In an information item submitted to Council on 28 August 1985, Council was advised of the sponsorship by the Memorial and further advised that a temporary outlet for the Memorial shop would be opened at the reunion. On the same day Council endorsed the Director's action in accepting the invitation to help sponsor the reunion and also commended the Director for his initiative in arranging for a temporary outlet to be established for the Memorial bookshop. 4.125 The Aircrew Reunion was subsequently attended by the Director and four staff members from 1-6 June 1986. The officers attending included the Commercial Operations Manager-to operate the bookshop; the official AWM photographer-to take photographs which could be of use to the AWM and to assist in the bookshop; and the Curators of Audio-Visual and Written Records who were to perform curatorial duties in securing donations of photographs, diaries and personal papers from participants. In addition, the Director's wife attended and her registration fee of $90 was met by the AWM. The total cost for AWM staff attendance at the reunion was $6,141 (which includes the registration fee for the Director's wife) in addition to which the Memorial was required to pay the $1,000 sponsorship fee. Total bookshop sales at the Reunion were $6,366.91. Comment 4.126 While the decision that the Memorial should be an official sponsor for this reunion appears to have been made by the Director, it is clear that Council subsequently endorsed that decision well in advance of the event and commended the Director's initiative in setting up an outlet for book sales. Reasons for the attendance of each of the AWM staff who participated are well documented and those reasons appear to be quite sensible. In these circumstances, and while noting that registration fees were paid for the Director's wife and for the four staff who were engaged in AWM work at the reunion, it is not considered that the decision to sponsor the function, or to send the staff who attended, was either irregular or inappropriate. Item 13: The Karen Rush Investigation Matters for Consideration 4.127 Circumstances behind Ms Karen Rush's appointment to conduct an investigation into AWM matters. The nature of the tasks she was given, the way in which the investigation was conducted, the protection given to staff during the investigation and reports or findings made as a result of that investigation. Background 4.128 At the relevant time Ms Rush was an officer of the AWM Secretariat pending promotion to another Department. On 13 June 1986 the Director instructed her, by minute, to undertake a comprehensive review of all Council and Committee resolutions since the introduction of the 1980 Act, with particular attention and priority to be given to the years 1983-86. Specific mention was made of all matters financial, under contract, consultancy or other arrangements involving government funding, and also to commercial operations covering the bookshop and associated activities. 4.129 The instruction was prefaced by a statement that the Council at its next meeting on 28 August 1986 (it actually occurred on 22 August) would consider a suggestion of the Minister that the Memorial organisation and its Act be subjected to a comprehensive departmental review. As part of the preface, the Director noted Ms Rush's knowledge that he himself had been the victim of vicious innuendos regarding the management of the Memorial and his personal conduct regarding the use of resources, to which he was unable to respond. 4.130 It appears that there was no promulgation of this inquiry and that Ms Rush proceeded by examining files and speaking with some members of staff. She provided a series of minutes to the Director which included reports of apparent discrepancies (eg. changes in scale of fees for photographic reproduction and waiver of any fees), indicated points requiring clarification, or made suggestions for action Council would have to take to regularise a particular transaction. 4.131 There is little indication of an attempt to seek clarification or explanation from the officers directly concerned or from the head of Research and Publications Branch, the work of which became the focus of attention. 4.132 There were written exchanges between the Assistant Director, Research and Publications Branch and the Director about the process and about rumours circulating amongst staff. On 30 June the Director confirmed that the work would proceed as Ms Rush's primary responsibility until 30 August when she was expected to leave on promotion. 4.133 On 1 August the Administrator (formerly Assistant Director Resources Management) commissioned the internal auditors, Arthur Young, to examine Council decisions since 1980; to confirm that decisions and directions had been carried out; to confirm that all AWM Fund expenditure had been approved by Council; and to recommend corrective action when necessary. It was hoped that the project could be completed in advance of the Council meeting which had then been set down for 22 August. Although not stated in the Terms of Reference given to the internal auditors, the Rush inquiries were subsumed into their task. The material from the Rush investigation was made available to Arthur Young. Arthur Young reported on 18 September. Comment 4.134 The Inquiry regards the process followed in the Rush investigations as unsatisfactory, particularly in relation to the position of individuals subject to criticism. It did not interview Ms Rush and has not taken up the issues or recommendations from her submissions to the Director. It has directed its attention to the follow-up work contained in the Arthur Young Report. Item 14: Declaration of the Director's Pecuniary Interests Matters for Consideration 4.135 Whether the Director has provided to the Minister a declaration of his pecuniary interests. In this regard whether the Director is a director or has any interest in any private company, the business of any such company and any remuneration received by the Director from business interests. Background 4.136 Since 1984 it has been Government policy to invite full-time statutory office holders of SES equivalent level to furnish annually a declaration of pecuniary interests to the Minister. This applies to the Director of the AWM and a similar requirement exists for the Assistant Directors to furnish declarations to the Director. These arrangements are intended to be administered with sensitivity and in confidence. Comment 4.137 The Inquiry has found a state of uncertainty within the Memorial on this matter. The Director says he had not been aware of the requirement previously, although he had provided a list of personal interests to the previous Minister towards the end of 1984. He had not done so with the present Minister, but, now that he is aware of the requirement, he has provided him with an appropriate statement. He has also drawn the requirement to the attention of his Assistant Directors. 4.138 From conversations with two long-serving Assistant Directors it is unclear as to whether the requirement had been drawn to their attention. Neither of them has ever made a declaration in the Memorial. 4.139 In answer to the Inquiry the Director provided specific information about family business interests including recent action to resign from non-remunerative directorships in two family trusts. The Inquiry is not aware of any conflict of interest arising from the Director's pecuniary interests. 4.140 Both the Minister and the Director need to ensure that the Government's requirements in this matter are observed on an ongoing basis. Item 15: Chilean Embassy Ceremony 1986 Matters for Consideration 4.141 Whether the Memorial's facilities were used for a ceremony conducted by or for the Chilean Embassy in September 1986 and, if so, whether this function was in contravention of Council's policy. Background 4.142 On 19 September 1986 a wreath laying ceremony by the Ambassador of the Republic of Chile took place at the Memorial. A similar event has been held each year since at least 1981. In 1985 and 1986 the explanation given with the request to hold the ceremony was as a `gesture of friendship between my country and yours . . .' whereas from 1981-84 the explanation was described as `in memory of Australia's contribution to peace, during difficult periods of this century'. 4.143 There is a Council policy for ceremonies and wreath laying at the Memorial and guidelines were last approved on 29 May 1986. The relevant provision appears to be `. . . as an extension of this policy, the Memorial does permit people to lay wreaths at the Memorial in honour of all people who died in war'. Comment 4.144 This function has been held periodically and presumably has been deemed to be within Council policy. However, the guidelines are not without ambiguity and ought to be made clearer for the benefit of all concerned and to avoid possible embarrassment. It is understood that the AWM administration has this in hand. Item 16: Garden of Remembrance Replanting Project Matters for Consideration 4.145 The circumstances in which plants were replaced in early 1985 in the Garden of Remembrance area. Background 4.146 In January 1985 it became apparent that a number of shrubs in the Garden of Remembrance had died due to lack of water. There had been problems with leakage in the Galleries below following work done by the NCDC and the reticulation system for the garden had been damaged and subsequently turned off. On his return from leave in late January 1985 the Director decided to have the plants replaced. He selected the firm Everglades from Sydney to do the work and on 25 March 1985 that firm submitted to the Director a quote for $5,500 for the supply and installation of plants for the garden. A note for file by the Director on an apparently undelivered minute to members of the Executive Committee shows that agreement to use Everglades at a cost of $5,000 was given by all members of that Committee who were contacted by telephone during the week commencing 1 April 1985. The work was ultimately completed by Everglades in the time specified. Comment 4.147 The replanting of the Garden of Remembrance appears to have been handled personally by the Director. In answer to questions during the course of this Inquiry he indicated that he had sought the services of Everglades because no Canberra nursery was able to do the work. He said that he had contacted several local nurseries (including Rodney's Nursery at Pialligo) but none had been able to do the work in the time specified, i.e. before ANZAC Day 1985. The Director confirmed that he had never had any previous contact with Everglades or its management and mentioned that their existence had become known to him following a visit by the principal of the firm to the AWM in early 1985. He said that it was as a consequence of that meeting that he invited Everglades to submit a quote for replacement of the shrubs. 4.148 It is noted that when this matter was discussed during the course of the Inquiry with the former Assistant Director, Resources Management, he stated that the Director had told him beforehand that the work was going to be done free of charge. 4.149 The procedures followed by the Director in relation to the replanting of the Garden of Remembrance were not consistent with normal purchasing and supply practices. In particular, there is no record of quotations having been sought from other companies, no indication of how Everglades was selected for the task, and no record of a Purchase Order having been completed in advance of the work being done. 4.150 Notwithstanding these administrative deficiencies, it should be noted that there is no reason to believe that the Director chose to pursue the matter personally for any reason other than his concern to ensure that the Garden of Remembrance was in a presentable form by ANZAC Day 1985. Item 17: Information for the Minister Matter for Consideration 4.151 The information provided to the Minister in order that he be kept informed on a continuing basis on the AWM's activities. Background 4.152 This matter comes up for consideration under a number of items being discussed. The Inquiry understands that this specific reference reflects difficulty faced by the Minister in obtaining copies of agenda papers and minutes of the Memorial Council and its Committees. These are now being provided. Comment 4.153 Just as the Council requires adequately and timely information from the Director about the administration of the Memorial, so ought the Minister to receive adequate and timely information from the Council about the conduct of its affairs. However, in neither case should it be necessary or is it desirable to go into matters of detail. As between the Minister and the Council, it might well be more appropriate, in an ongoing co-operative relationship, for summary material to be provided, supplemented by personal discussion. Item 18: Inadequate Information to Council or a Committee Matters for Consideration 4.154 Any Circumstances where Council, or a Committee of Council, has been placed in a position of making a decision based on inadequate, incorrect, one sided or biased advice. Item 19: Irregularities in Making Staff Appointments Matters for Consideration 4.155 Any failure to follow proper procedures, or favouritism, or prejudice, in filling positions, or not filling positions, on the AWM staff. Item 20: Irregularities in Distribution of Sections Among Branches Matters for Consideration 4.156 Any failure to follow proper procedures, favouritism or prejudice, in the relative disposition of staff members between different areas of the AWM. Item 21: State of Morale Among Staff Matters for Consideration 4.157 The allegations regarding poor morale in parts of the AWM, including whether this is a result of any lack of consultation (particularly with professional staff), capricious decision-making and inadequate delegation. Background 4.158 Item 18-21 are taken together. The topics were supplied by the Minister and on checking the Inquiry was informed that they reflected points made to the Minister by a deputation of four staff members on 9 September immediately after Council on 8 September had found no prima facie case of misbehaviour against the Director. The four officers agreed to meet with the Inquiry and identified a number of events in support of their criticism of the Director's actions under those four headings. 4.159 The Inquiry linked a number of points advanced by this group with representations it had received from other groups and individuals, including from two union job delegates. It put to the Director a series of criticisms of him based on this wide range of representations. 4.160 The Director declined to respond on the grounds of unreliability of the information and of what he regarded to be its source, that is, a small section of a disgruntled element. He asked the Inquiry to take no further evidence from that particular source unless he could be present and question witnesses. The Inquiry declined to do this, but said that it would take his views into account as the completion of the Report proceeded. 4.161 Some of the points put to the Director from various sources (not just the `disgruntled element') are discussed below against the background of this exchange with the Director: (a) The Director was criticised for having modified agenda papers going to the Research and Publications Committee on 11 September 1986 to make Committee approval of the manuscript a condition of proceeding with the Bicentennial Volume. It was contended that the Committee should have been told that all preparatory work had been done and that contractually the Committee had no power to intervene in the publication. The inquiry acknowledges the right of the Director to modify material going forward to the Committee, however in doing so he needs to ensure that the Committee is informed of the consequence of action proposed. In this case, an undesirable consequence could be staff dissatisfaction as well as administrative difficulties. (b) There is further criticism that certain elements of the previously approved research program for 1986/87 were deducted in the course of final preparation of material for Council on 22 August 1986. It was asserted that there had been no consultation with staff nor would Council have been in a position to weigh the relative merits of expenditure cuts in various areas within the Memorial. The Inquiry sees it as the prerogative of Council and the Director to make the hard decisions about priorities when available resources are limited. It is difficult for the Inquiry to assess whether adequate information was available or not, but it appreciates there can be a need for confidentiality about the reasons for such decisions. (c) The Director was criticised for making an arrangement to engage a person as an historian of the AWM contrary to advice from staff that this would contravene recently promulgated Public Service Board guidelines concerning fixed term temporary employment, and that a Public Service Board requirement for prior advertisement and union consultation should have been observed. The criticism appears to be substantiated. (d) Another staffing decision criticised was the process followed and the action finally taken recently to fill a position of Curator Grade 2 (Audio-Visual Records). The Inquiry believes that the Director was acting reasonably within his rights as a manager. It is noted that one unsuccessful candidate believed that the Director had dealt with a difficult situation equitably. (e) Over the last year or so, there have been changes in allocations of Sections across Branches following an internal organisation review. A recent decision by the Director to transfer Research Centre Sections to the Programs and Collections Branch was criticised because of lack of consultation under the Industrial Democracy Plan and of apprehension about further changes. The Inquiry acknowledges that the Director should have engaged in appropriate consultation, particularly as there was a legitimate expectation of no further changes. However it cannot share the view that the Director had an ulterior motive in wanting to disadvantage the head of the Research and Publications Branch. In the view of the Inquiry, there is a legitimate case for further review of the distribution of functions across the branches. (f) There has been a number of complaints about the impact of decisions the Director has taken during the planning for galleries. This has been asserted to involve unrealistic deadlines, costly and disturbing changes of mind, and the ignoring of considered advice from curators and conservators. It was further claimed that after the Exhibition Planning Co-ordination Committee had arranged the preparation of a statement of principles and a program for the planning of new galleries over a five-year period and this work had been endorsed at Assistant Director level, the Director had introduced substantial changes without consultation. In the view of the Inquiry, there is a need for substantially more cross-fertilisation of ideas and information within the Memorial staff and for enhanced opportunities for middle managers to bring forward proposals to the state of final consideration. There remains the important basic principle, that changes can be made by top management. When this happens there ought to be adequate consultation and feedback. (g) There is great concern amongst conservation staff about the action taken to instruct maintenance staff to increase lighting levels in several galleries without consultation with them. The Inquiry acknowledges the Director's responsibility to weigh up the competing needs of conservation and display, but he needs also to be sensitive to the impact his decisions are likely to have on the commitment of professionally trained staff. (h) The Inquiry sees a similar concern, and falling-off of commitment, amongst exhibition staff about costly and damaging changes being made contrary to agreed planning and execution arrangements. 4.162 The Inquiry itself had noticed criticism from certain areas because the Director has not accepted or has countermanded action professional staff have taken to reflect what might be called the protest movement in respect of some of the conflicts in which Australians have been engaged, eg. the Vietnam War. In the view of the Inquiry, these are policy issues which rest upon appropriate decisions by Council and their articulation in practice by the Director. It is not for individuals or groups within the staff to make such decisions. It may be, however, that Council needs to clarify the position. 4.163 These various criticisms need to be evaluated in the knowledge that there has been no specific response from the Director, and in the light of other related elements of the work of the Inquiry. The Inquiry has sought out views from other staff members so that it might make a balanced assessment of the Director's management style, an assessment which it acknowledges to be value-based. 4.164 The Inquiry has found serious morale problems among Memorial staff. This is by no means universal but it is substantial. The morale of workshops and security staff is high and they appear to have an extremely high regard for the Director. At the other extreme is a group of staff, primarily in the Research and Publications Branch, who are completely disenchanted with the Director. There are others among Conservators and Curators whose commitment has been damaged by what they see as capricious and costly decisions taken by the Director. The majority of administrative staff appear not to be ill disposed to the Director. 4.165 The Inquiry has noted also that some of those who are critical of the Director's management style are equally critical of the way some staff members have gone about developing their criticism of the Director. That behaviour brings into light the right of a chief executive officer to expect loyalty from his people. It needs to be recognised also that some morale problems derive from conflicting views among working groups, quite apart from their views about the Director's management. 4.166 A further general observation is that while the staff of the Memorial has grown rapidly over recent years and there has been a dramatic expansion of professionally trained staff, top management has continued to rely unduly on the advice of the pre-existing staff. The Inquiry sees it as the job of management to facilitate co-operation and support between various occupational groups within the staff and to use the range of talents to best advantage. 4.167 Formal delegations to staff positions were reviewed by Council in August 1985 and appeared to be appropriate, subject to what is said elsewhere about the authority of the Commercial Operations Manager and the need for review of publications policy and procedure. Item 22: Acquisition and Disposal of Aircraft and Historical Material by the Australian War Memorial Matters for Consideration 4.168 Any irregularities in the purchasing or disposal of aircraft or historical or other material by the Australian War Memorial. Background 4.169 Section 8 (4) of the Australian War Memorial Act provides that disposal (by the AWM) of historical material exceeding $5,000 in value must be approved by the Minister. Section 35 of the Act provides that, subject to Section 8 (4) the Memorial shall not, without the Minister's approval, enter into a contract under which the Memorial is to pay or receive, in the case of the acquisition of any historical material, an amount in excess of $100,000, or in any other case, an amount in excess of $50,000. 4.170 The AWM policy on aircraft collection is set out in the Report of the Committee of Review of the Aircraft Collection of the Australian War Memorial (The Barnes Report), which was endorsed by the AWM's Gallery Committee on 29 February 1984. Among other things, the Report outlines the AWM's collecting objectives; specifies the priorities for acquisition of aircraft and recommends that the AWM actively follow a policy of exchange of material. Comment 4.171 An examination of AWM records during the course of the Inquiry has revealed that Ministerial and/or Council approval has not always been sought for the disposal of aircraft parts where such approval appears to have been required. Examples include the disposal of two sets of wings of Mustang aircraft referred to in the Council resolutions of 12 November 1984; the disposal of two Mustang wings, two Winjeel wings, two Winjeel centre sections or a Merlin engine referred to in a submission to Council of 4 October 1985; and the disposal of a Gypsy Major engine referred to in the Agenda for the Gallery Committee meeting of 13 March 1986. In relation to this last item, the Director made the following file annotation on 25 February 1986. `. . . please proceed with exchange. Ministerial approval is not required for barter items'. 4.172 There is also inadequate documentation in AWM records relating to the acquisition of complete aircraft and in particular to the terms of specific acquisitions. An example is the P-51 Mustang Fighter which was purchased from the Royal Melbourne Institute of Technology (RMIT) in 1983. In a letter to the RMIT dated 1 February 1983 the Director said: `. . . I refer to our telephone conversation of 26 January with regard to the Mustang P-51D, A68-648. I have pleasure in confirming our offer of $55,000 (Fifty five thousand dollars) and aircraft components as discussed'. The RMIT responded by saying that they accepted the offer and would `. . . liaise with (the senior curator) at a later date regarding the other aircraft components'. It is not clear from the AWM records what (if any) aircraft components were provided to the RMIT as part payment for the P-51. When the matter was reported to the Executive Committee on 3 March 1983, the disposal of aircraft components as part of the price was not mentioned and there is no indication that the Minister was advised as would have been required if the aircraft parts were classified as historical material and their value was in excess of $5,000. 4.173 A further example of incorrect procedures being followed in relation to aircraft acquisition concerns the purchase of the B25 Mitchell Bomber. Circumstances surrounding this purchase have been addressed in detail in Item 23 of this Chapter. 4.174 It has also been noted that the AWM has an arrangement whereby it acquires aircraft and aircraft parts, seemingly free of charge, from the RAAF and the Aeronautical Research Laboratories. These acquisitions are being used by the AWM for the purpose of barter with other collectors. The precise arrangements are not entirely clear from AWM records and it may well be that they are contrary to the normal procedures for acquisition and disposal of Commonwealth property. 4.175 The issue of acquisition (and restoration) by the AWM of historical military aircraft was raised in a letter to the Minister from a former Curator of Military Technology on 29 September 1986 and that letter has been drawn to the attention of the Inquiry. In the letter it was asserted that the Director had: `. . . ignored the advice of his curatorial staff . . . jeopardised the security of the national collection . . . undermined the professional credibility of the Memorial in his dealings with the collection community . . . compromised professional standards . . . and . . . reduced staff morale to its lowest ebb'. Each of the specific examples given by the former Curator has been closely examined during the course of the Inquiry. 4.176 It is considered that the letter contains many factual errors, exaggerations and unsupported assertions and, in view of this, it was seen as being of dubious value in terms of making a balanced judgement about the acquisition and disposal policies of the AWM. In addition, while the Director had offered some comments on these criticisms, he had asked the Inquiry to seek further information from the author. Although requested, this was not available at the time of writing. 4.177 There seems little doubt that institutions such as the AWM need to `trade in the market place' if they are to operate effectively as a major museum. It is apparent, however, that some of the practices adopted by the Director and his staff have had a strong element of ad hockery about them and that there is a need to introduce better and more clearly identifiable procedures and to maintain better records in relation to the acquisition and disposal of aircraft and historical material by the AWM. Item 23: Letter to the Canberra Times from Mr. J. R. Heaton Matters for Consideration 4.178 Issues raised by the correspondence to the Canberra Times in October 1985 by Mr J. R. Heaton. Background 4.179 On 8 October 1985 a letter from Mr J. R. Heaton, former Senior Curator of Military Technology, appeared in the Canberra Times. In the letter Mr Heaton stated that staff morale in the Australian War Memorial had fallen to a critically low level following rapid staff turnover, particularly in the professional areas, during the previous 18 months. He said that a number of other experienced curatorial staff members were either actively seeking employment elsewhere or, though unwilling to move, were unhappy with the existing management. Mr Heaton also said that it was his experience while with the AWM that directives for major programs would change without warning from week to week, particularly in the area of gallery design and construction; that staircases would be built, knocked down and rebuilt without ever being used; that on the management side jobs were regularly offered to staff without proper consideration of the procedures to be followed; that employment offers, once made, were very often withdrawn or considerably modified; that sections within the institution were continually being changed and reorganised; and that staff morale was undermined when management freely and openly discussed the ability of staff with people from all levels. 4.180 Following a request from the Minister's office, the Director wrote to the Minister on 8 October 1985 (ie. the day the letter was published) addressing the three main issues raised by Mr Heaton, viz: staff turnover at senior levels, problems associated with the AWM's building and gallery programs and staff selection procedures. Although conceding that the Memorial had endured a number of difficulties during the previous 18 months (particularly in relation to staffing and financial constraints and building and gallery refurbishments) the Director essentially refuted Mr Heaton's allegations. 4.181 During Question Time that day (8 October 1985) the Minister assured Senator Aulich, in response to a question without notice, that he (the Minister) had satisfied himself that, to a great extent, Mr Heaton's allegations had very little substance and that senior staff who had resigned had done so for personal or career advancement reasons. He also said that the Memorial's previous problems were substantially due to inadequate financial and human resources and that these shortcomings had been effectively addressed in the 1985/86 Budget. The Minister has stated that in replying to the question he was acting on the Director's advice. 4.182 The following day (9 October 1985) in the adjournment debate in the House of Representatives, the Shadow Minister, Mr Fischer, referred to the Minister's answer of the previous day and asserted that the Minister had been wrong in his contention and advice to the Senate. Mr Fischer said that the AWM had had a loss of specialist middle management level personnel far in excess of what might be regarded as normal turnover. He stated that the Minister had been responsible for a `cover-up' or, alternatively, a failure to investigate the situation fully. He concluded by saying that the Minister had absolute responsibility to investigate comprehensively and then take corrective action. 4.183 Following Mr Fischer's comments, on 18 October 1985 the Minister asked the Chairman for Council's advice on whether there were management and staff morale problems at the Memorial which needed to be addressed and, if so, did Council see value in initiating a suitable form of management review. His request initiated a process which ultimately culminated in this Inquiry. Comment 4.184 While Mr Heaton's letter includes reference to such issues as staff morale, planning and construction of galleries, refurbishment of the Memorial and organisation and staffing practices, the essence of the Minister's concern is that the Director's minute to him of 8 October 1985 was not accurate and that it placed him in a position where he was in effect misleading the Parliament. The individual issues mentioned by Mr Heaton are each specifically addressed elsewhere in this Report. The point at issue here is whether or not the advice conveyed to the Minister in the Director's minute of 8 October 1985 was accurate. 4.185 A review of the reasons for resignation given by AWM staff who resigned between February 1982 and March 1986 has not been particularly revealing as the reasons tend to be worded in a non-specific way. Similarly, the list attached to the Director's minute of 8 October 1985 to the Minister is not particularly informative. The reasons for leaving specified in the attachment to the minute (ie. in relation to the positions referred to by Mr Heaton in his letter to the Canberra Times) vary substantially and include: temporary and permanent transfers, promotion, participation in a staff development program, pre-retirement-sick leave and resignation. While there is no evidence in AWM personnel records that people left during this period because of their disenchantment with the organisation, it cannot be assumed that this was not the case, particularly where no reason was given at all or the people concerned have stated that they were leaving for personal reasons. 4.186 When responding to points raised by the Minister on 16 October 1986 in relation to this matter, the Director, on 27 October 1986, reaffirmed his view that his minute of 8 October 1985 to the Minister was accurate in all respects. He has also mentioned that the minute was cleared through the Chairman and has noted that all documents pertaining to the matter were (subsequently) discussed at length by Council and the matter declared satisfactorily actioned. 4.187 In discussions with staff and former staff during the course of the Inquiry, it became apparent that some senior personnel left the AWM because of their dissatisfaction with the management style of the Director. From what has been said, there seems little doubt that Mr Heaton and at least two others resigned for this reason. It also seems likely that a further two senior officers sought (and obtained) moves elsewhere in the Service because of a deterioration in personal relationships with the Director. The Director would have been well aware of these particular staff morale problems when writing to the Minister on 8 October 1985 and the fact that he chose not to mention them at all indicates that his advise was at best inadequate and at worst misleading. Other matter raised in the Interim O'Connor Report Item 24: The painting of No. 77 Squadron Matters for Consideration 4.188 Circumstances in which a painting of No. 77 Squadron was commissioned from Mr Robert Taylor of Bath, England. Background 4.189 In March 1984 the then Curator of Post-1939 Art wrote to Mr Robert Taylor, an artist resident in Bath, England, to ask whether he might be interested in undertaking a commission for the AWM. Mr Taylor subsequently confirmed that he would be prepared to undertake the work for the AWM and, in a series of correspondence in succeeding months, it was agreed that he would paint an oil on canvas depicting the first raid into North Korea by a combined RAAF/USAF force on 2 July 1950-the first day of operations for Australian forces in the Korean war. It would seem that, as the Director flew as a pilot with 77 Squadron on that occasion, the Curator of Art sought his advice on the technical aspects of the event and the aircraft concerned. The Director subsequently also corresponded with Mr Taylor about this work. 4.190 The work was finalised in June 1986 and received by the AWM in August 1986. The final price paid by the Memorial was 5000 pounds sterling. (Payment approval had been given by the Gallery Committee on 8 November 1985.) Comment 4.191 Although the Director had a personal interest in this painting because of his Air Force background, and although he had an input to the final format of the work, there is no indication on file that he was responsible for the commissioning of it or that there was anything irregular about the purchase. Item 25: Eternal Flame Project Matters for Consideration 4.192 The circumstances surrounding the decision to install an `eternal flame' in the commemorative area as a bicentennial gift from the Australian Gas Association, and the related proposal and its cost, for relocating the present water feature elsewhere. Background 4.193 On 4 October 1985 the Australian Gas Association (AGA) approached the Memorial, through the Director, with a provisional proposal to donate an eternal flame to the AWM as a bicentennial project with the AGA meeting design and construction costs in addition to free gas. The Director referred the matter to the Building Committee which, on 24 October 1985, endorsed the concept and the acceptance of the gift, subject to, and with the intention of referring any formal offer to, Council for approval. The Director was asked to clarify matters of concern to the Committee-the responsibility for maintenance and approximate cost; safety aspects; security; environmental implications of long term burning of the gas flame. 4.194 On 27 February 1986 the Director reported, as a late agenda item, receipt of a detailed proposal from AGA to remove the present water feature and bear any costs involved in restoring the courtyard; provide an eternal flame to the War Memorial's specifications and design and provide free gas for the first ten years of operation. The Director pointed out that removal of the water feature and installation of the eternal flame would maintain the tranquil and reflective ambience of the courtyard. Council approved the concept and the bicentennial gift from AGA and sought assistance from NCDC in the formulation of a design for the eternal flame and the development of a suitable external setting for the water feature. 4.195 On 22 August 1986 Council considered a further letter of 13 August from AGA with sketch drawings of alternative designs, including plaques incorporating both the bicentennial and AGA logos. It appears that the NCDC had prepared the designs, but had not favoured inclusion of the logos on the plaques. Council decided on the title `The Eternal Flame' with a water level concept and approved one plaque at floor level, with reference to AGA and the logo to be deleted. 4.196 There is no record of any further consideration of a design for an alternative setting for the water feature. It appears that this is still with NCDC. Comment 4.197 The Inquiry understands that an earlier approach by AGA about the installation of an eternal flame in the commemorative area had not been taken up by a previous Council. However it is clear that the present Council has endorsed the bicentennial gift proposal. Until the NCDC comes forward with a design concept it is difficult to estimate the cost of relocation of the present water feature. That relocation cost would be a matter for the Commonwealth, and no doubt the Council will take that into account in reaching a decision on that matter. Item 26: Parliamentary Question-Remuneration of Members of Council Matters for Consideration 4.198 The provision of information to the Minister about remuneration in respect of Mrs E. Darling, MP, as a member of Council, for use in answer to a Parliamentary question. Background 4.199 On 22 March 1985 Mr Leo McLeay, MP, asked the Minister for Veterans' Affairs, on notice, for details of the remuneration and travelling allowance payable to each member of a statutory authority, advisory panel and council within his jurisdiction. 4.200 On 13 May 1985 the Minister answered the question (House of Representatives Hansard 2230) by providing a schedule with information about each member of the relevant bodies by name. This included information for members of the AWM Council based on advice from the Memorial. That information was incorrect in that it led to the inclusion of an amount of $4,487 for `salary or remuneration' for each of the members of Council other than the Chairman. In fact four of those members-Mrs Darling and the Chiefs of Staff-do not receive any remuneration. 4.201 On 27 May 1985 the Secretary, Department of Veterans' Affairs, drew the error to the Minister's attention, informed him that Mrs Darling had never received payment for her services as a member of Council and recommended that the recorded answer be amended to correct the information in respect of Mrs Darling and the other service chiefs. This was done. 4.202 When the Minister expressed concern that Mrs Darling's position could be endangered by the wrong information, the Director's response was that no remuneration had, in fact, been paid to Mrs Darling and it was ridiculous to assert that the information supplied could lead to forfeiture of her Parliamentary office. Comment 4.203 The significant consideration here, in addition to ensuring correct answers to Parliamentary questions, was that there could be serious consequences for a Member of Parliament who received remuneration through a second office of profit under the Crown. 4.204 The misleading information was probably due to lack of understanding or lack of due care by an officer of the Memorial. It was not picked up when the Department co-ordinated the response for the Minister. Following a period of uncertainty proper corrective action was taken and it is somewhat puzzling that the Director did not acknowledge that the information provided by his staff was misleading. Matters raised by internal auditors-Arthur Young report 4.205 Arthur Young are the Memorial's internal auditors. On 1 August 1986 the Director commissioned them to make a concentrated special study of Council resolutions to confirm that Council decisions and directions have been carried out; that all AWM Fund expenditure has been approved; to recommend corrective action when necessary. They reported on 18 September. The exercise was originally intended to provide a basis for the Director to report to a scheduled meeting of Council on 22 August about the matters under review and Arthur Young followed on from an internal review by an officer of the Secretariat which the Director had commissioned on 13 June 1986. Because of other developments with the matters that led to the appointment of this Inquiry, the Arthur Young report had not been considered by the Council when I undertook my own task. However, subsequently the Chairman of Council checked with me to ensure that I was following up the matters raised by Arthur Young which she said would otherwise have been acted upon by Council. Business Requiring Council Ratification 4.206 In response to their Terms of Reference, the internal auditors concentrated on matters involving expenditure from the AWM Fund. They drew attention to a number of transactions authorised by the Research and Publications Committee which they saw as requiring Council ratification. In doing so they raised questions about the powers of the Committee and about inadequacies in the contents of resolutions of Council without reference to supporting agenda material and minutes. They drew attention also to instances of private authorship by Memorial staff which had not been identified to the Research and Publications Committee and which might have been engaged in without prior approval. Their examination was not intended to be exhaustive. Powers of Committees 4.207 As to the powers of committees, it is clear that the AWM Act does not confer any decision-making powers on Committees or permit the Council to delegate such powers to them. It has been the practice within the Memorial to rely upon the ongoing delegations from the Council to the Director to underpin action proposed by Committees, subject of course to those cases in which the Council itself takes an appropriate decision. As noted by Arthur Young, in August 1985 the form of words used in the Terms of Reference for each Committee, and in the delegations given to the Director, and where appropriate to other officers, were modified by Council in an attempt to ensure that there was proper authority for action taken following Committee consideration. 4.208 I appreciate that members of a Committee concerned with significant ongoing activities of the Memorial would not be satisfied to be required to have all of their actions underwritten by the Council. There would be practical difficulties also with such a requirement. I support the efforts that were made in August 1985 by Council in this regard. Council should seek advice on the validity of the decision process, both before and after August 1985. 4.209 Arthur Young has recommended that the Council ratify a list of actions taken by Committees. I endorse that approach. However, in some instances it appears that Arthur Young were not sufficiently informed about the nature of Memorial activities in the publications area. It has been the practice for the Council or Research and Publications Committee to take a decision about a particular publication and then to rely on the delegation responsibility of the Director to carry that into effect. Proper approval having been given for an item in publications program, matters such as the eventual cost, print runs, tenders and contracts, retail price, marketing and distribution were the Director's responsibility within the limits of his delegations. I understand that some of the items which Arthur Young recommend for ratification may in fact be covered by these arrangements. 4.210 It is desirable however that the matter be clarified by a reaffirmation by Council of the policy and practice it wishes to pursue in these situations. Form and Content of Agenda, Minutes and Resolutions 4.211 As to the wording of resolutions, I see a need in a wider context for improved documentation of the material presented to Council and Committees, and of their deliberations and conclusions on particular matters. However, the action taken ought to strike a balance between providing adequate and timely information and adding unnecessarily to the workload and degree of detailed consideration required of Committee members. 4.212 Arthur Young have drawn attention to discrepancies in determining charges for reproduction fees from AWM holdings for use in commercial publications. This was seen to involve discounts or waiver beyond delegated authority. They referred to one case in which a fee of $3,000 had been paid for the reproduction of photographs for the first two volumes of the series when the normal fee would have exceeded $11,000. On this basis the internal auditors saw a need for Council ratification of the transaction. 4.213 My investigation shows that the Arthur Young assessment was based on a miscalculation by an officer of the Research Centre within the Memorial. In fact the cost for the reproduction of the number of prints actually ordered for the first volume of the series was very close to the $1,500 agreed with the publisher for each of the first two volumes. Action had already been taken to change the basis of costing for subsequent volumes, though that too was based on the same miscalculation as to the likely cost. There may be some tidying up needed for arrangements in this area. I see this as a task for the Memorial administration. Private Authorship 4.214 The internal auditors have noted instances in the publications examined by them where there has been no disclosure to the Research and Publications Committee of authorship of particular material by staff members writing in a private capacity. They have drawn attention to the provisions of the Public Service Act about outside employment in the context of staff appearing to have been engaged as authors or support staff in the production of private publications without prior approval. For convenience, I take up consideration of this matter in Chapter 5 under the heading `Private Authorship and Outside Employment'. 4.215 Arthur Young has asked questions about the publication `Guide to the Australian War Memorial' which was included in a report on the publications program at a value of $63,000 without any record of Council or Research and Publications Committee approval. In addition a member of staff had written the work for the commercial publisher in his private capacity. 4.216 My enquiries show there is a category of publications which are purchased for sale by the Memorial but are not part of the publications program. I have had conflicting advice from the Director and the head of the Research and Publications Branch about this particular publication. The Branch head says it comes within the category of items which have never had Research and Publications Committee approval; the Director says that is does not and requires specific Committee approval and ratification of expenditure by Council. 4.217 I can find no policy statement to determine this difference of view, but I must say that it is reasonable to expect that the expenditure of $63,000 on a publication intended for sale in the Memorial bookshop at a substantial price and with a topic of this sort, should be a matter for consideration by the Research and Publications Committee. There appears to have been no approval for private authorship even though the Branch head was aware of the staff member's engagement through his own dealings with the publisher. 4.218 The status of the publication has recently been brought under review by the Research and Publications Committee. These events underscore the need I address in Chapter 5 for the development and application of policies on publications and on private authorship. 4.219 One difficulty with the Arthur Young report is that it does not reflect discussions with senior officers of the Research and Publications Branch either during the enquiries or at exit. I sought a commentary from the head of the Branch on the detailed recommendations in the report. This has been passed to the Memorial administration for their consideration as part of the follow-up action on the report. Matters raised by the Auditor-General 4.220 During July 1986 the Minister drew to the Auditor-General's attention a list of 10 items relating to alleged irregularities in the operations of the Memorial. Subsequently in August that list was the starting point for the O'Connor Inquiry. The Audit Office took the items in the list into account in the course of its ordinary annual audit of the accounts and records of financial transactions and records relating to assets for the year ended 30 June 1986. An exit report by the Auditors was submitted to the Director on 26 September for comment. Comments were provided by the Administrator on 9 October (the Director was on leave pending my inquiry) and on 30 October the Auditor-General reported formally to the Minister after taking account of the comments received. 4.221 My purpose is not to canvass the details of the audit findings, but to take up some matters from the Audit report which are pertinent to the inquiry. In doing so I record my understanding that while there are still shortcomings, the Audit Office recognises that the standard of financial management and reporting at the Memorial has improved significantly during the term of the present Director. Item 27: Purchase of B25 Mitchell Bomber 4.222 The Memorial entered into an agreement with a partnership operating as `Aero Heritage' on 25 August 1983 for the purchase of a B25 Mitchell Bomber from the U.S.A. The agreement provided for a series of payments, the last of which would be due on or before 31 July 1987, with the intention that when that payment had been made title of the aircraft would pass to the Memorial. 4.223 Against this background Audit has questioned a number of apparently inaccurate statements made by the Memorial when applying for exemption from customs duty and sales tax in December 1983. Customs was told that the aircraft was being imported as the property of the Australian Government, was not intended for the purpose of trade and was therefore exempt from duty and sales tax. Enquiries by Audit indicate that as Aero Heritage was the owner at the time of importation, duties and charges amounting to approximately $30,800 may have been payable. 4.224 The Memorial has advised Audit that the certificate was signed in good faith with no intention to avoid customs duty and sales tax. The Memorial is seeking clarification from Customs of any liability in that regard. 4.225 Also on 16 March 1984 the Memorial wrote to the Department of Aviation stating that the aircraft had been purchased by the Memorial which would operate it as a flying museum piece. The aircraft would be flown for non-commercial purposes at infrequent air shows and would be stored and maintained by the RAAF at Fairbairn. This action was taken following representations from Aero Heritage which included a statement that it was beyond their means to meet the demands that had been made on them for air navigation charges. 4.226 There were further exchanges in this matter with the Department of Aviation, including a letter of 13 June 1984 in which the statement about Memorial ownership was reaffirmed. Enquiries by Audit indicate that based on a proper assessment the air navigation charges would have been around $18,000 per annum prior to 1986 and later $20,000 per annum as compared with a rate of $500 per annum for an historic aircraft. Taken over four years the difference is between charges paid of about $2,000 as compared with possibly more than $70,000. 4.227 At Audit request the Memorial is seeking clarification from the Department of Aviation of the liability of Aero Heritage for air navigation charges. 4.228 The matter for consideration is whether false statements were made by the Memorial to Customs and Aviation with potential to result in a loss of revenue to the Commonwealth. My enquiries show that the statements to Customs came from the Finance Officer following advice from a curator and that the letter to Aviation was signed by the Director to whom the Aero Heritage representations which stimulated it had been addressed. 4.229 I asked the Director questions to elicit whether he had grounds at the time for believing the aircraft to be Memorial property and whether he was aware that the provision of statements claiming ownership would have an impact on Customs and Aviation decisions about the level of charges. In reply, the Director argued the significance of the aircraft to Australia; stated that at the time he believed the AWM to be the equitable owner; and sought to draw a legal analogy to substantiate this view. At the time he did not consider that either duty or sales tax was applicable. 4.230 In my view, the Director and his staff should have been aware of the significance of the contractual arrangements and if in doubt should have sought clarification before making statements as to ownership. As indicated above, the Memorial is seeking clarification from Customs and Aviation as to their view of the matter. Item 28: AWM Kiosk Licence 4.231 In April 1985 the licensee of the kiosk claimed that there had been an unsatisfactory restriction to its trading during renovation and extensions of the kiosk premises and it sought a five year extension of the licence with a further five year option as compensation. Council responded by extending the licence for a further three years. Audit has commented that there was no consideration of a possible review of rental arrangements or of a stipulation as a condition to the extension of the licence that the licensee forego any claim. Audit commented further that Council was not advised to discuss the option of inviting tenders as part of normal business practices. 4.232 In its comments to Audit the Memorial has stated that the extension was not on the basis of compensation but as an act of good will as recorded in the Council minute and that in the circumstances the Memorial did not consider the need to seek legal advice. Audit says it does not consider the Memorial's response as adequate justification for not having sought an increase in the business rental for an expanded and refurbished kiosk. 4.233 My concern is to point out that in any transaction of this nature the administration of the Memorial should have given more comprehensive advice, including consideration of the options, to the Council. I note, however, that at the time the administration did obtain legal advice about the terms of extension. Item 29: Australian War Memorial Foundation 4.234 On 29 May 1986, following a submission from Council member Mr Wright, Council approved the establishment of the Australian War Memorial Foundation Incorporated in order to enhance the development of the Memorial. At the start of their investigation Audit questioned the administration about the legal authority for the Memorial to establish a limited liability company; as to how it would ensure that the body would operate within the scope of the AWM Act; and whether the proposed loan of $40,000 to the Foundation, which Council had also approved, was in accordance with the requirements of the Act. In reply the Memorial advised Audit that since the Council approval legal advice had been obtained which indicated that the loan contemplated is not within the authority of the Act and therefore the memorial was seeking further legal opinion. The Auditor-General did not pursue this matter in his report to the Minister. 4.235 However I asked questions of the Director in an effort to determine whether this was a case in which the Council had been placed in the position of making a decision based on inadequate advice from the Director. Acknowledging that the submission came from a member of Council, I asked whether the Director had made any recommendation about the matter to Council, had sought any legal advice in advance, and if so had made that known at the Council meeting or had taken any action subsequently to determine whether there was any legal impediment. I also asked whether this was a matter about which the Council should have informed the Minister and whether the Director had offered any advice to Council on that particular issue. Finally I asked him whether he agreed that the Council had been asked to make a decision based on inadequate advice from the Director. 4.236 My questions were put and answered before the Auditor-General's report of 30 October was available. In reply the Director has pointed out that it appeared that the details of Mr Wright's proposal were not circulated with the joint copies of agenda material and there was not sufficient time to seek legal advice before the meeting. However he had discussed the matter with an officer of the Secretariat some time later and had directed him to seek legal advice. The Director pointed out further that Mr Wright's paper indicated that the Minister was aware of and supported the proposal. The Director did not regard the Council as having been put in the position of making a decision based on inadequate advice from him. 4.237 In my view this proposed venture was a significant development with potential for a substantial impact over time on the affairs of the Memorial. In a case such as this the administration of the Memorial, and not simply the Director, should have ensured that the Council was aware of the need to consider its legal capacity before approving such an arrangement. Having established its capacity to act, a decision to proceed should have been conveyed to the Minister by the Chairman. Other Matters in the Auditor-General's Report 4.238 The Auditor-General has told the Minister that he is considering scheduling in the near future a `project' audit which is a more detailed review of the accounts and records and which, in the case of the Memorial, would focus primarily on management practices in regard to the acquisition and conservation of the collection. I see such a review as helpful to the Memorial. 4.239 Elsewhere the Auditor-General draws attention to deficiencies in workshop job control and recommends corrective action. In this context Audit identified a private job which had been completed in the Memorial workshop. It noted Memorial advice that there had been an unwritten policy for some years to permit workshop staff to use Memorial facilities in their own time for private non-commercial jobs which must be under the strict supervision of the foreman. Audit advised that a policy of this sort should be formally documented and promulgated to ensure that there is no private use of Memorial facilities during work time or private use of Memorial consumable materials or avoidance of taxes. 4.240 I have taken the Audit comment about private job control into account in my conclusions in Chapter 5 about private authorship and outside employment. 4.241 The Auditor-General has also noted that the Director, who has a delegation from Council to fix discounts for sale of commercial stock, has himself issued a delegation to the Commercial Operations Manager of the authority to set some discounts. Audit sees this as a contravention of the provisions governing the power of delegation in the Act and the Memorial has replied that this authority will not be exercised by the Commercial Operations Manager until it is given by Council. 4.242 Elsewhere at Item 7 I discuss the purchase of the Commemorative Port for the Memorial. Audit has noted the settlement in September 1985 of this longstanding dispute by the payment of $2,250 and has concluded that the practice of ordering goods without appropriate documentation had contributed to the confusion surrounding the delivery of the port and the subsequent claim by the wine merchant. 4.243 I have no comment on the other particular matters dealt with in the Auditor-General's report. Chapter 5 CONSIDERATION OF ISSUES AND CONCLUSIONS 5.1 In this chapter I identify issues for consideration arising out of my examination of the various matters in Chapter 4 and my other enquiries. I then arrive at conclusions. Interpretation of the terms of reference in my dealings with the Director 5.2 The Terms of Reference are not directed primarily at criticism of action by the Director. Nevertheless a large number of items put before me, some of which are anonymous in origin, are of that character. I have faced a difficulty in reconciling the general nature of paragraph 1 of the Terms of Reference with the process for arriving at adverse findings about an individual. 5.3 I have had to consider which particular matters can be determined by establishment of the facts and which require also the interpretation of events or of the actions of those involved. Some of the matters raised do not carry sufficient degree of specification to enable concrete propositions to be put to an individual in order that that person might be able to respond. In this situation I have had to weigh up carefully the information put before me. I have had to have regard also to the facilities and time reasonably available to me. 5.4 Before reaching conclusions I had to deal with differences of opinion with the Director about what constitutes specific allegations with particular reference to paragraph 4 of the terms of reference. Over the period 28 to 30 October I had nominated to him the following as covering a range of specific allegations that I was investigating in respect of him: The provision of inadequate or misleading advice to the Minister: the events nominated by the Minister-the Heaton letter; purchase of the warehouse; review of the top structure; the timing and presentation of the Annual Report for 1984-85; the eastern staircase; and the ceremony in connection with the proclamation of the Veterans' Entitlement Act. The provision of inadequate advice to the Council: the proposed establishment of the Australian War Memorial Foundation. The making of a false statement to a Commonwealth Authority: acquisition of a the B25 Mitchell Bomber. The making of a false statement to the Executive Committee and also to the then Minister: transfer of bank accounts. The provision of inadequate advice to the Minister; failure to follow proper procedures in filling positions and in the relative distribution of staff; his responsibility for poor morale among staff: instances put forward by staff pertaining to Items 18-21. 5.5 The Director has answered my questions throughout the Inquiry and sometimes has made submissions to me. In the case of the last item listed above, on 4 November he rejected the criticism from staff sources and sought the facility to be present and to question witnesses before I took any evidence from those whom he understood to be the source. I was not obliged to do this and I informed the Director on 6 November that I required no further information from him about this matter and would take his response into account in arriving at conclusions. 5.6 That particular group of questions covers matters about which I have had to weigh up conflicting advice and opinion. It is very much in the area of value judgments. 5.7 On 4 November the Director also questioned my assessment that the first item listed above (the group of six items nominated by the Minister) constituted specific allegations. The Minister had stated that this sequence of events `has led me to the view that the Memorial Director has on a number of occasions provided me with inadequate and misleading advice, and has therefore jeopardised the proper conduct of my ministerial responsibilities'. 5.8 While the Director has answered my questions on the first group of items from the Minister, on 4 November he told me he could not regard the Minister's letter of 16 October and its attachments as providing him with specific allegations. He requested that if, after having considered his answers, I believed there were any specific allegations I should provide him with further and better particulars about each of those six events in accordance with a schedule of questions he presented to me. 5.9 I was not prepared to do as the Director suggested. I was satisfied on the basis of the information available out of my investigation, including the answers given by the Director, that I have pursued those various matters sufficiently and had provided sufficient opportunity for the Director and others to respond. My reply to the Director on 6 November covered this matter also. 5.10 I believe I was justified in moving on to complete my inquiries and to reach conclusions both in respect of the conduct of the Director and of the broader management of the Memorial, and to complete this report. Issues concerning the Director 5.11 The principal issues which arise from the investigation in respect of the Director are whether he has provided inadequate or misleading information to the Minister; whether he has made false statements; whether he has provided inadequate advice to Council and whether there has been a deterioration in internal working relationships and of morale amongst staff of the Memorial, for which he carries substantial responsibility. All of these matters have an impact on a judgment about his management performance. 5.12 To begin it must be noted that during the term of the present Director the major building program has been completed, a number of galleries have been opened, the Mitchell warehouse acquired, further major acquisitions realised, work has commenced on a separate administration building, together with a very large increase in the number of visitors. 5.13 Through his dedication and energy the Director has contributed significantly to the development of the Memorial and its administration and has represented the Memorial most effectively in public. It has to be acknowledged that while the Director carries the responsibility for decisions taken and for advice offered to the Council and the Minister, he must rely on the advice and support he receives in a number of situations. 5.14 I take each of the issues in turn, but recognise that they are inter-related and that in a number of respects conclusions need to be based on consideration of the total picture. My references to individual items need to be related back to what is said in Chapter 4. Inadequate or Misleading Advice to the Minister 5.15 Each of the six items nominated by the Minister does involve inadequate or misleading advice to him. The Heaton letter, the eastern stairway and the VEA ceremony/bulletin issues were the subject of Parliamentary questions in which the Minister faced some difficulty and was not helped by the nature of advice given him by the Director. The misleading explanation about the delay in the tabling of the 1984-85 Annual Report appears to have been the fault of staff rather than of the Director himself. The answer given to the question about Mrs Darling's status on the Council was part of a composite answer prepared finally in the Department. The fault there seems to lie with Memorial staff members rather than with the Director. 5.16 The information given to the Minister about the building rather than the purchase of a warehouse, and in seeking his support for a top structure review was misleading also. While there was no direct communication with the Parliament at the time, the issues in both cases were important to the Minister's relationships with his colleagues in the Government, and the warehouse issue, at least, could have drawn comment in the Parliament. 5.17 As events developed from the end of 1985 into 1986 the Director should have been on his guard in the knowledge that the Minister was looking carefully at, and taking advice from his Department on, material coming to him from the Memorial. Making a False Statement 5.18 I am satisfied that the Director made false statements both to the executive Committee and to the then Minister in the middle of 1983 when he said that he had contacted other banks to ascertain what options were available to him before recommending transfer of the Memorial's accounts from the Commonwealth to Westpac. His failure in this respect was compounded by the answers he gave to me in the processes of my Inquiry. This matter was clearly his personal responsibility. There appears to be a similar situation with the statement he made in a letter to the Department of Aviation about ownership of the B25 Mitchell Bomber. He has argued that the intention was for the AWM to have at least, what he called, equitable ownership of the aircraft and if there had been any doubt he would have sought another form of agreement. I regard the provisions of the agreement as quite clear and cannot understand how he could have assumed otherwise, or not have been aware of the likely impact of his statement on the level of charges to be made by Aviation. Inadequate Advice to Council 5.19 This matter comprehends advice to the Chairman in her dealings with the Minister as well. With the top structure proposals, while the Director explained the nature of the Public Service Board's responses when she was asked to sign the two letters to the Minister, I believe he exercised bad judgment in not recommending that she declare this situation to the Minister. Information was given to the Council about the warehouse and the transfer of bank accounts in terms similar to that given to the Minister. The Arthur Young report has thrown up a number of matters of which the Council and the Research and Publications Committee were not properly informed, but the weight of responsibility for that situation must be shared with staff members, not simply the Director. I believe the Director was personally deficient in not ensuring that the Council had advice about its legal capacity to establish the proposed foundation and to make an interest free loan to it. There remains a general need for better information to Council and its Committees. Deterioration in Internal Work Relations and Morale for which the Director Carries Substantial Responsibility 5.20 As indicated in Chapter 4 these matters require a general assessment of information and comments and the application of personal judgment to the state of morale. The morale of the staff cannot be judged simply in global terms. It is necessary to consider morale among broad groups or even individuals within the Memorial staff. At one extreme I find a group of people in Research and Publications Branch, including its head, who have completely lost sympathy with the Director and, I believe, he with them also. At the other extreme the staff in the workshops and in the security force speak highly of the Director, of the effectiveness of his management and of their excellent personal relations with him. In between there are people, primarily in the Conservation and Curatorial areas, who feel aggrieved and professionally concerned about the Memorial and its assets because of the way the Director has dealt with their advice and treated work they have done. 5.21 There are some staff members who are anxious about their individual situation and not always because of the Director. Throughout the organisation there is a strong measure of commitment to the Memorial and its ideals. 5.22 The War Memorial is not a large organisation and it has been treated relatively well with staff and other resources in recent times. Its Director is entitled to loyalty from staff even where he exercises his right to disagree with advice or to change his mind. For effective administration such action needs to be handled with sensitivity, and if there is not mutual respect and understanding, there needs to be reporting back as to reasons and acknowledgment of the value of the advice received. Management Performance 5.23 The grounds for criticism of the Director reflect very much on his management style. He has to his credit complete commitment to the Memorial, energy and enthusiasm and a wish that things should be done promptly. However he has failed to maintain the support of significant elements of the staff because of capricious decision making and the lack of attention to two-way communication within the administration. He has exercised poor judgment on a number of occasions including an over-reliance, from time to time, on one or another individual who has been given wide responsibilities. He has failed to give sufficient attention to following the rules on things that matter. He has attempted to make himself the sole channel of communication with the Council and has abandoned section head meetings as being of no value where he ought to have tried to develop them as positive channels for the two-way communication of information and ideas. He has not paid sufficient attention to record keeping on significant matters, but he shares that deficiency with the administration of the Memorial in general. 5.24 He has not managed to weld the new corps of professionally trained people with the old. The Behaviour of the Director 5.25 The primary responsibility of the Director of the Australian War Memorial is to manage it from day to day and to assist the Council to manage its affairs through policy development and advice. Adequate and timely information flow is essential so that Council may be fully aware of events and circumstances. The Director must acknowledge and give attention to his responsibility to the Minister, through the Council. The Minister has a right to know. The Director's role is essentially that of a manager who need not necessarily have a background as a museologist or an exserviceperson. 5.26 I conclude that there are serious weaknesses in the management performance of the present Director. This represents a value judgment by me and is a considered view, arrived at in accordance with the Terms of Reference as discussed at the beginning of this chapter. 5.27 If some of the unfortunate attributes he has displayed in carrying out his duties had been tempered to a degree, the adverse impact on the morale of a significant number of professional staff members and on their commitment to work in co-operation for the enrichment of the Memorial, could have been avoided. 5.28 Nevertheless, the Director is entitled to respect from the Memorial staff at all levels for his authority and responsibilities. This has not always been forthcoming to the extent that it should have been, even in the face of differences or difficulties. 5.29 I conclude that in a number of cases, insufficient or misleading information has been given to the present Minister, but not so as to cause him serious embarrassment in the public arena. It has given the Minister serious cause for concern and grounds to lack confidence in the advice he receives from the Director. 5.30 I acknowledge that some of the less than full and frank provision of information to the Minister, and to a degree to the Council also, may well be due to carelessness by officers or loose administrative practice in the Memorial. In particular the practice of having material for the Minister, including answers to Parliamentary Questions, prepared in the Secretariat without full documentation and without reference back to the operating areas concerned, is bound to lead to problems. 5.31 From my investigations there was a serious deficiency by the Director in the way he carried out his duties in respect of the false information provided to the then Minister in answer to a Parliamentary Question in 1983 about the transfer of the Memorial's bank accounts, a circumstance which was compounded in the Director's response to my inquiries. There is also the possibility of a false declaration having been made by the Director to the Department of Aviation about the ownership of the B25 Mitchell Bomber with loss to the Commonwealth revenue. That particular matter may well need consideration in another forum. 5.32 I cannot conclude from this Inquiry that there exists misbehaviour by the Director in the terms of Section 24 (1) of the AWM Act as I understand that provision. I do not find a deliberate intention by the Director to transgress in carrying out his duties. Rather in some situations I have concluded that the Director has displayed a less than satisfactory level of competence and a carelessness in expression where the circumstances demanded truthfulness. Private Authorship and Outside Employment 5.33 As noted in Chapter 4, Arthur Young have drawn attention to cases of private authorship by Memorial staff which under the outside employment provisions of the Public Service Act require approval. Such approval, if given, appears not to have been documented. They have noted also cases in which the fact of private authorship was not disclosed in material put before the Council or the Research and Publications Committee. 5.34 Such research activity by Memorial staff needs to be assessed against the background of the developments in practice over time of the application of the outside employment provisions of the Public Service Act. With an institution like the Memorial particular consideration needs to be given to the status of officers whose duties involve a substantial research element. Furthermore, under its statute the Memorial is directed to assist in research and disseminating information about its field of interest. The Council has given weight to those activities in its corporate objective. 5.35 Council and Research and Publications Committee records demonstrate support and encouragement to staff to maintain and develop research activity together with a small element of direct financial support in particular circumstances. However, in material coming forward from the administration there often is no clear indication of whether a particular research or publication activity is official or private or indeed whether a publication is research-oriented or for popular consumption. 5.36 My examination of the instances referred to in the Arthur Young Report shows that there was a substantial level of approval, but not completely so, and that there was a lack of documentation about approval and any associated conditions. In some cases a small degree of staff and resource assistance with private publications has been acknowledged. What I failed to find was a clear understanding amongst those concerned of a need to seek and obtain specific approval for individual cases of private authorship and publication before undertaking them. 5.37 While the internal auditors were concerned with activities by some members of the Research and Publications Branch, the situation exists also for officers employed as curators and conservators. 5.38 There have been instances where administrative directions about these activities have been promulgated throughout the Memorial. In 1983 a Code of Ethics was endorsed by the Research and Publications Committee and by Council. This drew attention to the code of conduct applicable to both statutory office-holders and to Public Service staff. Among other things, it laid down that officers should avoid conflict between private interests and public duty, should disclose those interests where conflict might occur with a view to obtaining approval, or should divest themselves of those interests; and that scholarly publication and other scholarly endeavour undertaken as part of their duties was the property of the Memorial. 5.39 Also in 1983 Administrative Circular 10/83 addressed research assistance to be available to Memorial staff. Against the background of encouraging staff to undertake research, it set down guidelines approved by the Director. However those guidelines cover research undertaken as part of official duties and towards the acquisition of higher formal academic qualifications as well as for private research. The emphasis is on limited support from the institution with not a great deal of development of the circumstances in which private research might be undertaken. 5.40 More recently, by Administrative Circular 6/86 of 6 May 1986 the Director instructed staff that they would require his personal prior approval before undertaking writings, either on behalf of the Memorial or as a private venture. He emphasised that for private publications no Memorial resources should be used without the specific approval of the Director and this extended to a range of support staff, equipment and services. He related this instruction to the code of conduct applicable to Public Servants. This circular did not address other areas of outside employment. 5.41 The May 1986 instruction brought a reaction from members of the Memorial's Consultative Committee-its industrial democracy forum-and resulted in their consideration of a draft alternative Administrative Circular which was presented to that Committee towards the end of August 1986, by which time some of the difficulties which led to this Inquiry were well known within the institution. 5.42 I find the Consultative Committee's draft statement on outside employment and conflict of interest deficient in its treatment of research-related activity and publications. It first addresses non-job-related outside employment such as driving a taxi at night or writing articles for a particular magazine under contract, for which it requires formal application and permission. However, in the area of research and related publications the draft takes a quite limited form by simply questioning whether occasional production of books or articles for publication in the officer's own time actually constitutes employment. It states that where such external publications is relevant to the activities of the Memorial, it would be courteous to advise the Director. It further states that scholarly activities are generally to be encouraged and that ownership of material prepared solely in personal time remains with the staff member. It is silent about any requirement for advice and prior approval. 5.43 In the interests of the Memorial and its staff, it is essential for the Council to approve a set of principles governing outside employment in all aspects with particular reference to research and research-related publications. Such principles should recognise the interest of the Memorial in advancing the professional standing of its staff and in promoting research into and understanding about Australian military history. There needs to be recognition also that persons, including public servants, operating in areas of research and related academic endeavour do not base their official duties on hours of work or indeed on the place of work. Even so, there need to be clearly understood arrangements under which all private activity of this nature is to be approved in advance in order to ensure that appropriate attention is directed towards official duties and so that some measure of control can be exercised over the nature and level of outside activity related to those duties. Furthermore, approval should be within the discretion of the director or his delegate and not be regarded as an entitlement. 5.44 While the discussion here has concentrated on research and publications as an element of outside employment, similar considerations apply to instances of private practice by say, conservators, and to the use of workshops and other facilities other than for official purposes. In each of these cases, guidelines should be stated clearly, channels of approval should be known, and instances of approval documented. If this is done, there is less likely to be misunderstanding about the distinction which needs to be made between staff using facilities of the Memorial for private purposes with approval, and making their personal, professional or skilled services available to others outside hours and off Memorial premises. 5.45 It would be helpful to full understanding and acceptance of these proposed arrangements for the Consultative Committee to be associated with the developments of the details. 5.46 I note here and endorse the Auditor-General's advice that there should be a formally approved, documented and promulgated policy on the use by workshop staff of Memorial facilities in their own time for private non-commercial jobs. Assuming the Council adopts such a policy, the arrangements should ensure that there is strict supervision by the foreman; private use is not made of Memorial facilities during worktime; Memorial consumable materials are not used for private purposes; and taxes, e.g. sales tax on materials used are not avoided. Publications policy and procedure 5.47 In Chapter 4, under matters raised by the internal auditors and elsewhere in Chapter 5 under Private Authorship and Outside Employment, I have considered matters arising from the Arthur Young Report about practices for the approval and subsequent development of proposed publications. I now address the need which I see for some clarification and codification of both policy and practice in publications activity. 5.48 Relevant matters include: The use of the Director's delegation to carry through to finality a publication once it has been approved and subject to the availability of funds. The nature of the financial report to the Research and Publications Committee. The distinction between an official Memorial publication and a publication that is purchased for resale by Commercial Operations. Relationships with publishers. Information to Council and Research and Publications Committee about any private authorship by Memorial staff. Procedures for assessment of manuscripts as part of the process for initial and final approval of a publication. The suitability of the content of material going forward to Council and Research and Publications Committee in these matters. 5.49 The present arrangements should be reviewed between the Research and Publications Committee and the Research and Publications Branch so that proposals can be developed for final consideration and decision by Council. Relationship between the Council, the Director and the Minister 5.50 Against the background of the investigations I now give particular attention to terms of reference 1 (b)-management of the affairs of the Memorial; and whether the Chairman and the Minister are being properly informed by the administration about the management of those affairs. I outline the situation as I see it. 5.51 The Council has control of, and is responsible for, policy formulation and for general directions to the Director. It has oversight of the Director in his handling of day to day matters. 5.52 Council members are the trustees for the Nation's interest in the Memorial. In our system they discharge this general responsibility and associated specific statutory obligations by reporting through the Minister to the Parliament. The Minister is entitled to information about the affairs of the Memorial and to receive this from the Council. The Minister should not seek to intrude or feel obliged to do so. If the Council keeps the Minister in touch with developments and shows sensitivity to Government policy developments which apply to the Memorial there ought not to be conflict between the Council and the Minister. 5.53 The Memorial is not a Commonwealth Department and the Council has independent status. Even so the relationship between the principal parties-the Council, the Minister and the Director-is not limited to the formal structures. A fruitful and harmonious relationship can exist only where there are regular exchanges and meetings, at least between the Chairman and the Minister, and, on day to day matters which need reference to the Minister, between the Minister and the Director. The Director should advise the Chairman about matters to be taken up with the Minister by the Chairman and should keep the Chairman informed about exchanges between the Director and the Minister. A healthy relationship cannot be preserved if interaction is limited to crisis situations. 5.54 Council needs to demonstrate cohesion in carrying out its tasks and should lay down guidelines on major issues affecting the day to day operations of the Memorial. 5.55 The Director is responsible for running the Memorial under the general policy direction and oversight of the Council. He and the Chairman provide the link, particularly between meetings of Council. The Director needs to ensure that there is an adequate and timely flow of information to the Council and through the Council to the Minister. He will not succeed in this task unless he acknowledges the responsibilities of the Council to the Minister, and in public service matters, his own responsibility to the Minister. 5.56 The Director and senior staff carry the responsibility to ensure that Council is aware of the things that matter and at the time that matters. It would be beneficial if branch heads were regular attenders at Council meetings. I am not suggesting that they should all be there all the time or that the Council should be denied a measure of privacy in their deliberations. I do see increased understanding by the Council and a greater awareness among staff of Council's wishes being generated through such an association. The opportunity should also be given to Council members, in association with their attendance at Council and Committee meetings, to interact with staff and functional areas in the work environment. Members of Council are chosen for the knowledge and experience they can bring to Memorial affairs and they should be encouraged to share it with the Memorial family. 5.57 Events of the past year have produced tension and reserve between the Council and the Minister. Some rather extreme positions have been taken on each side, in particular over the issues concerning amendments to the Act. The Council has been slow and cautious in its responses to the Minister. I see regular consultation and exchange of views as a way to restore that relationship to a level of effective co-operation; legislative changes are not the answer. 5.58 In the course of the Inquiry I have noticed instances in which the Minister had discussions with staff members without prior or subsequent knowledge of the Chairman or the Director. One was an interview in July with a staff member shortly before the Director was confronted by the Minister about the circumstances of the staff bulletin issue. In my view the Director should have been informed. The other was a meeting with a small group of concerned staff following the Council's decision in early September that there was no prima facie case for the Director to answer about his behaviour. In the latter case the Minister could not be expected not to receive a deputation, but he might have been expected to follow up the assertions they made with, in the circumstances of the time, the Chairman rather than the Director. Situations such as these should not occur when a positive climate of co-operation between the Minister, the Council, and the Director is restored. 5.59 It is appropriate to comment here too on an effective and supportive role for the Minister's Department-the Department of Veterans' Affairs. The Department has been helpful to the Memorial in a number of important matters since the transfer of the function to their Minister's portfolio at the end of 1984. The joint efforts of the Minister and the Department produced additional financial and staffing resources for the Memorial and the Department has assisted with staff exchanges and specialist support. 5.60 In the current strained situation the Department is assisting the Minister in monitoring the activities of the Council and the Director. It is somewhat unfortunate that in the early days following the transfer of ministerial responsibilities there was no joint consultation among the Minister, the Chairman, the Director and the Secretary of the Department to work out an effective liaison. In my view it is appropriate and desirable for the Department to advise the Minister in the ordinary course of business on the more important matters coming forward from a statutory authority, particularly those to do with the Minister's relationship with the Parliament. It is critical that all parties have an understanding about the arrangements. 5.61 The development of on-going co-operation among all of these parties-the Minister, the Chairman and Council, the Director and the Departmental Head-will be a significant factor in restoring the management of the affairs of the Memorial and the discharge of the Memorial's responsibilities to a satisfactory level. Should the AWM Act be amended? 5.62 The terms of reference (paragraph 1 (d)) require me to consider whether there are any deficiencies in the AWM Act of 1980 as it affects management of the affairs of the Memorial and the relationships between the Director, the Council, and the Minister. I have done so against the background of my investigations and have taken into account specific proposals for amendment now current from the Council, with the support of the Director, and from the Minister. 5.63 It is relevant to recall some of the major characteristics of the present Act which came into force in 1980. The Council was created as a successor to a former Board of Trustees and, through incorporation and other provisions, was given ownership and control of land and buildings and other assets and control of funds, including the AWM Fund. Following representation from those trustees, the then government deleted from the draft bill, a provision for a general power for the Minister to give written directions to Council. The Parliament did not insert such a provision. It is worth noting that, at about that time, an act was passed to establish what was then called the Museum of Australia and contained such a power of ministerial direction. 5.64 By way of further contrast, the AWM Act provides for the members to elect the Chairman and does not make the Director a member of the Council. What is now the National Museum Act, provides for the Chairman to be appointed by the Governor-General in Council, and makes the Director an appointed member of Council. There are parallel provisions to this latter arrangement in the legislation governing other similar institutions. 5.65 To me, this distinction in treatment for the AWM expresses an intention for the Council to have a substantial degree of independence. However, even without specific provision, the Council is subject to certain restraints and obligations in its relationship with the Minister. Given the Minister's constitutional responsibilities, the Council is required to provide information to him beyond the limited areas set down in the Act. Even so, relationships between the governing body of a Commonwealth authority and the responsible Minister, do not depend entirely on the enabling legislation. There are wider questions of relationships and responsibilities which depend upon the establishment and maintenance of effective communication and understanding between the parties. These relationships and responsibilities extend to the chief executive officer also. That person must play a key role in exchanging information and fostering understanding among the three parties. 5.66 In looking at questions of possible amendment to the Act, I have considered also the contents of a Policy Discussion Paper tabled in the Parliament on behalf of the government in June 1986. That sets down proposed guidelines for ordinary statutory authorities-other than marketing authorities (para 1.17, page 4). These include- The authority's relationship with the responsible Minister, its governing board and other government agencies will be specified clearly in legislation. The authority's charter, its reporting obligations and its procedures for funding and financial management also will be specified clearly in legislation. Ministerial powers of direction, when used, will be in writing, and will be reported in the authority's annual report to Parliament. Financial and reporting arrangements will be standardised. Revised arrangements governing the creation and control of subsidiaries of statutory authorities will be adopted, including requirements for ministerial approval and notification to Parliament. As appropriate to the circumstances of individual bodies, `sunset' provisions will be included in the authorities' enabling legislation. 5.67 I have noted other statements in that discussion paper which I believe are relevant:- An acknowledgment that the degree of exemption from ministerial control depends upon the nature of the functions which justified its establishment outside the departmental framework. Areas of independence and those subject to ministerial control should be clearly and precisely specified. Even when independence is specified, the Minister will normally monitor activities and in doing so needs to be kept informed regularly about those activities. Historically, a power of ministerial direction has been used as a power of last resort to clarify differences of opinion between a Minister and an authority. The paper postulates, however, that there is scope for the constructive use of a power of direction as a means of improving communication between a Minister and a particular authority. In a general sense, and irrespective of whether there are expressed powers of direction, statutory authorities should take account of relevant government policies. Specific provisions requiring the authority to present an annual report to the Minister to be tabled in both Houses of Parliament represent the centrepiece of accountability and are an essential component of enabling legislation. 5.68 I have noted also that the guidelines envisage provisions for the suspension or termination of an appointment before a term of office has expired, which appear to be substantially more comprehensive in scope than those contained in the AWM Act (para 2.25, page 11). 5.69 Relevant to my purpose too, is the view in the proposed policy guidelines that from time to time departmental officers will be appointed as members of governing bodies. Attention is drawn to the need to exercise special care to avoid conflict of responsibility and loyalty between the officer's position as a member of the authority and as an officer of the department. 5.70 I have outlined these various provisions of the proposed policy guidelines to demonstrate that there are a number of considerations involved in a decision as to how the relationships between the principal parties should be reflected in legislation. 5.71 In my view, in most cases where an authority has been created to exercise a trustee role on behalf of the nation-which I believe to be the case with the AWM Council-it is undesirable that there be a statutory power for general or specific directions by the Minister. However, that view needs to be seen against the general policy objectives of the present government for ordinary statutory authorities. One has also to weigh up whether the present difficulties in relationships among the Minister, the Council and the Director are such that changes need to be made to the statutory provisions. No doubt it will be generally accepted that if there is to be such a power, its application should involve written directions and specific reference in the Annual Report to that circumstance and to the governing body's response. 5.72 I turn now to the list of amendments to the AWM Act which currently have the endorsement of the Council or the Minister. 5.73 The Council, with advice from the Director, has proposed that the position of Director be redesignated `Director General' and that the threshold figures for ministerial approval of certain Council action be brought up to date by way of an ongoing regulation making provision. The Minister has indicated his endorsement of these amendments for introduction in association with proposed amendments of his own. Further amendments proposed by the Minister are for the Minister to have power to issue directions to the Council relating to its management of the Memorial; to have power to seek information from the Council relating to its activities, and for the appointment of the Secretary of the Department of Veteran Affairs as ex-officio member of Council. I understand that the Minister has deferred, for the present, an approach to the Parliament seeking approval to changes to the Australian War Memorial Act. 5.74 I offer my own view of these proposals. 5.75 The proposed changes in measures for determining threshold figures for which ministerial approval is required, are sensible and non-controversial and I support them. 5.76 I do not support the redesignation of the chief executive officer's position to `Director General'. I see that designation as, in itself, rather outmoded, and if comparisons are to be made with the chief executives of other institutions in the family of cultural institutions, I regard the National Museum of Australia and the Australian National Gallery as more relevant than either the National Library or the Australian Archives. Nor can I accept the argument that such redesignation would facilitate recognition of the multi-purpose character of the Memorial and would facilitate an upgrading of senior executive positions immediately below the Director. That particular issue should be determined on its own merits. Furthermore, given my proposal elsewhere for an organisation and management review of the Memorial's administration, any such change now would be premature. 5.77 As indicated above, the Minister's proposal for a specific power to demand information is unnecessary, given his constitutional rights in that regard. Furthermore, against the background of the conclusions I have arrived at on other matters within the Terms of Reference, I am not persuaded that a statutory power of direction is essential to correct present difficulties and I would see the addition of either of these proposed powers as appropriate only in the context of the Parliament's approval of a comprehensive approach from the Government following confirmation of the thrust of its proposed policy guidelines which are now out for public discussion. 5.78 I do not support the Minister's proposal for the appointment of the Secretary of his Department to the Council in the form in which it has been put forward. I appreciate that there is now and has been a significant number of cases in which departmental secretaries serve as members of important statutory authorities within their Minister's portfolio, some of them ex-officio. My own preference in circumstances where a statutory body is responsible for a cultural or academic institution, is that any office of the Minister's Department appointed to such a body should be someone other than the secretary and should be seen to be one of those persons appointed for the knowledge and experience he or she can bring as an individual, not as a representative of the department. In this way, the key responsibility of the departmental secretary for giving advice to his Minister on any matter within ministerial responsibility will not be compromised. My reading of the relevant provisions of the proposed policy guidelines (paras 2.27-2.30, pages 11-12) lends support to this view. 5.79 For the Memorial, I do not see a parallel between the Secretary of the Department of Veterans' Affairs and the Chiefs of Staff who are ex-officio members of Council. Their relationship with the affairs of the Memorial has a particular character reflected in the Memorial's Charter which is not shared by the head of the department. 5.80 Therefore, in this particular matter, I would prefer any officer from the Department of Veterans' Affairs appointed to the AWM Council to be a senior officer, not the Secretary, and for any such appointment to be made from among the number of ordinary members. 5.81 I note the fact that under the Australian War Memorial Act the Council has the power to delegate the exercise of functions to a member, and I mention that there may well be circumstances which warrant some delegation to the Chairman to be exercised between meetings of Council. 5.82 Finally I note that in that Arthur Young report, attention has been drawn to the understanding that the Council has power to delegate authority only to a member, the Director or a member of staff; not to a committee collectively. That appears to be a standard provision in Commonwealth statutory authority legislation and should be considered for change only if legal advice indicates change to be necessary. The Council is free to take administrative action in support of a concept of granting effective authority to a Committee or its Chairman if it so wishes. A review of management of the memorial 5.83 Here I address action directed particularly to terms of reference (paragraph 1 (a)), internal management of the Memorial, including personnel, financial and general administration. 5.84 A number of the situations reviewed in this report demonstrate the desirability of promoting an improvement in the internal administration and management of the Memorial. However the need for improvement does not rest on the shoulders of a single individual nor is it due to any limited range of circumstances. An improvement in the performance of the administration and an enhancement of staff morale will flow on from greater attention by top management to consultation and feedback processes from improved record keeping and from enhanced communication. The latter should include regular meetings of section heads, serious attention to the industrial democracy plan and process and a higher profile for bodies such as the Exhibitions Planning Coordination Committee which cut across branch boundaries. 5.85 The Director must set the scene. However the task of putting those arrangements into place will rest heavily on middle management, with guidance and support from top management. 5.86 There are proposals outstanding for a reorganisation of the top structure of the Memorial staff together with reallocation of functions among branches. This has been caught up with consideration of proposed amendments to the Act, the proposed redesignation of the Director as `Director-General' and the need for all statutory authorities to pursue more cost effective operations. 5.87 Action taken or contemplated by the Director for changes in the internal organisation of the Memorial may have been misconstrued by some who consider them to be directed towards other objectives. The fact is that there is a good case for reviewing the allocation of some functions and for grouping functions in a way which reflects the essential purpose of the organisation. For example there is an argument for bringing all of the collection resources together and for divesting the Research and Publications Branch of operational activities which could better be placed elsewhere. 5.88 The requirements of Program Budgeting need to be observed, but at this stage of development they should not determine the organisation. 5.89 The organisation of the Memorial should reflect its corporate objectives and ought to be developed as part of an appropriately designed corporate plan. It is not essential for the Committee structure of the Council to parallel the internal organisation structure. Furthermore while any major internal reorganisation should have the support of Council, the task is primarily one for the Chief Executive Officer. 5.90 I believe it would be appropriate for the Memorial to seek the co-operation of the Public Service Board in mounting a Program Management Performance Review. The use of that label does not require a stereo-typed approach or standardised process. What it does entail is a co-operative effort between top management of the Memorial and the Board's Office, perhaps with the involvement of outsiders. 5.91 The starting point should be the Council's corporate objective (see paragraph 2.7 above). The review would be directed towards establishing a strategic direction within a corporate plan. This would entail the development of an associated program structure and organisation and staffing arrangements. The task could also involve measures for assessing program effectiveness and possible improvements in operations. The parties to the arrangement should settle the terms of reference. 5.92 It is critical to the success of such an operation that it have the support and direct involvement of the chief executive officer. Against the background of the current upheaval surrounding the Memorial, it is desirable that this activity be taken up promptly. In follows that there needs first to be a clearing of the air and the creation of a working environment which will foster the pursuit of common purposes between management and staff. LETTER FROM MINISTER FOR VETERANS' AFFAIRS TO CHAIRMAN OF THE COUNCIL OF THE AUSTRALIAN WAR MEMORIAL Minister for Veterans' Affairs Parliament House Canberra A.C.T. 2600 11 November 1986 Dear Dame Beryl I agreed in my telephone conversation with you at about 1 pm today that I would not table the report of the Inquiry into the Australian War Memorial in the Parliament today, in order to allow the Council to deliberate in an environment of confidentiality. However, I am now writing to advise you that I have decided to table the report at the earliest opportunity. I have been reluctantly forced to this decision because I have learnt that a member of the press has been provided with a copy of the report by a person associated with the Memorial. It has been confirmed to me that the journalist has written a detailed article on the report's content which will appear in a major national daily newspaper tomorrow. I have also been advised that that article is highly selective in its references to the report, and is said to draw conclusions very much at odds with the report's principal findings. It was certainly my intention to maintain the report's confidentiality, at least until the Council had concluded its deliberations on this matter tomorrow. However, I am sure you will understand that my hand has now been forced in this respect by the actions of another person. I will be tabling a copy of this letter with the report, and ask that you provide copies to each Council member. Yours sincerely (A. T. GIETZELT) Dame Beryl Beaurepaire, DBE Chairman of Council Australian War Memorial Canberra ACT 2600 Senator GIETZELT —I inform the Senate that I gave the Chairman of the Council of the War Memorial, Dame Beryl Beaurepaire, an undertaking by phone at approximately 1 p.m. today that I would not table the report today, in order to enable the Council to deliberate on its contents in an environment of confidentiality. However, I have now learned that a member of the Press has been provided with a copy of that report by a person associated with the Memorial and that that journalist has written an article, to appear in a major national daily newspaper tomorrow, on the report's contents. I have also been advised that that article is highly selective in its references to the report and draws conclusions very much at odds with the report's conclusions. I also inform the Senate that the report fully vindicates my concerns regarding the administration of the Memorial and my decision to seek the inquiry. It substantiates my concerns on the great majority of the matters that were referred to the inquiry. The report finds that the Director made false statements; that I was provided with inadequate or misleading advice on each of the six matters I referred to him as having the potential to cause me to mislead the Parliament or the Government; that the Director was personally deficient in relation to a number of items; that he was involved in capricious decision-making; that he exercised poor judgment on a number of occasions; that there were serious weaknesses in his management performance; and that false information was provided both to me and to my predecessor as Minister responsible for the Memorial, the Honourable Barry Cohen, MP. I wrote today to the Chairman of the War Memorial Council to advise her of my decision to table the report. I also table a copy of that letter. Senator LEWIS(Victoria)(6.23) —The Minister for Veterans' Affairs (Senator Gietzelt) has apologised because he has been unable to comply with the usual two-hour notice. The Opposition accepts the apology and understands the circumstances in which the Minister felt he had no alternative but to table the report this evening. As a result, the Opposition has had access to this report for only the last seven or eight minutes. The Minister stated that some journalist has written a report in which he has been highly selective in what he has said. It seems to me, with respect, that the Minister has been highly selective in what he has said about the conclusions in the report, because the Minister did not say that Mr Jones, who conducted the inquiry and who is held in high regard on all sides of this chamber, said: I cannot conclude from this Inquiry that there exists misbehaviour by the Director in the terms of Section 24 (1) of the Australian War Memorial Act as I understand that provision. I do not find a deliberate intention by the Director to transgress in carrying out his duties. Rather in some situations I have concluded that the Director has displayed a less than satisfactory level of competence and a carelessness in expression where the circumstances demanded truthfulness. I acknowledge openly that I have been selective in that I have picked out only one paragraph in the summary of conclusions, but it indicates that Mr Jones certainly did not find any evidence of misbehaviour within the terms of the section of the Act. I have not had a chance to look at the section of the Act but I presume that it would be the section contravention of which would warrant dismissal. Senator Gietzelt indicates that that is not so; I am not sure what that means. Mr Jones, in his report, makes it clear that he believes that this matter could be sorted out administratively by the Minister. I suggest to the Minister that there has been a breakdown in communications and a breakdown in confidence between himself and the Director which have led to a number of problems. Mr Jones says that there are some proposed legislative changes. He supports some of them, but he then states: I do not support the redesignation of the chief executive officer's position to `Director-General' . . . He also says: I do not support the Minister's proposal for the appointment of the Secretary of his Department to the Council in the form in which it has been put forward . . . I would prefer any officer from the Department of Veterans' Affairs appointed to the AWM Council to be a senior officer, not the Secretary, and for any such appointment to be made from among the number of ordinary members. Mr Jones then goes on to make this most significant recommendation: I believe it would be appropriate for the Memorial to seek the co-operation of the Public Service Board in mounting a Program Management Performance Review . . . Those are some of the significant recommendations to which I refer honourable senators at this stage. In other respects, I seek leave to continue my remarks later. Leave granted; debate adjourned. Sitting suspended from 6.27 to 8 p.m. The PRESIDENT —I report to the Senate that this afternoon I received from the Queensland Commissioner of Police a telex relating to the arrest and imprisonment today of Senator Georges. The telex reads: Further to my letter of 17.10.86 concerning the arrest of Senator George Georges on 11.11.85 and his subsequent appeal against his conviction under section 4a (1) of the Vagrants, Gaming and Other Offences Act (remain in building without lawful excuse). Following the dismissal of the appeal the senator failed to pay the fine of $100 imposed on his conviction, and on 6.10.86 a warrant was issued for his arrest. Senator Georges today presented himself to police at the Mitchelton police station, where at 12.12 p.m. he was arrested on the subject warrant. He will be required to serve a default period of 10 days imprisonment. I further report that this evening I received another telex from the Police Commissioner which reads: Further to my telex of even date concerning the arrest on warrant of Senator George Georges. The subject warrant has been satisfied, and Senator Georges was released from the Brisbane watchhouse at 3.30 p.m. this date. Debate resumed. Senator VIGOR(South Australia)(8.02) —Before the dinner break I was explaining how important the type of country to be declared stage 3 of Kakadu National Park is to Australia. It contains a number of species which are very rare and may be endangered if they are not protected in the correct way. They contain a considerable pool of genetic material which could be extremely important to Australia's economic future. There is already great concern within the Australian National Parks and Wildlife Service that erosion caused by pastoral activity in stage 3 of the park is increasing turbidity in the South Alligator River region. This is having a detrimental impact on the existing park. The Coronation Hill mineral deposit, right next to the South Alligator River, is on a steep slope so that, according to reports, run-off can not be adequately contained. The plan of management for Kakadu National Park is a responsible plan which does not allow any further mining other than at those mines already in operation. This is in accord with the accepted practice of management of national parks. The definition of national parks by the Council of Nature Conservation Ministers includes this statement: . . . an area that is a national park should be protected from all interference other than essential management practices. Mining, I believe, is not an acceptable practice in national parks. The Northern Territory Chamber of Mines in its recent submission to the Senate Standing Committee on National Resources inquiry into the potential of the Kakadu National Park region displayed a map showing key mineral resources. The minerals included gold, tin, tantalum and tungsten. Only three such deposits are shown within Kakadu, with a large number of promising sites being shown outside the park. A similar pattern exists for silver, lead, zinc and copper deposits. In fact, most prospects for those minerals are outside the park. It is probably only uranium, gold, and the platinum associated with the gold deposits at Coronation Hill, that are of concern to the mining industry. I believe that we should initially concentrate on mining resources outside the national park. The mineral sites within Kakadu are not unique, nor is their mining vital to Australia's national interest at present. There is no valid reason for overriding our need to preserve our natural heritage, our plants and wildlife and our genetic pool. Even tourism and education will not be allowed to have deleterious effects on such areas of the park. For this reason it is important to declare stage 3 of the Kakadu National Park as soon as possible. The area has been described by some people as `clapped out buffalo country'. No one has taken any responsibility for the area for years. It has been overgrazed because neither the departments responsible for pastures and resources nor any other Northern Territory Government department have seen the area as their responsibility. This is because it is due to become a national park. Such open savanna and forest land is becoming increasingly rare throughout the world. This is happening as man encroaches on it more and more in his search for grazing for livestock. We have already turned large tracts of land on the edge of the Sahara in Africa into desert. In South Africa overgrazing is causing great concern for the natural ecology of the open savanna and forest regions in that area. I seek leave to incorporate in Hansard a letter from the Australian Conservation Foundation, which I have shown to both sides of the chamber, that covers some of the dangers associated with gold mining in the South Alligator headwaters. Leave granted. The letter read as follows- ACF Australian Conservation Foundation 672B Glenferrie Road Hawthorn Victoria Australia 3122 7th November, 1986. Call for Immediate Declaration of Kakadu Stage III. The Director of the Australian Conservation Foundation, Mr. Phillip Toyne, said today that the Foundation was reassured that the Federal Government was prepared to take a stand to protect National Estate values in Tasmania's forests. However he said he was disconcerted that the Prime Minister's commitment to no mining in Kakadu was only for States I and II. ``The Prime Minister himself in announcing the declaration of Stage II recognised the value of having a total catchment included in the Park. On that occasion he said, `Of particular importance is the inclusion in the Park of virtually the whole South Alligator River catchment, with its internationally significant wetlands.' '' ``Gold mining in the South Alligator headwaters of Stage III would threaten these internationally significant wetlands, firstly with cyanide used in processing, and secondly with changes to the ecology because gold processing takes large quantities of water. In the dry season this could be crucial to the Stage II wetlands.'' ``For three years the Government has been reassuring the environment movement the area would be immediately added to the Park to complete the Ranger Inquiry recommendations of nine years ago. Why is the Government drawing back from this commitment?'' ``The Prime Minister has also acknowledged while visiting Kakadu that there are plenty of minerals outside the Park.'' ``The Government should immediately add all of Stage III to the existing Park under the same management plan as Stages I and II. This would allow no mining or prospecting. The area should then be declared World Heritage as has already been recommended by the World Heritage Committee,'' he said. Joan Staples 47-3013, 472-472. Phillip Toyne (03) 819-2888 419-0686(h). Senator VIGOR —I thank the Senate. We indeed need a quick decision to declare stage 3. The Gimbat and Goodparla pastoral leases should be part of the Kakadu National Park so that the National Parks and Wildlife Service can take responsibility for the management of this area and cut down the damage that has been done by overgrazing. The plateau complex, the southern hills and basins, are an as yet biologically unexplored region containing many species of insects and even many new animal species, such as a marsupial mouse which was reported recently as living in this area. We do not have full details of the flora and fauna which would be recorded in a national data base and protected if the National Parks and Wildlife Service were in charge of the area. The stage 3 region, and in fact a large part of the Kakadu National Park, are owned freehold by the traditional Aboriginal owners who have leased their land to the Director of National Parks and Wildlife for the purpose of a national park. The Aboriginal owners will continue to enjoy their traditional use of the land but will be trained in park management and public education and in providing information services for tourists. Recently I visited Kakadu and several Aboriginal communities throughout South Australia and the Northern Territory, including the `refugee camp' at Yalata to which Aborigines from the Maralinga bomb sites were moved. I was able to compare that camp with the communities at Uluru, where Aborigines have been used as park rangers. I was struck by the enormous difference in the outlook between the two camps. At Yalata there were problems of drunkenness, petrol sniffing, uncontrollable youth, and terribly low morale. Some difficulties were due to the large numbers of different communities thrown together, which had led to a breakdown of traditional values. On the other hand, at Uluru, optimism and self-esteem had come through the Aborigines being used in the management of a national park. I believe that this type of thing can be carried on in Kakadu and that we can have happy and constructive Aboriginal communities which will show world tourists that Australia is a very effective country in relation to its indigenous people. At Uluru there were none of the major social problems of petrol sniffing and alcohol. I believe that the outcome at Kakadu will be just as beneficial to all concerned. In fact, I recommend that the same type of program be introduced at Kakadu. On that note, I wish to commend the management plan to the Senate. It is far from perfect but it is certainly better than having nothing, which is what the Liberal and National parties are proposing. Senator TOWNLEY(Tasmania)(8.11) —We are discussing the Kakadu National Park plan of management and the decision by the Liberal-National Party to oppose its incorporation and adoption. I find it quite amazing for Senator Vigor to say that stage 3 should be incorporated as a national park. As a matter of fact, I find it quite amazing that all of stage 1 is a national park. I, as a Tasmanian who has been to Kakadu many times, find very little of the park, apart from the obvious areas that I suppose occupy some 20 to 30 per cent of stage 1, to be what I would regard as significant areas. In fact, I think a lot of the Tasmanians who visit the park feel that they have been robbed when they get there after having been shown photographs of very nice areas there. The Australian National Parks and Wildlife Service has put photographs of only seven of these areas into its brochure, although there may be more that it has not found or that it may not want people to go and see anyway. Of course, to have only that number of places in an area that is about one-third the size of Tasmania just proves to the world how insignificant some of them are. It is quite remarkable for people to rush up there to see this area and rave on about it, as the Prime Minister (Mr Hawke) has in the last few days. I said to somebody, almost jokingly: `If ever you hear that I am going to Kakadu National Park again, shoot me because you will know that I have gone mad'. I am just trying to emphasise how boring that area is. I do not use the word `boring' very much, even in this place, where a lot of the speeches could be properly described in that way. It is a word that I specially keep to use in the context that it is meant to be used, and I believe that a lot of the Kakadu National Park is like that. Let us look at what has happened recently. In the Senate today we heard discussions about the Government's new-found interest in conservation. It was trying to interfere in the logging operations that were taking place, as I see it quite within the agreements that the Federal and State governments had. During the last few days the Prime Minister visited Kakadu, even though he had said prior to going that he would not allow mining in the area. I do not think many people in this country really expected him to go there and to change his mind about it. He went there with a closed mind. I consider that he has found the Northern Territory and Tasmania to be expendable politically. They are virtually of no use to the Prime Minister politically. He may lose one seat in the Northern Territory and he would be lucky to win one in Tasmania at all-I do not think he will in the next election. He went to Kakadu with a closed mind. I think he wrongly anticipates that this country will fall for the kind of left wing rubbish that he has had thrust upon him in that area and in Tasmania. Even the Leader of the Opposition in Tasmania, Mr Batt, disagrees with the Prime Minister's interference in Tasmania. Tonight I want to concentrate on the plan of management, a plan that I have already said was produced by people who I believe have closed minds, a plan that many people have said is flawed in many areas and a plan that has been altered little from the draft, even though the people who sent in submissions pointed out that it was flawed in many areas. I have in my hand a copy of comments and representations concerning Kakadu National Park. Many of these people agree that the area is not worthy of total inclusion. Of course, we would expect the Northern Territory Chamber of Mines to say something like that but, on page 2 of its submission, it states: . . . there should be a balance between resource development and resource conservation. We are not seeing a balance in this country at the moment. The Northern Territory Chamber of Mines goes on to state: As currently worded, the proposals relating to mineral exploration and mining in the Kakadu National Park demonstrate clearly that no commitment to balance exists in the Plan of Management. I will say a little more about that in a moment. The Northern Territory Chamber of Mines, in its submission, also talks about tourism and mining. It states: It is often conveniently forgotten by those who would place resource conservation before resource development that the original catalyst for the recent tourist interest in the Kakadu area was the privately funded construction of the all-weather road to Jabiru . . . Of course, we all know that that is the site of the Ranger uranium mine. Further on in this document another letter states, in part: Lastly we believe it is an insult to the average tourists' intelligence to label much of stage 2 of Kakadu as National Park. This is a dry, dusty, featureless tropical savanna common across Australia. It is common across northern Australia. It is not unique except in the words that a lot of the conservationists use. They seem to use the words `pristine' and `unique' whenever they are trying to drive a point home. They use those words thinking they will be impressive to some of us whom they think have no intelligence. To me Kakadu is not pristine and it is not unique. Senator Vigor mentioned that there are endangered species. He, scientist that he is, would recognise that, just as an individual within a species has a lifespan, so it is believed by a lot of scientists that species themselves have an allotted lifespan. So we will always have endangered species in this world. The sooner a few people recognise that fact the better off this country will be. Senator Puplick, who is not in the chamber at the moment, made what I believe to be a very balanced statement about his attitude to Kakadu. It was balanced, it was detailed and it dealt in part with the requirement in the National Parks and Wildlife Conservation Act to include a detailed discussion of mining in that plan of management. Senator Richardson, who spoke shortly after Senator Puplick, seemed a little lost on just where the boundaries of the stages of the present park are, even though I have been with him to the UDP Falls. He seemed to think that that was in stage 2 of the national park when it is not. Somebody from Tasmania who had just been to the Kakadu National Park thought that UDP stood for undeveloped park and that person was quite surprised when I said that it had something more to do with uranium development than an undeveloped park. Obviously this is the kind of thing that people are trying to get across. They are trying surreptitiously to change the names of all these places. Many people seem to have forgotten that those who wanted to see what minerals were available first went to this area. They built the roads, they were there first and then came the conservationists. Now they are trying to make it look as if the miners are coming in to take over from the conservationists when in fact the opposite happened. Senator Collard —It was the miners who suggested the national park. Senator TOWNLEY —That is right. I thank the honourable senator. It was the miners who suggested the national park. People often forget that geologists, who go in first, by no means want to create havoc in the area. I will get on in a moment to what can be done these days in the rehabilitation of areas, many of which I have seen around this country. Senator Richardson seems confused. His confusion has come about because he has found out from some polls that may have been taken by the Australian Labor Party that the greenie vote is going to go to the Democrats. The Labor Party is doing its best to get rid of the Democrats from this place. They are now trying to make sure that they win those votes. They have written off the Northern Territory and Tasmania because they think that they can win a couple of seats in the Volvo socialist areas of Melbourne and Sydney by appealing to the greenies. Senator Gietzelt —That is pure supposition, Senator. Senator TOWNLEY —It may be supposition, but I am going to stick to it. I will keep saying it. Senator Crichton-Browne —They have all got Alsatian dogs. Senator TOWNLEY —My father was a politician before me and he said that if a person throws a few rocks, the dogs start yelping. There was a very good editorial in the Sydney Morning Herald this morning. It was headed `Richardson the populist'. I think it should have said `Senator Richardson the populist' but we will not argue about that. In the last paragraph it stated: Senator Richardson apparently shares Mr Hawke's intense concern for Kakadu and the environment. But sadly, he seems to lack the Prime Minister's understanding of the economic difficulties facing the Government, and the Treasurer's appreciation of the politics of tax reform. By calling for further changes to the fringe benefits tax, Senator Richardson has given the opponents of the new tax new hope and probably prolonged the noisy, destabilising struggle to have the tax watered down. I think that that is one of the areas that indicate that he is taking the easy way out in life at the moment. I do not think that many people on the Labor Party Government benches will disagree with me on that. There was an editorial in the Australian today which was headed `Duty of government is governing'. The last paragraph-Senator Richardson always seems to be saved for the last paragraph-stated: Senator Richardson's comments and some recent Government decisions must raise the suspicion that there is a growing desire within the ALP for electoral victory at any price. Mr Hawke and his Cabinet colleagues owe it to themselves and to Australia to repudiate Senator Richardson's clumsy suggestions and to reconfirm their commitment to the nation as a whole. Are they really committed to this nation as a whole, or are they out to get Tasmania? Are they out to knock the stuffing out of the Northern Territory? I say that the Government is about to do the latter. Let us think about the history of this area. What did Mr Fraser say when he set it up as a national park? He said: We look forward to the time when the management of the region, with its various planned uses, produces an harmonious relationship between the various activities . . . First of all he mentioned mining, then tourism, park management and environmental protection. Usually politicians put things in the order in which they want to deal with them. I would say that the former Prime Minister understood full well that there was going to be mining in that area. He finished off that statement by saying: . . . good management and goodwill can lead to natural resources being obtained with a minimum of interference to a region's inhabitants and its environment. Surely that is the kind of thing this country needs at the moment. We cannot afford any longer to go on with left wing rubbish about locking all sorts of areas up. A letter was incorporated from the Australian Conservation Foundation a moment ago. Without even reading it I know what it says-leave it as a national park. It says it has endangered species-endangered plants, animals, moths and things like that. I point out to Senator Vigor, who may not have had as many dealings with the ACF as I have, that every submission to each of the Senate committees of which I am a member that has ever come from the ACF has said the same things-make it a national park. Senator Jessop —What are they going to do about the natural leeching of heavy metals into the lakes-- Senator TOWNLEY —There should be some examination done on that matter. I am not sure that some of the areas where the tourists go are safe. They can sit on the sandstone monument in the grounds of Parliament House. Both Senator Jessop and I know from measuring its radioactivity that it is very radioactive. I think in many ways it would be a safer national park if we removed all the uranium. That is something I will not go into tonight because it is not something we ought to talk about at this stage. Let us return to the plan of management. It was always intended that exploration and other activities should coexist in the park. The new plan of management is quite different from what would have been expected. It states specifically: No operations for recovery of minerals will be carried out in the Park except on existing mineral leases. The Prime Minister has put paid to them as well. The present plan of management does not comply with the requirements of section 8 of the National Parks and Wildlife Conservation Act 1975. On that ground alone I put it to the Senate that it should not be approved. Senator Crichton-Browne, who is in the chamber, mentioned the attitude of the Aborigines. He did it very well. I refer people who read my speech to his, because we have both been on a committee that has been looking at the area. I get the impression that the Aborigines really want to have a say in-and rightly so-and benefit from the mining activities there. They want to have a say in the future of their land. I believe that a genuine error of massive proportions has been made by the Aboriginal Sacred Sites Protection Authority of the Northern Territory. Senator Crichton-Browne —Followed by a cover-up. Senator TOWNLEY —I am not sure from looking at the sacred sites legislation that, having put a sacred site unwittingly in the wrong area, there is any provision for deregistering it. Once a sacred site has been registered, can it be deregistered? I doubt whether that is possible. The Aboriginals have a huge sacred site in an area that I will not mention because I want them to come back and tell me whether I am right or wrong and whether there is any way of getting rid of a sacred site, having once said that it is sacred. Keeping in mind what Senator Crichton-Browne has said, the Aboriginals have an expectation that they will benefit from some of the mining activity. They will have a say in their future. Not many of the people who have spoken have mentioned the Aboriginals. I am sorry, Senator Vigor did mention them. I apologise. I was not trying to say that he did not speak about them, but many of the other speakers did not. I believe that the Aboriginals would like to see the commencement of detailed exploration work. I believe that they recognise that the money that they get does not grow on trees and they cannot continue to be given huge amounts of money unless there is some development-of course, I mean sensible development. The Minister mentioned Swiss cheesing the area. Nobody these days wants to do that. I have been to a sand mining area in New South Wales. As one looked along a sand hill which must have been seven or eight kilometres long, one could tell which areas had been sand mined. They looked better than the others; they had been rehabilitated. Somebody will say: `But they trod on a frog and that frog is not there any more'. People will come up with some stupid, left wing reason for saying that, because of that, we should not do anything. I really think we have to remember that some people are not as stupid as some of the left wingers in the Government of this country. It is time that this country recognised that Mr Hawke is now being run by the left wing group in his Government. He is giving in to everything they want. I am sure that is not what the people of this country want. Today the Australian-I am not using that as the only paper I have read today because it is not the only paper that I have read today-had a quote from Mr Butler on page 3. He said in Darwin yesterday that 75 per cent of stage 2 was not worth heritage listing. He said that large portions of stage 1 also were disaster areas. That comes from a guy who is well respected around the world. He was supported in that statement by another gentleman, a Professor Kenneth Mellanby from Britain, so he did not say it off his own bat. I think we have to recognise that the people of Australia are virtually being robbed by this Government if they allow this whole area to be locked up for the time which the Government would like to do that. Senator Jessop —What percentage of the area is under mineral lease? Senator TOWNLEY —I cannot tell the honourable senator the percentage, but I will give him that information tomorrow. We would expect the lease to be somewhere between 1 per cent and 5 per cent. Getting back briefly to the Aboriginals, they are in an area where they could have been of some benefit. The lease could have been granted to the wildlife service, I suppose, but they would not have any say in what would happen to it after that. Under those circumstances it must surely be open to the Aboriginals to refuse to participate in any lease-back arrangement with the Government. With regard to World Heritage listing, I again suggest that Senator Puplick was correct: The way in which the listing was carried out was both underhand and by the back door. It is questionable as to whether stage 2 would qualify for nomination for World Heritage listing if it were proposed in isolation. In fact I would say that it is extremely unlikely. The way in which the nomination was carried out was quite dishonest. The Minister responsible for conservation said that the Northern Territory Government would be consulted, right until the Federal Government announced that the World Heritage listing would be requested. Yet no consultation or agreement with the Northern Territory Government was sought or obtained. As such action is directly contrary to the formal agreement made between the Commonwealth and the States in a document that I will mention in a moment, I believe this whole plan of management should be rejected. The document that was signed in February this year is entitled `Australia and the World Heritage Convention'. It was issued by the Department of Arts, Heritage and Environment in February this year. Under the heading `Process for nominating Australian properties', that document says: The Commonwealth Government writes to the State and Territory Governments inviting them to submit suggestions . . . It goes on a little further to say: Any suggestions for World Heritage listing brought forward by other than a State or Territory Government to be referred, with supporting information, to the relevant State or Territory Government for comment prior to examination by the Commonwealth. I do not believe that happened. Finally, it says: The Commonwealth Government has indicated, however, that it will not take unilateral action to nominate areas for World Heritage listing without the agreement of the State or Territory concerned. I ask the Senate: Did that happen in this case? Of course it did not. Honourable senators will note that the agreement states that there must be not only consultation but also agreement. That did not happen. I suppose the real question that has to be decided is whether the preservation of an area that not all people feel is as good as some others claim it to be should be carried out to the exclusion of all else. Obviously the majority of Australians do not think so. In a survey they were asked: Provided areas of scenic and other significance were not disturbed, would you be in favour or against the mining under stringent environmental conditions of any large deposits of gold, platinum or other minerals found in Kakadu National Park? Just under 60 per cent were in favour of the mining and just over 33 per cent were against. Whereas the Government may think it is on a very popular course in what it is doing, let it be warned that the people of this country are not foolish. They know the economic difficulties that have been floated by everybody from the Treasurer (Mr Keating) down. I do not think that the Treasurer is an idiot. He has proved that he understands just how dangerous our economic situation is. The people of Australia recognise it, too. They realise that we cannot afford the multi-million dollar cost of conservation that is now intended for stages 1 and 2. Senator Jessop —We want jobs and export income. Senator TOWNLEY —We desperately need export income for this country not to be a worse banana republic than it is now. In the Australian today Des Keegan said: Mr Hawke senses the country is going against him and that he must do something. Mr Hawke, I believe, recognises, as does the Treasurer, the economic danger that this country is facing. He would love to have an election about this time, and I am sure that if the Pope were not coming he would have one. He cannot have one while the Pope is here, so there will not be an election this year. He knows very well the economic situation into which this country is getting, and next year it will be a disaster. We do not need a Treasurer to tell us that; everybody in this country is beginning to recognise it. If we do not allow sensible exploration, what would be the result? We would lock up forever about 13,000 square kilometres of land with a high mineral potential. Australia would never know just what the mineral deposits are, so we would forgo the economic, employment and other benefits that mining in the park could bring. We would deny ourselves a source of raw materials which we need and which could add to our balance of payments. We would deny the Aboriginals access to the economic benefits that would flow from that area. They are just some of the things that would happen. Senator Jessop —We are allowing other countries to get in front of us. Senator TOWNLEY —That is right. Canada would not be in the position with uranium which it is now had we gone ahead at a sensible pace. I must say that in that instance the Government of which I was a member should take some blame for not pushing ahead a little more rapidly. I draw everybody's attention to what the South Australian Minister of Mines and Energy said. In a recent speech he said that there should be an examination of what is available under the ground. His attitude is: . . . to foster multiple land use concepts and to ensure that no land is alienated from exploration without careful consideration of the subsurface mineral/petroleum potential, relevant economic factors and the existing and potential subsurface rights. In other words, the Cabinet in South Australia, a Labor State, recognises that there has to be a balance in life. That is something that we are not hearing from many of the people in this country at the moment, particularly the conservationists. We cannot ever satisfy them. If we give them stage 1, they want stage 2. If we give them stage 2, they want stage 3. Senator Vigor is a prime example of someone wanting that extension. I am waiting for somebody to say that he wants stages 4, 5 and 6. I do not know quite where this national park will end, because someone will step over a tussock and say: `Oh, an endangered species' or `an endangered frog' or something. It is about time the people of this country were told that we cannot afford this ratbag group that is trying to stop all production in this country. Senator Kilgariff —It is going to join the Katherine Gorge, the whole country. Senator TOWNLEY —I do not believe it would stop there because these people will never be satisfied. One cannot satisfy them. I am running out of time, but I recap by saying that the plan does not deal with mining as it is meant to under the Act. It does not pay attention to the rights of the miners and the leases that already existed and that pre-dated the park. It does not pay attention to the needs and the rights of the Aborigines of the area; nor does it cater for tourists as it should and nor does it cater for the rest of Australia economically as it should. On those bases alone-if anybody would like any more information I have a lot more-this plan should be disallowed. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Order! The honourable senator's time has expired. Senator ZAKHAROV(Victoria)(8.41) —I speak tonight in opposition to this disallowance motion in order to answer some of the arguments and misconceptions which we have heard from the Opposition in the course of this fairly lengthy debate, which I am sure is much longer than are most motion of disallowance debates. Senator Robertson —Or than is necessary. Senator ZAKHAROV —Yes, quite. I want to note first that we are not discussing stage 3 in this debate because it is not included in the plan of management, although reference is made in that plan to stage 3, to the Gimbat and Goodparla leases, because the reference is relevant to the present stages 1 and 2. For example, waterflows from stage 3 provide much of the inflow for the wetlands lower down. Because I am the Chair of the Senate Standing Committee on National Resources, which is at present inquiring into the Kakadu region, I have followed the progress of this plan of management since last year. I have become aware of many misconceptions about the plan-about what it is and what it does, what it is not and what it does not do, and what are the normal procedures in drawing up such a plan. I think Opposition senators should take a look at the terms of the 1975 National Parks and Wildlife Conservation Act, which remained through the days of the Fraser Government, and notice that the objectives of this plan of management are taken directly from that. I think it would be instructive for them to look at that Act to see its terms. Senator Jessop —Did you study the eight-year environmental impact before mining started? Senator ZAKHAROV —Yes, I have studied all that. Senator Jessop —I bet you didn't, because there have been a lot of environmental problems naturally. Senator ZAKHAROV —I have read that; I have read the Ranger Uranium Environmental Inquiry or Fox inquiry. Never fear, Senator Jessop, I have done my homework. Would that some of our colleagues had done as much. There have been suggestions that the plan of management should have been delayed until the Senate Committee had finished its inquiry. That view ignores the fact that the first plan of management ran out in December last year, 1985, and that the Committee will not be reporting until 1987-rather a long gap. At any rate, the plan of management is just that-a plan of management. It was subject to a lengthy process of consultation, quite openly done, and, as we can see, open to possible disallowance in either House of Parliament-a fact which the Northern Territory Government did not seem to realise as late as two weeks ago. I know conservative governments are not very familiar with methods of public consultation because they are not very keen on that. Maybe that is why. A number of speakers have referred to the relatively small area which would be occupied by any potential mining in stages 1 or 2. In fact, Senator Collard referred to `a speck'. But it is not just a matter of percentages, even if one accepted that description. For example, certainly the Ranger mine, both from the air and from the ground, is far from being a speck. A mine has an infrastructure. It has roads; it has equipment which has to be left somewhere; it has to have sheds, storage, possibly accommodation, site works and perhaps treatment works. Also, we are not concerned just with the areas. The effect of even a speck-if it were a speck-may, for example, allow pollution of river systems and therefore the effects can range over a very large area. It is important to recognise the role of the whole park river system in maintaining those wetlands which everyone on both sides of the chamber acknowledged as worthy of conservation. Frankly, I do not see how we can conserve those wetlands if we do extensive damage to the headlands of the waters that feed them. Senator Collard said that the wetlands cover at maximum level only about 16 per cent of stages 1 and 2. But a great deal of that water comes from parts of stage 3. Some members of the Opposition seem to have little knowledge or appreciation of national parks in general. They profess to be surprised, for example, that they are managed in the way they are. Yet this plan of management has many of its details, in fact its whole philosophy, in common with parks with which I have had dealings in other parts of Australia and, indeed, in other parts of the world. There has been a lot of talk about multiple land use, which is defined in different ways by different people. The Northern Territory Government, the mining industry representatives and some Opposition speakers, at one extreme, seem to believe there should be no limits to the level of land use in Kakadu National Park, no limit to the multiplicity of the land use, as long as small areas which they perceive as beauty spots are excepted. I remind honourable senators that beauty is in the eye of the observer. What Senator Townley saw as boring, frequently I saw as beautiful, and maybe the opposite would apply somewhere else in the world. To others `multiple land use' means controlled tourist access and traditional use by the Aboriginal traditional owners. At the other extreme, there may be people who do want to deny all access to outsiders. It is a view that I have been accused, wrongly, of holding. But I honestly have not heard anyone put that view. Yet we have comments from a number of speakers opposite that supporters of national parks want to lock them away forever from everyone. I sometimes think that those people believe that the minerals will rot if they are not mined now. National parks are not locked away; parks are for people. I have said that what is beautiful to some is not beautiful to others. Also it depends on when and how one travels, where one travels and who is one's guide, as I found travelling with mining industry representatives and with national park rangers, who both saw and interpreted the park in different ways. This brings me to the over-quoted term `clapped out buffalo country'. Two weeks ago the Committee was at the Commonwealth Scientific and Industrial Research Organisation station in the Kakadu region where we saw the dramatic results of fencing buffaloes out of such an area. The regrowth in a few years was amazing and gave us some idea of what the whole Kakadu National Park area would be like if the buffaloes were removed. The Australian National Parks and Wildlife Service, in my view, is doing a Herculean job in rehabilitating the land by eradicating the buffaloes which, incidentally, present a health hazard as well as an environmental disaster. Much use has been made in this debate of the word `pristine', and it has not usually, incidentally, been used by the conservationists. Again, like `multiple land use', the word has been used to distort the argument. With the possible exception of Antarctica, there are probably no pristine areas in the world in the sense in which Senator Durack, at least, used the word-of being free from human use. I know of no person or group who would argue that Kakadu National Park is or should be pristine in that sense. But it is the nearest we can get to an ecosystem or land form which is still basically as it was tens of thousands of years ago-and the rock art bears testimony to that. That is what we want to preserve. Senator Crichton-Browne raised the question of an inventory, a matter that has been raised a number of times. He seemed to assume that this can be done only by exploration by the mining companies, a view one might expect from the party of privatisation. An inventory can be done by the Government, just as the Commonwealth Scientific and Industrial Research Organisation and the Australian National Parks and Wildlife Service are at present making an inventory of the flora, fauna, Aboriginal art, rainfall patterns and all other aspects of the area. Senator Townley referred fairly briefly to a survey, but I would like to deal with it a little more deeply than he did. The survey was conducted, I understand, for the Australian Mining Industry Council, which drew it to my notice. For some years I worked for the gallup poll organisation and I have some experience in conducting polls and the way questions are asked to obtain particular answers. This is an obvious example. I note first that the sample size, the number of people interviewed, was only 1,150, a fairly small number if one is trying to get an Australia-wide view of what the population thinks. Gallup poll in the days I worked for that organisation did a minimum of 2,000 interviews, and I understand that still about that number is considered as a minimum to be valid. Let us look at the questions. The first question asked: Are you in favour or against carefully controlled exploration in Kakadu National Park in the Northern Territory to establish its mineral potential? The second question asked: Provided areas of scenic and other significance were not disturbed, would you be in favour or against the mining under stringent environmental conditions of any large deposits of gold, platinum or other minerals found in Kakadu National Park? I do not think I need to explain just how biased those questions are. In fact, one of the representatives of the Mining Industry Council as much as admitted to me that they were meant to get a particular answer. They got the answer they predicted, and anyone who has any knowledge of social science would know that that was what they would get. I want to set the record straight on my own position on a matter raised by Senator Kilgariff. I quote from Hansard on 20 October, where he said: Senator Zakharov, who is trying to interject, has been up there and knows full well what the Aboriginals believe in I thank him for that. He continued: They say, `Let us have a fair go to be able to develop ourselves'. They say that they do not have to live on government handouts, which is what the honourable senator wants them to do. She wants them to be subjected to the Federal Government so that their very existence is a handout to handout situation from day to day whereby they are not allowed to develop. That is certainly not my position. I know that the Aboriginal people I have spoken with in the area and elsewhere, including representatives of the traditional owners, know that that is not my position. Indeed, I am very concerned that Aboriginals should make their own decisions and be given time and opportunity to do so. Unlike Senator Crichton-Browne, I do not want to canvass this matter here because it is a matter into which the Committee is still inquiring, but I want to remove the slur that was cast on me by Senator Kilgariff. I conclude by quoting the then Deputy Prime Minister, Doug Anthony, speaking in 1977, I think, but I could be wrong as to the date. When speaking about the setting up of the national park, he said: The second major element of the machinery for regulation and control is the National Parks and Wildlife Conservation Act. We will establish a major national park in the region. Then comes the important part: The Director of National Parks and Wildlife, a statutory officer responsible to the Minister for Environment, Housing and Community Development, will have extensive powers over the region as a whole. Yet the same coalition of which Doug Anthony was a member now criticises that view and also the powers given then to the Director of the ANPWS. Senator COLLARD(Queensland-Leader of the National Party of Australia)(8.55) —in reply-I thank honourable senators on both sides of the chamber for contributing to what has been a long but interesting debate-such is the interest of senators from all parties in the Kakadu National Park, but more importantly in the philosophy behind national parks and the use of such parks and of mineral areas. When I moved this motion on 20 October, I said that we had national parks for four main reasons. I quote once again from page 1575 of the Senate Hansard: Firstly, to preserve as widely as possible the genetic pool of our flora and fauna; secondly, to preserve for aesthetic reasons locations of unique natural beauty; thirdly, to preserve for posterity areas of historical and cultural significance; and, fourthly, for recreational purposes. I do not think anybody at any stage disagreed with that, and there is common ground on both sides of the chamber on those definitions. Everybody who has spoken in this debate basically has agreed with those definitions in that as far as they pertain to the Kakadu National Park pertain to the wetlands, the escarpment and the Aboriginal rock galleries. The basic argument had been about that and the Opposition has at no time denied that they are areas of significance and should be preserved. I said that in my initial speech and just about every Opposition senator who spoke after me took up the same line-that the areas of significance, the wetlands, the escarpment and the Aboriginal rock galleries, should be sacrosanct. The debate then gets on to what I call the buffer areas, or what the original Act called the conservation zones. Those who are interested in the Kakadu National Park and in this debate should recognise that outside those areas an arbitrary line is drawn, namely, the boundary of the Kakadu National Park. Between that arbitrary line and the areas of significance is the buffer area or conservation zone. It is those buffer areas which are the focus of attention in this debate. The Opposition is saying that those areas should be available for multi-purpose use under strict environmental control. Senator Zakharov in her speech rightly pointed to the use, or misuse, of the term `pristine', a word that is used on many occasions. I agree with her. As a matter of fact, I mentioned the same thing in my remarks. Senator Zakharov also said, and I hope that I do not misquote her, that the area of Kakadu has been as it is for thousands of years. I disagree, and indeed Professor Ovington in addressing a Senate Committee on the term `pristine' mentioned the same thing. He then went on, and I quote again from page 1577 of the Senate Hansard of 20 October 1986. People forget that Kakadu has been managed as a land area by Aboriginals for perhaps 40,000 years. Their impact is there. I repeat that: Their impact is there. So it is that, no matter what we may think, nothing stands still. The human race has had an impact, for better or for worse, on our environment for countless thousands of years. Senator Gietzelt —But the difference is that the Aborigines do not affect the environment like Anglo-Saxons do. Senator COLLARD —That is a matter for debate. We are learning from the fact that the Aborigines fired the land quite regularly, and that was their method of husbanding the earth. Senator Gietzelt —They don't destroy anything. Senator COLLARD —Senator Gietzelt is so wrong. They fired the earth-I am not saying they should not have done so-for different reasons, such as flushing out game. But one can go now to areas which were fired for centuries and which when white man came to Australia were grasslands. Many of those areas are now forests, and indeed are becoming rainforest country, which would not have happened with the regular firing by Aborigines. So let me not hear it said that that practice did not have a `detrimental' effect. Mankind has always had an effect on the environment. This has to be said: Mankind is not an interloper in the environment, he is and always has been a part of the environment. He has an effect on it for better or worse. Unfortunately we could all point to instances when we would say that in a short time those effects have been for the worst. I am not arguing about that. Senator Gietzelt —We chop down trees. Senator COLLARD —Yes, we chop down trees and previous generations have chopped down trees because we have needed the timber. If we do not chop them down other nations will chop them down using the slash and burn method because the timber is needed. I do not wish to prolong this debate-it has been a good one-but the main threads of the Opposition's argument on the proposed Kakadu plan of management are as follows: Firstly, as has already been pointed out, the plan is defective not only because it does not make provision for exploration in mining, but also because it does not allow for proper and adequate tourist development. It ignores the wishes of the traditional land owners-the Aborigines-and it ignores the wishes of the Northern Territory Government. Secondly, the original concept of the Kakadu National Park was for multiple land usage, including mining. The first plan of management and the Act recognised this. This plan does not. Thirdly, the outstanding features of the park-the wetlands, the escarpment and the Aboriginal rock galleries-should and will be preserved. The rest of the park is essentially just a buffer zone and these areas should have a multiple usage purpose. If mining were to proceed in all the existing mining leases it would affect only about one per cent of the total area-that is, of stages 1, 2 and 3. Recently the Prime Minister (Mr Hawke) visited Kakadu. We have had the recent statements from the man whom we might call `born again Bob', the conservationists' friend and occasional `greenie'. Those statements would have to be some of the most cynical that have been uttered for a long time. I do not object to the Prime Minister doing Faustian deals with sections or factions of the Australian Labor Party in order to preserve his hide. The Prime Minister's soul would be poor currency indeed. I do not object to his selling the ALP's soul as it has very little else to offer. But on behalf of this nation, I object strongly to the Prime Minister selling this country down the drain for a handful of votes. The Prime Minister said that it would be `an obscenity to mine Kakadu'. The only obscene thing is the spectacle of the Prime Minister grovelling to sectional interests in order to hold his shaky grip on office. It is also an obscenity to seem to say that this generation cannot at the same time use and preserve. That is the challenge that faces this generation and subsequent generations. The challenge is to act in line with definitions of `conservation' which were laid down in the national conservation strategy for Australia. I quoted these definitions in my original speech, recorded at page 1577 of the Senate Hansard of 20 October. I will use them again now. `Conservation' is defined as: . . . the management of the human use of the biosphere so that it may yield the greatest sustainable benefit to the present generation while maintaining its potential to meet the needs and aspirations of future generations. `Development' is defined as: . . . the modification of the biosphere and the application of human, financial, living and non-living resources to satisfy human needs and to improve the quality of human life. Those are two very good definitions and that is the challenge that is facing our generation. It is an obscenity to expect us to believe that this generation is not capable of using and at the same time preserving. Many people think that a national park can be a picture frame in time which can be preserved in that state for all time. That is nonsense. The park was never the same as it is now and even if we were not here it would never be the same in the future. It is constantly changing. The challenge for us, if we wish to do so, is to minimise the impact of human involvement in that area. Now, of course, we have that other well known guardian of Labor moral direction, Senator Richardson, who seems to be worried that he has left his ministerial run too late. He is becoming so worried that he might miss out on a State funeral that he too is putting his soul up to the highest bidder. With two souls in one week the market is becoming rather saturated. I draw the attention of both the Government and Senator Richardson to the editorial in today's Australian which is headed `The duty of the Government is governing'. That is what governments are elected to do-to govern. In other words, they must make best use of the resources that are there and at the same time they must preserve them. That is the challenge which faces us, each and every one of us. We cannot go back in time. At the end of the day with all the arguments for conservation-and these are quite valid arguments-governments have to govern. Politicians have to take decisions to provide food, fibre, jobs and export earnings and all the rest of it. The fact that they have to do that does not mean they should not, at the same time, take into consideration the preservation needs of particular areas. Question put: That the motion (Senator Collard's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 32 —— Majority . . . . . . . . . 3 —— Alston, R. K. R. Kilgariff, B. F. (Teller)Archer, B. R. Knowles, S. C. Baume, Michael Lewis, A. W. R. Baume, Peter MacGibbon, D. J. Bjelke-Petersen, F. I. Newman, J. M. Boswell, R. L. D. Parer, W. R. Brownhill, D. G. C. Reid, M. E. Carrick, Sir John Sheil, G. Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Harradine, B. Withers, R. G. Jessop, D. S. Aulich, T. Jones, G. N. Black, J. R. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Coates, J. McKiernan, J. P. Coleman, R. N. Macklin, M. J. Colston, M. A. Maguire, G. R. Cook, P. F. S. Powell, J. F. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Ryan, S. M. Elstob, R. C. Sanders, N. K. Evans, Gareth Sibraa, K. W. Foreman, D. J. Tate, M. C. Gietzelt, A. T. Vigor, D. B. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Hill, R. Bolkus, N. Puplick, C. J. G. Richardson, G. F. Messner, A. J. Morris, J. Vanstone, A. E. Button, J. N. Chaney, F. M. Robertson, E. A. Question so resolved in the negative. Debate resumed from 23 October, on motion by Senator Walsh: That the Bill be now read a second time. Senator MAGUIRE(South Australia)(9.13) —The Government's record on the economy is that in the last 3 1/2 years some 670,000 extra employment positions have been created. Here I note that the last time I spoke on economic matters in this place-in fact at the beginning of the debate on the Appropriation (Parliamentary Departments) Bill, Appropriation Bill (No. 1) and Appropriation Bill (No. 2)-we had created some 650,000 jobs, so another 20,000 have been created in that interval. That compares with the Government's promise of 500,000 new jobs in its first three years of office. The unemployment rate has been reduced from a peak of 10.4 per cent in 1983 to 8.4 per cent for the month of October 1986. Those figures were released just last week. The Government has brought the inflation rate down from the 11 1/2 per cent it inherited from Mr Howard to 8.9 per cent now. The major problem facing the Australian economy is the deficit on the current account of the balance of payments. That is the classic external constraint on growth in the Australian economy. It is a constraint that has been documented for many decades and it is here again with us in the present period. In the last financial year, 1985-86, the current account deficit, which basically is defined as the balance of trade taken together with the so-called invisible items in the balance of payments, has risen to some $13,000m or 5.9 per cent of gross domestic product compared with a figure of $10.8 billion for the previous financial year. Of course, the big deterioration has been in the balance of trade, that is, physical trade. That moved from a position of surplus in 1983-84 to a position of deficit to the tune of $3,400m in 1985-86. The deficit means that Australia has borrowed overseas to finance the current consumption of imports in the Australian economy and also to pay off Australia's accumulated external debt. I should correct the record this evening about Australia's overseas debt. From listening to speeches from Opposition spokespersons, one would get the impression that overseas debt is the province of government in Australia, that it is essentially government debt. That is not true. That is far from the record and is very inaccurate. The fact is that at 31 March this year-these are the latest figures on external debt that I have been able to obtain-the total gross external debt was some $80,000m. Of that amount, $46,000m was debt incurred by the private sector. So the majority of gross external debt was private sector debt. All government debt, not just Commonwealth Government debt-the Commonwealth is always being blamed for this debt by honourable senators opposite-totalled some $34,000m. That government debt includes the debt of conservative States like Queensland and Tasmania. It does not just include Commonwealth Government debt. So it is quite possible to calculate that, of Australia's net external debt of some $62,000m, the maximum share of government debt is some 35 per cent; in other words, barely more than one-third of the total net external debt is public debt. Senator Siddons —Doesn't it worry you that most of the private debt is in the stock exchanges of Australia? Senator MAGUIRE —I am certainly very worried about the way in which private sector activity has been occurring and the patterns of private sector investment. All Australians should be concerned about that. The Government's economic strategy is to moderate domestic spending while increasing net external demand, which is defined as exports less imports. The aim is to lower and moderate domestic demand, to lower the overflow of economic activity into imports. The Budget, which is financed by the appropriation Bills we are debating tonight, calculates that net exports will constitute some 1 3/4 percentage points of the projected growth in gross domestic product this year, with the domestic sector contribution only one-half of a per cent. The Budget has made substantial reductions to government expenditure and in the growth rate of government expenditure. I find that unpalatable but it is very difficult to avoid in the current circumstances of very poor prices received for the products that we sell abroad. This will dampen domestic demand further, but will of course help cut imports. The reduced growth in public expenditure will also help to reduce borrowings and in that way also help to reduce Australia's future public debt liabilities. It is very important to note that the Commonwealth Budget for 1986-87 has made a very substantial reduction in the Budget deficit. The deficit last financial year of some $5,700m has been cut to $3,500m this financial year, which is a very substantial cut. The deficit for this financial year will amount to some 1.4 per cent of gross domestic product. That compares very favourably with the enormous prospective Budget deficit that we inherited from Mr Howard for the 1983-84 financial year. That prospective deficit of $9.6 billion would have amounted to a shocking 5 per cent of gross domestic product had no action been taken by the Hawke Labor Government. The zero real growth in government expenditure this year is aimed to bring about reduced government borrowing. It is also aimed at cutting pressures on Australia's domestic capital markets, and the objective in doing that is to cut pressures on interest rates and the economy in general, and, hopefully, to reduce interest rates in the market-place. The objective in doing that is to boost investment by the public and private sectors of the economy. Of course, investment is a key to general economic recovery and is certainly a key to the manufacturing export growth that we so desperately need. Australia's government fiscal policy and monetary policy are being backed by other policies. The Government has embarked upon policies to hit costs and contain inflation. The Prices Surveillance Authority has been beefed up recently. It will have a wider scope of activities and a greater compass of activities involving scrutiny of prices and proposed price increases by producers in the market-place. In framing the 1986-87 Budget, the Government has aimed to spread more evenly and more equitably the burden of readjustment of the economy to the difficult economic circumstances in which we find ourselves. We do not want to leave the adjustment of the economy to the laws of the economic jungle. It is important to note that the Budget contains some very progressive measures. For example, it disallows tax deferral advantages for a number of companies which were adjusting their reporting dates. From that, the saving to revenue in the current financial year will be $220m-a large and significant amount of revenue for the Budget. The Budget increases the unemployment benefit rate for 18- to 20-year-olds by $3 per week from 1 January. There will be a $1 per week increase in pensions and benefits per child, and a $1 per week increase in the rate of family income supplement per child as of this month. They are very important measures. There is also a youth homeless allowance of $23 per week, to be paid to some young persons already receiving education allowances or unemployment benefits who are unable to live at home for various reasons. That particular measure will add $9m to expenditure this financial year. Senator Siddons —Why do you not admit that there is a dramatic cut in social welfare expenditure? Senator MAGUIRE —Like many other members of the community, I have had my breath taken away this year by the Australian Democrats' discovery of social welfare as an issue. I have never heard the Democrats talk about social welfare in this place until this year. It is one of the issues that they discover-- Senator Siddons —We have been talking about it for six years. Senator MAGUIRE —That is not so. The Democrats have discovered social welfare as an issue only this year. It is one of the issues that they hope to put into a coalition of issues to try to get enough votes to win quotas at the next election. I feel appalled that Senator Siddons can be suggesting otherwise to me, a member of the Labor Party-which gives very high priority to social welfare activities and policies, and has done so for many decades-when the Democrats have discovered social welfare as an issue only this year. In the Budget there is new funding for the adult training program. Extra funds this financial year will enable over 7,000 adult unemployed persons to receive training during the current financial year as compared with 6,000 in the last financial year. That is a very important move. It is a very worthwhile activity. The focus in recent years in Australia has been to provide training opportunities for younger persons in the labour force, but I think it is now recognised that there is a core of adult unemployed persons who really need training. It is important to note that the funds for that have been voted in this Budget. This Budget includes revenues, perhaps for the first time in our history, from the capital gains tax. The 1986-87 Budget is framed on a basis that it will incorporate revenues from the capital gains tax. That has been a tremendous economic reform and reform of taxation laws, and it is a real milestone to see capital gains tax revenue going into the Budget this financial year. The revenue in the Budget also includes that arising from the disallowance of the so-called free lunch. That is something that Senator Archer and his colleagues repeatedly championed in this place last year-the ability of very wealthy people to have subsidised lunches at the expense of taxpayers. The savings from the removal of that rort will be about $300m this financial year. The Budget includes, most significantly, the first revenue from the fringe benefits tax. Those three devices-the capital gains tax, the fringe benefits tax and the disallowance of the so-called free lunch-are very important financing mechanisms for the Government's significant personal income tax reductions, which start in just over a fortnight's time, on 1 December. Without the capital gains tax and the fringe benefits tax and the removal of the so-called business lunch, this Government would not be able to deliver the very significant reductions in personal income tax to start on 1 December. It is important to note that the tax threshold will be increased in that package from the current $4,595 to $5,100. The highest tax rate in the top bracket will be reduced from 60c in the dollar to 55c, going down to 49c in July next year, and the 48c and 46c rates will be reduced to 40c in the dollar. So there are tremendous reductions in the marginal tax rates in our income tax system. The bottom rates will be reduced to 24c in the dollar. The best that Mr Howard could manage in his five Budgets from 1978 to 1982 was a bottom marginal rate of 30c in the dollar. Clearly, on that indicator, with a tax rate of 24c in the dollar this Government has made great strides in reducing the tax burden on ordinary Australians. The Budget forecast that gross domestic product-Australia's gross income-will grow by some 2.5 per cent this financial year, with employment growing by a further 1 3/4 per cent-not as high as it was last financial year, but still a significant increase in employment. It is important to bear in mind that since the Budget was brought down there have been some quite positive events in the economic area and in financial markets. The Australian dollar has increased in value by several percentage points and seems to have stabilised in the mid-sixties in United States cents. There have been significant reductions in interest rates throughout the economy. The prime rates charged by the banks for their large borrowers have been coming down across the board. The interest rate on bank bills, which banks themselves issue to borrow funds for lending by themselves, has fallen from 18.7 per cent in early September to 15.9 per cent yesterday. We have there a reduction in that key interest rate in the economy of over 2 3/4 percentage points-a very large reduction in a major interest rate in the economy. The unemployment rate seems to have flattened out at about 8.3 per cent or 8.4 per cent. We have now had four months in a row, from July to October 1986, with unemployment rates, on a seasonally adjusted basis, of 8.3 or 8.4 per cent. One of the most interesting aspects of the economy at the moment, a matter that is dear to the hearts of Liberal and National Party senators, is share market prices. That is the sort of indicator they like to use on their soap boxes at meetings when talking about levels of economic activity. They, unlike members of the Australian Labor Party, use share market prices as a measure of what is going on in the economy. Despite all the doom and gloom being poured out by Mr Howard and his supporters about the economy, it is interesting to note that during 1986 the all ordinaries index of Australian share market prices has recorded some 42 record highs-not two or 22, but 42 record highs. The market is up 36 per cent so far in 1986. On the basis of the rhetoric and dogma of members of the Opposition, they would have to say that the economy is going well, that there is no doom and gloom and that, on the basis of that indicator they use so regularly, the economy is going forward. It is also interesting to note that as a result of those very large rises in share market prices, which themselves were the result of larger numbers of transactions in the market-place, the Government will collect more money from the capital gains tax than it budgeted for because more assets have been unlocked from exemption from the capital gains tax. That clearly shows that investors are not worried or fazed by the Government's capital gains tax and undermines the claims made by the Opposition spokespersons that the capital gains tax is an important disincentive to investment. The expansionary economic policy and growth of the last three years have been checked by the classic balance of payments constraints facing the Australian economy and we now have the opportunity as a result of an adjustment to the value of our dollar to have a competitive edge-an edge that will provide, at least on paper, a boost to the manufacturing industry. The challenge still lies ahead to translate the devaluation of the Australian dollar into growth in manufacturing exports. Senator BJELKE-PETERSEN(Queensland)(9.33) —In speaking to these Appropriation Bills before the Senate I think it is fair to say that it is no secret that this country is presently in the grip of an alarming economic decline-a decline which in the opinion of the Opposition is being assisted by the policies of the Labor Government. Australia's problems have their origin largely in the narrow range of its export base and the fact that much of the country's manufacturing industry is uncompetitive. Rural and mining products accounted for approximately 77 per cent of Australia's exports during 1985-86, of which our six largest exports-coal, wool, wheat, iron ore, meat and petroleum-accounted for more than half. On the other hand, manufacturing exports represented around 20 per cent of our total exports. We see the difficulties this presents when we compare it with world trade figures, which show that around 65 per cent of world trade is manufacture based. If we add to that the fact that prices for most rural and mineral commodities for various reasons have fallen sharply during the 1980s we see why our export earnings have declined and our import outlays have increased. The Australian of Thursday 23 October contained an article headed `Survey pessimistic on exports'. It said, with reference to an important Government survey: The survey results, released yesterday in a report prepared by the Bureau of Industry Economics, suggest that a significant increase in manufactured exports is unlikely in the short term and that even if all the economic fundamentals are correct, it might be several years before there is a surge in export-related investment. Business managers interviewed in the survey indicated that overseas concerns about reliability of supply, continued competition by many newly industrialised countries and weakening overseas markets inhibited the growth of manufactured exports. Low profitability, due to high labour costs and low productivity, and low perceived rates of return, due to high interest rates and high corporate tax rates, are the main reasons cited for a poor investment response. I believe the Budget should have aimed at broadening our export base while at the same time introducing meaningful expenditure cuts. In fact, the Government has further worsened our balance of trade while imposing further charges to boost Government receipts. Major revenue increases will come from increased taxation. Surprise, surprise! There is to be further taxation on petroleum products, a rise in the Medicare levy, the introduction of the horrific fringe benefits tax, rises in sales tax on health foods such as citrus juices and milk products, and the bank account debits tax. Despite the tax cuts from 1 December, net pay as you earn taxation will still rise by more than 10 per cent. There is no doubt whatsoever in my mind that these changes will reduce household disposable income, something which I am sure will not go down too well with Australian consumers, who are seeing their shopping bills go up. From December people on the average wage will receive a tax cut of about $9 a week, but the Australian Consumers Association has assessed the impact of increased indirect charges at between $15 and $20 a week-a net income cut of $6 to $11 a week. Our inflation rate is running at about 8.9 per cent, which is three times higher than the Organisation for Economic Co-operation and Development average and nearly eight times more than that of our major trading partner, Japan. Government now consumes 44 per cent of Australia's national income, so the average Australian who starts working on 1 January has to work until about mid-June to pay for government. Total taxes in 1985 were 85 times greater than the total profit of the Broken Hill Proprietary Company Ltd from oil, gas, coal, iron, steel, gold and other minerals. In that year 86 per cent of Esso Australia Ltd's income from oil production from the Bass Strait went to government taxes and levies. The fringe benefits tax will go down in Australian political history as one of the most unbelievably misguided initiatives ever produced by a Federal government. The tax is to be imposed on businesses at a time when they can least afford it. There is a a lot of talk about broadening our manufacturing export base on the one hand, but businesses are being hit with the fringe benefits tax on the other. That makes a mockery of the supposed Budget strategy. At a time when this country needs incentives, the Government brings out disincentives. At a time when we need growth in the business sector, the Government introduces anti-growth policies. At a time when unemployment is one of the major problems facing this country, the Government chooses to stifle employment opportunities. Its idea of course is to tax everybody and bring them all down to the same level. Senator Walsh —Tell us about how your son and husband have been robbing the taxpayers of Queensland for the last two decades. Senator BJELKE-PETERSEN —I believe that this is not an opportunity for the Minister continually to bash my son's property. I answered his allegations on this matter, quite properly, in a television interview recently. I am discussing the present situation of this Government as far as the Appropriation Bills are concerned. The Government's idea is to tax employers so much that they have no incentive to provide jobs and job opportunities. I consider that the fringe benefits tax is a totally ridiculous idea, and I am not alone in this view. There are many people throughout Australia who believe the same thing. If we look at the election results in New South Wales-- Senator Walsh —All the tax dodgers in the country are on your side, starting from your husband, who got dragged into the High Court and was made to pay his taxes. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order, Senator Walsh! I ask you to withdraw the reflection on the leader of the Government in Queensland. Senator Walsh —Certainly, Mr Acting Deputy President. Senator BJELKE-PETERSEN —Thank you, Mr Acting Deputy President. I am glad to have the protection of the Chair. The fringe benefits tax is a totally ridiculous idea. There will be no value to the business community in its implementation. I know that it will raise a lot of money for the Government, but at what cost to the businesses and farming communities of this country? It is an administrative nightmare and, to make it even more ludicrous, many employers still do not fully know what they are liable for and, I hasten to add, nor does the Australian Taxation Office. The cost involved in providing the records required by the Tax Office will be horrific. At the moment we can really only visualise some of the problems that there will be, but when and if the Tax Office decides what it wants from the employers I believe that it will truly become a nightmare. I would like to quote from a document produced by the Confederation of Australian Industry which states: . . . a rough estimate of just the time cost of complying with the tax might be gleaned from the fact that each minute of time devoted to complying with the tax in all non-farm private sector firms in Australia would mean that over the year around 160,000 working days have been lost to the economy in complying with the tax. And that is just for a single minute of compliance time. Multiply this by the many hours of time throughout each and every firm that will have to be wasted in this way and the magnitude of the economic loss involved with this tax will be apparent. What makes me really annoyed is the fact that this tax proves just how out of touch this Government is with business and the farming community. It is simply not possible to draw hundreds of millions of dollars out of firms and farms across the economy without leading to further economic decline. A leading article in the Australian a few weeks ago stated: The fringe benefits tax will particularly hit those Australians mainly concentrated in vital export industries who are attempting to develop the outback in Western Australia, Queensland and the Northern Territory. In order to attract a work force to these remote areas it is necessary to offer subsidised housing and transport. These are not the kind of fringe benefits which should be taxed as they are essential elements of working in the outback, not rorts designed to avoid tax. The tax will severely undermine business confidence and profitability. This also means less opportunity for growth in the business and farming sectors and fewer employment opportunities. I would like to speak about a matter which I consider to be very important and which, sadly, has been neglected by this Government. I speak tonight about the family unit, which is the cornerstone of our society. I cannot recall any piece of legislation which I consider has been designed to promote or enhance the stability of family life in this country being introduced in the past three years of this Government. We have not had any increases in the family allowance for four years. The Medicare levy has been increased, a means test has been applied to families with 16- and 17-year-olds and with incomes above $39,000, irrespective of other dependants and the high costs of maintaining and educating children in higher secondary education. Prescription charges are to double from a maximum of $5 to $10. I spoke recently about the sales tax which has been applied to citrus juices and flavoured milk, both of which, of course, are health beverages and much consumed in the average family home. Extremely high interest rates and a very high inflation rate are making it almost impossible for young people to buy homes and for those who can afford to do so it means very high monthly mortgage repayments and sometimes, sad to say, even repossession. The Government is quite prepared to put a lot of money into making divorce faster, easier and less traumatic but in the last Budget it allocated only $100,000 towards marriage education-something which I believe is of paramount importance. Even after the 1 December tax cuts and taking into account the Medicare levy, the dependent spouse rebate, the family allowance and the effects of inflation, families with a single breadwinner and two dependent children will still be $23.50 a week worse off than they were at the time of the last election in 1984. We are daily seeing the decline of the single income family. The Government cannot convince me that there are not thousands of mothers in Australia who would love to be able to spend more time in the home with their growing families but who are unable to because of financial worries. I would like to see the introduction of income splitting for the single income family for taxation purposes. I can see a great deal of merit in such an initiative and I feel that it would benefit the average family in a way which would mean far more than any other initiative that I have seen in my five years in this place as a senator representing Queensland. We want to remember also that two-income families already benefit from a much higher tax free threshold than do single income families. The Sun newspaper of 20 August last reported that women in the work force: . . . will be assisted with the development of a $1 million Affirmative Action Agency to supervise the implementation of Affirmative Action employment principles in the private sector. What about affirmative action programs by the Government to raise the status of women in the home? I feel I have a responsibility on behalf of thousands and thousands of Australian families to ask the Government to consider the plight of the single income family. This basic unit of society is fast becoming an endangered species. Perhaps I should introduce some sort of private member's Bill to have the single income family put on the World Heritage List to ensure its continued existence. Certainly I am worried about the enormous pressures that are being put on the average working men and women who are trying to provide a secure and happy future for their children in this country. It seems to me that the Government is taxing everything that moves, including our nation's future-our children-and I believe that it has to stop. This Government is further eroding the stability of the country's basic unit of society, the family, and I for one mourn its decline. Senator KILGARIFF(Northern Territory)(9.46) —In speaking to the Appropriation (Parliamentary Departments) Bill 1986-87, the Appropriation Bill (No. 1) 1986-87 and the Appropriation Bill (No. 2) 1986-87 which are before the Senate, I wish to direct my remarks to a number of issues-one more general and the others specific. First, I would like to make some general remarks on the financial policies of this Government as they affect the people of the outback. While there has been widespread community opposition to the fringe benefits tax, nowhere will the effects of this tax be more damaging than in the outback. The fringe benefits tax will bite hard in remote communities where conditions are such that employers often need to offer benefits as conditions of employment in order to attract skilled workers. In mining and other remote communities such as pastoral homesteads, Aboriginal settlements and pioneer tourist projects where educational facilities beyond primary school level are often non-existent, employers commonly offer assistance with educational expenses for the children of employees. This is a recognition of a child's right to an education and that right should not be jeopardised by the nature or location of his or her parents' employment. Often assistance with air fares to the employee's home State is included as part of a package. This is a recognition of the fact that many skilled workers come to the Territory having left behind family and friends and they should be assisted in maintaining those family contacts. Subsidised housing is also a legitimate and common element of employment packages in the outback. These are not the lurks and perks of the wealthy tax evaders to which the Treasurer (Mr Keating) and the Prime Minister (Mr Hawke) have so often adverted. They are benefits paid to ordinary men and women as an inducement for them to work in an often harsh environment without the amenities which are taken for granted in more populous areas. I referred on a previous occasion to a survey commissioned by a number of Territory business associations, including the Master Builders Association of the Northern Territory, the Motor Traders Association, the Northern Territory Confederation of Industry and Commerce Inc., the Northern Territory branch of the Mines and Metals Association, the Northern Territory Cattlemen's Association, the Northern Territory branch of the Australian Small Business Association, the Real Estate Institute of the Northern Territory Inc., and the Northern Territory Chamber of Mines (Inc.). The survey which was carried out showed that the long standing award provisions of employment are now deemed to be fringe benefits, taxable in the hands of employers. These provisions are awards of the Australian Conciliation and Arbitration Commission and were not introduced or contemplated as tax avoidance schemes. The survey sample was of 13.2 per cent of the private sector work force and thus was a reliable sample. The benefits subject to the tax were calculated as being worth some $60m and the tax payable would be around $26m. I should say here that these figures are pre-review, but the magnitude of the employers' tax liability will still be of monumental proportions because the concessions being made by Mr Keating are miserable. Employers will now have to pay tax on 50 per cent of the cost of remote area housing rather than the previous liability of 60 per cent. This will still impose enormous burdens upon employers. It is estimated that the impact of the FBT in the Northern Territory will be to increase private sector costs by 5 per cent. With Territorians already paying unreasonably high prices for food, clothing and other necessities, to add to this burden by pushing up prices, which will be the net result of the FBT is unjustifiable. No one in the outback has been hoodwinked into believing that this tax is aimed at tax evaders. The people of the outback are not tax cheats and yet are being hit by this tax which one can only assume is a desperate attempt by a desperate Treasurer to milk Australians for a bit more income to pay for exorbitant government spending. To give one more example of how this tax will hit Territorians, it will have a devastating effect upon Aboriginal community education. The Northern Territory Education Department provides an on-site service to a large number of remote communities. It is estimated that in the instance of, say, the Maningrida school in Arn- hem Land, which is accessible only by sea and air, the FBT liability will amount to almost $70,000. What is being taxed is not fringe benefits but compensation to teachers and other staff for service in a harsh and remote environment. Things such as remote locality fares, freight free perishables in areas which can be supplied only by air, free or subsidised services on out- stations and homeland centres and very basic departmental housing are being attacked by the Treasurer as rorts. No wonder the Federal Government is shovelling massive amounts of money, estimated between $2m and $5m, on these flash advertising campaigns to try to convince the electorate that this tax is justifiable. Thankfully, the electorate will not fall for this glossy public relations exercise because ordinary men and women can see that they are being clobbered by Hawke and Keating. In the long run there will be no winners under this tax except the Department of the Treasury. I wonder whether even it will be a winner because the cost of recovery, the staffing et cetera that is required to administer this tax collecting will be enormous. I will pass to another matter which I think is extremely important. I wish to make some comments upon the way in which government tenders are called and dealt with by the Department of Administrative Services. During the Estimates Committee hearings I participated in the hearings of Estimates Committee F. The matter to which I wish to refer is recorded on pages 384 and 385 of the Hansard transcript of that Committee's hearings. During that session I asked some questions of a Mr Quinn of the Department of Territories concerning the procedure by which tenders are called for the supply of goods to the Cocos (Keeling) Islands. I asked Mr Quinn about the reasons for the failure of Mr John Clunies-Ross, Sr, to secure shipping contracts to supply the islands in spite of the extremely competitive freight rates which he was then offering. The departmental officer stated: It was a decision by Ministers that Mr Clunies-Ross's company not be considered in the tender process a couple of years ago. In response to my question `Are you able to say why the Ministers refused him this contract?' Mr Quinn said `No'. At this point the Minister attending the Committee stepped in and said that he was disallowing the question. It appears that he had shut the gate after the horse had bolted because it seems, from what has been revealed by the answers of Mr Quinn to my questions, that a directive from Ministers had been given that a specific company was to be excluded from consideration of government tenders. The whole matter raises serious questions about the right, if any, of the Ministers concerned to take this sort of decision. I have since discussed the matter with Mr Clunies-Ross who, as honourable senators may know, was bankrupted a few years ago. He informed me that not only were his companies excluded from consideration for tenders for supply of goods to the Cocos (Keeling) Islands, but the tender documents put out by the Department were marked to state specifically that the Clunies-Ross companies' tenders would not be accepted. Mr Clunies-Ross told me that it was made clear to him from discussions with departmental officers and the Minister at the time, Mr Uren, that this black ban was connected with the campaign to get Mr Clunies-Ross off the home island in the Cocos (Keeling) Islands. It seems fairly clear from the information available that the Minister was not taking the decision to exclude Clunies-Ross from tendering on any commercial basis. Clunies-Ross could offer very competitive rates as he had a lot of shipping business between Singapore and Perth. Because his ships were largely empty on the voyage to Singapore he could charge substantially less than the competition, which he had been doing. I am not aware under what authority the Minister gave his directive to the departmental officers. As far as I am aware, under the finance regulations contracts shall not be entered into until tenders have been publicly invited, except in certain exceptional circumstances. I do not think this was the situation in this particular case. As far as I can see, Clunies-Ross was a member of the public. The specific exclusion imposed by the Minister seems to amount to a clear contravention of the finance regulations. If some other authority for this decision can be pointed to, I would be interested to see it, but I do not see how the decision can be morally justified. It appears that an Australian citizen has been victimised by a Minister and the fortunes of the Clunies-Ross shipping company were certainly not helped by the actions of the Minister. Arguably, the implementation of the Minister's decision may well have assisted Clunies-Ross along the path to bankruptcy. I understand that when Clunies-Ross endeavoured to get justice the Ombudsman said that he could not investigate the matter because it was a directive of the Minister. It appears that ugly big government has destroyed another Australian because he was in the way of a government whim. I would be most grateful if the present Minister for Local Government and Administrative Services (Mr Uren) would care to clarify exactly how this situation arose and on what basis the Minister's decision was made. This is not the action of a democratic government but that of a harsh dictatorship. Surely Clunies-Ross must have some grounds for retribution. The final issue which I wish to address is that of funding of Aboriginal services. The funding to which I refer is not simply that which falls within the portfolio of the Department of Aboriginal Affairs, but funding through the very many other departments which provide services to Aboriginal people, such as the departments of Social Security, Health, Housing, Community Services and Employment and Industrial Relations. Funds are provided not only through these Commonwealth departments, but also through the departments of State and Territory governments and a great number of semi-government and statutory authorities. I must say from the outset that my remarks tonight should not be taken as an attack or an expression of opposition to the funding of Aboriginal services because far from opposing such funding I am very much in favour of it. It is a necessity of life, a responsibility of fellow Australians. The purpose of my remarks tonight is to bring attention to what I regard as a misdirection of funds, the result being that those Aboriginal people who most need assistance are often the ones who receive the least. I refer to responsible funding and controlled expenditure. Appropriation Bill (No. 1) which is before the chamber shows that the allocation for the administration of the Department of Aboriginal Affairs, the Aboriginal Development Commission and the Institute of Aboriginal Studies is in excess of $271m. Appropriation Bill (No. 2) shows further allocations to the Department totalling $39m. There we see the allocation of in excess of $300m within the confines of the Department. When one adds the funds within other Commonwealth portfolios, some of which are very heavily involved in funding Aboriginal services, and within the Territory and State departments and the various other bodies, one is looking at a much greater figure. I venture to suggest that it could be as much as double the Aboriginal Affairs budget-so it has been estimated by other authorities-and total spending could be in the vicinity of, say, $600m or more. Whichever way one looks at it, a lot of money is being spent on Aboriginal people. I think the question which must be asked is: What has it achieved? The answer, as far as I am concerned, is: Not nearly as much as it should have. I think the time has come for us to take a good long look not at how much is spent but at how government funds are spent on the welfare and the future of Aboriginal people. Massive amounts of money are being pumped into Aboriginal funding, but the money is not filtering through to those who need it most. Instead it is being eaten up in administrative costs, with only a very small proportion eventually getting to the people on the ground. While it is all very well for the Federal Government to say to its supporters or to grandstand overseas saying that it spends so many millions of dollars on Aboriginal people, it does not mean much in terms of the results of that expenditure. It probably gives the Federal Government and others a warm inner glow and a clear conscience to be able to talk about how much it spends, but success in improving the conditions of Aboriginal people should be measured in terms of actual results rather than the amount of money which is being spent. There is a need for a total review of the way in which Aboriginal funding is distributed. As I said before, there are an estimated 1,000 or even 1,200 departments, councils, commissions, offices, institutes, organisations, associations, committees, centres, funds, programs, boards, agencies, authorities, bureaus, schemes and services. The estimate of the number involved is not mine but rather is of the people who are involved in funding. It is apparent-common sense-that if there are hundreds of organisations there will be hundreds of administrators, hangers-on and leeches who are using up funds before those funds even get a chance to get to those on the ground. A full review of the functions which are performed by those various bodies needs to be undertaken to ensure that there is not duplication and waste which, if avoided, would free up funds to go to an effective and useful purpose for the benefit of Aboriginal people. The way things are at present, there is great scope for waste, duplication and double dipping. There is no check on who is paying what to whom and for what purpose. I am well aware that duplication of payments of social security benefits occurs to a great extent. While I am not having a go at the individuals who are receiving it-in this instance, anyway-I believe a lot of the trouble stems from lack of co-ordination of various programs. I am also not entirely sure that the priorities of those organisations are beyond question. The expenditure of $52,000 for an autobiography of Charles Perkins is not easy to justify when one considers that Aboriginal children are still suffering from malnutrition and living in the dust. There is no question that the money is being spent, but it is not being spent where it should be. I urge a total review of how funds are being spent, and I recommend that the starting point be the Department of Aboriginal Affairs, which is a mammoth organisation. The officers on the ground in remote areas do not have the capacity to carry out their duties and keep tabs on what is going on, despite the huge numbers within this Department and a huge payroll. What about the Aboriginal Development Commission? Was this not to be the operational head of Aboriginal services in Australia? It appears that it is being squeezed out as the massive bureaucracy of the Department takes over. The whole role of government support for Aboriginal people needs to be reviewed if there is to be any hope of bringing about an improvement in their lot. It is all very well to be able to say `Well, yes, child mortality rates are declining', but on the other hand the life expectancy of Aboriginal people is reducing, due to various problems with alcohol, petrol sniffing, road accidents and violence. It is ironic that we are saving more Aboriginal babies, only to see them die later prematurely as the victims of these epidemic, social and health problems. One has to be cynical when one considers the vast amounts of money spent and the reality of living conditions for very many Aboriginal people. The problem of petrol sniffing has been highlighted in the media recently, and it is clear that positive action is needed to deal with it. There has been far too much high flying, with conferences and meetings, and too little work on the ground. Positive action is called for. The Senate, as honourable senators will recall, established a select committee to look into this question, and it dealt with it very conclusively and, I believe, exhaustively, yet one wonders what action has been taken on its recommendations. Consider how we would react if a member of our families were carrying a tin can of petrol around his neck. We would take it away from him. The same should be done in the communities. These children are in low physical and mental condition. They need to be built up and treated as patients, for they are very sick people. They need to be cared for before reaching, say, the Alice Springs Hospital where there are now some 22 patients, mainly from northern South Australia. Death has occurred, and the hospital is overwhelmed and incapable of carrying out its normal operations. These Aboriginal youth require adequate food as well as something to keep them occupied. Many of their problems stem from boredom. They need sports programs, educational programs and the like, but there is much more to be done before they get to that stage. Co-operation between teachers, health workers, Aboriginal councils and Aboriginal parents is important. They all have to participate. The children need to be fed regular rations. We have to have kitchens set up, and we need supervision and discipline in a form of an out-of-doors hospital. The people who are encouraging the habit should be able to be removed if a complaint against them is lodged by the Aboriginal council. There must be more control of the accessibility of petrol. I believe the tribal elders have to be encouraged to get the younger people involved in tribal culture and bushcraft, having in mind that I am talking of remote areas; I am not talking about the towns. There is very little petrol sniffing in the towns. It will take a tremendous and well-organised effort. There has been a lot of talk for years about putting programs in place, but nothing has been done; there has been no positive action. Some will criticise what I am proposing and say that to take such positive steps to stop the sniffing is discrimination. How ridiculous! How foolish! This is a positive action to assist these people. The country is becoming very sick when it is said that there should be no prohibition on the use of, say, food vouchers which are intended for food purchases but which are used to buy tobacco and liquor instead. The vouchers are not allowed to be labelled to say that they cannot be used by buy tobacco and liquor because that, it is said, is discriminating. We are seeing the destruction of the fabric of the Aboriginal society because in the outback tribal law is breaking down; the elders are losing control; and an increasing number of young Aboriginal people are now in a void. If we are to achieve anything, we must stop talking all this nonsense and apply ourselves to the problem. As I have said, money is not all important. Nevertheless, Aboriginal funds are staying at the top of the tree where they are consumed by the gigantic bureaucracies which have been built up, so very little is getting down to the grass roots level where it rightly should be spent. Indeed, we live in the era of the haves and have-nots. The Federal Government has to learn that splashing money around is not the answer. In some situations it can make things worse. I was interested to see an article in the Australian on Friday, 7 November-last Friday. It was a comment by Senator Fred Chaney under the headline `Wise ways with charity'. His thoughts were directed to the sponsorship by the Anglican Church in Western Australia of a seminar called `Reconciliation 1988: Aborigines and Other Australians'. Part of the article, I think, is very pertinent. Senator Chaney said: The discussion will be- the discussion referred to is the seminar- less than productive, however, if it is not conducted with an understanding of what is likely to be required of all those who seek continued taxpayer support in light of the economic constraints facing all Australians-namely frugality and effectiveness. He went on to say: Frugality is essential when the whole community feels frugality is being thrust upon it. People in paid employment, many of whom are facing their own difficulties in making ends meet, will demand greater responsibility from government in the use of their tax dollars and from those who receive those dollars. Effectiveness will need to be demonstrated because waste of diminishing resources increasingly will be regarded as intolerable. He continued: Economic reality dictates the need for even more Federal Government spending restraint than we have had so far. In those circumstances, and particularly with respect to welfare spending, we need to know which government programs are succeeding. Where problems are being solved, rather than new ones created, there is ground for public sympathy and further government funding. I think those are quite wise words. To continue, I give just one brief example of how the maladministration or non-administration of funds can become a problem. I received a letter from an Alice Springs constituent recently. He is a small building contractor who built some houses for an Aboriginal community. The value of his work was $37,000. He did the work in July and has not been paid since. It seems that the community adviser has run up debts, including this one, to the value of $100,000 on the basis that money would be coming from somewhere. Well, the money was not there. Although the particular community is involved in an employment scheme, it did not have the funds to pay off debts of this magnitude and the debt should never have been incurred. I mention this instance as one example of what can and does happen when it is assumed, as it is by some organisations and individuals, that the various Aboriginal funding bodies are some sort of bottomless pit into which one need only dig to come up with another bucket of money. This should not be the way in which funding for Aboriginal people is approached, either by the people themselves or by those authorising the funding. There is, too, the situation in which, without exaggeration, millions of dollars have been lifted out of Aboriginal organisations, councils, co-operatives, et cetera, particularly by non-Aboriginals who have preyed on Aboriginal communities. In closing, I do not think any reasonable person would begrudge the funding of Aboriginal services. But I believe we are entitled as a nation to ask ourselves: Are we going about this in the right way? Personally, I do not think we are, and I believe that the way in which many Aboriginal people continue to live is evidence of the failure, at least in part, of what is being done. Senator COONEY(Victoria)(10.13) —I would like to make a few comments on what has been said, particularly by Senator Bjelke-Petersen, who I think mentioned a couple of points which need to be looked at. First of all, she spoke of the fringe benefits tax, saying that that robbed incentives. I want to come back to that. She then spoke about the family and the effect of taxation and government policies on families. I think the areas she dealt with are very significant areas because they go to what government, in a certain sense, is all about. They go, first of all, to the social impact that policies may have on the community and, secondly, to the economic effects that government and the taxes it imposes may have on the people who produce income. Those two areas, of course, are very significant areas. Whether the senator gave the right answers to those problems that she raised is another matter. Indeed, the Appropriation Bills open up a wide range of issues. That has been well illustrated by the speakers who have gone before me in the sorts of areas that they have looked at, and no doubt that proposition will be illustrated even further by those who come after me. However, the central theme to all the debates remains the same-it concerns the issues that government deals with. In recent times the debates that this chamber-and, indeed, both chambers-have been most devoted to are those that revolve around the economy. It seems to me that there are dangers in that sort of debate if it becomes exclusive, because it puts aside the sorts of areas that Senator Peter Baume, who is in the chamber, is interested in, such as moral, social and cultural issues which, in my view, are above and beyond the sorts of issues that are raised by economic debates. If the economy forms the only parameters given to debates, we tend to get a very soul-less, uninspired approach to things. People are treated like automatons because they are looked upon as units in some sort of economic sum. It is as if by increasing one particular aspect of the economy and taking away from another particular aspect salvation will come, and the whole treatment is very much one of looking at people not as they really are, as thinking, feeling, throbbing human beings, but as robots whose purpose is to man the office, shop floor and whatever else people consider they should be made to man. To a certain degree, that, I think, is the problem with this question of youth employment. One of the problems that we seem to have overlooked is the fact that children, young people and people in their early twenties are human beings with souls, aspirations and ambitions. Yet much of the debate we have gone on with says that these people should be forced into work and made to obtain jobs when in fact we do not have jobs to give them unless in some way we manufacture them. Surely if there were enough jobs in the community they would be filled up by the people who are presently unemployed, not only the young people but the older people as well. The fact that they are not and the fact that we have these young people in the situation many of them are in leads us more and more to label them with that rather dreadful term `dole bludger'. In doing that, I think we are being restricted too much, as I said, by the economic parameters and by that desire to get the economy going, while looking at the economy in terms of the number of people who have to get jobs, the number of jobs available, and the amount of money in the community. Looking at the economy in those terms we say: `If we can adjust this, if we can put these people here, this youth there and this young lady here, all will be well' without specifying actual and specific jobs that are available. While we are doing that we impose upon them quite severe, ruthless and unfeeling hardship. Of course there are people-as there must be, looking at the sort of evidence that has been brought into this chamber-who should be working and who are not. But to use them as an example to deduce or bring out a general rule is, as I said, quite ruthless and unfeeling and something we should think about as we use that as a form of debate in this House. Another approach which I think illustrates these points is this: There is a solemn declaration made again and again in this chamber that if we reduce wages the good times will come, as if to more or less present Australia with the cargo cult approach which existed in Papua New Guinea for a while. It was believed that planes would drop goods down from heaven, that they would be provided without effort to the people below, and that all would live happily ever afterwards. It seems that we often have that sort of approach in this chamber. The idea is put about that if wages are reduced, if we do this or that, in some way the good times will come without any further effort being made. However, that ignores the problems in our industry structure and our work culture that have operated in the past. It must be borne in mind that initiative does not come simply by making rewards greater, but by inculcating such an attitude into society, which up to now has not adopted that initiative in the industrial sphere. I want to say a few words about the approach that is involved in depressing the amount of money that is available. One understands that times are hard and that money is not as plentiful as it used to be. One also understands that there has to be some lowering in living standards for many people. But the fact that wages and incomes are reduced does not make any less unhappy those who as a result of reduced wages must lower the quality of food they buy or surrender their houses because they cannot pay the mortgage. This will not prevent the disappointment felt by children who are unable to go on school excursions, nor will it overcome the frustrated ambitions of many youths who cannot go on to university or other tertiary education and who otherwise might have been able to do so. One cannot overcome the fact that the quality of life in general is prejudiced by the decrease in availability of money and that the father and mother cannot bring into the house the sort of income they want to provide for their families. Therefore, great suffering and hardship is caused to the people concerned. When we talk here of the economic parameters, economic reality and the need to lower wages, we must remember that in so doing we are asking people to make great sacrifices. It is being said that those at the lower end of the scale, those who get less wages than others, will have difficulties in buying food, in housing, in looking after their children, and in enjoying the sort of life they enjoyed in the past. It seems to me that as a group perhaps we are not as compassionate as we might be in talking about the rigours that we as a parliament want to impose on people. We tend to talk in the rhetoric of the adversarial system, as if in some way we are conducting a court case in which one side puts up a proposition and the other side puts the contrary view. There is a division in the rhetoric in this chamber between capital and labour-almost a classical marxist approach. We do not use those words, but that is often what we mean. It is best illustrated in the analysis that is sometimes made about the way we should react to unions. It is said that if unions were in some way suppressed, if unions and their bosses could be crushed, that would enable the free market forces to flow. In that way, it is said, youth unemployment problems would be solved, business would become profitable, incentives would grow, and all would be well. Senator Siddons —I thought the Labor Party was sold on the free market forces philosophy. Would you please tell us? Senator COONEY —No. If one goes to the latest Australian Council of Trade Unions wages resolution-I do not say that this is the Government's approach but it is a proposition put forward by a very important part of the labour movement-one sees that the ACTU does not believe in that principle. What has been put even in the two-tier system is contrary to what has been said by Senator Siddons. On the two-tier system it is said that a flat rate to be decided by some formula that will be devised should be paid across the board and added to existing wages. In that way those people who are in danger of tumbling into poverty, disaster and distress will be protected to some extent from price rises. That is the first tier. The second tier, which is over and beyond that and subject to certain formulas that must be worked out, provides for more money to be added to the flat rate in respect of some people. That extra sum will be worked out within certain parameters and certain factors will be taken into account, such as people's ability to pay. In those circumstances justice will be done not only to the person paying but to the person receiving. I know that Senator Lewis is the last person in this chamber who would want to see people go without adequate pay for the work they do. Senator Siddons —You could have fooled me. Senator COONEY —Senator Lewis is a man with a great heart once one gets to know him well. He is not the sort of person who would stand aside and see wages so depressed that people could not live properly. Senator Lewis —It is your Government that wants to have this downgrading of wages all the time. Senator COONEY —Senator Lewis, that is not correct. We as a government want so to adjust wages as to enable people to live as decent human beings, to have enough income to exercise their economic, spiritual, moral, cultural and social aspirations. At the same time, the people who employ those workers and who hopefully provide the managerial skills will be enabled not only to let the desert flourish but also to let the economy flourish at every level, whether in manufacturing, in the rural sector or in the tertiary economy. The ACTU document is worth quoting in this context because it is interesting and inspiring. The document said: The ACTU would be prepared to accede to a maximum under this heading- that is dealing with the two-tier system- provided that the principles were acceptable and sufficiently flexible to allow widespread application; the government's economic and social policy was facilitating the achievement of the objectives of the Prices and Incomes Accord- let us remember that this is not only an incomes accord, but a prices accord, too- there is an acceptable increase in the general adjustment; no reduction in working conditions: award or over award such as 17.5 per cent annual loading, junior rates, penalty rates and unilateral extension of part-time and casual work; a continuation of the superannuation campaign. That document is saying that we as representatives of the work force are willing to be reasonable, provided that those who pay the wages are prepared to be reasonable. It is an indication that the trade union movement is willing to be more than reasonable to meet the present needs of the economy. The country needs the unions because if we do not have them we would go back to the days so eloquently described by Charles Dickens. Senator Siddons —Senator Cooney is still in the nineteenth century-laissez-faire politics by another name. Senator COONEY —That is not right. An agreement is being sought, and this is the difference in the policies of the Labor Party, the Liberal Party and the National Party. The Labor Party agrees to a negotiation at a particular level, but between equals-that is, between the ACTU, the unions and management. However, the Opposition puts forward a policy that such negotiations should take place between those in a very powerful position and those in a weak position-namely, between the employer and the employee direct. I have heard Opposition members put forward such suggestions and these are very much a nineteenth century approach to the question of just and proper wage levels. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator PETER BAUME(New South Wales)(10.30) —I rise tonight to raise a problem concerning a nursing home approval for the Lilydale Bush Nursing Home in Victoria. The Lilydale Bush Nursing Home is being set up with the support of the Lilydale and District Hospital on the outskirts of the suburban area of Melbourne. The Lilydale Hospital sought approval for capital funding from the Commonwealth Government for the building of the nursing home and this approval was granted in principle. I do not know when the approval was granted, but I take it from a letter that was written by the Department of Community Services that it must have been some time ago because the letter is in response to a request for additional time to establish the nursing home accommodation. The approval, granted by the Department of Community Services, has committed the Commonwealth to make a fixed capital grant of $600,000 towards the cost of building the nursing home. Once the approval in principle was received from the Department of Community Services, the promoters of the nursing home called for tenders to build the facility. They were told that it was in order to proceed to call tenders. Eight tenders were received and the lowest was $1.8m, which the Lilydale and District Hospital sought to accept. The tenders were put on the basis of a design which I am told had been approved by the Department when the application was first made for a capital grant. The tenders were then submitted to the Department of Community Services, as is required, with a request that the lowest tender be accepted. It is now some four to five weeks later and I am told by the promoters of the nursing home that they have received no official advice from the Department as to the fate of their application. They still do not know whether they can proceed on the basis of the tenders they have received and they have been told that unless building starts by 31 December they could lose the $600,000 capital grant. Unofficially the promoters have heard from the Government that the cost of the nursing home at $1.8m is too high on a per capita basis and that the grant will not be approved until the cost is reduced. A member of my staff has spoken to one of the officers of the Department, who has confirmed that advice. The question is: Why is this the case? A number of reasons could be suggested for the Department of Community Services taking this attitude-that it will not approve the grant because the cost of building the facility is said to be too high. The first could be that a comparison has been drawn between building a nursing home in the Lilydale area and what is said to be the more standard cost of building a nursing home in an inner suburban area. The Department may feel that it is too expensive. Perhaps the Department is using inner suburban figures. But if there were eight tenders submitted and if the Bush Nursing Association has tried to take the lowest of $1.8m on a design approved by the Department, I need to have explained to me why the cost is said to be too high. How can it be other than the going commercial rate in the area? That has to be the going commercial rate. Another suggestion that has been made is that the Department is using this easy or underhand way to slide out of its commitment in principle to grant capital funding to the nursing home. That argument has been put forward in the context of the move to give more emphasis to hostel rather than nursing home accommodation. I have been told by the Department that that is not the case and my office has so told the promoters. I hope that I have been correctly advised. I am concerned about a letter which was received by Mr L. G. Ashcroft, the Chief Executive Officer of the Lilydale and District Hospital, dated 4 July and signed by R. G. Lewis, Senior Assistant Director of the Residential Programs Branch of the Department of Community Services. This letter says, in part: However in view of the extreme delay in proceeding with the construction of the proposed nursing home accommodation it is unlikely that any further extensions will be granted if the building has not commenced before the expiry date-- That is, 31 December. The letter continues: In such circumstances your approval for capital funding would also lapse. It seems quite likely that any instruction to redesign the facility and call for new tenders would take the promoters beyond the 31 December deadline. It is a real catch-22 situation. The promoters called for tenders, they received eight and they selected the lowest tender. They asked the Department to approve it. They cannot start the building until approval is received. The Department has told them unofficially that it will not approve it because the tender is too high and it has also told them that if they do not start building by 31 December they will lose their grant. They are in a terrible position because they do not know what to do. They do not know what they can do. They simply want to get the building under way so that they do not lose the capital funding which has been offered. It seems quite likely that any redesigning or retendering that the Department may require will mean that the promoters cannot comply with the deadline. The Department must address that issue if its protestations of trying to help are to be believed out there in Lilydale. I am told that the real reason for the delay in approving the capital grant is the total cost of the nursing home. I am told that the Department will not allow public funds to be used to finance the building of nursing homes that are considered too lavish or too expensive. This is a grey area; it is a question of values. I was told that the Department had had experiences with certain buildings which it referred to as `Taj Mahals' and that it did not wish to approve those. I am not satisfied that this kind of scrutiny is necessarily proper. If the Department makes an approval in principle for the building of a nursing home, if it approves the plans, if it has the plans out to tender, if eight tenders are received, surely to goodness that is adequate for these people to get the lowest tender approved and be allowed to proceed with the building. At the moment they face an absolutely impossible position in that they cannot get approval to build, they cannot afford the time to go to retender and they look like losing their capital grant of $600,000 through action which they simply cannot see their way through. The question arises whether this refusal to fund facilities which the Department considers too expensive is an unnecessary interference with the building of nursing homes by groups such as this one at Lilydale. Where such groups wish to take appropriate action to build a nursing home they have to find the balance of the funds, after all. It is not the Department that has to find the money. The Department's subsidy is fixed. This sort of thing probably slows down approvals, adds to the amount of bureaucracy that is necessary in the process and makes the whole process more difficult. I have raised this matter informally with the Minister for Community Services (Senator Grimes) and I ask him again to look at this matter urgently because it is a real catch-22 situation in which this group of Australians find themselves. They simply want to get the facility built, they do not want to muck around, and they need some help from the Department if they are to go ahead. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.38) —Senator Peter Baume has made it clear that he has already drawn the attention of the Minister for Community Services (Senator Grimes) to this matter. No doubt his speech will add further fuel to the fire that he is stoking. I think that we can leave it to the normal processes to take their course in this matter. Question resolved in the affirmative. Senate adjourned at 10.38 p.m. The following papers were tabled: Australian Citizenship Act-Regulations-Statutory Rules 1986 No. 306. Australian Meat and Live-stock Corporation Act-Orders 1986- No. MQ 18-High Quality Beef to EEC-1987 Quota Administration Scheme, dated 24 October 1986. No. MQ 19-Sheepmeat and/or Goatmeat to EEC-1987 Quota Administration Scheme, dated 24 October 1986. No. MQ 20-Buffalo Meat to EEC-1987 Quota Administration Scheme, dated 24 October 1986. Bankruptcy Act-Rules-Statutory Rules 1986 No. 323. Compensation (Commonwealth Government Employees) Act-Regulations-Statutory Rules 1986 No. 308. Customs Act- Notice 1986-No. 11-Specified rate in respect to the diesel fuel rebate, dated 14 October 1986. Regulations-Statutory Rules 1986 No. 307. Defence Act-Determinations 1986- No. 64-Education Assistance Overseas. No. 65-Travelling Allowance and others. No. 66-Intermediate Term Duty Living Allowance and others. No. 67-Intermediate Term Duty Living Allowance and others. Excise Act-Notice 1986-No. 21-Specified rate in respect to the diesel fuel rebate, dated 14 October 1986. Export Control Act-Regulations-Statutory Rules 1986 No. 313. Family Law Act-Regulation-Statutory Rules 1986 No. 322. Federal Court of Australia Act-Rules of Court-Statutory Rules 1986 No. 324. First Home Owners Act-Regulation-Statutory Rules 1986 No. 312. Fisheries Act-Fisheries Notice-No. 173-Equipment for taking prawns off Fog Bay, dated 30 October 1986. Grain Legumes Levy Act 1983-Regulations-Statutory Rules 1986 No. 321. Grain Legumes Legumes Act 1985-Regulations-Statutory Rules 1986 No. 309. Health Insurance Act-Regulations-Statutory Rules 1986 No. 318. Judiciary Act-Rules of Court-Statutory Rules 1986 No. 305. Lands Acquisition Act- Land, etc., acquired for Telecommunications purposes-Ardlethan, NSW, dated 1 October 1986. Statements (2) by the Minister describing lands acquired by agreement under sub-section 7 (1) of the Act, for specified public purposes. Migration Act-Regulations-Statutory Rules 1986 No. 317. National Health Act-Regulations-Statutory Rules 1986 Nos 319, 320. Papua New Guinea (Members of the Forces Benefits) Act-Regulations-Statutory Rules 1986 No. 316. Postal Services Act-Postal By-laws 1986-No. 3-Postal (Amendment) (No. 3), dated 16 October 1986. Public Service Act- Determinations 1986 Nos 71, 75, 76, 77, 78, 79, 80, 81, 83. Regulations-Statutory Rules 1986 No. 314. Quarantine Act-Determinations under section 86E, dated 31 October 1986. Seamen's War Pensions and Allowances Act-Regulations-Statutory Rules 1986 No. 315. Seat of Government (Administration) Act- Determination under the Radiation Ordinance, dated 16 October 1986. Ordinances 1986- No. 66-Chiropractors Registration (Amendment). No. 67-Health Professions Boards (Elections) (Amendment). No. 68-Health Professions Boards (Procedures) (Amendment). No. 69-Betting (Totalizator Agency) (Amendment) (No. 2). No. 70-Coroners (Amendment). No. 71-Magistrates Court (Amendment) (No. 2). No. 72-Credit (Amendment) (No. 4). Regulations 1986-No. 24-(Motor Traffic Ordinance). States Grants (Petroleum Products) Act-Amendments of the Schedules to the subsidy schemes in relation to the States, dated 16 October 1986. Superannuation Act-Regulations-Statutory Rules 1986 No. 311. Telecommunications Act-By-laws-Telecommunications (Charging Zones and Charging Districts) Amendment No. 72, dated 8 October 1986. Trade Practices Act-Regulation-Statutory Rules 1986 No. 310. Veterans' Entitlements Act-Statements (3) by the Minister under sub-sections 90 (4) and 91 (2), dated 1 November 1986. GOVERNOR-GENERAL'S PROCLAMATION-COMMENCEMENT OF SECTION OF ACT: A Proclamation by His Excellency the Governor-General was tabled, notifying that His Excellency had proclaimed the following section of an Act to come into operation on the date specified: Australian Federal Police Amendment Act 1986-Section 3-1 December 1986 (Gazette No. S 577, 10 November 1986).