Friday, 14 November 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 9 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth:- That there is widespread community concern about the proposal to irradiate food in Australia Your petitioners, most humbly pray that the Senate in Parliament assembled, should:- 1. Block the introduction of food irradiation into Australia and 2. Ban the import of Cobalt-60 and Caesium 137 and Caesium 134 to be used to irradiate food products. And your petitioners as in duty bound will ever pray. by Senator Robertson (from 34 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:- 1. That the Bill of Rights will have the power to override and negate our Common Law within five years of its enactment. 2. Because the Bill of Rights is based on an International Covenant, this will take the control of our country out of the hands of the people and their democratically elected representatives, giving the power to those outside Australia. Your petitioners therefore pray: 1. That the Senate rejects the Australian Bill of Rights and all cognate Bills. 2. That as our representatives, you protest our Australian Heritage and Christian culture and values, both in the Education System, and through the Media. And your petitioners as in duty bound will ever pray. by Senator Robertson (from 55 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned citizens of Australia respectfully showeth objection to the Metric system and request the Government to restore the Imperial system. And your petitioners as in duty bound will ever pray. by Senator Bjelke-Petersen (from 22 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that whereas: (a) Aboriginal and Islander languages, which numbered approximately 260 when Europeans first arrived, are even more seriously endangered-already 145 have become extinct. (b) English-speaking population expansion and English-speaking mass media expansion threatens the survival of the remaining languages of Australia. (c) Aboriginal languages reflect an ethos that is truly Australian and unless steps are taken to implement language maintenance, this ethos will be lost not only to Aborigines but to non-Aboriginal Australians, and to the world. We humbly pray the Government to: 1. Through the Prime Minister's Department, provide $300,000 per annum for a guaranteed period of ten years to enable the Aboriginal community of Australia to establish a co-ordinating body to implement steps to prevent the extinction of the remaining languages, and to introduce programmes which will enable these languages to continue into the future for the sake of all Australians. This body will enable us to maximize existing financial, material, and human resources, and is the least expensive way of implementing urgently needed maintenance programmes. 2. Through the Prime Minister's Department, provide finance for the establishment of Regional Language Centres-ten are urgently needed-cost $200,000 each. And we pray you may be conscious of God's sovereign purposes for our Nation and your petitioners in duty bound will ever pray. by Senator Messner (from 31 citizens). To the Honourable the President and members of the Senate in Parliament assembled: We, the undersigned are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1. Its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2. Its capacity to seriously worsen unemployment through the additional costs it imposes. 3. Its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4. In that it may compel many honest and decent citizens to defy tax in order to preserve their livelihoods, their businesses and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefits Tax legislation forthwith. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 74 citizens). 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 Mason (from eight citizens). To the Honourable the President and members of the Senate in Parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth Government 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognise that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection, storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving `property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects, namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 33 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of certain citizens of South Australia respectfully showeth: That all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. That the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Senator Robertson (from 13 citizens). To the Honourable the President and members of the Senate assembled, the petition of certain citizens of Australia respectfully showeth opposition to cuts in English as a Second Language (ESL) teaching, the scrapping of the multicultural education program, the amalgamation of the Special Broadcasting Service (SBS) with the Australian Broadcasting Corporation (ABC), and the abolition of the Australian Institute of Multicultural Affairs (AIMA), as announced in the Federal Budget of August 19, 1986. Your petitioners request that the government will review and reverse its decisions on these matters. And your petitioners in duty bound will ever pray. by Senator Robertson (from 14 citizens). Senator ROBERTSON(Northern Territory) —by leave-I present to the Senate the following petitioning letter from 59 citizens of Whalan, New South Wales, requesting that the Australian Bill of Rights Bill 1985 be withdrawn: The Anglican Church of Mount Druitt 40 Halinda Street, Whalan 2770 Telephone: 625 9374 St. James' Whalan St. John's Mount Druitt The Hon. Douglas McClelland Parliament House Canberra, 2600...10th August 1986 Dear Senator, The signatories to this letter are all members of the congregation of St. James' Anglican Church, Whalan, N.S.W. We write to express our strong disapproval of the Bill of Rights and to ask that you influence your Party to either withdraw the legislation in the forthcoming session of the Senate or at the very least, to put the Bill to the people of Australia in a Referendum. We object to the Bill of Rights on the following grounds: (1) The rights and freedoms set forth in the Bill are expressed in very general terms which are ambiguous and imprecise. (2) The powers given to the judiciary in respect of legislation deemed inconsistent with the Bill, involves a diminution in the authority of our elected Parliaments. (3) The Bill is silent on some very basic human rights: the right to own private property and the right to life from conception are but two. (4) The Human Rights and Equal Opportunity Commission is given extensive power, indeed, dangerous power, in a democracy. We, the undersigned, are deeply concerned about the future of our nation in general and about the Bill of Rights in particular. We trust that you will think again the Bill that could well deny the very rights it seeks to preserve. With the assurance of our prayers. Petitioning letter received. Petitions received. Senator HAINES(South Australia-Leader of the Australian Democrats) —I give notice that, contingent upon the Senate on any day concluding its consideration of any item of business and prior to the Senate proceeding to the consideration of another item of business, I shall move: That so much of the Standing Orders be suspended as would prevent the Leader of the Australian Democrats (Senator Haines) moving a motion relating to the conduct of the business of the Senate. Senator COONEY(Victoria) —Pursuant to my notice of intention given yesterday, I now withdraw Business of the Senate Notices of Motion Nos 2 to 12 standing in my name for this day relating to the disallowance of the Crimes (Amendment) Ordinance 1986 as contained in Australian Capital Territory Ordinance No. 15 of 1986, the Public Service Regulations (Amendment) as contained in Statutory Rules 1986 No. 130, the Air Navigation Regulations (Amendment) as contained in the Statutory Rules 1986 No. 141, the Navigation Orders (as contained in Navigation (Orders) Regulations Orders Nos 5 to 11 of 1986), the Defence Determination No. 46 of 1986, the Crimes (Amendment) Ordinance (No. 3) 1986 (as contained in Australian Capital Territory Ordinance No. 37 of 1986), the Credit Regulations (Amendment) as contained in Australian Capital Territory Regulations 1986 (No. 17), the Long Service Leave (Building and Construction Industry) (Amendment) Ordinance 1986 as contained in Australian Capital Territory Ordinance No. 55 of 1986, the Domestic Violence (Miscellaneous Amendments) Ordinance 1986 as contained in Australian Capital Territory Ordinance No. 53 of 1986, the Motor Omnibus Services (Amendment) Ordinance 1986 as contained in Australian Capital Territory Ordinance No. 48 of 1986 and the Motor Omnibus Service Regulations (Amendment) as contained in Australian Capital Territory Regulations 1986 No. 13. Senator COONEY(Victoria) —Pursuant to standing order 109a, I give notice that it is my intention after Question Time to withdraw Business of the Senate Notice of Motion No. 1 standing in my name for the disallowance of the Children's Services Ordinance 1986 as contained in the Australian Capital Territory Ordinance No. 13 of 1986. I seek leave to make a short statement. Leave granted. Senator COONEY —The Standing Committee on Regulations and Ordinances has been scrutinising the Children's Services Ordinance 1986, which is a long, detailed and very significant ordinance dealing with the welfare of children in the Australian Capital Territory. The Committee raised with the Minister for Territories (Mr Scholes) a number of concerns under its principles of scrutiny. It also held two in camera hearings with, among others, the Chief Magistrate of the Australian Capital Territory, and the Law Reform Commissioner upon whose report the ordinance is based. The matters of concern to the Committee related to the following issues: Uncontrolled extensions of the powers of the youth advocate; the need for representative membership of the Children's Services Council; the need for a magistrate to have discretion to deal with certain defendants over 18 years of age whose alleged offences occurred before that age; reasonable limits on police powers to enter premises and determine who should be present when a child is interviewed; the need for parents to be told where a child is being held in custody; the need for express protections when identifying material like blood or fingerprints is to be taken from a child; the power of the police and the youth advocate to hold a child in detention for up to 48 hours before there arises any need for judicial intervention; the need for parents to have a right to apply to a court to seek the release of a child as soon as it is taken into custody as allegedly being in need of care; the need for a right of appeal to a magistrate against certain administrative decisions touching on the religious interests of a child; the need for law enforcement officers to carry and use proper photographic identity cards; the need to ensure that before a child is removed from an un- licensed child minder the parents will be warned that this will happen rather than learn of it after the event; the provision of Administrative Appeals Tribunal review of certain decisions affecting applicants for licences to be a child care provider; and, finally, the need for the tabling in Parliament of State-Territory agreements on child care. As the Senate will realise, the Committee has conducted a quite extensive review of this Ordinance under its limited principles of scrutiny. Indeed, the Minister for Territories and his private office and departmental staff have extended to the Committee a quite outstanding measure of co-operation, advice and assistance with this task, and they have done so with the dual commitment to protect children's interests as well as their rights. The Minister has undertaken to make a number of very important changes to the Ordinance in the interests of protecting, as far as reasonably possible, the rights of individuals, including parents, but particularly the rights of children, who are the Minister's paramount concern in relation to this Ordinance. The Committee, having scrutinised the Ordinance more thoroughly than it has scrutinised any previous legislation in recent times, has no further objection to it under its principles. The Minister has given undertakings to amend the Ordinance, and he is to be commended for the way in which he has dealt with the Committee and ultimately acted decisively to protect rights. For the public record, I think it would be proper to table the Committee's correspondence on this important legislative scrutiny. I therefore seek leave to table these documents. Leave granted. Senator COONEY —I table the corres- pondence. Senator LEWIS(Victoria) —Pursuant to standing order 109a, I indicate to the Senate that I do not wish Business of the Senate Notice of Motion No. 1 relating to the Children's Services Ordinance 1986 to be withdrawn, and I wish my name to be put on the notice of motion. I seek leave to make a short statement of explanation. Leave granted. Senator LEWIS —As Senator Cooney has pointed out to the Senate, the Children's Services Ordinance 1986, relating to the manner in which children in the Australian Capital Territory will be dealt with, is a very significant step in the handling of the welfare of children. I wish to take over this notice of motion because the Opposition has some reservations about the number of issues of policy relating to the Ordinance. The Ordinance is, as I have said, very important for the welfare of the most vulnerable group of people in our society-our children. Indeed, it breaks much new ground, and for that reason it is necessary that the very novel mixture of legal, administrative and judicial procedures contained in the Ordinance does not operate in any way that is detrimental to children. For that reason and because of a range of quite new and experimental initiatives in the Ordinance, the Opposition has decided that the operation of the order and its effects on children should be subject to a genuine ongoing review. I have asked the Minister for Territories, Mr Scholes, who, as Senator Cooney has pointed out, has been very co-operative with the Senate Standing Committee on Regulations and Ordinances and whom I believe will be co-operative with me, to subject the Ordinance to a four-year sunset clause to ensure that such a fundamentally important piece of legislation is subjected to a mandatory review and, if necessary, overhaul after a reasonable period of operation. I have discussed this matter with Senator Vigor, and I understand that the Australian Democrats agree with the Opposition parties that a four-year sunset clause should be inserted. Indeed, it is my belief that members of the Government also believe that there ought to be a four-year sunset clause. Accordingly, I am waiting on the Minister's final response in relation to this proposal. I believe that some time during the day the Minister will indicate to me agreement to insert a four-year sunset clause into the Ordinance, so it is probable that later today I will be seeking to withdraw the notice. Senator GARETH EVANS(Victoria-Minister for Resources and Energy) —by leave-I can put Senator Lewis out of his misery right now. I am advised by the Minister for Territories (Mr Scholes) that, while he is happy, after a period of four years, to set in train a major review of the operation of the Children's Services Ordinance, he is not willing to accede to any suggestion that the Ordinance contain a sunset clause. There are a number of reasons for that basic stance, the most basic of which, I suppose, is that in the event that the legislation were to terminate at the end of that period- and there are all sorts of contingencies with which we are all entirely familiar which could result in the sunset clause taking effect without continuity arrangements having been put in place-not only would there not be the new apparatus of administrative and welfare-type provisions to which Senator Lewis has drawn attention but also there would not be any Children's Court at all and no powers in existence to protect abused or neglected children. We are talking here about a combination of machinery and rules which are really quite fundamental for the protection of children in this society. We are not talking about some body, such as the Commission for the Future or the Human Rights Commission, or the other statutory authorities responsible for particular programs, about which there may be concern expressed from time to time and a reasonable desire to scrutinise thoroughly, against the backgrounds of the discipline of a sunset clause, their continued existence. We are talking about something absolutely fundamental to the effective administration of this society, and we believe that a sunset clause, whether it is to operate as originally proposed by Senator Lewis after two years, which would have been totally inappropriate because of the way in which this legislation is being phased in over time and the need to accumulate a body of experience in its application, or whether we are talking about a longer period, such as four years, for the reasons I have indicated the newly fashionable mechanism of a sunset clause is simply inappropriate in this particular context. I give the undertaking on behalf of the Minister for Territories that there will be a full-scale review of this legislation, but not in the context, for the reasons I have mentioned, of a sunset clause. Whatever private deal Senator Lewis might have had with the erratic Senator Vigor which may have come unstuck, that is a matter for Senator Vigor and the Australian Democrats to untangle with him. I can say, however, on behalf of the Government that the position is as I have described. The Minister is not prepared to accede to any such request. There is no point in delaying until a later hour this day consideration of this motion. If Senator Lewis wants to go ahead and move the motion, I suggest that he do so and that we put the matter to a vote and determine it here and now. Senator Lewis —Yes, put it to a vote. The PRESIDENT —Order! I think that it comes after the introduction of messages. Motion (by Senator Macklin) agreed to: (1) That, unless otherwise ordered, where a Bill is introduced by a Minister or is received from the House of Representatives, after 19 November 1986, and a motion is moved for the second reading of the Bill, debate on that motion shall be taken to be adjourned upon the conclusion of the speech of the Senator moving the motion, and the resumption of the debate shall be made an Order of the Day for the first day of sitting in 1987, without any Question being put. (2) That immediately after debate on a motion for the second reading of a Bill is adjourned in accordance with paragraph (1), or following the giving of notices on a subsequent day, a motion may be moved without notice to refer that Bill to a standing committee for inquiry and report by a day not later than the first day of sitting in 1987. (3) That this Order cease to have effect at the commencement of the first day of sitting in 1987. Bills received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Bills being put in one motion at each stage and the consideration of all or several of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Gareth Evans) read a first time. Second Readings Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(9.16) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) AMENDMENT BILL (No. 3) 1986 Volume 4 of the Report of the Commonwealth Tertiary Education Commission (CTEC) for the 1985-87 Triennium was tabled in the Parliament on 22 October 1986. The Report responds to the Government's Supplementary Guidelines announced on 19 August 1986, and makes recommendations on the distribution of additional funds for universities, colleges of advanced education and institutes of tertiary education for 1986 and 1987, and the Commonwealth's contribution to TAFE systems for 1987. This Bill gives effect to the Government's decisions on the Report. The Bill seeks appropriation of an additional $414.7 million comprising: $19.6 million in additional grants for higher education for 1986 and 1987, including recurrent grants for The Western Institute in Melbourne, the first institute of tertiary education within the Commonwealth programs of assistance for tertiary education: $305.7 million for the TAFE sector in 1987; and $89.4 million for adjustments for cost increases to existing grants for all sectors consistent with Government policy on retrospective cost supplementation for education grants. The distribution of the additional higher education grants for 1986 and 1987 is as recommended by CTEC. The key features of the increased triennial program for the States and Northern Territory for higher education are: a further increase of intakes of some 3,000 in 1987, 1,000 more than previously planned. In total an additional 29,600 higher education places will have been created over the triennium. Some 90 per cent of the new intakes in 1987 will be directed to courses relevant to future economic growth, in particular, engineering, applied science, computing, economics and business studies; 200 of the new places in 1987 will be set aside for Aborigines which, together with the intakes and provisions made in earlier years, will result in some 1,050 places being earmarked for Aborigines in 1987; 50 places will be provided for initiatives in higher education in Northern Queensland involving co-operative arrangements between TAFE colleges in Mackay and Cairns and James Cook University of North Queensland and Capricornia Institute of Advanced Education, respectively; 40 places will be provided for higher education initiatives in North-West Tasmania involving co- operative arrangements between TAFE colleges in Devonport and Burnie and the University of Tasmania and the Tasmanian State Institute of Technology; a contribution of $0.75 million will be made towards the construction of the Macquarie University Graduate School of Management; and the Special Assistance for Students Program is to be extended to include students in advanced education courses in institutes of tertiary education, at TAFE institutions and at Northern Territory tertiary education institutions. In the TAFE program for 1987, increased funding will be provided for fees reimbursement grants, from $96.8 million in 1986 to $102.7 million in 1987, while designated grants for special course provision and equipment grants will be maintained at the same real level as in 1986. An additional $4.0 million will be made available in 1986-87 for minor works and equipment to assist in the provision of the off-the-job training component of the Australian Traineeship System. TAFE capital grants totalling $138.3 million will be provided for 1987. This amount includes funds to commence construction of 16 new projects and designs of 7 new projects as well as providing further funding for 51 continuing projects. The Bill also provides for continuing support for the concept of ``institutes of tertiary education'' as multi-sector institutions. Recurrent funds for 1986 and 1987 are provided for the first such institute, the Western Institute in Melbourne, under a new category of recurrent grant. A grant of $0.2 million is provided as an initial contribution towards the construction of facilities for the Western Institute. The Commonwealth will be contributing $2 million to this project with the balance-at least $2 million-to be provided by the Victorian Government. This new institution, to provide both TAFE and higher education courses, will be an important advance in expanding education opportunities for people in the western suburbs of Melbourne. I commend the Bill to the Senate. STATES GRANTS (EDUCATION ASSISTANCE-PARTICIPATION AND EQUITY) AMENDMENT BILL (No. 2) 1986 The purpose of this Bill is to amend the States Grants (Education Assistance-Participation and Equity) Act 1983 to supplement for cost increases the grants available to government and non-government education authorities in the States and the Northern Territory to conduct projects and programs under the Participation and Equity Program in the years 1986 and 1987. The Bill also provides new schedules for 1987 showing the allocation of funds to the States, the Northern Territory and the education sectors. The cost supplementation proposed is in accord with the Government's undertaking to provide retrospective cost supplementation for this program. The adjustments are consistent with those being made to the States Grants (Schools Assistance) and States Grants (Tertiary Education Assistance) Amendment Bills which are also before the House today. The financial impact of this Bill will be to provide an additional $0.741 million in 1986 and an additional $1.476 million in 1987. Total provision for the Participation and Equity Program is $43,987,000 in 1986 and $44,722,000 in 1987. I commend the Bill to the Senate. STATES GRANTS (SCHOOLS ASSISTANCE) AMENDMENT BILL (No. 2) 1986 The main purposes of this Bill are to amend the States Grants (Schools Assistance) Act 1984 to implement decisions in the recent Budget on Commonwealth programs for schools in 1987 and to supplement for cost increases grants already appropriated for schools programs. The detailed appropriations for specific purpose and capital programs for government and non-government schools in each State and the Northern Territory give effect to the Government's decisions on the Commonwealth Schools Commission's Report for 1987 which was tabled on 22 October 1986. The 1984 Act already contains the per capita grants under the General Recurrent Program for government and non-government schools for the period 1985-88. This comprehensive long term program was retained intact in the recent Budget and continues to provide authorities with stability and security in the planning of school operations. In the area of the Commonwealth's special education programs for the handicapped, the Government has accepted the Commission's proposals for the restructuring of some programs. This will entail the integration, into a joint program, of the existing separate elements for Early Special Education, and the establishment of single State level committees to co-ordinate the administration and allocation of funds for this program along with programs for Special Education Services, Severely Handicapped Children, Children in Residential Institutions and Special Education Recurrent Grants for Non-government Schools. The Government has also accepted the Commission's proposals for phasing in over a number of years more equitable bases for the distribution of funds for these programs between States and Territories so that allocations will closely reflect the needs of groups being assisted. For the English as a Second Language General Support Program, the Bill incorporates an additional $4 million in 1987 to support English language teaching. These funds have been distributed between government school systems in the States and Territories on the basis of the number of students of non-English speaking background, the same basis as that used for the existing program. In relation to the out of hours element of the Ethnic Schools Program, the Schools Commission recommended that, in the context of the development of a National Language Policy, further consideration be given to the continued administration of this element as a ``Schools'' program. At the present time, given the advanced stage of work on a National Language Policy, the Government does not propose to accept this recommendation. The Bill appropriates $1.8 million for the Projects of National Significance Program in 1987 and approval of allocations for particular activities under the provisions of the Act will be determined by the Minister in the normal way. All the other recommendations of the Commission in its Report for 1987 have been approved by the Government. The Bill also provides for a number of technical amendments. These include a requirement for government and non-government school authorities to provide appropriate recognition of the funding provided by the Commonwealth in respect of building and equipment projects for the Commonwealth in respect of building and equipment projects for schools serving predominantly Aboriginal Communities; provision for non-government schools and systems to furnish original documents, if required, relating to the accountability provisions under the general recurrent grants program; and provisions to enable the results of amalgamations or separations of schools to be included on the list of non-government schools for grant purposes. The financial impact of this Bill will be to appropriate an additional $19 million for 1986, $418 million for 1987 (bringing total funding for 1987 programs to an estimated $1614 million), and an additional $47 million for 988. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Message received from the House of Represenatives intimating that it had agreed to the amendments made by the Senate to this Bill. Motion (by Senator Lewis) agreed to: That Business of the Senate, Notice of Motion No. 1, standing in the name of Senator Lewis and relating to the disallowance of the Children's Services Ordinance 1986, be postponed till a later hour this day. Senator DURACK(Western Australia)(9.18) —I move: That Regulation 4 of the Companies Regulations (Amendment) 1986, as contained in Statutory Rules 1986 No. 247 and made under the Companies Act 1981, be disallowed. The purpose and effect of this motion would be to disallow new regulations made under the Companies Act which came into force on 1 October last. Their main purpose is to repeal the existing schedule of those regulations and to substitute a new schedule. This new Schedule is a massive document, appended to part of the new regulations. It deals with new accounting rules for companies. As I said, the purpose of this motion is to disallow the new schedule. Even though the new schedule is the major part of these new regulations, it is, in fact, only part of them. The Senate, of course, has the power to disallow part of a regulation even though it cannot amend it. The difficulty that the Opposition faces in this matter is that we do not disagree with the whole of the new Schedule. It is good in parts. Unfortunately it has some grave deficiencies and it is not possible to move amendments to the Schedule under the existing power that we have to disallow regulations. The Opposition is having to move the disallowance of the whole of the new Schedule in the hope that if that is successful the Government and Ministerial Council will adopt a new approach to this whole question of enforcing accounting standards. The new schedule has some favourable features, the main one of which is a reduction in the reporting requirements for the majority of companies and in particular exempt proprietary companies, which cover 90 per cent of all companies. The reduction in the reporting requirements is welcomed by the Opposition. We do not object to that but unfortunately we cannot separate that from our other objections to the Schedule. Our main objection is that there are much greater disclosure requirements for large companies which are defined as listed corporations, borrowing corporations and companies other than exempt proprietary companies with gross assets exceeding $10m or gross operating revenue exceeding $20m a year. They will be required to disclose a great deal of information about the directors' and executives' total remuneration, significant trading relationships, superannuation provisions, valuations of assets and relationships with associated businesses and other corporations. These new requirements have brought strong objections from a whole range of organisations and people involved in the administration of companies. In particular they have come from leading business organisations such as the Business Council of Australia, the Institute of Directors, the Confederation of Australian Industry, the professional accounting bodies and the Australian Accounting Research Foundation, which is a most prestigious organisation supporting accounting standards. There has been very serious objection from experts in the field and it is clearly a case where the Ministerial Council and the Government should think again. The Schedule itself has been developed through the Ministerial Council, which means the State and Commonwealth companies offices. It is not a scheme which has been developed through the accounting bodies themselves and its professional accounting standards research body, and it has not been developed through the Government's ministerial scheme of final approval to accounting standards being given by the Accounting Standards Review Board, the annual report of which has only recently been tabled in this Parliament by the Government. I refer to that report because it sets out the valuable and important work being done by this new statutory body. Its establishment has been a major development in company law in recent years and has received the approval of the Ministerial Council and of this Parliament. That is the proper way in which accounting standards should be developed and approved. Yet here we have a completely different approach-the old fashioned approach of strict legislative, convoluted, complex regulations which have been a feature in this area of accounting standards in company law in the past. This development is now provided for, yet the new Schedule follows the old approach and seems totally to ignore the new approach foreshadowed by the establishment of the Accounting Standards Review Board. The Opposition has objections to the way in which this has been done and it has objections to the approach of Schedule 7. The Government's approach maintains great legal complexity and detailed legislation rather than establishing standards. It imposes strict formats for profit and loss accounts and balance sheet requirements and these are inconsistent with the approach that has been made, particularly in Canada and the United States, which are the two countries at the forefront of accounting research. This pro forma type reporting has also been rejected in New Zealand and the United Kingdom. Indeed, the only major group with our form of company law and regulation which seems to be adopting this is the European Economic Community. The exposure draft itself has not been given sufficient consideration. There has not been sufficient time given to its consideration. It was developed through the Ministerial Council, which means the companies officers of the various States and the Commonwealth. It was made available to the professions and to business in December 1985 and submissions on it had to be made by 28 February 1986. That was a very short period. It is also a very unsatisfactory time of the year for any bodies to be able to devote to full consideration of matters of this complexity. Indeed, the bodies did reply and, as a result of their comments, major changes and improvements were made in the exposure draft. Nevertheless there are these major deficiencies still in the Schedule. I wish to deal briefly with the major deficiencies that we see, even assuming that we thought this was the right approach. However, I want to emphasise that we in the Opposition believe that this is the wrong approach. The major defects relate to the new and greatly expanded disclosure required of major corporations and particularly the disclosure of salary packages of the directors of listed corporations and of the five most highly paid executives of those corporations. Again, these requirements go far beyond those of other countries and a large enterprise that comes within the definition of a listed corporation will obviously have a number of subsidiaries, even sometimes inoperative subsidiaries. Senior executives at various levels in a company of that size tend to be directors of subsidiary companies. These requirements for disclosure of the remuneration of directors of those companies and of the five most highly paid executives could result in disclosure of remuneration packages of literally hundreds of executives. This will not apply just to the senior executives; it will go right down to the middle management of these companies and hundreds of executives will have their salary packages-not just their remuneration-required to be disclosed. They will be identified by name and, as I have said, the full details of their salaries will be provided. Of course, the provision not only will make it far more onerous for the company but also it will result in public knowledge of salary levels within the corporation to a great extent. We can well understand the reasons why this Government wants to be so intrusive but the extraordinary irony is that on the very day we are debating this matter this Government has introduced a privacy Bill which no doubt we will be debating shortly. On the one hand, the Government is recognising a principle of privacy-albeit in a limited fashion but nevertheless it is giving legislative recognition to people's privacy requirements and their feelings-yet here, on the other hand, it is breaching in a most intrusive way what is essentially private information about people working for private companies, not even for governments. This will also probably have the ironic effect of creating greater increases in salary levels in the corporate sector. People will know what companies are paying, creating problems because of the move for comparative wage injustice that has become endemic in the community, with the encouragement of the trade union movement and Australian Labor Party governments. In the opinion of the business community this sort of information will result in an overall increase in salary levels in the corporate sector. These sorts of price lists will give executive search firms a field day. Senator Macklin —But they do not have to have the individual executive amounts, only an aggregate. Senator DURACK —The point is they have to provide the directors' salaries, and quite minor executives often become directors of subsidiary companies. That is the point I was making earlier. So altogether it is a very intrusive provision and, apart from the breaching of privacy principles, it will have undesirable economic consequences which the Opposition would have thought the Government would want to resist and certainly not encourage. The Opposition has other objections to the details of the new provisions. I will not go into them in any detail; I just mention them because I do not want it to be thought that the Opposition is simply concerned with this particular aspect of the legislation. We are opposed, as the people in the corporate sector I have described who have expressed their strong views are opposed, to the disclosure required of significant volumes of business with particular parties. Regardless of whether or not the viability of a company depends on a relationship, it has to be disclosed. The test of what is a significant volume of business is ambiguous. It could be anti-competitive, as could another requirement-namely, the disclosure of the separate contribution of the profit and loss of companies in which the disclosing company has a material interest. There are, as I have said, requirements to disclose the superannuation arrangements of directors and employees, and to give recent valuations of interest in land and buildings which can also contain significant ambiguities and to which widespread objections have been voiced. The Opposition strongly prefers a different approach to these matters, as does the industry and the professional accounting bodies. We would prefer to see the development of the approved accounting standards which are already in place. That is the policy of the legislation and of the Ministerial Council. This can be backed where necessary by legislative action. We think that this new Schedule is an unhappy and unjustified return to the old technical approach and that a new and different approach, which has already been legislated for and which is operating successfully, as one can see from the recent report of the Accounting Standards Review Board, should be adopted for the present and the future. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(9.35) — The Government resists this motion for disallowance. There is a certain irony in Senator Durack moving it in the way in which he did, arguing that the matters dealt with in these regulations ought to be the subject of accounting standards rather than regulations because one of the characteristics of accounting standards is that they are not subject to any disallowance by the Parliament, only by the Ministerial Council for Companies and Securities, with the legislative process having no role at all in determining the content of such standards. Senator Durack seems to want to abdicate completely parliamentary or governmental authority in relation to these things rather than accept the responsibility, as we all must, in a democratic parliamentary system to take policy responsibility for these matters of great moment. The new Schedule to the companies regulations has in fact evolved over a period of-- Senator Durack —What responsibility does Parliament exercise on your approach to these matters? Senator GARETH EVANS —A great deal. We are up here defending these particular measures in public and not hiding behind whatever it is that the business community wants to put up in its own interests without regard to the overriding public interest. It is proper that these matters be dealt with in forums of this kind and we are perfectly happy to explain and justify whatever policy decisions we take. This particular set of policy decisions has, as I have said, evolved over a period of almost four years. There is no question of its being sprung in any alarming or improper way upon the business community. The proposals were exposed for public comment on two occasions during that period right back in 1983 in the form of a National Companies and Securities Commission Green Paper and again in 1985-86 in the form of draft regulations. While it certainly cannot be denied that the new Schedule imposes a number of additional reporting obligations on some companies, this is largely a reflection of the changes in overseas views-in the United Kingdom and the United States of America particularly-of what constitutes good reporting during the 15-year period in which the Australian requirements stood absolutely still. But let us put the new requirements in perspective. The new Schedule introduces significantly reduced requirements for all exempt proprietary companies, which make up about 95 per cent of all Australian companies. In future, these companies will only have to prepare a profit and loss account and balance sheet and provide notes about commitments for expenditures, contingent liabilities and, where auditors have been appointed, auditors' remuneration. All of the remaining public companies and proprietary companies in which shares are owned by public companies or overseas corporations will have to provide the following additional information over and above their existing disclosure requirements; that is to say details of asset valuations where they are supported by guarantees, warranties or indemnities; particulars of payments to prescribed persons or prescribed superannuation funds and details of directors' remuneration. In addition, certain additional information has to be provided by listed companies, borrowing corporations and other large companies. The Ministerial Council has judiciously balanced this combination of exemptions and new requirements on the basis that the benefits flowing from the substantial reductions in disclosure requirements that apply to the exempt proprietary companies far outweigh the alleged disadvantages of bringing the disclosure requirements of the other categories of companies more closely into line with overseas requirements. The Opposition has talked, particularly through the thundering and the Press release warfare conducted by the shadow Attorney-General, about the additional burdens that these requirements place on business, especially big business. I think it needs to be said that disallowance of these regulations in the way that the Opposition is now irresponsibly seeking would only serve to increase business costs and would result, certainly, in a great deal of confusion and uncertainty in the business community. Large parts of the business community have already invested considerable sums of money in gearing up for the new requirements. There is no possibility of the Accounting Standards Review Board substituting any alternative requirements in these areas in the sort of time frame we are talking about if an instant disallowance is put in place. More importantly, I guess, the smaller companies, allegedly the political constituency of this Opposition, are looking immensely forward to taking immediate advantage of these new requirements. How does the Opposition propose to justify to those 95 per cent of companies in this community that will be largely removed from reporting requirements at all under this legislation that they have to suffer, that they have to continue the burden of paperwork just to prevent the other 5 per cent from allegedly suffering-the 5 per cent who are perfectly well able to look after themselves and have the procedures, the staff, the resources and the wherewithal to do just that? So much for the Opposition's alleged passionate adherence to the interests of the small business community. It is a sham and a charade, as it is so often with the Opposition's posturing on these matters. As to the particular matters in the Schedule that have attracted comment or criticism, let me say only a word or two about the two issues of directors' remuneration and executive remuneration which attract the most passionate neurosis on the part of the Opposition. As far as executive remuneration is concerned, the Australian requirement is based squarely on the position of the United States of America, although the remuneration of individual officers does not have to be disclosed, as Senator Macklin pointed out by way of interjection, interrupting Senator Durack in mid-flight on that matter. So much for the privacy concerns that he was endeavouring to advance. As in the case of directors - - Senator Durack —Can't you divide by five? Senator GARETH EVANS —If the honour- able senator thinks that is the way business works he is even more out of touch than I thought he was. I, and I am sure a lot of people in the business community, would be delighted to know that the number fives in the hierarchy are getting exactly the same return as the number ones and number twos. That aint the way the world works, as Senator Durack ought to know but manifestly does not. We will not be able to pick and choose on the basis of any ratio between the top five. The reality is that there are all sorts of individual arrangements for remuneration at that level. Simply having a total figure will do no more than give a general guide as to the way in which shareholders' funds are being utilised in the managerial area. The principle behind giving the shareholders that much access to information is quite clear. If they are to determine whether they are getting value for money out of senior executives employed on their behalf they need to know, at least in the general and limited terms that we are suggesting here, how much they are paying. As far as directors' remuneration is concerned, the principle is exactly the same. If the shareholders are going to be able to determine whether they get value for money they need to know how much they are paying. After all, they are employing the directors. There has been an inference in a number of Opposition statements on this matter, particularly by Mr Spender-I think Senator Durack was too embarrassed to make the point today, but let me respond to it-to the effect that shareholders can already find out this sort of information. The reality is, however, that it is not a simple task for a shareholder to find 5 per cent of fellow shareholders in order to require a company to provide the information in question. Just to take one obvious example, what about the Broken Hill Proprietary Co. Ltd? Five per cent of issued shares in BHP is a total of 63 million shares and only the four largest shareholders hold that number. It would be virtually impossible for the average BHP shareholders to gather sufficient of their number to represent 5 per cent of the issued shares. The top 20 shareholders, those ranked twelfth to twentieth, in aggregate, do not between them hold 5 per cent of the issued shares in that corporation. So the reality is that the existing procedures are manifestly inadequate to enable access to this kind of information. It is information which ought to be available to those with an interest in having it. Well managed companies and companies in respect of which the directors are doing their job in the interests of shareholders have manifestly nothing whatsoever to fear from this kind of scrutiny. It is in line with the kind of disclosure requirements that have become very much the norm in other comparable parts of the world and there is no basis whatsoever for these regulations to be thus disallowed. Senator MACKLIN(Queensland)(9.45) —We are dealing with a regulation that emanates from the Ministerial Council on Companies and Securities. I do not want to rehearse today the types of problems that we have had in previous debates when either legislation or regulations have emanated from that body. The difficulties have been apparent of this chamber's dealing with material that comes from that body. It is sufficient to say that State governments of Labor, Liberal and National Party persuasion are all agreed on this item. That in itself seems to be a singularly extraordinary event in Australia's political history. Most people realise that the differences between States in Australia are far greater than between countries in most parts of the rest of the world. Therefore, when all State governments and the Federal Government agree on a set of guidelines or on amendments to the principal legislation, it is very difficult to deal with that in the way that we deal with material that is merely a policy decision of the current Federal Government. Various items were raised in the last debate that we had on this matter. The Minister for Resources and Energy (Senator Gareth Evans), who is currently at the table, undertook to look at the types of procedures that were being used, particularly with regard to amendments to the principal legislation. We hope that that is being fulfilled. With regard to the points that Senator Durack raised, the arguments as he presented them are really not sufficient to overcome that extraordinary agreement of all State governments and the Federal Government, involving all parties, to promote this regulation. The accountancy items that Senator Durack wished to make the focus of the disallowance are certainly of a highly technical nature. I do not propose to canvass any further points other than the ones raised by the Minister on that item. It seems to me that the ability to replace these with other items is probably not there. I suggest that the fact that we have State and Commonwealth agreement to these precludes, certainly in the next two or three years, the ability to agree on a completely different set of accounting principles. Surely, the mere political logic of the operation is that we should stay with these or else we will not have anything. Hence, we would be most loth, in the absence of extremely compelling arguments, to accept the proposition that we should do away with this set. The other item that Senator Durack raised related to the remuneration of directors and executives. The Minister raised points, particularly with regard to exempt proprietary companies. I think the Minister said that up to 95 per cent-I am not sure and would use the more conservative figure of 90 per cent at least-of companies in Australia are exempt proprietary companies. Senator Gareth Evans —Due to the increase in business activity under this Government. You haven't kept up with it. Senator MACKLIN —We have an updated figure from the Minister. But at least 90 per cent of those small businesses, those exempt proprietary companies-in other words those ones in which generally the entire operation is run by a husband and wife or a family, such as a corner store; in other words, the vast bulk of our companies-will have significant reductions in their accounting necessities. That is extremely important. Indeed, it is something that small business has been asking for over a long period. To overthrow this at this time does not seem to be terribly sane politics for the Opposition or for anybody in Australia, quite frankly, given the current push of small business in the political world. I am not quite sure why the Opposition has decided to take on the small business sector in this way and suggest that accounting and reporting procedures should be increased when in fact the Government has moved to lessen them significantly. With regard to directors of big business, it is legitimate that the fees and other emoluments paid to those directors be available to the shareholders of the non-exempt proprietary companies. Basically, we are talking about public companies. It seems that a listing on the stock market already brings with it a certain disclosure. This merely follows that trend of disclosure and is a disclosure that the shareholders are well entitled to. The fees of directors are an expenditure of a company. We want to know what they are receiving. Most other major groupings in society already have their incomes disclosed. It does not seem to me to be a major intrusion. In terms of executives, as I pointed out by way of interjection, it does not relate to a particular executive but to the aggregate emolument of the top five executives. It is interesting to look at the Thatcher approach to this in the Companies Act in Britain in 1985. Section 22 (1) relating to emoluments to directors states that there shall be shown the aggregate amount of the directors' emoluments. In other words, Britain has not gone for the particularisation of directors' emoluments. But it is different for executives. The point is often raised in the media about head-hunting and picking off people. That would be much more difficult under the Australian regulation. With figures given for the top five, it is difficult to pinpoint precisely what people are receiving. Therefore, the head-hunting argument really does not hold up. But in the British experience it certainly does. Although on first reading it may appear similar to Australia's, it certainly is not in practice. Section 35 (1) states: There shall be shown by reference to each pair of adjacent points on a scale whereon the lowest point is #30,000 and the succeeding ones are successive integral multiples of #5,000 beginning with that in the case of which the multiplier is 7- in other words, #35,000- The number (if any) of persons in the company's employment whose several emoluments exceeded the lower point but did not exceed the higher. That must be one of the most convoluted bits of drafting I have seen in a long time. Basically, it means that one starts off at #30,000. One takes #5,000 and works out how many people fall within #30,000 and #35,000, between #35,000 and #40,000 and between #45,000 and #50,000. Of course, in practice what happens is that, while at the bottom scale there may be a number of people, say, four or five, as one reaches the higher scales there will be the staggering number of one. So one could certainly work out what the highest executive is being paid and one could probably work out pretty closely what the two deputies will be paid, and even have a fair stab at what the next general manager level will be paid. So under the British Thatcher Administration, of which I thought the Opposition was quite enamoured, executives' emoluments are laid out in a very bare fashion. This regulation does not do that to anywhere near the same extent. Alternatively, the British method does make it much more difficult to get at the directors' fees. But it seems to me that the Australian approach of the identification of the individual directors is much more important than the identification of the executives' fees. After all, the executives are all employees of the companies. The directors are the ones directing the public policies of the companies. Particularly in our major public companies, there is a very strong national interest in knowing what emoluments those people are getting in return for the directions they are providing for those companies. Hence I indicate that we will not support the Opposition's disallowance motion on this, basically on the lines that the regulation emanates from the Ministerial Council and as such has been agreed by all State governments and the Federal Government, that is, by Liberal Party governments, National Party governments and Labor Party governments. On that basis it seems that we do not have any option. This is the only game in town and hence it should be supported. Question put: That the motion (Senator Durack's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 33 —— Majority . . . . . . . . . 6 —— Archer, B. R. MacGibbon, D. J. Baume, Michael Messner, A. J. Bjelke-Petersen, F. I. Newman, J. M. Brownhill, D. G. C. Parer, W. R. Carrick, Sir John Puplick, C. J. G. Chaney, F. M. Reid, M. E. Collard, S. J. Sheil, G. (Teller)Crichton-Browne, N. A. Short, J. R. Durack, P. D. Teague, B. C. Hamer, D. J. Townley, M. Jessop, D. S. Vanstone, A. E. Kilgariff, B. F. Watson, J. O. W. Knowles, S. C. Withers, R. G. Lewis, A. W. R. 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. Cook, P. F. S. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Elstob, R. C. Ryan, S. M. Evans, Gareth Sanders, N. K. Foreman, D. J. Sibraa, K. W. Gietzelt, A. T. Tate, M. C. Giles, P. J. Vigor, D. B. Haines, J. Walsh, P. A. Jones, G. N. Zakharov, A. O. McClelland, Douglas Hill, R. Bolkus, N. Alston, R. K. R. Colston, M. A. Boswell, R. L. D. Grimes, D. J. Baume, Peter Button, J. N. Walters, M. S. Georges, G. Question so resolved in the negative. Debate resumed from 13 November, on motion by Senator Walsh: That the Bill be now read a second time: Senator VIGOR(South Australia)(10.03) —When the debate was interrupted last night I was explaining how the Budget of the Government could be called the Budget of a thousand cuts, and that these cuts have been made in most inappropriate places. I was moving on to explain the effects of these cuts on Telecom Australia. The Government decided to remove from Telecom's budget an extra $98m. This seemed to be part of the phoney exercise to produce a deficit of around $3,500m rather than the more average one of 33 per cent of the gross national product, which would have been around $4.6m. The only reason for the Government's doing this can be a response to the international money markets and the large corporations rather than showing any concern for the people of Australia, and particularly the poorer people. Some of the decisions the Government has taken have involved cuts in budgets of departments which make profits. Telecom is an organisation which makes a profit and which could, if properly managed in the area, give an enormous boost to our telecommunications industry. We are now in the forefront of fibre optics research in the world. Billion dollar markets are available for products such as fibre optics products. We have the ability to chase these markets and we have the ability to follow them through, provided that Telecom, like the Overseas Telecommunications Commission, gives the boost by making these products in our domestic market. The Government seems to be squeezing these organisations of research and development funds. The Ergas report, `Telecommunications and the Australian Economy', drew attention to this neglect. It pointed out the need for increases in investment in real terms of the order of 10 to 15 per cent per annum for several years in order for us to establish ourselves in this industry. We cannot afford not to establish ourselves in this industry because the balance of payment costs for the country will be very great if we have to buy in all our telecommunications needs. I believe that this type of policy has come from pressure from the puppet-masters in the Treasury. The Government must learn to resist listening to these people in the way in which it is doing, just following through the type of program that is set out for it by Treasury along American-based monetarist lines. The Government must also think clearly about what departments can make money for it and what departments do not make money. Everything seems to be treated as a cost, but in fact the Department of Communications actually brings in more money that it spends. We should be expanding such areas. I shall return to that point later. No one will be fooled by the attempt by the Minister for Education (Senator Ryan) to justify the Commonwealth's abdication of its role in relation to English as a second language. No one is taken in by the `administrative charge' euphemism for the reintroduction of tertiary fees. I should like to look a little more closely at what has been happening. While the right hand has been throttling English as a second language, multicultural education, and computer education programs, the left hand-in the form of the Minister for Education-has been calling for a national target of 65 per cent of students to complete year 12 at the start of 1990. Senator Ryan has also called for an upgrading of science education. I believe that these calls are completely empty gestures, given the determination of the various people in Cabinet who seem to be set on following a Thatcherite path to a brave new world. I believe that most Australians can understand how the Government's antics are robbing Australia of a reasonably rosy future because of completely short term measures and views. That is exactly the position. I point out to the Minister for Resources and Energy (Senator Gareth Evans) that there is strong community protest over this latest round of unwarranted and discriminatory cutbacks. On Budget night I was able to liken the whole process to someone falling asleep on a giant ant-hill. The individual stings would hurt but would not be fatal, yet the overall effect may be total collapse and death. That is exactly the type of effect of this Budget. That is certainly where we are heading while the Government remains captive to the various corporate interests which see Australia purely as a mineral and agricultural producer ripe for gross exploitation. In that contest, I deplore the decision to withdraw our Peruvian representation. It is an outrage and a snub which has not gone unnoticed, I believe, in Latin America. I notice that Senator Gareth Evans is leaving the chamber on that point. I think that it is a serious point for us to note that the Peruvian government is one of the governments that have made a strong stand on moving towards a new world economic order, and we should be supporting it rather than cutting our support in that area. It seems that the present Australian Government is afraid of working towards a strong and independent Australia; it seems to be shrinking away from the process of working towards a new world economic order. I believe that in the Whitlam time this vision would have meant that that we would not have agreed to removing the Peruvian representation. However, as things stand, quite a few members of the dominant minority faction within the Government seem to spend much of their time working out ways of implementing the current Opposition policy. This is a real contradiction in politics at present. There is very little to distinguish between the policy of the right of the Labor Party and the Liberal Party's policy. That is probably because policy is completely set down by Treasury. We have had several decades in pursuit of an egalitarian society, and the whole operation of the present Government seems to be undoing that process. The sad thing is that it is a government that has a Labor label on it. A prime example is the reintroduction of tertiary fees under the euphemism of an administrative charge. I do not believe that this fools anyone, and the Government should realise that. It is a first step towards a massive fee structure that will make education the preserve of the wealthy and speed our slide into the state of an undeveloped country, a banana republic. The overseas student charge has been a forerunner for this little exercise. Its rapid escalation shows that once the Treasury gets its teeth into something, it will continue nibbling away until eventually the structure falls apart. What needs to be remembered is that we no longer have the former safety net of the bonded teacher scholarship to enable those with poorer backgrounds to scrape their way through college or university. Once we start actively to discourage post-graduate students, we can make preparation for the vassal status which will eventually fall upon us in this world-a colony of people who will just be working on the fringes, digging holes in the ground to produce minerals for other people. Senator Grimes —You must be joking. Senator VIGOR —It is estimated, Senator Grimes, that the value of research done free of charge by post-graduate students is worth between $10m and $25m per year to Australia. For that reason the report of the Goldring Committee of Review of Private Overseas Student Policy recommended against charging fees to post-graduate students. It is estimated that about 20 per cent of these students will withdraw if the $250 fee is imposed. For a total apparent yield of a few million dollars, in fact the Government stands to make a loss of about the same amount by imposing this fee on post-graduate students. It just does not make economic sense-any more than the Australian Broadcasting Corporation-Special Broadcasting Service merger makes any type of sense. Similarly, the overseas student visa fee for post-graduate students of about $4,500 per year will leave those students only $2,500 per year on which to live. I doubt whether any honourable senator would be prepared to live under those conditions. Yet these people are contributing to research to the value of $25,000 each per year, and for the most part this is in technological and scientific fields, in which they may represent up to 35 per cent of the total of post-graduate students. They are making a major contribution to the development of our industrial effort, and I believe that we should recognise and recognise that it is totally and blatantly unreasonable to add insult to injury by increasing the fees. Senator Grimes —Do you know the definition of the word `populist'? You are a perfect example. Senator VIGOR —Yes; I believe in supporting people; that is what matters to me. The Government stands to lose $18,000 per overseas student per year by imposing this unjust visa fee on students. These people should be recognised as benefactors for the future technological success of Australia. Surveys at Adelaide University and the University of New South Wales show that about two-thirds of students will have difficulty in paying the $250 fee. We can imagine what will happen if they have to find $2,500 if the Government raises the fees to about 25 per cent of the cost per student, which one can see, possibly, in the offing. I hope that I am wrong. This is the sort of rubbish that comes from a government that asks us to believe that it is determined to lift participation rates and to give us proper skills for the future. Perhaps some Cabinet Minister can tell me whether the Government thinks that it is easier to preside over a banana republic than over a trained and well informed community. Dr Anderson of the Australian National University, whose work on the effects of the abolition of tertiary fees has been gravely misrepresented in this place, made some very cogent comments which were reported in the Age of 19 March 1985. He said that his most recent evidence showed that, after decades without change, at the end of the 1970s there had been a noticeable shift towards equality among the groups of school leavers entering higher education. He went on to say: . . . in the USA evidence is emerging of a sharp regression in participation due to sharp rises in tuition fees following the Reagan Administration's cuts in federal funding to universities and colleges. Is this really the sort of society that the majority in the Australian Labor Party wants to head towards? Is this the type of society the Labor Party wants, so shortly after Caucus rejected the introduction of tertiary fees? It is an amazing turnaround on a scale similar to that of the outrageous decision to resume sales of uranium to France-just after the platform was reaffirmed at a carefully stage-managed conference in Hobart. The Labor Party no longer seems capable of standing up for what is right. That is why so many former supporters are deserting it each day and joining up with organisations that still have a vestige of integrity. The University of Queensland Union summed it up quite adroitly when it said: Labor promised participation and equity. It would appear that participation is restricted to the wealthy and equity exists only in an international banker's trust. Senator Grimes —Oh, for heaven's sake! Senator VIGOR —It is in fact, Senator Grimes, the golden rule: Those who have the gold, rule. Senator Grimes —What is equitable about giving the sons and daughters of wealthy people free tuition in that way? Tell us what is equitable about that. You are a populist of the worst type. Senator VIGOR —It is quite equitable to make certain that everybody can get in there. It may make little difference to the rich people-and the Government is already collecting a fair amount in tax from those people. Certainly it is not doing very much about collecting tax from some people. Senator Grimes —Don't tell me! That is the worst form of populism I have ever heard in this place. Not even the most conservative person over there would put that argument. That is the worst form of populism I have ever heard. Senator VIGOR —I would indeed like to take issue with this. It is obvious that-- Senator Elstob —He is putting our lights out. Senator VIGOR —Even the lights are going out under this Government. I would like to examine some of the reasons given by the Government for its abandonment of traditional Labor concern for the underdog-because it really is the underdog who is suffering. The Government might be shooting at the children of the rich, but really the people it is hitting are the poor in this country, the people whom the Government is not giving an opportunity to get an education. That is the real problem. In the first case, I believe the Government has been totally overrun by the terms of trade which Australia faces. It has been left with the problem of a very large deficit. It is panicking and is quite unable to see that the very rich corporations and overseas organisations are exploiting Australia and making the most out of this situation while ordinary Australians cannot escape the effect. The Government has not delivered to the people of Australia a sensible program. In the communications area, it has been kowtowing to the large media consortia with its aggregation program. There is also the shenanigans over broadcasting policy and the Government's failure to take decisive action against those responsible for the inept handling by the Department of Communications of the expansion of services throughout Australia. It is also a fact that that Department is hopelessly underresourced in engineering staff, and has been so over the period since the big shift from Melbourne. I believe that the Government should take very firm action against the policy bunglers in this Department, who seem to have a client mentality of serving just the large networks and their representatives, the Federation of Australian Commercial Television Stations and the Federation of Australian Radio Broadcasters, rather than taking any notice of the public interest as they are employed to do. The record on the extension of radio and television services to regional Australia is shameful. It continues to deplete the Government's revenue while failing to deliver real choice to listeners and viewers. The Government has also missed many opportunities to reverse our reliance on agricultural and mineral exports by moving into more value added exports. In some ways it has gone backwards through its assistance to foreign interests, allowing them to pick off Australian producers one by one, or to pick off our choicest manufacturing concerns, reinforcing the branch plant mentality through encouraging a corporate raider boom. As I pointed out earlier, the Government has also hampered the investment activities of Telecom Australia and the Overseas Telecommunications Commission through its demands for extra repayments and its threats to allow the Treasury and the Department of Finance to intrude continually into their activities. I want to take an even more fundamental case because, although it is small and perhaps relatively unnoticed it demonstrates the `New Right-is' which has infected the Hawke Government. The Government is in fact becoming the New Right itself. It certainly bodes ill for our future, just as it demonstrates why the executives of multinational companies regard this Administration as a bit of a joke. The Minister for Science (Mr Barry Jones) often tells us just how good we are at conceiving ideas and even patenting something as a result-but that it all falls down when we try to develop these ideas into products or services. With that in mind, I want to consider the Patents, Trade Marks and Designs Office, with which I had an illuminating encounter in Estimates Committee A. In the 1984-85 Budget, staffing for the Technical Information Branch within the Office was increased from five to 16, and a little extra money was set aside for its travel expenses. The explanatory notes waxed lyrical on how this was going to help the transfer of technology. I quote from it: An extensive promotional program has been developed to encourage the business, academic and government sectors to avail themselves of this information and to educate the clientele on the range of information which is available and the most effective methods to access it. The effective implementation and promotion of this government initiative has the potential to generate an increase in the revenue earned by the Patent Office. That was indeed a very enthusiastic buildup-and quite rightly so. After all, overseas countries respected for their ability to export high technology products have long fuelled the process of industrial innovation with the strategic dissemination of technical information. That is a very good reason for us to get involved also. In fact, the Australian Science and Technology Council report on Mechanisms for Technology Transfer into Australia, released earlier this year, took up this point with great gusto. It took great pleasure in describing the operations of the Japanese Information Centre for Science and Technology. That body acts as a central clearing house for technical information generated within Japan or obtained elsewhere. It receives the equivalent of $25m from government sources each year and generates $19m more from subscriptions and service fees. It has an on-line information retrieval network collected over 10 years, and this database can be accessed from terminals right around Japan. It is in great demand because it is kept at the cutting edge of latest developments. Our Government seems to be intent on closing all of this down. One would have thought that, with that build-up, the technology transfer unit would have been kept. No, the Government has closed it down at this stage. These are just some of the examples which I will be expanding on and asking a few questions about during the Committee stage consideration of this most disappointing Budget. I believe that it is really a Budget of no hope. The ACTING DEPUTY PRESIDENT(Senator Jessop) —Order! The honourable senator's time has expired. Senator KNOWLES(Western Australia)(10.25) —The Appropriation Bills, of course, provide us with the opportunity to take stock of this Government's policies as expressed in the 1986 Federal Budget and the impact that they are having on the Australian community. What concerns me most of all is that families are yet again the big losers under this Government. I very rarely find myself in agreement with anything much that the Australian Democrats say, but I can find myself to a degree in agreement with what Senator Vigor has said: Invariably we now find that it is the lower income earners of the Australian community who are suffering most. We are continually told that tax cuts, deferred of course in part until 1 December and not beginning in full until 1 July 1987, will restore incentive and redress the costs now imposed by the fringe benefits tax, increased sales tax and fuel excise and, of course, the freezing of benefits to families, but the fact is that families will still be worse off at the end of the day. It was interesting that soon after the August Budget Mr George Campbell of the Amalgamated Metal Workers Union and Mr Eric Risstrom of the Australian Taxpayers Association agreed that the average wage earner would be worse off by around $15 a week, a figure that would fall only to $12.40 when the tax rates fell in December. What is even more interesting is to compare the amount of tax paid by a person of average weekly earnings in March 1983 when this Hawke Government came into power with what he is paying today, and what he will pay in July next year when the tax cuts are fully in force. The marginal rate has risen from 30 per cent to 46 per cent today and will still be at 40 per cent next year. Fiscal drag, that old ally of big taxing governments, is far more effective than a formal rise in the tax rate. The same taxpayer in 1983 paid nearly 23 per cent of his total income in tax, a figure that now stands at 26 per cent and in July of next year will amount to 24.5 per cent of pay as you earn earnings. This means that he is 1.6 per cent worse off after the tax cuts compared to when this Government took office. A family supported by a single income of average weekly earnings with a dependent spouse would have paid 17.5 per cent of its income in tax in March 1983. Today the same family pays 21.6 per cent and next year will pay 20.5 per cent, so it is going to be significantly worse off by a full 3 per cent of income. By late next year the dependent spouse rebate will have declined 27 per cent since November 1982, and the rebate that in 1951 would have equalled 47 per cent of average weekly earnings for a family with five children now amounts to 1 per cent of earnings. While the introduction of the family allowance makes such a comparison probably of limited value, we should remember that the value of the family allowance has fallen by up to 50 per cent in 10 years since its introduction. The larger the family, the more likely it is to be disadvantaged under this Australian Labor Party Government, especially when we realise that 74 per cent of families with more than six children have incomes below $20,000. It is difficult enough for a family with one child to live on $20,000, but 74 per cent with more than six have incomes below $20,000. The larger the family obviously the more disadvantaged it is. It is a good illustration of the Hawke Government's attitude to such families that the family allowance is the one area of social security spending to see a sharp reduction. Expenditure is down by $172m, 11 per cent, while the supporting parents' benefit rises by $123m, nearly 10 per cent. This is just a further illustration of how this Government provides a greater incentive for marriage break-up than for families to stay intact, and the intact families of Australia are increasingly weighed down by the taxation of this ALP Government; and this Government does not care. We need to be more conscious of the fact that a couple with one child requires 30 per cent more income to retain the same living standard as a couple without any children. It is also worth considering that a family income of $39,000, the cut-off for the family allowance for children over 16, is not so massive if the family is a large one. Once again, $39,000 per year in this day and age does not go very far with a large family. These facts do not necessarily mean that the family allowance should be massively increased. What they do mean to the Liberal Party is that the overall tax burden of the Australian family simply must be reduced as a matter of high priority and as a matter of survival for these families. Family income splitting remains a fair and obvious solution to assist the massive numbers of families dependent on one income or maybe on one and a half incomes, and that is about the only solution that can be offered in a fair and equitable way to encourage families to have children and to enable them to survive with children. Families will get no long term benefit from the vaunted tax cuts, as I have illustrated, because more taxpayers on average incomes drift into higher tax brackets. This Budget is not going to assist Australian families indirectly by restoring sound economic management because it is becoming an absolute joke now. The Euromoney magazine which saw fit to give the Treasurer (Mr Keating) his prized accolade a few years back is the same magazine now, of course, which is giving him the prize as runner-up to the most disastrous economic manager. I am glad that the magazine has seen the light of day. In effect, it has only confirmed, of course, what small business and the taxpayers of Australia have generally been saying for months and months. Taxpayers in this country are not being bluffed and blinded by the rhetoric of this Treasurer saying that the Government is fighting for the welfare of the lower income families. The point must be driven home that the Budget was not an exercise in long term responsibility and truly courageous spending cuts, because the reduction of the deficit by $2.2 billion is not such a remarkable achievement when we look at the fact that $1.5 billion has been raised through increased taxation, creating that heavier burden on each and every person, and a further $0.6 billion has helped balance the books through the gain in currency trading of the Reserve Bank of Australia. As I have said before, so much expenditure reduction lies in deferments in preference to really biting the bullet and tackling the problems at their source. Government services may well be reduced, but the size of government remains. Also, the size of government in terms of employment and staffing is up by 0.3 per cent and salaries will increase by 6 per cent. Those Australian breadwinners who are working one and a half days of the average 40-hour week just to pay direct and indirect taxes would have every right to query this ALP Government's spending priorities, because money is still being found by this Government to fund such things as the Constitutional Commission, which the Australian people never asked for and which was established to serve the ideological ends of the ALP factions determined, quite frankly, to save us from ourselves through a new Constitution. Money will also still be available, and is still available, for political advocacy groups utilising taxes, or PAGUTS, such as the Australian Conservation Foundation and the Australian Federation of Consumer Organisations, which is 99 per cent funded by the Federal Government. This organisation has benefited from a 300 per cent increase since the Australian Labor Party came to office. Such groups are characterised, as we all know, by a left wing bias and a comparatively small number of activist members who are highly unrepresentative of the general community. The general community is getting a little fed up, sick and tired of seeing money being dished out to the left wing biased groups at the expense of relief for ordinary taxpayers. The Budget maintains Australia Council funding in real terms; so I suppose we can look forward to more of our taxes going to support the Sydney Gay Mardi Gras Association and to trade unions for crude political propaganda masquerading as community arts. It is worth remembering that in Western Australia alone the trade unions have so far creamed off $200,000 in this way for community arts. This Budget will not halt the process whereby the Hawke Government buys off the extreme Left with our money. What makes me really angry is the fact that in this same Budget the funding for marriage guidance organisations is frozen and therefore reduced in real terms. This has forced the Marriage Guidance Council in Western Australia in particular to close its country services. To me that is a real tragedy. These people are fighting very hard to keep families together, yet this Government sees fit to cut their funding, to split people up and not give them any assistance whatsoever. Voluntary organisations who fight to keep families together, with the resultant enormous savings to social security, should get higher rather than lower priority. They are getting the raw end of the deal compared with the fringe activists and the trade union militants when it comes to distributing the tax dollar taken, of course, from Australian families. We should not forget that $500,000 is to be found for refurbishing the Sydney residence of the Prime Minister (Mr Hawke) at Kirribilli, which already has a running cost of $12,000 a week. A further half a million dollars of taxpayers' money is being usurped by the Prime Minister and the Treasurer to make the Prime Minister's life a little more comfortable in Sydney. There are many families in Australia who are not leading a comfortable life at all, yet this Government is providing a more comfortable life for the Prime Minister. Such are the spending priorities of this ALP Government. Health expenditure priorities are an essential feature of the Budget, and I now turn to the direction this Government is taking the health of our nation and, of course, the price of that direction. Australia continues to suffer through this Government's misplaced belief in better health through systems analysis. Somehow the Minister for Health (Dr Blewett) believes that if he can find the right mix of tax dollars and physical resources he can give us the ideal socialist health system. In most practical terms what we are being offered in theory is our overall health care at greater cost because this Government wants to preserve sacred cows and ignore reality. As I said previously on the Loans Bill, this ALP Treasurer has the gall to say in the Budget Speech that the Medicare levy should be increased `so that Medicare is self-financing'. The simple arithmetic of this situation contained within the same Budget Papers makes an absolute mockery of that statement. Therefore what we are looking at is a supposedly self-financing health system that will consume the equivalent of a 2.8 per cent levy on personal income to meet its costs. We should also remember that on numerous occasions the Minister has repeatedly said that there would be no increase in the Medicare levy. Obviously the Treasurer thought otherwise and he has increased the Medicare levy and proved yet again that what is promised and what one gets are two entirely different things. It just adds more and more and more to the list of broken promises that this Government made prior to the last election. The Minister for Health, Dr-non-medical-Blewett, has also had the gall to say such absurd things as: The Government is concerned to ensure that any changes should be made in the fairest possible way. He also said: . . . an overall package of measures within the health area which achieves restraint and equity. But the best of all was when he said that the Government would: . . . preserve its commitment to a universal health insurance scheme based on the principles of equity, simplicity and cost efficiency. I put it to the Senate that we have none of those things. There is no cost efficiency, no equity and absolutely no simplicity. While the Minister for Health pursues a policy of non-interference with bulk billing, when we see figures released this week that more than 50 per cent of doctors are now bulk billing, he employs the techniques of a systems analyst to reduce hospital costs. His solution is simplicity itself: Limit public hospital benefits to a 2.9 per cent increase for 1986-87 and let the hospital system cope with the consequences. Like a First World War general, this socialist Minister seems to regard the lengthening hospital queues as part of the attrition process. The Minister has also said that the continuation of bulk billing overwhelmingly works to the benefit of pensioners and the disadvantaged. Of course what he failed to add was that it overwhelmingly works to the benefit of the dishonest as well. No longer can pensioners and the disadvantaged be assured of a hospital bed when they need it, with the greater demand and lesser funding for public hospitals. How can that be classified as a system that `overwhelmingly works'? People are queueing up and they are not getting treated when they need it. The classic example in my State of Western Australia was brought to light on 5 August when it was reported in the West Australian newspaper that at the end of May, 3,450 patients were awaiting elective surgery at Royal Perth Hospital. Two months earlier the waiting list was only 3,000, with a further 1,400 awaiting surgery at Perth's other major teaching hospital, the Queen Elizabeth Medical Centre. According to a Royal Perth Hospital submission, heart patients are waiting up to 12 weeks and those patients with problems such as ear, nose and throat problems could be waiting anything up to two years. If that is a system that is `overwhelmingly working well, fairly and simply' then I would query it very genuinely. Only 700 of the 4,400 on the surgery waiting list in March needed plastic surgery. That is always the argument of this socialist Minister-that people are going for elective surgery to have themselves dollied up and that is why the queues are so long. Only 700 of those 4,400 are waiting for that type of surgery. All the others had conditions which, if not life threatening, meant real discomfort. I wish that it meant so much discomfort to the Minister that he would do something about smartening up the health system in this country. We are treading the same path as that of the British national health service where people do not die of complaints, they die with complaints. That in itself is a tragedy. Of course, the true story is told of a national health service hospital administrator who wanted to place the bed of an incontinent patient under a roof leak as it would cause the patient no extra discomfort and would save on repairs. That is exactly where the policies of this Government are taking us. The public hospitals are also becoming increasingly more concerned about their accreditation as teaching hospitals and so well they might because they are not getting the mix they used to get. This is simply not hearsay. They know that they are running real risks of accreditation because it is based on that mix that the doctors and nurses of tomorrow are trained. If they do not get that mix how can the doctors and the nurses of tomorrow be sure that they are getting the broad coverage they need? So what light can prospective patients see at the end of the tunnel if these doctors and nurses are not getting the training that will provide a wide service. Under the guise of cost cutting the health Budget has savaged the private sector for essentially ideological reasons that will have the inevitable effect of forcing more Australians into the public health sector and adding to the hospital queues. We cannot have longer queues than we already have. We see in this Budget an incentive being created for people to move out of private health insurance because of the additional costs of that insurance. We must remember that people are already paying twice for health insurance. They have to pay the Government's wretched Medicare levy and now, in a full year, they will have to pay an extra $286 if they choose to take out private health insurance. That is not a small amount to lower and middle income earners. A full year's saving of $129m through the abolition of the private hospital bed day subsidy is likely to add $1.50 each week to private health insurance. So those families can be expecting to pay that extra $286 a year plus an increased Medicare levy. What is this going to do? The Minister for Health has said that private health insurance increases should be moderate. I put it to the Senate that $286 a year is not moderate. Some families simply will not be able to meet these additional costs. They will discontinue their private health insurance and will then be reliant on an already overworked public health system. The other effect of this measure is that people will occupy public hospital beds at a cost to the Government of $280 a day, as opposed to the previous amount of $40 a day in a private hospital. Is it sound economic management to have a cost of $40 a day skyrocket to such an extent? That is typical of the type of economy practices in the health field undertaken by this socialist Government that is now claiming to have saved, or supposedly is trying to save, taxpayers' dollars. The sad aspect is that many simply cannot afford private health insurance, and this extra cost invariably will impinge on the aged. The aged in this country are getting worse and worse treatment from this Government, and it is the families of the aged, who are already pressed to the limit, who will be forced to find money to put their aged relatives into private hospitals and pay more now than they ever have before. Should we as a country be placing that type of strain on families? So the impact of this Budget will be more severely felt not by the financially well off but by those most in need. Since the last Liberal Budget in 1982, total health spending has risen by over 100 per cent-from a grand total of $3,425m to $7,306m. Health spending has risen from 7.2 per cent to 9.8 per cent of Budget outlays. But it can hardly be argued that as a result of that greater expenditure people are getting a better deal. They are getting a far worse deal; they are getting far less service for their tax dollar. Those who pay twice for health care, who have private health insurance and who actually lessen the burden on the public health system, are clearly regarded with disfavour by a Labor government that has no concern whatsoever for those who want to provide for themselves. We should be creating incentive for people to provide for themselves; we should not be creating the disincentive. If people can provide for themselves, well and good, but let us not disadvantage them at the same time. If we are trying to reduce taxation, we should let people provide for themselves. I have raised this matter because I consider the Medicare farce is a perfect example of the general economic policy direction of this Government, and the candour of the Treasurer in admitting that Australia has become a banana republic, and all the rhetoric about sacrifices and national purpose have not been matched by bold decisions. We must create incentive for the individual, we must create incentive for private enterprise and we must create incentive for people to look after themselves, but we must not tax them to death at the same time. Senator McKIERNAN(Western Australia)(10.50) —The Senate is debating cognately the Appropriation (Parliamentary Departments) Bill 1986-87, Appropriation Bill (No. 1) 1986-87 and Appropriation Bill (No. 2) 1986-87. The Appropriation Bills collectively are designed to give effect to the Budget statements drawn up by the Federal Treasurer, Mr Keating, and delivered by him in the other place on 19 August this year. The Budget presented by the Treasurer has received overwhelming public acceptance by commentators in the media, by industrialists and by the trade union movement. That is not to say that some sections of the community-including indeed, some sections of the media, business and the trade union movement-have not voiced some criticisms of the Budget. However, practically all sectors of the community recognise that Australia is facing difficult economic times. Those difficult circumstances have forced our Government to take some tough budgetary decisions- decisions which largely have been forced upon it by the dictates of overseas money market zealots who judge the policies of governments such as ours by their own dry monetary standards. Some of the overseas money market mandarins have had the gall to offer advice to Australia on internal policies such as industrial relations- advice which would cause and has caused industrial havoc in this country; advice which will not prove in the long term to be beneficial to this country or its people. If as a result of our continued colonial cultural cringe we scramble to implement the dry monetary policies of those overseas mandarins, we could be facing diabolical problems within a few years. The Government, as I have said, was faced with tough decisions. We had the problem, as all governments before us have had, of attempting to balance the Budget. In doing so we were forced to make many unpopular decisions in order to reduce the deficit-a deficit we inherited from the previous Government, a deficit we have worked hard for nearly four years to ease in order to rectify the tragic circumstances in which the Fraser regime left this country. We have grave problems not the least because of the international terms of trade having moved against us, something that we were not able to predict, particularly in the area of our two major export sectors, agricultural products and minerals. Falling world prices for these commodities have had a most unfortunate effect on our short term trade prospects. The devaluation of the dollar has assisted, and has presented an opportunity for exporters and manufacturers within Australia to compete on more favourable terms with imported items. Although we now have that opportunity it is unfortunate that not too many of those involved in enterprising management in Australia, particularly in the manufacturing sector, are taking full advantage. In the light of the current circumstances we require responsible, reasoned responses from all sectors of the Australian community. We have witnessed, and are witnessing, the political sacrifices this Government has made in order to reduce the deficit. Similarly, we have witnessed continued restraint on the part of the vast majority of the trade union movement in Australia, a restraint which is demonstrated by the profitability of many companies. Many sections of the private sector have demonstrated a willingness to co-operate in the challenges which face us in the struggle to retain overseas markets and to guarantee deliveries to overseas nations. The vast majority of people have demonstrated a willingness to work for Australia's economic future, both in the short term and, more importantly, in the longer term. There are always exceptions to any rule. Where are the people who have a decided responsibility to ensure that we, in government, do our job? Where do members of the Opposition stand? I am afraid that when one examines their role one sees that they do not measure up very well at all. I refer back to my own State and, indeed, the State from which the previous speaker, Senator Knowles, comes. She is a senator from Western Australia. In my own State very recently there was an amazing incident in which a State member of parliament, one Mr Ross Lightfoot, a Liberal member of the Legislative Assembly for Murchison-Eyre, wrote an impassioned plea to senior figures in the United States of America Government asking that positive damage be done to Australia's overseas wheat sales as that was the quickest way to bring down the Government. There was no interest in the economy and no interest in its people, just mere political expediency. Lightfoot was subsequently chastised by the Western Australian Parliament for that particular example of Liberal patriotism. But what has the Liberal Party done to him? We will wait and wait. Perhaps when we get a change of leadership in Western Australia we will see some action. But that is only being parochial in regard to my own State. I can be accused of that and I have no problems with being accused of that. What is happening at the national level? We can look at the treasurer of the Liberal Party, a Mr John Elliott of Elders IXL Ltd, of Fosters lager fame. He has gone on record as saying: `Australia would be the last place you would want to invest in'. That was reported in the Australian Financial Review, the Age and many other newspapers in the middle of last month-on 17 October. There we have it. In an era when it is critical that all sections of Australian society work together to secure the economic future of this country, the true patriotism of the Opposition shows through. Members of the Opposition are committed to achieving power and ensuring that their friends can make a fast buck out of Australia. What is needed in this country at this time is consistency of supply. We have the spectre of the New Right attempting to impose its industrial panaceas unilaterally on the workers of Robe River in Western Australia. I will give some more detail at a later time in my contribution to the debate. Let us examine the contribution the working people right across Australia have made to ensuring reliability of supply. In 1980, under the industrial relations expertise of the Fraser Government some 3.3 million working days were lost because of industrial disputation. Those days lost caused damage not only to industry but also to the people who were taking part in that industrial activity. They lost money as well. I think that point is often missed by media commentators. In 1981 it was even worse-4.2 million days were lost through industrial activity. Let us compare that situation with what we have under the prices and incomes accord, the agreement between the Australian Council of Trade Unions and the present Government. In 1984-85, 1.3 million days were lost through industrial activity. Under the accord we have seen industrial activity lessened to the degree of 65 per cent. That is happening in an era when real take-home pay has actually been reduced. At the same time, while real take-home pay has been reduced, profitability has recovered substantially from the depths that it reached under the previous Liberal Government led by Malcolm Fraser. Working people and the trade union movement have demonstrated that, when they are consulted and when they are given reasonable access to government on key issues, real, tangible sacrifices can be and are being made in the interests of Australia's future. Working people have always invested 100 per cent of their labour on behalf of this country. When we compare those actions with the actions of Ross Lightfoot, whom I have mentioned before, and John Elliott, we can really examine the loyalty of both sectors in the community to the future of this country. In the last full financial year of the Fraser Government imports exceeded exports by $23 billion as opposed to $19.5 billion. The Labor Government, since taking office, has rectified this imbalance with the assistance of the working people of Australia and the active participation of the trade union movement, together with some of the more enlightened sections of the private sector. Thus, in the 1983, 1984 and 1985 financial years, Australia was able to show a surplus of exports over imports. However, the situation has changed and we are now faced with a number of external factors, not the least of which is the fact that world prices for a number of key export items are depressed on the world market. At such a critical time, what is the leadership of the Opposition doing? It is in attendance at meetings of the H. R. Nicholls Society and it is in attendance at H. R. Nicholls Society book launches. Leading figures of the H. R. Nicholls Society attend fashion parades. They are fund raisers for the Liberal Party. The leadership of the Liberal Party has been very quick and very keen to align itself with the New Right. It is equally keen to defend its new heroes, people such as Charles Copeman, who came to fame very recently when he engaged in a cynical exercise to smash the trade union movement of this country at the Robe River plants in Pannawonica and Cape Lambert in Western Australia. Mr Copeman was perfectly willing to place Australian exports of iron ore-a crucial commodity in our export area-at risk through his actions and the actions of his company. The money that we, as a nation, earn from those exports is all at risk. For what purpose? In pursuit of narrow sectarian objectives with the claim that they want to free up the labour market and the industrial legal structures which have been in force since Federation. However, many people are seeing through the hidden agenda and seeing what Copeman and Mr Howard are all about. They are not in pursuit of some fine point of industrial law. It merely comes down to a question of class greed, a philosophy that working people in Australia earn too much and that more of the cake should be channelled to the owners of capital. The sacrifice that working people have made over the years in terms of wage restraint has not been enough for the Copemans, the Hays or many other activists of the New Right in Australia. In fact, no amount of sacrifice by working people will satisfy the New Right. There is no way in the world that we can make any reasonable deals with people such as that. The employer-initiated strife at the Peko- Wallsend installation at Robe River in Cape Lambert and Pannawonica is an example of what the current leadership of the Opposition would like to put in place as an industrial relations panacea. These panaceas might be attractive to some of the money market men in Wall Street, but they would assuredly be alarming to industrialists in overseas countries who have to operate in the real concrete world of production, as opposed to speculation, and have to depend on the steady supply of Australian raw materials. There are plenty of other sources of supply in the world at the moment. That is why the world price for iron ore and other items is currently so depressed. So Mr Copeman and, by implication, Mr Howard are quite happy to put our exports at risk. Because of them, Australian exports are of secondary importance to the freeing up of the industrial system in order to grab a bigger share of the cake for the owners of capital in Australia. The Old Right and the New Right will always have in common the greed of the greedy to have more. Responsibility is what is required by all sections of the Australian community at this time. Many sections of society are answering the challenge that is demanded of them, but some honourable senators opposite must look more critically-indeed, they are doing so at this very moment-at the so-called leadership being displayed by the Opposition front bench. Johnnie Howard and the dries know as much about punk rock as they do about industrial relations. Ultimately, good industrial relations, among other things, will enable this country to overcome its trading difficulties. Reasonable people on the Opposition benches must bring their influence to bear to demand a leadership that is not dependent on the strident and decisive philosophy of the New Right. Australia needs the combined, co-operative efforts of all at this moment. I commend Mr Steele Hall for having the guts to stand up and warn the Liberal Party of Australia to be wary that it does not end up on the same political desert island as the New Right is on. Mr Steele Hall found that some earlier remarks by Mr Neil Brown, the Deputy Leader of the Liberal Party, were encouraging a positive drift of perceptions that members of the Party were tied to the extremes of the Right. He said that he rejected that position because, if it were true, it would mean the demise of the Liberal Party as we have known it. Mr Steele Hall was speaking in early October. Since then he has received a thorough dressing down for his pains and Mr Howard and Mr Brown have continued the warm and moist relationship with the New Right and the Liberal Party has continued its slide to the extremes of the political spectrum-a slide which is causing enormous trauma at the moment because of the leadership difficulties. Members of the Liberal Party have no leadership. They are now in a position which makes the Party irrelevant because they could not hope to gain the confidence of large sections of the Australian community as a viable alternative to the present Government. I said earlier that I wanted to refer to some matters relating to Peko-Wallsend and its operation at Robe River in the Pilbara of Western Australia. Events in the Pilbara have made headlines right across Australia. Only very recently a judgment was handed down by the West Australian Industrial Relations Commission. That judgment, which runs to 200-odd pages, makes some very interesting reading. I have some quotes from it that need to be placed on the record because I do not think they have been fairly or adequately publicised. All honourable senators would know that on 11 August this year, the company concerned decided to close its operations at both of the places I mentioned earlier and to sack 1,150 members of staff. The reason given by the company-I have the letter from the company but I will not quote it-was that the company could no longer exercise its managerial prerogatives to manage the operations because of an order handed down by another commissioner in the Western Australian Industrial Relations Commission. However, in the transcript of the hearing that led up to this decision we find some very interesting information. I wish to quote what the Operations Manager and Registered Manager for the port at Cape Lambert had to say. He advised the company that things were virtually out of control. I will quote just a small part of the actual transcipt where he states: We really had plant running out there and we had people wandering around the site and we had no supervision and really under the Mines Regulations Act I saw that I had no way to turn other than to close that plant down and at least return the equipment to a safe condition. The Chief Commissioner of the Western Australian Industrial Relations Commission, Mr Collier, in presenting his findings, stated in part: Under cross examination the witness said that the operation was safe until 2300 hours on 10th August 1986. Shift change advices commenced issuing on 5th August and the first shift change took place on 10th August at 2300 hours. Mr Commissioner Collier, quoting the witness, stated further: He considered that anarchy was on site and a supervisor could not expect reasonable orders to be obeyed. However, his information came from others because he was absent from the site at the time. Let me quote again from what Mr Collier had to say before I wind up my contribution today: I find that the situation at both the port- that is, Cape Lambert- and the mine- Pannawonica- which caused the closure of both operations could have been avoided if the respondent- which is Robe River Iron Associates- had exercised its prerogative to manage in a reasonable way. In its zeal to show the workforce that the days described earlier in these reasons were over the respondent either forgot or chose to ignore that it had an obligation to honour the arrangements that had been entered into with the workforce in the past and, pursuing an obstinate approach which precluded any discussion whatever with its workforce or their representatives on future relations, made decisions which produced inevitable and easily foreseen consequences. Its notice to all employees on 31st July . . . tore up agreements which it had negotiated under its own joint consultation policy over the years with its workforce. Thus its own actions led to the chaos which caused the closure of the operations and I find that the termination of the services of its workforce in the circumstances to be quite unfair. I think the quotations that I have just gone through clearly show that the blame for the closure of the Robe River plant in Western Australia was the fault of the management. It was done clearly to establish a new vogue in Australia's industrial relations-all power to management and nothing to the work force. If this trend continues, Australia will be in a very sorry state in a very short time. What is the response of the trade union movement? I had the honour of being in attendance at a Mining Unions Association meeting in Port Hedland on Monday last week and at a meeting of the Western Australian Iron Ore Industry Consultative Council on the Tuesday and Wednesday. At the meeting on Monday the Mining Unions Association developed and later put forward a proposal to the tripartite body at the Consultative Council meeting on the Wednesday. I would like to read very quickly that proposal into the record to show what responsibility is on the side of the trade union movement. The document is headed `M.U.A. Proposal on Improved Efficiency and Productivity`, and there are about seven points in it. It states: A. The M.U.A. recognises that there is a need to address the matter of cost efficiency and improved productivity in the Iron Ore Industry if we are to survive in a highly competitive Global market. B. The M.U.A. is prepared to discuss with the Iron Ore producers ways of improving efficiency and lowering the unit costs of production. C. We note that in the past Company spokesmen have talked about productivity issues but have failed to produce methods of measuring productivity. We suggest that Dr. N. F. Dufty in his 1984 Pilbara Iron Ore Industry paper propounded a criteria for measuring productivity. An examination of the Dufty proposition may be fruitful for all parties. D. The M.U.A. realises that improved efficiency and productivity should lead to increased corporate profitability and we believe such profits should be re-invested in the Pilbara region. New technology and steel production methods make Secondary Processing in the Pilbara feasible. E. It should be accepted by all parties that there will have to be frank and open discussions at all levels to secure the long term future of the industry. Concepts of absolute managerial prerogative must be set aside if we are to approach the problems in the dispassionate and objective manner. F. The M.U.A. believes that the issue of lowering unit costs and improving efficiency must be debated at shop floor level. Consultation between union officials and their membership with full cooperation of management will be all important in this project. G. Consequently, the M.U.A. proposes that we are ready to enter into meaningful discussions at industry and company level to assist in bringing about collective measures to remedy current deficiencies in the area of increased productivity and improved efficiency. We therefore urge the companies to accept our propositions and join us as soon as possible in tackling these mutual problems. That is quite a departure from what is being propounded by the New Right and the Opposition parties in their policies. The document was presented at the meeting and was welcomed by the representatives of the companies present. Incidentally, Robe River Iron Associates chose not to attend the meeting and also not to allow rank and file members of the unions to attend the meeting. So they were not included in the welcoming of this statement. But it gives an indication of the restraint the trade union movement in Australia is imposing upon itself in the long term interests of this nation. Hopefully, it is a restraint that will be spread more widely within the community. Finally, the measures in the Appropriation Bills have been put forward by a responsible and responsive government. In doing so, we seek the co-operation of all sectors of Australian society in achieving a sound economic future for Australia. I commend the Bill to all honourable senators. Senator MacGIBBON(Queensland)(11.17) —Time is short in this debate and I will not rehash the economic argument or go through the great list of failings of this Government and its inability to manage the economy any better than it can manage the Parliament. My colleagues have done that more eloquently and persuasively. Because time is short, I want to deal with only one aspect, which is an expenditure item within the Department of Defence of $10.099m for the project definition study for the new submarine. I do it at the second reading stage because it is more appropriate that I canvass some general issues now rather than at the Committee stage. It is a matter of some astonishment to me that, when we have very large expenditures for some of our defence projects, the matters are never discussed in the Parliament, yet we spend days and days arguing over really trivial and ephemeral issues with expenditure of a few hundred thousand dollars. There has been no formal debate on this big issue of the new submarine program. There have been a number of contributions in this place and in the other place, but very few members of the Parliament have taken any interest in it. When we go back to the last big expenditure, the purchase of the F18, the new tactical fighter, I think I was the only person in either chamber who spoke about it. I notice that I drove the Australian Labor Party to distraction when I brought it up. But I make no apology for that. Very big sums of money are involved and these purchases have a consequence and an influence on the defence capability of this country that runs for 30 or 40 years. While under the Westminster system the selection of the equipment and the conduct of the Department of Defence is a matter for the executive government of the day, it is quite proper that the members of the Parliament have their say and debate these issues. That is why today I will spend a few moments talking about the new submarine program because it will be the biggest defence program this country has ever written. In March 1985 the project cost was $2.6 billion. With the inflation rate that has been running since then, we can project that forward to a cost of about $3.6 billion today. I do not know what the tenders came in at when the tenders closed on 11 November, but it may well be more than $3.6 billion at today's prices. If we project ahead over the life of that program-I think the build time will be at least 15, maybe 20 years, for those boats, we are looking at a huge expenditure. Now that we have an impoverished country, thanks to the Labor Party, we have a responsibility to make sure that we get value for our money because we are picking up a huge additional debt with this submarine program. But, more than the mere monetary side of it is the value of this equipment to the Australian defence forces. We have to be sure that we get the best for the money we spend because a lot will ride on this decision. Much of the deterrent capability that is the basis of Australia's defence will turn on the suitability of these submarines for the next 30 to 40 years. I cannot overemphasise the importance of making sure that we get what we are doing right. I regret to have to say that, on the evidence before us at the moment, we are not very reassured on that point. In fact, it is fair comment to say that the need for the new submarines has not been established beyond reasonable doubt. It is clear that the Oberons we have are costly to maintain. They are now old boats. The big problem with them is the internal mechanical equipment. It is not beyond the wit of man to replace those pumps and the internal machinery and update them. Basically, there are no problems with the hulls. They have turned out to be an extraordinarily successful design and are not plagued by the fatigue problems that other submarines have. They go through a major refit every four or five years. The assessment of the boats that has been made at refit is that they are in first class condition and from a hull point of view are quite capable of staying in service for another 15 or 20 years. They must have their refits; if they do not have them at the nominated time, limitations will be imposed on their diving depth. Once they go through that refit, they go back to their original designed diving depth because the fittings that are subject to a fatigue life are replaced at refit. They are very good boats. They are still the best diesel electric submarines around. They are very long range and they have the best weapons and sensors fitted to them of any diesel electric boat. We hope that the new boats we are buying will be better in that regard, but they will be better only in a matter of degree; it will not be a quantum jump forward. It is that that has to be considered against the price that we are paying for them. If we look at previous Navy equipment and the time, nearly 20 years ago, when we ordered the DDGs, they were a quantum jump ahead of the cruiser then in the fleet, HMAS Hobart. When we bought the F111s they were a quantum jump ahead of the Canberras and the Lincolns. Similarly, the F18 was a great jump ahead of the Mirages. In all those cases there was a very large change in the capability of the new equipment. The new boats will be better only in degree. We hope that they will be quieter but no one knows that because none of the boats have been built. We know that they will not have as great a range, but the Oberons have an exceptional range. We hope that their weapons systems will be better, but again we do not know because they have not been developed. We hope that if engines like the fuel cells and the Stirling engine can be developed, they will have a considerably greater underwater endurance, but that has yet to be proven. It is rumoured that the Stirling engine, on which the Navy is banking a great deal, met some disastrous failure in the last two weeks on tests in Sweden. I am not surprised about that because the principle on which the Stirling engine is based is a very old principle. It goes back an awfully long way and no one has yet designed a practical one that really works. That is not to say that that will not be done or done in the near future, but the point is at the moment it has not been done. The new submarine program falls into two parts-the design of the platform, which is the hull and the engines, and the weapons systems-the electronics, the detectors and the armament itself. Roughly the costs are split fifty-fifty-maybe it is 40 per cent-60 per cent, but it is of that order. The Navy invited tenders for the two separate components-the platform and the weapons systems. Regrettably, at the time the Navy showed no recognition at all publicly of the difficulties of integrating a weapons system with a platform. I will have more to say about that later. I have read the tender document that was put out-it was a public document-for the hull design. It was a very comprehensive document. It contained some very specific things, and I would like to quote from two sections of it. Clause 1.1.6.1 called for `a design which meets the Royal Australian Navy required ship characteristics' and clause 1.1.6.2 calls for a design `which is a derivative of proven in-service design-I emphasise those words ``a proven in-service design''-of demonstrable performance and reliability where changes to incorporate particular RAN requirements constitute a low technical risk and do not involve significant design efforts. The application of up to date technology will be an important consideration'. The meaning of clause 1.1.6.2 is black and white-it is calling for a boat which has been built and which is in service. There are some very obvious reasons why that should be done. In this country we would not dream of going to Lockheed, General Dynamics or McDonnell Douglas, even though they are very reputable and very competent aircraft builders, and saying: `We want an aircraft to do a specific task in Australia'. We would always say: `We want to see how suitable one of your designs that is already in service is for Australian needs'. We do that for very good reason. The major capital equipment that we buy will be in service for about 30 years. No piece of equipment can be bought off the shelf, out of the factory, and go through a 30-year service life without at least one major mid-life update in which its capabilities are changed significantly. Most importantly, the equipment has to be supported through its life in service. With an orphan design of three, four or six boats, which is the position in which the Navy has now put us, the question of through-life support is very, very dubious. It cannot be guaranteed in any sense at all. The only guarantee that one may be able to make about it is that it will be very difficult and horrendously expensive. I come back to this comparison with the Army. We would not buy from anyone a tank that was not in service. We would not buy a design to meet special Australian characteristics. Yet this is precisely the position in which we are now in relation to the submarine project, despite clause 1.1.6.2 in the tender which called for a proven design. The absurdity of the situation is that those tenderers who responded to the request for tender and who had built or were building submarines which satisfied clause 1.1.6.2. were excluded. RDM of Holland and Vickers Shipbuilding and Engineering Ltd of the United Kingdom were excluded. Not only were they building boats but also they are very reputable, experienced companies. The contract was given to two of the minor league-the Mickey Mouse builders of the submarine world, the builders whom no reputable submarine power takes seriously. It is history now that the HDW-IKL complex-always the favoured son of the Navy-was awarded one of the places. Kockums was put in to make HDW look good. At the time tenders were lodged and accepted by the Navy neither hull satisfied the Royal Australian Navy required ship characteristics. The integrity of the hulls did not meet the Australian Navy design standards; nor were they boats that were in service. HDW is blessed with a very effective sales team which makes a big thing about the large number of boats that it has built since the late 1940s. They have been built for the really great submarine powers of the world, such as Ecuador, Chile, Peru, Venezuela, Columbia, Greece and Turkey-countries that use submarines as status symbols on the presidential or the national day. It has also supplied boats to Norway, Denmark, the Federal Republic of Germany, Indonesia and India. All these are low technology boats. They are short ranged and shallow diving. The only examination that has been made of the HDW designs is the well publicised investigation that is a matter of public record on the United States congressional record. In the early 1980s when the US Navy was looking for diesel electric boats it found that HDW designs were specifically deficient on the grounds of silence, safety, maintainability and manning. One of the sad things about it was that the better known and more capable German designer Thyssens was excluded from the selection program, solely on the grounds that the RAN favoured HDW and it did not want two German designs on the short list. I do not want to enumerate the many technical failings or difficulties with the design that we have accepted. I come back to the point that neither boat has been built and there is a very high technical risk in the path which we are following. One of the key things about a submarine is its noise signature. How noisy it is under water under all operating conditions cannot be established. Not even model studies that are meaningful have been done on these designs. Another serious criticism relates to security. The design office for the German tenderer is within metres of the border with East Germany. The future of Germany is a matter for conjecture. Reunification between East and West Germany may take place. If that took place-it could within the lives of our boats-almost certainly Germany would have to adopt a position of neutrality, and through-life support for those boats would not be available. In Sweden there is evidence that the design parameters that were laid down, the technical details of the boats, have passed to the Soviets. That is a very important criticism. If the Soviets know the design characteristics of the Australian boats, we will lose some very important secrets. If one knows anything about submariners one will know that the one thing they will never talk about is the diving depth of the boat, for obvious reasons. If the ultimate depth to which the hull is designed to go is known, weapons used against the submarine can be programmed for that depth. The cavitation speeds of the propellor at various depths are also highly important. The fact that the Russians seem to have this evidence really compromises the whole program. Many aspects about the selection process are disturbing. I have mentioned the elimination of the known builders. The pricings of the original tenderers are also a matter of some concern. Having built the boats, RDM from Holland and Vickers Shipbuilding and Engineering Ltd from the United Kingdom had a pretty fair idea of what they would cost. Their tenders were higher than the tender prices advanced by HDW and Kockums which had not built their designs. It now turns out that we are looking at a figure of about #100m sterling for the first of the Upholder class built by VSEL and, as the line proceeds, it is probable that the price will come down to about #75m or #80m sterling, which will make it considerably cheaper than the price of the HDW design. No matter how the dollar moves as a result of this Government's actions, that relationship will be maintained. One of the other unusual things about the selection program is that now all the key personnel who were in the Navy and the Department of Defence at the time of the decision are no longer there. A continuity of assessment has been lost. Rear Admiral Rourke, Chief of Naval Materiel at the time, retired, and it was no secret that he was an HDW fan. Captain White was the head of the project. He had a great career ahead of him. He had an unblemished record in the Navy and would have gone on to be an admiral status without any difficulty at all. But Captain White, inexplicably, retired suddenly, and he went to work for Senator Button in his Department. Mr Harper, who was the submarine project design manager, who is a world figure in submarine design and certainly the most capable Australian in the technicalities of hull design and is regarded as the ultimate design authority in the world on the Oberon hulls-the British even refer to him from time to time when they have modification programs with their Oberon class-also retired prematurely. He went to work for HDW. I believe that that appointment was terminated very suddenly as a result of pressure from Australian sources. The break in continuity in the Department of Defence that we now have is very serious. I make it clear that that is only one of many factors about the selection process which are unsettling. I am convinced that, in relation to the selection of the submarine, the Department of Defence acted dishonourably. I am not prepared to go as far as my colleague in another place and say that the Department acted dishonestly. I think that is an open question at present. I am certain that the tenderers did not all get equal consideration. I am aware that there are some very aggrieved companies, in RDM, Thyssen and VSEL. I am not concerned about their feelings, because there always are losers, but I am concerned that the process of selection was not fairly conducted. Further, I am not convinced that we have the best design that is possible. We have ended up with something that is very expensive and has a very high technical risk. So much for the hull. The weapons system is much the same story, except that one of the two on the short list there has much better credentials in the field of submarine weapons systems than either of the hull builders have in their field. But even there, even though we have a very capable electronics company doing the design of the weapons system, the problem of integration remains. One can take equipment that works very well on the laboratory bench or in a different setting, in a different aircraft or a different ship. When that equipment is put into the chosen aircraft or ship, there can be enormous problems. There can be years of work and tens of millions or hundreds of millions of dollars in research and development programs to make it work in that setting. One of the two electronics companies that we have short-listed on the weapons system program is at present experiencing enormous difficulties-difficulties which seem to be insoluble for it-in fitting a weapons system to the boats of another nation. This illustrates the very great difficulty of integration of electronics into a platform. I started out saying that I wished to speak about the $10m that we are spending this year for the project definition study. That study was funded originally for $25m. It is now apparently up to $35m. The purpose of the PDS is to make sure that the design works. That is a nonsense. One of the conditions was that it should be a proven design so that we did not have to spend money on it. We shall be spending $35m of Australian taxpayers' money to try to establish that these paper designs will work. We did not spend one cent when we bought the F18 because we bought a proven design, and that was why the contract was written that way. We shall be spending $35m of taxpayers' money quite unnecessarily. That should have been borne entirely by the tenderers, not by the taxpayers. What is even worse is that the design has been rushed, and much of the essential data that should have been provided is not there in the PDS because there has not been time to provide it. For example, we do not know how quiet these boats are-yet submarines are found principally by their noise signature. Data on the noise emanating from them is absolutely essential. The estimates that we have are estimates only of their structural integrity and their fatigue life. We come to the business of costing. The Department of Defence very foolishly let a contract for the PDS which is an open-ended contract. It said to the tenderers `You will build those boats for a certain fixed price', but it never defined what had to be in those boats for the price. What will happen is that tenderers will meet that price. They will say: `There is your boat, for X hundred million dollars; but if you want it to fight, if you want the weapons systems, the range and the rest of it, that will cost you X hundred million dollars more'. That is quite a wrong way to go. Those tenderers who tendered originally with an accurate costing have been excluded because of this. Apart from the design, and moving away from the project design study, I should like to deal with the business of where the submarines are to be built, because this is one of the most unsavoury elements of the whole submarine program-the squalid squabbling in public as to where those boats will be built. Both the Navy and the Department of Defence have been very clever politically in this matter. They have been too clever by half. They have played on the greed of the various State governments, their cupidity, in holding out a carrot in the form of a $2.6 billion or $3.6 billion building program, the employment, the technology leap and all the rest of it, which will take place in their States if they get the contract. By so doing, they have turned the argument away from an examination as to the suitability of the design that has been accepted and even whether we need the boats at all. There are two aspects to this. The first is where the boats are to be built, and the second is the pressure that is now coming on people in this Parliament and in the Department of Defence to press ahead at breakneck speed because of the jobs and the money that is involved in the program. Building submarines is a highly skilled task. Only one company in Australia, Vickers at Cockatoo, has a proven record in submarine maintenance and modification. Yet the Royal Australian Navy and the Department of Defence, at the time when the selection of the boats was made, had no serious formal discussions with that company at all. They talked to other companies in Australia, though, about constructing the new design. Not only did that fly in the face of common sense, because these are people with a proven capability in a very specialised field; Vickers also happens to be the only Australian company in the business. It is owned by Australian National Industries and the shareholders are Australian. We have a government that brays about how it is now buying Australian made products for the Department of Defence, but in fact it does nothing for Australian industry. As we see with the PC9 design for the Air Force or the Steyr rifle for the Army, the Government has bought overseas on two orders which could well have gone to Australia. Consider the sophistry of the contenders for the program. They call themselves Australian companies-the Australian Submarine Corporation, which is Kockums; and Australian Marine Systems, which is HDW. The name `Australian' in these front companies is a misnomer. This business of building the submarines has turned into a blatant pork-barrelling exercise. What I suspect will happen is that one State will be named as the prime assembly area and some fabrication will be done in other States; it will be spread around to keep everyone quiet. There will be big cost penalties in that, and there will also be very big safety problems, because one cannot guarantee quality control and quality assurance may not be guaranteed in that circumstance. Submarines are not like surface ships. They are very much like aeroplanes. They are inherently dangerous. I have very grave fears about the safety of submarines that are put together from components built all over Australia, the selection of those sites having been based on political grounds. This is precisely the situation in which the United States Government found itself with the Challenger program, and we know how tragically that ended in January this year on its launch. We are inviting precisely the same result with the Minister holding out the production sites as a bait to his political colleagues around Australia. In conclusion, I want to talk about the Minister's haste to get a decision and contract signed. Let us get it right before we sign the contract. There will be a new government in this country within three months or 12 months. The incoming government will put the submarine program on hold, irrespective of what the contractual position is at the time. It will not matter what documents have been signed; it will not matter how many tonnes of metal have been cut. We will go back and evaluate the design and examine its suitability for Australian needs. We will work out whether it is adequate; we will work out whether we are getting value for money. No one has anything to fear if the design is the best and if it is the best value for money. We will not be blackmailed by the industrial complex telling us that jobs will be lost. That is nonsense. The order will still go ahead, but it might just be delayed a year or so. The Opposition has been scarred by the Whitlam years. We came into government in 1975 and carried on with two disastrous contracts-the FFG design and the Leopard tank. The Leopard tank had a most unusual design, with a very light hull and a big gun. The Leopard II which replaced it is very different. But we honoured that contract. We honoured the FFG contract. In so doing we bought the most useless ship that the Royal Australian Navy has ever had. We will not be faced with the same situation with this submarine program. Senator BROWNHILL(New South Wales)(11.47) —I welcome the opportunity to speak in this debate on the Appropriation Bills today, although it gives me little joy to speak about the Australian economy. Following on from my learned colleague Senator MacGibbon, I wonder whether really this Government is trying to submerge us by taking us under the water in a submarine with the economy, or whether actually it is just trying to scuttle the whole of the Australian economy. Senator Button —Are you going to dazzle us with your wit for half an hour, Senator, or is that the only joke? Senator BROWNHILL —No, I am not, Senator Zipper. The other day somebody said: `What do you have if you don't have a zipper?' I said: `You have a Senator Button'. The latest figures for our balance of payments give us a very clear picture of the appalling state into which this Government has put the economy. No longer can our once famous, now infamous, Treasurer (Mr Keating), the clock collector, blame the previous governments, the weather, external forces, or anything else that comes to his mind, for the economy. I wonder whether the clock collector has got his timing right or whether he actually has a watch that, most probably, is not waterproof and he has taken it under water. The economy today truly stands as all the Australian Labor Party's own work. The downturn in industry-especially the motor vehicle industry- is a result of government policy. The cost of living is a result of Government actions and policy. Our massive and ever growing external debt is a result of Government actions and Government policy. High interest rates are a result of Government actions and Government policy. Australia today is in a mess, and words are not the solution. The Labor Party cannot keep trying to talk up the economy, and Australia is getting heartily sick of hearing that the economy is about to turn the corner, that things are about to start to improve, that interest rates are about to fall and that inflation is about to come down. They have heard all that over the last three years. Although they hear it, what they see is quite the reverse. Our annual inflation rate-currently something like 8.9 per cent-is still four or more times that of any of our major trading partners. Interest rates are still unacceptably high and will continue to stay up while our economy is in such a mess. That comes as hard news for those in the rural sector, many of whom have battled soaring interest rates for over two years, along with drought and slumping world markets for their commodities. Also, just in the last day or two, they suffered the damaged wheat situation that comes from heavy rains falling on ripe wheat. Interest rates have been kept high by this Government, in an attempt to attract overseas capital. Many farmers have hung on in the last few years in the belief that the Government would do as it promised-that it would return Australia to the strong economic growth that we have had in the past. They hoped relief would come in the rural statement in April of the Minister for Primary Industry, Mr John Kerin. In that statement he claimed: No government has ever presented such a comprehensive, wide-ranging policy review from the standpoint of the rural, or any other, sector. No government has ever been so active in promoting the revenue concerns of Australian agriculture; and no government has ever given more recognition to the needs of all residents of rural and provincial Australia. Frankly, I have cattle at home that produce better fertiliser than that. What a lot of hot air, wasted words and meaningless phrases. What hope did that give to the rural sector? But that was in April. What has happened since? For starters, the consumer price index has recorded its largest increase since the December 1982 quarter. Interestingly enough, there has been quite a dramatic difference between the CPI increase of the city in which I have my electorate office, the city of Tamworth, and those of the major capital cities of Australia. For example, in the survey that I did in that city it was found that house fuel rose by 14.23 per cent, whereas the capital cities average was 1.7 per cent. For light, the capital cities average CPI rise was 1.7 per cent; in the Tamworth area it was 5 per cent. For fuel, in the major capital cities the CPI rise was 6.8 per cent, whereas in Tamworth it was 11.86 per cent-a 12 per cent increase for diesel fuel and a 14.23 per cent increase for heating oil. For wine and spirits, the capital cities average rise was 6.4 per cent; in Tamworth the rise was 20 per cent. Unemployment has also risen, with the latest September figures reaching some 8.4 per cent. The current account deficit has soared, with the latest figure being $1.735 billion-a record. That sounded warning bells throughout the economy. That is something like $50m per day or $2m per hour. Of course, the Budget holds no great hopes either. The Budget suggests a lower deficit target of some $3.5 billion, but this will be achieved only through increased taxes. In its first three years the Labor Government has attempted to produce an expenditure led recovery. In doing so it has run up a total deficit of some $20.3 billion. As we all know, the hallmarks of Labor governments are big government, big spending, increased taxation and big interference in our lives. This Budget and this Government are living up to reputation on all three counts. On the question of restraint, this Government works on the premise that one should hit the productive and assist the unproductive. Let me cite some of the better examples of just how carefully this Government is managing our taxes. It has provided $440 a week for four people over 18 weeks to train as clowns. That is really not as funny as it sounds. It has given $11,000 to a women's group to design a surfboard for women. This Government has provided $52,000 to the Victorian Builders Labourers Federation for artists and muralists. With spending like this is it any wonder that the economy is in such a mess? The Treasurer himself, in his Budget Speech, said Australia was facing a financial crisis and becoming a banana republic. Let me just quote from an article by Angela Mackay and Terence Maher on the front page of today's Australian Financial Review: According to Mr White, union moves for productivity-based wage claims and superannuation payments were out of the question in a climate of mounting foreign debt and trade deficits. And he accused the Federal Government of failing to create a climate for investment to take advantage of increased competitiveness resulting from recent sharp falls in the Australian dollar. Mr White, former head of the Australian Business council, asked: `Why is the Government imposing such savage imposts on business?' Wearing a badge depicting the Australian flag on his tie, Mr White asked rhetorically whether Australia had to wait until it was `a Brazil' before action was taken to correct our lack of competitiveness. I ask the Government why it is not doing something about stopping this country slipping the way it is slipping at this stage. Australia is not just in a financial mess; it is also in a legislative mess. It would seem that this Government cannot even get its legislation drafted properly. The fringe benefits tax fiasco must rate as an all-time classic example of bad legislation badly managed and woefully inappropriate. In fact in the Committee stage of the debate on that legislation numerous people tried to point out some of the anomalies likely to happen, and they have now happened. I think it is time the Government actually scrapped it completely and got on with the job of putting incentive back into the community. Budgets have been drafted on anticipated revenues from the FBT, but to get that extra revenue the Government has had to spend millions and now, the Government claims, unintended consequences have thrown these financial calculations out the door. Of course, unintended consequences, such as a 30 per cent drop in car sales, were predicted and the Government was told that it would happen. I chose to ignore it, just as it chose to ignore other unintended consequences which were pointed out to it at that time. In many cases in this chamber, and before the legislation was passed, as I have already said, this Government ignored any of the comments and suggestions made as regards that iniquitous tax. Of course, the fringe benefits tax legislation is not the only legislation with which there have been major problems. There have been similar bunglings with capital gains tax changes and for months the Treasurer kept assuring Australia in general and the Opposition in particular that there was nothing wrong with the legislation. The fact that we now have Taxation Laws Amendment Bill (No. 4) is clear evidence that in fact the legislation was far from perfect. The Australia Card Bill is another example of bad legislation, shabbily drafted, but in this case it will not have the opportunity to get to the amendment stage. I quote what Mr Frank Costigan, QC, said when he appeared before the Senate Select Committee on an Australia Card, as reported at pages 1203-4: There is no doubt that the introduction of an Australia Card of the kind contemplated by the submissions that I have read is a significant intrusion into individual privacy. I have no doubt at all about that . . . I have formed a judgment about it, and I am very strongly opposed to the introduction of an Australia Card. I think the benefits that might flow from it are to some extent illusory, certainly speculative, and can be achieved by other means. Bill after Bill and policy after policy are changed from one month to another as flaws are found. Is that the way to run a country? It is not just the legislative program that is a mess. The Treasurer's Round-up for October is sorry reading. I would like to contemplate that it may be the last round-up. For example, private new capital expenditure has declined, housing finance approvals have fallen, and building approvals for new dwellings have fallen also. And the economy continues its downward slide. It is no good this Government pushing the State of the economy under the carpet or trying to take us into the depths of the water, as I said at the beginning of this speech. It is still not facing up to its overspending. It is still not facing up to the holding of wage demands and it is not facing up to advising the Australian community that all of us are living beyond our means. In reality this Government, the Hawke Labor Government, is turning Australia into a faceless country. It is time the people of Australia were told the truth. Senator SHORT(Victoria)(12.00) —I rise in this debate on the Appropriation Bills to say just a few words on some issues which have arisen in recent days and on which I believe a comment needs to be made from this side of the Parliament. I will not take the Senate's time unduly because many of the matters I wish to raise will be raised during the Committee stage of the debate. I want to comment particularly on an attack on Wednesday of this week on a wide range of people-seven or eight, I think-by the Minister for Finance (Senator Walsh) in reply to a dorothy dix question from his own side of the chamber. He made a swingeing and deplorable attack on many people, including in particular one of Australia's leading businessmen, Mr John Elliott. I appreciate that Senator Walsh will probably, in response, portray me as defending Mr Elliott because he occupies a leading position in my party organisation. I am commenting on the issue not for that reason at all but because Mr Elliott is one of Australia's leading businessmen. He is one of those people in the community, fortunately an increasing number, who are really getting Australia's act together in terms of where we are going in the world. They are doing it despite the best intentions and endeavours of this Government to frustrate business activity, incentive and endeavour wherever they raise their heads. I deplore the use of this Parliament to make personal attacks on people in the way in which particularly Senator Walsh but other members of the Government do. It is a very cowardly form of approach to attack under privilege people who have no way of responding in a like manner. I take very much the point that his President alluded to the other day in response to a comment by Senator Chaney: I hope that these matters will be raised in the Privileges Committee of this Senate before too long. Coming back to the detail, the Minister, Senator Walsh, attacked Mr Elliott for building an industrial and manufacturing base in Australia, having started with very limited personal resources. Surely that is the precise activity we ought to be encouraging in this country. How on earth can we build a nation, a manufacturing sector or a financial sector if we are not to have people who are prepared to put themselves at risk, to work hard, to strive and to achieve-not just on their own behalf but, for the nation as a whole? It ill suits a Government Minister such as Senator Walsh to make outrageous and scurrilous statements about any figure in the Australian community when he knows perfectly well that if he said them outside this place he would have criminal proceedings taken against him immediately. Why then did Senator Walsh attack Mr Elliott? He appears to have attacked Mr Elliott because Mr Elliott spelled out in simple arithmetic a little earlier the fact that investment in Australia is a very difficult proposition nowadays compared with investment in other countries because of our high tax rates and high interest rates. By the way, the Australian company tax rate, now at 49 per cent, I understand is the highest in the world, certainly the Western world. We have, with our interest rate structure today, the highest real interest rates in the Western world. Those two factors, the greatest possible inhibitors of investment in this country, are due primarily to the policies of this Government. That is why Senator Walsh was so reactive because he knows as well as I do that his Government's policies have led to this situation. I wish to put on the public record my disgust at the attacks on people such as Mr Elliott. This attack is just one example of the attacks that are taking place in this Parliament. Helpful comments that are made in the community are completely distorted and demeaned in this place. Senator Walsh said that Mr Elliott had been engaged in `de facto embezzlement' as a result of the activities associated with the Henry Jones takeover some years ago. He accused Mr Elliott of making a tax free profit in a way which, by implication and innuendo, was somehow illegal. I point out to the Senate that all the profit that was made on those transactions and the development of the Henry Jones industrial vehicle was entirely within the taxation law of this country at the time. These were entirely legal transactions. Had the Government objected to them at the time presumably it would have made the necessary changes to the law. Regardless of whether changes are made after the event, it is absolutely disgusting that an action by any person in the community which was legal at the time can be subsequently regaled as being in some way illegal or underhand. I really detest that sort of approach. Mr Elliott responded to this attack yesterday in the media and it is worth recalling some of the things that he said. His comments should certainly be set out in the public record of the Senate. He said that new investment in Australia is being inhibited by high interest rates and the highest tax rates in the world. He also said, quite rightly: That's what makes it one of the least attractive places to invest. He pointed out that in terms of the cost structures in Australia at present, this country is now highly competitive with the rest of the Western world. Mr Elliott even said-and I am not sure that he is right-that the cost structures in Australia were now the lowest in the Western world. However, he pointed out also that there is not enough margin in Australia on which to predicate investments. This is because of our tax and interest rates structure. Mr Elliott said that in order to earn an 18 per cent after-tax return on investment debt and equity funds, Australian companies need, on a pre-tax and pre-interest rate basis, a return of at least 25 per cent. That compares with less than 15 per cent-in fact, 14.8 per cent-in Hong Kong; 16.7 per cent in the United States; and 17.8 per cent in Britain. Then one must compare the interest rates of different countries. Borrowings in the United States, according to Mr Elliott, can be obtained at interest rates of between 7 and 8 per cent. In Australia the borrowing rates are 17 to 18 per cent. As he quite rightly said, it is a matter of simple arithmetic as to why people are having grave doubts about investing in the productive sector of this economy. It is about time that this Government woke up to that fact: There is no point in imploring business to invest in Australia if we do not set the framework to enable it to make a profit on its investment. That is the situation that exists in this country today because of our interest rate and tax rate structures. Incidentally, I point out to honourable senators that one of the other great critics of Mr Elliott's statement a few weeks ago when he talked about the difficulties of getting a return on investment in Australia, was the Victorian Labor Premier, Mr Cain, who accused people who invest overseas of `ratting' on Australia. It is very interesting to note a report that was tabled in the Victorian Parliament two days ago. The first report of the Victorian Government's new notorious and desperately expensive Work Care scheme-a scheme that attracts a lot of income from employers-showed that of the income from that scheme in its first year of operation $70m, or 18.5 per cent of its total income, was invested overseas. Why was it invested overseas? Why would the Cain Government invest 18.5 per cent of the total income of this Government instrumentality overseas? It was done in order to earn a return on investment in exactly the same way that business people in this country seek to earn a return. It is about time that Labor governments, both Federal and State, got their acts together and grasped at least a basic simple comprehension of what is required to make the private sector of this country operate and perform. The efforts of this Government in inhibiting productive investment are no more than an indication that it has learnt nothing in its four years in office about the real operations of the private sector, which is the powerhouse income and wealth generator of this country. As a result of that it is no wonder that our economy has ground to a halt. For three successive quarters we have had negative growth in Australia. That information was released surreptitiously by the Treasurer's principal adviser. The Treasurer (Mr Keating) himself did not have the gumption to tell us. The information was leaked surreptitiously on the other side of the world that there will be no domestic growth in this country this year. If there is to be any growth at all in the economy it will come entirely from the external sector. When one looks at the external sector one really wonders how on earth that growth could possibly eventuate. In Australia today we have a balance of payments deficit on current account that absolutely boggles the mind. Last month alone we were in debt, in hock, to the rest of the world to the tune of $1,735 billion-not far short of $2,000m. There were some factors in that that must be taken into account in assessing an annual rate, but the fact is that we are running a deficit with the rest of the world of something like $17,000m this year on top of a deficit of about $14,000m last year. To finance that debt we are now borrowing at a rate which puts us amongst the highest borrowers in the world, including the Third World countries whom we used to denigrate so much because of their external indebtedness. We have put ourselves in a position where our external debt is one of the most horrendous in the world. We have a government that treats with lax disdain the problems of out external account, especially when it comes to actually doing something about it. Senator Button talks in the Senate about the long and medium term problems facing Australia in relation to getting the external situation right but 50 metres away, on the other side of this building, the Treasurer and the Prime Minister (Mr Hawke) are trying to talk up the economy and talk down our external account problems in a way which is totally misleading. We have not been told what this Government's exchange rate or interest rate policies are. We appear now to have a situation where we have the Government, or the Prime Minister and the Treasurer, saying that we have a floating exchange rate. But everyone in the financial markets knows that the Reserve Bank of Australia put a floor under the Australian dollar back in July when Australian Reserves absolutely haemorrhaged as a result of what was going on in the Australian economy at that time. There was Reserve Bank intervention on a massive scale. It lost us a fortune in international reserves to shore up the level of the dollar. Now, in the last month or so, it appears that the Reserve Bank is buying in the market to keep the value of the Australian dollar from rising too high. I do not pass judgmental comment on those actions but I do say, though, that it is absolutely imperative for the Government to tell the Australian people, the Australian economy and Australian markets just what its exchange rate policy is. At the moment the Government appears to be acting almost to fix the exchange rate whilst having a floating interest rate structure. That is the most interesting development in economic policy that appears to have occurred in this country in a long time. Having a near-fixed exchange rate and a floating interest rate completely turns on its head the sort of policy that the Government until recently was saying we had. It is imperative for the Government to come clean and tell us what its exchange rate and interest rate policies are. At the end of the day it is the fundamentals of our economic situation that will determine how our country develops. It is the fundamentals that will determine whether the industry policies that either this Government or the incoming coalition government pursue, will work. There is no point in trying to restructure the Australian economy in an industrial sense if we do not get things right in relation to exchange rates, interest rates and the macro-environment in which productive activity in this country has to take place. I fear very gravely for the future of this economy unless fundamental changes are made to some of our key macroeconomic policies, not least of which is budgetary policy, because we have a Government that is not seized of the problems facing the long term future of this country; we have a Government which is treating almost as a yawn the fact that we have not only a record external debt but also a record internal debt. Australia now owes the rest of the world $17,000 for every taxpayer in Australia. That is an enormous debt cast over each and every Australian. The Government seems not even to recognise that that is a problem. It goes on in successive years to record new highs in government spending and therefore in government taxes and borrowings. The Appropriation Bills the subject of debate today are the Bills of a Budget which is totally out of tune with the needs of this country in terms of the economic parameters and the environment in which the productive sector and all Australians are attempting to operate and to increase the prosperity of Australia and the living standards of us all. Unless this Government takes urgent action to do something about putting its spending house in order-by that I mean if the Government does not have a mini-Budget very early in the new year, if not by the end of this year-the problems which the present Budget has brought on, on top of the three preceding Budgets, will be enormously compounded in 1987 and we will run the risk as a nation of going into severe recession. So I do call on the Government as a matter of the greatest urgency to review its Budget strategy. It was the wrong strategy when the Budget was introduced in August; it is even more wrong today. It is imperative that the strategy be changed, it is imperative that the Government introduce a mini-Budget as soon as possible and it is imperative that it tells the Australian people and brings the Australian people into its confidence about where it is going in terms of this nation's economic policy. Senator RICHARDSON(New South Wales)(12.21) —The Budget brought down by Treasurer, Paul Keating, on the night of 19 August probably represents the most important Budget to come before the Parliament in 40 years. It was the first time in those 40 years that any Australian government really attempted to cut government spending. It certainly contained some of the horror features that caused so much comment and heartache in the lead-up to its presentation. No Budget which increases taxation, reverses previous policy and admits that living standards will have to decline in the short term could be expected to escape that sort of labelling. However, it is the most economically responsible and politically honest Budget this place has ever seen. It is in sharp contrast to the rubbery Budgets that Messrs Howard and Lynch presented during the years of the Fraser Government. It shows that this Government is deadly serious about getting the Australian economy back on the road to sound development. Senator Short —It is deadly. Senator RICHARDSON —I do not know how deadly it is, but I sincerely hope that Senator Withers is not too deadly. Long live John Howard; long may he reign. We love him; we need him. Senator Watson —What has it got to do with Senator Withers? Senator RICHARDSON —It has a bit to do with Senator Withers. I am told he is the one who is going around to the honourable senator's office, knocking on his door and asking: `Will you agree to knock off your leader?' Why does the honourable senator not tell us now where he stands? Senator Watson —That is news to me. Senator RICHARDSON —Most things are. The conservative parties in this country have had a pretty good run at government. The Australian Labor Party has been in government for very few of the years since World War II. We had 30 years of conservatives attempting to get the Australian economy right. All they ever did was bring about the causes of the problems this country faces now. The framework of this Budget had to be undertaken considering the very real problems of the decline in our terms of trade. It is worth looking at why we have this problem. Why are we in this situation? The major problem we have at the moment is the current account deficit, which is running at approximately $14 billion per annum. That situation has not been brought about by excessive wage increases, it has not been brought about by militant trade unions and it has not been brought about by reckless government spending. Senator Lewis —Of course it has. Senator RICHARDSON —Most rational-I use the word `rational', so Senator Lewis is excluded-economic observers acknowledge that the real problem has been the decline in the terms of trade. If we were able today to secure the prices for our exports that we were achieving at the end of 1984, as a nation we would be earning $6 billion a year more. If we had earned that $6 billion and had got our current account deficit down to $8 billion, we would still certainly have had a deficit of concern, but it would have been minimal compared to the problem we face at the moment. Senator Lewis —Eight billion dollars is minimal? Senator RICHARDSON —It is minimal in terms of the sorts of deficits Malcolm Fraser was able to produce. Look at what he did with the resources boom, which I will get to in a second. The former Government really knew how to muck up an economy. One of the reasons for the current account deficit, in a sense, was this Government's tremendous success with growth rates. There has been phenomenal growth in imports. Because of buoyancy and a surge in the economy our domestic demand picked up enormously, imports grew substantially, and our trading partners did not achieve a rate of growth equal to ours and were, therefore, not buying our exports at the same rate as we were growing. That is one of the fundamental reasons for the current account deficit. Hence the Government's strategy in this Budget was to gear back the rate of economic growth. The Opposition, when in government, was flat out trying to lift it. It could not. It did not have a clue. A further reason why imports were continuing to grow at such a rate was that our export performance did not measure up. Why did it not measure up? Conservative parties in their 30 years of government since the Second World War, because of their inward looking, misguided, selfish, miserable policies-particularly because the then Country Party's tail was always wagging the Liberal dog-gradually rendered our manufacturing industries uncompetitive. They gradually tore at its heart and gradually stripped it of its competitive edge. The current account deficit that we have today is going to be fixed because this Government has policies in its Budget to lift the manufacturing sector to make sure it gets back to the performance level it ought to have been at and would have been at if the lot opposite had not had 30 years attempting to wreck it. While on the question of debt I will try to put to rest some of the claims made by members of the Opposition and their more vocal supporters around Australia, particularly those in the New Right, their real masters. It is true that in June this year Australia's debt stood at some $65 billion. But one of the things never referred to by the Opposition is the fact that only 35 per cent of that debt is public debt. Of that total, less than $14 billion is Commonwealth debt. What members of the Opposition fail to understand and fail to ever mention is the fact that the debt is so high because of the aggregate borrowings of corporations in Australia, many of them led by very prominent businessmen who hold very high office in the Liberal Party-if that is an honour these days; some of them still consider it such but most of them are looking closely at whether they should support the Liberal Party at all. These people have borrowed great sums of money overseas. Why have they done that? Far from what John Elliott `I would not invest here' has done, they have done exactly that-they have invested it here, because we have created an economy in which those businesses can grow. So they are prepared to spend money on doing just that. Let us look at some elements of the Budget in more detail and look at how it comes to grips with the fundamental problems facing our economy. It does not hold out the traditional carrots in the form of financial protectionist bribes, the likes of which we saw so often during the 30 years of varying degrees of sleaziness; rather it is aimed at restoring a climate of confidence for producers and exporters. Our domestic economy and our standard of living must adjust to those changed circumstances. The adjustments required involve greater self-sufficiency as a nation. Senator Watson —Are you a free trader? Senator RICHARDSON —While I have been in this chamber, Senator Watson and I have had one thing that separates us-no, we have many actually, apart from this enormous gulf-and it is this: I have always been honest in this chamber. The Government is directly assisting the process by spending less and by borrowing less. This Government has been able to take those decisions, decisions that people such as Phillip Lynch and John Howard have been able only to talk about when they have had the opportunity. We have addressed the need to slow down the growth of foreign debt and we have substantially slowed down the rate of growth in government spending, with the deficit down to $31/2 billion. In real terms, after allowing for inflation, the rate of increase in government spending has been held to zero. That is something that no previous Australian government had been able to deliver since the Second World War. This Government has brought the coalition's massive budget imbalance back to more proper proportions-from 5 per cent of gross domestic product with John Howard to less than 11/2 per cent of GDP under Paul Keating. That is an achievement in itself. That is the reason why the economy is picking up again, that is the reason why business is again getting confidence and it is the reason why this Government will comfortably win the next election. More and more people are coming to understand that we are the only Party with the answers. Senator WALSH(Western Australia-Minister for Finance)(12.32) —in reply-In this debate egomaniacs and compulsive chatterers have already wasted far too much of the parliamentary staff time and the Government Printer's paper. I do not propose to add to the waste. Question resolved in the affirmative. Bill read a second time. (Quorum formed) The Bill. Motion (by Senator Walsh) agreed to: (1) That leave be given to Senators to move motions expressing opinions or making recommendations based on the Report of Estimates Committee A. (2) That where more than one motion is proposed, the motions may be debated together, but in all cases a motion or motions shall be disposed of before the Question is put on the Vote before the Chair. (3) That any Resolutions be reported when the Chairman reports to the President at the conclusion of proceedings in Committee of the Whole. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Walsh) read a third time. Consideration resumed from 21 October, on motion by Senator Walsh: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Motion (by Senator Walsh) agreed to: (1) That clauses 1 to 20 and Schedules 1 and 2 be postponed till after the consideration of Schedule 3. (2) That, unless otherwise ordered, the Votes in Schedule 3 be considered in the same groupings and order as the departmental estimates referred to Estimates Committee A, B, C, D, E and F, respectively, as follows: Page in Bill Division No. Department Amount $ Group A 63 380-382, 385, 386 Industry, Technology and Commerce... 353,853,000 73 500, 504, 506, 508, 510-513, 516-519 Prime Minister and Cabinet... 130,872,000 99 640, 642-643 Trade... 245,869,000 80 540, 542-545, 547-548, 550, 552, 554 Science... 541,025,000 Group B 27 220, 221 Community Services... 468,642,000 60 360, 364, 365 Immigration and Ethnic Affairs... 173,793,000 85 560 Social Security... 573,693,000 53 325-328 Health... 526,957,000 Group C 43 304, 305, 307 Finance... 110,747,000 46 310 Advance to the Minister for Finance... 160,000,000 40 287-292 Employment and Industrial Relations... 818,629,000 105 670, 672, 676, 678 Treasury... 723,995,000 70 490, 495, 497 Primary Industry... 220,224,000 25 200-202 Communications... 510,115,000 Group D 36 270, 271, 278, 279, 282-284 Education... 934,420,000 56 352-356 Housing and Construction... 573,592,000 34 245 Buildings and Works (Defence)... 296,509,000 34 246 Repairs and Maintenance (Defence)... 146,383,000 34 247 Consultants' Fees-Buildings and Works (Defence)... 25,000,000 34 248 Housing for Members of the Australian Defence Force- Advances to States... 1,937,000 92 590, 592, 593 Sport, Recreation and Tourism... 92,032,000 14 130-133, 136, 140, 142-149 Arts, Heritage and Environment... 193,300,000 11 120, 123, 125 Aboriginal Affairs... 271,391,000 Group E 77 520-523, 525 Resources and Energy... 147,129,000 18 165, 170, 175, 177-181, 184-191 Attorney-General's... 247,499,000 87 575-583 Special Minister of State... 278,939,000 47 315, 317-319 Foreign Affairs... 1,111,670,000 31 230, 232-234, 237, 239, 240, 241, 244 Defence... 6,589,130,000 Group F 108 690, 692-694 Veterans' Affairs... 999,200,000 102 664, 666-668 Transport... 179,309,000 23 193, 194 Aviation... 460,113,000 95 620, 622-626 Territories... 529,924,000 34 249 National Capital Development Commission (Defence)... 2,486,000 67 400, 402, 403 Local Government and Administrative Services... 619,734,000 34 250 Rent (Defence)... 76,466,000 35 252 Acquisition of sites and buildings (Defence)... 36,185,000 (3) That leave be given to Senators to move motions expressing opinions or making recommendations based on the Reports of the Estimates Committees; that such motions be moved when the appropriate Vote is under consideration; that where more than one motion is proposed in relation to a particular Vote, the motions may be debated together, but in all cases a motion or motions shall be disposed of before the Question is put on the Vote before the Chair; and that any Resolutions be reported when the Chairman makes his Report to the President at the conclusion of proceedings in Committee of the Whole. The CHAIRMAN —The question now is that the votes in Group A be passed without requests. Senator Vigor-Are we to debate the Group A departments together or department by department? The CHAIRMAN —The votes in Group A will be taken together unless the Committee wishes to take them separately. Senator Messner-May I suggest that we take them department by department? The CHAIRMAN —Is it the wish of the Committee to take the votes department by department? There being no objection, it is so ordered. GROUP A Department of Industry, Technology and Commerce Proposed expenditure, $353,853,000. Senator MESSNER(South Australia)(12.37) —The first department mentioned in Group A is the Department of Industry, Technology and Commerce. Bearing in mind the shortness of time I intend to address my remarks only very briefly to the estimates for that Department. Quite clearly, this is a major area of concern for the Government and the Opposition, given the very difficult economic circumstances into which this country has been led by the current Government. We have seen a very substantial change in the last 18 months or so in the value of the Australian dollar which has caused enormous difficulties for Australian industries as they adjust to the change induced by the very substantial fall in the dollar. In many industries that has meant a very big increase in the cost of inputs into particular industries. Let me instance several of the manufacturing industries in my State of South Australia. Of course, we know about the motor vehicle industry insofar as it has been greatly affected by the very substantial input of imported materials coming chiefly from Japan as a result of the rising value of the yen and the falling price of the Australian dollar relative thereto. This has meant that the cost of manufacture of vehicles in South Australia has risen and, consequently, tends to offset the advantages that may have come through other savings in the area of wage costs and so on. The imposition of the fringe benefits tax and also the new provisions relating to lead-free petrol and other matters such as that have increased the tendency towards higher costs through the effect of the devaluation of inputs into industry. That has meant higher costs to the consumer and a falling market for motor vehicles which is very substantial. Senator Elstob, from South Australia, would know very well that vehicle production this year has fallen by some 170,000 units. It is anticipated that that trend will continue for the next two to three years and will have a dramatic impact on the industry in South Australia. Not only has the motor vehicle industry been affected but also we know of the effect on smaller industries, such as the wine industry in South Australia. We have seen the impact of increased costs of chemicals, of corks, of the kinds of materials that are used in the winemaking processes, which have risen dramatically by percentages upwards of 60 per cent and added substantially to the cost of wine production in South Australia. That has come at a time when there has been a substantial imposition of extra costs by this Government through the imposition of a sales tax on wine, which has affected the market for wine production rather seriously and, consequently, has led to a downturn in employment opportunities and gross employment in the wine industry. Let me just quote figures to indicate employment numbers last year in the wine industry. The total number of people directly employed in the wine industry in Australia, just after the Government imposed its first sales tax increase of 10 per cent in 1984, was 6,000. That number is now reduced to 5,000-a net loss of 1,000 people out of a small but very important industry to South Australia. Consequently, that has had an effect which is flowing through the rest of Australia's economy. Taken with the downturn such as we are seeing through the substantial fall-off in the production of motor vehicles, it really does not lead one to a very positive and confident attitude for the outlook of manufacturing and industry generally in my home State. One would hope that the Government, through its industry and technology policies and the development of alternatives in the future, will have due regard to the problems of special industries such as those I have just outlined and will undertake positive policies to ensure that development is improved in those industries in the future. We know that the Government is very keen to promote itself as something of a supporter of private enterprise. Yet, given the opportunities to do so, all it has done is impose more and more taxes on Australian manufacturers and Australian industry generally and destroy the opportunities for industry to look after itself. We have seen the fringe benefits tax and the capital gains tax introduced at a time when confidence needed to be built up. This has led to a destruction of enterprise in this country. Clearly, that is a wrong approach by any government, but this Government appears to be addicted to that kind of approach. It does not know when it puts out its right hand what its left hand is doing. Consequently, it gets its industry policies totally confused with its taxation and other policies and never quite gets its act together. This is having a very disruptive effect on the economic development of Australia and this must reduce the capacity of Australian industry to be able to handle its own affairs in the future. I think it is time that this Government woke up to the fact that it is destroying the capacity of Australian industry to develop right at a time when the reverse ought to be occurring. What it should do at this time to demonstrate its faith in Australian industry and Australian enterprise is remove those crazy, lunatic investment-destroying imposts, such as the capital gains tax, the lump sum superannuation tax and, above all, the fringe benefits tax, which are so destructive of incentive and enterprise in this country. It is time the Government woke up to that fact. It is time it started to do something positive for Australian industry. Consideration interrupted. Sitting suspended from 12.45 to 2 p.m. Senator CHANEY —My question is directed to the Leader of the Government in the Senate in that capacity and also in his capacity as Minister for Industry, Technology and Commerce. Has the Minister noted the comments of Mr Bob White, Managing Director of Westpac Banking Corporation, that in his 46 years with the bank he has not seen the economy in worse shape? Is he aware that Mr White described the impact of the fringe benefits tax on business and banking in general as `horrendous'? I ask whether the Minister will answer the question posed by Mr White at his Press conference yesterday, namely: Why is the Government imposing such savage imposts on business? When will the Government acknowledge the need to change its wages and taxation policies to create a climate that will encourage, not depress, private investment in Australia? Senator BUTTON —If Mr White's bank had perhaps given more attention to the performance of its own institution instead of advising small investors on foreign exchange dealings, many of those small investors having gone broke as a result of that advice, it might have had a better performance this year. Now that the big banks are living in a more competitive environment, it seems that the name of the game is to blame the Government for static profit performance. If Mr White says that about the performance of the Australian economy, he has a very short memory. I do not know what indicators he is using in comparison with the year, for example, of 1982. Senator Chaney —Real interest rates, perhaps, and deficits? Senator BUTTON —Yes, real interest rates, deficits, employment and inflation. Perhaps we can refer these things to Mr White directly. But the areas of policy that were singled out for criticism in Mr White's statement include interest rate ceilings, the fringe benefits tax and government spending. It is not so long ago that Mr White was party to a group of businessmen who made very favourable comments about the Budget brought down in August this year. Banks are being compensated for retaining interest rate ceilings by a $140m subsidy negotiated as part of the April housing package. I do not want to go through all of the criticisms that have been made by Mr White. It is a sort of grab-bag of criticisms designed to camouflage the poor profit performance of Westpac this year. Senator ELSTOB —My question is directed to the Minister representing the Minister for Health and refers to petrol sniffing in Aboriginal communities. Can the Minister confirm that the number of petrol sniffers hospitalised has started to increase? Can the Minister give any details of the outcome of the recent Ministerial Council on Drug Strategy meetings regarding initiatives to deal with petrol sniffing? Senator GRIMES —I am sure that all honourable senators know that petrol sniffing is a considerable health problem in some Aboriginal communities, particularly in the Northern Territory and South Australia. There has been an increase in the numbers but the increase varies from place to place. In recent times there has been an increase in admissions to Alice Springs Hospital from an annual average of five or six patients to, I think, 22 patients, 20 of whom are from South Australia. There was one death from petrol sniffing in the Alice Springs Hospital early this month. The Ministerial Council on Drug Strategy met earlier this month. Officials and Ministers representing all of the Commonwealth and State departments of health, Aboriginal affairs and community welfare discussed petrol sniffing in the Aboriginal communities, expressed their concern and established a small special task force, convened by the Northern Territory Government but comprising members from South Australia, Western Australia and the Commonwealth, to prepare an action plan for consideration by relevant Ministers meeting in Alice Springs in the next week or two. The plan will have to propose strategies for more effective co-ordination between the relevant authorities, ways of improving delivery of prevention and treatment services and means of improving quickly the knowledge about petrol sniffing. As in all areas of Aboriginal health, it is clear that any program will have to involve the Aboriginal communities, particularly the parents. It will have to take into account the very difficult social conditions that lead to this sort of behaviour. For instance, as with trachoma, the superficial problem is part of a total health problem and involves consideration of the total problems facing Aboriginal communities, particularly those young Aboriginals who, having received an education, find that that education is of very little use or relevance to them in their conditions. I hope that the task force will report soon. I will seek any further information from the Minister for Health and report to the Senate. Senator LEWIS —My question is directed to the Minister for Veterans' Affairs. I refer the Minister to his statement in the Senate on 29 May this year in relation to using the Australian War Memorial for a function associated with the proclamation of the controversial Veterans' Entitlements Act. He said: The Department therefore took steps to itemise suitable venues for the holding of such a function. The Department then made the decision that the suitable place for the proclamation ceremony would be the Australian War Memorial. I ask whether it is a fact that in the Jones report on the War Memorial administration a minute is detailed from the Minister's office, signed by a senior staffer, which states: He- the Minister- would like a ceremony arranged at the War Memorial. I ask the Minister: Why did he fail to tell the Senate that it was his request that the Australian War Memorial be used for the function? Senator GIETZELT —The fact is, as I have indicated and as Senator Lewis mentioned in the earlier part of his question, that the Department chose the Australian War Memorial for the purpose of the proclamation ceremony. I was not aware then that the responsibility for assisting with the organisation of the function was passed to a member of my staff who in her own right communicated with the public relations section of the Department of Veterans' Affairs to organise the function. In no way did I mislead either the investigator, Mr Jones, or the Parliament in respect of that. That was the natural corollary of the initiative taken in the first place by the Department. Senator LEWIS —I ask a supplementary question, Mr President. I ask whether the Minister can explain how it was that Mr Jones found: 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. Can he explain why he bucketed Mr Flemming over this matter in the light of that finding? Senator GIETZELT —Never at any time did I direct the Australian War Memorial to perform the function or to make its premises available for the function. It was a decision of the Department to hold the function. It was a decision of the Department that it should be held at the Australian War Memorial. It was then the responsibility of the Department and of an officer from my office, as well as the persons involved in the War Memorial, to organise the function, who was to be invited and so on. Never at any stage was it a ministerial direction. Senator COLEMAN —My question without notice is directed to the Minister for Community Services. What is the reasoning behind the Government's proposal to close the Queen Elizabeth II Medical Centre and Melville Rehabilitation Centre? What plans does the Department have to ensure that existing clients will not be disadvantaged by the planned closures? How can the Government continue to provide the same level of service to future clients as is provided at present? What facilities, similar to those available at QEII and Melville, will be available to clients after the closures? For what will the centres be used afterwards? Senator GRIMES —The decision of the Commonwealth to close and sell major Commonwealth owned rehabilitation services in the next 12 months is part of the ongoing plan to reform the role of the Commonwealth rehabilitation service generally. The Commonwealth rehabilitation service was established in the post-war years in a vacuum. There was essentially no rehabilitation service within Australia. At that time and since then the large rehabilitation institutions were and have been built in most capital cities, including the ones mentioned by Senator Coleman. As a result of the siting of these centres and as a result of the development of the cities in which they were sited, there has been a major misallocation of resources in rehabilitation. For instance, in Western Australia up to 25 per cent of the costs of rehabilitation at the Melville Rehabilitation Centre was spent in transporting patients to and from the rehabilitation centre. When we had a residence at the Glen Waverley Rehabilitation Centre in Melbourne, it would have been cheaper to send the residents to Hawaii for a fortnight than to put them in that rehabilitation centre. The demographic centre of Sydney is around Parramatta in the western suburbs, yet one of our centres is in Royal Prince Alfred Hospital, QEII, which was referred to by Senator Coleman, and the other is on the far North Shore. We are providing rehabilitation services through regional units where the clients are so that we can extend our services and increase the number of clients with whom we deal, so that we can act in co-operation with the State governments and the increasing number of private rehabilitation services to ensure an equitable distribution of services. We are now planning, in conjunction with the States, to achieve this. We have guaranteed, and I repeat the guarantee, that there will be no loss of services as a result of these actions. Where it is necessary, part of the sale of rehabilitation centres will be provided with a lease-back arrangement if we have to maintain services in existing areas while new ones or different ones are developed. I point out that the sorts of services described in an article in the Sydney Morning Herald yesterday-gymnasium facilities, swimming pools and training facilities-are available elsewhere and the Government will be able to arrange and pay for, if necessary, access to these services by rehabilitation clients. It is of considerable disappointment to me that I noticed today that the Australian Medical Association has put out a rather inflammatory Press statement concerning the closure of some of the rehabilitation centres, saying that thousands of people who have been severely disabled by sickness or injury will have a shadow of doubt and uncertainty hanging over their futures. The first statement in the Press release says that I took over the Commonwealth rehabilitation service from the Department of Health. I did not. The Commonwealth rehabilitation service was in the Department of Social Security and came to the Department of Community Services in the split. It is that obsession of the AMA and others that rehabilitation is a medical process alone which has led to the difficulties that we now have. Medical rehabilitation is only part of general rehabilitation. The States and State hospitals are, and will continue to be, predominantly involved in medical rehabilitation. We will continue to provide, where necessary, the medical skills necessary for rehabilitation but, by and large, we will be involved in a counselling and brokerage role to improve, not lessen, the position of people in this country needing rehabilitation. Senator HAINES —My question is directed to the Minister representing the Minister for Foreign Affairs, although I acknowledge that it may be more appropriately directed to the Minister Assisting the Prime Minister on the Status of Women. I remind the Minister of a statement in the 1986-87 `Women's Budget Program' document that `significant reductions in the total level of overseas development assistance are likely to have a disproportionately adverse impact on women's participation in development activities'. In light of the Government's claim to be seeking to improve the position and status of women, can the Minister explain the rationale behind and the impact on women of the following: A 100 per cent cut in Australia's contribution to the United Nations Development Fund for Women; a 72 per cent cut in Australia's contribution to the United Nations Fund for Population Activities; a 20 per cent cut in Australia's contribution to the United Nations High Commissioner for Refugees; and a 90 per cent cut in Australia's contribution to the United Nations Relief and Works Agency for Palestinian Refugees in the Near East? Can the Minister also explain the effect that the 12.8 per cent drop in official development assistance will have on the ability of the Australian Development Assistance Bureau to supplement fully and evaluate its policy on women and development? Senator RYAN —I have some information about the matters raised in Senator Haines's question. Despite cuts to Australia's overseas aid program in the last Budget, Australia continues to contribute to a range of international organisations that are important in assisting women. The Government does not consider that its commitment to issues of special significance to women in development can be expressed only in terms of funding commitments to these two particular organisations. Both the United Nations Development Fund and the United Nations Children's Fund, which receive significant Australian support, undertake projects focusing on the developmental needs of women. Lesser cuts to UNFPA and UNDFW would have been made at the expense of other key agencies. Reductions in Australia's contribution to the UNFPA do not signal a reduced commitment to UNFPA's mandated responsibilities, nor do they signal a diminished focus within the overall aid program on important population issues relevant to development. In 1986-87 Australia is still contributing $350,000 to the Planned Parenthood Federation and $110,000 to the Population Council, as well as $870,000 for the World Health Organisation's special programs, including research, development and training in reproduction. Senator Haines's question touched upon some other issues. I will refer them to the Minister for Foreign Affairs for reply. Senator SIBRAA —Has the attention of the Minister representing the Treasurer been drawn to an article in the West Australian this morning headlined `More backing for ID card'? I ask the Minister whether the article contains the following statements by the Director of the Taxpayers Association, Mr Eric Risstrom, in relation to the Australia Card: I am completely convinced that the majority of the Australian public wants it. Furthermore, the majority of the Australian public needs it because I can see a tax cut of as much as 15 per cent at the end of the line. I ask the Minister: Is the tax cut figure of 15 per cent an accurate estimate of the benefits to the Australian public of the Australia Card? Senator WALSH —I have indeed seen the article in the West Australian, part of which Senator Sibraa has quoted. I should add one or two lines to Senator Sibraa's quote, as Mr Risstrom said the system would lead to tax cuts of up to 15 per cent and would be a boon to honest taxpayers. That is, of course, a very accurate description of what the Australia Card would be-a boon to honest taxpayers. He said that he is completely convinced that the majority of the Australian public wants it and that he believes in it much more than he did a year ago. I am not aware of the reasoning behind Mr Risstrom's estimate of tax reductions of 15 per cent consequent upon the introduction of the Australia Card, but certainly there are very large benefits to honest taxpayers in its introduction. The amounts of money would grow over time, but the official estimates are that in the very first year it would yield an additional $700m in tax revenue-that is, $700m of tax would be paid by people who are presently evading tax-and that it would save around $300m a year in social security fraud. That adds up to a figure of $1 billion-the official estimate. Mr Risstrom's figure is somewhat higher than that. Who is to say that Mr Risstrom is wrong? Certainly, the official estimates, as such official estimates usually are, are rather conservative, and there is no doubt that the savings would grow over time, as compared with the continuation of a society without identity cards, as we have now. Mr Risstrom has placed himself in very good company on this issue. For example, Senator Haines said at the Tax Summit: Furthermore, the use of identity cards to limit tax avoidance-for example, the holding down of two jobs by people using different names-and social security fraud, including maintenance avoidance, must be considered. Mr Greiner, the Leader of the Opposition in New South Wales, said of the introduction of national identity cards: `They are in the interests of the community'. He said that only people who were acting dishonestly had anything to fear. Mr Greiner is completely right about that. On 15 September 1985 John Howard said, in reply to the question `. . . where do you stand on the proposed ID card?' from Laurie Oakes: I personally see some merit in having an ID card providing the civil liberties concerns that people have voiced can be looked after- I interpolate that they have been- and provided the Government can satisfy the community that there is some cost benefit in it. I haven't gone overboard in supporting it, but, as a matter of principle, I think there is some merit in giving it . . . consideration. When asked about his professed belief in deregulation and the introduction of the card, Mr Howard said: I don't think there is any inconsistency. I mean, the United States has had a social security card for generations and yet the United States economy is the most deregulated economy in the world. And so on, and so on. In other words, Mr Risstrom is in very good company and the only reason that some people in the Opposition have had a change of heart on this issue is that their tax evader friends have been putting political pressure on them. Senator MacGIBBON —My question is directed to the Minister for Veterans' Affairs. I hope that he can answer it a bit more confidently than he did the last one. Government senators interjecting- The PRESIDENT —Order! Senator MacGIBBON —They can have the floor if they want it, Mr President. The PRESIDENT —I ask Senator MacGibbon to ask his question and to ignore the interjections. Government senators interjecting- The PRESIDENT —Order! There are far too many interjections from my right. Senator Gietzelt has some difficulty in hearing and he is entitled to hear the question. Senator MacGIBBON —My question concerns the book Padre: Australian Chaplains in Gallipoli and France, authored by the Assistant Director for Research and Publications at the Australian War Memorial, Dr Michael McKernan, whose conduct was strongly defended by the Minister in the Senate yesterday. I ask: Was an Australian War Memorial researcher, Ms Ann Millar, diverted by Dr McKernan for three weeks to work on Padre? Were two Australian War Memorial secretaries, Ms Lyn Lowes and Ms Dot Haines, used by Dr McKernan for typing and word processing of his manuscript during office hours? Did Dr McKernan use Mr Tom Frame, an Australian War Memorial vacation scholar, for additional research during office hours? Finally, under what circumstances were 31 photographs from the Australian War Memorial library used in Padre, and were reproduction fees ever paid to the War Memorial by either Dr McKernan or his publisher, Messrs Allen and Unwin? Senator GIETZELT —Senator MacGibbon asks a very detailed question in respect of the activities of one of 217 people who work at the Australian War Memorial. I obviously would not have the details necessary to respond to satisfy Senator MacGibbon. I have 13,000 people working in the Department and I would not know whether they use resources for this, that or anything else. All I know is that, if resources were used in respect of any matter of a private nature, that would come within the jurisdiction of the person in charge of the Australian War Memorial, who at that stage would have been the Director, Air Vice-Marshal Flemming. If there were any suggestions that resources of the War Memorial had been improperly used, then it was the responsibility of the Director to draw it to the attention of the Council and/or the Minister. Never on any occasion, as far as I am personally concerned, in the period of almost two years during which the War Memorial has been under my ministerial jurisdiction, have any of these matters been drawn to my attention by anybody associated with the War Memorial. Senator MacGIBBON —I ask a supplementary question, Mr President. In the light of that explanation, was the Minister not concerned yesterday, when he presented, with full support, the statutory declaration from Dr McKernan, at the discrepancy between Dr McKernan's statutory declaration and the audit from Arthur Young? Senator GIETZELT —The honourable senator's assertions do not impress me at all. If he can produce evidence, they will be investigated; but on the basis of attempting continually to smear officers of the Australian War Memorial without any evidence at all, I am not prepared to respond. Senator ZAKHAROV —Can the Minister for Education inform the Senate of progress being made in the export of services by Australian educational institutions? What action has the Government taken to encourage institutions to establish and market educational services overseas? Senator RYAN —I am happy to inform the Senate that the Government's relatively new policy of exporting education services is moving along very satisfactorily indeed. For example, there are currently 350 overseas students enrolled in full fee courses here in Australia or off-shore. At this stage about 20 higher education institutions are offering such courses. At the same time, we would like to see even more institutions get involved and more courses offered. Those honourable senators who are interested in this very exciting development will be pleased to hear that, to facilitate an increase in activity by the institutions, the Government recently announced new measures to encourage and reward institutions entering the export market. For the next five years higher education institutions will be permitted to retain a part of the capital component of the full fees that they charge overseas students. Under these arrangements institutions will retain the full capital element of fees until the end of 1988, 75 per cent in 1989, and 50 per cent in 1990. Institutions will be free to use this revenue to develop new facilities, which in turn will generate a further capacity for export activity. The Government has also decided that the remaining 50 per cent of the capital component in 1989 and 1990 will be applied through the Commonwealth Tertiary Education Commission to priority capital projects across the higher education sector. It is clearly now very much in the interests of institutions themselves and of the sector generally that they pursue the opportunity for the development of full cost courses. I am delighted at the response of our institutions. I believe that more of them will respond energetically now that there is an incentive, in terms of the development of their own capital facilities, to do so. In the light of the current debate about the desirability of private entrepreneurs coming into this field, there is really no need, in terms of our export development, to have private operators in the field, since public institutions are showing themselves to be very able and willing to move into this market. Senator REID —I refer the Minister for Veterans' Affairs to his tabling yesterday of a statutory declaration from the Assistant Director of the Australian War Memorial, Dr McKernan, denying allegations made against him by the member for the Northern Territory, on the basis of which the Minister rejected Mr Everingham's allegations and described them as scurrilous, defamatory and scandalous. Given the Minister's acceptance of the version contained in the McKernan declaration, I ask whether the Minister will explain why Dr McKernan omitted to mention that a memorandum from the Director of the Memorial to him dated 4 July 1986 stated that neither the research and publications committee nor the Australian War Memorial Council had specifically approved expenditure for or publication of a guide book to the War Memorial; that despite this lack of specific approval, a total of $33,067 had been paid out of Memorial funds at that time; asked why a member of Dr McKernan's staff, Mr Peter Stanley, had been hired on a freelance basis to write the publication, and what were the terms of his contract; and asked why an in-house booklet developed into a glossy, expensive publication by a company controlled by Mr John Ferguson, a Sydney publisher, but also a paid consultant to the War Memorial. Senator GIETZELT —The Council of the Australian War Memorial is charged under the Australian War Memorial Act, which was introduced into the Parliament by the previous Government and became law in 1980. So any questions about the administration of the Australian War Memorial rest with the decisions taken by the previous Government. The Act vests the authority for the care, control and management of the Australian War Memorial in the Council. The powers of the Minister are very limited. Consequently, I have little power over the way in which the Australian War Memorial operates. The Council, then, in its day to day operations, reposes the responsibility for the management in the Director, a statutory officer appointed in 1982 for a five-year term. If any of the matters the Opposition wishes to raise in respect of any of the public servants employed by the Australian War Memorial have any substance at all, those matters, of course, become the responsibility of the Council of the Australian War Memorial. In regard to Mr Everingham's scurrilous attack in the Parliament upon these public servants, I did no more than request from the officers concerned their response. I did not endorse their response, and I do not resile from my responsibilities in that respect. I neither endorsed nor rejected anything. All I did yesterday was table their responses so the Parliament would be aware of how the officers responded to the allegations made. According to section 20, sub-section (2), of the Australian War Memorial Act, the responsibility for these matters rests with the Council. The Council, of course, has been meeting for 3 1/2 days, and is still meeting, with a view to resolving the difficulties surrounding the Director. I imagine that when that position has been determined, if there is any substance at all in respect of the matters raised by the Opposition or, for that matter any person, about the publications, the bookshop or the research sections of the Australian War Memorial, it will be the responsibility-I will see that it is-of the Council to examine these matters. Honourable senators can rest assured that the Council will accept its responsibilities in these matters now that it is aware of the serious deficiencies that exist in the administration of the War Memorial-deficiencies which caused the Council to request me to appoint an investigator and which obviously led to the situation of the Director being asked to retire. Senator McINTOSH —I direct my question to the Minister representing the Minister for Foreign Affairs. Does the Government have any information that can throw further light on the vicious murder of Rolando Olalia, a leading trade union figure and left wing politician in the Philippines? What does the Government think the likely effect of this murder will be on the stability of the Philippines? Senator GARETH EVANS —The Australian Government has been appalled and shocked by the report of the murder in Manila yesterday of a leading Philippines public figure, Mr Rolando Olalia, who was Chairman of the Partido Ng Bayan, or PNB, and of the trade union grouping Kilusang Mayo Uno, or KMU. On behalf of the Government I wish to express our sympathy to Mr Olalia's family and to Mr Bobby Ortaliz, the Secretary-General of the KMU, who is currently visiting Australia. Mr Olalia's role in the public life of his country brought him into contact with a great number of Australians, particularly Australian trade unionists, and he was a very well known figure. The Australian Government has no further information that I am aware of at this stage in addition to that which has been in the Press, and is, of course, unable to comment on allegations concerning those who might be guilty of the crime. Of course, we hope that the Philippines Government will be able to move quickly to ensure that they are brought to justice. To the extent that this crime may be symptomatic of some larger political unrest operating in the Philippines at the moment, I think it should also be said that the Australian Government attaches enormous importance to the efforts being made by the Government of Mrs Aquino to consolidate political stability in the Philippines and to introduce social, economic and political reform and, of course, to restore the full operation of normal democratic processes. We deplore any actions which aim to destabilise the Government of the Philippines and so hinder the Aquino Administration's ability to tackle the very serious problems it faces. Senator MASON —My question is addressed to the Minister representing the Attorney- General. According to a report in the Sydney Morning Herald yesterday concerning questions I have on notice regarding possible Australian Security Intelligence Organisation involvement in the Vanunu affair, a spokesman for the Attorney-General said he would not comment on security matters. Can this be taken as an official response to my questions? If so, what possible involvement with Australian security does the matter of nuclear weapons in Israel have? For instance, would it imply some undisclosed connection between Australia and Israel in the development of nuclear weapons? If not, can this response be taken as an open licence for ASIO to meddle in the affairs of other countries, immune from any obligation to inform this Parliament? Senator GARETH EVANS —Any questions on notice that may have been asked by Senator Mason on this or any other matter will be the subject of a written answer from the Attorney-General in the usual way. The response that was made yesterday by the Attorney-General's office was consistent with the practice of successive Australian governments of neither confirming nor denying allegations about ASIO, no matter how far fetched or inaccurate those allegations might be. However, in response to some of the more wide-ranging and extravagant parts of Senator Mason's question, it does need to be said that the functions of ASIO are limited by statute to matters concerning the security of Australia and that Mr Justice Hope, in his recent report on Australia's security agencies, found, as I hope Senator Mason has noted, that ASIO had been concerned to ensure that its operations and actions are within its statutory charter. Insofar as Senator Mason refers to the role of Parliament in overseeing the activities of ASIO, Senator Mason will, or should, know-one is never quite sure with Senator Mason-that the accountability of ASIO will be strengthened by measures recently passed by Parliament increasing the role played by the Attorney-General and, of course, by the Parliament itself, through the proposed new committee. Senator Mason will also recall that legislation has recently been passed to establish the office of Inspector-General of Intelligence and Security, whose functions will include investigating complaints about the Organisation's conduct. In respect of the filling of that position, an announcement is, I believe, scheduled to be made very shortly indeed. Senator JONES —My question is directed to the Minister for Resources and Energy. Which section of the industry is responsible for the wildly erratic prices of petrol from service stations throughout Australia and, in particular, the Brisbane area, where at many of the service stations over the past 10 days the price has moved from 54c a litre to 36c a litre and back again? What motives lie behind such fluctuations, which seem to be uniform? I further ask: What opportunity exists for the Federal Government to intervene to stop this practice? Further, what harm do these changing prices have on the management of petrol stations owned by oil companies, and can any action be taken to protect the motoring public from the confusion that has developed over petrol pricing? Senator GARETH EVANS —Let me make it clear, as I have done on numerous previous occasions, that the Commonwealth has no control over the retail petrol market. That is a State responsibility to the extent that the States choose to exercise it. The Prices Surveillance Authority established by the Commonwealth does of course endorse, however, a maximum wholesale price based on examination of oil company costs and profit levels and each of the States accepts at the moment the PSA's recommendations. What the Commonwealth itself does that is crucial, at least so far as the base price is concerned, is set the price for Australian crude oil based on world market prices. At the retail level there are many reasons for discounting of the kind that we have witnessed in Queensland in recent times, as in a number of other parts of Australia. It might be instigated by oil companies with excess product or it might be instigated, as it occasionally is, by independent operators with access to spot sales of petrol, or sometimes by the service stations themselves. As far as I am aware, there is no excess supply of petrol in Queensland at present, so I can only assume that increased market share struggling is the reason behind the discounting that has been mentioned by Senator Jones. Once one service station lowers its price its competitors, of course, have to follow quickly or they jeopardise their commercial position. This is because, as is well known, consumer loyalty in the petrol market is a commodity in very short supply indeed and, as a result, there is this great sensitivity to price. Discounting again tends to be most prevalent in areas of high volume sales so that increased sales can in those circumstances more than offset the reduced profit margin involved. To the extent that service station owners or lessees are supported by oil companies when discount selling is under way, it is usually clear that there are no adverse effects on service station management. However, it is the case that private operators without financial support are in a vulnerable position when discounting of this kind takes place. All I can say, finally, I suppose, is that the public can rest assured that the Commonwealth is doing its bit to minimise the effects of crude oil price changes on petrol prices by offsetting, as we continue to do, increased revenue from crude oil excise as the price of crude gradually goes up by, at the same time, bearing downwards the excise on petroleum products, and certainly we would intend to maintain that policy for the foreseeable future. Senator VANSTONE —I refer the Minister Assisting the Prime Minister on the Status of Women to section 40 of the Sex Discrimination Act which effectively removed from the application of that Act anything done by a person in compliance with a number of Acts, including the Marriage Act, for a period of two years from the commencement of the Sex Discrimination Act, which period expired on 1 August 1986. I ask the Minister: Has the Government made a decision to exempt permanently section 11 of the Marriage Act from the application of the Sex Discrimination Act? Does such an exemption confer different rights on men and women in that women can marry at 16 and men not until they are 18? Which women's groups were consulted to come to such a decision? What is the principle which justifies the continuation of this discrimination between men and women in the matter of marriage? Senator RYAN —Senator Vanstone no doubt realises that the administration of the Sex Discrimination Act is the responsibility of the Attorney-General. While I am aware of a number of steps that have been taken to bring various State and Federal laws into line with the provisions of the Act within the two-year period, I do not have information with me specifically answering the effect on the Marriage Act. I will seek that information from the Attorney-General and provide it to Senator Vanstone. Senator VANSTONE —Mr President, I have a supplementary question. Am I to understand from the Minister's answer that, as the Minister responsible effectively for the status of women, she is unaware of such a move? Senator Ryan —I will not answer that question. The PRESIDENT —The Minister cares not to answer the question. Senator REYNOLDS —Is the Minister for Education aware that there is considerable concern among Queensland external students opposed to a recommendation made by the Commonwealth Tertiary Education Commission, which proposes serious restriction of courses offered from the University of Queensland? Can the Minister assure external students that any necessary rationalisation will not lead to a closure of Australia's pioneer in the field of external studies nor will Queensland external students be directed to universities in other States? Senator RYAN —One of the recommendations of the very wide-ranging efficiency and effectiveness review of higher education was that there be a series of rationalisations in the external studies area. The aim of those rationalisations would be to concentrate expertise in the distance education area and to provide better access, better follow-up and better opportunity for tutorial assistance and so on to external students. The efficiency and effectiveness review is, as I said, a very wide-ranging report. It deals with an enor- mous number of matters concerning efficiencies involved in the operation of higher education, and the Government has not yet given consideration to the recommendations in the report. We will be doing so shortly. Indeed, on 25 November, I think it is-I will correct this if it is wrong-there is to be a major seminar on the efficiency and effectiveness review sponsored jointly by the Tertiary Education Commission and the Institute of Public Administration. The Government's consideration of these matters is in the very early stages. Certainly no decisions have been taken and I think we are some distance from making decisions on the recommendations. Certainly Senator Reynolds herself, as a member of the Government, will be able to make comments on the review. I am aware that there is a campaign amongst external students, particularly those at the University of Queensland. All I would like to say in response to the campaign at this stage is that, whatever decisions we make, they will be decisions in the interests of improving access by students to external studies and improving the quality of external studies. Those two criteria would certainly be the basis from which we would consider the CTEC recommendations. Senator PUPLICK —My question is addressed to either the Leader of the Government in the Senate or to the Minister representing the Attorney-General. Has the Government made a decision to intervene before the Supreme Court of New South Wales in support of the United Kingdom Government's moves to suppress the publication of Peter Wright's book Conspiracies of Silence? If so, why? Is it a fact that Wright's book adds nothing new to the public debate about the role of Sir Roger Hollis which has not already been exposed by Chapman Pincher in the about to be published new biography of Anthony Blunt and others? Are the people of Australia not entitled to know the full details of Hollis's role in the establishment of their own security organisation, the Australian Security Intelligence Organisation? Is not the Australian public's interest best served by the open discussion of these issues rather than by the techniques of censorship and suppression which are always ultimately doomed to failure? Senator GARETH EVANS —The Government has given some consideration to the matters involved in the Wright case which, I might say, are much more wide-ranging than simply having to do with the position of Sir Roger Hollis. All I am able to say on behalf of the Attorney-General at this stage is that the Government will make its position known at an appropriate stage. The PRESIDENT —Before I call Senator Giles, I take the opportunity of wishing her a happy birthday for next Sunday on behalf of all honourable senators. Senator GILES —Thank you very much, Mr President. My question is directed to the Minister representing the Minister for Foreign Affairs. This is the sort of good news that anybody would want for a birthday present. Can the Minister report on the outcome of the two resolutions sponsored by Australia at the United Nations? Senator GARETH EVANS —I am very pleased to be able to tell Senator Giles that the First Committee of the United Nations General Assembly voted yesterday on several resolutions dealing with nuclear testing, two of which were sponsored by Australia, and both of those received overwhelming support. First of all, the Australia-New Zealand resolution on a comprehensive test ban, which reaffirms the fundamental importance of the comprehensive test ban treaty and develops a program of action to achieve it, received the highest number of positive votes of all five resolutions, that is to say, 117 votes. This support included the majority of Western non-nuclear states as well as the Soviet Union and its allies. Twenty-six countries co-sponsored the Australian text, including Sweden, Canada, Japan and Papua New Guinea. Only one country, France, voted against. The second Australian resolution called on the nuclear testing states to make public each test and provide certain data, including the size of the test and the geology of the test site. This was a new initiative and the resolution received 107 positive votes. Only one country-again, France-opposed the resolution. It is worth mentioning for the record that there were two other resolutions which supported test bans-one sponsored by Mexico and another by Hungary. The main differences were that the Mexican resolution, beside calling for a test ban, proposed that the United States and Britain should join the Soviet moratorium. Australia voted in favour, but recorded a reservation on the moratorium idea. The Hungarian resolution placed main emphasis on the moratorium and used a formulation designed to permit nuclear explosions for peaceful purposes. Of the three, this Soviet bloc resolution received the fewest votes. Finally it is worth noting that support in the First Committee for the Australian sponsored resolutions reflects very creditably again on the performance of Australia's Ambassador for Disarmament, Richard Butler, and of course more generally on Australia's very high standing under this Government in the international community as a dedicated, determined and realistic advocate of the vitally important arms control measure-that is, a comprehensive nuclear test ban treaty. And a happy birthday to Pat! Senator KNOWLES —I direct my question to the Minister representing the Minister for Health. The Minister for Health said, when introducing the Australia Card Bill, that the precise cost to the private sector had been difficult to estimate. Can the Minister inform the Senate what steps the Government is taking to ascertain what costs the private sector will incur in complying with the Australia Card proposal and with new tax requirements to be imposed by the Australian Taxation Office? Can the Minister say whether the Government will have regard to the statement in June of the Director of the Business Regulation Review Unit that, as a rule of thumb, all new regulations could be expected to cost the private sector twice the cost incurred by the Government? Senator GRIMES —I have neither knowledge nor briefing on those matters. I will refer the question to the Minister for health. Senator VALLENTINE —My question is directed to you, Mr President. I mention for the benefit of other senators that you and I have exchanged correspondence already on this matter. Is a group of senior officers from the parliamentary departments now examining administrative and organisation options for the future of the departments? If so, is it true that these options include one which would have the two chamber departments absorb the other three departments; and another which would have the Joint House Department absorbing the Library and Hansard? Can you assure senators and parliamentary staff that there will be an opportunity for them to consider and comment on the various options being touted around before you and the Speaker make any decisions? What mechanisms do you propose for consultation with parliamentarians and with the parliamentary staff? The PRESIDENT —The honourable senator raised this matter with me on 21 October by way of letter and I responded to her on 23 October. The honourable senator will realise that all large organisations from time to time, especially in a modern and changing world, have to look at their existing administrative arrangements. I suggest that that applies to this Parliament just as much as it does to any outside organisation. I have pointed out to the honourable senator in my letter to her and I point out to the Senate that within the next 18 months this Parliament is expected to move to a much larger building in which the number of people employed and the general administrative and operational costs involved in running the Parliament can be expected to be much greater. As I told the honourable senator in my letter, a group of senior officers from the existing five parliamentary departments is now engaged in looking at all the existing administrative arrangements and is charged with the responsibility of reporting and making recommendations to the Presiding Officers. Until I receive those recommendations and am in a position to discuss the matter further with the Speaker, I do not intend commenting any further, except to say, however, that the Speaker and I have a number of advisory parliamentary committees, such as the House Committee, the Library Committee and, in my case, the Senate Appropriations and Staffing Committee, and we discuss administrative arrangements in respect of those departments with those committees on a fairly regular basis. Senator VALLENTINE —I ask a supplementary question. Can we have an assurance that provision will be made for consultation with parliamentarians and parliamentary staff before a decision is made? The PRESIDENT —I cannot make any other comment until I receive any report that I receive on the recommendations and until I have discussed the matter with the Speaker. With the concurrence of the Senate I will incorporate in Hansard the honourable senator's letter and my reply. Leave granted. The letters read as follows- Parliament of Australia THE SENATE Jo Vallentine Western Australian Senator for Nuclear Disarmament 977 Wellington Street P.O. Box 137 West Perth 6005 Tel. (09) 481 1244 Parliament House Canberra A.C.T. 2600 Tel. (062) 72 1211 October 21, 1986 President of the Senate Hon. Senator D. McClelland Parliament House CANBERRA ACT 2600 Dear President, QUESTION TO THE PRESIDENT Are you aware of rumours circulating among Parliamentary staff which suggest a drastic reorganisation of the Parliamentary departments is planned? Is there any proposal before you and the Speaker to have the Senate department absorb the library and half of Hansard, while the house gets the other half of Hansard and Joint House? Can you assure the Senate that there will be proper negotiation of these matters with Parliamentarians and Parliamentary staff before any action is taken? Yours sincerely, Jo Vallentine PRESIDENT OF THE SENATE Parliament House Canberra 23 October 1986 Senator J Vallentine Parliament House Canberra ACT 2600 Dear Senator Jo Vallentine, Thank you for your letter of 21 October referring to what you describe as ``rumours which suggest that a drastic reorganisation of the parliamentary departments is planned.'' You will appreciate, of course, that within the next 18 months Parliament is expected to move to a much larger building, in which the numbers of people employed and the general administrative and operational costs involved will be much larger than at present. It is therefore incumbent upon the Presiding Officers to review the present administrative arrangements as they have applied and are applying in this provisional building. We naturally have discussed some of the problems involved with the heads of the five parliamentary departments, and following those discussions a group of senior officers from those departments is now examining a range of related matters. At the completion of this examination further consideration will be given to the subject by the heads of departments who will then report to the Presiding Officers with their recommendations. When that stage is reached I will be discussing the matter with the Speaker. I am taking the liberty of sending to Madam Speaker a copy of your letter and my reply for her information. Warmest personal regards. Yours sincerely, Douglas McClelland Senator CRICHTON-BROWNE —I refer the Minister for Community Services to the recent Robe River dispute in which between 560 and 570 Cliffs Robe River employees had their employment terminated and received 40 hours termination pay. The Minister will no doubt be aware that the employees received unemployment benefits of about $170,000 for the three weeks while the operations at Robe River were closed and that the Industrial Relations Commission has subsequently handed down an order requiring back pay of approximately $1.8m for the three weeks for which the employees were stood down. In as much as under the present policy the week's termination pay is calculated to be included in the last working week's pay and the back pay is calculated to be included in the period following the workers' reinstatement, does the Minister consider it an appropriate distribution of unemployment benefits that they be paid to workers who have received four weeks wages for the same three weeks they received unemployment benefits, together with the fact that they received $25 a week from employees in the industry other than from Cliffs Robe River? Senator GRIMES —I do not have exact details of the case but I know that the workers at Robe River were sacked, they applied for unemployment benefits and were deemed to be eligible for them because they were not sacked for any reason of their doing. They were sacked because of the ideological actions of Mr Copeman and his colleagues. They were eligible for unemployment benefits, these benefits were paid. Senator Crichton-Browne tells me that, later on, as part of the settlement when Mr Copeman and company lost the case, the workers were paid their wages. If, as he said, they received both unemployment benefits and wages, I am sure that the Minister for Social Security has been notified. It is up to him to decide what to do about it. I will seek an answer from the Minister and give it to the honourable senator as soon as possible. Senator CRICHTON-BROWNE —I ask a supplementary question. Is the Minister aware that the guidelines that are provided by the Department stipulate in quite specific terms that a refund shall not be claimed against the employees-- The PRESIDENT —Order! The honourable senator is debating the matter. Senator CRICHTON-BROWNE —With respect, Mr President, I am asking the same question. Senator GRIMES —I am not aware exactly of that fact. I will determine that from the Minister, and again give Senator Crichton-Browne the answer as soon as possible. Senator FOREMAN —Was the attention of the Minister representing the Minister for Defence drawn to an article in the Age newspaper on Monday, 20 October, entitled `Scupper $2,600 million submarine project because of communist spies'? In that article the Federal Liberal member of parliament, Mr Ken Aldred, was reported as saying that the Federal Government had ignored allegations of security risks at Kockums, the Swedish consortium, one of the two contenders for the Oberon replacement. He was further quoted as saying: Labor's shared socialist ideology with the social democrat government of Sweden and their grandiose promises to State Labor premiers have blinded them to reality. Can the Minister assure the Senate that this is not so and can he make clear the major considerations governing the granting of the contract to the successful tenderer? Senator GARETH EVANS —I saw the article quoting the honourable member for Bruce, Mr Aldred, who seems to have turned his attention for the moment away from his usual preoccupation with his sleazy and defamatory allegations about organised crime to pursuing paranoia about the submarine contract. Mr Aldred's imaginative allegations about spies and supposed security problems at Kockums are based on the reports of an Irish journalist named Carson who has been working in Sweden. Mr Carson is engaged in a taxation dispute with the Swedish Government and his abusive letters to officials of that Government have been recently tabled in the House of Representatives. The letters include clear threats to damage Sweden in the media. I can provide the Senate with an example of just one of these threats that is in language fit for this august chamber. It goes as follows: On receipt of yet another harassing letter from the Swedish Tax Department, I have made the following reply to Mr Hans Wemar. Please note I have every intention of screwing Sweden as much as possible, as and when possible, and that continued pro-commie harassment by Swedish authorities will only result in increased efforts by me to embarrass your nation at every turn. As an indication of the idiosyncratic character of this particular fellow, there is another line to the following effect: . . . please remember I'm an Irishman of the Brendan Behan tradition. Kick me more and I'll slaughter you with printed prose. That would go down well in the members' bar late at night. I am informed that the Herald and Weekly Times group sacked Carson last February from the position of Scandinavian correspondent. The British submarine consortium VSEL, formerly Vickers, recently wrote to the Minister for Defence here to completely dissociate the firm from Carson. So it is only the Opposition, in the person of Mr Aldred, that continues to choose to believe this nonsense. Mr Aldred also claims in the article that a shared ideology has gained the Swedish contender some sort of favouritism. This is also completely untrue. The Royal Australian Navy submarine tender evaluation board selected the Swedish company Kockums and the German consortium HDW-IKL from six early competitors and the Department of Defence and the Government accepted that recommendation. I mention, finally, that in deciding the final winner of the contract many factors will be considered, including cost, capability, Australian industry involvement and technical and financial risk. Political factors, whether international or within Australia, will not play a part in the awarding of this extremely important contract. Senator GARETH EVANS —On 11 November Senator Sibraa asked me a question about the denial of entry into Syrian and Egyptian air- space to Qantas Airways Ltd. For the completeness of the record I add the following further information: Syria has now confirmed that flight QF10 was temporarily denied entry but has advised that the temporary closure was in response to the proximity of United States war planes, on exercise in Turkey, and had nothing whatsoever to do with any particular reaction to Australia. Furthermore, it has been confirmed that denial of entry into Egyptian airspace was caused by the Qantas aircraft quoting a wrong clearance number to the Egyptian traffic controllers. So again no significance at all can be attached to that particular incident. Senator CHANEY(Western Australia-Leader of the Opposition) —Mr President, I seek leave to incorporate in Hansard a letter from the shadow Attorney-General from South Australia, the Hon. Trevor Griffin, who was referred to in Question Time yesterday in a question asked by Senator Aulich. He referred to Mr Griffin calling for the introduction of an identification system similar to an Australia Card. I do not wish to take the time of the Senate, but I have shown the letter to the Leader of the Government in the Senate (Senator Button) and indicated that I would seek leave to incorporate in Hansard Mr Griffin's explanation. He makes it clear in his letter that he was seeking a voluntary system of identification for people with respect to under-age drinking, and nothing like the Australia Card. He wanted that put on the record and so I seek leave to incorporate the document. Leave granted. The document read as follows- LEGISLATIVE COUNCIL Parliament House Adelaide, S.A. 5000 14 November 1986 Senator F. Chaney Leader of the Opposition in the Senate Parliament House CANBERRA Dear Senator Chaney, I notice that yesterday in the Senate a Senator Aulich asked a ``Dorothy Dixer'' question about the Australia Card and relied on a report in the Adelaide Advertiser as the basis for the question. Senator Aulich said that I had ``called in the Adelaide Advertiser for the introduction of an identification system similar to an Australia Card''. I did not. Senator Aulich misrepresents significantly what I said and the context in which my remarks were made. The Adelaide Advertiser story yesterday was concerned principally with proposals by the South Australian Government to make changes to Liquor licensing laws in this State to deal with under-age drinking and abuse of alcohol in public places. Those proposals included significantly increased penalties on licensees in supplying alcohol to minors and a prohibition against the consumption of alcohol by minors in public unless in the presence of a parent, guardian or spouse. I made the point that mechanisms for identifying the age of drinkers and who is a parent, guardian or spouse have to be considered by the State Government to ensure that there is protection for licensees from substantial penalties for inadvertent breaches of the law and no unnecessary police harassment of young people and adults in public places. I suggested that the State Government should give consideration to a voluntary system of identification cards as is operated in Queensland. Such a voluntary system has been operating in Queensland for some time and has proved of assistance to young people who may be adults and to hotel licensees in administering under-age drinking laws. Obviously, the question of infringement of liberties is a critical question in the administration of liquor laws in this State as there is with the Federal Government's proposal for a compulsory universal Australia Card. My request to the South Australian Government to consider a voluntary identification system as a possible way of helping in the administration of liquor licensing laws in this State bears no conceivable relationship to the Australia Card proposals. I would appreciate it if you could find an appropriate opportunity to correct the gross misrepresentation of my position by Senator Aulich and Senator Grimes. Yours sincerely, Hon. K. Trevor Griffin M.L.C. Shadow Attorney-General for South Australia Senator CHANEY —I thank the Senate. Senator PUPLICK(New South Wales) —by leave-Mr President, I wish to make a personal explanation. Yesterday in the General Business debate on the Enmore conspiracy case Senator Cooney said, at page 2190 of yesterday's Hansard: Senator Puplick will go along with that because one of the great statements he made-I will quote this to him again and again over the years because I have it all highlighted in yellow-is: `Only people who have anything to worry about have anything to hide'. In fact that is not an accurate quotation of what I said. What I said appears at page 2175 of the Hansard, as follows: Here is the Labor Party rabbiting over the country about the Australia Card. The only people with anything to fear are people who have something to hide. That is to say, that is what the Australian Labor Party is saying about the Australia Card. I then went on: The only people with anything to fear in the Enmore business are the people with something to hide. That is substantially different from what Senator Cooney alleges I said. I have been misrepresented by him, I have absolutely no doubt quite inadvertently because it was something he took down on the run during the course of my speech. But the quotation he says he has `highlighted in yellow' and will quote back to me many times in fact is not an accurate quotation; therefore I do not expect to hear it again. Senator LEWIS(Victoria)(3.06) —Pursuant to my notice of motion, I move: That the Children's Services Ordinance 1986, as contained in Australian Capital Territory Ordinance No. 13 of 1986 and made under the Seat of Government (Administration) Act 1910, be disallowed. I would like to explain to the Senate the reasons why I took over this motion of disallowance from the Regulations and Ordinances Committee. The Ordinance is in my view, and in the view of many other experts in this area, the most far-reaching piece of reforming legislation about children and families that has been made by a Minister for the Australian Capital Territory for almost 20 years. It is based on the Australian Law Reform Commission's Report on Child Welfare which was almost three years in the making. It was tabled in 1981 and is almost 500 pages long. The Ordinance itself has been in preparation for over five years and contains close to 200 sections. The Ordinance is obviously not just another piece of municipal ministerial legislation for Canberra; it provides for a fundamental restructuring of the way in which the most vulnerable people in our society-our children-are to be dealt with by two of the most powerful forces in our society, the Public Service bureaucracy and the courts. The Ordinance establishes a Children Services Council; a standing committee of that Council; a statutory office of Youth Advocate; and a Children's Court. It provides a complete code as to how children accused of crime or in need of care are to be proceeded against or dealt with in terms of their arrest, their detention, being interviewed, taking fingerprints and blood samples and being sentenced or put in care. Officials are given wide and certainly necessary powers to enter premises where children are on probation or subject to supervision orders. The Director of Welfare is to have large powers to deal with children in custody. The Ordinance contains detailed and far-reaching provisions regulating children's day care services and the employment of children. The Youth Advocate-that is an interesting statutory officeholder-will be a person possessed of the most remarkable range of conflicting powers and duties, as an administrator, an investigator, a collector of evidence, as an adjudicator or in effect a judge of that evidence, a prosecutor in care proceedings, a defender of children, a welfare officer, a family counsellor, and a public spokesperson on child welfare issues. Although called a Youth Advocate, the incumbent will very often be in conflict with children and parents. This statutory office will be at once the focal point of important powers and discretions and great stresses and tensions. I need to make one thing clear. I am not passing judgment on these innovations. I am not saying they are wrong or misguided. I am not saying that they do not reflect the honest and serious commitment of the Minister for Territories (Mr Scholes) and his child welfare advisers to try to do the right thing by parents, families and children in this city and Territory. However, we cannot get away from the fact that this Ordinance breaks new ground. It contains a highly innovative mixture of legal, administrative, judicial, custodial and welfare measures and procedures. The subjects of these new proceedings, of these novel proposals, will be children who have committed crimes, who have been abused or who need to be controlled. The subjects of these new departures will be broken families, families in crisis, parents in strife and conflict. If the unique mixture of provisions in this Ordinance is in practice a mismatch, if the new child welfare scheme does not function as it is hoped it should, the real victims will be those children and families who need the most help. As I said this morning, because of these implications the operation of the Ordinance must be subject to a real ongoing review. The Minister has said he will review it, but long before four years are up this debate, these concerns, will all have disappeared from the forefront of anybody's mind. If the Ordinance does not work easily it will be made to work uneasily and everyone will adjust his level of expectations to perhaps second rate procedures and mechanisms for helping children in trouble. However, if a sunset clause had been put into the legislation, that single fact on its own would guarantee, firstly, that the practice and procedures under the Ordinance would be regularly and consistently looked at and appraised over the four-year period and not put on the back burner. Secondly, flaws would be sought out and rectified, not merely ignored or accommodated. Thirdly, statistics, reactions and evaluations would be collected and assessed on a continuing basis and not merely sporadically; and finally, amendments and adjustments would be made to make the Ordinance fit the facts of children's lives and not insist that those lives be made to meet any possibly unrealistic requirements of the Ordinance. If a sunset clause were part of the law, the Australian Capital Territory community would have a guarantee that it would not be left burdened for, say, 20 years with legislation which may not work out in practice. If the Australian Democrats had been prepared to support this motion, the Minister for Territories (Mr Scholes) would certainly have agreed to put a four-year sunset clause into the Ordinance and there would be no question of disallowance. In fact what has happened is that the Democrats have been snowed. The Public Service got on to the Democrats last night and said: `Isn't it a terrible thing. The Liberal and National parties are going ahead with the disallowance of this Ordinance. This Ordinance will be disallowed. What a terrible thing'. The poor old Democrats fell for the three-card trick. Instead of saying to the Public Service `That is nonsense, the Minister will agree if the Opposition parties stand firm', they fell for the three-card trick and the result is that they have not supported with me the proposal before the Minister that a sunset clause be inserted. Without a clause the Australian Capital Territory community runs the risk that in four or 14 years time these child welfare laws will be as out of date and inappropriate as the 1957 Ordinance is to date. The ongoing amendments needed to make the Ordinance work, to justify its retention after four years, will not be in place because there will have been no pressing obligation to put them in place. Since the Minister would have agreed to a sunset clause if he had had to, nothing would have been lost by supporting this motion up to this stage. The Ordinance would not have been lost, the machinery would still all be in place, but the sunset clause would represent a vital means of quality control and a vital means of bureaucratic accountability to the highest standards of child welfare. Because the Democrats will not support this motion, the Senate has given away, perhaps for another 20 years, the power to ensure that Australian Capital Territory child care law is properly and adequately monitored and reviewed. As a Senate, we should have insisted upon that. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.15) —This matter has already been the subject of some discussion by leave earlier today. I explained then why the Government rejected the concept of a sunset clause and accordingly opposed the disallowance motion now being taken up by Senator Lewis. I want to say a couple of things again for the record. This is an important piece of legislation concerned with the welfare of children in the Australian Capital Territory, as Senator Lewis acknowledged. The Ordinance is being implemented in stages and it will, in fact, be some time yet before its full dimension is in place. It has been developed as a result of a Law Reform Commission report produced in 1980 and lengthy community consultations before and since. It is also worth saying that the Ordinance had unanimous support of the major parties of the former Australian Capital Territory House of Assembly-that is to say the Australian Labor Party, the Liberals and the Australian Democrats-and it clearly has the backing of the Australian Capital Territory community. The Government is concerned to ensure the success of the Ordinance and will monitor closely the effects of those parts of the Ordinance in operation. The Children's Services Council set up by the Ordinance will provide annual reports to the Minister and the Parliament and will be an authoritative source of reporting on the progress of the Ordinance. The Council will be broadly representative of people with an interest in the operation of the Ordinance-for example the Chief Magistrate, police, youth advocate, director of welfare and representatives of the Health Authority and the Schools Authority. The Government this morning through me indicated its willingness for a review to take place into the operations of the Ordinance after it has been in place long enough for a reasonable foundation for such a review to be made. We are thinking in terms of four or five years after the initial implementation of it. On matters as sensitive and as important as this, it is hardly likely that the matter will disappear from sight in the absence of the discipline of a sunset clause in the way that Senator Lewis is asserting. There are all sorts of other reasons which I mentioned this morning, and will not repeat, why a sunset clause is inappropriate when such wide ranging and central administrative machinery as this is what is in issue. For all those reasons, I suggest that the Senate reject the disallowance motion and ensure that this Ordinance will come into force. Senator Lewis —You have never really understood the role of the Parliament, have you? Senator GARETH EVANS —I have understood that the honourable senator has totally misunderstood and misread the support that exists for this matter and misrepresented, as I understand it, the position of a number of other people in this place and on committees as to what their position is. Now the honourable senator is in a state of acute and understandable disappointment of the course that has been followed. Under those circumstances I think it would be appropriate if the honourable senator just shut up and let this matter go through. Senator POWELL(Victoria)(3.18) —In what I hope are the dying stages of this debate, I rise to express the strongest support on behalf of the Australian Democrats for the Australian Capital Territory Children's Services Ordinance. I think it is necessary to underline the history of this Ordinance. What we have really had in the Australian Capital Territory-as the report from the Standing Committee on Health, Housing and Welfare from the Australian Capital Territory House of Assembly said-is a set of concepts and procedures developed at the beginning of this century. It pleased us greatly that the Senate Standing Committee on Regulations and Ordinances saw the wisdom of looking at the whole Ordinance, accepting the Ordinance as it stood, and accepting the advice of one of the people submitting information to the House of Assembly inquiry, the former commissioner in charge of the Law Reform Commission's inquiry into child welfare law in the Australian Capital Territory, Mr Seymour. He cautioned very strongly against piecemeal changes to what is, as the Minister for Resources and Energy (Senator Gareth Evans) has said, a very complicated Ordinance. It is complicated because its basis is so far back in history. The motivation of the Australian Democrats' strong support has been questioned this afternoon. The motivation is, as it always should be, the interests of the people concerned in the Ordinance, in this case the children of the Australian Capital Territory. In turn, we could question the motivation of people who have been prepared to tinker with something, to deal with it in a piecemeal fashion and suggest that perhaps concepts and procedures of the turn of the century are more comfortable than concepts and procedures which belong here at present and which are far more appropriate to the children of the Australian Capital Territory. The wide community support and input into the development of this Ordinance should not and was not overlooked by the Australian Democrats or by bodies such as the Australian Capital Territory Council of Social Service, the Law Reform Commission, the Chief Magistrate, the Australian Capital Territory Health Commission and the Children's Court and it had the endorsement of the House of Assembly. We have taken that into account along with consideration for the children of the Australian Capital Territory. As Senator Lewis has said, this ordinance breaks new ground. It is innovative. Finally, after a tremendously long history of detailed work, it is taking the children of the Australian Capital Territory into the twentieth century. There is no question-I think it is incredible that the Opposition could question this-that those people and groups who have already put so much into the development of this Ordinance will let it drop and will not be concerned to see how it works or to do anything about it if there are problems. I am not referring here to this Government, the next government, this Minister for Territories (Mr Scholes) or the next Minister. I am referring to the people in the Australian Capital Territory who have put so much work into this Ordinance. I think it does no credit to the Opposition at all to suggest that these people would just drop it and lose their concern overnight for the children of the Australian Capital Territory. The Australian Democrats do not believe that that will happen. As to the very strong belief in the mechanism of the sunset clause, if the people promoting the welfare of children in the Australian Capital Territory are imperfect so too are sunset clauses, particularly, one could say, in the hands of those public servants to whom we have been accused of being beholden, rather than, as we are, to the children of the Australian Capital Territory. Sunset clauses can be used as excuses for inaction, not necessarily always as motivators for action. It did strike me as interesting that Senator Lewis, by way of interjection, seemed to be proposing a variety of different times for a sunset clause. I thought he was after four years but I heard him say five. Who knows? All I know is that we have an ordinance for the children of the Australian Capital Territory which will bring opportunities for children of the Australian Capital Territory into the twentieth century. Although the Ordinance may not work perfectly all the time I am certain that we have, as Senator Lewis himself said, an innovative proposal for the children of the Australian Capital Territory which, no doubt, will serve as a model in other areas and we heartily endorse its passage. Senator REID(Australian Capital Territory)(3.22) —Just about everything that needs to be said has been said on this matter. But there is some background that I think is relevant in the light of the comments of Senator Powell. Our concern in suggesting a sunset clause is to make sure that the people in Canberra, who we know will still monitor the Children's Services Ordinance will have a forum in which their concerns can be expressed. That is the reason for a sunset clause, not, as was suggested, the belief that the people of Canberra will not continue to take an interest. Nothing could be further from the truth. They would then know that their concerns would be looked at and addressed. On occasions, people have a lot to say about ordinances and they feel, perhaps, that they cannot find anyone to listen. That will not be the case because I shall continue to listen. I have been involved with the need for this Ordinance in the community for a very long time. It has many new approaches. I hope that they will turn out to be what we expect them to be. I still have concerns about the Ordinance and I have expressed them previously. I have tabled a letter from the Minister for Territories (Mr Scholes) in relation to Part VII in which he expresses his view which was different from mine. Time alone will tell. I have taken up some concerns with the Minister and his staff about sections 141 and 160 and I shall not go into them in detail today. They perhaps relate to an interpretation of how children in custody will be dealt with. It is my concern that those unfortunate enough to be in custody should be dealt with in a way that will encourage them and help them develop to the point where they can control their own lives. I believe that that is probably the intention of the Ordinance. I am not even sure how we could word it differently to state this more precisely. Those are the things that will be monitored and watched. I think a sunset clause does have a place but we accept that that will not be the case. We support the Ordinance and certainly wish it well. Question resolved in the negative. Consideration resumed. The CHAIRMAN —The Committee is considering the votes of Group A of Appropriation Bill (No. 1) 1986-87 and has agreed to take them department by department. The question is that the votes for the Department of Industry, Technology and Commerce be passed without requests. Senator CHANEY(Western Australia-Leader of the Opposition)(3.25) —There are a number of things that I want to say about the Department of Industry, Technology and Commerce without, I hope, repeating the matters which have been dealt with in Estimates Committee A where there was a very good opportunity to question the Minister for Industry, Technology and Commerce (Senator Button) and officers of that Department. I will not waste the time of the Committee on those areas where the Opposition believes that the Department is on track. Needless to say, one tends to concentrate on the areas where one is concerned about negatives. But, in opening my remarks, I wish to acknowledge in a substantial way that the Opposition has supported the general direction of industry policies in a narrow sense-that is, the policies which are administered by this Department-although we have continually expressed our concern about the failure of the Government to provide an appropriate economic framework for the policies which are being put in place. I think the simplest way of explaining that would be to refer to the recent decision of the Government with respect to the chemicals industry where very significant reductions in protection have been put forward by the Government, more significant, in fact, than those recommended by the Industries Assistance Commission. Indeed, since its interim report was put down, where some allowance was made for the substantial contribution to our imports by developing countries, I think it would be fair to say that the Government has wound up making decisions with respect to the chemical industry which will put that industry under a great deal of pressure. I have little doubt that Ministers in the Government would have been concerned about that, not least the Minister for Veterans' Affairs, Senator Gietzelt, who is at the table. But we have a situation where the government, in a programmed way, is reducing tariffs in that area, as one example. The Government's general direction will not get a substantial quarrel from the Opposition. However, there is a very deep concern on the part of the Opposition that, for example, the Government will put the chemical industry in a position where it is receiving less protection than equivalent industries in competitor countries. At the same time the Government is not doing enough to ensure that the industry can compete. When the chemical industry faced the prospect of the Government's decision it took the trouble to point out to the Government that a series of cost burdens on the industry put it at a disadvantage compared with industries in other countries. The industry drew attention to a whole range of things, including the Government's taxation measures, the inefficiencies of transport in Australia-for example, the very high cost of coastal shipping is a significant cost burden on elements of the chemical industry-and the restrictions in the taxation area and a whole lot of other things. The labour market was another very important area where restrictive practices and very high labour costs put it at a disadvantage. The fundamental point of difference between the Opposition and the Government in this matter is that we believe that, if the Government is going to take industries, such as the chemical industry, and say: `You must be more competitive; you have to face up to a much more open market situation', there is a very heavy obligation on the Government to do something about those cost burdens which make it very difficult for Australian industry to survive. The chemical industry made the point that, whilst it might receive assistance to the tune of some $200m through the tariff, it suffered what it saw as cost disabilities equal to $400m because of these various things, many of which are caused by government itself at both the State and Federal level. The first point that I wish to make is that the Government, in its administration of industry policies, has fallen woefully short of accepting the strong, reciprocal obligation which rests on it, if it is to pursue an opening up of Australian industry to international competition. We believe that that is the direction in which to move but there is a very strong reciprocal obligation on the Government to do something about the cost disabilities which are suffered by Australian industry. That really takes me to the second area of concern that I have, which is that it seems that in a number of areas where the Government has taken initiatives that have had the support of the Opposition the moves that the Government has taken are running out of steam. The best example that we have had of that recently is in the steel industry. The Government is very proud of the fact that, under its steel plan, there has been a very considerable improvement in productivity. During the early period of this Government there was a very considerable improvement in the level of industrial disputes; that is, there was a drop in the level of industrial disputes. Of course, there was a reduction in employment. But I think most people in the Parliament now agree that, as far as blue collar industries are concerned, unless there are reductions in employment in those industries, they will not compete or survive. The choice is between a reduction in total employment or no blue collar industries. If we look at the employment record of the Organisation for Economic Co-operation and Development countries, we find a decline in industrial employment everywhere, including in those countries that have a thriving manufacturing industry. The interesting thing is that the level of unemployment in those countries in general is proportional to the drop in blue collar employment. In other words, the more quickly a manufacturing sector becomes efficient, and the more efficient the manufacturing sector is, the smaller proportion of the work force it tends to employ and yet there will be a lower level of unemployment. It is a quite extraordinary situation that has to be thought about in Australia. At least some sections of manufacturing industry, and of course trade unions involved in manufacturing industry, find it terribly difficult to face up to the need for a constant search for greater productivity, often at the expense of a reduced work force. I congratulate the Government on acknowledging that in the steel industry it was necessary to have a thinning down, a fining down of the work force. The fact is that the Broken Hill Proprietary Co. Ltd is now running, I think, the second most profitable steel industry in the world. That means that there is a real future for the steel industry in this country and for those people who make their livelihood from it. There is a need to accept that general direction. There is no quarrel between the Government and the Opposition to that point. The quarrel begins when one sees, as I said a few minutes ago, that what is being done by the Government appears to be running out of puff, out of steam. That is reflected in the report of the Steel Industry Authority which the Minister brought into the Parliament just a few weeks ago. It is reflected in the very substantial increase in industrial disputes over the last 12-month period. In the various six-month periods defined in the Steel Industry Authority report there are increases ranging up to 600 per cent in the level of industrial disputes. There are figures of 250, 300 and so on. I will not cite the exact figures but there are very substantial increases. What is even more serious is that there seems to be a considerable hardening of attitude against further productivity increases. That is a very important warning sign for the Government and for Australia because the reality is that Australia in manufacturing does not have to make a quantum jump on to a new plateau of performance. What we have to do is to get on to a rising graph that continues to rise. In other words, we have to accept that our task in the future is to improve productivity continually, and accept that at the work place it is the common interest of management and labour to arrive at the most efficient work practices possible. The situation in the steel industry, after a very promising start, is that attacks on work practices seem doomed to failure unless the changes in work practices being sought are related to new technology or new investment. That really is not good enough. I enter into the debate on this point because I believe there is a totally common interest between BHP and its work force to see that slow-down really put aside and a genuine attack, a continuing attack, on work practices carried out, and a commitment by both management and labour to a continuing improvement in productivity and efficiency. That is the attitude that has to become the standard attitude in manufacturing industry, whether in a large industry like steel or in a very small plant. We are not pursuing international competitors who are static. They are steeply increasing their levels of efficiency year by year and we are engaged in the pursuit of them. It is interesting to find that in a country such as Japan, which is having to restructure its industries to meet its economic situation at the moment-that was also referred to by the Minister in the chamber recently-there is an acceptance that manufacturing industry has to achieve continual productivity increases and that in general there will be an accompanying reduction in work force numbers. The important social point that goes with that is that that does not mean increased overall unemployment; but quite the reverse. It seems to be that, if one can get manufacturing industry to the level of efficiency that can be obtained by a country such as Japan, one is likely to have a much lower rate of overall unemployment than a country such as the United Kingdom which has had the slowest rate of reduction of blue collar work force. The United Kingdom stands as the other end example, if you like-an example of a very slow reduction in the blue collar work force. I know that Senator McIntosh, who is in the chamber, has a great interest in this and would want to see those jobs maintained. But this is a country where there has been a relatively slow reduction in the blue collar work force and yet there is 13 per cent unemployment. The facts speak for themselves and they suggest that the Government's industry policy really does need a bit of a boost. It needs a recharge and renewal of energy and enthusiasm to get some of the changes that were under way moving again. I do not think that the Minister or the Government can accept that the job has been done. There is a serious risk that in 1986 we will see a hardening of the arteries again and a lack of progress that will really do us great harm in the future. The next area of concern to me is in the approach that the Government is adopting towards industry in a number of cases where there is an excessively bureaucratic element. I have criticised elsewhere the heavy engineering plan, again not because of its general direction but because, instead of fostering the idea that at the work place itself there has to be the greater pursuit of efficiency, the Government is setting up committees which are defining which work practices should be tackled. The attitude being adopted is that the Government has to put up some money to achieve improvements in work practices. That is pathetic. It is ludicrously wrong. We will shortly have a piece of legislation before us-it has been introduced by the Minister-in which the Government will put up, I think, $6m in bounties, really as a bribe to say: `If we put up $6m in bounties, will you trade unions stop engaging in restrictive work practices in respect of ship repairs?' I put it very seriously to the Government that we do not have the money to pay for that sort of exercise. If we want to pay money to Senator Gietzelt's veterans, to the poor, to the disabled and to the other people who are supposedly the natural constituency of the Australian Labor Party, and who are certainly a constituency about whom the Liberal Party of Australia is concerned, we cannot afford to bribe people simply to do sensible things. But that is the situation. That is one of the trends and tendencies within the Government's industry policy that needs to be watched with great care. I will just say something else about the heavy engineering plan. The whole problem is that, by ensuring a tripartite approach of trade union, employer and government, part of the difficulty is that introduced into the equation are people who have no direct interest in the outcomes. In closing, because I have nearly finished my time on this, I remind the Government of what was said-- Senator McIntosh —Incentive. Senator CHANEY —Senator McIntosh uses the expression `incentive'. That is precisely the theme that was put forward by Mr Charles Fitzgibbon in one of those papers that has received a lot of attention over the last year. He made the point that the performance of the Australian work force will not be improved if we pay people who perform badly in exactly the same way as we pay people who perform well. He entered a plea for the need to introduce greater incentives into the system. That acknowledgment of the direct importance of the rewards to individuals that accrue from productive work flies in the face of the Government's pattern of having trade unions, that are not directly related to the interests of a particular work place, involved in on the ground issues such as changes in work practices required in a particular enterprise. In other words, the Government is adopting an unduly bureaucratic approach to these matters instead of saying, as indeed the Minister said in his comments to Estimates Committee A: I do not think it is the Government's job to tell companies how to improve those things . . . I agree with that: It is not the Government's job, nor is it a particular trade union's job, to tell people how to improve those things; it is the job of the company and its work force. Again I quote from the Hansard of the Estimates Committee of 16 September in which Senator Button said: . . . it is important to put in place the right incentives and then industries will do those things for themselves. That is all I am saying. Senator WATSON(Tasmania)(3.40) —Australia's technological base, unfortunately, has not kept abreast of that of our more aggressive trading partners. Recently Barry Jones described Australia as a technological museum. I am not really sure whether this is a criticism of his shortcomings in that area or whether it is a criticism of the current Minister for Industry, Technology and Commerce, Senator Button. One of the few good features to come from the Government recently was its policy, which it cribbed from the Liberal Party of Australia, of a 150 per cent research incentive. One of the unfortunate features of this carrot has been the relatively small number of manufacturers who have taken up, by way of registration for this tax concession, research and development. I ask the Minister to answer the following question: How many manufacturers to date have registered to take advantage of this research and development contribution that he has put forward? One of the difficulties of Australian manufacturing is that, certainly in the last 20 years, exports of manufactured goods as a percentage of total exports have increased from only about 13 per cent to 24 per cent, which compares with an average of something like 60 per cent in most other Western nations. I acknowledge that there are difficulties for manufacturers in the Australian market because of the small scale of the domestic market. Small runs cannot always justify the capital investment or the investment in technology which is necessary to improve processes and to develop new products. Manufacturers certainly have to look to world markets and invest in technology. We really have to get Australian industry more motivated to develop overseas markets. I must hand the Minister a bouquet on his recent trip to Japan with a few aggressive marketeers. We must develop a positive market approach and product-orientated action. Going one step further along that chain, we must then develop sources of technology and place greater emphasis on that, and therefore allocate more of our resources to ensure that we have the appropriate technology for industry. That is on the positive side. The Minister and his colleagues continue to laud the positive effects on manufacturing of the devaluation of the Australian dollar, and we acknowledge that a number of manufacturers have adapted and exploited this potential against some pretty heavy competition. The view I put to the Senate is that those bold entrepreneurs who have gone out-in the glass industry I think of Pilkington ACI Ltd and these sorts of firms-and used their technology and grabbed markets and who are now supplying companies such as Daimler Benz in Germany and others in Japan could soon be in trouble because they are working with pretty fine margins. They will be in trouble because of Australia's high rate of domestic inflation. This inflation is significantly higher now than that of our trading competitors. The short term effects of the devaluation of the dollar-they are short term effects, let us acknowledge it-I believe will soon be eroded, within a couple of years, as a result of this creeping domestic inflation. I believe the Government has to put a greater emphasis on keeping down its rate of internal inflation. This is difficult when a country devalues because certain inflationary effects arise, not from wage increases but from the effects of the devaluation. This domestic inflation is a major problem, not only for those who are entering for the first time this export market with very fine margins but also for those who are already established in it because they could be losing their export opportunities to other firms. The big problem we have to face is inflation, and I do not think the Government is putting enough emphasis on it at the moment. The other reason for my not thinking manufacturers will get the real benefits from this devaluation is that many of the foreign suppliers have kept their export prices to Australia in terms of their own currencies. I think we have problems. Consideration interrupted. The CHAIRMAN —Order! It being 3.45 p.m., pursuant to sessional order, I put the question: That the Chairman do leave the chair and report to the Senate. Question resolved in the affirmative. The Chairman having reported accordingly- The PRESIDENT —Order! The question is: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 3.45 p.m. The following paper was tabled: States Grants (Petroleum Products) Act-Amendments of the Schedules to the subsidy schemes in relation to the States, dated 6 November 1986. The following answers to questions were circulated: (Question No. 959) Senator Reynolds asked the Minister representing the Treasurer, upon notice, on 12 March 1986: (1) Can the Treasurer detail how the Taxation Office will assess charitable employers who are providing disabled people with essential services free of charge. (2) Will charitable organisations be exempt from fringe benefits tax where their work is clearly associated with service delivery to disabled people. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) Public benevolent institutions will be exempted from fringe benefits taxation on the non-cash benefits provided to their employees. The phrase `public benevolent institution' does not have a statutory definition but is generally understood to be an institution for the relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness. Public benevolent institutions have, as a common feature, the giving of relief freely to those who are in need of it and are unable to care for themselves. Organisations which do not satisfy these requirements will be subject to tax on benefits provided to their employees in accordance with the valuation rules set out in the legislation. (2) Yes, provided the organisations qualify as public benevolent institutions. (Question No. 1229) Senator Michael Baume asked the Minister representing the Special Minister of State, upon notice, on 20 August 1986: (1) What were the names, descriptions and salaries of the ministerial, parliamentary and other staff who accompanied the Australian Labor Party's Rural Task Force, headed by Mr Barry Cunningham MP, in its recent visits around Australia. (2) What staff travel was involved and against which head was it charged. (3) If ministerial staff were seconded to assist the inquiry, what travel authority was used to pay for travel which did not involve accompanying a Minister on official business. (4) What accommodation expenses incurred by Parliamentarians and staff were met by the Commonwealth. (5) What travel expenses incurred by Parliamentarians and staff were met by the Commonwealth. (6) What payment arrangements were made. (7) What other expenses incurred by Parliamentarians and staff were met by the Commonwealth. (8) What services and facilities were supplied by the National Media Liaison Service. (9) What was the cost to the Commonwealth. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) to (3) The entitlements of Senators and Members to travel and the payment of travelling allowance for such travel is determined by the Remuneration Tribunal. My Department has no knowledge of travel arrangements made for members of the Rural Task Force and received no information concerning accompanying staff, if any. Any staff travel at official expense which may have occurred as a result of travel undertaken by the Task Force would have been made in accordance with the normal travel entitlements of the staff concerned. (4) to (7) Travelling allowances for Senators and Members are paid by the Parliamentary Departments. My Department meets the cost of transport expenses for Senators and Members and transport expenses and travelling allowances for staff. My Department has no knowledge of payments made to Senators, Members and staff, if any, in connection with the Task Force. (8) and (9) Advice from the Department of Sport, Recreation and Tourism is that the National Media Liaison Service office in Perth arranged two media conferences for the Task Force during its visit to Western Australia in April. The office also acted as a media contact point for the Task Force. The National Media Liaison Service office in Melbourne distributed two media statements and assisted with media liaison during the Task Force's visit to Victorian regional centres in mid-June. Because of the nature of the services provided, the Department of Sport, Recreation and Tourism states that it is not possible to accurately estimate the cost of the services provided by the National Media Liaison Service. (Question No. 1328) Senator Colston asked the Minister representing the Treasurer, upon notice, on 19 August 1986: Is the special temporary, or bereavement, allowance for age pensioners regarded as assessable for income tax purposes; if so- (a) does a payment of this allowance require some age pensioners who have not been required to submit taxation returns for many years to once again complete a return; and (b) as this allowance is paid to help a bereaved pensioner spouse through a difficult period, will the Government consider making the allowance non-taxable. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (a) The Special temporary allowance (STA) or bereavement allowance is paid to age pensioners and certain other social security recipients on the death of the pensioner's spouse. The STA is subject to income tax if paid to a person of age pension age. Because of the receipt of the allowance a pensioner may be required to pay income tax and submit an income tax return when, without the allowance, his or her income would have been below the tax free threshold for pensioners and, therefore, non-taxable. (b) The honourable senator can be assured that his proposal to exempt the allowance from tax has been noted and will be considered when the matter is next reviewed. (Question No. 1401) Senator Reynolds asked the Minister representing the Minister for Science, upon notice, on 7 October 1986: (1) Was the Budget for the Marine Sciences and Technologies Grants Scheme cut by approximately 25 per cent; if so can the Minister for Science advise the reasons for such a severe cut to this Scheme. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) The allocation for the Marine Sciences and Technologies Grants Scheme has been reduced from $3.842m in 1986 to $3.052m for 1987 a reduction of 20.58%. In the end the competition was between maintaining the Scheme at the increased level of recent years and ensuring that the Australian Research Grants Scheme (ARGS) would have a real increase of 10% for 1987. On this occasion, ARGS was given priority. The amount available for 1987 has contributed to the continuation of marine sciences and technologies research. 102 well refereed projects will be supported with grants in 1987. I have recently received from the Australian Marine Sciences and Technologies Advisory Committee (AMSTAC) its report on the operation of the MST Grants Scheme. I have stated that the Scheme will continue in 1988. Decisions on the longer term funding of the Scheme will be taken when I have considered the recommendations contained in the AMSTAC Report. (Question No. 1449) Senator Macklin asked the Minister representing the Minister for Science, upon notice, on 20 October 1986: (1) Has funding for the Marine Sciences and Technologies Grants Scheme (MSTGS) been reduced by 25 per cent for 1987 and is it intended to abolish the scheme in 1988. (2) Will this have a detrimental effect on the development of marine aquaculture which is a technique of importance in South East Asia for a number of species of marine fish and of growing interest in Australia. (3) Is there a major need to expand our marine research capacity and develop and market new products. (4) Have laboratory facilities been developed at the Department of Civil Engineering, University of Queensland involving a coastal processes wave basin and was this facility completely designed and built by Australians at a considerable saving in cost compared with purchasing equipment from established source of supply overseas. (5) Will research that is being undertaken provide essential understanding of the mainland coastal and Great Barrier Reef environments required by coastal and marine park managers. (6) Will this research also assist engineers concerned with the design of marine structures such as jetties, breakwaters, boat harbours, navigational aids, weather stations and reef viewing platforms. (7) Are conditions on the Australian coasts and reefs generally very different from those in other parts of the world, so that the results of research conducted in European or American waters are often not applicable. (8) Will the abolition or continued curtailment of the MSTGS mean that significant current and potential research of practical relevance to coastal communities and industries, particularly the tourist industry, cannot be carried out. (9) Would it not be in the national interest to expand the MSTGS, so that Australia can benefit from continuing research on the development of marine aquaculture and into the use and conservation of Australia's coastal environment and marine resources. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) The allocation for the Marine Sciences and Technologies (MST) Grants Scheme has been reduced from $3.842m in 1986 to $3.052m for 1987, a reduction of 20.58%. In the end the competition was between maintaining the Scheme at the increased level of recent years and ensuring that the Australian Research Grants Scheme (ARGS) would have a real increase of 10% for 1987. On this occasion, ARGS was given priority. I have announced that support for the Scheme will continue in 1988. (2) Grants under the MST Grants Scheme are awarded on a competitive basis. 102 well refereed projects will be supported with grants in 1987. Marine aquaculture is not given special consideration under the Scheme. (3) The MST Grants Scheme was established in 1979 to fulfil a need perceived by the government for a viable, effective and productive Australian effort in the marine sciences and technologies. The Scheme has been highly successful and a number of major research groups have now been firmly established in this country. It could be expected that these groups should be in a position now to become more self-supporting and to seek funds from other sources. (4) I do not have a detailed knowledge of the marine facilities available at the University of Queensland. (5) Yes. (6) Yes. (7) In general there are some similarities but Australia has quite a unique coastal environment, half of which is in the tropical area and includes the Great Barrier Reef. (8) No. (9) No. It was never intended by Government that the MST Grants Scheme should be the sole source of funds for marine sciences and technologies in Australia. It should be pointed out that expenditure of Commonwealth funds on civil marine science research and development has increased from $12.26 million in 1978-79 to $49.87 million in 1985-86, and even in real dollars this is a substantial increase.