Thursday, 20 November 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned 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 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 Senators Macklin (from 344 citizens) and Reynolds (from 20 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 80 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: 1. That over 67,000 men, women and students enjoy the pursuit of their sport and recreation every year at the Anzac Rifle Range at Malabar and have done so since 1967. 2. The people of Sydney through their membership of 41 clubs headquartered at the Anzac Rifle Range together with a number of other community, school and commercial groups, the police and armed forces will lose this community facility if the Federal Government proceeds to sell the Range to private developers. 3. The Australian Bicentenary Fullbore Rifle Championships are to be conducted at the Anzac Rifle Range in April 1988 as part of the celebration of Australia's Bicentenary. Your petitioners most humbly pray that the Senate in Parliament assembled should ask the Federal Government to retain the Anzac Rifle Range for the continued use and enjoyment of the people of Australia. And your petitioners, as in duty bound, will ever pray. by Senators Gietzelt (from 112 citizens) and Richardson (from 108 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 the imposition of the $250.00 Administrative charge will: (1) Prove a disincentive for all students-particularly part-time and mature age students-from continuing their tertiary studies. (2) Lead to higher levels of youth unemployment as fewer students will now enrol in tertiary studies. (3) Impose economic hardship upon the student population at large. Your petitioners most humbly pray that the Senate, in Parliament assembled, should vote to reject the imposition of the Administrative charge, or, at the very least, vote to impose a lower fee on students who are not full-time. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 66 citizens). To the Honourable the President and members of the Senate of the Parliament of Australia assembled. The petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at proposed cuts to the functions of the Human Rights Commission. In particular the undersigned believe that the Human Rights Commission or any body that may replace it in December must be allocated adequate resources for complaint handling and equal opportunity. The functions at present carried by the Human Rights Commission and the additional responsibilities relating to ILO Conventions will require increased resources if the rights of Australian citizens are to be safeguarded effectively, particularly in States and Territories which at present lack anti-discrimination legislation. And your petitioners as in duty bound will ever pray. by Senator Giles (from 34 citizens). To the Honourable the President and members of the Senate, in Parliament assembled. The humble petition of the under-signed citizens of Australia respectfully showeth that your petitioners are gravely concerned that in the International Year of Peace, young Australians face an uncertain future due to: 1. a continuing arms race between the super-powers which threatens to extend into outer space 2. military expenditure continuing at ridiculously high levels 3. continuing testing and stockpiling of nuclear weapons Your petitioners therefore humbly call upon the Federal Parliament to do everything possible to make our future more certain, by: 1. encouraging peaceful dialogue through diplomatic channels as the means of solving issues. 2. persuading all developed countries to spend less on armaments, and more on basic needs like food, health, shelter and education for all people of the world. 3. promoting the extension of agreements to reduce testing and stockpiling of nuclear weapons. Senator TATE (Tasmania)-by leave-I simply want to note and mark the event that on this morning we had presented to the Senate the greatest number of signatures on a petition to be presented on any one day. I wish to pay tribute to the students of Geilston Bay High School, whose project this was, and to the 450 high schools throughout Australia in which the petition was circulated and which returned the signatures which the Senate has before it today. I know that the students will recall with great pride and honour the presentation of their petition to the Prime Minister (Mr Hawke) and the Minister for Foreign Affairs (Mr Hayden) yesterday on the steps of Parliament House. They have done much to advance the peaceful future of young Australians and young people throughout the world. And your petitioners as in duty bound will ever pray. by Senator Tate (from 67,232 citizens). Senator KILGARIFF(Northern Territory) —by leave-I present to the Senate the following petition, which is not in conformity with the Standing Orders, from 591 citizens requesting that the alliance between Australia and the United States be strengthened and that joint Australian and United States defence bases in Australia be supported: To the Honourable, the Prime Minister, and members of the Federal Parliament: We the undersigned citizens of Alice Springs and Australia support the Joint Defence Bases at Pine Gap and elsewhere in Australia and strongly oppose any attempts to close the said bases. We believe the bases make a considerable contribution to world peace and stability and that they reduce the likelihood of nuclear war. We urge the Federal Government to strengthen the alliances between the United States and Australia because we believe our mutual interest will be served by such a strong alliance and your petitioners as in duty bound will ever pray. Petitions received. Senator GRIMES(Tasmania-Manager of Government Business) —On behalf of Senator Button I give notice that, on the next day of sitting, he will move: That the Senate adopt the following resolution relating to the registration and declaration of Senators' interests, such resolution to continue in force unless amended or repealed by the Senate in this or a subsequent Parliament: 1 Declaration of Senators' interests (1) That, within 28 days of making and subscribing an oath or affirmation as a Senator, each Senator shall provide to the Registrar of Senators' Interests a statement of- (a) the Senator's registrable interests; and (b) the registrable interests of which the Senator is aware (i) of the Senator's spouse; and (ii) of any children who are wholly or mainly dependent on the Senator for support, in accordance with the resolution adopted by the Senate and in a form determined by the Committee of Senators' Interests from time to time, and shall also notify any alteration of those interests to the Registrar within 28 days of that alteration occurring. (2) Any Senator who: (a) knowingly fails to provide a statement of registrable interests to the Registrar of Senators' Interests by the due date; (b) knowingly fails to notify any alteration of those interests to the Registrar of Senators' Interests within 28 days of the change occurring; or (c) knowingly provides false or misleading information to the Registrar of Senators' Interests, shall be guilty of a serious contempt of the Senate and shall be dealt with by the Senate accordingly. 2 Registrable interests That the statement of a Senator's registrable interests to be provided by a Senator shall include the registrable interests of which the Senator is aware (a) of the Senator's spouse; and (b) of any children who are wholly or mainly dependent on the Senator for support, and shall cover the following matters: (i) shareholdings in public and private companies (including holding companies) indicating the name of the company or companies; (ii) family and business trusts and nominee companies- (a) in which a beneficial interest is held, indicating the name of the trust, the nature of its operation and beneficial interest, and (b) in which the Senator, the Senator's spouse, or a child who is wholly or mainly dependent on the Senator for support, is a trustee (but not including a trustee of an estate where no beneficial interest is held by the Senator, the Senator's spouse or dependent children), indicating the name of the trust, the nature of its operation and the beneficiary of the trust; (iii) real estate, including the location (suburb or area only) and the purpose for which it is owned; (iv) registered directorships of companies; (v) partnerships, indicating the nature of the interests and the activities of the partnership; (vi) liabilities, indicating the nature of the liability and the creditor concerned; (vii) the nature of any bonds, debentures and like investments; (viii) saving or investment accounts, indicating their nature and the name of the bank or other institutions concerned; (ix) the nature of any other assets (excluding household and personal effects) each valued at over $5,000; (x) the nature of any other substantial sources of income; (xi) gifts valued at more than $250 received from official sources, or at more than $100 where received from other than official sources provided that a gift received by a Senator, the Senator's spouse or dependent children from family members or personal friends in purely personal capacity need not be registered unless the Senator judges that an appearance of conflict of interest may be seen to exist; (xii) any sponsored travel or hospitality received; (xiii) membership of any organisations; and (xiv) any other interests where a conflict of interest with a Senator's public duties could foreseeably arise or be seen to arise. 3 Register and Registrar of Senators' Interests That- (a) at the commencement of each Parliament, and at other times as necessary, the President shall appoint an officer of the Department of the Senate as the Registrar of Senators' Interests and that officer shall also be Clerk to the Committee of Senators' Interests; (b) the Registrar of Senators' Interests shall, in accordance with procedures determined by the Committee of Senators' Interests, maintain a Register of Senators' Interests in a form to be determined by that Committee from time to time; (c) as soon as possible after the commencement of each Parliament, the Chairman of the Committee of Senators' Interests shall table in the Senate a copy of the completed Register of Senators' Interests and shall also table from time to time as required any notification by a Senator of alteration of those interests; and (d) the Register of Senators' Interests shall be available for inspection by any person under conditions to be laid down by the Committee of Senators' Interests from time to time. 4 Declaration of interest in debate and other proceedings That, notwithstanding the lodgment by a Senator of a statement of the Senator's registrable interests and the registrable interests of which the Senator is aware (a) of the Senator's spouse; and (b) of any children who are wholly or mainly dependent on the Senator for support, and the incorporation of that statement in a Register of Senators' Interests, a Senator shall declare any relevant interest- (i) at the beginning of his or her speech if the Senator should participate in debate in the Senate, Committee of the whole Senate, or a Committee of the Senate (or of the Senate and the House), and (ii) as soon as practicable after a Division is called for in the Senate, Committee of the whole Senate, or a Committee of the Senate (or of the Senate and the House) if the Senator proposes to vote in that division, and the declaration shall be recorded and indexed in the Journals of the Senate or Minutes of Proceedings (as applicable) and in any Hansard report of those proceedings or that Division: Provided that it shall not be necessary for a Senator to declare an interest when directing a question seeking information in accordance with Standing Order 98 or 98a. That the following new Standing Order be adopted- 36ac (1) A Committee of Senators' Interests shall be appointed at the commencement of each Parliament to: (a) inquire into and report upon the arrangements made for the compilation, maintenance and accessibility of a Register of Senators' Interests; (b) consider any proposals made by Senators and others as to the form and content of the Register; (c) consider any specific complaints made in relation to the registering or declaring of interests; (d) consider what changes to any code of conduct adopted by the Senate are necessary or desirable; (e) consider what classes of person (if any) other than Senators ought to be required to register and declare their interests; and (f) make recommendations upon these and any other matters which are relevant. (2) Unless otherwise ordered, the Committee shall consist of 6 Senators, 3 being members of the Government to be nominated by the Leader of the Government in the Senate, and 3 being Senators who are not members of the Government to be nominated by the Leader of the Opposition in the Senate or by any minority group or groups or Independent Senator or Independent Senators. (3) Three members of the Committee shall constitute a quorum. (4) The Committee may proceed to the dispatch of business notwithstanding that all members have not been appointed and notwithstanding any vacancy. (5) The Committee shall elect a Government member as Chairman who may from time to time appoint another member of the Committee to be Deputy-Chairman, and the member so appointed shall act as Chairman at any time when there is no Chairman or the Chairman is not present at a meeting of the Committee. (6) In the event of an equality of voting, the Chairman, or the Deputy-Chairman, when acting as Chairman, has a casting vote. (7) The Committee shall have power to send for and examine persons, papers and records, to move from place to place and to transact business in public or private session, notwithstanding any prorogation of the Parliament or dissolution of the House of Representatives. The Committee shall not exercise these powers, nor undertake investigations of the private interests of any person unless approved by not less than 3 members of the Committee not including the Chairman. (8) The Committee shall have power to confer with a similar Committee of the House of Representatives. (9) The Committee shall, as soon as practicable after 31 December each year, report to the Senate on its operations during that year and shall also have leave to report from time to time. (10) The Committee shall be provided with all necessary staff, facilities and resources. That, notwithstanding anything contained in the Standing Orders- (1) The Committee of Senators' Interests determine a form for registration of Senators' Interests by 31 March 1987. (2) Each Senator provide to the Registrar of Senators' Interests by 30 June 1987 a statement of (a) the Senator's registrable interests; and (b) the registrable interests of which the Senator is aware (i) of the Senator's spouse; and (ii) of any children who are wholly or mainly dependent on the Senator for support. In accordance with the resolution adopted by the Senate and in the form determined by the Committee of Senators' Interests, and shall also notify any alteration of those interests to the Registrar within 28 days of that alteration occurring. (3) Any Senator who- (a) knowingly fails to provide a statement of registrable interests to the Registrar of Senators' Interests by the due date; (b) knowingly fails to notify any alteration of those interests to the Registrar of Senators' Interests within 28 days of the change occurring; or (c) knowingly provides false or misleading information to the Registrar of Senators' Interests, shall be guilty of a serious contempt of the Senate and shall be dealt with by the Senate accordingly. Senator GRIMES(Tasmania-Manager of Government Business) —On behalf of and at the request of Senator Button, I withdraw Government Business notice of motion No. 1 standing in his name relating to the declaration of senators' interests. Motion (by Senator Grimes) agreed to: That unless otherwise ordered- (1) the days and hours of meeting of the Senate for the remainder of the Budget Sittings be as follows: (a) Tuesday, 25 November, 1986 and Monday, 1 December 1986- 2 p.m.- 6.30 p.m. 8 p.m.-10.30 p.m.; (b) Wednesday, 26 November 1986, and Wednesday, 3 December 1986- 10 a.m.-12.45 p.m. 2 p.m.- 6.30 p.m. 8 p.m.-10.30 p.m.; (c) Thursday, 27 November 1986, and Thursday, 4 December 1986- 10 a.m.- 6.30 p.m. 8 p.m.-10.30 p.m.; (d) Friday, 28 November 1986 and Friday, 5 December 1986- 9 a.m.-12.45 p.m. 2 p.m.- 3.45 p.m.; and (3) Tuesday, 2 December 1986- 10 a.m.-12.45 p.m. 2 p.m.- 6.30 p.m. 8 p.m.-10.30 p.m. (2) For the week commencing 24 November 1986 and on Friday, 5 December 1985, the Sessional Order relating to the Routine of Business for Week 1 apply. (3) With the exception of Tuesday, 2 December 1986, for the week commencing 1 December 1986, the Sessional Order relating to the Routine of Business for Week 2 apply. (4) The Order of Business for Tuesday, 2 December 1986, be as follows: (a) Petitions; (b) Notices of Motion; (c) Formal Motions-Discovery of Formal Business; (d) Postponement and re-arrangement of Business; (e) Government Business, Notices of Motion and Orders of the Day, or vice-versa, as set down on the Notice Paper; (f) At 2 p.m., Questions (g) Any proposal pursuant to Standing Order 64; (h) Consideration of Government Papers pursuant to Sessional Order; and (i) Further consideration of Government Business, Notices of Motion and Orders of the Day, or vice-versa, as set down on the Notice Paper. Motion (by Senator Grimes for Senator Button) agreed to: That leave be given to introduce a Bill for an Act to provide for the payment of bounty on the production of certain books. Bill presented by Senator Grimes, and read a first time. Motion (by Senator Grimes) agreed to: That the order of the Senate of 14 November 1986 relating to the introduction of Bills into the Senate after 19 November 1986 not apply to this Bill. Standing Orders suspended. Senator GRIMES(Tasmania-Minister for Community Services)(10.06) —I move: That the Bill be now read a second time. I table the explanatory memorandum and I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill proposes a continuation of the bounty assistance on Australian book production for the next three years until 30 June 1989. It replaces the current bounty legislation which is due to terminate on 31 December 1986. Bounties have been paid on certain Australian book production since 1969 in order to assist the Australian printing industry compete with overseas book printers. This particular industry is assisted by means of a bounty because, although not a signatory, the Government adheres to the spirit of the Florence agreement which precludes the imposition of tariffs on books containing educational, scientific or cultural material. The assistance arrangements for the next three years follow the Government's consideration of the Industries Assistance Commission recommendations contained in its report No. 377 of 20 December 1985 on book production. In its report the IAC concluded that the sector of book production activity which is assisted receives a level of assistance comparable with that available to other assisted printing activity, but at a high level by comparison with assistance generally afforded other manufacturing activities. The Commission was of the view that assistance to book production should be provided in a manner which, as far as possible, allows the structure of the industry to respond to changes in market conditions, technology, and other factors, unencumbered by government direction. It said that the high level of assistance applying to most categories should be reduced. The main recommendations contained in the Commission's report were that: (1) bounty on eligible books be reduced from 25 to 20 per cent of net selling price, that is the selling price less the bounty; (2) bounty on paper supplied free of charge by publishers to printers for the production of bountiable books be reduced from 20 to 16 2/3 per cent; (3) bounty eligibility be extended to Australian directories, guides, street directories, road guides and the like and customs duties for those books to which bounty is extended be at minimum rates; (4) customs duties on other books dutiable at 25 per cent be reduced to 20 per cent. The Government has accepted the basic thrust of the recommendations of the Commission. However, it has decided to defer the reduction in bounty rates until it has had time to consider the current wide ranging inquiry on the pulp, paper, paper products and printing industries being conducted by the IAC. The Commission's final report is due in February 1987. Book production is included within this inquiry as it is an integral part of the printing industry. It has however been decided to vary the bounty rate in accordance with the decision announced in the 1986-87 Budget to reduce bounties generally by 20 per cent. Clause 11 of the Bill therefore provides that under the new scheme eligible books are to be paid a bounty of 20 per cent of the printer's net selling price, that is the selling price less the bounty. Further, in circumstances where publishers supply paper free of charge to printers for the production of bountiable books the bounty rate is to be 16 2/3 per cent of the publishers material costs. The Government has also decided that bounty eligibility is to be extended to include Australian guides and directories. The exclusion of these goods from the previous bounty scheme has caused considerable administrative problems for the Australian Customs Service and confusion within the industry. Books published by the Australian Government Publishing Service and books required to be published or printed by State or Territory government printers after 1 January 1987 will no longer be eligible for bounty. This is for the reason that Government publications are usually printed in Australia and are not subject to competition from overseas printers. In order to simplify the administration of the scheme clause 14 of the Bill provides that only one bounty claim per production run will be allowed. The claim can be lodged by either the publisher or the printer but a minimum value of $200 per title per production run will apply. It is worth mentioning that imported typesetting in any pre-printed plate form will not disqualify an otherwise eligible publication from bounty. Likewise, books using imported colour separations will continue to be eligible for bounty. The cost of any process carried out overseas is however to be excluded from bounty calculations. Clause 4 of the Bill provides that books which, if imported, would be classifiable to a tariff item on which customs duty is payable will not be eligible for bounty. This is proposed to avoid the possibility of a locally produced book being assisted by both a bounty and a tariff. The Government has also decided that import duties on books currently dutiable at a general rate of 25 per cent will remain unchanged. Part 4 of the Bill contains provisions which update the previous legislation to improve administrative effectiveness, in line with similar provisions recently introduced in other subsidy and bounty legislation. The Government is committed to maintaining a healthy and viable book industry in Australia. We believe that the Bill provides the necessary ingredients upon which the industry can build, and provides the industry with an appropriate level of assistance pending the outcome of the Government's decision on its wide ranging review of assistance for the whole paper and printing industries. Financial Impact Statement Bounty payments to the book printing industry totalled $18.8 million in 1985-86. Bounty payments for the 6 months to June 1987 are expected to be $7.9m and in 1987-88 $12.7m. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Senator MESSNER(South Australia)(10.07) —I move: That the following matters be referred to the Standing Committee on Finance and Government Operations- (1) The particular procedures of the Commissioner of Taxation and the Administrative Appeals Tribunal, for- (a) raising and amending income tax assessments; (b) imposing penalties and interest on such assessments; and (c) dealing with objections and appeals against them. (2) Possible changes required to streamline and simplify the existing system and to safeguard the rights of taxpayers. The history of this matter goes back to approximately June of this year when the debates on various tax reform Bills were undertaken in this place. Honourable senators will recall that one of the Bills which the Government sought to rush through the Senate at that time, which was explained at the time to be part of the taxation reform package, dealt with the transfer of jurisdiction of the appeals mechanisms within the Australian Taxation Office, previously undertaken by boards of review, to the Administrative Appeals Tribunal. That little matter, as it seemed to be at the time, was part of a major change in appeals mechanisms in the system by which taxpayers could seek justice under the taxation assessment law. As is now becoming apparent, more and more concern about this matter is arising within the community. Consequently, honourable senators should examine the infringement of the rights of individual taxpayers in respect of their assessments. That is not the only concern that has arisen in recent times. The Government, through the Australian Taxation Office, has introduced a new system of self-assessment for taxpayers. Very broadly, this involves a change whereby people will lodge their taxation returns, receive assessment from the Tax Office almost automatically and pay any moneys due on those assessments. Under the various procedures that have been outlined by the Tax Office the taxpayer will not know whether such assessments are final until many years later. In fact, it is highly questionable whether any taxpayer will ever know whether any asessment issued by the Australian Taxation Office is ever final and consequently his obligation to pay tax is at an end. Therefore, the question arises as to whether taxpayers' rights are being infringed as a result of the introduction of that system. There is very little information from the Government and the Tax Office about the actual operation of these procedures. This has been the cause of much more concern, too, as we realise that there have been substantial changes to the law under which the Tax Office can amend taxpayers' assessments. That, of course, occurred as part of the taxation package last June and was pushed through this place by the Government with very little debate. Those amendment procedures are very substantial and mean that virtually all amendments to assessments made by the Taxation Office are open-ended and consequently can go on ad infinitum. That represents a colossal transfer of power by the legislature to the bureaucrats in the Tax Office and represents very great possible and potential infringements of the rights of individual taxpayers. Taken together with the new legislation-it has not yet reached the Senate but will be debated within the next week or two-which will allow the Taxation Office to go back an unlimited number of years to recover tax debts, whereas every other arrangement between debtors and creditors in this community is subject to the statute bar as it applies in each individual State, these matters have also raised very considerable concern about the possible infringement of taxpayers' rights. The Liberal and National parties will oppose that legislation when it comes before the Senate late next week. That matter, I think, also shows the way in which this Government tends to transfer the power of the legislature to the bureaucrats and administrators in the Tax Office. Another example of this, of course, is the introduction of the Government's legislation-again, it has yet to be debated in the Senate-for the identification card. It has the effect of transferring enormous power from the legislature to the Taxation Office and gives it enormous opportunities to interfere in and invade the rights of ordinary taxpayers in the community. Consequently, this raises considerable concern in the community as to the powers that are being generated in favour of the bureaucrats. The point that must be made is that there has been a growing degree of disrespect for taxation laws as the laws have become far more complex and far more difficult for individuals in the community to interpret and apply to their individual circumstances. This has developed over many years and, I believe, is almost reaching a crisis point. It has also led to a perception in the community that the Tax Office is a big brother office, that it is a bullying operation, and that it has powers of enormous consequence which tend to infringe the rights of ordinary people. This widespread perception of the big brother attitudes within the Tax Office I believe is leading to a counter-revolution amongst taxpayers, many of whom are simply prepared to break the law and not declare income, thus leading them down the paths of evasive activity and also, it would transpire, criminal activity. That is, of course, something which ought not be encouraged by any government or any legislature, and certainly not by the Taxation Office. We must realise that the actions undertaken by the Taxation Office in seeking to issue assessments virtually at will, without any regard to the consequences-if you like as a try-on to see whether taxpayers will cough up the money rather than go to the expense of appealing to the courts-lead to a very high degree of disrespect for the law. We have to recognise that this is happening. All of us, as members of the Senate, have had circumstances and situations raised with us by constituents who have brought to us cases where they have been oppressed by the Taxation Office, where they feel they have been unjustly treated, where they feel they have been put under pressure by the Taxation Office and where assessments have been issued without due regard to the consequences. Those matters are all leading to this growing disrespect for the tax law and, in particular, the operations of the Taxation Office. There is a crisis of confidence in the operation of the Taxation Office. This is not just demonstrated by widespread anecdotal experience in the community or perceptions in the community; it is borne out by official reports. I instance the recent reports from the Auditor-General which pointed out the malpractice and mismanagement within the Taxation Office. Inadequate attention has been paid to the ordinary duties of tax officials and literally millions of dollars have been allowed to roll out the window by virtue of tax evasion because the Taxation Commissioner simply has not done the job that he was appointed to do. Mismanagement has led to those things happening. As a result of the perception that has developed in the Hawke Labor Government that something needs to be done, or at least to be seen to be done, the powers of the Taxation Commissioner have been increased by numerous pieces of legislation, as I outlined earlier. Those actions by the Hawke Labor Government certainly have not enhanced the position and the perception of the Taxation Office in the community generally; in fact, it has been the reverse. This transfer of power to the Taxation Office, if it continues to increase, holds grave dangers for us all. We should all be very concerned about this development of enormous big brother power within a bureaucracy such as the Taxation Office. That is not to say that the Taxation Office has not had enormous powers in the past. Of course it has. It has had powers which it has exercised and which it should have exercised more diligently in the past to chase up tax evasion and avoidance. The powers already exist in the law. Section 260 of the Income Tax Assessment Act as it used to exist could have been exercised in many cases but was not. Yet just recently we found that the Taxation Office had suddenly rediscovered section 260 of the Tax Act which, of course, was effectively written out of the law back in 1981, and has sought to issue 10 000 assessments to taxpayers off the top of its head, some seven or eight years after the time in which the original assessments could have been issued, paid and cleared up. Those kinds of activities, which will have the effect of wiping out thousands of businesses in Australia, really are true examples of the trends that are occurring under this Government by virtue of its inability to face issues and to deal positively with the bureaucracy. This Government is abrogating its responsibilities by transferring, by virtue of its domination of the Parliament, powers to the bureaucracy and leaving it to the Australian Taxation Office to pick up the pieces. That is fine so long as there is some supervision of the activities of the bureaucrats. That is where we come to the point of this particular motion. It is quite clear that there is a need, because of this growing disrespect for the law, because of the growing disrespect for the operations of the Taxation Commissioner, because of the growing abrogation by the Hawke Labor Government of its duties and because of its transfer to the bureaucracy of enormous powers, powers of which it does not know the limits, for the Parliament, through the Senate Standing Committee on Finance and Government Operations, to examine the enormous and very rapid changes that have occurred in the administration of the tax law in the last year or so to see what is actually happening to taxpayers' rights. I do not have to remind honourable senators that this is a parliament of the British tradition. All of us would understand the powers of taxation and the problems that taxation has caused over the centuries in the fights between the House of Lords and the House of Commons and between various forces in society. The civil war in Britain was fought over taxation issues. Similarly, George III lost the northern American colonies as a result of taxation issues of this kind. This issue goes to the core of what this Parliament is about and it ought to be examined very searchingly and with a sense of diligence, concern and sincerity by this Government and this Parliament. The people of Australia have only this Parliament to appeal to when enormous power is transferred to individuals within the bureaucracy. The powers that have been transferred by virtue of the legislation that has been passed by this Parliament-apparently, more legislation is about to be passed-are absolutely enormous. I do not believe that the people of Australia have yet to come to understand the full effect of what this Hawke Labor Government has done in effecting transfers of power. Consequently, I have moved this motion so that the Senate Standing Committee on Finance and Government Operations can investigate the issues concerned, look into the ways in which people's rights are being infringed, develop alternatives and come back to the Senate with suggestions as to how people's rights can be safeguarded in these circumstances. Senator SIDDONS(Victoria)(10.22) —The Australian Democrats have a great deal of sympathy for the various problems associated with the new taxation package as outlined by Senator Messner. This whole tax reform package has been a very divisive issue in the community and it still is. Tax reform is a very great problem; it has been bypassed and shelved by progressive governments virtually for the last 30 years. At least the Hawke Government had the courage to grasp the nettle. I doubt whether any future government will ever attempt any fundamental reform of the taxation laws. The point I want to make is very simply this: There has been the National Taxation Summit at which no agreement at all was reached in the light of the conflicting attitudes of various sectors of our society. We have had nearly 12 months' debate on the tax issue. It is the Democrats' view that the issue is so fundamental and so divisive that there is only one place in which this tax question can be debated and that is in the Parliament itself. I believe that it is impossible to put the enormous responsibility for coming up with recommendations on any changes to the tax system on a Senate committee-the Senate Standing Committee on Finance and Government Operations. It would be divisive; it would put responsibility on that Committee way beyond its normal area of responsibility. Apart from anything else, I am advised by the Chairman of the Finance and Government Operations Committee that the Committee is already very heavily committed with other references. In essence, there are still many problems with the taxation legislation. While various tax Bills were before the Senate the Democrats moved amendments to put responsibility on the Commissioner of Taxation to advise taxpayers as to the law as the Australian Taxation Office saw it. We did what we could, when the legislation was passing through the Parliament, to protect the rights of the individual taxpayer. It is a great pity that the Opposition did not liaise much more closely with the Australian Democrats when these Bills were before the Parliament because, if it had, I am sure that we could have moved many more constructive amendments to overcome many of the problems that are confronting us today. These problems remain. They are the responsibility of the government of the day, not the responsibility of the Finance and Government Operations Committee. So, for this one fundamental reason, the Democrats cannot support the Opposition's motion. Senator COATES(Tasmania)(10.26) —I also oppose the motion. Senator Messner is proposing a major investigation into the whole operation of the Australian Taxation Office and the various tax Acts. The only change that he had made to the motion he first moved in May is to limit it to income tax rather than all taxes, but such a reference would still be a huge job. The size of the task, if it were undertaken, would involve a committee working full time for a year or two to the exclusion of any other subject or any other parliamentary duties. Senator Messner admitted that he originally moved this motion last May as a means of stalling the tax Bills. The Senate decided otherwise at the time and defeated an amendment seeking to refer these issues to the Standing Committee on Finance and Government Operations. This motion is an attempted second bite at the cherry. I think that the Senate should make the same decision now as it made in May when the Bills were passed. It is completely inappropriate, now that those Bills have been passed, for a committee to try to review those operations before they have had a chance to work. Senator Messner, if he wants to, can certainly try again in a year or two and move a similar motion. He should wait until there has been a year or two of experience of assessments and appeals under the new system. Now is entirely the wrong time to do such a thing. I think this is just another example of the Opposition supporting those people who want to get out of their taxation obligations. It just wants to provide another avenue for the tax whingers to get more publicity for their cause. Senator Messner —Madam Acting Deputy President, I raise a point of order. I request that Senator Coates withdraw that disgraceful reference to the Opposition being supporters of tax cheats. The ACTING DEPUTY PRESIDENT(Senator Giles) —Senator Messner, I do not believe that was a personal criticism. Senator Messner —That was a reflection on the Opposition. The ACTING DEPUTY PRESIDENT —It was a political comment. There is no point of order. Senator COATES —Senator Messner used the term `tax cheats', I did not. I talked about the Opposition supporting those wanting to get out of their tax obligations. I did not mention Senator Messner personally. Senator Messner —Well, what are you talking about? Senator COATES —He knows what I am talking about. Senator Messner tried to give us a lesson in history. He then tried to imply from that that this was unjust to taxpayers. What, of course, he forgets is that provision is made for a system of appeal which allows anybody to have his case heard in accordance with the administrative law of this country. The responsibility for any disrespect that might exist for the tax law can be laid at the door of the Opposition. The prime matter is that the Opposition disagrees with the Government's policy. The Senate committee system would be totally bogged down if we decided that every issue on which the Opposition disagreed with Government policy should be referred to a Senate committee. Certainly, there are insufficient resources to do that, but there is a principle involved and, accordingly, I oppose Senator Messner's motion. Senator SHORT(Victoria)(10.30) —I want briefly to support, but very strongly, the motion by Senator Messner. Of all the issues confronting the Australian community today it is hard to think of one that is more important and certainly one that is debated more than the general question of taxation. It is a subject we have seen increasingly in recent months, weeks and days hit the headlines, particularly in the area of the administration of the taxation laws of this country and the procedures that are to apply. If we are to have a tax system which is fair and equitable, it must not only recognise the need for people to pay tax as well as have the appropriate procedures to ensure that they do, but it must also develop procedures to ensure that the basic rights and civil liberties of taxpayers in the Australian community are protected. There is no doubt that there is a great deal of concern in the community about the activities of the Australian Taxation Office. I believe that some of those fears and concerns are well-founded. Others perhaps are not so well-founded. The important thing is that at the moment the system is under criticism and under very great scrutiny. We have only to look at some of the headlines of last week to see this. For example, the Commissioner of Taxation has conceded that there are considerable problems in the Tax Office. Mr Boucher was quoted in an interview in the Australian Financial Review last week as saying that all is not well with the Tax Office and that senior officers had been meeting management consultants to set priorities for improvements. Concern was expressed by the Tax Commissioner himself about the administration of his own office, and that must automatically lead to concern being expressed by the Taxation Commissioner and the Tax Office about its ability and capacity to administer the taxation system as presently legislated on an efficient and equitable basis. Other reports in the last week or so claim that the Tax Office is in fact acting outside the law. A study of the taxation system has found that the Australian Tax Office has effectively been making tax laws that are either inconsistent with legislation, against political intent, or do not have the sanction of the law. In some cases tax reform legislation which has been backdated contains measures which were not announced or even expected at the time of the reform announcement. Learned academics in the field of taxation have said that it would appear that the real tax policy is made by the bureaucracy rather than the Parliament. Those allegations are very serious indeed and they go to the very heart of whether the administration of perhaps the most important area of government activity at the Federal level is efficient and is being carried out appropriately. I do not think anyone within this Parliament could conceivably deny that the matters we are talking about, namely, the procedures followed by the Taxation Commissioner and the Administrative Appeals Tribunal on the whole question of raising and amending income tax assessments, the imposition of penalties, interest on such assessments, and dealing with objections and appeals against them, which is, of course, the crux of Senator Messner's motion, are very important issues; as are the matters contained in the second part of the honourable senator's motion, that is, the need to have a look at the possible changes required to streamline and simplify the existing system and to safeguard the rights of taxpayers. I repeat: No more important subject could be considered to be the propriety and requirement of this Parliament than to be sure that we, as legislators and as the developers of administration, are right in what we are doing. To say, as Senator Siddons did, that he has sympathy with the views and the concepts put forward by Senator Messner but would nevertheless not support Senator Messner's motion, I find a strange proposition. Some of the points he made simply do not stand up to the light of day. The fact that there has been a National Taxation Summit, that there has been wide ranging debate on the issues, the principles and the policies of taxation, has nothing at all to do with the question of whether particular procedures in the administration of taxation are appropriate or not. As Senator Siddons would have to concede, I am sure, it is simply not possible on the floor of this chamber to have adequate debate and consideration of all those issues. The Senate does not have the scope or the ability to do that. The whole purpose of the development of the Senate committee system over the last 10 or 15 years, which has done so much to improve government administration, was to enable the Senate to obtain very careful and detailed advice, following very detailed and careful consideration by its senators in committees who would act, and look into things, in a much less political partisan manner than occurs automatically on the floor of this chamber. If Senator Siddons is serious in expressing sympathy with the intent of Senator Messner's motion, why has he not put up one proposition which stands up to the light of serious consideration as to why he will not support the motion? To say that the issue is so fundamental and divisive that the only place for debate on the issue is in the Parliament itself seems to me to turn logic on its head. If we want a rational debate on this issue-as I assume we all want if we wish to rationally consider it-the very thing we must do is take it out of this hothouse and put it in the quiet environment of a Senate committee where we do not have to play politics and where we can sit around a table to look at things in a sensible way. I fail to understand Senator Siddons's point of view. The other point Senator Siddons made was that it would be putting too much responsibility on the Senate Standing Committee on Finance and Government Operations. Again I find that an extraordinary statement. Senate committees are made up of responsible senators. If senators do not have the responsibility to handle their task adequately on the floor of this chamber they should not be here. They are the same people who would be looking at issues, in small committee groups in a less hothouse environment, which are of concern to us all. I think Senator Siddons denigrates the committee system very gravely in saying that to put a motion such as this, which was moved by Senator Messner, to a committee puts too much responsibility on that committee. What about all the other vast and very important issues that have been dealt with so well by Senate committees over so many years? They have done much to lift the status and the role of the Senate within the community. So again, with respect, I say to Senator Siddons that that is a nonsense argument. The other point Senator Siddons mentioned, and which the Chairman of the Committee, Senator Coates, echoed, was that the Finance and Government Operations Committee is already heavily committed with other references. I am a member of that Committee and I accept that it does have a not inconsiderable work load, but it does not have a work load that is so heavy that it could not take a reference such as this. It is a question of ordering priorities, as is the case with any committee. If one looks at the Notice Paper one will see that the current inquiries under way by the Finance and Government Operations Committee do not constitute a work load of such overwhelming magnitude that this reference could not be taken on board for practical reasons. That is not a real issue at all. The reason for the opposition to Senator Messner's motion was summed up by Senator Coates in his final point. He said that the issue was really that the Opposition disagrees with the Government's policy. That is really what the opposition to this motion is all about. It appears that the Government is running scared on the issue and is not prepared to have the very real issues of concern in the area of tax administration subjected to further careful, considered and deliberative scrutiny and analysis by this side of the Parliament. By this side of the Parliament I mean by the Senate as a whole in the form of a very responsible and important Committee. I say to Senator Coates that if that is the reason for not allowing the Senate to use its committee system in the way that committee system was designed to be used, he denigrates the whole system of committees. Senator Coates is the Chairman of an important Committee. The committee system deserves much better from one of its chairmen than the denigration Senator Coates is bringing to it today. Senator Coates —You know that if you cannot get a majority report then it will be a minority report. Senator SHORT —I do not know whether there would be a majority report and a minority report or not. The whole purpose of the motion is to consider some of these key issues. Many of them are procedural issues. We are not necessarily talking about taxation policy, although obviously some policy elements are involved. A great deal of it is procedural. By refusing to allow this issue to be considered carefully, calmly and deliberatively by the Senate, Senator Coates is, in effect, saying to the Parliament and, therefore, to the people of Australia that he is not prepared to use all the resources at the disposal of the Parliament to ensure that we have the best administration possible of, perhaps, the key issue of government administration, namely, the taxation system. I realise that there is no point at all in talking to Government senators on this issue but through you, Madam Acting Deputy President, I urge the Australian Democrats to reconsider their attitude towards this motion because, if they vote against it, they will never be able to hold up their heads again in this chamber, in the Parliament and in the Australian community and say that they are serious about the proper administration of the laws of this country and, most important of all, the taxation system. If they do not support this motion they will be seen for the party they are-a group of opportunists who are not prepared to tackle the real issues and who are just here for their own cynical political ends. Senator MESSNER(South Australia)(10.44) —in reply-I am absolutely flabbergasted by the attitude of the Australian Democrats and of Senator Coates, although Senator Coates's position is somewhat more understandable in the light of the likelihood that he will take over Senator Grimes's seat in the Ministry once Senator Grimes shakes off his Senate coil. Consequently, Senator Coates will continue to do the bidding of the front bench of the Labor Government while he sits on the back bench. But it should be remembered at the same time that he is the Chairman of what is supposed to be and is perceived to be a non-partisan committee of the Parliament. The motion I have moved today involves what is very much a non-partisan issue-the consideration of administrative issues within a very important arm of government. It certainly raises very few political issues or things that might create the divisions which he apparently fears-which fears, as Senator Short has pointed out, are totally baseless. This must draw us to the conclusion that Senator Coates is driven by forces which he understands but will not explain to us fully in this place. The other point I would like to draw to the attention of honourable senators is the attitude of the Australian Democrats. I am horrified by it. When this motion was discussed originally back in June this year I had nothing but encouragement from the former Leader of the Democrats, Senator Chipp. Senator Short —Because he realised that it was an important issue. Senator MESSNER —Yes, he did. He gave me his support at that time. Quite clearly he was very interested in the welfare of citizens, and could see the potential damage to their rights and believed that it would be good to support such a motion. Now Senator Chipp has moved to holier and other grounds and we have the new leadership of Senator Haines, who comes from South Australia and apparently has changed her mind about this matter. She clearly has very little interest in the rights of citizens. I suspect that one of the reasons for that is that she is on the embarrassing side of arguments about support for the fringe benefits tax, the capital gains tax, the pensions assets test and the lump sum superannuation tax. Senator Haines would not want any questions raised about those matters in this place or in the public arena. Consequently she has changed her mind from the attitude of Senator Chipp which is most wholesome and useful and which definitely gives a great deal of encouragement to forces within the community which are seeking, or were seeking, to put forward in a non-political arena their views about the problems in the administration of the Australian Taxation Office. It is not as though these matters have not been properly documented. Senator Coates knows quite well that reports of the Auditor-General and the House of Representatives Standing Committee on Expenditure demonstrate very significant problems in the administration of the Tax Office. Leaving aside those matters, we are concerned here chiefly and supremely with the rights of individual taxpayers. We assert that those rights have been challenged severely by changes to the laws which have been so rapid that few people can understand the implications and what will be the eventual effects. Government senators choose to take another view. I am disappointed that that is so. They are not thinking clearly about their constituents and the rights of taxpayers. In my opinion, it is a disgrace in the context of this motion that a chairman of a Senate committee in this place can accuse Opposition senators of supporting tax cheats. We are seeking justice for people. The honourable senator would understand better than most that there is a great deal of opportunity for the rights of individuals to be infringed by bureaucratic actions. I know that he is concerned with those issues. He should be concerned about them for taxpayers but, for his own obvious political and personal ambitions, he chooses not to support this motion. One final small point that really shows the hypocrisy of Labor senators in this matter is that this Government recently introduced legislation to provide that, whereas people used to be able to lodge an appeal against a taxation assessment with a deposit of $2, the amount raised to $200, so that little people with small tax disputes will now have to lodge with the Administrative Appeals Tribunal a sum of $200 to have their appeals heard. This is a disgrace and will take many people out of the realm of pursuing their disputes with the Tax Office. That kind of small point goes to the very root of what is happening to justice for taxpayers and which the Taxation Office is only assisting by its administrative procedures, bureaucratic actions, bullying tactics and other big brother approaches which make sure that people are frightened out of claiming their just desserts. On the $200 appeal charge that has now been imposed by this Government, if a taxpayer is turned down by the Administrative Appeals Tribunal and subsequently pursues his or her appeal to the Federal Court of Australia or some other court, the fee then chargeable is an extra $300. An ordinary workman might be disallowed a claim for a deduction against his income of $50 or $100 for his work clothes. That is peanuts to anybody such as Senator Coates but to that man it might be a great deal of money. Such a person would find that in order to chase his appeal over $100 through the legal system this Government has erected he will have to lodge $500. Clearly, people are going to make a judgment that it is not worth risking that kind of money in the appeals system. Surely that does not bring justice for ordinary taxpayers into the system; the reverse is so. Honourable senators on the Labor benches were party to abrogating significantly the rights of ordinary taxpayers in this country. I am tal-king about the very ordinary taxpayers. Clearly, those who have substantial issues to pursue and prospects of gaining, say, millions of dollars from tax decisions in the courts will not worry about lodging $500, but the small people of this country will. They are the ones who will suffer from the Government's actions. That is one of the issues we are seeking to have examined by the Senate Standing Committee on Finance and Government Operations, which Senator Coates chairs. I must say that I am absolutely disgusted with the attitude taken by Senator Coates in not supporting a bipartisan examination of these issues. I am even more disgusted with the attitude of the Australian Democrats. Question put: That the motion (Senator Messner's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 38 —— Majority . . . . . . . . . 7 —— Archer, B. R. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Baume, Peter Messner, A. J. Bjelke-Petersen, F. I. Newman, J. M. Boswell, R. L. D. Parer, W. R. Brownhill, D. G. C. Puplick, C. J. G. Carrick, Sir John Reid, M. E. Collard, S. J. Sheil, G. (Teller)Crichton-Browne, N. A. Short, J. R. Durack, P. D. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Harradine, B. Walters, M. S. Jessop, D. S. Watson, J. O. W. Kilgariff, B. F. Withers, R. G. Knowles, S. C. Aulich, T. McIntosh, G. D. Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Morris, J. Cook, P. F. S. Powell, J. F. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Robertson, E. A. (Teller)Evans, Gareth Ryan, S. M. Foreman, D. J. Sanders, N. K. Gietzelt, A. T. Sibraa, K. W. Giles, P. J. Siddons, J. R. Grimes, D. J. Tate, M. C. Haines, J. Vigor, D. B. Jones, G. N. Walsh, P. A. McClelland, Douglas Zakharov, A. O. Alston, R. K. R. Button, J. M. Chaney, F. M. Georges, G. Hill, R. Bolkus, N. Question so resolved in the negative. Debate resumed from 12 November, on motion by Senator Grimes: That the Bills be now read a second time. Senator PETER BAUME(New South Wales)(11.00) —The Opposition supports the purposes and the thrust of the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986, but will propose some amendments, which I will set out shortly. The approach of the Opposition to disability may be gained from looking at some of our policy documents and some of the commitments we have made to people in Australia. We regard community services generally-- Senator Harradine —Have the amendments been circulated? Senator PETER BAUME —Senator Harradine has asked whether the amendments have been circulated. They have been circulated. I ask one of the attendants to give Senator Harradine a copy of the amendments. We regard community services as one part of public policy whose goal is to enable as many Australians as possible to live their lives with dignity, free of interference, and as independently as possible. To the extent that this legislation seeks to enhance and advance that goal, we support it. When we are in government and responding to need we would like to determine priorities, set goals and pursue outcomes. To the extent that this legislation seeks to do those things, we support it. Our goals include the restructuring of government funding so that we can promote services that look towards producing certain outcomes as they affect the dignity, the financial, physical and emotional independence of people, and a new community integration of people with disabilities. To the extent that this legislation seeks to do that, we support it. We recognise, too, that society has moved towards new understandings and new recognitions in terms of people who have disabilities. As individuals they are not merely deserving of support and care; they are citizens. They deserve and, indeed, they demand, that they should receive the services and training which will permit them to live their lives with maximum dignity, maximum independence and maximum development of their potential. The coalition has, and always will, fight for the development of individuals towards individual independence, individual achievement, individual responsibility and individual opportunity. Further, we believe that we are looking at a changing society. In the past, services for persons with disability were directed differently. They were often directed towards providing residential accommodation, often with some ongoing training, predominantly recreational, and with an emphasis on support and care. Persons with disabilities who had been more mobile had been able to enter special work environments, undertake special tasks, and attract special wage subsidies. In fact, there was really a separation from the community. There was a situation-if I use the word `ghetto' I try not to use it in a pejorative sense-in which there was a separation from the community. The difficulty is that many of those services were developed by parents or the families of those who had disabilities. They were developed at a time when there was a vacuum. If they did not provide or develop the services, there were no services. They moved in and did what seemed to be right and what seemed to be most appropriate. They did it out of a sense of love and commitment and an investment in their own children or loved ones. It is very difficult for many of those people, for whatever the reason, to see government reports, such as the report of the Handicapped Programs Review entitled `New Directions' and to see new legislation which may suggest that all of that commitment, all of that love and all of that dedication may have been misdirected or misapplied. What is being said is that many of the services which were provided in years gone by to meet a different situation are no longer appropriate or adequate and they are no longer the type of service that is being supported. I again place on record that we understand that services were developed at a time when there were no services. They were developed by people who have actually moved mountains. They have performed miracles in what they have provided. We are now at a stage of seeking to change the emphasis. We are not trying to throw out our appreciation or our understanding of what people have done. There is today less need for people to withdraw from the community because of disability. The modern employer is far more receptive now than he or she was previously to the adaptation of jobs or work places to accommodate persons with disabilities. Modern technology has broadened the range of paid work available to less mobile and less physically able individuals. These are very good developments and, of course, they are still proceeding. Above all, modern society now has a capacity and a willingness to look beyond the disability, to recognise and to accord to the person who has the disability the full rights of an individual in a society such as ours. This is a welcome process. It is welcomed by the Opposition. It is a process which is occurring in many areas, not only in terms of disability, but also in terms of some of the disadvantage which has been suffered by people in terms of their colour, creed, race or gender. What is happening in the disability area is entirely consistent with what has been happening in certain other areas. We are concerned that, in relation to disability, we are looking at a problem of great size, range and diversity in this country. It has been said that there are at least 270,000 people in Australia between the ages of five and 64 who have significant disabilities. I would imagine that that figure which we have obtained is probably a marked underestimate. But most of those people experience functional disabilities in terms of their capacities to move around. Mobility is one of the major problems. Nearly half of them have disabilities in relation to self-care. These are needs which we must address and which we must try to meet. The Minister for Community Services, Senator Grimes, will know that in the past he and I, for our sins, served on the Senate Standing Committee on Social Welfare which produced a brace of reports, including one entitled `Through a Glass, Darkly', in which we drew attention to some of the inadequacies in evaluation in Australian health and welfare services. What we said in that report was that we had no goal setting, no objective setting and no data collection. We did not know where we wanted to go, what we wanted to achieve, whether we were getting there or whether we had got there. That report of the Senate Committee called for certain things to be done. Senator Grimes, by way of this legislation, seems to be trying to do some of them. So who am I to object to the concept of goal objective setting? I certainly do not object. I certainly do not object to the idea of data collection and measurement, or to the thrust of looking towards outcomes rather than cash inputs as a way of measuring government activity. That is something which I think is necessary, and which I applaud. In 1978 or 1979 we called for more data on the various cohorts of those in need in the community, including those with disabilities. We accept that this legislation, and the activities which preceded this legislation, have gone part of the way towards answering what the Senate Committee was seeking. I am sure that Senator Grimes, as a member of that Senate Committee, will share my pleasure in that development. Those with disabilities, of course, receive at least two kinds of support. The first is income support. This legislation is not related in any significant way to the income maintenance parts of the support for those with disabilities. It does not affect the question of pensions and benefits in any significant way. But those with disabilities also receive services of various kinds. This legislation is concerned with service provision. Those with disabilities receive rehabilitation services. This legislation does relate to the provision of rehabilitation services. People with disabilities have access to programs for the provision of aids, plus a lot of money is spent by the States through States grants for people with disabilities. So this legislation seeks to revamp and streamline disability services and rehabilitation provision. There is a move towards trying to achieve greater flexibility and greater efficiency, as well as greater effectiveness, as the emphasis of provision is moved, as I say, from cash inputs to social outcomes. We believe that it is necessary to propose some amendments to this legislation because, along with very desirable things, it introduces some injustices and inappropriate measures, which I will come to in a moment. But consistent with the Opposition's principles and goals, the Bill does a number of things. It takes us some of the way towards the type of community responses and programs which people with disabilities are seeking and which the Opposition supports. The Opposition supports the principles of greater integration of persons with disabilities into community life. We support that and, if this legislation will help achieve that, the Government has our encouragement and support. The Opposition supports the principles of community-based services; that is, services out in the community rather than services separated or isolated from the community. As I indicated earlier, that is partly a matter of history. Some of those services have been separated-the institutional basis for provision of services-because that was the only way the service could be delivered, but it has now been suggested that there may be other ways. The Opposition supports an increased range of service options to incorporate accommodation options, employment options, training options, education options, advocacy options and the provision of information, community education and self-help skills. All those things will help empower people and move them to greater independence. They are consistent with the classic principles of philosophic liberalism. The Opposition supports the proposal by the Commonwealth that these services should be funded on the basis of demonstrated achievement of individual consumer outcomes. As I said earlier, I happen to believe in measuring outcomes and in seeking outcomes. It is a damned sight more rational than looking at dollar inputs as if that was some measure of social effectiveness. The Minister might like to comment later, but I wonder whether this is the first major example where we have moved to outcomes as the basis of provision and not to inputs. If so, it is a notable first. The Opposition, therefore, supports in principle some of the major thrusts of the Bill, especially where services available to persons with disability are extended and especially where they are made more available and with more flexibility. We do have some areas of concern and I suppose I should move to those because they relate partly to equity and partly to administrative clumsiness. On several major issues we do not think the Government has followed through with equity in answering the needs of persons. The discussion paper `New Directions' tabled in May 1985 permitted some public examination and debate and permitted some input from concerned individuals and organisations about the desirable provision of disability services. But some of those concerns have been ignored or do not seem to have been taken notice of and we think some of them were put forward legitimately and should have been noted. We think there are some innovations in the legislation which are unusual enough to warrant comment. There is at least one innovation that we wish to oppose. We think what has been done in relation to rehabilitation services represents administrative clumsiness, which we wish to oppose, and I will explain why later. One of our most compelling concerns relates to the need to ensure equity as between people with a disability. By excluding those organisations for people with a predominantly psychiatric disability from becoming eligible organisations for the purposes of this legislation, we think the equity principle has been breached. The legislation redefines and restricts the target groups in such a way that it is at least possible that organisations representing people predominantly with psychiatric disability may not fall within the provisions of the Bill and may not be able to gain the benefit of the new range of services which is offered. It is true that, because of ministerial discretions and because of transitional funding, organisations may not be unfunded. But new organisations which care only for those with psychiatric disability will not be able to apply for funding as a target group recognised under the Bill because they are not a target group. It is not an inadvertent omission. It is a quite deliberate omission because representations were made by those representing people with psychiatric disabilities, the matter was considered by the Government and it decided quite deliberately not to include those with psychiatric disability as one of the target groups. I can see no reason in equity or in logic, when looking at this Bill and the really quite noble goals it is seeking to achieve, to separate out one group of people. I can see no reason in equity to separate one group out and to say that it is not part of the target group. In terms of Commonwealth-State funding details, the history of Commonwealth-State relationships and the bad faith which has been displayed by some State governments and the way they have behaved, I can understand what is going on. Honourable senators will be aware that recently in New South Wales and Queensland, for example, there have been major and fairly rapid moves towards de-institutionalisation from psychiatric institutions which just happen to have the effect of transferring large amounts of expenditure from the State to the Commonwealth. There is not a history of good and fair dealing on the part of the States and I can understand that the Commonwealth might feel properly aggrieved by that circumstance. But I come back to this legislation and what it seeks to achieve. There is no reason in logic or equity to leave out of the target group, and to have done so deliberately for reasons which have to do with another agenda and another rubbing point, those with psychiatric disability. Therefore, we will move the amendment we have circulated or support the amendment that the Australian Democrats have circulated, to include those with psychiatric disability within the purview of the Bill as a target group, because we think that is fair and logical. I draw the Minister's attention to another potential problem which is not really a matter for amendment, namely, that services to people with disabilities are to be made accountable in terms of consumer outcomes. That is fine. Question: Who is going to determine what kind of outcomes? Who is going to lay down what the outcomes to be achieved are and who is going to ensure that the outcomes laid down are fair and reasonable? We know that they are going to be laid down by the Minister on the advice of his officers. Question: After consultation with whom? The Government has set up no formal mechanism whereby the services are accountable to the consumers as individuals or groups. It is all very well for the Government to say that it wants consumer outcomes, but in a sense the consumers have a right to demand that kind of accountability and to demand that the services will deliver the outcomes they want. I understand that concern about the consumer and about outcomes in terms of consumers has been put forward as a responsibility to be negotiated between the Government and the service organisation. I understand that there is to be a two-way contract between the Government and the service organisation in which they will talk about consumer outcomes. That may be a quite sensible course for persons whose disabilities do involve overwhelming dependence and who may not be able to negotiate for themselves, but most people with a disability have a clear idea of the outcomes they want for themselves and it may not be enough just to have the contracts drawn up between the Commonwealth and the service organisation without ensuring that the consumers who are affected can agree that those are the desirable outcomes and can have a role in evaluating whether those outcomes have been achieved to their satisfaction. We cannot find where the individual consumer is provided for in the legislation. He is not a player to be consulted, not a purchaser of services, not someone who is able to make as many free choices for himself as he may want to make. The next area of concern is that the Government has proposed in this legislation that the eligible organisations, which may seek grants under the legislation, can include the States. I find that very unusual. From time to time we fund the States through this Parliament. Under section 96 of the Constitution we have a whole series of States grants Acts which pass through this place each year and which are generally supported. We are about to consider the States grants education legislation. Senator Gietzelt —Mainly associated with the Budget. Senator PETER BAUME —It is mainly associated with the Budget, but it can be a special appropriation. However, funding is mainly done through States grants legislation. The legislation before us is proposing that an eligible organisation can include a State. It is a very small matter; it is a matter, we think, of constitutional style. It represents a departure from normal practice. By the way, we do not object to the States being given money but we think that if they are to be given money let us do it through States grants mechanisms unless there is some overwhelming reason for States being able to become eligible organisations and to compete with non-government and local government organisations for access to part of the available pool. This will not increase or decrease the total appropriation. The amount of money for which eligible organisations can apply will be set each year. However, to include the States as an eligible organisation seems to be inadequately explained and we intend to try to amend the legislation to oppose the inclusion of the States as eligible organisations under this Bill. Finally, I come to the question of rehabilitation services. It appears that rehabilitation services in Australia fall under several heads. The Government has already, by administrative means, wound down the operation of several major rehabilitation services. The Government has established a whole series of regional rehabilitation services and centres. We do not object to the extension to a number of regional centres, if that is the Government's wish. If the Government wishes to move the focus of rehabilitation effort by the Commonwealth from what is essentially a medical and training model, which it has been, to a more broadly based model, which is what the Department of Community Services and the Minister propose, it may do so, but with one proviso: It should not remove or wind down existing services where no adequate alternative services exist for the people who currently need and use those services. My colleague Senator Brownhill will address this matter in his contribution. It is our belief and concern that that is what has happened to a greater or lesser degree. I am not going to enter into the argument about whether the medical and training model is the only model. I do not think it is. I am not going to decry the Government's attempt to develop a broader series of rehabilitation emphases. That is no problem. Our concern is that within this country a number-six, seven or eight-of major rehabilitation centres have been developed over one or two decades. They have become centres of excellence and deliver certain services within the medical training rehabilitation model which are necessary as part of the spectrum of services for those with a disability. The Government has announced that it will sell those centres. They will be gone by the end of this financial year. They are already on the market. Tenders are being called for some of them. When these centres are gone the services which they offer will be gone. Senator Grimes —No, that is not true. Senator PETER BAUME —The Minister may explain. However, at the moment there are clients, or patients, who believe that they will fall between several stools. In the Estimates committee hearing the Minister told us that he is willing to contract to outside organisations, if that is necessary, for people needing medical training services. That is fine if he will tell us where they can all be delivered. It is the belief of many of the people involved in rehabilitation medicine-some have no direct vested interest in what happens-- Senator Grimes —Not many. Senator PETER BAUME —I am sorry, but many have no direct vested interest in what is going on. Certain people, such as Dr Oakshott at Royal North Shore Hospital of Sydney-I think he is the President of the college-has no direct vested interest. He believes that the withdrawal of services will mean the winding down of unique expertise and leaving a vacuum in services which are and have been available. The Government intends to sell off rehabilitation centres in Melville in Western Australia, Glen Waverley in Melbourne, the Douglas Parker Centre in Hobart-I am not sure about it-Taringa in Brisbane, Queen Elizabeth II in Sydney, Mount Wilga, I think, and Payneham in Adelaide. Unless these centres are replaced by equivalent services elsewhere in those States they will be sorely missed. This year $20.3m is provided for running these major centres. It is intended that next year nothing will be provided for these major centres. I think within the portfolio there are transfers of money from rehabilitation services to disability services generally. As I look at the figures that is partly how the financing has been done. That may be so. We are concerned that services that have existed and that are assisting people today will be wound down. We think there will be disestablishment and service withdrawal without adequate alternatives in place, and that is the concern of people who have given their lives to providing rehabilitation within the medical and training model. We understand rationing. We can see no argument that would justify this course. Because of that, we intend to oppose those parts of the legislation which relate to rehabilitation services to indicate to the Government that we believe it should not close these major centres until it can guarantee and convince us and the establishment, those who are now delivering the services, that at least the interests of the patients will be met. That is our concern. The representations I have received have included representations from patients, and it is their concern which leads us to this end. We support the legislation. We intend to support measures to include those with psychiatric disability. We will oppose the provision that would allow the States to become eligible organisations and we will oppose the Government's provisions on rehabilitation services, not because we do not want to see an extension of services but because we are concerned about the withdrawal of some very valuable services which are presently available. Senator POWELL(Victoria)(11.29) —The Australian Democrats too welcome the thrust of the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986. I think a brief quote from Australian Democrat policy clearly outlines the reasons why we support this legislation and the process which has led to it. Our policy states: Every individual regardless of sex, age, marital status or disability in Australia is entitled to the basic means of support as a right . . . It recognises that assistance from government and elsewhere: . . . must be designed to enable individuals to develop fully their capabilities both for their own satisfaction and the consequent benefit to the community. The policy goes on: This will require a complete change from the present system. People must regain control of their own lives . . . and community services must be improved so they are more efficient, more readily available, and more responsible to changing needs. We commend the Government on the priority it has given to improving the services available to people with disabilities; the general thrust of the principles and objectives which underlie the legislation before us; and the trouble and care it has taken actively to involve the community, especially people with disabilities, their families and service providers, in devising the report entitled `New Directions' which this legislation puts into effect. This legislation embodies a significant and welcome shift in the way in which the Commonwealth Government will allocate funds for people with disabilities. Funding will be based on the actual outcomes achieved for the users of the services-that is, people with disabilities. Organisations receiving funds will be accountable for the content and quality of the services provided to those who have disabilities. The draft principles and objectives will become the measure by which benefits achieved for people with disabilities will be evaluated. All services will be required to be formally reviewed at least every five years so that their ability to produce outcomes in line with the draft principles and objectives may be evaluated. The Minister for Community Services (Senator Grimes), in his second reading speech, refers to the potential for providing initiatives for performance in the achievement of positive client outcomes. My discussions with the Department of Community Services indicate that these incentives could be given in the form of additional financial incentives grants for achieving the outcomes negotiated and contracted by the organisations who receive funding. I welcome the future development in implementation of this method of rewarding organisations which can make a definite contribution to the achievement of the stated objectives. Let me outline some of those objectives. Services for people with disabilities should ensure that the conditions of everyday life of people with disabilities are the same as or as close as possible to the norms and patterns which are valued in the general community. People with disabilities should receive services which are tailored to their individual needs and goals. Programs and services should reflect the needs of people with disabilities, who experience double disadvantage as a result of sex, ethnic origin or Aboriginality. No single organisation providing services should exercise control over all or most aspects of the life of an individual with disabilities. Finally, services should provide appropriate avenues for people with disabilities to air and resolve any grievances about the service they receive. It is of concern, however, to the Australian Democrats that people with psychiatric disabilities are excluded from the ambit of this legislation. During the International Year of Disabled Persons, it was debated whether people with psychiatric problems had disabilities. That debate during that very important year for all people with disabilities concluded with a strong affirmation that people with a background of psychiatric illness are often disabled and that often the disabilities are of such severity as to handicap people for long periods. People working in the area of the psychiatrically disabled make it quite clear that people with psychiatric disabilities have particular needs. Those needs, as recently outlined in a speech by a representative of VicServ in Victoria, are the need for shelter and housing; for general and specialist health services; for access to community resources in education, recreation and leisure time activities, transport, information services and vocational training; for the support of family and friends; for social competence and development in social and practical skills; for a supportive community network; for security and access to entitlements; and for advocacy. This, of course, is a very similar list to the list of needs which people with other disabilities are recognised as having. It seems that the Minister has argued that psychiatric disability should remain a State responsibility because it has traditionally been one. Senator Grimes —I do not argue that at all. Do not say that. Senator POWELL —That is fine. I doubt whether this is a real reason for the decision because certainly it is obvious that within the range of areas between State and Federal, such an argument would not bear very much weight. The Commonwealth Government gets involved in a range of areas which can be seen to be significantly within the responsibility of State governments. We have also had statements from the Minister, particularly when he appeared before Senate Estimates Committee B on 16 September this year, that if psychiatrically disabled people were included, we would need a huge expansion in money and services. I have been informed that currently services to the psychiatrically disabled account for $2m out of $130m of expenditure and that even if another $2m or $3m were spent over the next two or three years, that seems to us not to be an enormous impost, particularly when the issue of equity is raised, and I will refer to that in a moment. It is quite likely that if psychiatrically disabled people are excluded from this legislation, there will be a consequent rise in the amount of money which States have to spend and so, from the taxpayers' point of view, the question of money is not particularly cogent. It is also the case that the exclusion of the psychiatrically disabled has been noted by the Human Rights Commission as being a breach of human rights. It undermines, too, the second principle of the Minister's statement of principle and objectives that people with disabilities, whatever the origin, nature, type and degree of disability, have the same fundamental rights as all members of Australian society. Given the exclusion from the Bill, we probably need to add to that principle the rider: `Except for those with psychiatric disabilities, who have no right to Commonwealth funding under the disabilities services legislation'. People with psychiatric disabilities were invited to participate in the Handicapped Programs Review. The `New Directions' report made the following recommendation on psychiatric disabilities: It is recommended that relevant Commonwealth and State Ministers hold discussions about: sharing the responsibility for the provision of non-medical services for psychiatrically disabled people; expanding Commonwealth programs, including the proposed Disability Services Program, Home and Community Care Program and the Supported Accommodation Assistance Program, to provide services for people with psychiatric disabilities; and State Departments of Health/Mental Health maintaining responsibility for treatment and crisis intervention. In spite of all that, these people remain excluded from this legislation. As I told the annual conference of the Australian Council for Rehabilitation of Disabled last Friday, the Australian Democrats are prepared to stand firm on the principle expressed by the Minister. Consequently, we announced that we would be moving an amendment to include the psychiatrically disabled. That amendment was circulated to all honourable senators on Monday, 17 November. I note that on the afternoon of Friday, 14 November, following my announcement to the ACROD national conference, I received a telegram which said: This morning at the ACROD national convention it was unanimously resolved that the conference deplored the failure to include people with psychiatric disabilities in the Disability Services Bill. ACROD members greatly appreciate the Australian Democrats' intention to seek amendment. I am sure that ACROD members greatly appreciate, as we do, the fact that the Opposition, obviously moved by the comments that have been made, subsequently proposed an identical amendment. This means that the move we have taken will ensure that the psychiatrically disabled will be included in this legislation. We have some other concerns about the legislation. One of those is with regard to the exclusion of interpreter services for the deaf from the lists of types of services which the Minister may approve, as outlined in clause 9 of the Bill. We recognise, however, that they could possibly qualify under clause 9 (2) (e), information services. While we do understand that ultimately there is a limit to the amount of money available, we believe that that must not and should not be used as an excuse in cases where there is genuine need. We trust that the ability for interpreter services to qualify under clause 2 will mean that from time to time they will. We also express some concern at the inclusion of State organisations in clause 10, and concern has already been expressed on this by the Opposition. State organisations were excluded under the Handicapped Persons Assistance Act, which this legislation replaces. However, we recognise that that created difficulties when the Department of Community Services wanted to fund services through the State organisations. To continue to exclude State organisations would make it difficult for the Commonwealth to fund such activities as private housing for people with disabilities, for example, through a State housing commission. Although we understand some of the concern which has been expressed to us and which has been expressed by the Opposition, we will not do anything other than draw the Minister's attention to it. As I have said, we welcome this Bill because it represents a considerable step forward and also because it represents the results of extensive consultation in the community with consumers, providers and families across the board. We are particularly pleased that as developments have unfolded the legislation will be improved in the way that we initially proposed, to provide justice and equity for the psychiatrically disabled. We commend the other groups of people with disabilities who have supported this move for justice for the psychiatrically disabled under this legislation, and who have resisted what might have been a temptation to accept an exclusion which might have been seen to be in their best interests, given that it is quite possible that they might have accepted arguments which said that the fewer groups involved, the more money there might be left over for those who are included. I have been pleased to have been associated with this kind of selfless attitude and recognition of justice on behalf of people with disabilities. We welcome this legislation. We support its thrust and trust that the Government will recognise the improvement made by the amendment which the Australian Democrats first proposed. Senator BROWNHILL(New South Wales)(11.43) —I support the comments made by Senator Peter Baume on the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986. I want to talk to only one aspect of the Bills. The Treasurer (Mr Keating) in the Budget Speech said: This Government has a commendable record of directing assistance to those in greatest need I think that comment is rather hollow at this stage. In this legislation we have clear evidence that the Federal Government is walking away from its responsibilities. I refer particularly to the decision to sell its rehabilitation centres in various places around Australia. The Minister for Community Services, Senator Grimes, who is sitting at the table, after the Budget announced: More and better regional rehabilitation services around Australia will result from the Government's decision to redirect resources from large rehabilitation centres to a community based network. That may well be so, and that sounds quite commendable, but in reality that is not what is happening. It is certainly possible that more centres may result, but the more important criterion, that of quality, is certainly not going to eventuate. The speed and the manner in which this Government has approached this change has upset many people in the community and it will only serve to create further hardship for families who have already had enough personal tragedy. The changes to the rehabilitation program follow the Handicapped Programs Review, which has already been mentioned. This review stressed among other things the need to assist people with disabilities to achieve independence in their own communities, and I wholeheartedly support that view. I believe the authors of the review consulted extensively with people with disabilities in the community, and I do not agree that there should be either a cutback in the quality of service or any suspension of services while any changeover is being organised. The Government intends to sell the Federally funded centres and to use that money to provide the funds for the community based centres. The Minister has claimed that the moneys from the sales would more than double the numbers and range of regional services throughout Australia. That may well be, but unfortunately, this policy does not spell out just what is to happen to those people who are presently in those places that are to be sold while more numerous community based centres are being developed. As a New South Wales senator I have had numerous calls from people who have been associated with the Mount Wilga Rehabilitation Centre in Hornsby in the northern suburbs of Sydney. I have had similar calls of concern from people associated with the Queen Elizabeth II Centre in Camperdown. These centres are held in the highest esteem in the community. Let me explain what they are all about. For many of us in the Senate the Mount Wilga and the Queen Elizabeth II centres do not mean terribly much. Most of us have had no direct involvement with them and no need for their services. We are the lucky ones, but it may be tomorrow or next week that Mount Wilga or a similar place will become significant to us. Mount Wilga and Queen Elizabeth II deal with victims of motor accidents and illnesses, such as strokes. They get their patients after the doctors have patched up the gaping wounds and revived them from comas. They come as paraplegics, quadraplegics, with head injuries and amputations, or they are sound in body but with no control over their minds. Many come as angry young men and women, bitter at a world which has dealt such a vicious blow, and those angry young, and just as often not so young, men and women have families who are equally as confused, angry, bitter and frightened. However, those people have the determination, the courage and the desire to improve their lives and they want to acquire new skills and to regain old ones. These centres are very often the last hope and the saviour for these people and their families. The people at the centre are known and expected to work miracles at putting people back together, people whose minds and/or bodies refuse to function properly. They give their patients hope and new lives, and they do it in a variety of ways. Many who come to places such as Mount Wilga come with horrendous problems and with little chance of regaining a useful place in society. The staff at these centres work on these physical and mental disabilities with a great deal of success. But not only do they work with the patients, they also provide hope for the families. They help them to come together, to see a light at the end of the tunnel and to cope with the many new problems that they have been faced with, problems that they could not cope with at home. They perform these miracles every day of the week. They have at their disposal a full range of medical facilities-physiotherapy, occupational therapy and vocational training, combined with other specialist services, social workers, psychologists, et cetera. The regionalised centres that will take the place of these larger centres cannot possibly provide the same full range of expertise. People wanting all of these services may be forced to move to several locations. Many of them do not want to move. Where will they go while these centres are being established? This is the worry and concern to me at this time. A letter to the Sydney Morning Herald recently from the President of the Australian Council of Social Workers, said: Costly medical care at the acute stage is only economic if further rehabilitation facilities are provided to continue the road to recovery and a useful life both at home and work. It is important for rehabilitation to start as soon as possible, both to capitalise on maximum recovery and to maintain an optimistic view of the future. The situation that I have outlined in New South Wales is, I believe, being repeated around Australia. There is equally as much concern at the closure of large rehabilitation centres such as Glen Waverley in Victoria and the Payneham Centre in South Australia. There is equal concern at where the patients from these centres will go while waiting for the new centres to open. I very much regret the Government's decision to sell such worthwhile facilities as Mount Wilga, with the resultant dispersal of qualified and highly skilled teams. I think that is the biggest concern of all, the dispersal of the qualified and highly skilled teams. I, and the thousands of people who need to use the services at Mount Wilga and at the Queen Elizabeth II Centre, call on the Government to reconsider seriously this decision. We are not dealing with economics; we are dealing with the future of disabled people. Obviously, there is a need for such services to help these people. It is very apparent that the regional services, although more numerous, will not be able to provide such quality of care. I emphasise the words `quality of care'. Another difficulty with the closure of the larger centres is that young people may well be forced into the geriatric wards of large hospitals. This type of rehabilitative care is the very worst kind of treatment that young disabled people can have. It is not beneficial at all and very often completely disillusions them, making them unreceptive to any therapy. Places like Mount Wilga, on the other hand, provide specialist care and a range of services which simply will not and cannot be made available in smaller regional centres. I ask the Minister to look more closely at the problems I have mentioned to save the worry and concern of these people. Senator HARRADINE(Tasmania)(11.51) —I will be brief. My main concern is to hear what will be said at the Committee stage. I do not know whether the Minister for Community Services, Senator Grimes, would prefer me not to give him a rap, to save time. I know that there have been many speeches and interventions recently-not by me, I must add-but I am sure that the Minister, as Manager of Government Business, would probably prefer me not to go to great lengths to recognise the very important work that he has done in this area and the important work that others who have been referred to previously have done. I was not always on the receiving end of Senator Grimes's compassion in the old days in Australian Labor Party conferences and so forth, but I know that he is a man of compassion and that he has a deep understanding of these issues. I know also that he will take on board the matters that have been raised in this debate. They are matters which I will not go over. I have, of course, considered them. I am interested to hear further discussion on the matter that Senator Peter Baume raised about psychiatric disabilities. I am also interested to hear from Senator Peter Baume how he equates what he has said with the need not to condemn persons with psychiatric disorders to a sense of hopelessness by categorising them as having permanent disabilities. That is a philosophical question, of course, that I think we could probably advance and discuss more appropriately at the Committee stage. Senator Peter Baume —It is the whole question of stereotyping throughout the area, actually. Senator HARRADINE —I am sorry, I have two disabilities today: One is a bad back and the other is that I have gone deaf. I do not know why. Senator Peter Baume —I said that the question of putting names on people goes right across the area of disability. It is one of the problems we have to overcome. Senator HARRADINE —Certainly. As I said, that is probably more appropriately discussed when we are fine-tuning at the Committee stage. I wish to raise a matter which has been raised during previous discussions-I am not sure by whom-and that is the need for the Department of Community Services and people administering this legislation to understand the special needs of the smaller States and the outlying areas of those States. I see Senator Grimes nodding. He knows what I am talking about. I refer particularly to the north-west coast of our State of Tasmania. There is no need for me to go into that in any detail, but I am interested in hearing his response to those questions. I will be supporting the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 and considering the proposed amendments at the Committee stage. Senator SHEIL(Queensland)(11.55) —I support this piecemeal attack in the legislation to help disabled people. Disabled people may be young or old. They may be psychiatrically or mentally disabled or physically disabled, or combinations of both. It may be a temporary or permanent condition. A small number of these people are savable and can pass from the permanent to the temporary category, or even to the cured category. The Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 specifically exclude mentally disabled people and therefore exclude people both mentally and physically disabled. If people have both conditions they are not included in the target group under the legislation. So it is a piecemeal attack. There is no mention at all about income maintenance for these people. That has been left bubbling along on the back burner under whatever circumstances exist today. It is, at best, a piecemeal attack and is causing some concern to us because of the exclusion of the mentally disabled. The purposes, objectives and principles are all laid out in pretty high flying rhetoric which seems to me to have been taken from some of the international covenants. Very few of them are possible of implementation. I notice the Government is introducing new requirements for accountability of the people who supply the services. It is introducing a new orientation of consumer outcomes which, of course, fits in very well with this Government's philosophy. It applies this philosophy to education. It wants people who come out of educational institutions to come out with equal outcomes. Presumably it is applying that philosophy to the disabled. It wants them to have the same outcome regardless of equality of access. Historically, I suppose, care of the disabled really started with parents who were inflicted with having to look after disabled children. Eventually they would have formed groups and got some medical, nursing and therapy people interested in the groups. This would have stimulated much of the research that went into the various areas. Admittedly, 50 years ago not much was known about this sort of thing. Those people deserved a lot of credit for the advances that have occurred. Undoubtedly, as they progressed they would have realised that they needed more money and help. Unfortunately, they went to government for it and got it. Governments have been funding these sorts of things ever since. I suppose that it is because of that that we went down the institutional road to start with and put these people away. Now we have learnt that they can be much better looked after in the community. That is also due to advances in medical science that have made many of the disabilities less permanent and made many people a lot easier to put up with. It has given people a chance to fight off their disabilities. A lot depends on the amount of fight in the patient as to how much disability he or she has. The saying is that it is not the size of the dog in the fight that counts; it is the size of the fight in the dog. I saw a film the other day of a chap in the United States of America with no legs who was playing football. There is no limit to what can be done if one can play football without feet! This legislation is a move away from institutional care back to the community. Despite all the high flying rhetoric in the principles and objective, the Government is selling off the large institutions. This is causing disruption. We have heard what it is doing in the community at the moment. The Government is not providing any alternatives while these large institutions are sold. The Government should explain its position very carefully and be very particular about how it expands the regional services. We can see the dangers of the States being funded as though they are institutions. Those dangers have been enunciated in the debate today. I suppose that the Commonwealth wants the States to be mendicants. I do not know what sorts of programs the Government expects the States to come up with when it is already closing down their institutions. I suppose that, with changing times, there will be a need for new and additional services. There are three areas of concern. The first is the complete exclusion of all mentally disabled people from the target group. I do not know the exact figures, but at least half the disabled in Australia will be excluded from the target group. Secondly, there is the business of the Government putting the States into unfair competition with other institutions when applying for Commonwealth money. Thirdly, there is the lack of provision of interim services while these large institutions are being sold over the next few months, which is already causing major disruption to the care of the disabled in the community. Senator GRIMES(Tasmania-Minister for Community Services)(12.02) —in reply-I thank honourable senators for their support of the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 and their contribution to the debate. I must say with all charity that Senator Sheil's remarks demonstrate a comprehensive lack of understanding of what the legislation and the program are about. The reason there is no reference to income support in this legislation is that income support is the responsibility of the Minister for Social Security. It has been since the introduction of the social security legislation in the 1940s. The honourable senator may advocate that income support should be brought within the purview of the Minister for Community Services under these circumstances but it is not and has not been within his purview and I have not heard any argument as to why it should be. The principles and objectives in the legislation do not come from any international covenant. They come from the Department of Community Services and me and the many meetings we have had with organisations concerned with care for the disabled throughout the community. To see an international red or communist conspiracy in the legislation is unfortunate and denigrates the views of the people who have worked so hard to make the changes we are making. Through this legislation we are trying to do all the things that Senator Sheil believes, apparently, we are not trying to do. It has been my belief for many years, and I think it has been the belief of all people in the area of disability, that the people with disability in this country and those who care for them have shared and have had to carry an unnecessary burden. Their capacity to help one another or to help themselves has been limited by the legislative processes and mechanisms of funding we have had in the past. They have had to try to develop their programs to suit the rigid guidelines which were set up in good faith by previous governments and supported by political parties of all persuasions. They have been limited by their inability to raise funds. In many ways we have all been prisoners of the past, of history, in this area in that we have judged people and the programs which have existed, as Senator Peter Baume says, on how much money we have spent on them. We have not been sufficiently concerned about the outcomes for various people. Another phenomenon which occurs in the area of disability is that the good, hard working and dedicated people who over the years have been responsible for the development of facilities for people with disability, who have worked so hard and who have had to spend all their time raising funds, fighting governments and developing services sometimes find their vision impaired a bit by the sheer efforts they have had to contribute and by all their heart breaks and difficulties. One feature of this is that they become extremely protective-as they should be; one can understand it-and sensibly suspicious of people who want to change. They view, for instance, efforts to increase the independence of the disabled, particularly the intellectually disabled, as being the efforts of heartless people who want to throw intellectually disabled people out into the cruel and hard world. Senator Sheil —You are not dealing with them here. They are outside the target group. Senator GRIMES —I am talking about intellectually disabled people who are well and truly in the target group. I ask the honourable senator please to read the legislation before he comes in here and contributes that sort of nonsense. What we want to do in supporting these organisations and people is also to give them the opportunity to see that there are new ways of doing things, new ways of expanding the horizons of their client groups and those they want to help. It is because of this that the legislation went through such a long gestation period. It is because of this that we spent years consulting individuals, organisations, carers, people with disabilities, people caring with disabilities throughout the country, not only to find out what they saw as the disadvantages and difficulties of our legislative program but also to help them see that there are other and improved ways of doing things. I do not believe, and have never claimed, that we have come down with a perfect bit of legislation. We would certainly make a great mistake if we believed that this legislation was something like the Ten Commandments which would be set in stone, never to be changed. It will need to be changed as we develop experience in the area. It will need to be changed as conditions change. It will need to be changed over the years as we develop new ideas and techniques to deal with the problems of disability. That is the first thing. The second thing is that we must never, as we sometimes do, put our faith in legislation and legislation alone. If one reads the second reading speech on the introduction of the handicapped persons assistance program, one will find that there was universal support in the Parliament for the program. One will find an expression of hope in the Parliament for the program. The program was going to lead to de-institutionalisation and to more individual rights. It was going to do all the sorts of things we are talking about here today. It did not do them, partly because it was unnecessarily restrictive and partly because people resisted change. This legislation tries to provide the capacity for people to change and be innovative and the capacity for government to respond to people's ideas, rather than people having to respond to rigid government guidelines. There are certain problems with the legislation which honourable senators opposite find difficulty with. I can understand those difficulties. I will deal with some of them now. The first difficulty is the exclusion, as some honourable senators see it, from the target group of people with psychiatric disability. The legislation talks about people with physical, sensory or intellectual disabilities which are likely to be permanent. I would have thought that was a very broad definition. The Opposition and the Australian Democrats wish to, and apparently will, add to the definition by including the term `psychiatric'. The legislation will not fall as a result of that inclusion. The world will not change. If the Parliament wishes to include it I will have to accept it. I caution people about doing what Senator Powell did-raising the hopes of those with psychiatric illnesses generally in the community that this legislation will suddenly change the world for them, because whether or not the word is included it will not do that. In passing I must say that, although Senator Powell released her amendment on 17 November and therefore claims authorship, people on the other side of the Parliament and those outside the Parliament have been discussing this sort of thing with me and having differences with me over it for many years. I thought it was a bit ungracious of her to suggest that everyone else had followed the Australian Democrats on 17 November. I suppose that is part of the rhetoric and hypherbole we hear in this place. Senator Powell —If you can read a calendar it is quite obvious. Senator GRIMES —The honourable senator should be a bit more gracious and concede that other people in the community and in the Parliament have had ideas, perhaps even before she came into this place. I have to make certain points. The Commonwealth has never been closely involved in funding or directly providing services of habilitation or rehabilitation for people with psychiatric illnesses. One can argue, as does Senator Peter Baume, that that may be wrong but it happens to be a fact. Whether right or wrong, this matter traditionally is a State government responsibility. There are extensive services in place. Indeed, the services are being realigned to embrace the sorts of principles of the least restrictive alternative-or normalisation, for those who like that term-throughout the country. With respect to the disability services program or the handicapped persons assistance program, the Commonwealth traditionally has funded services which provide long term support for people with permanent disabilities and long term needs. We have never supported services of a medical, custodial or intensive supervision nature in this area. We have not included within our ambit people whose needs are subject to fluctuation and depend on periods of remission. We have provided and will continue to provide vocational as opposed to medical or treatment-oriented rehabilitation programs for people with certain psychiatric overlays to their intellectual, physical or sensory disabilities and for people whose psychiatric disability is stable to enable them to obtain substantial benefit from these programs. We have done that and will continue to do that. There is no reason under the existing legislation why organisations which provide services to people with a psychiatric disability could not adopt the innovations contained in this legislation. I think it would be very unfortunate if the impression gets around that under this legislation we will provide rehabilitation services, for instance, for people with long term neurotic disorders, unless the services are vocational or of the training types we now have. Senator Peter Baume —There are some already, are there not? Senator GRIMES —Yes, but it would be wrong to give the impression that there is an open go now for the States to get out of this area and spend money on something else and that we will move in and provide all services for the psychiatrically ill, just as we will not do so for those suffering from acute duodenal ulcers, in Senator Peter Baume's speciality, or for any other acute medical illness. It is absolutely ironical that for years and years psychiatrists and people with psychiatric illnesses have argued vigorously that such people are part of the medical scene, that they suffer from medical illnesses, and that they do not want to be treated differently from other patients. Senator Powell is exactly right. As soon as it became obvious that there was a greater interest in the area of disability and it looked as though more funds would become available in the area of physical disabilities, some of those medical practitioners decided that this was a good area to get into, that there would be more funding, and they said that their patients were disabled and no longer suffered from medical illnesses. I would be interested to know whether they would stretch that to the point of having treatment of those patients undertaken by people other than those with medical degrees. I will not die in a ditch over this matter. If this word goes in it will be as the result of a fairly successful campaign. In passing, as I think Senator Peter Baume knows, I must talk to some of my friends about the effectiveness of their campaign. Members of Disabled Peoples International, all old friends of mine, sent me the other day a whole pile of telegrams identically worded, all apparently coming from individuals supporting these amendments. Unfortunately, at the top of those telegrams it was pointed out that they had all been sent at 15.39 on 17 November from one post office in Australia. I hope quite sincerely that the sending of those telegrams did not take too much out of the grant we have given that organisation for advocacy in this area. If those people wish to do this in future they ought to be a little more subtle. I dare say that we will talk again about psychiatric disabilities during the Committee stage. Senator Peter Baume talks about problems with funding of State governments. As I said in the second reading speech, we have provided for a mechanism whereby we have the capacity to fund State government organisations on a similar basis to funding for eligible organisations. I do not believe that I heard from Senator Peter Baume that we should not fund State organisations in any way. He was a bit more concerned about the mechanism. Senator Sheil apparently believes that we will sool the States out into competition with non-government organisations. Under this legislation we cannot block fund States along the lines of the special assistance program or the home and community care program. We can pay funds to the States only for State-administered eligible services or to eligible organisations for one of those services. This will provide an avenue for greater use of Commonwealth-State co-operative arrangements, greater use of State-provided services by Commonwealth-funded voluntary organisations, more flexible arrangements, more open, I believe, and wider possibilities for integrating people with disabilities into the community, and the least restrictive alternative, of which I spoke. The sorts of projects we are thinking about, and they will be limited, will be similar to that put forward by the Spastic Centre of New South Wales in its community living demonstration project. I think that that is a great step forward for such an organisation. The New South Wales Department of Housing is buying 10 group homes at a cost of approximately $1m. It will rent the houses back to the Spastic Centre for 28 people presently in nursing homes. The Commonwealth will subsidise recurrent costs such as salaries and equipment. That is a good and sensible State co-operative arrangement. The legislation provides that that can be done. We will have jointly funded assessment teams in other areas to determine the most appropriate assistance for people with disabilities, if we can come to an agreement with State governments. State governments are already involved in this area. We want to involve them with us to avoid duplication and to avoid some of the problems we have had in the past. People should not see this capacity as being sinister, whereby we would disadvantage non-government organisations in this area. They will continue for a long time to be the basis of delivery of services to disabled people. The greatest misunderstanding-some understandable and some deliberate-is in the problems that people see in changes to the Commonwealth Rehabilitation Service. If I may say so, I think that the best example of this was shown by Senator Brownhill in his contribution. He talked largely about New South Wales. Some time ago we announced considerable changes in the Commonwealth Rehabilitation Service because the situation had changed since the Commonwealth Rehabilitation Service was established in the post-World War II years. We were no longer in a vacuum as a government in this area because the States were getting involved in rehabilitation, in particular in the provision of medical and specialist-type rehabilitation. In fact some private organisations are now becoming involved in the delivery of rehabilitation services. It was time we had a good look at what we were doing, had a look at some of the problems with what we were doing and had a better co-ordinated response in this area. Two or three years ago I announced that we needed to provide a more flexible and comprehensive rehabilitation program than is now available. The key strategy to that is regionalisation. I say to Senator Harradine that one of the best models of regional rehabilitation is already in existence and that is the Commonwealth rehabilitation regional unit at Burnie on the north-west coast of Tasmania. That service has been there for a long time. It was put there especially because of Tasmania's decentralised system. As a result of the regional service there, local people got direct access to rehabilitation programs. It had the indirect effect of stimulating the provision of State government medical-type rehabilitation services in the north-west coast of Tasmania. Although we have some distance to go, it is a very good example of what we are about in this program. Less than 30 per cent of our clients undertake programs at our large centres; the remainder are handled by regional units. Through this legislation the Government wants to assist the development of more innovative, alternative and co-operative arrangements for current and future clients. Things have changed considerably. Most of the rehabilitation services once had residential sections where clients could stay. The need for that has gradually gone except for the special case at Mount Wilga Rehabilitation Centre, which I will come to in a minute. Those facilities, except Mount Wilga, have all now closed. The result is that people undergoing rehabilitation live in normal residential situations, which we provide in flats, houses, et cetera, and not in the institutional-type residences that were there before. The Queen Elizabeth II Rehabilitation Centre and the Mount Wilga facility are very good examples of large institutions which are no longer appropriate. As Senator Peter Baume knows, QEII is slap-bang in the middle of Royal Prince Alfred Hospital in Sydney. It sees about 80 people a week and has a staff of over 60. The demographic centre of Sydney is now at Parramatta. A considerable percentage of the cost of rehabilitation at that centre goes in transporting patients to the centre in Commonwealth cars. A large number of people, because they live way out in the western suburbs, cannot be or are not referred to the Queen Elizabeth II Rehabilitation Centre. At the same time, Royal Prince Alfred Hospital has a physiotherapy and therapy section in an old barn market building nearby. It sees many more people. It provides medical and specialist rehabilitation service in those deplorable conditions. I believe the most sensible use of the QEII building would be to have it incorporated into the Royal Prince Alfred Hospital to replace the rehabilitation facility of that hospital so that the limited services which we currently provide may be provided in that hospital. At the same time we could expand our regional units in the area. Mount Wilga is a special case. It is unique in Australia. It is in fact the only unique service that the Commonwealth Rehabilitation Service provides. It is an appendage of the Royal North Shore Hospital-Senator Peter Baume's and my old hospital-for the stages three and four care of spinal injury cases. Dr John Yeo, who is well known to both of us, and I have had long discussions about what we will do with Mount Wilga. Mount Wilga is at Hornsby, way out of the mainstream of Sydney life-medical or otherwise. Apart from the specific service it provides for spinal injury it provides no other unique service. As Senator Brownhill has said, these centres do excellent work. What I am suggesting is that it could be done better, more economically-which is important-and more effectively by a redistribution of such services. There has never been a suggestion by anyone except Senator Brownhill that the result of the changes to the Commonwealth rehabilitation centres will be to put people into geriatric wards of hospitals. That is absolute nonsense and I do not know from where he dreamt that up. It is the absolute opposite of what we are about and what we will be about. We are negotiating with the States about the maintenance of the services and I have given a guarantee that any specialised services that are provided in these centres will continue to be provided-especially for those with head injuries, for instance-after these centres are closed. If necessary, they will be sold on a lease-back basis so that the service can be maintained. The sorts of consultations we are having, briefly, are as follows: In New South Wales the State Government and the Commonwealth Government are working together through a consultancy to develop options for an integrated system of rehabilitation and the result of this will serve as the basis of future negotiations with the State Government. We have been talking to Dr John Yeo and others about alternatives-and we have very good alternatives, I believe-to the provision of the services Dr Yeo delivers to the spinal injury cases in his unit. I believe he is satisfied with the way those negotiations are progressing. I am certainly satisfied with what we are developing there. In Victoria, officer level discussions have commenced. We have had focus discussions with relevant authorities such as the Victorian Accident Rehabilitation Council, the Motor Accident Board and the Department of Health. The discussions will start in full bore shortly so that we can develop comprehensive services there. The State Department of Health is negotiating with us to take over the medical rehabilitation aspects of services to people with head injuries and other severe disabilities. A proposal has been developed by the State Health Commission and the Department of Community Services and it will be put to the State Minister in the week after next. We are awaiting a response from the Western Australian Government regarding the future use of Melville Rehabilitation Centre and the respective roles of the State and the Commonwealth in rehabilitation services in that State. The State is already heavily involved in the provision of rehabilitation services there. In Tasmania, we are having officer level consultations regarding the future of Douglas Parker Rehabilitation Centre. Formal approaches have been made to the Commonwealth Department of Health and the Department of Finance regarding the ongoing funding of the Douglas Parker centre under the Health Insurance Commission provisions and we are approaching the State Government on this basis. We certainly do not intend to walk out of Douglas Parker and leave it without funding but it is a unique centre in that we pay most of the money and the Royal Hobart Hospital does all of its controlling. We will ensure those services are maintained but we will do so in co-operation with the State Government, as I think is sensible. In the Northern Territory there is a major review of rehabilitation services. The results of this review will serve as the basis for further negotiations with the Territory Government. We are not selling any centres there. In Queensland, we are having officer level discussions with the Queensland Government and the Queensland State Government Insurance Office in fact wants to get involved in the area of medical rehabilitation. We have not suddenly come up with this program to get out of rehabilitation as we have known it. We want to change our rehabilitation services. Over the last few years we have gradually got out of the area of the provision of institutional-type residences. We are gradually regionalising our services so that we can get to far more people where they live to give them counselling and provide back-up medical and specialist services in rehabilitation-whether they live in isolated areas such as the north-west coast or the north coast of Tasmania or in isolated areas such as far north Queensland, where the provision of rehabilitation offices per head of population is six times the rate it is in almost any other area of Australia. We want to provide regional units and access to rehabilitation for all of those people-no matter what their disability, not matter what their problems-where they face those problems. The days of shipping people long distances to central rehabilitation institutions, apart from the provision of some very specialised rehabilitation services, have, I believe, gone. As I said before, we have no services in our rehabilitation units in this country-with the exception of the one at Mount Wilga-which are unique. Those services are provided elsewhere. What is more important, they can be provided elsewhere. They can be provided where the people need them, where the people live, rather than moving people large distances. Economics does come into this problem, no matter what Senator Brownhill says and thinks. We can no longer have rehabilitation centres which have as many clients as staff. We can no longer have the situation which existed, in which it was cheaper to send people to Hawaii for a holiday than it was to put them in the institutional residences we had. We can no longer have-and we do not have-the situation we had in Melville, in which it would have been cheaper for the people who were in residence there to be placed in the Parmelia Hotel in the middle of town and provided with full services than it was to have them in our own residences. It was not natural and it was not sensible. We want services to be provided where people live; services that enable them to be rehabilitated, to get back into the community and live normal lives. We cannot, by and large, do that in the way in which we have done it in the past. We cannot do it in the restricted institutions we have had in the past. If we can all co-operate-Commonwealth and State government and non-government organisations-to provide these new services I think we will be successful. I think this legislation provides the basis for that success. I commend the legislation to the Senate. Question resolved in the affirmative. Bills read a second time. The Bills. Senator MACKLIN(Queensland)(12.33) —I raise at this point a procedural matter, something that has concerned me on other occasions and which has occurred again. Two identical proposed amendments have been circulated in the chamber. I know it is something which is not covered by the Standing Orders and therefore it is a difficult item to deal with. It seems to me that at least one way of solving the matter, as a courtesy, possibly, to the senators who propose to move the amendments, is that the amendment which was circulated first in the chamber-if that is easily able to be determined-ought to be the first one to be called on. The CHAIRMAN —In this case, as Senator Macklin says, there are two identical amendments. The Opposition has grouped its amendments under subject matter. I was proposing to call the Opposition to move its group of amendments together. In this case, that would necessitate calling the Opposition first. I take the point raised by Senator Macklin. I am not aware of the order in which the amendments were first circulated. Are you aware of that, Senator Macklin? Senator MACKLIN —They were circulated a day apart. The amendments that the Australian Democrats propose to move were circulated in the chamber a day ahead of the Opposition's amendments. I am concerned about procedure. Indeed, who moves the amendments in terms of some of the issues, is important. That is a fairly obvious political point. If it is always to be assumed that the major parties, if they propose to move amendments which are identical to ones which we have already circulated, are to be called first, it seems to me that they will be able to pick up any amendments that they wish in the knowledge that they will be called on first as a matter of course. Senator PETER BAUME(New South Wales)(12.35) —In regard to this point, the Opposition had not intended to seek to aggrandise itself on this matter. It seemed to us that what mattered was achieving the right outcome. I do not know whether I understand Senator Macklin, but it would seem that he sees it as a matter of some political importance that the Australian Democrats can say that they moved a particular amendment. Two identical amendments are proposed. I am perfectly happy to have them co-sponsored, if that is appropriate. It really does not matter to us. The CHAIRMAN —In the circumstances, I think Senator Peter Baume has yielded gracefully. I will call Senator Powell to move the amendments concerned. There are 14 proposed amendments to the main Bill. Two of them are identical. Senator Peter Baume proposes to move his amendments in groups. The first group to be moved by the Opposition, group A, covers psychiatric disabilities. Senator POWELL(Victoria)(12.36) —by leave-In regard to the Disability Services Bill 1986, I move: (1) Page 5, paragraph 8 (1) (a), after ``intellectual,'', insert: ``psychiatric,''. (2) Page 13, paragraph 18 (b) (i), after ``intellectual,'', insert: ``psychiatric,''. I addressed the major issues concerning these amendments in my speech during the second reading debate. I will reiterate the key issues at this stage and then pick up some of the comments made subsequent to my remarks. In regard to the issue of psychiatric disability, we should be very clear as to what we are talking about. The Minister for Community Services (Senator Grimes), in his summing up, in referring to my comments quite often used the word `illness'. It is not our suggestion in moving these amendments that it should be in any way construed to be covering psychiatric illness. We recognise, as it has been recognised increasingly over time-I did mention the impact of the International year of the Disabled-that psychiatric disability can exist, and it is in that context that I have moved the amendments. I do not intend that they should in any way encompass psychiatric illness. I noticed that Senator Sheil at one stage made reference to mental disability. Again, I make it clear that we are talking about psychiatric disability. I do not agree with Senator Sheil, either, that people with psychiatric disabilities make up an enormous number of the people in the community with disabilities. That is perhaps another reason for our insistence on these amendments. It is more a matter of principle than a matter which will be a major impost on government or on programs. Because of the increasing recognition that people can suffer psychiatric disability, we, and the people in the community, believe that psychiatric disability must be recognised, and must be recognised within the context of this legislation. If it is not, it is an exclusion which is against the interests of the sorts of moves that are being made in the area of disability towards integration in the community rather than segregation. I think it is important that the views expressed on behalf of the Human Rights Commission to the Minister should be placed on the record. The Deputy Chairman stated: The Commission hopes it will be possible to ensure that those suffering from psychiatric disabilities are included within the ambit of your welcome new proposals for services for people with disabilities. I would be disturbed if I am correct in understanding that the Minister said that he believes there is something of a band wagon effect here in respect of medical practitioners. They are not my colleagues; they are his. He did seem to suggest that, following the International Year of the Disabled and the increasing recognition of psychiatric disability, the attraction of more money being available might cause people to grasp after classification as being psychiatrically disabled. I do not wish to question the integrity of medical practitioners in that context but I will say that there is obviously a fine line between illness and disability. That does not just apply in the case of people with psychiatric problems. A great deal of medication and medical care is given to people with a number of disabilities. Certainly, it is a fine line and it is one which I would not want to see exploited in any way at all. I certainly do not believe and do not want it to be thought that, in moving these amendments, the Australian Democrats are trying in any way to open up a floodgate. We are very concerned about the justice of the issue and we are very concerned that a group of people should not be excluded from this type of legislation. We believe, too, that the principles, the objectives and the process that took place leading up to this legislation really behoves us to make sure that this group is included. I am very pleased that these amendments are jointly supported by the Opposition and are so gracefully received by the Minister. Senator PETER BAUME(New South Wales)(12.42) —I am not going to speak at any length on this point. I am grateful that the Australian Democrats' seven votes and the Opposition's 33 votes will ensure the passage of this amendment. Senator HARRADINE(Tasmania)(12.42) —I would like to know what the Human Rights Commissioner would define as a person with psychiatric disability. Frankly, I do not know whether we are talking about the same definition. If we are going to address this amendment properly we need to know about whom we are talking. During the debate I asked whether, in discussing this matter at the Committee stage, we should consider whether we are condemning the people we are concerned with to a permanent disability category. As has been explained by the Minister for Community Services (Senator Grimes) and as is clear from the Disability Services Bill 1986, the purpose of this legislation is: . . . to ensure that persons with disabilities receive the services necessary to enable them to achieve their maximum potential as members of the community; to ensure that services provided to persons with disabilities- (i) further the integration of persons with disabilities in the community . . . Clause 8 of the Bill talks about the target group. It states: The target group for the purposes of this part consists of persons with a disability that: (a) is attributable to an intellectual, sensory or physical impairment or a combination of such impairments; (b) is permanent or likely to be permanent . . . I wonder whether it is appropriate to talk of persons with psychological disorders as having those conditions permanently. I am not a medico, but is not one of the aims in addressing the problems of persons with psychological disorders to give those persons some hope that they will be able to emerge out of the impairment caused by their psychological disorders? Alcoholism is just another type of example. I recognise also that we must address the problem of the permanence of the effect of their disability-for example, whether an employer is likely to take on a person with a psychological disorder. That also must be addressed when considering this amendment. I acknowledge the problem that exists in a number of, for example, supported employment establishments, of which the predominant target group is the intellectually disabled. I note the distinction that is being made between the intellectually disabled and the type of stable situation in which they find their particular disablement, and the psychiatrically disabled. I acknowledge, and I want the Minister to address this point, that though there is a distinction, the disablement effect in many cases, so far as the latter are concerned, is permanent. I note that the legislation provides that where the service is provided predominantly for persons included in the target group, the service shall be taken for the purpose of the Part to be provided for persons in that target group, notwithstanding that the service is also provided for some persons who are not included in the target group. I understand that there is a concern about this aspect amongst a number of people who operate, and have operated for many years, what we all knew as sheltered workshops but are now apparently referred to as supported employment establishments. Their concern may be able to be overcome by this particular amendment, or perhaps this particular amendment is designed for some other purpose. I would like to know the specific reason Senator Peter Baume has put forward this particular amendment. Senator GRIMES(Tasmania-Minister for Community Services)(12.48) —Senator Harradine has raised the very real difficulty that we have all had in this area. The reason we have not heard a definition of `psychiatrically disabled' from either of the people who have proposed the motion, or any of those who support such a proposal, is that it is probably impossible to do so. Here is legislation which provides for the care of people with physical, sensory or intellectual disability. What the Opposition parties want to do, and I do not think the legislation by any means will fall apart from the change, is add the term `psychiatric'. `Psychiatric' means pertaining to mental illness. I suppose it is just as reasonable to get up and say `gastroenterological' disability, or `respiratory' disability, or all these other things. What is being introduced here is a medical term in addition to these other terms-a specific medical term. My concern, apart from the historical reason that this is traditionally, whether it is right or wrong, a State matter, is that the expectations of people with long term but recurrent and episodic psychiatric illness will be raised, that we are going to pick them up under the disability legislation. My concern is that we do not give people that impression, because if we did, it would cost more than the $2m that Senator Powell says, it would cost many times that, and we would have to get more funds, or we would have to distribute the funds we have got now over a very small group of people. I said before that we have provided vocational and supportive rehabilitation services for people with psychiatric overlays to their intellectual, physical or sensory disabilities. We will continue to do that. We will always do that. We do provide services for people whose psychiatric disability is stable, and who can benefit from the programs; and we will continue to do that. But what Senator Powell, and to some extent Senator Peter Baume, want to do, is uphold what they see as a principle of equity and put in the term `psychiatric' without being very clear about who it covers. Senator Powell said: `It will not cover many people, it might cost another $2m'. The reason it costs only $2m now is that we have restricted the entry of these people in the past. Senator Peter Baume —It will not cost anything extra, will it? Senator GRIMES —The way I administer the legislation, in fact, it will not cost anything at all. Let us face it, and I am not being unkind about this, Senator Macklin put his finger right on it when he got up and asked whose amendment is to go first and who is to take the political credit for this. It is, and I accept that it is, partly a political thing. Senator Powell remarked: `I said it at the Australian Council for Rehabilitation of Disabled and ACROD then said how great we were and then those nasty Liberals put out the same thing a day later'. It is partly political. I accept that, and I am not going to lie down and cry. I certainly will not divide the Committee over this, but I think it is upholding a principle which has not been defined. It is putting a statement into the legislation which is not defined; it is asking the Government and future governments to incorporate a group of people in this legislation, and we are not sure which group we are talking about, and I do not think anyone knows that. Therefore, it comes under the labelling of an amendment which upholds a principle and makes us feel good. I am not opposed to that. I think that people should feel good, and I do not think I am being uncharitable about that; but Senator Harradine's point that we may be labelling people with psychiatric illnesses as `permanent' I do not think really holds, because the bit about permanency occurs later and is separated from the disabilities themselves. Certainly people who are running sheltered workshops need not be concerned. People with psychiatric disorders who are in those sheltered workshops are there because they can benefit from the services those sheltered workshops provide. This demonstrates, although it is not of great import, that we can all get worked up about what we see as a principle of equity, but unless we are quite clear on what that principle is, unless we are quite clear about the people we are including in that definition, this whole thing becomes pretty meaningless. As Senator Peter Baume says, it is not going to add a whole lot to the cost of this legislation because quite simply, and I make no bones about it, I will continue to administer the legislation the way we have administered the program in the past. Senator WALTERS(Tasmania)(12.54) —There are really no grounds at all, as the Minister for Community Services (Senator Grimes) has indicated, that disabilities cannot be treated in a general way. They have been up to date. People are mentally disabled, and that term has been introduced into our vocabulary in the past 12 months, really. I think it is a great advance and to treat the psychologically disabled in a totally different way from the group disabled would be very unjust. There are so many groups and so many of the sheltered workshops that believe that this legislation will make a big difference to them. The Minister has said that it will not make a difference to them because they are there for their own benefit, but I believe that if there is to be any distinguishing mark at all, it will introduce a lot of problems that the Minister has not acknowledged. Amendments agreed to. Progress reported. Motion (by Senator Grimes) agreed to: That unless otherwise ordered, till 2 p.m. this day matters of public interest may be discussed by senators, provided that no senator shall speak for more than 15 minutes. Senator MACKLIN(Queensland)(12.56) —A few weeks ago the Government brought into the Parliament a report with regard to its overseas trade. This is a major statement by the Government on international trade and it comes at a time when there is increasing global protectionism and when Australia itself is being battered by this rising protectionism. Australia's terms of trade over the past several years and the consequent slide in value of the dollar have probably done more in recent times to sensitise the Australian public on the importance of trade on our standard of living. For the first time since I can remember the community is actually talking about trade and articles are appearing in the popular Press concerned with trade and Australia's balance of trade. If the current slump in the dollar and the current account deficit help to instil in our community an export or perish mentality as is so ingrained, for example, in the Japanese mentality, this nation will have gained something out of the present problems. Most of Australia's present trade problems, particularly with regard to agriculture, can be found in the trade policies of the European Community and the United States of America. In terms of agricultural trade these are based on the marketing programs of the two big traders, and in the case of the United States we are talking about the export enhancement program-the EEP-which authorises the expenditure of up to $1.5 billion of assistance for export of agricultural products. A second subsidy program is the targeted export assistance program which provides for mandatory expenditure of $110m a year until 1988-89 and $325m in 1989-90. A trade program which is of special concern to Australia's rice and cotton growers is the marketing loans scheme by which the United States producers are able to receive cheap subsidised loans. Most Australians will be familiar with the European Community's common agricultural policies, which have severely depressed world prices for many of our major agricultural exports. The Bureau of Agricultural Economics estimates that for major temperate zone products, such as wheat and dairy products, the European Community's policies have pushed world prices down by an average of 16 per cent since 1975. The United States policy makers are coming under increasing pressure on several fronts to engage in protectionist policies. First, there is the United States massive trade deficit, which is currently running at about $US170 billion. With unemployment running at 8 per cent in the United States at the moment, it is very easy for the unions and for business in the United States to draw a connection between imports and factory closures and unemployment lines. Second, the United States deficit has not been helped by the economic policies of other countries, such as Japan and West Germany. Both countries, of course, are refusing to stimulate their economies and the United States argues that this would help to attract United States exports to their countries. The Latin American debt crisis has also, of course, added a major part of the destabilisation, slashing United States exports to South America by about 20 per cent over the past couple of years. Third, the structure of the United States Congress itself is also feeling protectionism. The recent United States congressional elections have now resulted in a Democrat majority in the Senate as well as in the House of Representatives and there has been some talk in newspapers that this may pose a problem for Australia. I think that is a somewhat simplistic approach to what occurred in the last United States elections, and I for one believe that the new United States Congress will not be any more or any less protectionist than the last United States Congress. I base that estimate on the fact that if one looks at the newly elected Democrat senators and at their individual records, one finds either that they are less protectionist or that they have made very few statements and therefore their positions will be very difficult to pinpoint. My prediction for the new United States Congress is not the one that has been floating around in most of the newspaper-that is, that we have a problem-rather, that we have the continuing problem, the same as we had with the old United States Congress. I think that problem is not understood in Australia. It essentially derives from the structure of the United States Congress and the problems that have arisen with its structure in recent years. I think it is important to put on record the context we are confronting because it seems to be little understood in this country and seemingly very few people are willing to pull apart the strands of what we are talking about. The political strains of increased global economic independence, I think, and the weakening industrial base have widened the cracks in Congress itself and the institution, when one looks at it as an outsider, is having enormous difficulties in being able to cope. At the congressional level the chaos is evident from the facts. If one looks, for example, at the flow of trade Bills and amendments, many of which are identical, many of which are contradictory, which are hitting the floor of each chamber, and the growing number of congressional committees with some authority over trade legislation, one realises the chaos that is the American legislative system with regard to trade. For example, there are now 70 congressional committees with jurisdiction over the United States farm exports. The breakup of the seniority system since 1975 is a factor that is rarely commented on but it is one of the direct results of the Watergate scandal. That breakup of the seniority system and the proliferation of the committee systems, which stated also at the same time and for similar reasons, now really mean that in the Congress no one is in charge of United States export policy. Certainly even fewer are in charge of the farm policy; although one would believe that the agricultural committees might be, that is not the case. Equally worrying is that when Congress does finally get around to considering trade issues there are now no formal mechanisms at all for that body to reconcile the often competing and conflicting objectives of trade policy. It is an interesting fact that when the all-party delegation recently visited Washington and was confronted with an additional Bill with regard to United States support, that particular Bill had passed unanimously the House Agricultural Committee. And while it had a dual reference, because it was on a fast-track operation, the House Foreign Affairs Committee was not intending to have any formal hearings into that particular Bill. It was, I think, probably the sole success of our visit that in fact the United States House of Representatives Foreign Affairs Committee held a formal hearing and voted 26 to two against the Bill. Many observers on the Hill commented to us that they had never seen a reversal on any Bill in their time as quickly, effectively and dramatically as has happened with the Daschle Bill. That at least was one success out of that all-party delegation. The point I am making here is not that we had one success-and of course one swallow certainly does not make a summer-rather, it is that the continuing problem in the new Congress is not the fact that it is democratically controlled, that is a simplistic carry-over from the idea of political parties in Australia, to impose a political system that does not work in any way similar to our own. The problem is that the inherent structure of the Congress in terms of its committees since Watergate is now not adequate and not capable of dealing in a coherent way with these matters. The current United States Farm Bill, for example-the omnibus new Farm Bill will be up next year-was not once considered by a committee with any expertise either in trade or foreign policy. I would re-emphasise that the Bill which is currently causing so many problems for Australia, for Latin America and for countries such as the Argentine, and which has led to the depression of world markets in major commodities, was not once considered by any committee with expertise in trade or foreign policy. I think that fact alone ought to sensitise us here in Australia to the fact that we are dealing with a jurisdiction which really does not have the ability to take the types of decisions that need to be taken and to recognise that the domestic policies of the United States are, in fact, of vital interest to most trading countries in the world. I am not interested here in trying to outline whether or not the United States can be considered to be an ally of Australia. My definition of an ally is a country which pursues policies which are at least compatible or helpful to the country maintained to be an ally. I really do find it very difficult to understand how the United States could fall into that category with regard to its trading policies. I suggest that the moves which have recently been announced by the Minister for Foreign Affairs (Mr Hayden) ought to be supported by everybody in Australia, whether they support the current government or not. Indeed, I called for such a congressional liaison service immediately upon returning from the all-party delegation to Washington and I am very pleased that the Foreign Minister has chosen to take up that suggestion. I believe that it is the most vital of our current posts. I wish to go one step further and make a suggestion which might not be so well received, but I hope it will be taken in the spirit in which it is meant. Currently we provide to the United Nations a continuous parliamentary representative; in fact, we provide two. We had a report, for example, recently from those who are currently returning. In terms of any success-and there was a modicum of success of the all-party delegation to the United States-that flowed from the fact that there were politicians in Washington talking to politicians. We were able to understand one another immediately in terms of the types of pressures that bear upon us from the electorates. We could move immediately beyond that to talking in a very frank way about our own problems. That would not be possible and was not possible at the bureaucratic level; it was not possible at the diplomatic level; it was not possible, as the National Farmers Federation found out to its chagrin some month after we had been there, at the farming level. It is only possible at the political level. Therefore, if this Parliament feels that we do get an adequate return for having two members of parliament permanently at the United Nations, how much more ought this Parliament consider having at least one-and if we were having one, fairly obviously it would have to be a government back bencher-in Washington on a continuous basis in support of that parliamentary and congressional liaison service? I put that suggestion to the Minister for Education (Senator Ryan), who is here, and hopefully she will be able to convey that to the Foreign Minister because I believe that such a person, at least for a trial, would be able to do more in establishing and organising a liaison service than any bureaucrat, no matter how highly paid, simply because that person as a politician would have access to other politicians and would understand that milieu. I believe that we are confronting an institutional problem. It is for this institution to do what it can to overcome that problem in the interests of this country. If we can afford it at the United Nations, we certainly must be able to afford it and need to be able to afford it in Washington. Senator HARRADINE(Tasmania)(1.11) —I take this opportunity to address the fallacies in strategic thinking which are contained in the post-Budget statement of 14 October of the Minister for Defence (Mr Beazley). I do this because it is the only available chance I will have, and in the knowledge that there is a re-write going on of the Defence White Paper. There is much that is good in the Minister's statement. I applaud almost all of it. I say `almost all', because only very little of the document touches on substantial defence issues; these are strategic. As for the nuts and bolts which so much arouse the Minister's enthusiasm, I have no quarrel. In this field I am happy for him to take the laurels. For this Minister the defence forces are the ultimate meccano set and he pieces together bits more deftly and to greater effect than his coalition predecessors. This achievement I acclaim. Where the Minister is at his weakest, however, is in strategic thinking. It is a weakness that is potentially fatal for Australia. In his statement Mr Beazley reiterated the Government's belief. I quote: Unlike many countries we can say with confidence that it would take years for a potential enemy to develop the military capability- and this is the important part- to mount an attack on us of sufficient magnitude to destroy our society. As I have said before, this is true but beside the point. It is beside the point because Australia is vulnerable, not so much to direct but to indirect threats. In our case, this means a threat to our sea lines of communication. The Minister and his advisers are fond of looking at the map and waxing sanguine about Australia's `strategic isolation'. Because of this, they tell us that only a country with maritime resources of a super-power could contemplate invading us, and even then it would be confronted with formidable logistic problems. Add to this a `sea-air gap' as quoted, stoutly manned by our airmen and submariners, and the cost of invasion becomes too horrific for an enemy to contemplate. Conclusion: Australia is safe as houses; safe from invasion possibly, but not safe from being strategically outmanoeuvred. It is true that our isolation is an advantage. The art of generalship, however, turns on the ability to convert an opponent's strengths into weaknesses. Our strengths are so obvious that we cannot see the weaknesses they conceal. We may think that Australia is so remote that the big problem for an enemy would be getting its forces to us. Far from it. Australia is so isolated that an enemy needs to advance no forces at all against the Australian continent. The wise enemy commander would ask himself this question: `Why face the risk of invading this faraway place when I stand a good chance of gaining my end by isolating Australia further by cutting, or at least interrupting, the long slender lines of communications which are attached precariously to the rest of the world?'. The history of military strategy would suggest to a commander that the defeat of Australia could be achieved most elegantly by the indirect approach. Detach Australia from her markets and from her sources of supply and she will wither like fruit on the uprooted vine. The only way that Australia can defend herself against this kind of move, the one to which she is most susceptible, is by pursuing foreign and defence policies designed primarily to secure our sea lines of communication. This is exactly what this Government so far refuses to do. I want to comment now, in the light of the strategic principle just outlined, on two of the most important points made though briefly by the Defence Minister. First, I note the remark to the effect that we have regional responsibilities. I quote: . . . responsibilities that must be addressed after we have assigned first priority to our own needs. Is this statement, perhaps, a signal that the Government is beginning gradually to distance itself from aspects of the Dibb report? After all, this report made it perfectly clear that Australia has no `regional responsibilities'. All that we ought to have, according to Mr Dibb, is a concern about developments in what he terms our area of primary strategic interest. Since this falls outside our area of `direct military interest', Mr Dibb counselled a concern almost purely academic in character, an attitude which maybe fits the armchair intelligence officer but one which makes the job harder in the extreme for those who will have to fight a future enemy. The Minister, however, is now talking about `regional responsibilities' which will be met after we have made adequate preparations for the defence of the Australian continent. What are these responsibilities and how will they be met? What does `after' mean? Has the Minister inwardly admitted to himself the isolationist drift implicit in Mr Dibb's strategic proposal? I look forward to seeing how these questions are answered in the Defence White Paper. But even after putting the best gloss on these particular words they are still beset with problems. The point remains that Government defence thinking is dominated by two inadequate and thus dangerous principles. One is that we should concentrate on defending the continent, the other is that an attack on it is unlikely and, in any event, readily foreseen. The chief problem with these principles is that a defence focused on the continent does not provide Australia with the means of countering the most plausible kind of threat, namely, an indirect threat in the form of a move against our sea lines of communication. Jindalee, Tindal, FA18s, new helicopters, Harpoons and all the things that give such joy to the Minister will be of little use as crowded on the ramparts we watch helplessly whilst an enemy begins far away to choke us off from the rest of the world. I am happy to see attention being given to the defence of the mainland. I am glad that the Dibb report has outlined how, in part, this can be done. Between them, Mr Dibb and the Minister have proposed repairing a weakness in Australia's defences which scandalously has been long neglected. But as important as it is to prepare the defence of the continent itself, continental defence does not address the more probable dangers facing Australia. The centrepiece of our defence policy should be, therefore, a sea lane defence policy. In such a policy, continental defence has a role. This is to provide us with a prepared line of defence on to which we can fall back if all else fails. Mr Beazley and Mr Dibb are patriotic men, and thus they value the security of this country. But they are so patriotic that they overvalue the strategic importance of our own lands and waters and undervalue those of our neighbours. Consequently, I wish here to reiterate the points that I made in my initial response to the Dibb report. Because Australia depends on sea lanes for economic survival and for military resupply, the areas of greatest strategic importance to Australia are the following: First, our trade routes to Japan; secondly, the Persian Gulf and our sea communications to that area; thirdly, the narrow waterways between the Pacific and Indian Oceans; fourthly, the lands adjacent to these waters; and fifthly, Australia's sea and air links with the United States. If these waters or the lands adjacent to them are controlled by hostile forces-for example, the Soviet Union or its regional clients-and if our resupply routes to the United States could be severed, this would amount to an indirect threat to Australia of strategic proportions. If such a development occurred the enemy, who had this advantage over us, would not need to threaten our mainland. In such circumstances Australia could lose its power of self determination without firing a shot. As for the second point, I note that the Minister in his post-Budget statement makes the following remark: Capabilities for low level threat, both to our national interest and to those of our friends and neighbours, do exist within the region. In this case the emergence of such threats is a product not of capability but politics. A political situation can change rapidly and this Government accepts that there is a requirement for it to be able to counter such challenges should they emerge. I entirely agree. But what had Mr Dibb in mind by what he termed `credible contingencies'? Is it two bearded gorillas in a motor boat or a Lilliputian kingdom led by a regional King Seth of Azania who declares the Daly River liberated territory and proclaims the peoples' republic? Those comic book scenarios cooked up in recent times to exercise the armed forces would be laughable if they had not assumed a life of their own. Their images seem now to fill the minds of otherwise sober and intelligent men. Yes, it is true that there are already `capabilities in our region' which need only political change to activate them; capabilities which could express themselves suddenly as a threat to us, but not as `a lower level threat' directly against Australia. The potential is already there for sudden strikes against our sea lines of communications. Such strikes, in a sustained way, but kept to a level short of all-out war, would have a devastating effect on Australia. I explained the implications of this kind of genuinely `credible contingency' to a meeting of the Australian Defence Association in July. It is a pity that more honourable senators were not there to hear what I said, so I will make the key points again. I seek leave to incorporate the key points. Leave granted. The document read as follows- In time of all-out war and national mobilisation . . . trade losses (in order of a 75% interdiction of our exports to Japan) would not be critical. However, under conditions of sustained but limited warfare, in which the community and the government would expect to deal with an enemy without putting the whole of national life on a war footing, the pressure generated by attacks on merchant shipping would pose a serious threat to the government's freedom of action. The limited war, moreover, is an option with a lot of appeal, especially for a totalitarian enemy. Controlled and circumscribed military action, taken to focus maximum force on an opponent without provoking a full-scale reaction, is a tempting strategy for a totalitarian regime. It offers an opportunity to use to advantage the political control which such governments ordinarily have over their human and material resources, but which democratic governments cannot exercise except in conditions of total war. Small wars waged to exploit the natural political divisions within a liberal democracy, can be an highly effective way for totalitarian governments to achieve their objectives. This is one of the great lessons of this century; but it is one which the Dibb Report has failed to consider. Limited military action taken against our trade, which was calculated to energise the centripetal political tendencies of liberal democracy, but was not sufficiently potent clearly to threaten our national existence, would place the government in a serious dilemma. Given the direction taken by our current strategic thinking and military planning, Australia would be in no position to defend effectively with peace-time armed forces against this sort of attack. The government, therefore, would be faced with three alternatives, each of them untenable: to accept unchecked trade losses and a gradual erosion of living standards; to attempt, without full public support, to mobilise for a higher level of armed conflict; or to meet the demands of the enemy.'' Senator HARRADINE —The Government has yet to apply its mind to these issues; that it has not is understandable. Australia does not have a tradition of thinking about grand strategy. Defence thinking in this country has been limited to guns and allies. With enough of both we have thought Australia will be safe. Little attention has been given to the diverse combinations of means by which Australia's safety might be destroyed, with or without guns and allies. Perhaps the Dibb report will prove to be the beginning of the end of Australia's intellectual immaturity and strategic thought. By giving us at least a strategy for last ditch defence of Australia, Mr Dibb has served as a stimulus for thinking about what might constitute a complete national security policy. As I have indicated today, a complete national security policy must address Australia's grave susceptibility to attack on her sea lines of communication. I want also to draw attention to the fact that the joint communique issued on 12 August from the Australian-American ministerial talks in San Francisco represented the alliance between us as a Pacific area alliance. One cannot play a credible role in a Pacific area alliance by adopting a strategy which strictly limits Australian military activity in time of conflict to a 1,000-nautical mile rim of sea around the continent. Let us hope that this Government's reaffirmation of what our alliance with the United States really means indicates that the Government's romance with Mr Dibb's inadequate strategy will soon end with the rewrite of its White Paper now being undertaken. Sitting suspended from 1.25 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I inform the Senate that the Minister for Trade, Mr Dawkins, left yesterday on official duty in Indonesia. He will return on 22 November. In his absence the Minister for Primary Industry, Mr Kerin, is the Acting Minister for Trade. Senator REID —Does the Minister for Veterans' Affairs recall that when he attended the 1984 Christmas party at the Australian War Memorial it was announced that a wedding would be held at the Memorial two or three days later? Does he recall that the bride and groom were both employees of the Memorial and that the groom, a Vietnam veteran, felt that being married in such surroundings was an appropriate way to remember friends who did not return from that war and who could not attend the wedding? Given that the Minister knew about the wedding, that he had time to stop it happening if he so wished, why did he feign such outrage during Question Time in the Senate yesterday when asked whether a wedding had been held at the Memorial? Senator GIETZELT —Yesterday I was asked a question by Senator Tate. As I said on that occasion, and I repeat it now, I regard the use of the Hall of Remembrance for holding a civil ceremony as a decision of appallingly bad taste by the Director of the Australian War Memorial. It is true, as Senator Reid suggested, that several days after the War Memorial was transferred to my portfolio by the Prime Minister following the 1984 election I attended a Christmas party at the Australian War Memorial. I remind the Senate, and Senator Reid in particular, that there was some controversy, related not just to the staff, of which she was aware. It is very interesting to look at the Press comments at the time about some of the people who have been attacked viciously in the coward's castle of the House of Representatives by Mr Everingham. Those people expressed an opposite view to that of the Government. They did not support the transfer of the Australian War Memorial to my portfolio and neither did Air Vice-Marshal Flemming, who said that he hoped the decision would be overturned. Honourable senators will appreciate that when I went to the Christmas party I was concerned about the matter and desired to build bridges and to allay any suspicions that transferring the Australian War Memorial to my portfolio would be detrimental to the future of that very important sacred shrine. A number of people spoke at the ceremony, and I have absolutely no recollection-I say that quite definitively-of any suggestion that there would be a civil marriage ceremony at the Australian War Memorial. Only a short time ago I checked the matter with the Secretary to my Department, Mr Derek Volker, who is now the head of the Department of Social Security. He said that he had no recollection of the matter. I also checked with my Senior Private Secretary, Mr Hansen, who has no recollection, and neither do I. When Mr Fischer made the statement in the House of Representatives in the grievance debate today he very carefully used the words `I am advised'. Of course, honourable senators on both sides of the chamber know that those words are a very easy escape hatch. A member is able to say `Someone else told me', because he has no particular brief. He relies on somebody else's credibility. Even assuming I knew what the circumstances were-I did not-I had no power. As I have pointed out to the Opposition on several occasions, the only power the Minister has is to appoint members to the Australian War Memorial Council and to grant leave to the Director when he makes such applications. Outside that, under the present Australian War Memorial Act no power is given to the Minister. So even if I knew of the matter, which I did not, I would not have been able in the circumstances, either then or now, to issue a direction against it. I ask the Opposition to make up its mind. It has sought on several occasions to suggest that it was improper to hold the proclamation ceremony, which extended a range of benefits to war widows and those who served in Vietnam who were not previously covered by legislation. The Opposition objected to that. Is it saying that it does not object to a civil ceremony being held, not in the War Memorial but in the Hall of Remembrance? Of course it must, as indeed the Government does, and, as I am sure the Council would, some of whose members were probably at the function. I did not know any of the persons at the first official function I went to. I went to allay suspicions, and I make no apology for the fact that I have built bridges with every person at the Australian War Memorial. It was only in the last year or so that I found I had difficulty with respect to Air Vice-Marshal Flemming. Yesterday I gave an undertaking that I would seek official information in respect of these matters. I found that a civil marriage ceremony took place on 22 December 1984 in the Hall of Remembrance. Approval was given by the Director, Air Vice-Marshal Flemming. The Director was present at that civil ceremony. No records in the Australian War Memorial show whether approval was given. Whilst I am on my feet I add that I was also asked to deal with the question of the use of the logo of the Australian War Memorial. I will table a letter which has been provided to me by the staff at the Australian War Memorial which indicates that Air Vice-Marshal Flemming gave the company that runs the kiosk the use of the official logo for advertising purposes. The letter goes on to say that it may be used without reservation at the discretion of the director of that company. With respect to both the marriage ceremony and the logo, there is no evidence of the matters ever being formally approved by the Council. The PRESIDENT —Do I take it that the Minister is tabling a paper? Senator GIETZELT —Yes. Senator ELSTOB —Is the Minister for Industry, Technology and Commerce satisfied with the number of government contracts currently being awarded to local industry, particularly in the light of the present buy Australian campaign? How much credence can the Minister give to the allegation made recently by the Chairman of the Australian Science and Technology Council of `deeply entrenched attitudes in the bureaucracy opposed to the purchasing of Australian products'? What action is open to the Government to ensure that local industry maximises its chances of attaining government contracts? Senator BUTTON —This question is couched in simple terms but it is a very complex question. Let me say first of all that I have not been satisfied with the numbers and extent of government contracts which have been awarded to local industry. However, there are many reasons for that. Sometimes the reasons are associated with poor quality or poor price competitiveness of locally produced goods. However, I also think there is a series of bureaucratic reasons why more local industry involvement is not present in government contracts, reasons associated with the way tenders are let, reasons associated with specifications for government contracts, and reasons associated with the lead times involved in letting government contracts. Senator Elstob in his question asked whether there are deeply entrenched attitudes which militate against local industry involvement in government contracts and my answer is that I suspect there are a wide variety of circumstances. It was because of these concerns that the Government appointed a committee under the chairmanship of Sir Brian Inglis to look at government purchasing procedures, particularly in the high technology area associated with computer purchases and things of that kind. I think that committee was appointed in July and it will report next month. I would not in any way wish to pre-judge the findings of the committee. But when that report is available I believe the Government will have something on which it can take action in respect of the entrenched attitudes to which Senator Elstob refers. Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to comments yesterday by Dr Peter Brain, Director of the National Institute of Economic Industry Research, which cast doubt on the extent of benefits to Australian manufacturing of the currency depreciation. Dr Brain is reported as saying that while the weighted value of devaluation has been about 30 per cent over two years, this benefit has been offset by between 33 and 45 per cent because of higher import costs. Does the Minister agree that Dr Brain's assessment is in line with the recently released Bureau of Industry Economics study on the effects of the 1985 devaluation which found that, in general, cost increases for manufacturers have been of the same order as export price increases? Given that this week's National Australia Bank Ltd survey also highlighted the effect of cost increases on profitability, what action does the Government propose to reduce domestic costs? In addition, does the Minister agree that everything points to the fact that the economy simply cannot afford an across the board rise to flow from the current national wage case? Senator BUTTON —I might start at the last part of the question first and say that the Government will be putting its position to the national wage case bench. It has been foreshadowed in general terms what the Government will be putting. The question of the extent of across the board increases in wages is of crucial importance in the context of this case. I have not had time to study the views of Dr Peter Brain on the particular matters that were reported yesterday. I will do that as quickly as possible. But I am not sure that it is correct to relate the 1986 views of Dr Peter Brain and the 1986 views of the Bureau of Industry Economics to the findings of the Bureau of Industry Economics survey on the effects of the first major devaluation which occurred in 1985. If Senator Chaney is seeking by this question to make a general point that governments and Australian institutions generally have to be very rigorous about cost increases, I agree with that. At this stage I am not in a position to answer the particular parts of the question regarding the Brain survey. Senator CHANEY —Mr President, I ask a supplementary question. Can the Minister address himself to that part of the question where I asked what action the Government proposes to reduce domestic costs, which I would suggest to the Minister is an important matter, given that these surveys indicate a very limited value to industry from devaluation and the urgent need that we have for increased activity in manufacturing? Senator BUTTON —I might just come back to the surveys. I think it is very difficult to generalise on the basis of this material from industry to industry. It is quite clear that the devaluation has had very markedly differential effects in terms of costs. Secondly, in relation to the point that Senator Chaney made about wages, let me just make the point that in most industries now wage costs constitute about 15 per cent of total costs. In the high technology industries they constitute about 8 per cent of the total costs. In the more labour intensive areas of the clothing industry they constitute about 25 per cent of total costs. Australia has a very significant management problem, which other countries have addressed much more rigorously than we have. It must reduce the proportion of total costs in industry which are outside the wages field and which relate to a whole range of issues of management and so on. I am not sure that governments can do other than encourage in respect of those areas of costs. I have already said that the extent of wage increases is a matter of legitimate debate and the Government will be putting a view which, as emerges from today's Press, diverges from the view put by the Australian Council of Trade Unions and others on the appropriate level of wage increases. Senator BLACK —Is the Minister for Resources and Energy aware of an announcement by the Queensland Government signalling the go-ahead for the development of Cooper Basin gas deposits in the south-west of that State to supply New South Wales and South Australian consumers? Does this development accord with the Federal Government's desire to promote the use of Australian energy resources in line with national needs, rather than solely State interests? Senator GARETH EVANS —I very much welcome the announcement yesterday that the gas fields in the Cooper Basin in south-west Queensland near the borders with New South Wales and South Australia are to be developed by Hartogen Energy Ltd and its joint venture partners for sale to commercial interests in Queensland and New South Wales and, perhaps ultimately, South Australia. The announcement represents a very welcome change of view from the previously entrenched position of the Queensland Government, which had maintained that these resources should remain in the ground for use within Queensland only at some unspecified future time. This change of heart will, I believe, confer significant economic benefits on both Queensland and New South Wales in the first instance and ultimately on South Australia as well. I do not know whether this new national vision on the part of Sir Joh is anything to do with his impending, imminent move on to the national stage. But whatever motives lie behind this, it is a change of heart very much to be welcomed. Under the development plan, as I understand it, it is anticipated that the south-west Queensland producers will sell some 350 billion cubic feet of natural gas, ethane and liquefied petroleum gas to the Australian Gas Light Co. in Sydney over a 10-year period. Valuable gas condensate from the same fields will be transported eastwards in the Jackson to Moonie liquids pipeline, and then on to Brisbane. I also understand that AGL proposes to offer to the Pipelines Authority of South Australia a volume of gas equivalent to the quantity to be obtained by AGL from the south-west Queensland fields. If such an offer were taken up, the additional supplies to South Australia would come from AGL's entitlement under its existing contract with the Cooper Basin gas producers. Obviously, many complex commercial details remain to be negotiated between the various interests involved, and this will take time. Nevertheless, the first major step has now been taken in what is a most promising program to develop more of Australian's abundant resources of natural gas. Finally, this is an excellent example of the kind of interstate co-operation and efficient use of our resources which the recent Energy 2000 national conference concluded was needed on a much wider scale in Australia. Far too often in the past, the interests of both individual States and the nation as a whole have suffered from damaging interstate rivalry. Senator HAINES —My question is directed to the Minister representing the Minister for Primary Industry. As part of a question to the Minister last Thursday, I asked him on what evidence had the Minister for Primary Industry based his judgment that no National Estate values were threatened by the logging in Jackeys Marsh. The Minister failed to answer that part of the question so I ask again: Did the Minister for Primary Industry have any evidence on which to base his claim that no National Estate values were being threatened by the logging of Jackeys Marsh? Does the Minister for Primary Industry still believe that no National Estate values are threatened by that logging? Was the Minister's mistaken belief that no National Estate values were threatened a factor in the Government's reluctance to back up the Prime Minister's pledge, made a week earlier, to protect Jackeys Marsh? If the Minister for Primary Industry was wrong in his statement about Jackeys Marsh, what guarantee can the Minister give of the accuracy of his advice to Cabinet in November of last year to the effect that logging would not endanger National Estate values in the 21 other National Estate areas that the Minister for Arts, Heritage and Environment recommended should not be logged? Senator WALSH —In response to the last part of the question, I am not sure whether the facts are entirely in accordance with what Senator Haines said. I will see whether Mr Kerin has anything to say about that. Principally I was asked on what evidence Mr Kerin's judgment was based. If that was part of the question asked last week, I apologise because I have not got an answer to that and I still do not know on what evidence it was based, but I will try to get an answer. Senator CROWLEY —My question is addressed to the Minister Assisting the Prime Minister on the Status of Women and Minister for Education. Under this Government the funding for the National Health and Medical Research Council has greatly increased, and along with that increase is an increase in the number of women winning research grants. Can the Minister say whether the increase in grants for women reflects a percentage increase that redresses a previous insufficiency, and does it reflect the level of excellence of our women researchers as well as our men researchers? Senator RYAN —Yes, there has been a pleasing increase in the number of women being awarded research grants, including medical research grants. Indeed just this week I had occasion to make a statement that five Australian women have been awarded training fellowships to do medical research overseas. These fellowships, for two or three years of study, are intended to provide a clear structure in medical research for investigators of exceptional merit who have established themselves as independent researchers, and the training fellowships were awarded by the National Health and Medical Research Council. Their funding has almost doubled in the period that our Government has been in office. I think this does reflect a pleasing trend and it is one we hope to accelerate by raising the interests of more young women in pursuing science degrees through a number of programs and procedures which I described in the Senate earlier this week. Senator Sir JOHN CARRICK —I ask the Leader of the Government in the Senate: What obstacles, if any, including International Labour Organisation decisions, exist which might prevent the compulsory employment of persons in receipt of unemployment benefit? I need not remind the Minister that this is the third time of asking this question and that the Minister gave me an assurance on each of two occasions that he would get an answer as soon as possible. What possible reasons are there for a delay of five weeks in answering? Senator BUTTON —My mind boggles, I must say, to think of the possible reasons. I have sought an answer on this matter for several weeks. I will not give the honourable senator any further undertakings, if he does not mind, because I have given them to him twice already. Senator Sir John Carrick —Can you give me the reasons why you cannot get it. Senator BUTTON —I will, when I give the honourable senator the answer. Senator COOK —Has the Minister representing the Minister for Employment and Industrial Relations seen a letter to the editor of the Australian, published in Wednesday's edition of the paper, from the H. R. Nicholls Society luminary, Western Australian Liberal Party guest speaker and Peko-Wallsend Ltd Chief Executive-- Senator Haines —Is that `loony`? Senator COOK —Luminary, but the same thing applies. Has the Minister seen the letter from Charles Copeman protesting at the editorial it ran on 15 November? In the letter Mr Copeman defends the dismissal of workers at Peko's Sydney Besco Batteries factory at 30 minutes notice on the grounds that they were paid for the period of notice required under their award. I ask the Minister: Does this justify the means by which Peko effected the Besco Batteries plant closure? Senator WALSH —I have seen the letter from Mr Copeman which was published yesterday. Frankly, I am not at all impressed by the defence he offers for the sacking, at 30 minutes notice, of employees who had been employed by the company for many years. His defence hinges on the fact that the employees were paid for the period of notice required under their award. Of course it is well known that, if Mr Copeman and others in the New Right got their way, there would be no award because there would be no Australian Conciliation and Arbitration Commission or industrial tribunals. Under those circumstances workers in some future Besco Batteries situation would not get, unless the employer deigned to give it to them, their payment in lieu of notice and they would be sacked at 30 minutes notice, as they were in this case-out the door and only paid for that day, most likely. That is the sort of utopia which the extreme Right wants, a world of two classes-those who get the sack and those who do the sacking. I interpolate here that I understand the New Right is fragmenting and that the Housing Industry Association has left the Australian Federation of Employers, that Association, I presume, having come to the conclusion that its interests and the interests of employers, employees and society generally would not be advanced through associating itself with the policies of the New Right. If the Liberal Party leadership is not prepared to dissociate itself from Mr Copeman and others and their tactics in the field of industrial relations, it is time that those in the Liberal Party who do not want to be part of a political organisation dominated by an outside group with such an obvious set of self-interest did something about it. In particular I think it is true that people, such as the honourable members for Denison, Boothby and Goldstein, did something about it. Senator VANSTONE —I refer the attention of the Minister for Education to Tuesday's report concerning a memo from the Director of Special Programs in the South Australian Department of Education, describing as inequitable a move by the State Government to increase the State's charge for administering a federally funded program for disadvantaged students. The program in question is the participation and equity program. The memo in question states: As this programme addresses the needs of disadvantaged students in schools targeted through aggregated disadvantage, such a move is a direct removal of resources from a program for the disadvantaged to general revenue. I ask the Minister: First, has the State Government communicated to the Federal Government its intention to increase administrative charges related to PEP? Secondly, what consultation has taken place between the Commonwealth and the South Australian Government on the management of PEP? Thirdly, what steps will the Minister take to ensure that the State does not milk Commonwealth or PEP students? Senator RYAN —The participation and equity program is a decentralised program in that the actual projects that are to be funded under the program are approved at a State level. I, as the Commonwealth Minister, receive those recommendations but I accept the recommendations of the State Ministers. There are, of course, extensive guidelines within which the programs must operate, but it is a program which is essentially State-based in that respect. I have no knowledge of the minute to which the honour- able senator refers, which is not surprising since it is one from the South Australian Department of Education, nor do I know what could be referred to in terms of the administrative charges involved in PEP. I will have to take that question on notice. Obviously the Commonwealth has extensive consultations with the South Australian Government over a whole range of education matters. I would like to place on record the fact that those negotiations are always very satisfactory and handled very well, and we regard the State Government in South Australia as a very important partner of ours in the exercise of improving educational standards for children in South Australia. As for the specific minute and the matters raised in it, I will take that on notice. Senator CHILDS —My question is directed to the Minister for Finance. Given the imminence of a change in the leadership of the Liberal Party, is the Minister concerned about the cost to the taxpayer in terms of future superannuation payments of the Opposition having another leader? Senator WALSH —The short answer is no, and the reason is that entitlements under the Commonwealth parliamentary superannuation scheme for an office-holder-that is a leader of the Opposition or a number of other people-are worked out in proportion to the number of days that a member or senator spends as holder of a particular office. Therefore, a change in the leadership would not affect the liability which the taxpayer ultimately would be required to pick up. In fact, it would not even matter if the Opposition decided to take it in turns and let everybody have a go at the leadership before the next election. The back bench component of either an office-holder's pension, or any parliamentary pension, becomes cheaper to the taxpayers after 18 years because no further entitlement accrues to that component after 18 years. Finally, if members of the Waste Watch Committee, such as Senator Michael Baume and his colleagues, are worried about this and the cost to the taxpayer, if they vote in a particular way they will have nothing to worry about. Senator COLLARD —I refer the Minister representing the Minister for Aviation to the explanatory notes of the Department of Housing and Construction for new capital civil works for the Department of Aviation which show the only amount to be spent on the Brisbane Airport as $300,000, which is for the relocation of the duty free shop and a new gift shop at the international terminal. I refer to the Minister for Transport's Press release of 9 November in which he states that $1.5m will be spent in upgrading Brisbane's international airport terminal. Where is the extra money coming from? What has changed since the August Budget to warrant the Government's change of mind to spend money on what will ever only be an inadequate terminal? In the light of this extra expenditure why did this Government not accept the proposal by a private company to build a terminal and a hotel complex, as asked by Senator Bjelke-Petersen and not yet answered? Are there any other extra Budget aerodrome capital works programs proposed? If so, is Rockhampton one of them and, if it is, will the Government build a new terminal and not waste money on an inadequate old one? Senator GIETZELT —It is pretty clear that that is a detailed question asking about matters that are very much irrelevant to the Minister for Aviation's portfolio responsibilities. I am not in a position to respond at all to the precise questions. They are quite legitimate and I will seek an early response for the honourable senator and, I hope, get a response for him before Question Time is over today. Senator DEVLIN —My question is directed to the Minister for Veterans' Affairs. At page 29 of the Jones report into the Australian War Memorial it was argued that a request from the Minister's office could be taken as a ministerial direction. Further, the Director stated that he abides by that principle. In circumstances where the Minister and the Council have expressed no confidence in the Director and asked that he vacate his position, can the Director's action in continuing to turn up for work be justified? Senator GIETZELT —I think the score card is slightly in favour of the Opposition with respect to questions without notice on the Australian War Memorial. I think we are getting pretty close to a score of them. It is a matter of some concern to me that the Director has taken a position in respect of `direction' and `request' which is at variance, depending on the particular circumstances. For example, Mr Flemming admits that-and here it might be of some interest to Senator Chaney because I have checked on some of the matters that, quite properly, he has raised with me-there are written submissions from him to Mr Jones. I have a copy of one page here relating to the staff issue with the Director's signature on it which indicates that it is his considered reply. So any suggestion that he has not had an opportunity to present evidence properly to the Jones inquiry can be rebutted. In his response to the staff bulletin issue he said: Until my meeting with the Minister and his staff on 31 July 1986, I firmly believed that the Minister had directed that the function be held at the Memorial. At the meeting the Minister explained that he had asked his department to find a venue and he made no direction as to where the function was to be held. I accepted this and offered the Minister my apologies but I repeat that until then I had no reason to doubt that the Minister had made such a direction. That was shown in other documents that I have tabled. So Mr Flemming regards a request as a direction. In respect of the decisions of the Council, which questioned him on at least two occasions last week-on Thursday and Friday of last week-Mr Flemming was requested not to return to duty. I am advised that the officers who represent the armed forces on the Council are of the view, and I am of the view that, in military parlance a request is tantamount to a direction. He defied that direction and returned to work. So it is pretty clear that Mr Flemming has different attitudes to suit different circumstances. Senator CHANEY —My question is to the Minister for Veterans' Affairs and follows the question asked by Senator Devlin and the answer that was just given. The Minister pointed out in his answer that he had material submitted by Mr Flemming which had been signed by him-I think this was submitted to the inquiry. The Minister made the point in his answer that this showed that Mr Flemming had had a chance to be heard. I ask the Minister: Does he acknowledge that, whilst Mr Flemming had an opportunity to make written submissions to the inquiry, what Mr Flemming sought was the right to be present where there were questions relating to him and the right to question witnesses, and that that was a formal request by Mr Flemming? Does the Minister also acknowledge that the solicitors for the War Memorial, Messrs Freehill, Hollingdale and Page, advised the solicitors for Mr Flemming and their client, the War Memorial, that Mr Flemming had the right under the terms of reference to be present and to question witnesses? I further ask the Minister: Does he accept that there are issues of fact which are disputed by Mr Flemming when he has not had the opportunity to attend in the presence of the witnesses and to question them as the solicitors to the War Memorial said he was entitled to do? I ask those questions of the Minister because they are fundamental to his understanding of the point of view that has been put by the Opposition, namely, that the Opposition should accept the finding of the inquiry by Mr Jones that Mr Flemming should not be dismissed, or was not dismissible, or that there should be a full inquiry in the form which has been sought by Air Vice-Marshal Flemming. I again ask the Minister: Will he in those circumstances either leave Mr Flemming alone or have a proper and full inquiry where Mr Flemming has the rights that the solicitors for the War Memorial said he should have? Senator GIETZELT —The responsibility for appointing Mr Jones and for drawing up the terms of reference was under the jurisdiction of the Council of the Australian War Memorial. It is true that I was consulted in respect of both the appointment and the terms of reference. It was the intention of the Council, and it was certainly my intention, that a number of the items listed in the terms of reference were to be changed in order to ensure that natural justice was given to Mr Flemming. The matter was raised by the Council's legal representatives. When that point of natural justice was canvassed, Mr Jones sought the opinion of the Attorney-General. The Attorney-General's Department said that, in the nature of the inquiry and in the terms of reference that had been endorsed, every opportunity was available to Mr Flemming to have natural justice. In those circumstances, when it is asserted by the Opposition that there are some issues of fact that are disputed, I suggest that the assertion does not rest on firm ground. On each of these issues, Mr Flemming was asked to respond to those matters that had been referred to Mr Jones by me, that is, issues in respect of which there was some conflict between either the Department and myself or Mr Flemming. The Government accepts unequivocally that in the circumstances the principles of natural justice should exist and did exist. I saw for the first time, just before I came into Question Time today-almost two days after I offered the Opposition an opportunity for the Government to study its point of view-a submission from Mr Fischer who, I assume, is speaking on behalf of the Opposition. There is absolutely no substance at all in the assertions that are being constantly made in an emotive way about natural justice, politicisation and a vendetta. They are emotive words which are not borne out by the facts of the case. For example, Air Vice-Marshal Flemming put a submission to the Minister with respect to the purchase of the warehouse. All the evidence is on the file-his letters to me, the approval by government, his failure to advise me that the building was not for sale, and his subsequent request to me, without drawing my attention to that fact, to construct the building. What witnesses exist in those circumstances? The files are there, and they are relied upon to come to a conclusion in respect of that issue. We can go down the track on each of the issues which became substantive in respect of the matters I placed before the inquiry. I made the statement that I was misled. I believe that I was improperly informed. Air Vice-Marshal Flemming was asked to respond. He did. Based on that response and an examination of the files, Mr Jones came to a conclusion. I do not know who else one talks to in terms of witnesses. The inquiry was held in accordance with normal procedures as advised by the Attorney-General. Senator GILES —I refer the Minister for Veterans' Affairs to the report in yesterday's Canberra Times and the accompanying photograph of the extensive flooding of the Australian War Memorial on Tuesday which seriously endangered the Memorial's priceless archives and film collection. Is this the first occasion in recent times that such flooding has occurred at the Memorial? If there have been previous occasions, what steps have been taken as a result to counteract the risks to the Memorial posed by floodwaters? Senator GIETZELT —All honourable senators would be aware that there is an Australian War Memorial in Canberra. They would also be aware that on Tuesday a very extensive storm did quite an amount of damage generally to Canberra and to the Australian War Memorial. Honourable senators would have seen a photograph yesterday of the Director of the Memorial with his trousers rolled up-he had not lost them; he had merely rolled them up-doing something to get rid of the water. Obviously, I sought some information about the matter because I expected a question from the Opposition on it. However, the Opposition has been more concerned with subjective factors than with protecting the very important collections at the Australian War Memorial. This is not the first occasion on which storms have resulted in water damage to the Memorial. Over the last three years there have been at least 16 reports of such damage at the Memorial's research centre alone, as well as a number of recurring problems with leaks and seepage. For example, between July 1983 and April 1986 there were 14 reports of seepage and leaks in the special collections area which, as honourable senators would probably be aware, houses a priceless and irreplaceable collection of war records and relics. I can inform the Senate that when the new building was being planned two or three years ago the officer in charge of building operations recommended in writing against the storage of the collections in the research centre area. The curator of prints and special collections prepared a submission to the Memorial Council's Research and Publications Committee in January 1984, when the Memorial was under the control of the previous Minister, the Minister for Home Affairs and Environment. The submission stressed the need for the collection to be housed in different accommodation of an approved standard. However, the Director did not allow the submission to be presented. A further submission was then made from three research centre section heads to the Committee for its October 1985 meeting. At that time the Memorial was my portfolio responsibility. The submission stressed the water risks. Unfortunately, the files show that the matter was not dealt with by the Committee so it progressed no further. Consequently, the important relics and collections of the Memorial continue to be at risk from flooding and associated problems. Senator BROWNHILL —My question is directed to the Minister for Finance. I recall the Minister's statement earlier this week, in remarks he made on a recent study by the Livestock and Grain Producers Association of New South Wales on rural debt, that there is no widespread rural crisis. Does the Minister consider average net farm incomes of less than $4,000 a year for two years in a row to be crisis level? Further, does he accept that the Government's reluctance to act to bring down interest rates by the estimated 5 per cent which the LGPA believes arises from Labor's monetary policy is wreaking immense damage amongst farmers? Does he agree that a 5 per cent cut to interest rates would save farmers more than $8m a week? What action has the Minister taken to correct what he must see as the misstatement made in Bangkok by the Minister for Primary Industry that it is not possible to say that Australian farming is in crisis? Senator WALSH —The answer I gave to the question on Monday consisted almost entirely of quotations from the Livestock and Grain Producers Association newsletter. If Senator Brownhill wants to dispute the accuracy of the LGPA's assessment he should take it up with the LGPA rather than with me. I welcomed the emergence from the LGPA of a more rational and accurate assessment of the condition of agriculture than one is accustomed to getting from the LGPA, let alone from the National Party of Australia or the various other propagandist groups which purport to speak on behalf of the agricultural sector. It is well known that the net farm income figure, as defined by the Bureau of Agricultural Economics, which Senator Brownhill cited is not an accurate measure of the net cash flow farmers receive from their farm income, let alone from any non-farm income they may have. Net farm income as defined by the BAE includes an allowance for depreciation on machinery which for wheat farmers, if I remember correctly the most recent figures, is $27,000 a year. That is a notional expense and not a cash expense in many cases. It is well known by anybody who has made a serious study of agriculture or of comparative farm analysis that wheat farmers, in particular, have a propensity to overinvest grossly in plant and equipment. That propensity has been encouraged from time to time by stupid taxation laws introduced by tory coalition governments, which have encouraged farmers to do more of what they should not have been doing in the first place. To the extent that farmers overinvest in equipment which is too expensive and has a larger capacity than they need, it also has a very high propensity to be imported. The plain fact for anybody who knows much about wheat growing in Australia is that wheat farmers in general can get by for many years without any significant new purchases of plant. Finally, the principal point of the LGPA article was an assessment of the level of equity in farms. It showed that over 80 per cent would be in a sound position even if there were a significant increase in their debt and a decline in land values. What various National Party coalition governments have screwed their Liberal partners into doing-- Senator Siddons —You should be pointing at them. Senator WALSH —I am sorry. I did not mean to point at the Democrats, if I was. The National Party has screwed coalition governments into finding the odd case in which there is some genuine poverty or need and using that as an excuse to provide massive handouts to the wealthy section of the agricultural community that it represents. Senator BROWNHILL —I ask a supplementary question. Does this mean that the Minister for Finance does not agree with the Minister for Primary Industry that there is a farming crisis? Senator WALSH —I do not know what `crisis' means in this context, let alone in the context in which Mr Kerin put it. On the authority of the LGPA I am stating that the equity situation for the overwhelming majority of farmers is very sound. Senator Messner —They still have to have cash to pay their debts. Senator WALSH —I am glad that the honourable senator raised that question. The PRESIDENT —Order! The Minister will ignore the interjections and answer Senator Brownhill's supplementary question. Senator WALSH —Certainly, Mr President. Farm commodity prices are low, as they have frequently been before. `Crisis' literally means something like `turning point'. I am not sure that we have yet reached the turning point where agricultural commodity prices will, in the main, go up. Senator REYNOLDS —Has the Minister for Finance noticed reports of a Queensland Cabinet reshuffle which has failed to make any changes to the Treasury portfolio? What steps will the Federal Government take to monitor the accountability of the Queensland minority Government's spending of Commonwealth funds? Will the Minister ask his Department to oversee all contract letting for joint Federal-State projects so that the cronies of the Queensland National Party cannot manoeuvre for favoured treatment, as occurred in the recent contract for multi-million dollar Expo projects? Senator WALSH —The Department of Finance exercises some oversight of most joint Commonwealth-State funded projects. However, I am not sure whether that applies to Expo contracts. I am not familiar with the contract to which Senator Reynolds refers but I presume that it went to some firm which gave the Bjelke-Petersen Foundation a big sling-in other words, the usual situation in Queensland. I will make inquiries and see what, if anything, can be done. On the demonstrable maladministration by the Queensland Government of the national disaster relief arrangements, last week I wrote to all State governments asking them in future to report to the Department of Finance all instances in which the recommendations of a State board have been overturned for political reasons as was done in the notorious Behan case in Queensland. I also sought their views on whether an applicant should be allowed to get loans from more than one source under more than one program. Again, in the Behan case, it would appear that Mr Behan had three separate loans. He had two loans apart from the one that the Queensland State Government directed that he receive, against the advice of the bank and the board. Finally, the letter seeks the views of the States on what ceiling should be placed on the total loan that may be obtained by an individual. Senator NEWMAN —I refer the Minister for Veterans' Affairs to the question I asked on Monday concerning the 18-month-old review of the defence service home loans scheme and to his reference last night in the appropriation debate to his answer. In view of the fact that the Minister did not give a satisfactory answer to my question on Monday, will he now tell the Senate whether he has yet taken the matter to Cabinet. If not, why not? If so, has the Cabinet rejected his proposals or, if not, when will the new scheme be announced? Senator GIETZELT —In the 14 May statement the Government announced its intention to seek private interest to improve the defence service home loans scheme. At that stage, there was substantial interest from the private sector in acquiring or being involved in the assets or development of the scheme. Honourable senators would, without exception, be aware that there has been considerable change in the home market situation and in financial institutions since that statement was made, which had the objective of having a new scheme commenced on 1 January 1986. As the parties that had expressed some interest in the proposals no longer did so the Government decided that the matter would be re-examined by the Department of Finance, the Department of the Treasury and the Department of Veterans' Affairs and a fresh approach would be made to the financial institutions. Those tender documents are now at the point of finality. It is expected that very shortly, possibly this side of the end of the year, those documents will be made available on the basis of the Government's commitment of May last year that all the existing beneficiaries and benefits under the current operation of this scheme will be maintained. People will be able to borrow for 32 years, which is not a very attractive proposition to financial institutions which prefer a shorter loan period of 20 or 25 years. The widow's relief scheme will be maintained. There will be an opportunity for portability of the scheme, which is very important from the point of view of the permanent forces. All those matters have been re-examined to make sure that the financial institutions, if they are interested, realise that they have to meet the Government's minimum commitments. The documents have been prepared. They will become a public issue when we call for involvement in the scheme from private interests. In the meantime, it is business as usual. We are providing loans commensurate with the $25,000 limit and current eligibility arrangements. No person is being disadvantaged by the alternative proposals which are being considered. It is the Government's hope that if there is interest by financial institutions a higher limit will become available. We would still want to keep the very generous subsidisation of the interest rate which is currently 6.8 per cent. Whether the banks in the latter part of 1986 are as interested as they were in the early part of 1985 will be tested. Senator VALLENTINE —My question is addressed to the Minister representing the Minister for Defence. Has a list been made public of alternative sites to Jervis Bay as possible options for the ammunitions depot and associated facilities which need to be moved from Sydney harbour? If the list has not been made public, is the Minister prepared to make it public and, if so, when? As the Dibb report on the Review of Australia's Defence Capabilities stresses the defence of the north, would it not make more sense to move the ammunition depot to the north of Australia rather than to the south-east corner? Will the environmental impact statement now being prepared for Jervis Bay include the topic of nuclear hazards? Surely this is desirable if Jervis Bay is to be further developed as an east coast harbour for United States nuclear warships as an alternative to Sydney and Melbourne, which are not regarded as suitable. Senator GARETH EVANS —I am advised by the Minister for Defence that he is not aware that there has been any formal public release of a list of all options considered by the Department of Defence for alternative sites for such facilities. Such information would be made available as part of the major environmental study which the Prime Minister has already announced would precede any Government decision on a relocation to Jervis Bay. The fleet's main ammunition depot should be near the fleet's main base. As it would be strategically and operationally unsound to have the fleet's main base in the north of Australia in a forward operating area-neither the Government nor the Dibb report has suggested this-the location of its main ammunition depot in the north would not make sense. I am further advised that the environmental impact statement for naval facilities in Jervis Bay would as a matter of course endeavour to address all aspects of the proposal which could have a significant impact on the environment. Implications of possible use of Jervis Bay by visiting ships would be addressed in that context. No facilities are proposed specifically for other than Royal Australian Navy ships. Senator VALLENTINE —Mr President, I have a supplementary question. The specific question that I wanted an answer on concerned nuclear hazards. Is this topic specifically included in the terms of reference for that environmental impact statement? I understand that so far it has not been included. That is what I want clarified. Senator GARETH EVANS —I have no specific information on that but to the extent that no facilities are proposed specifically for other than RAN ships I do not imagine the situation would arise. The PRESIDENT —Once again I draw attention to the length of questions being asked by honourable senators and the length of answers that are being provided by Ministers. It is obvious that the questions could be shortened considerably. I also suggest that the answers given by Ministers could be shortened. I urge all honourable senators to consider this when they rise at Question Time in future. The PRESIDENT —I present the fourth report of the sixty-second session of the Standing Orders Committee. In doing so I draw the attention of the Senate to the agreement by the Leader of the Government in the Senate (Senator Button) reported in the last paragraph of the report that time will be made available in the first week of the next period of sittings to deal with the outstanding recommendations of the Committee. Motion (by Senator Grimes) proposed: That the report be printed. Senator HARRADINE(Tasmania)(3.03) —Mr President, I rise to find out precisely when we will debate the report. Presumably the recommendations of the report will not be implemented in any way until the matter has been fully considered by the Parliament. Senator CHANEY(Western Australia-Leader of the Opposition)(3.04) —It is my understanding, as the report itself makes clear, that we will have an opportunity to discuss this report and the recommendations in it in the first week after we resume in February. Senator Harradine —I have not seen the report. Senator CHANEY —I am sorry. Excuse my intervening, Mr President, but I thought you may not have heard the full question. There is no question of changes being made in advance of that debate, as I understand it. In fact, the Opposition is not in general supportive of a number of the recommendations and we would certainly expect a serious debate on them and the preservation of the usual free vote on those matters. Question resolved in the affirmative. Motion (by Senator Grimes) agreed to: That consideration of the report in Committee of the Whole be made an order of the day for the next day of sitting. Senator SIBRAA(New South Wales) —On behalf of the Joint Committee on Foreign Affairs and Defence, I present the report `Australia and the Philippines', together with the transcript of evidence and extracts from the minutes of proceedings. Ordered that the report be printed. Senator SIBRAA —by leave-I move: That the Senate take note of the report. The report `Australia and the Philippines' of the Joint Committee on Foreign Affairs and Defence represents a timely and valuable contribution to the Australia-Philippines bilateral relationship by the Australian Parliament. The decision to conduct such an inquiry was based on several considerations, including the Philippines's location in a region of primary strategic, political and economic interest to Australia, its membership of the Association of South East Asian Nations and its alliance with the United States of America. A further consideration was the growing public concern in Australia about Australia's policies towards the Philippines in general; and the Marcos regime in particular. Soon after the Committee commenced its program of public hearings in February 1986, the political landscape in the Philippines changed dramatically. After being declared winner of the presidential election held on 7 February, Marcos's position was rapidly eroded by widespread reports of vote buying, multiple voting, mass disenfranchisement and other forms of fraud. The election was condemned both in the Philippines and by the international community. I would note here that Senator Hill, Deputy Chairman of the Sub-Committee, participated in an international observer group at those elections and the Committee welcomed his contribution when he returned. In an extraordinary sequence of events, Defence Minister Enrile and General Ramos announced that they had broken with Marcos and could no longer accept his authority as President. Their defection quickly attracted the support of the armed forces. Simultaneously, the church and opposition groups acted swiftly to mobilise `people's power' in the streets of Manila to support the cause of the rebels. Within a few days, Marcos left for exile in the United States once it was clear that he had lost control of the armed forces and that the United States Administration would no longer support his presidency. Again, the Committee was fortunate that Senator Lugar, Chairman of the United States of America Senate Foreign Relations Committee, who played a key role in these events, was able to brief the Joint Foreign Affairs and Defence Committee. On the same day as Marcos left, Corazon Aquino was sworn in as President and established a new government. I now turn to the major findings of the report. The Aquino Government-Challenges and Prospects The problems facing the Aquino Government are daunting in their number, scale and complexity. After 20 years in office, Marcos left the Philippines a legacy of decayed and corrupt political institutions, an economy in crisis, an active communist insurgency and a society marked by sharp inequalities and widespread poverty. Despite these problems, the Aquino Government has moved quickly to begin the task of rebuilding the political system and restoring individual freedom and respect for human rights. There have been some major political developments since the Committee concluded its inquiry in September of this year. Regrettably, political instability has persisted. Serious differences between Defence Minister Enrile and other members of the Cabinet, which were explored in detail in the report, have intensified in the last two months. The handling of the communist insurgency remains the major bone of contention between Enrile and some other Ministers. The draft constitution, to be presented to the people in a plebiscite in early February, is also emerging as a source of instability and friction within Aquino's Government. The murder in recent days of a prominent left wing political and trade union leader, Rolando Olalia, and the kidnapping of a senior Japanese executive provide further evidence of the difficulties which now exist. Despite the current instability, it should not be concluded that Aquino's Government is about to fall. What is more likely to happen is a continuation of the present circumstances, in which personal ambitions and policy differences are being fought out within the Aquino Government. Despite persistent rumours, a military takeover does not appear likely in the short term. As noted in the Committee's report, Aquino enjoys the support of the Reagan Administration and the US Congress. Anyone contemplating the illegal seizure of power would have to take account of strong United States disapproval and probable withdrawal of US economic and military aid. We should also bear in mind that there is a very broad constituency supporting the Government's emphasis on national reconciliation and moderate reform. If Aquino can hold together the broad middle ground, there is a fair prospect that her Government will lay the foundations for political stability and economic recovery. The Economy President Aquino's Government is facing severe economic problems after three years of contraction in the economy as a result of mismanagement by the Marcos Government and the drop in world commodity prices. The most pressing needs are to reschedule foreign debt, to improve economic policy formulation, to revive business and investor confidence, and to alleviate poverty throughout the country. The Committee's report concluded that, even with sound economic management, economic recovery would be slow and difficult. Recent developments confirm this unfortunate outlook, with the economy contracting by about 2.2 per cent in the first half of 1986. The persistence of political instability is a major reason for the reluctance of domestic and foreign business to invest. The Communist Insurgency One of the most serious challenges to the Aquino Government is the communist insurgency. The Committee's report concluded that the communist insurgency, which remains at a high level, would continue to burden the Aquino Government at a time when its energies and resources are already stretched to meet political and economic problems. Regrettably, recent developments appear to bear out that pessimistic assessment. The Committee's report concluded that a lasting nationwide ceasefire was not likely. Though negotiations between representatives of the Government and the insurgency have continued, the chances for success look remote. The recent murder of Rolando Olalia will set back even further the prospects of a lasting ceasefire. Australian Policy The Committee's report strongly endorses the Australian Government's decision to extend political support and to increase development assistance to the Aquino Government. The emergence this year by peaceful means of a new Philippines Government, committed to democracy and reform, was a better outcome than was widely expected in the closing stages of the Marcos regime. The Aquino Government deserved support and assistance in February this year. It continues to deserve that support and assistance now. Defence Co-operation Program Australia's defence relations with the Philippines have been the subject of controversy within the Australian community, mainly because such relations have been perceived as providing support and assistance to the Marcos regime, and because of concern that they associated Australia with human rights abuses. The nature and extent of the defence co-operation program is not always clearly understood. No weapons or armaments are provided under the DCP, and funding for the program has remained at the very modest level of about $1.5m since 1979-80. The major element of the DCP in recent years has been the training in Australia of personnel from the armed forces of the Philippines. The Committee does not consider that training of armed forces of the Philippines personnel in Australia contributes to human rights abuses in the Philippines or that it represented endorsement of the policies and practices of the Marcos Government. The conduct of armed forces of the Philippines personnel is a matter for the Philippines to resolve. If Australian training imparts useful skills and knowledge and encourages a professional and disciplined approach, it will have served a worthy purpose. I point out that Amnesty International told the Committee that it was unaware of any individual of the armed forces of the Philippines who trained in Australia and later became implicated in human rights abuses. The Committee believes that training in Australia of armed forces of the Philippines personnel may serve to instil in the recipients values that tend to discourage human rights abuses. The Committee believes that the time to make the armed forces of the Philippines more proficient and professional is now, and Australia's DCP can make a modest but useful contribution to this process. The Committee recommends that the Australian Government consult with the Government of the Philippines on the most appropriate form and orientation of the defence co-operation program; and give careful consideration to any proposals from the Philippines Government for reorientation of the DCP, including any relating to human rights issues, such as the provision of special training courses. Development Assistance Although there was no disputing that the Philippines was a deserving recipient of aid, the forms and effectiveness of its delivery by Australia were questioned in many submissions received by the Committee. The Samar and Zamboanga projects have been criticised for an excessive emphasis on infrastructure on the basis that roads and bridges are of limited value to the poorest groups in the community and may also benefit the military. The Committee considers that this criticism misses the point that sustained economic growth, without which lasting poverty alleviation is unlikely to occur, requires the removal of major obstacles to development, one of which is poor infrastructure. The Committee has concluded that, on balance, large scale integrated development projects, such as those at Zamboanga del Sur and northern Samar are suitable vehicles for aid delivery and that these projects in the Philippines have increasingly met their objectives. In its current form, the Samar project represents a well balanced combination of infrastructure and agriculture components with an appropriate emphasis on fostering community organisations and local decision making. The Committee is keen to see the benefits of this project sustained and improved. The Committee understands the Australian Government's decision to withdraw Australian personnel from Samar in 1985 on security grounds. It would be a pity, however, if project implementation were to lose momentum now. For this reason the Committee recommends that the Australian Government, in consultation with the Philippines Government, should arrange the return of Australian personnel to northern Samar as soon as security conditions allow. Earlier this year, shortly after the Australian Government announced an increase in development assistance to the Philippines, the Australian Development Assistance Bureau outlined a series of proposals on how best to structure and implement an expanded aid program. The Committee agrees in general with ADAB's proposals and considers that they offer an imaginative and constructive approach to the problems confronting the Philippines. The Committee commends the proposed sectoral inputs program as an appropriate response to the Philippines' pressing budgetary and balance of payments difficulties. This proposal will require careful design to ensure that Australian exports to the Philippines will not be adversely affected. The Committee commends also the proposals for an Australian community assistance program which focuses on the pressing need to create jobs and generate income in rural areas, and which recognises the important and effective role which Philippines non-government organisations and the Catholic Church can play in pursuing these objectives. This scheme should go some way towards addressing the criticism, raised by Australian NGOs, that Australian aid to the Philippines is inadequately focused on community needs and is excessively implemented through bilateral rather than community channels. Economic Relations Although Australia and the Philippines are not major trading partners, economic relations are an important aspect of the bilateral relationship. Domestic economic circumstances in both countries, and the state of the international economic environment, do not favour a rapid or substantial increase in bilateral trade or investment. The Committee believes, nonetheless, that several opportunities exist for an increase in Australian trade with the Philippines, particularly in the sale of agricultural and mining equipment and technology. The Committee heard claims from a number of witnesses concerning the alleged abuses of Filipino workers by Australian companies operating in the Philippines. The Aquino Government has announced its intention to overhaul drastically industrial practices and improve labour conditions in the Philippines, which currently leave much to be desired. Evidence submitted to the Committee would not appear to support claims of repeated abuses by Australian companies of Filipino workers. The Committee does not consider that the establishment of a code of conduct for Australian companies in the Philippines would be a useful or effective measure. Australian companies operating in the Philippines are subject to the laws of that land and it is ultimately the responsibility of the Philippines Government to enforce those laws. Social Concerns In the course of the inquiry the Committee also encountered a level of concern within the community about issues affecting Filipino women. These included the problems faced by Filipino brides in Australia, the organisation of so-called `sex tours' to the Philippines, and prostitution. Whilst these matters go beyond the scope of this inquiry, the Committee believes that they require further investigation, particularly by the Minister for Immigration and Ethnic Affairs (Mr Hurford). Conclusion Before concluding my remarks I would like to express my appreciation to all who assisted with this inquiry. I thank all members of the Sub-Committee, chaired by Mr Gordon Bilney, who attended the series of meetings and public hearings, and all organisations and individuals who placed submissions before the inquiry and assisted the Sub-Committee with its work. I also thank Hansard for its assistance during the formal proceedings of the Committee. I would also like to thank Mr Peter Stephens, secretary to the Sub-Committee, Mr Marcel Dimo, Foreign Affairs Adviser, Ms Kelly Edwards, who was responsible for typing of the reports, and Ms Margaret Ray and Mr Jack Cassels for their valuable assistance with this inquiry. Senator VALLENTINE(Western Australia)(3.20) —I would like to make a few comments on the report entitled `Australia and the Philippines' of the Joint Committee on Foreign Affairs and Defence, although I have only just seen the final version of it. It is regrettable that this report is couched in typical East-West views that Australia seems to be taking the Western line and that its decision on what to do about the new regime in the Philippines is dependent on whether it suits our American allies or not. Least of all are the needs of the Philippines considered by this report. The Filipino people are the pawns in this game of East-West balance of terror. It is very regrettable indeed that Australia dares to play that game. I think the Australian Government is responsible for that. Australia supported the Marcos regime and it seems now that, by recommending that military aid be increased to the new Philippines Government, which is backed by exactly the same military regime as was in place during the Marcos regime, we are perpetuating the problems. Very little account is being taken of what is best for the Filipino people, many of whom made submissions to this inquiry. The needs of the Filipino people are clearly in the area of economic security. That is the main need of the Filipino people. I think the issue of communism is blown out of all proportions in the Philippines. The particular brand of communism in the Philippines arose because of the economic hardship which the people suffered there under 20 years of the repressive Marcos regime. The New People's Army is not even aligned with Moscow. It does not follow a Moscow communist line or a Beijing communist line. It is distinctly Filipino in character. It is simplistic for people to consider the whole problem in the Philippines to be one of communism and the possibility that the Philippines might deteriorate into another satellite of Moscow. That is totally unrealistic and only ill-informed people would make that sort of claim. The Aquino Government needs every support it can get. The Australian Government should be giving economic support and not military support. That is where the problem really lies. I would like to mention a few points about ANZUS. Last year Mr Hayden, the Minister for Foreign Affairs, suggested that ANZUS may need to be invoked in the case of the Philippines to defend United States interests there; that is, the United States bases. It is absolutely deplorable that an Australian Government report should come down in favour of supporting United States bases in another country. That is none of our business at all. Surely it is a matter for the Filipino people to decide. If they are left to decide that for themselves, I think there will be a very healthy debate in that country about the appropriateness or otherwise of those bases being on their soil. We should not make the assumption that those bases should stay in the Philippines. Whose interests are best served by those bases in the Philippines? I suggest that it is the interests of the United States and not the interests of the Filipino people. The Filipino people are being blatantly used in every imaginable way to serve the interests of the United States personnel who frequent those bases. Australia's role in supporting Marcos and now in its continuation of military aid to the present regime is deplorable indeed. The Filipinos have called over and over for that to stop. Filipino people who visit this country implore Australians to put pressure on our Government to stop military aid. They know that it is being used to repress the Filipino people. It was used under Marcos and it is continuing to be used under the leadership of Enrile because he has not changed his spots at all since the takeover by Aquino. In the last year Mr Hayden has contradicted himself several times over the Philippines situation, first of all by suggesting that we may need to invoke ANZUS to support the maintenance of the United States bases there and now by-- Senator Gareth Evans —He didn't say anything of the kind, you silly lady. Senator VALLENTINE —He did float that argument last year. He said that we may need to consider it and we may need to get involved. It is totally ridiculous for the Minister for Foreign Affairs to make that kind of suggestion to the Australian people. It is important that Australians realise that it is none of our business to get involved in defending United States interests anywhere at all on the face of this globe. Neither should we be propping up those interests on our own soil. It is totally out of line with any notion whatsoever of Australian sovereignty. Mr Hayden has now called for an increase in military aid to the Filipino regime and I think that in that he is out of line with the people who come to Australia from the Philippines, who are suggesting that we should not be involved in any way in supporting the military in that country. It is a pity that he has not listened to that and that he does not remember more clearly what he said so strongly at the United Nations in October this year when he talked about the export of military arms from Australia to any country where that military assistance could be seen to be repressing the local people. That is exactly what is happening in the Philippines and we should have no part of it whatsoever. It is also important to note in conclusion that there was not one woman on this Committee that heard these various submissions. There are millions of women in the Philippines who are on the move and putting their point of view very clearly that we should not be seeing the world in terms of East-West conflicts, that we need to think beyond those blocs, and that we need to get out of the strait-jacket of thinking that everything in the West is good and that everything in the East is bad. I have already said that the simplistic notion of the possibility of a communist uprising in the Philippines cannot be seen in any way to be an alliance with Moscow. The Communist Party of the Philippines is a people-based party which came out of the urgent need for the people of the Philippines to throw off the shackles of the Marcos regime. The problem in the Philippines is an economic-based problem and that is where our aid should be going, not towards any further propping up of any kind of military body. It is a shame that we are not listening more to the voices of the people of the Philippines. We should be listening to the voices of the people. The Committee's report states: It would be desirable for defence relations with the Philippines to be maintained and perhaps expanded now that there is a new government, provided that this is mutually acceptable. I hope that the Australian Government, before it decides to expand military aid, actually listens to the voice of the Filipino people. Debate (on motion by Senator Robertson) adjourned. Senator GEORGES(Queensland) —I present report 260 of the Joint Parliamentary Committee of Public Accounts entitled `Medical Fraud and Overservicing-Response to Pathology Report'. Ordered that the report be printed. Senator GEORGES —by leave-This is the fourth and final report of the Committee's medical fraud and overservicing inquiry. It contains responses from the Government, the medical profession and others to the Committee's report on pathology-PAC report 236. The Committee welcomes the Government's response to the 236th report. The response is timely and establishes an appropriate legislative framework to address many of the problems outlined in the Committee's report. The development and introduction of this legislation represents a major step forward for the Government in tackling the issue of pathology laboratory accreditation and creating effective mechanisms to review the rendering of excessive pathology services. Frameworks have been established for the administration of approved pathology practitioner undertakings and approved pathology authority undertakings and the creation and operation of a pathology services advisory committee and Medicare participation review committees. In particular it is noted that the provisions of section 129 of the Health Insurance Act, covering false statements relating to Medicare benefits, have been revised. As previous reports for this inquiry have emphasised, a legislative response to medical overservicing is appropriate only to establish the framework within which professional review mechanisms can operate effectively. It remains that medical overservicing is a problem where the judgment of providers by their peers is required. The continued development of co-operation and consultation between the profession, the Minister for Health (Dr Blewett) and the Commonwealth's administration is essential if improvements are to be made in this area. This report also details other responses to the Committee's pathology report. The support of the Royal College of Pathologists of Australasia, the Australian Medical Association, major specialist pathology practices, practitioners generally and members of the public for the Committee's recommendations is certainly welcomed. The Committee remains resolute in its opposition to those medical entrepreneurs who rank the pursuit of profit and market control over and above patient care. The Committee believes that it is now the responsibility of the Commonwealth and State governments, in conjunction with the medical profession, to examine the activities of medical entrepreneurs and to bring them to public account where their actions are judged not to be in the public interest. I emphasise that point because, as I have said, this is the final report of the Public Accounts Committee's inquiry into medical fraud and overservicing. I reiterate that it is now the responsibility of governments and the profession to place the house in order. The Committee is concerned that the problems that it has uncovered in the pathology area also appear to be developing in radiology and psychiatry. In particular some medical entrepreneurs appear to be moving to exploit these areas. The Committee believes that it is the joint responsibility of the medical profession and the Government to pre-empt these moves. The Committee has also carefully examined the responses of Dr G. W. Edelsten. Because of sub judice principles, comment on Dr Edelsten's submission will be tabled at a later date. In commending this report to honourable senators I must voice the appreciation of the Committee for the work of the secretariat and, in particular, the work of Mr Peter Mason, who has been responsible for drafting reports for the Committee's consideration from the very inception of this inquiry. The Committee is aware and I am personally aware that his dedication to this investigation has cost him considerably both in promotion opportunities and in other ways. I place on the record that this dedication and application should be recognised by the Parliament. I think the Parliament would accept that the first report for which he was responsible-the Tobruk inquiry report-was received with great approval by not only the Senate but also others who were familiar with the problem. This report is the final of our reports for which he has been responsible. I also thank the chair person of the sectional committee which was responsible for the investigation, Mrs Ros Kelly, the honourable member for Canberra. It would be remiss of me not to acknowledge the work of members of the Committee, the sectional committee and the Committee as a whole. I have said that this is the final report of this inquiry. I merely add that the investigation of medifraud and overservicing is not at an end because the Committee has decided that it can go no further in this matter. It is now up to governments to respond. I am obliged to reflect on the report from the Director of Public Prosecutions who outlined in his report the difficulties that he faced. I think the Parliament, and in particular the Senate, ought to address itself to the problems which the Director of Public Prosecutions faces in the area of fraud against the Commonwealth and, in particular, fraud against medical services. The briefs the Director has received have been for the most inadequate. They are inadequate because the Australian Federal Police, which is responsible for gathering evidence in support of those briefs, has not had the resources or the skill to support them. I suggest to the Government that, without apportioning blame on the institutions which are responsible, it should merely examine its own role, re-examine the resources which are available to the Australian Federal Police, acknowledge that there is a lack of expertise and technique and move quickly to supply them. After five years the Committee is somewhat concerned that medifraud has not been suitably responded to and that the number of cases being brought before the courts has been few. This is a grave reflection on the ability of the authorities to react to a very serious problem. The major concern, of course, is overservicing. As I have mentioned before, unless the Government takes the advice which is very clearly put before it by the four reports overservicing will seriously disadvantage the delivery of health care in this country. It will certainly seriously disadvantage the provision of free medical services to the community, especially to those who are in great need. I commend to the Senate the final report of the Public Accounts Committee's inquiry into medifraud and overservicing. Senator BLACK(Queensland) —I present the report of the Joint Select Committee on Telecommunications Interceptions, together with the transcript of evidence. I seek leave to move a motion in relation to the report. Leave granted. Senator BLACK —I move: That the Senate take note of the report. I seek leave to incorporate my speech in Hansard. Leave granted. The speech read as follows- The committee's task was not an easy one. Formed by resolution of the Houses in June of this year, the committee sat for the first time on 17 July 1986 and for the last time on 18 November 1986. In that time, the Committee was required to examine and report on firstly, the Telecommunications Interception Amendment Bill 1986 and secondly, the recommendations contained in Mr Justice Stewart's report of the Royal Commission of Inquiry into Alleged Telephone Interceptions to the effect that the power of interception be extended to cover serious offences. The Bill itself is complex, and covers an area in which there is a wide divergence of views within the community and within this Parliament itself. But the Committee took the view that, consistent with the requirement in its resolution of appointment to report as soon as possible, it should report by the end of parliamentary sittings in 1986. This task has now been achieved. But in doing so it precluded a protracted inquiry into important peripheral issues raised by the Bill and raised in evidence taken by the Committee. There were many issues of central importance which emerged during the inquiry. These included: a. The requirement of law enforcement agencies to have rapid access to the information which would assist in countering organised and drug-related crime and in solving other serious criminal offences; b. The protection of individual privacy from unwarranted intrusion; c. The prevention of abuse of interception powers; d. The protection of the integrity of the telecommunications system; e. The need for a thorough and practicable system of safeguards, consistent with administrative efficiency; f. The requirement for a streamlined system for the lawful implementation of interceptions; g. The admissibility of evidence gained through legal and illegal interceptions; h. The communication of information gained through legal interceptions, and i. The problems created by the free availability of devices capable of effecting illegal interceptions. The Committee's consideration of these issues generated both heat and light during the inquiry. The Committee was unanimous in its view that there is a need to give law enforcement agencies such assistance as is necessary to combat organised crime, drug trafficking and other serious offences. The Committee was also in broad agreement that there needed to be a balanced structure of safeguards to protect individual privacy and to maintain the integrity of the telecommunications system. The Committee divided, however, on the best means of achieving these aims. The majority report outlines a proposed system which will extend to all necessary law enforcement agencies rapid access to intercepted information sought by them, targeted by them, and in accordance with priorities determined solely by them. The recommendations retain, however, a form of central control in a proposed telecommunications interception agency which itself will provide a significant safe-guard against abuse of interception powers and wrongful use of intercepted material. Other safe-guards recommended by the Committee in its majority report include a detailed warranting system, strict criteria for the issue of warrants by Federal Court judges and a detailed system of reports culminating in the requirement for the responsible Minister to present to the Parliament an annual report on interceptions conducted, in considerable statistical detail. This, in itself, will permit the Parliament to assess the efficacy of the interception process while at the same time protecting information which might either prejudice individual privacy or impede police operations. In addition the Committee proposes a totally independent audit and scrutiny function over the interception process by a judicial officer. As I have said, throughout the inquiry the Committee as a whole had a broad unity of purpose, differing only in methodology and mechanisms necessary to achieve that purpose. The Committee maintained its cohesion right throughout the inquiry despite occasional differences, and I was pleased to serve as a member of it. On behalf of the Committee, I would particularly like to thank those officers of the Department of the House of Representatives who, although not part of the Committee secretariat, played a major role in enabling this report to be tabled today: To Margaret Tie, Pat Arentz and Carol Richardson, for their invaluable keyboard assistance in the production of the report since it was approved by the Committee on Tuesday, and to Sarah Grey, who worked well into last night, and is still working, to duplicate sufficient copies of the report for those who require it today. Throughout the inquiry, the Committee received un-reserved co-operation from two key Commonwealth agencies, the Australian Federal Police and the Australian Telecommunications Commission. State police forces permitted by their governments to make submissions to, and appear before, the Committee made a significant contribution. The Committee is grateful to these organisations, and extends its thanks also to the various law societies, police associations, civil liberties groups, government departments and private individuals who gave evidence to the Committee or made submissions. The Committee was surprised at the response of State governments to invitations to contribute to the Committee's inquiry. Their responses are detailed in the report, and can best be described as less than enthusiastic, particularly when the main issue before the Committee involved a significant potential devolution of Commonwealth power to the States. Most of the issues raised by the inquiry involved the Committee in `drawing the line' between conflicting, and, occasionally, opposing positions. Balanced judgments were required, and in large measure, the Committee achieved agreement. The Committee trusts that the report contributes to public awareness and discussion of the issues involved, and assists in the development of appropriate legislation in this important and sensitive field. I commend the report to the Senate. Senator ARCHER(Tasmania)(3.38) —I speak to the Joint Select Committee on Telecommunications Interception report because it is important that it be spoken to in view of the fact that when the inquiry finished a minority report was brought down. There was general agreement in the Committee on all the fundamental issues. While acknowledging the ultimate necessity of telecommunications interceptions in the fight against crime many submissions were against the proposal. However, no evidence of telecommunications interception as not being effective came forward from anyone. The Committee supports the fact that participation by the State and the Northern Territory, the National Crime Authority and the New South Wales Drug Crime Commission is totally optional. It is up to them to apply individually for registration under the Telecommunications (Interception) Act if they so desire. The proposal to extend powers to other authorities came out of the drug summit of April 1985. The Prime Minister (Mr Hawke) gave the undertaking then so the inquiry was really one for implementation issues only. Already more than 18 months have been lost since the undertaking was given. The Committee was unanimous in its support of the extension of powers to the States, the Northern Territory, the Crimes Authority and the New South Wales Drug Crime Commission. It was unanimous in requiring strong safeguards in the operation of interceptions; it was unanimous in ensuring the protection of innocent people and of requiring heavy penalties for all breaches, it was unanimous in instituting total bans on all the equipment used, or for use, illegally. There were no differences of opinion on any of those matters and that is what is really important. However, there was a minority report to which I was a party and the dissent comes from the areas of operation, the methods of implementation, the safeguards and reporting required, the degree of seriousness of crimes to warrant interceptions, the use of material obtained and the speeding up of getting the legislation passed and operative. The majority report of the Committee failed to provide a reasonable, workable implementation of the major issues of operation. To follow the recommendations in these areas would have very severely hampered the adequate operations of the Drug Summit undertaking. The dissenting report, if accepted, will minimise delays in implementation, establish the most workable system, maintain the tightest security, avoid additional bureaucracy and restrain unreason- able costs. We must remember that discussion about fighting crime-serious crime, murder, kidnapping, organised crime involving drugs and the like-is important. It is not simply an academic exercise. The system to be installed must work simply and efficiently. The proposal for a single national agency is unsupportable operationally. To centralise would be cumbersome and expensive and would get the operation out of the hands of the agency which authorised it. The extension of this to a regional office operation would defeat the aims of the proposed single authority on the one hand, and retain the weaknesses of time, duplication, et cetera on the other. We must admit that all Federal Government law enforcement operations are already undermanned and underfunded. Why would this be granted a priority? The cost recovery proposal is a myth. The method of calculating rent, power, stationery, authorised and unauthorised labour costs could never be agreed upon and, under a central monstrosity, would be enormous. The vast majority of State interception requests will naturally be for matters totally within a State's boundaries, and to involve a national agency can only be detrimental to the efficient fight against crime. That is what it is all about. I must ask: Is the Government in earnest in fighting organised crime? The main report has provision for two lots of supervision. Either would be quite adequate; both would create a real impediment. Then there is a request for an entirely new Bill which would replace the existing Bill and the basic Act. This may well be desirable but would inevitably delay implementation when there is great urgency if the Government's bona fides is to be preserved. I would like a new Act, but the practical approach is to put a sunset clause in the amended Bill and to have the full replacement Bill as soon as possible thereafter. Then there is the call for all warrants to be issued by a judge of the Federal Court of Australia only. Why? The minority report for all practical reasons suggests that warrants be issued by a judge of the Federal Court or a judge of the Supreme Court, and there is no reason why this would weaken the proposal in any way. Not one witness offered any evidence to support these quite unreasonable impediments. Little, if any, weight was given to the evidence of the law enforcement authorities. Urgent action is what is required without a minefield or obstacle course on the way. Law enforcement agencies are fighting a new breed of criminals these days. Additional funding is not being provided. While old methods are effective to a point, resources are finite and the methods are limited. Interceptions have been proved effective in Australia and overseas and are essential, but they must be reasonable and workable. The whole Committee places very high priority on privacy, as do most Australians, and we must recognise that criminal elements rely on that and abuse it accordingly. We must gain access to their phones. Finally, we all agree that the use, ownership, possession, importation, manufacture or whatever of all interception equipment should be banned and heavy penalties should be imposed upon anybody breaching those regulations. We did achieve general agreement on the vital issues. The dissenting report took greater account of producing something that was feasible and workable. The investigations were interesting and the Committee very compatible. I thank the Chairman, Mr Martin, and the Secretary and staff for their excellent work and co-operation. I record my thanks and appreciation. Debate (on motion by Senator Robertson) adjourned. The Bills. Consideration resumed. Senator PETER BAUME(New South Wales)(3.45) —The Committee has considered and disposed of one lot of amendments only, moved by both the Australian Democrats and the Opposition. I seek leave to move the Opposition amendments (1) to (7) which have been circulated in my name as group B. Leave granted. Senator PETER BAUME —I move: B To remove references to grants to the States (1) Page 5, clause 7, leave out the definition of ``State''. (2) Page 6, sub-clause 10 (1), leave out ``a State or'', insert: ``an''. (3) Page 6, sub-clause 10 (4), leave out ``a State or'', insert: ``an''. (4) Page 7, paragraph 10 (5) (b), leave out ``State or''. (5) Page 7, clause 11, leave out ``State or''. (6) Page 9, leave out sub-clause 12 (6), insert the following sub-clause: ``(6) In this section, ``person'' includes an eligible organisation, but does not include a State.''. (7) Page 12, leave out sub-clause 16 (2), insert the following sub-clause: ``(2) In this section, ``person'' includes an eligible organisation, but does not include a State.''. These amendments seek to remove from the Bill the word `State', wherever that appears as one of the eligible organisations for grants under the Bill. As we explained during the Second reading debate, it is our understanding that there will be a finite pool of money available from which grants will be made. We believe that the States should not be able to have access to that pool of grants, that if it is the desire of Government to fund the States that should be done by the more normal route of States grants legislation. It is for that reason that I have moved the amendments. Each has the purpose of taking out the word `State', wherever that appears and where it would make the State and eligible organisation within the purposes of the Disability Services Bill. This matter has been canvassed and I commend the amendments. Senator POWELL(Victoria)(3.47) —I just want to reiterate the point that I made briefly at the second reading stage, that we will not support these amendments. While we appreciate some of the concerns that have been expressed by the Opposition, we feel that there are sufficient practical cases in which this provision could be useful. We also feel that any Minister who abused his rights under this part of the legislation would risk the anger of voluntary organisations out there in the community. We do not believe that any sensible Minister of any government would risk that happening-certainly Senator Senator Grimes would not. Any future Minister who did so would incur the anger of certainly voluntary organisations, probably the Opposition of the time and most certainly the Australian Democrats. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.48) —For reasons advanced earlier in the debate and also indicated by Senator Powell, the Government opposes these amendments. Amendments negatived. Senator PETER BAUME(New South Wales)(3.49) —I seek leave to move together Opposition amendments (1) to (5) in group C relating to the Disability Services Bill 1986 and amendments (1) and (2) to the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986. Leave granted. Senator PETER BAUME —In relation to the Disability Services Bill 1986, I move: C To remove provisions for rehabilitation services (1) Page 2, paragraph 3 (a), leave out ``, and of Part VIII of the Social Security Act 1947,''. (2) Page 2, paragraph 3 (f), leave out ``by the provision of comprehensive rehabilitation services''. (3) Pages 13 to 22, Part III, leave out the Part. (4) Page 22, sub-clause 31 (1), leave out paragraphs (c) and (d), insert the following word and paragraph: ``and (c) an approval given under sub-section 9 (1).''. (5) Page 23, sub-clause 33 (1), leave out paragraph (d). In relation to the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986, I move: (1) Pages 3 to 7, Part III, clauses 12, 13, 14 and 16 to 28 to be opposed. (2) Pages 7 to 12, Parts IV to VIII, leave out the Parts. I am grateful to Senator Grimes for the response he gave in the summing up and to the debate which has occurred already, but some of the concerns of the Opposition have not been met. I refer Senator Grimes to the Estimates Committee B transcript in the Hansard of 19 September where we explored the question that is before the chamber now; that is, the question of whether the withdrawal from the medical and training model of rehabilitation which has been carried out par excellence in the major centres has left behind it any vacuum. I put to the Minister that, had alternative services been in place, that might have been a different situation. At page 471 of the Hansard, where the Minister was talking about the South Australian situation at Payneham, he said: We have to be satisfied that this is so- that is, that there are alternative services available- and we will not transfer and we will not give up a function unless we are satisfied that a decent function is provided elsewhere. For instance, the head injury people in South Australia will go to the head injury unit which has been set up by the South Australian Government. We are perfectly satisfied that that facility is as good as ours. That is a prefectly reasonable statement by the Minister, but it is of course a testable statement. Senator Grimes —It is not actually quite reasonable, I am sorry to say. Senator PETER BAUME —I am just about to make the point that it is not all that reasonable because when we test it we find it lacking. I have received a letter-several letters in fact-from Dr Peter Oatey, the neurosurgeon from the department of neurosurgery at the Royal Adelaide Hospital. He is a surgeon who has no personal vested interest but he has a professional vested interest in that he is required to care for those who have suffered head injuries from motor vehicle crashes and the like and to seek to have rehabilitation carried out on them. I would like to read part of what Dr Oatey has said to me, to explain the kinds of difficulties we have with what we think is the premature closure of some of the major centres. In relation to Senator Grimes's statement, Dr Oatey said: This statement shows a lack of understanding of what the South Australian Head Injury Unit to be set up at the Julia Farr Centre will do. The Julia Farr Unit, called the South Australian Head Injury Service, will possibly open in mid 1987. It will merely take over the early rehabilitation of head injured and neurosurgical patients currently rehabilitated at the Neurosurgical Rehabilitation Unit at Hampstead which has been in existence since 1977. The Hampstead unit is understaffed with para-medical staff, in spite of frequent requests for bettering staffing. The proposed S.A. Head Injury Service at Julia Farr Centre would entail modification of several wards at a cost of over a million dollars. This will be provided by the South Australian Government. However, the facility at Julia Farr Centre, will not provide the services which have previously been provided at the Payneham Rehabilitation Centre, run by the Commonwealth. I interpolate that this is where the problem arises. The letter continues: If the Payneham Rehabilitation Centre does not function, then there will be no ongoing rehabilitation for these patients. When they are discharged from their early rehabilitation phase for the first two months after their injury and then require ongoing rehabilitation and support, no such services will be provided. That is unless the State Government acquire the Payneham Rehabilitation Centre and run it or some other similar centre which is not currently available. For Senator Grimes to say that he is satisfied that the facility at the Julia Farr Centre, the South Australian Head Injury Service, is as good as the Commonwealth Rehabilitation Service is ludicrous. That is Dr Oatey's word; it is not mine. He continues: It is just not a comparable service. One deals with the early phase of rehabilitation and the other has the facilities for long term rehabilitation which may extend over several years. I hope that this will be pointed out to Senator Grimes . . . This is not a question on which we are trying to score points, it is a question on which we are trying to test the facts. The assertion by the Opposition is that if one wishes to close down those medical and training centres which have been expensive to run and which I believe Senator Grimes has said, with some evidence, have been less than optimally efficient or less than optimally located, that is all right provided no vacuum is created. I think there is an obligation upon government to have the alternative service in place and then to withdraw the Commonwealth service if it is desired so to do. As things stand in South Australia, there are neurosurgical patients and those who have had head injuries who presently have access to a Commonwealth service and, when it is withdrawn, will not have access because the neurosurgeon, whose only vested interest is professional, not personal, says that there is no comparable alternative service available. That really is an example of the kind of issue which is concerning us, and we have had examples given to us from various parts of Australia. This morning Senator Brownhill raised a matter, and he based his concern upon a particular patient known to him who has been transferred to a residential facility, which is mostly geriatric, with no rehabilitation services because there is no other rehabilitation service available in New South Wales. What we are saying to the Government is that it should not proceed to close down its own centres until adequate alternative centres are available. We know that the Government's intention is that there should be alternatives available. We put it to the Government in the best possible good faith that that is not the case. In some parts of Australia we do not think there are sufficient alternatives. We are getting very anguished inputs from people who are concerned about their relatives' welfare. For these reasons we are moving these amendments. We ask the Government to proceed in an orderly fashion. It must first have the alternatives in place and then, if it wishes, take steps to close down its service. Senator GRIMES(Tasmania-Minister for Community Services)(3.56) —I have no argument with anything Senator Peter Baume said. I apologise for the remark I made during the Estimates Committee hearing. That is one of the problems when we are talking conversationally and prospectively, but I note that I did not mention the Julia Farr Centre. I was not in fact implying that the Julia Farr Centre was the equivalent of what we were doing. I said during the Estimates Committee hearing, and I say again now, that we are not going to leave vacuums. Where there is no replacement of a service we will maintain that service either by providing for a lease-back arrangement in the sale or by ensuring that the patients get that service through alternative service providers, by brokerage or any other means. I emphasise that with the exception of Mount Wilga-I will come to the case Senator Brownhill talked about in a minute-we do not have any unique services. Most of the services are available elsewhere. Some will have to be developed to cope with the volume. I am sure that if one reads the Hansard and listens to Senator Baume, one could assume that we have already closed down services. We have not done that and we are not doing that. We are aware of the need for the head injury services that Senator Baume talks about in relation to Payneham. The South Australian Government, and the South Australian Minister in particular, are proceeding to and want to develop the long term rehabilitation medical aspects of services for people with head injuries and other disabilities. I have talked to the Minister about this. Negotiations are going on at the moment with the South Australian Government for it progressively, over three years, to take over from the head injury unit. We will not walk out and have them walk in. Part of the negotiations is for the South Australian Government to lease part of the facilities from the purchaser at Payneham that are useful to it, if that is possible, or for us to assist it financially to improve the facilities. In fact there has been some interest from the South Australian Government in purchasing Payneham for this purpose. So we are not just suddenly putting down the shutters and walking out and leaving people without adequate services. I do not know about the individual case Senator Brownhill talked about. That is something that has happened recently. If someone, I assume he meant from Mount Wilga, has been transferred to a geriatric residential centre-I think that was the expression used-that is not our responsibility. I am sure that Mount Wilga's facilities are not full at the moment. It must have been a decision of the medical practitioner who is looking after him. We have not closed down Mount Wilga or the Queen Elizabeth II centre. They are still there and we are not withdrawing from those services until we have ensured that alternative services are in place. The South Australian head injury unit is a very good example of that. We and the South Australian authorities are concerned that the facilities provided there are good facilities and that they are adequate and continuous facilities. It seems eminently sensible to me for those specialist facilities to be provided by the State authority if that is what it wants-and it does-rather than having people going backwards and forwards from one stage of their treatment to the other, from Commonwealth to State facilities. I can do no more than make the assurances that I have made. I can do no more than say that we are proceeding with the sale of these centres in an orderly way. I can say that we have had our three-year programs for the Commonwealth rehabilitation service now for a long time. We have had discussions about them and we have included trade unions in those discussions, despite the misunderstanding of the presidents and officials of them. We also have had the Australian Medical Association involved. I believe there has been ample discussion about this. I can understand people being concerned if we were going to march out and leave a great big vacuum. The simple fact of the matter is that we are not. In the specific case mentioned by Senator Peter Baume, it is a three-year project for the transfer of the facilities from the Federal to the State authorities. I do not know that we can give a better guarantee than that-that we are doing it gradually over three years. It is more sensible to do it that way than to have a physical facility put up, side by side with the existing one, and on day one have people march out of one into the other. I do not think that is a very practical way to go about it. The gradual way we are going about it is in fact the sensible way. Senator PETER BAUME(New South Wales)(4.01) —I thank the Minister. On rereading the Hansard from Estimates Committee B I see that we did not really go through in detail what the Government envisages happening for the other major centres such as Glen Waverley, Queen Elizabeth II, and Taringa. Would the Minister very briefly give us a run-down on what arrangements the Government envisages for facilities in each of those cities. I think the Minister did discuss Melville, but could he include Melville in the answer? Senator GRIMES(Tasmania-Minister for Community Services)(4.01) —The latest development at Melville is that we are negotiating with the State Government. There have been many offers, from all sorts of people, to purchase Melville for all sorts of purposes. The Department of Health there is doing a feasibility study on taking over the whole site. We will be discussing retaining the responsibilities for some of the recurrent costs there; for instance, costs for head injuries, if the State takes over the management and conduct of the facility. In Victoria, the Motor Accident Board has announced its intention to purchase Glen Waverley. Sixty per cent of the head injury cases there are from car accidents. We have retained a head injury unit in Melbourne. Senator Peter Baume —They are referred to as motor car crashes. Senator GRIMES —I am sorry about that. I have spoken about Douglas Parker and what we intend to do there. In New South Wales I think the most sensible thing would be for Queen Elizabeth II to go to the Prince Alfred Hospital. I am sure Senator Peter Baume would agree. I cannot imagine anyone else wanting to buy it-in the middle of that place. The Royal Prince Alfred Hospital is looking at it and the Department of Health is looking at it. They certainly would like the facilities which are much better than the facilities they have got. Senator Peter Baume —Would they run it as a rehabilitation training centre? Senator GRIMES —They have a rehabilitation unit, the members of which-the medical profession particularly-are very keen to get decent conditions. I cannot answer for them, although I do know from individual discussions that what they visualise would be the establishment of a specialised and highly skilful rehabilitation centre there. That is sensible, in conjunction with a hospital of that type. I have had discussions with Dr Yeo concerning the future of spinal injury people. As Senator Peter Baume would know, Dr Yeo is also interested in the rehabilitation of severely injured people. At the moment we are looking at building up the facilities at Coorabell for the residential treatment of those individuals. I do not know how far down the track we are with that but we are getting a fair way. At Taringa in Queensland we are retaining specialist facilities where they are necessary. We are setting up a large regional specialist unit on the Gold Coast. Sessional services and the skills of sessional people in sessional services will be purchased where necessary. The Queensland Government is pretty tardy, as it often is. I suppose it is aggravated by the fact that it has just had an election. It has yet to answer our offer about planning together. Officer level discussions have taken place and we want to look at joint planning facilities with the compensation board there which is very interested in rehabilitation, for obvious reasons. We are not selling the Townsville facility. I have had suggestions from local members in the area about what we may do with the residences we have there which we do not fully use or need for our own use. I will be discussing with them soon plans we have there. The Townsville facility will be retained, as I have said, and I am looking at having the north Queensland regional office of my Department there as well. There is no plan to sell the Northern Territory facility at all. So the plans vary a bit from place to place. What will result, after careful co-operation with the States and others, is a more rational approach to the rehabilitation service. One of the problems was, as I said earlier, that the service was established in the post-war years in an absolute vacuum. The large facilities were purchased and built in those post-war years and we now find them in inappropriate places, and frequently performing inappropriate functions. The changes we have made over the years have been gradual. Of course there will be some problems with the redeployment of staff in some places. There have been fewer problems than I thought there would be. We will have 50 new regional units this year, and 97 new regional units, all up, by 1988. I think the progress has been good. The access to services will be improved. The number of people being attended to will be improved. Therefore, I urge Senator Peter Baume to accept the assurances that we have given, to accept the good faith we have shown in the changes we have made, and to allow us to proceed in the orderly way that I believe it is sensible we should. Senator POWELL(Victoria)(4.08) —The Australian Democrats do not support the amendment. We agree with the Government that rehabilitation services are better delivered closer to where the people are who use the services. We point out that objectives Nos 3 and 4 which are with this legislation actually require such decentralisation in the provision of services. We believe that even if this amendment were passed it could scarcely stop that process of regionalisation which has already begun. We believe that priority four, the delivery of rehabilitation services, must be established where patients are. We should not be moved to take too much notice of the providers and the professionals who might be wanting to resist, in some cases at least, this kind of move. For those basic reasons we are not supporting this amendment. Senator HARRADINE(Tasmania)(4.09) —I raise a matter which is of specific interest to my constituency. I do so in the general context of this debate at this time of the Committee stage. The CHAIRMAN —Senator Harradine, at the moment we are considering specific amendments. We can come back to the Bill as a whole. Senator Grimes —The honourable senator may be wanting to speak about Douglas Parker, Mr Chairman. The amendments do refer to that. The CHAIRMAN —Senator Harradine, go ahead. Senator HARRADINE —I think they are relevant to this particular point. I refer to the Douglas Parker Rehabilitation Centre. I suppose Senator Grimes knew Sir Douglas Parker. I knew him and have had a longstanding interest in the area of rehabilitation. My late sister-in-law, Margaret Ward, would have been known by many people interested in the area. She worked in the physiotherapy area of Royal Hobart Hospital for many years. Senator Peter Baume —Do you know Dr Townley? Senator HARRADINE —I do not know that I have met Dr Townley. I know that he works at the Douglas Parker Rehabilitation Centre. I want to raise a couple of matters publicly. I have discussed them with the Minister on a couple of occasions. I know that he is fully apprised of my views. There is an agreement between the Commonwealth, the Tasmanian State Government and the Hobart public hospital's board with respect to the Douglas Parker Rehabilitation Centre. I have a copy of the agreement with me. The philosophy underlying the Douglas Parker Rehabilitation Centre is to serve the rehabilitation needs of the community. The possibility of the withdrawal of Commonwealth Rehabilitation Service staff from the Douglas Parker Rehabilitation Centre concerns me. The question must be addressed as to whether it would lead to a fragmentation and lack of co-ordination of services for Tasmanians in need of them with consequent delays and frustrations. As I understand it, at present in the mainland States, and particularly in Melbourne, quite considerable delays are being experienced. We do not want to experience those delays in our State. I am aware of the Government's policy in respect of these institutions. However, I understand that the Douglas Parker Rehabilitation Centre operates not as an institution but rather as a base from which services are provided to the community. The Commonwealth Rehabilitation Service staff prepare management plans, set goals and provide the early delivery of co-ordinated services. As I said, we do not have the substantial delays and waiting lists which appear to have been experienced in other States before Commonwealth Rehabilitation Service involvement. Concern is being expressed in Hobart by a number of people, including some support groups, about the proposed withdrawal of Commonwealth Rehabilitation Service staff from the Douglas Parker Centre. I had hoped that the discussions that have been taking place would have been concluded by the time the Disability Services Bill 1986 and the Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 came before us publicly. I apologise to the Committee for having to raise this essentially `constituent' matter in the forum of a Committee consideration of amendments. Senator GRIMES(Tasmania-Minister for Community Services)(4.13) —The matter Senator Harradine raises is important. The Douglas Parker Rehabilitation Centre is in a different situation from other centres. As Senator Harradine says, there is an agreement between the Federal Government, the State Department of Health and the Hobart public hospital's board regarding the running of the Douglas Parker Rehabilitation Centre. It is an extraordinary agreement. Those who negotiated it some years ago still hang their heads in shame about it-I am talking about the public servants concerned and one politician I know who does the same. We provide most of the funds but have very little control. We are discussing with the State Government the proposal that we withdraw from Douglas Parker the vocational service we carry out there and provide it through two regional units in Hobart so that we have the community access we have talked about and have been aiming for. The Douglas Parker Rehabilitation Centre will remain. We do not intend to withdraw its funding. We are perfectly aware of the fact that there would be no likelihood of our getting agreement with the State Government without continuing to fund the Centre. We have written to Mr Groom offering to continue funding for the Centre through our health grants, the Medicare system. Delays will not be a problem in Douglas Parker in the future any more than they are a problem there now because the Centre will still be there. We will have our regional units. We will, if necessary, have to get back our specialist assistance from the Douglas Parker Centre but we intend to maintain our financial support for it. I certainly think it will be a much more rationally run centre if we do not have the divided system we have there at the moment. There is no intention to sell the Douglas Parker Rehabilitation Centre. The Douglas Parker Centre will remain. It will remain the Centre of medical-type rehabilitation in Hobart. At the same time, we will be able to provide more regional units in Tasmania, both in Hobart and outside Hobart, so that we have a better spread of services where the people are. I can assure Senator Harradine that the changes we intend to make in Hobart, if we can succeed in getting an agreement with the State Government, will be consistent with our moves towards community-based services. The present system we have there is certainly not consistent with those moves. Senator HARRADINE(Tasmania)(4.16) —I place on record that I have a different understanding of what the Douglas Parker Rehabilitation Centre is all about. As I understand it, the Centre was designed to be, and was developed as, a community base which offered enhanced expertise in other areas as well as the rehabilitation area. From what I can gather from statements which have just been made by the Minister, two centres will be established, presumably in southern Tasmania. Did I misunderstand the Minister? Senator Grimes —That's right. Two regional-type centres. Senator HARRADINE —In southern Tasmania? Senator Grimes —Yes. Senator HARRADINE —I know that now is not the time to debate the matter, but I wonder whether the size of southern Tasmania warrants the breaking up of what essentially is a team operating out of the Douglas Parker Rehabilitation Centre. The Centre brings together all the professional agencies into one area and is able to provide a unique service offering multi-disciplinary assistance from the time that acute medical care becomes no longer necessary right through until the patient takes his place in the normal community environment. This care is not medical treatment offering a cure, but rather a problem-solving service. I thought that is what we were talking about. The group of agencies has not produced an institution but a base from which services are provided to the community. The advice that has been given to me is that the service provided can be only as good as the people who provide it. The Centre's basic functional unit is a rehabilitation team which brings together professionals from many disciplines: Rehabilitation counsellors, physiotherapists, social workers, psychologists, occupational therapists, teachers, nurses, speech pathologists, rehabilitation medical consultants and vocational counsellors. To cut a long story short, if the Commonwealth Rehabilitation Service staff were withdrawn from the team they could have a narrower outlook and could see rehabilitation as involving only their discipline. The problem with that is that it could lead to the restriction of options available to the person seeking rehabilitation. All these matters should be kept in mind. I agree with Senator Grimes that the agreement concerning the Commonwealth, Tasmania and the board of the Royal Hobart Hospital is very interesting. By the way, I do not see anything in the document which would require the Royal Hobart Hospital administrators or legal advisers to hang their heads in shame. It is vital that, if there is to be an harmonious resolution of the problem, full discussion and consultation take place. Senator GRIMES(Tasmania-Minister for Community Services)(4.21) —I assure Senator Harradine that that will take place. From memory, we have seven or nine Commonwealth people at the Douglas Parker Rehabilitation Centre. We provide 70 per cent or more of the funds and have 40 per cent of the clients, so they got a pretty good deal. I am afraid they will continue to get it because I know the skills of my Tasmanian colleagues at screwing the Commonwealth and I recognise that the chances of resolving this issue without continuing to give considerable funding support are slight. We will not take a huge number of people from there. As Senator Harradine says, they try to operate as a rehabilitation team. I would not like to say any more than that the idealistic view that Senator Harradine has been given of the place is not necessarily shared by the Commonwealth people who work there. Sometimes they are considerably frustrated by the medical sort of approach taken. We accept that there is a need for a medical specialist rehabilitation centre. It will stay. But we also believe that there is a need for rehabilitation, counselling and vocational type centres in Hobart. They will be developed. We want to complement the existing service and improve it, not set up in competition with it. Undoubtedly people will go from our regional centres to Douglas Parker. The CHAIRMAN —Senator Peter Baume has moved five amendments to the Disability Services Bill and two consequential amendments to the Disability Services (Transitional Provisions and Consequential Amendments) Bill. The question is: That the seven amendments moved by Senator Peter Baume be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 37 —— Majority . . . . . . . . . 7 —— Archer, B. R. Kilgariff, B. F. (Teller)Baume, Michael Knowles, S. C. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. MacGibbon, D. J. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Newman, J. M. Carrick, Sir John Parer, W. R. Chaney, F. M. Sheil, G. Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Harradine, B. Watson, J. O. W. Jessop, D. S. Withers, R. G. Aulich, T. McIntosh, G. D. (Teller)Black, J. R. McKiernan, J. P. Childs, B. K. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Morris, J. Cook, P. F. S. Powell, J. N. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Ryan, S. M. Evans, Gareth Sanders, N. K. Foreman, D. J. Sibraa, K. W. Gietzelt, A. T. Siddons, J. R. Giles, P. J. Tate, M. C. Grimes, D. J. Vigor, D. B. Haines, J. Walsh, P. A. Jones, G. N. Zakharov, A. O. McClelland, Douglas Hill, R. Bolkus, N. Alston, R. K. R. Zakharov, A. O. Reid, M. E. Robertson, E. A. Puplick, C. J. G. Button, J. N. Question so resolved in the negative. Disability Services Bill 1986, as amended, and Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 agreed to. Disability Services Bill 1986 reported with an amendment and Disability Services (Transitional Provisions and Consequential Amendments) Bill 1986 reported without amendment; report adopted. Bills (on motion by Senator Grimes) read a third time. Senator GRIMES(Tasmania-Minister for Community Services) —by leave-On behalf of Senator Gareth Evans I give notice that, contingent on the Senate resuming consideration of the Human Rights and Equal Opportunity Commission Bill 1985 and associated Bills, Senator Gareth Evans will move: That so much of the Standing Orders be suspended as would prevent Senator Gareth Evans moving a motion for the reconsideration of the Human Rights and Equal Opportunity Commission Bill 1985, as amended, and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill 1985 and for the suspension of so much of standing orders 202 and 265 as would prevent amendments being moved to the Human Rights and Equal Opportunity Commission Bill 1985. Debate resumed from 17 November, on motion by Senator Walsh: That the Bill be now read a second time. Senator CHANEY(Western Australia-Leader of the Opposition)(4.32) —I think the Senate is being asked by the Government to consider five Bills cognately. I think we may as well clear that up with the Government. I have no wish to get the Government's program for it, but if it is interested in getting its program it might tell us. The ACTING DEPUTY PRESIDENT(Senator Townley) —Is it the wish of the Senate that the Bills be dealt with cognately? There being no objection, it is so ordered. Senator CHANEY —In that case, in the course of this speech I shall address the Opposition's attitude to the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986, the Bounty (Ship Repair) Bill 1986, the Navigation Amendment Bill 1986, the Subsidy (Cultivation Machines and Equipment) Bill 1986 and the Fertilisers Subsidy Bill 1986. These Bills are significant. The Opposition opposes a couple of the items of legislation. Before moving to outline the Opposition's attitude to each of the Bills, I make the point that the measures are brought forward and the debate takes place at a time when there is really unprecedented interest in the future of Australian manufacturing industry. That interest arises from the fact that the Government's economic policy does not seem to be able to cope with the difficulties which Australia is facing in the international economic community at the moment. It would appear that our balance of payments is deteriorating even more than the Government anticipated at the time of the Budget. In the first four months of this year we have a deficit $6m short of $6,000m. All the serious economic commentators predict no relief for Australia in terms of our commodity trade and our sale of primary produce. It is always possible that the predictions are wrong and undoubtedly we will see fluctuations in commodity prices and in the prices of our primary products, but I think it would be a very foolish government and a very foolish country which proceeded to look at its economic future and to govern this country today other than on the basis that we face very significant difficulty in our ongoing balance of payments. In that environment it is not surprising that there is great interest in what can be done about Australian manufacturing industry. It is important to note that, on the Government's own assessments, we are not operating in a very happy environment. There are some areas of signal success. For example, the steel plan has given a very significant lift in the efficiency of that industry and a very great lift in its profitability. One would hope its future is assured. I have just had representatives of the plastics industry talking to me about the growth in that industry which is taking place at present and which is predicted to continue. Whilst one can look at some other areas of success, it is important to remember that this debate is taking place in the general environment in which the Government's own predictions are for a decline in private investment. The Government's own statements on what is happening in manufacturing industry are not very different from those that are being made by outside observers. I referred in Question Time this afternoon to the comments of Dr Peter Brain, who was speaking at an Economic Society of Australia seminar on exports in Melbourne yesterday. He was reported as expressing pessimism about the future of the Australian economy until a consensus emerged about how to deal with the problem. Dr Brain talked about an approach which certainly does not appear to lock in tightly with what this Government is doing at the moment. I cited to Senator Button this afternoon Dr Brain's remarks about the loss of the benefits of the devaluation to manufacturers because of the higher import costs which manufacturing industry is sustaining. I refer to the Bureau of Industry Economics publication on manufactured exports and the 1985 devaluation. It was pointed out that in general the cost increases for firms in the manufacturing sector have been of the same order as the export price increases since 1984. I do not want to speak at great length on the general situation but I think it is important to note that these very specific measures we are dealing with in the Senate this afternoon are part of a much wider pattern which requires that the national mind be focused on what is our future in manufacturing industry and how we can better improve that future. I would suggest that the Government has failed to achieve that very necessary situation. The second point is that there has been a very healthy movement in the debate away from a concentration on the sort of matters that we are addressing this afternoon-namely, bounties, tariffs and industry assistance-in favour of an emphasis on doing something about the cost burdens which make industry assistance necessary in this country. It was healthy that the chemical industry in its submission to the Industries Assistance Commission report took the trouble to identify for the Government $400m worth of costs within the control or influence of government which make that industry uncompetitive and require it to seek tariff assistance. The industry pointed out that it obtained something like $200m worth of benefit under the old tariff regime which has now been supplanted and that partially compensated it for costs, including taxation costs, to the tune of $400m. It went on to specify things such as transport costs, work practices, general labour market practices, the lack of uniform safety regulations, prohibitions on the use of foreign shipping, the non-commercial pricing of electricity, and so on. On behalf of the Opposition I say that whatever time we spend debating these issues of industry assistance, it ought to be remembered that we are arguing on the periphery of the problems that face manufacturing industry in Australia. What we are dealing with in this narrow aspect of the Government's industry policy is of absolutely minimal importance when one compares it to the interest rate regime with which this Government has saddled this country. How anyone can be expected to invest in manufacturing and do other than maintain production with existing plants when interest rates are around 20 per cent beggars description. The general reluctance to invest in this country is easily understood when one sees the general economic framework which is being provided by the Government. It does not matter whether one looks at the tax regime-both the burden of the tax and the way the tax is being implemented-the labour market, the grossly inefficient work practices which flourish in this country or the grossly inefficient transport sector. Perhaps I should mention interest rates again. One sees a pattern of factors which surround investment decisions which makes being a member of the Public Service look like God's gift to a human being, because at least a public servant can draw his salary from the taxpayer and know that his superannuation can be collected. He can put his savings, meagre as they might be, into a deposit account and earn interest at the rate of 15 per cent. Who in the world will invest in manufacturing industry when such nice options are available to them? The noted trade unionist, Mr Fitzgibbon, said the other day that he thought that investment in Australian companies was pretty hard to justify when one could get the sort of returns that one can by depositing money in an account, rather than running the risk of making something. If one looks at the report of the Australian Manufacturing Council, which was released a week or so ago, and which sets out to identify the key issues which need to be addressed to facilitate Australian manufacturing industry becoming more outward oriented and, consequently, more export market driven, it is notable that industry assistance of this sort does not feature as a very prominent part of the scene which needs to be addressed. There is a good deal of generalisation in that report with which it would be hard to disagree. I suppose that I would share my major disagreement with that of Mr Carmichael, who complained, although he is deputy chairman, about the lack of urgency which came through in the report. I totally agree with that. I think that both the Government and the Manufacturing Council tend to behave as though we have 10 years in which to solve our problems. I do not think that that is true. What one finds in the report is a reaffirmation of what is a sort of motherhood phrase on these matters. It states: It is . . . imperative for the national economy that manufacturing industry becomes more outwards oriented, by efficiently replacing imports and expanding exports. It refers to the need for attitudinal and structural changes within manufacturing enterprises and sectors. It states: . . . strategies and policies to foster changes in attitudes, market orientation and capabilities are needed, but the nature of these issues, suggests that the effects of such strategies and policies will mostly be medium to longer term. That is a very gloomy statement, given the crisis we face in regard to our balance of payments today. Most importantly, I think, the report points out: . . . a strong increase in manufacturing investment and productivity will be essential. However investment will only occur within a favourable economic environment, which includes expectations that there will be sustained market growth and continued improvements in cost structures, industry profitability and interest rates. I think it is the gloomy truth that we are debating these five Bills in a situation in which nobody can say that there is a favourable economic environment. Nobody can say that there are expectations that there will be sustained market growth, unless people manage to export. Nobody can say that there are continued improvements in cost structures in this country. Nobody can say that interest rates are other than a gross disincentive to investment. I refer to that report, and to the elements which it sets out as being relevant to provide a growth environment. I point out that in those element one does not actually find reference to the sort of industry assistance which is part of this package. Indeed, I wanted to quote from that report, because it basically explains why we want to chuck out some of these Bills. Some of them, I think, are quite contrary to the interests of the future of industry in this country. I single out for generalised comment the Bounty (Ship Repair) Bill. The country is facing disaster. It is not competitive and it has to do all of the things which have been identified by the Australian Manufacturing Council. This Government is proffering millions of dollars of taxpayers' money to try to get trade unions to stop behaving like naughty boys and engaging in extraordinary restrictive practices, including the hijacking of ships. If it is the view of the present Government that we can solve Australia's problems by purchasing occasional relief from what is virtually illegal conduct, all I can say is that the country is doomed. We have no prospect of buying our way out of trouble on that basis. What this country needs is some leadership and strength-the sort of strength that was displayed by a Labor government as I understand it, in dealing with the New South Wales State dockyard. It said: `We won't let contracts where ships are hijacked'. It faced up to the fact that there was no future in that sort of behaviour. But this Government has one of its endless tripartite-or, in this case, four-way-discussions and offers millions of dollars of taxpayers' money to bribe people out of behaving in a most disgraceful way. I say simply that the Opposition does not believe that there is any future for Australia if we maintain that approach to industry policy. Indeed, there is no future for Australia if we allow that sort of thing to continue. What is required is the clearest possible understanding on the part of both management and the work force that if we are to solve our problems it requires some honesty of purpose, hard work, dedication and application by both management and labour. I now turn to the Bills, but I make no apology for talking in a more general way before coming to the details, because it is the framework which is so much more important than these attempts by government to make up for some of the deficiencies of our cost structure in this country. I concede that the implications of the Bills are wide-ranging and quite significant. Perhaps the most important Bill is the Bounty and Subsidy Legislation Amendment Bill (No. 2) which implements the Budget decision to cut almost all bounty rates by 20 per cent. That decision epitomises the Hawke Government's cavalier attitude to manufacturing industry and its total disregard for the need for a stable investment environment. The Minister for Industry, Technology and Commerce, Senator Button, unfortunately, cannot be with us during this debate. He explained that he had other commitments and that he will reply to the debate in due course. It is a disgraceful decision, which Senator Button has made no attempt to defend on industry grounds. It is a decision which cannot be opposed by the Opposition in a voting sense because we are committed to allowing the passage of the Government's Budget legislation. We have avoided making decisions on legislation which will reduce the revenue or increase the expenditure of government, because the situation in the country is so perilous that it would be wrong for us, from the Opposition benches, to seek to remake the Budget. It would place the blame for our perilous situation in the wrong quarter. We cannot vote against this decision, but I would like to make absolutely clear our condemnation of it. It is a decision which flies in the face of all of the principles which have been so ably argued by Minister Button in terms of what is required for industry to have a future in this country. One of the principles which he has endorsed is predictability. He endorsed the previous Government's textile, clothing and footwear regime in the interests of having stability for investment and predictability. This Government, because of its mismanagement, because of its excessive expenditure in other areas, has made a totally unprincipled decision to make an across the board 20 per cent cut in bounties which, as the Minister has made clear, is not possible to justify on industry policy grounds. Senator Siddons —Pure ad hockery. Senator CHANEY —Pure ad hockery, as Senator Siddons points out. Another area which is of great concern to us is the proposed amendment in regard to fertiliser subsidies so that the subsidy will apply only to domestically produced fertilisers. This is a much more difficult matter. In the Oppositions' view there are valid arguments on both sides. On balance, the Opposition believes that, as the objective of the consumption subsidy is to assist farmers and to provide them with a subsidy which will lower their costs-it is not a subsidy which is provided to assist manufacturers; it is a consumption subsidy for farmers-the pre-Budget situation should prevail. I will outline the reasons for that in more detail later. But suffice to say that the Opposition will also oppose that Bill. I turn to the Subsidy (Cultivation Machines and Equipment) Bill which implements a promise made in the Government's rural and economic policy statement earlier this year. The Opposition generally favours bounty instead of tariff assistance, chiefly because the prices of the assisted goods are not affected. Of course, the big drawback of bounties is that they swallow up revenue. This is the overriding constraint on their use. They do have the advantage of transparency, but it could also be said that that is a significant disadvantage at a time of budgetary restraint. The Opposition will raise a couple of concerns held by major local producers about the proposed bounty scheme and, indeed, their concern that the bounty should be extended to goods produced for export, but at this stage it does not propose any substantial amendments, depending finally on the explanations given by the Minister during the Committee stage of the Bill. However, we will be proposing amendments to the Bounty (Ship Repair) Bill 1986 and the Bounty (Cultivation Machines and Equipment) Bill 1986 to remove the so-called orderly development clauses from that legislation. I turn now to the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986. This Bill amends the shipbuilding bounty in line with the Government's decision to impose a ceiling on all bounty claims of $144m over three years. It also implements the across the board bounty cuts of 20 per cent, which I mentioned a few minutes ago. The Opposition has no objection to the imposition of a cash limit on the shipbuilding bounty, nor to the proposed additional but partial scaling down of the rate to 15 per cent in 1988. The bounty is still reasonably generous and the Opposition acknowledges the need for budgetary restraint and the reasonably healthy state of the industry. However, the Opposition does propose to amend proposed sub-section (11) in clause 11 and proposed sub-section (11) in clause 12. The effect of these amendments is to delete the so-called orderly development provisions which give the Minister discretion to refuse registration of premises or persons if he believes such registration would not be in the interests of the industry's development. When those clauses were introduced in 1985 the Opposition went no further than to express reservations about the need for `some form of mechanism to keep people out and to make judgments about who should be entitled to a bounty and who should not'. I addressed that matter in the Senate on 31 May last year. We did not oppose the provision at that time. We have given it further consideration and the Opposition is determined that it must actively oppose those provisions, which appear to be becoming standard in all bounty and subsidy Acts, as a way of expressing our general opposition to the increasingly bureaucratic direction of Australian industry. In addition, the Minister has stated that the shipbuilding industry has benefited from devaluation. If this is the case, the constraints of an orderly development clause may be stifling competitive pressures. In other words, we do not see it as being the place of the government to be putting the sort of limit which the Minister is establishing in these bounty Bills on entry into an industry. We think the proper course is for the Government to limit entry by ensuring that the competitive pressures are so great that only those people who will be developing an efficient industry will wish to enter. The second major provision in this Bill is the reduction by 20 per cent of most bounty rates, which I have already discussed. We will not vote against the amendments, for the reasons I have outlined, but we will continue to criticise the decision in the strongest possible terms. There has been a fair degree of common ground between the industry policy of the Minister for Industry, Technology and Commerce (Senator Button) and the Opposition. Senator Button has often stated the need for predictability and stability in government policy and these principles are endorsed by us. Budget decision effectively undermines the Government's own industry policy. The decision is non-neutral; that is, the only people who will be affected by this cut are those who get bounty assistance. People who receive tariff assistance, of course, are not affected. It is a quite discriminatory change which affects only the small number of industries that receive bounty assistance. It flouts the intention of section 23 of the Industries Assistance Commission Act 1973 which says that the IAC must review an industry before the Minister changes industries assistance arrangements, and it flies in the face of Senator Button's stated aim of continuity and predictability in industry policy. The sleeping Minister for Finance, Senator Walsh, is probably the architect of this rather than Senator Button. He has obviously worn himself out in his labours to convince Senator Button that he should behave in this insane way and is choosing this debate as a time to rest after his herculean labours. The erratic and inconsistent approach which this decision represents is not the exception under the Hawke Government. Its recent decisions on business taxation, which again fly in the face of the policies being pursued by the Department of Industry, Technology and Commerce and which have been somewhat coyly objected to by the Minister for Industry, Technology and Commerce, are yet another example. I return to the Bounty (Ship Repair) Bill and the Navigation Amendment Bill. Earlier this year the Government announced its long awaited $90m heavy engineering assistance package. That scheme has been under way officially for some months but as yet hardly anyone has met the prerequisites in order to receive assistance. One of the conditions for receiving assistance is the removal of restrictive work and management practices but, as is obvious from the questions which were asked during the Estimates Committee in the Senate a month or so ago, progress in these areas has become bogged down while a committee tries to decide what a restrictive work practice actually is. I suspect that the heavy engineering package is a classic example of the fallacy of trying to provide bureaucratic solutions to what are essentially problems of getting a more flexible system. The heavy engineering package will need to be watched with great care, not only by the Government but also by this Parliament, because I think there is a potential there to waste taxpayers' money and to be fairly ineffective. The proposed ship repair bounty is a more blatant attempt to buy peace on the waterfront. Peace on the waterfront would be wonderful, but should taxpayers have to reward badly behaved unions for doing what they should be doing in the first place? In addition, given the notable lack of success of the heavy engineering package so far, it must be questioned how effective any of these packages can be in improving employer-employee relations. Maritime unions are one of the strikingly famous aspects of our country. Certainly internationally they have a reputation; unfortunately, it is a very bad reputation. The Australian waterfront has an infamous history of industrial strife. One of the less charming ploys is to extort payment for repairs and cleaning. Ships are virtually held to ransom and shippers must pay for often unnecessary repairs before being released. The Baltic and International Maritime Conference described the activities as `bordering on the criminal'. I think the word `bordering' might be a very kind word indeed. This year the Federated Ship Painters and Dockers Union has stepped up its extortion campaign and the dispute over the Caltex oil tanker in July is perhaps the most outstanding example. I could go on at some length to refer to the disgraceful behaviour to which this legislation is a quite wrong response, but perhaps we can leave some of that debate to the Committee stage when the Minister is here. Suffice to say that it seems a very extraordinary thing for the Government to be rewarding that sort of behaviour with this sort of assistance from the taxpayers' purse. In a report on the maritime industries in the early 1980s Dr Peter Stubbs concluded: Until unions in Australia become fully aware of the implications of abusing their power one must doubt that there will be real harmony and prosperity in the maritime industries. It must be questioned how the Government's bounty scheme will work towards this very desirable and, indeed, essential objective. It can be argued that this scheme provides an incentive for unions to misbehave in order to extract a larger bounty allocation. Importantly, the scheme does nothing to break the monopoly union power in the industry and it is this which must be addressed if our ports and shipping services are to compete internationally. The scheme could be described as being morally wrong. For this and the other reasons I have outlined it will be opposed by the Opposition. We do not, on the other hand, propose to vote against the complementary amendment to the Navigation Act. Although the Minister's powers of detention of ships are to be extended, we believe that the criteria for this, relating to health and safety standards, are more reasonable. However, while the Minister must take note of criteria agreed to in tripartite consultation, these are subject to parliamentary scrutiny and disallowance. The Opposition will carefully monitor the effect of this change to the law because quite obviously this could be abused, just as the unions have abused their power to detain ships. It is always possible that changes which are put forward, supposedly to protect the health and safety of crew, will be used as a front for other things. It will be quite important that ship owners and this Parliament carefully scrutinise the orders which are brought forward and which are subject to parliamentary disallowance. The Opposition would want to put the Government on notice that we would expect the conditions to properly relate to health and safety standards in a quite rigorous way and that we would expect the Government to maintain very high standards of behaviour. That, of course, means that the bureaucracy must maintain high standards of behaviour in ensuring that this provision is not abused. I turn now to the fertilisers amendment. The Treasurer (Mr Keating) announced in his Budget speech that the Government had decided to limit payment of consumer subsidies on fertilisers to fertilisers which are produced locally. Since 1982 subsidies have been paid on imports of phosphatic fertilisers so that there is neutral treatment of domestically produced fertilisers and imports. In the Budget Papers the reason given for the change is the increase in assistance to local producers without affecting the level of overall assistance to farmers. The second reading speech of the Minister for Community Services (Senator Grimes) adds another reason, that of reducing imports and therefore easing pressures on the trade balance. On the figures I have been able to get I think the estimates are $14m and $15m alteration to the trade balance respectively. Given the $6,000m imbalance which was incurred in the first four months of this financial year, not a very dramatic contribution, if ultimately any contribution, will be made by that change. The Opposition believes that the restriction of the subsidy to purchasers of domestic fertilisers will adversely affect those farmers who must continue to purchase imports of high analysis phosphatic fertilisers which, at the moment, are not produced in adequate quantities in Australia. This is a time of severe financial hardship for many rural producers, especially grain producers. The Opposition does not believe that these farmers should arbitrarily be made worse off. Moreover, while the Government maintains that farmers overall will continue to reap the full benefit of the $55m annual subsidy, the Opposition is concerned that an administrative mechanism will not be as effective as import competition in restraining domestic prices. Competitive pressure on the local industry must be reduced by the change which the Government has introduced. It must produce a lessening of the downward pressure on prices of fertilisers in this country. At the same time, it should be pointed out that the local fertiliser manufacturing industry is not inefficient. The Industries Assistance Commission estimates that it receives effective assistance within the range of minus 2 per cent and zero. It is impeded by high cost shipping contracts and high cost imports of raw materials. This industry has the potential to develop efficiently and the Opposition urges measures which will reduce these impediments, high shipping costs especially. However, it is the Opposition's view that, if the objective of the consumption subsidy is to assist farmers-this was the original intention and the Government has not said anything to the contrary-the status quo should prevail. It is also worth noting that in 1985 the Industries Assistance Commission recommended against restriction of the subsidy to domestic fertilisers. (Extension of time granted) I opened my comments on the fertilisers decision by saying that there are valid arguments on both sides. In our view, in the current circumstances where Australian farmers are under enormous pressure, many suffering tremendous hardship-not least because of the very high interest rate policy which is being pursued by this Government in its desperate determination to hold the dollar at its present level-we must give the farming community the benefit of the doubt. I now turn to the cultivation machinery bounty. This is a matter on which various concerns have been raised with the Opposition. The provision is part of the Government's rural assistance package. As part of that package the Government announced that it would help reduce machinery costs for farmers by replacing the tariff on cultivation machinery with a bounty. The Industries Assistance Commission was asked to determine the appropriate rate of bounty so that the level of assistance given to the industry was maintained. The Industries Assistance Commission recommended a bounty rate of 12.5 per cent, but due to the very unfortunate timing from the industry's point of view, to the fact that this recommendation has come forward at the same time as the Government has made an across-the-board, ad hoc 20 per cent cut in bounties, the industry has lost 20 per cent of the promised assistance and the Government is now proposing to legislate to provide a bounty of 10 per cent. In a sense this small example of what the Government is doing with bounties serves to demonstrate very well just how utterly unprincipled and unfair the Budget decision is. There was an announcement earlier this year that the Government was going to assist farmers by providing an offset to the tariff, the offset to the tariff being calculated as a bounty. Then, without any reference to the needs of farmers, manufacturers or anybody else, the bounty is reduced from 12.5 to 10 per cent. There is no logic, there is no reason, there is no sense, there is no justice in that. Quite apart from the problems I have just addressed, some manufacturers have raised concern about the Industries Assistance Commission's calculation of the tariff equivalent rate of bounty. They argue that the Industries Assistance Commission has miscalculated the figures and that the bounty should be increased to 11 per cent. The difference in the calculation of the bounty rate revolves around estimation of Customs clearance and wharfage charges. Briefly, the higher the estimate of those charges the lower the bounty, or vice versa. Local producers reckon that the IAC estimates, which are allegedly based on experience, are far too high and they have proffered documentation of transactions to prove their point. These concerns have been raised by the Opposition with the Minister. He has responded that the industry's evidence has been submitted to the IAC for examination. However, the industry now claims that the Industries Assistance Commission has not been asked to re-examine the estimates of wharfage and clearance costs; in other words, it has checked the actual cost of the product but it has not checked the wharfage and clearance costs which are in fact the points at issue. I am glad to see some of the Minister's advisers making some notes because I would expect the Minister to be in a position to satisfy us on this point when we deal with the Committee stage of this Bill, which may not be until next week. The Opposition is concerned that, in a situation in which the Government has already deprived the industry of one-fifth of the bounty which was promised, there might also be a shaving of the bounty which has been caused by arithmetic errors in the calculations by the Industries Assistance Commission. I gather that the Minister has told the industry-therefore I do not think it matters if I say that it is what the Minister told me-that he would not expect to personally have to check the arithmetic calculations, and I agree with that. One would expect that, with the handsome group of bureaucrats he has advising him, he would be able to call on plenty of assistance. However, it appears that to this point those matters have not yet been fully dealt with. I put the Minister on notice that, at the Committee stage of this Bill, I expect him to be able to give us a very convincing and complete explanation of the arithmetic calculations. There is no point in trying to play a game of bluff on this matter. I have already indicated that the Opposition will not support amendments which increase the total cost to revenue. We simply wish, by exposing the arguments, to see the Government honour its promises and meet its obligations if, as the industry claims, there have been arithmetic errors which would warrant some adjustment to the bounty. It has been raised with me by manufacturers-I think it is accepted by the Government as it is certainly accepted by the Opposition-that manufacturers in this area are under very significant pressure at the moment. I think most of them are in a loss situation. So these decisions are of more than academic interest to them. It has been suggested by one manufacturer that the Government should consider extending the bounty to exports. Again, the Minister has done that with respect to some bounty areas. There is some economic logic, in a situation in which we are saying that we wish to encourage industries to be outward looking, export oriented and internationally competitive, to encourage them to pursue overseas markets. I ask the Minister to consider that matter and to give us some response, either in his reply to the second reading debate or at the Committee stage of this Bill. Other matters have been raised with respect to this legislation. The larger manufacturers have requested a minimum eligibility threshold-for instance, 25 per cent local value added-as a minimum requirement for the bounty to apply. On this point the Opposition has considered the industry's representation but it agrees with the contrary view that to restrict bounty payments to certain producers would alter the pattern of assistance previously afforded by the tariff, which was not the intention of this change. Also, I think it would be inconsistent with the general approach we have adopted about trying to encourage flexibility in the economy rather than further restrictions. There are, however, three additional concerns. Again, I raise them because I think they need the Minister's attention. Apparently there have been problems in devising a reasonably simple claim form for the bounty payment. The original form is being redrafted, but manufacturers have been told that even when it becomes available there will be delays in processing claims because of staff shortages. Can the Minister give an assurance that claims for payment will not be delayed? When I was assisting a Minister for Education I can remember delays occurring in the payment of student allowances. It always seemed to me that there was a quite simple way to prevent delays in payment-that is, to make the employment of public servants who are responsible for making the payments conditional on the requirement that they will not be paid until the payments for which they are responsible have been made. I always had a feeling that this more lateral approach would solve the problem immediately and I would commend it to the Government for consideration. I am sure that there would be enormous consumer satisfaction if this approach were adopted. The public servants themselves would breathe easy as they made the payments to the citizens who were entitled to them and then they would be able to go off and get their well earned cheques. The other matters I want to raise concern the industry's concern about long term assistance and its request for an inquiry by the Industries Assistance Commission. The cultivation machinery industry is experiencing severe problems, not least because of the generally depressed state of the rural economy. I ask the Minister to give an indication of whether and when such a reference will be accepted. The industry has also requested an extension of the bounty to production of exports. As I previously mentioned, this would represent a quite substantial increase in the level of assistance to the industry, and, as I did a few minutes ago, I ask the Minister to respond to that request. Finally, as I have already mentioned, the Opposition will propose an amendment to delete clause 23 (8), which gives the Minister discretion to refuse the registration of premises if he considers that such registration will not contribute to the orderly development of the industry. I have already outlined the reasons for this. I always think that giving consideration to these large and complex pieces of legislation is a vivid reminder of the extent to which the Australian national energy has been directed into thoroughly unproductive paths. Many people of talent and enthusiasm spend their time wading through these extraordinarily complex areas of law and administration, be they public servants, manufacturers or those who are seeking to benefit from the activities of manufacturers. I would simply go back to the point at which I started and say that the more this country can concentrate on reducing costs and getting genuine flexibility into our economy, the more likely it is that we will solve some of the fundamental industry problems that I believe the present Minister is trying to tackle in a very conscientious way. However, I believe there is a danger that in his approach he will wind up leaving us with more complex bureaucratic mechanisms which, in time, will atrophy and become themselves a problem. I look forward to getting the support of the Australian Democrats in the defeat of those couple of iniquitous Bills that we have chosen to oppose. I also look forward to getting their support on our amendments, which just shows that I am an incurable optimist. Senator SIDDONS(Victoria)(5.14) —As Senator Chaney pointed out, we are debating the Bounty and Subsidy Legislation Amendment Bill (No. 2) and four cognate Bills. The only thing that these five unrelated Bills have in common is that they relate to money or to handouts by government to industry. So it is a very tall order for me, as one who is putting the Australian Democrats' position in this debate, to cover these five Bills in half an hour. I will do the best I can but I hope the Senate will be tolerant if I need to go just over my allotted time. Again, as Senator Chaney pointed out, these Bills touch only the edges of industry problems. It is a great pity, since we are debating Bills which relate to one very important part of industry, that we could not at the same time debate some of the more fundamental issues relating to the problems of getting our industries efficient and export orientated. There is a crisis in the balance of payments and unless this crisis is addressed promptly this country is set to go down the gurgler. I would like to outline the Democrats' attitude to all the Bills, briefly touch on our amendments to some of them, and then deal in some detail with the Bills we consider to be important. First, we oppose the 20 per cent reduction in bounties and subsidies that is proposed in the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986. We will be moving amendments which seek to restore the bounties to their original levels. As I think Senator Chaney pointed out, to reduce bounties at this stage to meet a Government deficit is nothing other than hypocritical on the part of the Government. It is ad hockery at its worst. Industry cannot possibly operate in an atmosphere of uncertainty, which is what the 20 per cent reduction in bounty places over the whole industry concerned and, I might add, over every industry in this country. When the Government gives a bounty one day and cuts it off the next, who knows whether there can be any reliance on the long term direction this Government is applying to industry problems? Secondly, we believe that government hand- outs to industry should be conditional. As honourable senators know, I have long advocated the need for employee participation in industry. In fact, the Industrial Democracy Bill which has been introduced into the Senate seeks, amongst other things, to encourage employee share ownership, which is an important aspect of employee participation. Debate on that Bill has been delayed because of the Government's budgetary problems, the shortage of money, and so on. Here we have a golden opportunity to make a handout, which the Government is intending to make anyway, conditional on a company moving to have 8 per cent of its capital sold to its employees. If this were done the Government's handout to industry would benefit not just a small group of shareholders of a company but a much wider sector of the Australian population. I will talk at greater length about this essential initiative when I comment on the Bounty and Subsidy Legislation Amendment Bill (No. 2). Thirdly, we believe that the Government also has an opportunity to make payment of the subsidy conditional a 25 per cent local content requirement. It is a fact that many of the agricultural implement manufacturers and their work force spend a lot of their time and effort in assembling equipment from overseas. If there were a requirement that 25 per cent local content should apply, an effort would be made to source locally many of the components of essentially overseas designed and manufactured agricultural machinery. Fourthly, we are very concerned, as is the Opposition, about the dictatorial power the Minister has over where subsidies or bounties should be directed within an industry. The Minister's decisions could represent life or death as far as many industries are concerned. We believe that it is absolutely beyond dispute that the Minister's rulings should be subject to an appropriate appeal procedure to the Administrative Appeals Tribunal. We have an amendment that will put that principle into effect in respect of at least two of the Bills. Fifthly, in the Subsidy (Cultivation Machines and Equipment) Bill 1986 the Government proposes to replace the tariff with a bounty. We believe that it has made an arithmetical mistake, and this was alluded to by Senator Chaney. Accordingly, we will be moving that the bounty be increased from 10 to 11 per cent. I support the Fertilisers Subsidy Bill 1986 and will shortly be giving my reasons for that support in some detail. However, I first have to say that my support for this Fertilisers Subsidy Bill is not representative of all of the Australian Democrats. Unfortunately, some of my colleagues do not agree with my position, and Senator Janet Powell will be putting the position of those of my colleagues who are proposing to vote against this Bill. I will now turn to the Fertilisers Subsidy Bill 1986 and outline in some considerable detail my reasons for supporting it. This Bill terminates a subsidy on imports. This is a typical peculiarly Australian initiative. It is as typically Australian as are the boomerang and the kangaroo. To the best of my knowledge no other country has moved to have a subsidy on imports. It is an encouragement to import against the local manufacturing industry. Senator Short —It is not a subsidy on imports. Senator SIDDONS —I do not know what else we can call it. It is a straight subsidy on imports and it is a straight incentive to importers to import a product against a locally manufactured product, and it can be interpreted in no other way by any country that wants to export fertilisers to this country. Australia, as we know, has a critical balance of payments problem. We have a critical shortage of hard earned foreign exchange. We are spending money that we have not got. We are borrowing money overseas when, at the same time, we cannot meet the interest on money that we have already borrowed. What are we doing about this? We are persisting with a subsidy to import fertilisers that can be readily made in Australia. The whole thing is beyond my comprehension and it makes no sense whatsoever, as far as I can see. Surely the goal, the objective, before Australia is to get its industries working efficiently. They are not going to reach their maximum efficiency if they are being attacked by subsidised imports. They cannot possibly become efficient if that is to continue. The country is on the brink of bankruptcy and the Government is going to persist with a subsidy on an import which is unique in the world. We are bankrupt but we are going to persist with a subsidy on imports. It is beyond my comprehension why anybody would support such a measure. Certainly anybody who looks at the critical position Australia is in would not think twice about supporting such a measure. Thirty per cent of the revenue gained from our exports currently goes to paying the interest bill on money that has already been borrowed. In the Australian Democrats' alternative Budget we went to great lengths to point out how this problem of our balance of payments has to be attacked directly, and we pointed out that there should be a tax to discourage imports. A 6.5 per cent tax on luxury imports would have slowed down our import bill dramatically and at the same time raised government revenue. The critical importance of doing something about our balance of payments is the first point that I make on this Bill. This apparently has escaped the notice of the National Farmers Federation, which is fighting a rear-guard action to retain the $13m subsidy on this imported fertiliser. It is necessary for me to answer some of the points that the National Farmers Federation and, I am afraid, some of my colleagues will be raising on this issue. Before the Government drafted this piece of legislation it negotiated with the local fertiliser industry to re-direct the $13m subsidy on the import of fertiliser directly to the farmers through reduced prices for the locally produced fertilisers. That seems to me to be a much more sensible way to go about it. Instead of encouraging and helping overseas manufacturers with a subsidy of $13m, let us direct that $13m to help the farmers. The original rationale of the Government was that it wanted to help the farmers, and it can do that by directing the $13m directly to them. In fact the Government has done that, because it negotiated with the industry to reduce the price of single superphosphate by $1.30 a tonne, TSP and DAP fertiliser by $10 a tonne and MAP fertiliser by $11 a tonne. It seems to me that the farmers are not in a position to complain about this legislation because they are directly receiving the benefit of that subsidy. The first and fundamental point I have to make is that Australia can no longer afford to import products that it can make locally. We have to start earning more as a nation and spending less. But it is always the case that when people are making large amounts of money out of importing products, they always go around trying to denigrate the local manufacturer. It is always good tactics to do this. Accusations are made that the local industry is inefficient and monopolistic. I think it is necessary for me to answer some of the propaganda about the industry that has been spread around by the National Farmers Federation and others and to bring a few fundamental points to the attention of the Senate. Firstly, the industry is not monopolistic. There is one manufacturer in each State and 60 per cent of the industry is owned by the farmers themselves. The industry is essentially a co-operative. In Western Australia 100 per cent of the industry is owned by the farmers. Under no circumstances can it be regarded as monopolistic. It has been rationalised to a very large degree but it is certainly not monopolistic and there is plenty of competition. Even without the subsidy on imports companies would continue to import and if the industry wanted to be competitive it would still have to compete with the imports. From 1970 to, I think, 1981 the Australian fertiliser manufacturing industry saved the Australian farmer $2.5 billion, on a straight comparison of the cost of locally produced fertiliser and the cost of importing a similar amount. The industry is efficient; there is no doubt about that. In a task force report in March 1981 the National Farmers Federation stated just that. So it cannot now turn around and say that the fertiliser industry in this country is inefficient. As Senator Chaney pointed out, the industry has virtually no protection at all. It must be one of the most unprotected industries in this country but it has not been bleating for protection. It has certain problems, such as the carriage of its products around Australia by the Australian national shipping line, which of course helps the shipping line but which puts an additional cost burden on the products. Another criticism of the industry is that it does not have the capacity to supply high analysis phosphate fertiliser. An Industries Assistance Commission report-as we all know the IAC is not prone to handing out bouquets to industry-stated that the industry has: . . . sufficient capacity to manufacture all the high analysis phosphate fertiliser used in Australia. It has also been claimed that Australian farmers pay more for fertiliser than their counterparts in the United States of America. As I have said, the local industry has already been saved $2.5 billion, and that was established in a report relating to the situation between 1970 and 1984. But what is the current situation compared with that in the United States? A survey done only last month showed that prices for high analysis phosphate fertilisers in key areas of the United States, such as Missouri and Kansas, are comparable to current prices in Australia. Some are a little up and some are a little down but, on average, prices are about the same. So there is no cost disadvantage as far as fertiliser is concerned. Prices are comparable to the current prices in the United States. It is a fact that there is a world shortage of phosphate rock. Eighty per cent of the world's reserves of phosphate rock are located in politically and commercially unreliable countries. Australia does have very large reserves of phosphate rock, so far undeveloped. We have large reserves at Mount Weld in Western Australia, at Duchess in Queensland and at Lady Annie in Queensland. The local industry has stated that it is prepared to develop these critical reserves of phosphate rock. We have just about run out of phosphate rock in our protectorate at Christmas Island. Our sources are somewhat tenuous at the moment. The industry has undertaken to develop our very important reserves of phosphate rock, but it cannot be expected to do so if it is put under attack by the Government by subsidies on imports. For that reason alone I think it is vitally important to give the local industry a go and let it get on with the job of developing our own resources. As I said, there is only one possible explanation that any foreign country interested in exporting fertilisers to Australia could offer if we continue to subsidise those exports. It would say that the Australian Government wants to wipe the local industry off the face of the country. It could not draw any other conclusion. This matter has to be cleared up. We have to get rid of this peculiarly Australian idiosyncrasy of saying that we want to have a local industry but we will still subsidise the importer. I turn in some detail to the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986. I believe this Bill reduces the subsidy on a range of industries by 20 per cent. By doing this the Government has shown itself to be opportunistic. Suddenly to cut a bounty by 20 per cent to meet budgetary requirements has very damaging long term repercussions right through the industry. Of course, it highlights the essential problem with bounties-they are open to manipulation by governments for short term political ends. This Government particularly has put the argument that where possible tariffs should be replaced by bounties. It has acted in this regard particularly with the agricultural industry. There is no doubt that there is a very strong rationale for a shift from tariffs to bounties. The Australian Democrats would support this as a general rule. The big rationale for bounties is that they keep prices at the levels of imports while tariffs, on the other hand, push prices up to the local level. However, the Government, by its actions here, has demonstrated that bounties are open to political manipulation. It has, by its very actions, created a whole atmosphere of uncertainty not only across the agricultural industry but also across all other industries. What industry needs above all else is stability. It needs stability for its markets and stability and predictability for its prices. It cannot make investment decisions unless that stability is there. The Government, by this ad hoc approach, has cast doubt on the whole rationale and credibility of its long term industry plan. I cannot help seeing the similarity between this Government's initiative and the sudden initiative of the Whitlam Government in 1973, when overnight it reduced all tariffs by 25 per cent and at the same time revalued the Australian dollar. It took over 12 years for industry to recover from that ad hoc initiative. If this present Government is not careful its illogical and sudden attack on bounties will have the same disastrous effect on industry. Industries have made very important investment decisions. They have the daily problem of surviving in a highly competitive world. If the Government says suddenly to an industry `Your bounty will be cut by 20 per cent' it throws the whole cash flow of industry out the window. It is impossible for industries to plan under that sort of arrangement. The first sentence in the Press release on the Budget by the Minister for Industry, Technology and Commerce, Senator Button, states: This year's Federal Budget contains strong initiatives for the continued development and strengthening of Australian industry . . . I cannot see how cutting bounties to meet a short term political crisis is anything like giving industry a strong incentive. Senator Short —Or leadership. Senator SIDDONS —Yes. Let us look at the bounties. Overall, they cost the Government $209.6m in 1985-86. That is not a large amount in budgetary terms. The cut in bounties will save a paltry $43m this financial year. For that it is putting at risk its credibility. If the Government loses the trust and confidence of industry in its policies it will not regain it. Industry must be our number one priority, as has been said many times by me and others in this place. If we are not careful we will kill the goose that is laying too few golden eggs at the moment. The fundamental problem is that this Government is dominated by the radical free marketeers who say that we must have free trade. That is their god and everything else must be subservient to that. The fact of the matter is that free trade does not exist elsewhere in the world. Certainly it does not exist in Japan, where billions of dollars have been spent recently revamping its very inefficient coal industry. It does not exist in the United States or in the European Economic Community. Why does a country such as Australia have to fall down and worship at the free trade altar, presumably in an attempt to create an example for the rest of the world? It does not make sense. Mr Bruce Judge, Chairman of Ariadne, had this to say on protection recently: Free trade idealists are selling Australia and New Zealand down the river. The smart boys over there are quite happy to bow down and say, `You are marvellous. Somebody has to take a lead on free trade, and then they come in and rape us'. A sensible industry policy is not one which one changes every five minutes to conform with the whims of the currency speculators. Industry policy must be essentially a long term policy. Let us look at what has happened as far as the Government's budgetary processes are concerned. Let us look at the events over the last few months. First, we had the comment of the Treasurer (Mr Keating) about Australia becoming a banana republic. The balance of payments crisis and our rising foreign debt caused the foreign exchange markets to panic. The dollar fell to US57c and suddenly our airwaves were choked with money market people demanding Budget cuts, demanding lower deficits, demanding that those that had the least in our society should carry the burden of our reduced trade position. The monster that Mr Keating created when he deregulated our financial markets had taken control of its maker. Panic set in at a Cabinet level. `We must get the deficit down' was the catchcry. Instead of a deficit of $4.5 billion or $5 billion, the Government cut it back to $3.5 billion, ensuring that a recession would follow. We are beginning to see signs of that recession today. Financial markets now totally dominate economic policy. Banks and financial institutions happily lent $5.5 billion to participants in the Broken Hill Proprietary Co. Ltd takeover. The $5.5 billion was fed into a stock market that was already over-heated. The all ordinaries index rose dramatically. This speculative drive was funded by borrowings, mainly from overseas, and did not create one new job or industry. Our productive capacity fell as that money was fed into the stock market. In the last two days $3.5 billion has been taken off share prices alone. Almost all that money has been lost and will probably be lost forever. We do not have one additional factory, job or productive machine to show for the $5.5 billion that went into financial speculation over the BHP takeover alone. That is to say nothing of the Repco takeover or the Nicholas Kiwi Ltd takeover. I could go on indefinitely. Enormous amounts of money have been speculated in the stock market without creating one additional job. Senator Short —How do you know that? It depends on where the proceeds go. Senator SIDDONS —One has only to look at the rate of investment in industry to see that the money is not going into productive investment. It is money being invested to make money. That is the essential problem. We have to encourage investment directly into productive areas. It is being directed into the stock market to fund takeovers. Corporate cannibalism is what is happening. Takeovers do not add to the productive capacity of the country. I thought Senator Short would have understood that. It is very obvious. There is a great incentive for companies to expand by buying shares in other companies. They get a tax incentive to do so. There is a tax deduction on the interest on what is borrowed and the dividends from the shares in the company that is doing the raiding are tax-free. Senator Gietzelt —The taxpayer is subsidising the takeover. Senator SIDDONS —Indeed, the taxpayer is subsidising the takeover merchants. If, on the other hand, money is spent on a machine tool, the profits it generates are taxable at corporate tax rates. So, on the one hand, there is a tax-free incentive to expand by takeover but, on the other hand, if a firm expands by increasing its productive capacity it makes itself vulnerable to being attacked by other companies which are interested in expanding purely by takeovers. In the short time I have left I would like to elaborate a little on a couple of our amendments. We believe that it is essential to foster co-operation between workers and management in Australian industry and as a practical move in this direction we will move amendments ensuring that companies which receive bounty protection are required to develop share ownership schemes for their employees. Senator Crichton-Browne —CSBP is owned by all the farmers in Western Australia now. Senator SIDDONS —I am pleased to hear it, but it is not very common in Australian industry, I am afraid. The advantages of employee share ownership schemes are twofold. They give employees a stake in the company, thus helping to break down old antagonisms, and they give employees incentives to increase the profitability of the company. They give them a stake in what is going on and a slice of the action. The Australian Democrats believe that employee share ownership in Australian industry should be much more general. Here is a golden opportunity for the Government to put a requirement on bounties. It will not cost the Government an additional penny. (Extension of time granted) I would like to see the Industrial Democracy Bill on employee participation, which has been introduced in the Senate, debated and implemented. Passage of the Bill would give a broad incentive to all industry to move towards employee participation in a wide area, not only in regard to employee share ownership but also in regard to profit sharing, cellular organisational structures, as opposed to hierarchies, and the small group activity that has been so successful in Japan. I have been told unofficially that money is short and that the time is not opportune. I have been given all kinds of reasons why we cannot debate my private member's Bill at this stage. I hope that it will be possible to do so in the new year. In the meantime, I put it to the Government and particularly to the Opposition that it would be no hardship for any of the industries receiving a bounty to issue shares that could be purchased by their employees over a five-year period. It would substantially increase the efficiency of those industries. The requirement would not put any hardship on the industries concerned. I plead with the Opposition and the Government to give serious consideration to the amendments. I will leave it to my colleagues, particularly Senator David Vigor, to outline our reasons for suggesting that there is an arithmetical mistake in the bounty the Government proposes to replace the tariffs with in the agricultural implements industry. At the Committee stage I will talk at greater length on some of the reasons for our amendments. In the meantime, I hope that we can consider important aspects of these Bills, particularly of the Fertilisers Subsidy Bill and the aspects of the bounty Bills which are important to the agricultural manufacturing industry. I hope that we will use this opportunity to increase the efficiency and incidence of Australian manufacture in these industries. Senator SHORT(Victoria)(5.47) —The five Bills we are debating-the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986, the Bounty (Ships Repair) Bill 1986, the Navigation Amendment Bill 1986, the Subsidy (Cultivation Machines and Equipment) Bill 1986 and the Fertilisers Subsidy Bill 1986-are an important series of Bills. Despite the fact that we are debating them cognately, they are essentially separate Bills. I am surprised that this is a cognate debate. I do not believe that it should have been a cognate debate. It is yet another example of the bad organisation of Government Business in this place that, particularly as we crowd towards the end of each session-it always happens with this Government-we get concertinaed and squeezed dealing with an enormous amount of legislation. This is for no reason other than bad government management. As a result the debates and considerations of Bills in this chamber are not given the justice they deserve. Senator Gietzelt —Senator, I appreciate that you are relatively new to the Senate, but that was the process under your Government, as it is under this Government. It is the normal process towards the end of a session. Senator SHORT —It is something that certainly should be looked at. Regrettably, the Minister's Party is in government now. I cannot help the Government improve Government Business but it is something the Government certainly should be looking at. I reiterate Senator Chaney's condemnation of the 20 per cent across the board bounty cut that occurred in the Budget. It was a cut that applied to all industries. It was a totally arbitrary decision that had nothing at all to do with industry policy. It has caused considerable concern throughout some of the industries that have been affected by it. Although it has applied to all industries, it has had particular effect on some of the major textile companies at a time when they are awaiting, in a very uncertain manner, the outcome of the Government's consideration of the Industries Assistance Commission report of the textile, clothing and footwear industries. It has had an enormous effect on the book printing and publishing industry, particularly given the double hit that industry has had with the decision, the very day after the Budget's 20 per cent bounty cut-this was another decision based on an IAC report-to have a further cut as from 1 January 1987, thereby giving a 36 per cent cut in bounty to the book industry in a period of 4 1/2 months. More than half of that reduction was totally unexpected and unconsidered in the context of industry policy. The Government obviously has no idea of the effect that such arbitrary decisions can have on the cash flow of companies and, therefore, on the whole of their investment, production and planning processes. The Hawke Government claims-or at least its Minister for Industry, Technology and Commerce, Senator Button, does-that it accepts the need for stability and predictability in government policies so far as they relate to industry. The decisions this Government has made recently make a total mockery of those statements. It is no wonder that there is a loss of confidence. Without any fear of contradiction, I say to the Government that in the private sector there is an enormous loss of confidence in the Government because it has shown that it is quite unfit and incapable of adopting either industry or economic policies that have predictability and stability. I accept that the Budget bounty cut was not Senator Button's decision. He has made that perfectly clear. He has walked right away from it every time it has been raised, and rightly so. He has made it clear that it was a Budget decision and not an industry policy decision. Sadly, it seems to be the case nowadays that the Minister for Industry, Technology and Commerce, Senator Button, for whom I have a great deal of respect, always seems to lose when it comes to the important issues of his portfolio. He lost on the bounty legislation and therefore has lost a great deal of face in the industry. He lost on the fringe benefits tax. He knew what that legislation would do to the automotive and other industries. He lost in Cabinet in pressing his line on the need for greater flexibility in the wage fixing processes. He lost in Cabinet on the need he obviously foresaw for a much stricter approach to government spending, and he has lost on most of the other major issues he has been pursuing in the Cabinet. I regret that because most of the positions he has been putting in these areas are essentially correct. It accords very closely with the thinking on this side of the Senate. It is a matter for real regret that the Minister does not seem, despite the fact that he is the third most senior Minister in the Government, to be able to command sufficient support or attention in the Cabinet to have sensible economic policy decisions made. I will confine the remainder of my remarks today to the Fertilisers Subsidy Bill. I would like to comment on the other Bills but time prevents this at the second reading stage. I will reserve those comments for the Committee stage. In the Minister's second reading speech on the Fertilisers Subsidy Bill he pointed out that it implements a 1986 Budget announcement by the Treasurer (Mr Keating). The Bill has several elements. It amalgamates the nitrogenous fertilisers subsidy and the phosphate fertilisers subsidy into one Act. It maintains the subsidy payable on nitrogenous fertilisers at $20 per tonne of nitrogen content. It introduces a three-tiered system of subsidy on phosphatic fertilisers, depending on the amount of available phosphorous content. It maintains the total payout under the subsidy arrangements at $55m per annum for each of the three years to 30 June 1989. It contains provisions to ensure that the subsidy is passed on in full to users; that is, to farmers. I shall comment on these provisions in the Committee stage. I think they need to be looked at very closely. Finally, the Bill removes the application of the subsidy from imported fertilisers and reallocates the resultant subsidy savings to increase the subsidy rates on the consumption of locally produced phosphatic fertilisers, particularly high analysis phosphate products. As Senator Chaney has said, the Opposition supports these elements of the Government's proposals, with one major exception, which is that the Liberal and National parties believe that the subsidy should continue to apply to the consumption of both locally produced and imported fertilisers, as has been the case since 1966 for nitrogenous fertilisers and since 1982 for phosphatic fertilisers. The two main reasons given by the Government for its decision to restrict the subsidy to the consumption of locally manufactured fertilisers are, firstly, that it will provide benefits to the balance of payments when our external account is in quite dire straits; and secondly, that it will bring some benefits to manufacturers, as the Minister said, `in the form of increased price competitiveness' whilst it will `at the same time avoid disadvantaging the rural sector'. Those are the reasons advanced by the Government for this Bill. The Minister in his second reading speech said that the Government has faced a difficult task in trying to reconcile the interests of the producers and the users or consumers of this important commodity. I agree that the Government was faced with a difficult task. Arguments can be made in favour of the Government's decision and arguments against it. The Opposition's view is that the arguments against the Government decision to direct the subsidy solely towards the use of locally-manufactured fertiliser outweigh the arguments in favour of that decision. I will examine the arguments put forward on both sides. Before doing so, I should make it clear that the products at issue are essentially the higher analysis phosphatic fertilisers for which farmers have demonstrated a growing preference in recent years. Single superphosphate is not at issue. All our requirements for single superphosphate are met from local production because of natural competitive advantage. However, since the mid-1970s the trend in fertiliser usage in Australia, as in other countries, has been away from single superphosphate towards the increased use of nitrogen and high analysis combination fertilisers. The most common forms of high analysis fertilisers in use are double superphosphate, or DSP, triple superphosphate, or TSP, mono-ammonium phosphate, or MAP, and di-ammonium phosphate, or DAP. The trend towards higher analysis fertilisers appears unlikely to be reversed because of their considerable economic benefits to users through reduced application, transport storage and similar costs. High analysis fertilisers now account for about 40 per cent of elemental phosphate used annually by Australian agriculture. About half this is imported and half is locally produced. Until 1983-84 almost all fertiliser imports were made by local manufacturers. They manufactured and also imported, and they were the sole importers. However, other firms have been importing a growing proportion of fertilisers since then. There is a surplus capacity within the Australian industry. Both the IAC and the Department of Primary Industry have concluded that domestic manufacturers have sufficient capacity to meet all local requirements, but this is disputed by other groups including, in particular, farmer organisations and especially the National Farmers Federation. In world terms, the high analysis fertiliser industry is in massive oversupply. There has been enormous growth in the production by certain Third World countries in recent years, notably such countries as Morocco, Jordan and Korea. Dumping is prevalent throughout the world, including into the Australian market, where fortunately we have very stringent anti-dumping provisions, although the local industry says that these are not stringent enough. The Government provides grants which offset the effects of dumping duties on fertilisers in order to prevent the costs to farmers from increasing. The Industries Assistance Commission has reported on all or parts of the fertiliser industry on several occasions in recent years. The most recent occasion was in October 1985. In the report of that date the IAC reached several interesting conclusions. First, the Commission concluded that assistance for the consumption of fertilisers then, as distinct from in the early 1960s when the current subsidy arrangements for the consumption of fertilisers had their origin, had little effect on levels of output of the using rural industries. Secondly, the IAC concluded that agricultural competitiveness in the short term is not sensitive to changes in the price of fertilisers. The Commission believes there are a number of aspects of macroeconomic management which can have a considerably greater influence on agricultural competitiveness in the short term than the existing fertiliser subsidies. I for one would certainly agree with that conclusion. The IAC also concluded that the subsidies do not lead to significant community benefits compared with the cost to the community of providing that assistance. For those reasons the IAC recommended that the subsidies on the consumption of phosphate and nitrogenous fertilisers, both imported and locally manufactured, should cease on 30 June 1986. The Government has rejected that recommendation, as we can see from the Bill before us. Senator Harradine —Half. Senator SHORT —Yes, I will come back to that. It is also important to note that the IAC-this is the point-in its 1985 report did not address itself to the question of whether any subsidy payments should be limited to the consumption of locally produced fertiliser. It was not asked to do so and given the conclusions that it reached that there be no subsidy at all it is not surprising that it did not address it in detail. But I will come back to that a little later. The Commission did make some passing reference to it. I turn now to the arguments advanced by the local manufacturers in support of the Government's proposal to restrict payment of the subsidy to the consumption of locally produced fertiliser and the arguments to the contrary which have been advanced by the user or rural industries. I refer first to local manufacturers. As I understand it, in summary the local manufacturers argue as follows: Firstly, consumption subsidies in Australia are rare at any time but the payment of a consumption subsidy on an imported product is unique. Secondly, there would be a progressive benefit to to the balance of payments from the Government's proposals, starting off with a $15m benefit in 1986-87. Thirdly, the Australian fertiliser industry does have the capacity to supply all the high analysis fertilisers and all the mixes required by Australian farmers. Fourthly, the Australian industry is efficient, a view, I would emphasise, that has been supported by the IAC. I have no quarrel with that. Without the benefit of tariff protection or industry plans the Australian fertiliser industry has carried the significant cost burden of such Government decisions as the Australian National Line contract, the coastal shipping provisions of the Navigation Act, the 2 per cent general revenue duty and so on. The local industry also argues that the fertiliser industry is an important, integrated Australian manufacturing industry with a work force of over 4,000 and an annual turnover in excess of $700m. It argues that the continuation of a subsidy on the consumption of imported fertilisers would act as a disincentive-I use the word `disincentive' rather than anything stronger; I quote the industry's own word-to future capital investment projects in the industry, including the possible development of Australia's indigenous resources of phosphatic rock at Mount Weld and Duchess. The local industry also argues that the Government's proposal to remove the subsidy from the consumption of imported product would reduce the overall price of fertiliser to farmers because increased local throughput would reduce unit costs of production and that would therefore lower prices to farmers despite the reduced competition facing the Australian industry. The user industries-that is, the rural sector-argue on the other hand, firstly, that the Government's proposals will reduce competition because they will make the imports of fertiliser that much less competitive and will eventually lead to a monopolistic situation for Australian industry vis-a-vis imports. The Minister's statements have admitted this. Secondly, the rural sector argues that the Government's decisions are based solely on a desire to assist local fertiliser manufacturers, with little regard for the effect on farmers. Manufacturers continue to show a good financial performance and none are in danger of financial failure. Thirdly, the rural sector argues that the Government's proposal will discriminate strongly against farmers who have no option but to use imported fertiliser. Fourthly, past arrangements did not subsidise imports. I direct this comment to Senator Siddons. I am sorry he has left the chamber. Imports and locally manufactured fertilisers have been treated on an exactly equal basis. When an imported and a domestic product are treated on an exactly equal basis it is simply not true to say that the imported or the local product is subsidised in the sense of getting favoured treatment relative to the other. Fifthly, the rural sector argues that the Australian industry does not have the capacity to manufacture to meet farmers' demands for all high analysis fertiliser product. Obviously this is a point of disagreement between the user and the consumer industries. Sixthly, the rural sector argues that the Australian industry may be able to produce an additional 85,000 tonnes of fertiliser to replace imports. It is not enough to meet the market, but is on the way to meeting it. The rural industries calculate that after allowing for the cost of imported raw materials-a very significant point-the net balance of payments effect would be less than $10m. Finally, the user industries argue that when current stocks of fertilisers are exhausted the price of imported products will rise by up to $42 per tonne. So there are conflicting arguments on both sides, in logic and in fact. The Opposition acknowledges many of the points made by the local fertiliser industry. We acknowledge fully and welcome the fact that the industry plays an important role in our manufacturing and rural sectors in Australia. It is an efficient industry. It has demonstrated that by virtue of the fact that it has had little or no assistance almost throughout its history. Indeed, some calculations would indicate that the local industry has experienced negative assistance over recent years. Whether it is negative or slightly positive, it is virtually nil. The industry has also demonstrated, I think, the potential for further development. The Opposition acknowledges those points. However, we do not accept that either of these points or the reasons advanced by the Government provide sufficient grounds to change the arrangements that applied prior to the Government's announcement in the Budget. Our reasons are as follows: Firstly, there is undoubtedly a real prospect that the Government's decisions will lead to a significant reduction in competition in the Australian market. Imported fertilisers would not be able to follow the Australian market down when they would be at such a subsidy disadvantage following the Government's proposals. I believe they would have great difficulty in remaining in the Australian market. This would run the real risk of creating a near monopoly for the domestic producer. The problem is compounded when one takes account of the fact that, although there is more than one producer in Australia, there are natural internal barriers which mean that a manufacturer in, say, Western Australia has difficulty in competing with someone on the eastern seaboard. The costs of transport of the fertiliser and the like are very significant. So the risk of a monopoly, or a near monopoly, arising is very significant. If that is the case, it follows that, if prices move as a result of this decision, the price movement is more likely to be upward than downward. That is contrary to what the Government says it wishes to see, and it is certainly quite contrary to the interests of the Australian economy at the moment, particularly to the rural sector which, cost wise, has been taxed and squeezed almost blind in recent years by a major cost-price squeeze. So the prospect of fertiliser prices going up is not insignificant. As I say, it has suffered already from the great pressure of rural cost increases. The other important question, one that the Government was advancing, is the balance of payments argument. The balance of payments argument is very difficult to argue. Even if one accepts the Government's and local industry's figures, they are not large, although admittedly they would be worth while. But they ignore the possible price effect of the Government's decision on farm costs and inputs and, therefore, the effect on the farming sector and on its export credit worthiness, particularly when it is facing difficult enough decisions as it is. To me, the balance of payments argument is very difficult to argue either way. It is also indisputable that the decision would add significantly to the protection of the Australian industry. The industry would go from having no protection, as is the case now, to having not insignificant protection. There has been no Industries Assistance Commission investigation on this specific issue. To the extent that it considered it at all in its 1985 report, it tended to argue against what the Government is now doing. I quote from page 10 of the IAC's report: Payment of a production bounty- that is what we are now talking about in the Government's proposal- as a long term form of assistance would distort the incentive structure for fertiliser manufacturers and pose a significant barrier to change. The Commission considers that this industry is capable of operating over a long period of time with minimum levels of assistance, albeit with a structure different from that which currently applies. The IAC has not really addressed this issue. It is quite clear that there is confusion in the Government's mind with regard to the purpose of these subsidies. It is typical of the Hawke Government's approach to economic policy making. It is an important reason, as I said at the beginning of my remarks, for the growing lack of confidence throughout the private sector about this Government's economic policies. No one, least of all the Government, seems to know where it is going at the moment in terms of economic policy making. The confusion in this case is that this subsidy arrangement is, and it always has been, a subsidy on consumption. It is not a subsidy on production. It has never been seen to be a subsidy on production. I again quote from last year's report of the IAC, which outlines the history of the rationale for these subsidies. Page 8 reads: The current subsidy arrangements for the consumption of fertilisers had their origin in 1963 . . . with the stated objectives of improving the productivity of farm lands and pastures, encouraging growth in rural output and improving the competitive position of exports. That was the phosphatic bounty. It continues: In 1966 a subsidy was introduced on domestically produced and imported nitrogenous fertilisers with the stated objectives of reducing costs of industries which were major users of nitrogen, encouraging the experimentation with and use of those fertilisers, and improving the competitive position of exports. In other words, the whole rationale of these subsidies has always been consumer based. If it is a subsidy on consumption, it should apply to all fertiliser products, or to none. It makes no sense to differentiate between imports and local production on this basis. The proposal of the Opposition to oppose the Government's proposal will not wipe out local industry. Local industry does not claim that it will. Local industry has said that it is not seeking increased protection. Yet that is the effect of the Government's proposals. The Opposition has considerable confidence in the local industry. We are sure that it will develop, despite chronic world oversupply. If the industry does decide not to develop further at this time, it will take that decision because of the world oversupply, not because of the fate of this Bill, whichever way the Parliament votes in the end on the Government's proposal. It is about time that the Government, in putting forward industry proposals, along with other economic proposals, got its line of thinking straight before starting to make proposals which, in the long term, will not be in the interests of industry structure in this country and therefore will not be in the interests of the industries with which it is dealing. Senator BOSWELL(Queensland)(6.17) —We are debating today a number of bounty Bills-the Bounty and Subsidy Legislation Amendment Bill (No. 2), the Bounty (Ship Repair) Bill, the Navigation Amendment Bill, the Subsidy (Cultivation Machines and Equipment) Bill and the Fertilisers Subsidy Bill. I wish to address my remarks to the Fertilisers Subsidy Bill 1986. The Opposition will oppose the removal of the subsidy on imported fertilisers on a number of grounds. One of the reasons that we cannot support the Government's stand on this fertiliser Bill is that the Government seems to have misread the situation. There are 67,000 tonnes of mono-ammonium phosphate and di-ammonium phosphate manufactured in Australia. Yet the total use of these two types of phosphate is 423,000 tonnes. That represents a shortfall in Australian production of 356,000 tonnes. If that 356,000 tonnes has to be imported into Australia, if this legislation is passed there will be no subsidy on those imports. That means, effectively, that 356,000 tonnes of fertiliser, at $33 a tonne on average, will be lost to the farming community. The removal of the subsidy on imported fertiliser, in reality, takes the subsidy for cheaper fertiliser away from the farmer and gives the manufacturer a bounty for manufacturing costs. What was intended initially to give farmers cheaper fertiliser, to encourage the production of overseas exports, to encourage farmers to look after and care for the land and keep it in good condition will go to subsidise the manufacture of fertiliser. The local currency devaluation that has occurred has already given the local manufacturers of fertiliser a 40 per cent subsidy, because the value of the dollar has fallen by 40 per cent. In effect, the manufacturers have already received a 40 per cent extra bonus which they have up their sleeves. We should look at the consistency of the Government's policies. In this case it has been hopelessly consistent in every policy it has enunciated since it came into office. It has bled the rural industry white. It has removed many benefits. It has removed from the primary industries of this nation benefits totalling $440m. It has cancelled the Bicentenary water program, removed the petroleum freight equalisation scheme, emasculated the income equalisation deposits scheme, increased slaughter inspection charges by 200 per cent and cut rural adjustment spending. They are just a few of the benefits it has removed. If I were to name all of the benefits it has removed from primary industry it would take me all the time that is allowed me in this speech. The Government is doing it again tonight. In effect this legislation is going to take $55m off primary industry and give it to secondary industry. As I said before, this is totally consistent with what this Government has done for the last four years. It has emasculated primary industry but let us look at what it has given secondary industry. In this year's Budget the Government has given $30m to the steel industry, $25m to the car industry, $90m to the heavy engineering industry and $6m to the shipbuilding industry. That is a total of $151m to secondary industry in the 1986-87 Budget. Whilst it has done that it has taken $440m from primary industry. That demonstrates the uneven-handed approach of this Government to the rural producers of Australia. It is a disgraceful performance over its four years of office. No wonder people in rural industry have almost given up with this Government. They see it as totally unsympathetic to their cause. We should note in this debate that secondary industries receive an effective rate of assistance of 27 per cent while primary industries have had their assistance reduced to 10 per cent over a number of years. The grain industry only receives 2 per cent government assistance. Every farmer in Australian pays $9,000 a year, on average, to protect the jobs of workers in secondary industries. Tariff protection is costing the primary industries of this nation $1.5 billion a year. Yet our highly efficient grain growing industries do not compete in a free market-they have to go overseas and compete in a heavily corrupted market caught between the giant European Economic Community and the United States of America, each cutting the others throat to win markets. Australia is caught in the middle of this terrible trade war. It is probably the biggest trade war in modern history. Wheat and sorghum prices have fallen by $30 a tonne in the 18 months. This Government, which is unsympathetic to primary industry, wants to take another $55m off it. I want to make it very clear that the National Party of Australia is not against protecting people's jobs in secondary industry, but the Government must realise that it cannot protect jobs in secondary industry at the expense of primary industry. As I have said in this Senate continually, 38 per cent of the nation's export income exchange comes from primary industry exports. If this Government wants primary industry to earn foreign exchange to pay back our foreign debt, or even the interest on our foreign debt, it is going to have to allow primary industry to use the cheapest imports so that Australian farmers will be able to compete in the highly corrupted world markets. What will result from this Government's efforts to subsidise the fertiliser manufacturers will be the reduction of the reduction of the subsidy to farmers. I seek leave to continue my remarks later. Leave granted; debate adjourned. Bills received from the House of Representatives. Motion (by Senator Ryan) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Ryan) read a first time. Motion (by Senator Ryan) agreed to: That the order of the Senate of 14 November 1986 relating to the introduction of Bills into the Senate after 19 November 1986 not apply to these Bills. Second Readings Senator RYAN(Australian Capital Territory-Minister for Education)(6.25) —I move: That the Bills be now read a second time. I table a revised explanatory memorandum for the Broadcasting Amendment Bill 1986 and seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- BROADCASTING AMENDMENT BILL 1986 This is a historic Bill because it provides the legislative framework for a major expansion of the Australian broadcasting system. Honourable senators will know that Australians living in our mainland State capital cities already have-or in the case of Perth, soon will have-a choice of three commercial television services as well as the two national channels. The five million people who live in regional Australia only have, in the main, one commercial service and the ABC. This is a situation that the Government is no longer prepared to accept; it is inequitable and discriminatory; moreover it is unnecessary. Accordingly, in 1984 the Minister for Communications announced that the Government placed primary emphasis upon the need to extend regional services and to maximise diversity of choice. After a process of research, consultation and public debate we have now reached the point where we can begin to put flesh on the bones of that policy. In the Minister's statement to the Parliament of 20 May he set out three strategic goals the Government wants to achieve; firstly, to provide services in most regional areas comparable to those in capital cities, that is equalisation; secondly, to create larger more viable markets in regional Australia through the process of aggregation; and, thirdly, to encourage competition. Equalisation After the Department of Communications' 1985 report on future options for the development of commercial television, two processes were identified for moving towards equalisation. The first process was direct aggregation, whereby existing markets (or service areas) were combined in order to provide a sufficient population base for three competitive services. The second process was to utilise a mechanism known as multi-channel services (MCS). This involved allowing existing regional operators to provide two extra non-competitive, services in their existing markets. Honourable senators will know that either approach necessarily involves structural change on a very large scale. They will also know that managing and financing this large expansion will impose considerable strains upon the regional commercial television licensees who will play the central role in achieving it. Accordingly, both concepts were exposed to wide industry and public debate. Regional commercial licensees represented by Regional Television Australia (RTA) and the Federation of Australian Commercial Television Stations (FACTS), met with the Prime Minister, with the Minister for Communications and with honourable senators on the Government side on several occasions. Moreover, both individual licensees and a wide cross-section of interested parties have made submissions to the Minister and the Department of Communications. Someone once remarked that in the race of life, you can always back self-interest as a starter. The media reports have often been colourful, but, in fact, there is no single view in the industry. Neither RTA, nor FACTS reflect all licensees' views all of the time, and over the last few months in particular, the industry has demonstrated a flexibility in debate which can only be admired. Interests which took one point of view in 1984, or even 1985, have adopted the opposing view in 1986; moreover they have argued for that view with all the fervour and zeal of the converted. In all of this, the Government has tried to remind the parties of the Government's strategic objectives, and particularly of its concern to encourage competitive markets. The Australian broadcasting industry has been heavily regulated and protected. We are not interested in perpetuating that protection if it works against the interests of regional viewers. As the Minister announced on 20 May, the Government has decided to adopt the aggregation process and allow the licensees themselves to make the choice between proceeding directly to aggregation in enlarged markets or to provide multi-channel services (MCS) in the licensee's existing service area as an interim step before aggregation. It remains our view that aggregation is the preferred way in which larger and more soundly based competitive regional services can be developed to give regional viewers services like those currently available in the mainland capitals. Aggregation will unlock the competitive dynamism which regional commercial television, despite its many achievements, has so far lacked. Less Ministerial involvement and Government regulation is attached to the aggregation process than is the case with MCS. Moreover, aggregation represents, for the Government and the industry, one decision point, and importantly, the decision is an industry decision. The scheme provided for in this Bill is, as far as possible, market driven. The Indicative Plan The Bill before the Senate provides the mechanisms for achieving the objectives I have outlined above and provides a framework within which the industry drive transition to aggregated competitive services in regional areas is to be achieved. This will result in regional viewers in approved markets having a level of service like that now enjoyed by their metropolitan counterparts. The Bill provides that the Minister is empowered to publish the `Equalisation of Regional Commercial Television Indicative Plan'. This is the basic strategic planning instrument for the Equalisation scheme. The Indicative Plan will not be a complex document. Firstly, it will specify the regional licences to which the Equalisation scheme is to apply. It does not cover Tasmania, however, as special provisions to cover Tasmania are set out in the Bill. Secondly, it will specify areas, to be known as `approved markets', which are the expanded markets in which a number of identified licensees will eventually provide, between them, three competitive services. For most regional viewers in Australia this will be by 31 December 1996. The major means of achieving equalisation is by a process called `aggregation'. This will involve the expansion of a licensees service areas so that licensees who previously had monopolies in their service areas are brought to compete in expanded service areas (`aggregation areas') against other licensees from their Approved Market. The Indicative Plan will specify the aggregation area for each licence. The Indicative Plan will also list pairs or groups of licences which are, under the Bill, eligible for consolidation into one licence. The Indicative Plan may also specify, as approved markets, regional areas in which there are only two existing licences. In these areas a third service would be provided by means of the issue of a new licence. The creation of this type of market provides some planning flexibility for the creation of new approved markets in future years. Regional licensees who are not specified in the Indicative Plan as being part of an approved market will be permitted, and encouraged, to adopt multi-channel services in order to provide additional services in their existing service areas. On 29 July this year the Minister for Communications released a draft indicative plan for public comment. As a result of comments received, the structure of approved markets has been revised and substantially reworked. The essential criteria which will be applied in the determination of approved markets include community of interest, contiguity, viability, and where possible, avoidance of overlap of State boundaries and time zones. The Bill also provides for variations to be made to the plan. The power of the Minister to vary the Indicative Plan is primarily to bring further regional licences into the equalisation process and to set new deadlines for aggregation for these licences in the new approved markets. The Minister cannot change arrangements already in place. In relation to approved markets set in the Indicative Plan, the Bill will require that aggregation be completed by 31 December 1996. Where subsequently approved markets are created under a variation of the Plan, a later deadline can be set for those new markets. Multi-Channel Services (MCS) The second mechanism for providing additional services to regional viewers is multi-channel services (MCS). In most approved markets, the licensees may elect, as an interim step, to provide additional services utilising these permits, in their original service areas, before proceeding to aggregation. Licensees in an approved market will have 28 days from the date of publication of the indicative plan to give the Minister notice whether they wish to proceed immediately towards aggregation or to first provide MCS services in their existing service areas before proceeding towards aggregation. Where a licensee in an approved market fails to give notice within 28 days, the licensee will be taken to have given notice of an election for aggregation. If all licensees within an approved market elect to provide MCS then the market will be taken as proceeding towards aggregation by way of MCS. If any one or more licensee elects to move to aggregation immediately, then the approved market will move directly towards aggregation. This is what has become known as the `one-in-all-in' rule. Implementation Plan After the Minister has given notice to licensees of the direction to be followed in an approved market, each licensee is required to submit an implementation plan to the Minister for approval. They have 3 months to do this. If the approved market is proceeding immediately towards aggregation, the implementation plan will set out the stages and timetable proposed by the licensee for the extension of services into the licensee's aggregation area. In the case of licensees utilising MCS, the implementation plan will set out the stages and timetable proposed by the licensee for the provision of MCS in the existing service area. The plan will also set out the stages and timetable proposed by the licensee for the subsequent extension of services into the licensee's aggregation area. A vital function of the Implementation Plan approval process is the co-ordination of the transition from MCS to aggregation in an approved market. Licensees in MCS markets may include, in their implementation plans, a proposed timetable for the transition to aggregation prior to the end of 1996. The process must, however, be completed by the aggregation completion date. Concern has been expressed that the powers in relation to implementation plans could be used so as to impose an unrealistically short period for the currency of MCS services before licensees are required to move to aggregation. I want to state that where licensees elect to use MCS services before proceeding to aggregation, the timing of the transition in the approved market would be based on their proposals rather than ministerial preference. This, of course, is subject to satisfactory completion of aggregation by the end of 1996. Further some judgment will be required where the licensees proposed timetables vary substantially. The flexibility in the provisions allows licensees to put forward a transition timetable which best suits the circumstances of the particular approved market. In this way it allows the process to be market driven, as much as possible, within the constraints of the basic strategy. When considering a licensee's Implementation Plan the Minister will need to have regard to the Implementation Plans of other licensees within the Market. This is particularly necessary in relation to the transition timetable from MCS to aggregation which must necessarily be co-ordinated for each approved market. As this co-ordination could involve considerable negotiation between licensees and the Minister, and between licensees, the Bill provides flexibility to the Minister as to how he might approach this task. If the Minister does not approve the licensee's implementation plan, the affected licensee concerned will be required to submit a second plan. Should the Minister not approve the second plan, the Bill outlines several options. The Minister may again refer the plan back to a licensee; he may refer the matter to the Australian Broadcasting Tribunal (ABT) for consideration and recommendation or, in the ultimate, he may determine the terms of the implementation plan that is to be applic- able to the licensee. The Bill allows the first two processes to be used more than once; the ultimate power of the Minister to determine an Implementation Plan is clearly something that would only be used as a last resort. If a licensee fails altogether to submit an implementation plan the Bill also permits the Minister to determine an appropriate implementation plan. The Minister may vary an implementation plan in certain circumstances. This may be on application by a licensee or on the Minister's own initiative. Before the Minister varies a licensee's implementation plan he is required to give each licensee in the approved market notice of any proposed variation and have regard to any subsequent representations made to him. Most importantly, an Implementation Plan cannot be varied to alter the period over which the MCS option can be used in the absence of consent from all licensees in the Market. A feature of the MCS permit is that it is granted by the Minister whereas broadcasting licences are issued by the ABT. The Minister may grant an MCS permit consistent with the licensees implementation plan. An MCS permit may be granted for up to 12 months. Its relationship to the head licence in such that if the head licence is transferred to a new licensee then the MCS permit automatically transfers with it. MCS permits do not have separate proprietary interests attached to them. Should at any stage the head licence not be in force then the MCS also ceases. Licensees will be permitted to operate a maximum of two MCS permits in relation to a particular licence. MCS Permits will be subject to the same broadcasting requirements as commercial licences. They will individually have to provide an adequate and comprehensive service to the service area and will be subject to the normal commercial programming constraints set out in Part IV of the current Broadcasting Act. This includes the requirement to comply with program standards. An additional requirement is that MCS permit holders will need to obtain ABT approval before they can regularly broadcast programs of the head licence or of another associated MCS permit, that is, it will not be possible for a licensee to `simulcast' without ABT approval. This requirement is based on an existing provision applicable to supplementary licences. Planning Obligations The planning obligations accepted by licensees and permit holders in approved markets are contained in the licensee's Implementation Plan. Licensees will be required to comply with their Implementation Plan as a condition of licence. The ABT will be able to refuse to renew a licence where the licensee has failed, to a significant degree, to comply with the licensee's Implementation Plan. This includes provision of MCS transmissions. The ABT will not, however, be able to refuse to renew a licence on this ground without seeking the Minister's views on the matter and without having regard to any representations that the Minister might make. The Bill provides for a licensee's performance under his Implementation Plan (with respect to both his licence and his MCS permits) to be investigated by the ABT at the time of the normal cyclical renewal of the head licence. The division of functions between the Minister on planning and the ABT on licensing is maintained by providing that the Minister's representations are necessary before the ABT can refuse to renew a licence on the grounds of non-compliance with the licensee's Implementation Plan. The same structure is provided for in the Bill with respect to the suspension and revocation of licences. Further, the ABT can, at its own initiative or on receipt of an application, recommend to the Minister that he revoke an MCS permit on the basis of the MCS permit holder's substantial failure to comply with his Implementation Plan. Programming The ABT role in relation to programming matters is basically unchanged with respect to licensees. In its simplest sense the process of aggregation only means an expanded service area. The Bill contains a new provision, however, which is designed to cover the licensee's obligation to provide an adequate and comprehensive service during the period when he is progressively expanding his service: (i) into his aggregated service area in compliance with his Implementation Plan; or (ii) by the MCS process whereby he is extending the coverage of an MCS service in his service area in compliance with his Implementation Plan. In each of these situations the ABT is required to have regard to the Implementation Plan when considering whether the licensee has been providing an adequate and comprehensive service for the purpose of a licence renewal or suspension or revocation inquiry. This provision is intended to act as a protection to licensees. It ensures that they are not required to provide an adequate and comprehensive coverage immediately to the whole area but rather in accordance with the staged process set out in the Implementation Plan. Consolidation of Licences In order to allow for the creation of larger markets, the Bill will enable specified pairs of licences, at their option, to consolidate their licences into one licence. These pairs or groups of licences will be specifically identified in the Indicative Plan. Approved Markets with an Additional Licence The Bill includes a provision which could enable the granting of additional licences in some specified approved markets. The Bill provides, that an approved market could be made up of 2 services (which may consist of pairs) with the third service being provided through the grant of a new additional licence. As decisions on the desirability of having a third new licence is made as a Ministerial planning decision, the Bill will not allow the ABT to refuse to issue a licence on the basis of commercial viability of existing licences or because the Tribunal concludes that a licence of the nature called for by the Minister should not be issued. Special Provision Applicable in Tasmania The Bill makes special provisions concerning commercial television services in Tasmania. Currently both licences in Tasmania are controlled by the one company. It is the Government's intention that a new second service will be introduced as soon as possible in Tasmania. There are two ways to achieve this objective. Firstly, the existing licensee may sell one of the two licences to another operator whereupon each licence will have its service area expanded to include the service area of the other. Alternatively the existing 2 licences may be consolidated into one licence and another licence called for having the same service area as the consolidated licence. If another licence is called for, the Tribunal will not be able to refuse to issue a second licence on the basis of the commercial viability of the incumbent licensee, or on the grounds that it does not consider that another commercial television licence should be issued. Delegation The Bill includes a number of miscellaneous provision including one which enables the Minister to delegate his powers in relation to licensees' Implementation Plans to officers of the Department. The relevant clause in the Bill is in standard form but the Minister intends to issue directions on the exercise of delegated powers. Ownership and Control In regard to ownership and control the Bill introduces a new constraint by providing that a person may not acquire a prescribed interest in more than one licence in a single approved market. This provision reaffirms the competitive objective underpinning the Bill. If problems arise between now and when the Bill is enacted in relation to attempted transfers or licences which would conflict with the ``one to a market rule'', then the Government will have to consider introducing further amendments to remedy the situation. I should also point out that the government has the so called `two station rule' under consideration at the moment. In addition, Department of Communications has recently prepared a report on the general ownership and control provisions of the Broadcasting Act. This Report is also being considered by Government and major revision to this area of the Broadcasting Act could well result. Supplementary Licences As the Minister indicated in his statement of 20 May 1986, provisions relating to supplementary television licences will be repealed by way of this Bill, however, those relating to supplementary radio licences will be retained. Localism I briefly want to address some specific issues that have received some publicity. Among these issues has been the claim that aggregation will lead to loss of what is known as local content or localism. This claim needs to be put into perspective. Latest data available from the Tribunal indicates that over recent years local programming by regional stations runs at an industry average of about 7%. Some stations are of course better than others. The vast majority of programs, however, are taken from the major networks. If localism is important to local viewers, and an inherent part of regional TV viewer preferences, then the competition introduced by aggregation will encourage localism. It will ensure that the licensee/operator who fails to provide local content will suffer a loss of viewers with its attendant commercial consequences. Larger service areas provided through aggregation will also provide the opportunity for forward-looking licensees to expand and develop regional content to serve a range of population centres. Given the consequent need for additional production, service and sales staff in a wider range of cities and towns, this will not decrease employment opportunities, but increases them. Commercial Viability A second major point at issue has been the question of regional stations having their commercial viability adversely affected by of aggregation. Historically, the regional stations have been highly profitable, with a low level of commercial debt and a high price/earnings ratio, compared to other industries. An independent consultant engaged by the Department of Communications has formed the opinion that with a modest 4% per annum real increase in advertising revenue stations would be able to meet their commitments under the Indicative Plan. Financial Implications As an incentive to licensees to implement aggregation the Government has decided to exempt from sales tax UHF television transmitters purchased specifically for equalisation before 1991. It is estimated that the cost of revenue foregone by this provision will be approximately $13 million in 1986 prices. Additionally the Government has agreed to rebate a percentage of licence fees paid by licensees to the Commonwealth over the period required to implement aggregation. Expected revenue to be forgone is estimated at some $22 million. The foregone revenue is likely to be made up, at least in part, by increases in licence fees arising from increases in revenue earned by licensees as a consequence of the equalisation policy. A co-ordinated capital works program is being undertaken to upgrade Commonwealth transmitting stations to accommodate equalisation and two other major programs, the ABC Second Regional Radio Network and clearance of Band II television channels. For equalisation alone, expenditure of $16 million will be required on capital works over a six year period. This will be offset, however, by the ongoing economic rents levied on licensees sharing Commonwealth transmitting stations. Total costs to the Commonwealth for equalisation are estimated to be of the order of $60 million over the period until 1996. Honourable senators will be aware that as a result of consultations with television industry groups, the Minister for Communications, on behalf of the Government, agreed to the Bill being amended during passage through the House of Representatives. These amendments do not alter the substantive purpose or provisions of the Bill but accommodate concerns and clarifications of the regional licensees as to the mechanical and administrative processes inherent in the Bill. The Minister for Communications has outlined the nature of these amendments during debate on the Bill in the House of Representatives on 17 November 1986. In concluding I wish to take the Senate back to November 1983 not long after this Government came to office, when the Minister for Communications first spelled out our intentions in the area of broadcasting policy. He said then: `The Government's primary concern is to see that radio and television services reach the people who want and need them. The day has long since passed when broadcasting services could be regarded as luxuries. Virtually all Australian homes have both radio and television, and people now regard the opportunity to choose between a range of services as their basic right. While we always have to be constrained by consideration of cost and good management, the Government's intention is to see that they get that choice.' Those were not idle words. This legislation paves the way for a fundamental restructuring of Australian commercial television, and that restructuring is directed towards giving the five million Australians who live in regional areas a choice of programs. Almost three years to the day from my original speech on equalisation, I am proud to commend the Bill to the Senate. TELEVISION LICENCE FEES AMENDMENT BILL 1986 Consequential amendments are required to the Television Licence Fees Act to provide for the aggregation of revenue of existing licences and MCS permits for fee calculation purposes. The Bill also provides for the making of regulations to give effect to the Government's decision to allow a rebate on licence fees paid to the Commonwealth by licencees involved in aggregation as outlined in my second reading speech on the Broadcasting Amendment Bill 1986. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Motion (by Senator Ryan) proposed: That the Senate do now adjourn. Senator KILGARIFF(Northern Territory)(6.28) —I was very pleased to be able to table in the Senate earlier today a petition from 591 people, predominantly Alice Springs residents, who are opposed to any attempt to close the Pine Gap Joint Space Defence Research Facility near Alice Springs in the Northern Territory. This facility is shared by the United States of America and Australia and employs many residents of the town of Alice Springs. In addition, the United States personnel make a positive contribution to the community life of the town. The petition was circulated in the Alice Springs area by Mrs Bobbie Roth, a concerned Alice Springs citizen, who is one of the many people who want to ensure that the support of Alice Springs people for the joint facility is brought to the attention of the Federal Government and to the people of Australia. The petition was signed by people who are opposed to any attempt to close the joint facility which Australia shares with the United States and states that the petitioners believe that the facility contributes to world peace and stability. It urges the Federal Government to strengthen the alliance between the United States and Australia because our mutual interests will be served by a strong alliance. I believe that the efforts of people such as Mrs Roth in circulating the petition are very commendable and I am aware that further petitions, along the same or similar lines, are in the pipeline. In addition to the petitions from Mrs Roth, who is a housewife employed in the town, I have received numerous other smaller petitions all calling for a commitment from the Federal Government that, when the existing agreement with the United States on the Pine Gap facility expires in October next year, it will renew the agreement for a further 10 years. These petitions, when taken as a whole, are indicative of the solid support in the Northern Territory, and particularly in Alice Springs, for the continued operation of the joint facility. The people who are circulating and signing these petitions refuse to be hoodwinked by the emotive rhetoric of so-called peace activists who come to Alice Springs to tell us when we will all be nuked. They realise that, far from making nuclear war, the facility and others like it in Australia are contributing to making nuclear conflict less likely. The base at Pine Gap receives satellite signals which allow the United States to monitor the nuclear forces and activities of the Soviet Union. The arms limitation agreements between these countries, that is, the Soviet Union and the United States, specifically provide for such monitoring. They are crucial to arms control. These petitions from the people of Alice Springs are clearly showing that very many people support the need for the facility and are prepared to say so. Question resolved in the affirmative. Senate adjourned at 6.31 p.m. The following paper was tabled: Parliament House Construction Authority Act- Direction by the Minister under sub-section 9 (1), dated 7 November 1986. The following answer to a question was circulated: (Question No. 1390) Senator Morris asked the Minister representing the Minister for Aviation, upon notice, on 24 September 1986: (1) Under what circumstances are licensed airline operators entitled to cancel scheduled flights. (2) What arrangements is an operator required to make, when a scheduled flight is cancelled, regarding notification, accommodation and alternative transportation of passengers booked on the cancelled flight. (3) What were the circumstances in which schedule flights of F28 aircraft operated by Air New South Wales were cancelled on Sunday, 21 September 1986 and were they proper, given the answer to part (1) of this question. (4) What arrangements were made for the notification, accommodation and alternative transport of passengers booked on those flights and were they proper, given the answer to part (2) of this question. Senator Gietzelt —The Minister for Aviation has provided the following answer to the honourable senator's question: (1) and (2) The cancellation of scheduled flights and the resulting notification of passengers, arrangement of accommodation and alternative transport are commercial matters for the airline concerned. While the Air Navigation Regulations require airline operators to submit timetables for approval, this is directed at ensuring the safety of air navigation. The Commonwealth has no authority to regulate intrastate air services on other grounds such as economic and public interest considerations. In New South Wales, these are matters for the State Government. (3) Air New South Wales has provided the following advice in relation to the cancellations of flights on 21 September 1986. On Sunday 21 September 1986, two of the airline's three F28 aircraft were unserviceable. F27 aircraft would normally be substituted to undertake the services, however, an industrial ban restricted Air New South Wales; ability to do so on this occasion. The first of the unserviceable F28 aircraft was returned to regular services at midday on 21 September. The second aircraft was re-introduced into service on Monday 22 September. (4) The airline made alternative travel arrangements for its passengers. The airline's policy is to provide passenger accommodation although, in this instance, no passengers required such assistance.