Tuesday, 25 November 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that. Deferring the Consumer Price Index increase for pensions which will take place in November and May for 6 weeks each will cause hardships to pensioners and penalise people already living in the shadow of poverty. It is interesting to note that the last stock exchange 6 monthly survey of profitability indicated that average profits for Australian companies have risen 41% during the half year to December 1985 over the corresponding period in 1984. Pensioners are already making unfair sacrifices. We call on the Government to restore the Consumer Price Index flow on and to take measures to alleviate poverty traps immediately and your petitioners as in duty bound, will ever pray. by Senator Jessop (from 52 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth that- There should be no introduction of payment for pensioner pharmaceuticals. The proposed deletion of 46 products from the Pharmaceuticals Benefits Scheme will cause great hardships to pensioners. There should be no substituting of cheaper drugs for those prescribed by the Doctor. There should be full testing of all pharmaceuticals by the Australian Authorities before they are released on the market. And that Australia should develop its own manufacturing industry in Pharmaceuticals and stop relying on all overseas multinational drug companies. by Senator Jessop (from 240 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 Senator Sibraa (from 116 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That there is widespread community concern about the proposal to irradiate food in Australia. Your petitioners, most humbly pray that the Senate in Parliament assembled, should: 1. Block the introduction of food irradiation into Australia and 2. Ban the import of Cobalt-60 and Caesium 137 and Caesium 134 to be used to irradiate food products, And your petitioners, as in duty bound, will ever pray. by Senator Button (from 60 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Senator Georges (from 1,635 citizens). Senator KILGARIFF(Northern Territory) —by leave-I present the following petition, which is not in conformity with Standing Orders, from 90 citizens: 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 SIDDONS(Victoria) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act relating to collective agreements regulating the terms and conditions of employment of employees of corporations and for other purposes. Senator MACKLIN(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate, noting that the European continent contains the highest concentration of nuclear weapons and armed forces- (a) welcomes the timely announcement in November 1986 by the Social Democratic Party of the Federal Republic of Germany and the Socialist Unity Party of the German Democratic Republic of their joint political initiative for the establishment of a 300 kilometre-wide corridor across Europe free of all types of nuclear weapons; and (b) wholeheartedly supports their initiative and calls on the Australian Government to lend its weight in all appropriate international bodies to assist in having this important plan implemented. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. States Grants (Tertiary Education Assistance) Act 1984-Report detailing Determinations made under the Act in respect of the 1985-87 Triennium-pursuant to Section 55 of the States Grants (Tertiary Education Assistance) Act 1984. 2. Australian Manufacturing Council-Annual Report 1985-86. 3. Public Service Board-Annual Report 1985-86 pursuant to Section 22 of the Public Service Act 1922. 4. Department of Resources and Energy-Annual Report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922. 5. Department of Territories-Annual Report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922. 6. A.C.T. Architects Board-Annual Report 1985-86. 7. Australian Postal Commission-Annual Report 1985-86-pursuant to sub-section 102 (3) of the Postal Services Act 1975. 8. Australia-China Council-Annual Report 1984-85. 9. Companies and Securities Law Reform Committee-Annual Report 1985-86. 10. Australian Institute of Family Studies-Annual Report 1985-86-pursuant to Family Law (Institute of Family Studies) Regulations. 11. Taxation Statistics 1984-85-Volume 1-Report of the Australian Taxation Office. 12. Australian Electoral Commission-Annual Report 1985-86-pursuant to Section 17 of the Commonwealth Electoral Act 1918. 13. Rural Adjustment Scheme-Annual Report 1985-86-pursuant to Section 25 of the Schedule to the States and Northern Territory Grants (Rural Adjustment) Act 1985. 14. Grain Legumes Research Council-Annual Report 1985-86-pursuant to Section 30 of the Rural Industries Research Act 1985. 15. A.C.T. Bush Fire Council-Annual Report 1985-86. 16. Milk Authority of the A.C.T.-Annual Report 1985-86. 17. A.C.T. Surveyors Board-Annual Report 1985-86. 18. Department of Transport-Annual Report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922. Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to new vehicle registration figures for October which are 25 per cent down on the same month last year, and to the fact that the January to October figure is the lowest since 1972. Is the Government concerned at this continuing severe downturn in vehicle sales? Has the Minister's Department, or any other department, yet made an assessment of the impact of the fringe benefits tax on the car industry? If so, can he confirm that the tax is having a significant effect on car sales, particularly on the fleet, business and commercial market, as found by the recently released survey by the Australian Automotive Dealers Association? If he cannot confirm that, will the Minister initiate an urgent review of the effects of the tax which the Automobile Dealers Association estimates has already cost 4,000 jobs in vehicle retailing? Senator BUTTON —The figures to which Senator Chaney refers have been drawn to my attention. The answer to the question as to whether the Government is concerned about the figures is, of course, yes, the Government is concerned about the figures. The question goes on to try to attribute particular reasons to the downturn in the motor vehicle industry. We have been through all this over many months. Senator Chaney —I asked whether you had made an assessment of the fringe benefits tax impact. Senator BUTTON —If the honourable senator does not mind, I will answer the question in my own way. The answer which I have given over many months, and which I continue to give, is that there has been a very large and significant downturn as a result of a variety of factors. The downturn is particularly dramatic because 1985 was a record year for the Australian motor vehicle producing industry. The year 1986 was expected to be bad for a variety of reasons, including tax changes, the introduction of unleaded petrol, the general downturn in the economy and the effects, whatever they may be, of the fringe benefits tax. The most significant area of downturn is in the imported motor vehicle area as a result of the effects of the devaluation. That was to be expected. While the local industry has also incurred something of a downturn, it is in the sense of a beneficiary from the downturn in the imported elements in the motor vehicle market. In respect of whether an assessment has been made which produces any definitive result about the effects of the fringe benefits tax, the answer is no, it is largely a matter of impression and judgment. I refer Senator Chaney to one impression which was given by the Managing Director of the Ford Motor Co. of Australia Ltd, Mr Dix, on the Derryn Hinch show this morning. He was asked: How much do you think the fringe benefits tax has hurt . . .? He answered: Well it's had an effect Derryn, when people ask me what's going wrong with the market . . . I look at it over the years and generally when there is bad news in one element of the market there may be good in the other, but this year when you look at the total market throughout Australia, rural, domestic, and metropolitan, you look at it between business use and private use, and there's adverse factors affecting all of it. So it is taking its share because business buying has gone down just as private buying has gone down, and just as rural buying has gone down. Senator Durack —You are not saying something is wrong with the economy, are you? Senator BUTTON —Senator Durack has woken up to the fact that the Government, as a matter of deliberate strategy, has wound back growth in the Australian economy. What an extraordinary discovery for the Deputy Leader of the Opposition in the Senate to make on Tuesday, 25 November 1986! It should be noted by everybody that Senator Durack has at last woken up to that fact. Senator Chaney —The Government has deliberately wound back the economy? Senator BUTTON —Senator Chaney has read the Budget Papers, has he not? The PRESIDENT —Order! There are far too many interjections. Senator BUTTON —Mr President, I am not worried about the quantity of the interjections; but the quality is appalling. I do not mind if they continue on that basis. Mr Dix is saying that there are many factors, as I have continually said in the Senate, for the decline in motor vehicle production. The fringe benefits tax is only one of them. In the interview Mr Dix certainly does not attribute the fringe benefits tax to be a major cause of the decline in vehicle production and registration in Australia in 1986. Senator CHANEY —Mr President, I ask a supplementary question. I note the Minister's admission that there are adverse factors in all sectors of the market which his Government has brought about. I ask him: In light of the fact that the Australian Automotive Dealers Association survey shows that there has been a 21.7 per cent drop in the market overall sales and that in the fleet business and commercial vehicle market there has been a decline of 30.5 per cent, will he undertake a review to determine the extent to which the fringe benefits tax is contributing to the greater deterioration in the commercial market than in the rest of the market and examine whether something should be done about this factor, namely, the fringe benefits tax, which is totally within the control of his Government? Senator BUTTON —I am quite happy to have officers of my Department conduct a review but I am sorry that I am not able to say that the result of that review would lead to the action which Senator Chaney suggests in his question. There has already been an adjustment to the fringe benefits tax in respect of motor vehicles. It is a departure from the Government's original intentions and a departure which I welcomed, but there will be no further change to the fringe benefits tax on the basis of any review, although if it is a matter of academic interest I am quite happy to have one conducted. Senator ZAKHAROV —My question is addressed to the Minister for Resources and Energy. What effect will the progress of court proceedings instigated by the mining company Peko-Wallsend Ltd have on the Government's declared policy that there will be no mining in Kakadu National Park? What action does the Government propose to take in light of current developments to fulfil the commitments expressed in that policy? Senator GARETH EVANS —I am happy to repeat the categorical undertaking given in the Parliament on 10 October by the Prime Minister-which I suspect that he might be in the process of repeating right now in the other place-that the Government will not countenance any mining in Kakadu National Park stages 1 and 2. The action that has been taken in the courts by Peko-Wallsend to endeavour to delay the processing of the World Heritage listing application for Kakadu stage 2 cannot and will not succeed in its basic objectives. It is the Government's intention to legislate at the first available opportunity to make it clear beyond dispute that no such mining activity can or will take place anywhere in the existing Kakadu National Park. We will legislate regardless of the course that may be taken by the company's present legal action, an action based on its claimed right to engage in mining activity under the present terms of the National Parks and Wildlife Conservation Act. As to the timing of the Government's proposed legislation, we have been giving consideration to introducing such overriding legislation later this week as the clearest possible demonstration of our intention to prevent mining in the existing park. However, it would be inappropriate to introduce such legislation until the High Court of Australia has indicated its attitude to the application for special leave to appeal which is now before it and will be heard and possibly determined today. I make the further point that as a practical matter it would simply not be possible to pass the necessary Bill through both Houses before the World Heritage Committee has completed its present meeting, so, at most, we would be introducing legislation, not seeking to enact it this session. If such legislation is introduced this week it would accordingly be our intention to lay it on the table until the new year and have it debated in the first week of the autumn parliamentary session. There should not be any concern, however, about the park being put at risk in any way pending the enactment of the legislation we now have in mind. I remind the Senate that the mere seeking of listing of the park for World Heritage status, which occurred on 17 September, provides the foundation under the World Heritage Properties Conservation Act upon which the Governor-General can issue a proclamation prohibiting any action that he has reasonable grounds to consider threatens the values of the park. Also relevant in the shorter term is that Peko-Wallsend has given a formal undertaking to the Northern Territory Supreme Court that it will not enter the park for exploration or mining purposes pending the determination of one of its numerous other court actions-this one is against Mr Cohen and me under the Administrative Decisions (Judicial Review) Act-which will take some time to finalise. Let me make the further point that even if as a result of these various current legal manoeuvres the final listing of stage 2 by the World Heritage Committee is delayed until the 1987 meeting of the Committee we can give a categorical assurance that the protection of the park will not be jeopardised in any way. The Commonwealth has ample legislative power to protect the park fully in every respect, and we are determined to so act. Finally, let me say that the Government will continue to meet any challenges that may be made to its decisions in relation to Kakadu, whether they come from Peko, the Northern Territory Government or anyone else. We will not be diverted from our clear and unequivocal commitment to preserve for future generations of Australians the unique natural and cultural heritage of Kakadu. We are fully confident of our capacity to honour that commitment. Senator DURACK —My question is also directed to Senator Gareth Evans but in his capacity as the Minister representing the Attorney-General. He may have some passing interest in his capacity as Minister for Resources and Energy, although I doubt it. I ask, on the same subject as the previous question, whether the Minister is aware that the World Heritage guidelines set a deadline of 1 January in any year for the receipt of nominations for World Heritage listing to be dealt with in the coming year. Why did the Government not follow this long-established procedure and put forward its nomination of stage 2 of Kakadu National Park for consideration next year, which would be in accordance with those guidelines? Does he agree that this would have given time for the Government to consult with the Northern Territory Government-as it had promised, but failed to do-before putting stage 2 forward for listing, and also for consulting with interested parties who claim rights in the area, such as Peko-Wallsend? If the Government is not successful in the High Court proceedings, does the Government intend to withdraw the nomination in its entirety or will it proceed with it with the excision of the area under dispute? a Senator GARETH EVANS-The circumstances of the Government's seeking of listing by the World Heritage Committee when it did are well known and were fully described and explained at the time. They are a product of a rapidly evolving set of circumstances in which the interests of all parties were well and truly known to the Government, not least the interests of the Northern Territory Government and the alleged interests of the leaseholders or lease applicants in that area. Nothing would have been gained by further consultative processes of the kind to which Senator Durack referred. In all the circumstances of the case, and given the need to demonstrate the extent and the depth of the Commonwealth's commitment to Kakadu, which I have again spelt out today, it was thought appropriate to proceed with that nomination as soon as possible. It was accepted by the World Heritage Committee on its agenda for today's meeting. There was no difficulty about having the matter dealt with through that body until the current legal proceedings and the interlocutory injunction. Senator Durack would know that it is only an interlocutory injunction that we are here talking about. The criteria, standards of proof and legal argument that must be satisfied for an interlocutory injunction by no means settle the likely outcome of the final determination of the case, when it happens. It should not be thought that the proceedings that have occurred to date are in any way a demonstration or proof of the inadequacy of theCommonwealth's legal position, quite apart from its moral position, in this matter. Senator Durack, in the final part of his question, meant to ask, I suppose, whether, if the interlocutory injunction was not overturned by the High Court today, the Government would still seek to proceed with its application to the World Heritage Committee in a form that was shorn of those contested lease areas, or whether, rather, it would seek to defer consideration of the whole application until a later date. I am able to say that the latter course would be that which the Government would take, not least because it is not at all clear that the World Heritage Committee would be prepared to countenance an application being proceeded with for some different land area-that is, one short of the leasehold interests in question-than the land area which is the subject of the basic application. It is the Government's intention, as I said in answer to the first question today, to legislate as soon as is appropriate and as soon as possible to put all these matters beyond doubt. At the latest, that will occur at the beginning of the autumn session next year. The application for the listing of the matter before the World Heritage body, perhaps with some further extension of the national park, can be dealt with next year. Nothing will be lost by the delay that will thus arise if in fact it is the case that a delay will be imposed upon us by a court decision today. Senator DURACK —I have a supplementary question, Mr President. What is the further extension of the national park that the Government is perhaps thinking of including? Senator GARETH EVANS —I know that Senator Durack does not take much notice of what is going on in his shadow portfolio area but he will recall that back in September the Government announced-- Senator Durack —I recall only too well but you were not too specific. Senator GARETH EVANS —In the context of stage 3 of the park, the Gimbat and Goodparla pastoral leases, it is well known that the Government stated right back at the outset of its term of government an intention to extend the national park into that area. We should be in a position to have some further extensions ready to go on the World Heritage List, certainly by the time that that Committee meets again next year and hopefully a lot earlier. Senator McKIERNAN —Has the Minister for Industry, Technology and Commerce seen a report in today's Australian which claims that Australian companies are moving their factories off-shore in order to establish operations in markets far larger than the Australian market? Does the Minister agree with the view of Mr John Elliott quoted in the article that it is Australia's harsh tax rates which are pushing our firms off-shore? Senator BUTTON —I have indicated publicly that I disagree with Mr Elliott's view on this matter and I do not see why I should not do so again here. The question comes as no particular surprise. I have said in the Senate before that Australia's business tax regime compares very favourably with those of other industrial countries. Taxation paid as a proportion of gross operating profit is 18 per cent below the Organisation for Economic Co-operation and Development average of 21 per cent. There have been major reforms of the Australian taxation system which include new measures to encourage productive investment-I think that is the important point-and these reforms have enhanced Australia's attractiveness to foreign investors at a time when other countries, such as the United States of America and Canada, are taking away tax concessions currently enjoyed by business. The Australian corporate tax rate will increase next year to a flat rate of 49 per cent but the overall burden of corporate taxation will fall with the introduction of an imputation system to abolish double taxation of company profits, the abolition of the 15 per cent withholding tax on dividends repatriated overseas and the abolition of branch profits tax. These reforms offer particular benefits to overseas investors and are favourable to Australian industrial activity. There are other features of the tax system, including the tax concession for research and development, the depreciation allowances and so on, which I could elaborate on at length but I will not. Mr Elliott has made a number of comments about this, some of which are quite inconsistent. At the time of the August Budget he was saying things which were inconsistent with what he was saying a fortnight ago in relation to the investment environment in Australia. Sir James Balderstone, the Chairman of Broken Hill Proprietary Co. Ltd, put another view last week. He said that Australia had become attractive for foreign investment, particularly in export oriented manufacturing industries. Last Friday I had a discussion with the managing director of a very big Australian company who told me that in 1987 his company would invest more in manufacturing in Australia than it had in its whole history in Australia. There are different views within the business community about this. That said, I agree with one comment which is made in the article in the Australian. It points to the relatively small size of the Australian market. That is why the Government is targeting its industry, technology and trade policies towards expansion of Australia's export capacity in markets. That is why a number of significant companies in Australia have made overseas investments, in order to provide linkages with substantial overseas markets which are not presently available. Senator HAINES —Is the Minister representing the Minister for Arts, Heritage and Environment aware of the fact that road building equipment and workers were present in the Lemonthyme in Tasmania as recently as last Friday? Can the Minister say whether these moves to extend the road as announced by the Tasmanian Forests Minister last week are in breach of the memorandum of understanding? Further, can the Minister say whether the small fire burning near the Lemonthyme road works in the middle of last week was lit as part of the management plan for the area? Finally, will the Minister urge the Prime Minister to accept the invitation extended to him by the Tasmanian Wilderness Society to visit the Tasmanian National Estate forest areas to see at first hand what the effect of logging in these areas will be? Senator RYAN —I do not have any information on the particular details that Senator Haines is seeking, but I can assure her that it is our Government's intention and, indeed, the Prime Minister's intention to take whatever steps we can take to protect national rainforests in areas such as the area referred to in Tasmania. I will pass the particular question on to the Minister for Arts, Heritage and Environment. Senator Haines —Is there any chance of getting an early reply as there is some urgency. Senator RYAN —I understand that it is urgent but I do not have any information, so I will pass the question on and get the information as soon as possible. Senator GILES —Has the attention of the Minister representing the Minister for Employment and Industrial Relations been drawn to the November edition of Industrial Review, the journal of the Confederation of Australian Industry? Is the paper critical of the New or extreme Right's approach to reform of the industrial relations system? Does the CAI's attitude, as expressed in the review, indicate a level of support within the mainstream of the industrial relations community for the Government's industrial relations policies? Senator WALSH —The answer to the last part of the question is, of course, yes. The article in question does in the broad support the Government's industrial relations policy although I would be very surprised if the CAI, when it argues any particular case before the Australian Conciliation and Arbitration Commission, would be completely in accord with the specific policies that the Government might be advocating. I do not think many people would expect that to happen. The Review provides a clear indication that the CAI is opposed to the belligerent policies of confrontation that are being proposed by some members of the H. R. Nicholls Society. I am not sure that all members of the H. R. Nicholls Society advocate that. Last Friday's Australian Financial Review contains a report of comments by Mr David Nolan, who is the CAI's industrial council director, and I think a couple of those quotations focus on the degree to which the CAI is in broad agreement with the Government and, of course, diametrically opposed to the views that have been put forward by various members of the H. R. Nicholls Society which are being repeated by the Leader of the Opposition and his Deputy. Mr Nolan said: These critics of our centralised industrial system, virtually none of whom have been involved in industrial relations, threaten employers with changes which would create conditions far worse than those that already exist. These critics of the industrial system seem to believe that the mere existence of industrial tribunals makes things worse rather than improves them. Their arguments, however, have nothing to support them but their own personal opinions and in fact represent a grave danger to employers. Mr David Nolan of the CAI said that the policies being advocated by members of the H. R. Nicholls Society and loyally repeated by the Leader of the Opposition and his Deputy, no doubt at the direction and instigation of Andrew Hay, `represent a grave danger to employers'. I understand that Mr Andrew Hay put on a spectacular performance on the Australian Broadcasting Corporation Four Corners program last night. Finally, I quote from the CAI's paper to which Senator Giles's question referred. In respect of industrial relations in the United Kingdom, the CAI paper stated: What in actual fact represents the best example of an Australian industrial environment without tribunals is the United Kingdom. It is a landscape so bleak that it is impossible to imagine anyone wanting to go down that road. And yet that is the most likely outcome here should we move to a system of decentralised collective bargaining. I can only endorse that statement and say that it is remarkable that anybody, particularly given the experience in Australia in the early 1980s and in the United Kingdom throughout the 1980s, should want to go down that road. However, some of the fanatics of the far Right, some of whom are members of the H. R. Nicholls Society, and its toadies outside, want to do precisely that. Senator TOWNLEY —I ask the Leader of the Government in the Senate whether he agrees with radio announcer and columnist, John Laws, who, when talking about certain government grants by this Government, said in last Sunday's edition of the Sunday Telegraph: Millions and millions of dollars are being squandered at a time when the country is practically on its knees. He also said that the Government was mollycoddling the parasites and fringe dwellers of society. Does the Minister agree that the public is fed up with the loony grants that are being made to fringe groups of society? Will the Minister guarantee that taxpayers' millions will not continue to be wasted? Senator BUTTON —The question of whether taxpayers' money is being wasted always requires a very subjective judgment. Many people in the community think that taxpayers' money is being wasted by supporting the whole lot of us here in the Senate. That may be true when I look across the other side of the chamber but it is not true as far as the Government is concerned. In relation to the matters raised by John Laws, it was a useful list, if you like, of matters in respect of which judgments have been made about their general social utility as items of expenditure. I have a lot of sympathy for what he said and I would enjoin the Government to examine some of those matters as quickly as possible. Senator FOREMAN —My question, which is directed to the Minister representing the Minister for Territories, concerns the provision of furnishings for the new Parliament House. Will the Minister state whether it is Government policy to select furnishings produced in Australia at every stage possible? Is it true that two companies are at this stage vying for a $4m contract for furnishings at the new Parliament House, one of which is Arredorama International Pty Ltd and the other Co-Design? Will the Minister further confirm that Co-Design will manufacture these furnishings in Australia and that Arredorama will fully import them? Senator GIETZELT —I think it is well known that the Government's policy in respect of purchasing by the Government-this also applies, of course, to statutory authorities-is that as far as is practical we should be purchasing Australian goods and that includes materials and fittings. I imagine that that policy has bipartisan support in the Parliament, having regard to the extensive amounts of goods and materials that are purchased by the Commonwealth Parliament as well as State parliaments. The only qualification I make in that respect is if the goods were not available in Australia or were not suitable for the particular purpose the statutory authority required them for. I understand that the Parliament House Construction Authority is currently considering furnishings for the new Parliament House. I am advised that some 12 companies have submitted tenders and that the tenders are currently under consideration. I would expect that Senator Foreman's concerns would be the concerns of the Government. I would expect that the Authority, when making any decision with respect to these very important and very expensive contracts concerned with the new Parliament House, would take into account Government policy in these matters. Should it depart from that policy, I am sure the Government would be very interested to know the reason for such departure. If there is any such departure, I would hope it would be brought immediately to the attention of the Minister. I do not know what remedy lies in that area but certainly it should be publicly proclaimed that the Government expects the majority of materials and purchases in respect of the new Parliament House to have an Australian content. Senator JESSOP —I direct a question to the Minister representing the Attorney-General and the Minister for Foreign Affairs. I refer to the recent terrorist attack on the Turkish Consulate in Melbourne on Sunday, the most recent of a series of incidents which have occurred since 1970. I ask the Minister whether he can recall making the following statement as Attorney-General on 24 October 1984 over the Australian Broadcasting Commission radio in Hobart: ASIO has at my insistence wound back significantly its intelligence activities in relation to so-called subversive or potentially subversive organisations. Has the present Attorney-General followed this policy in regard to surveillance of subversive or potentially subversive organisations? In view of the Government's inability to determine just how many explosive, ordnance and other goods have been stolen from Government ordnance factories and stores, or even who did the stealing, will it give urgent attention to increasing the surveillance capacity of the Australian Security Intelligence Organisation and the resources available to the Australian Federal Police and other security forces in order to provide Australian citizens and diplomats with adequate protection against terrorist activities? Finally-and this part of the question relates to foreign affairs-why has the Foreign Minister not provided information to State police forces concerning terrorist organisations in Australia until now? Senator GARETH EVANS —I can only hope that Senator Jessop's question was deliberately misleading because, if it is based on his actual understanding of either what I said in 1984 or the difference between `subversion' and `terrorism', it displays an intellectual quality that would be quite inappropriate for, I think, a primary school, let alone the Parliament of this country. I recall my statement very well indeed back in 1984, that ASIO had wound back its activities so far as subversion, as defined in the then ASIO Act, was concerned in order to concentrate its resources where they could be more appropriately directed to the defence and genuine security concerns of this nation. There is a fundamental difference between the concept of subversion, as it then appeared in the legislation and as it was being applied by ASIO, and the concept of terrorist activity or activity which might result in terrorist activity, or planning for terrorism, or activity which might be a precondition to terrorism. There is a fundamental distinction. Subversion in that context is the sort of thing that a miscellany of basically loony right wing or left wing organisations were engaged in by way of armchair theorising, occupying in times past the resources of a considerable number of ASIO officials and part time enthusiastic supporters to no discernible result so far as the security of this nation was concerned, other than, arguably, to undermine its civil liberties. I have no regret, shame or embarrassment whatsoever about re-ordering the priorities of that organisation against that background. It is not possible, of course, to go into more detail about these things than what appears now in considerably greater detail in the annual reports of the Organisation. But without going into detail, what did happen and what has continued to happen, is that the first class resources of ASIO to deal with terrorist threats and terrorist capability in this country were fully and thoroughly maintained and have, indeed, been enhanced by a variety of arrangements over the years. There is no question that there has been any winding back of that organisation's capability to handle the kind of thing that was presumably involved in the bombing over the weekend in Melbourne. So I reject utterly the whole foundation of Senator Jessop's question. It is based, as I say, either on a misunderstanding, which does his intelligence no credit, or upon a deliberate misstatement, which does his honesty no credit. As to the final point of his question about liaison and relationships between ASIO and State police forces, there may well be some more specific information I can give in response, and I will take the matter up with the Special Minister of State. Senator JESSOP —Mr President, I ask a supplementary question. I also asked the Minister whether the Government would give urgent attention to providing increased capacity and resources to the Federal Police and other security organisations in view of the thefts that have been carried out from the various ordnance factories and the fact that the Federal Police at the time of the last theft said that it was incapable of providing adequate surveillance of the factories. Senator GARETH EVANS —As I have said, representing the Minister for Defence in this place, the alleged thefts from ordnance factories in this country are another fantasy which has been perpetrated either as a result of deliberate dishonesty or as a result of stupidity and an inability to separate fact from fantasy by the Opposition-- Senator Button —Mainly by Sinclair. Senator GARETH EVANS —Usually by Sinclair. Senator Jessop —Mr President, I raise a point of order. I object to the Minister suggesting that I am dishonest. I ask that he withdraw those aspersions on me. The PRESIDENT —Order! I ask the Minister to withdraw any imputation in his remarks against Senator Jessop. Senator GARETH EVANS —I did offer an alternative thesis, Mr President, and that was that he was a dope, but, of course, I withdraw. The PRESIDENT —Order! I ask the Minister to withdraw. Senator GARETH EVANS —I withdraw. I make the point that there has been a continuing campaign-- Senator Chaney —Mr President, I raise a point of order. He just substituted one insult for another, and I suggest that you ask him to withdraw that also. The PRESIDENT —Order! I did not hear the second remark. Senator Chaney —I did not want to repeat it, Mr President. I suggest that he should withdraw it. Senator Grimes interjecting- The PRESIDENT —Order! The Minister will withdraw that remark. Senator Grimes —I withdraw, Mr President. I can assure you that it was not aimed at you, sir. The PRESIDENT —The Minister withdraws, irrespective of whether it was at me or anyone else. Senator Evans, do you withdraw? Senator GARETH EVANS —Yes, Mr President. I repeat that there has been a deliberate series of misrepresentations, for whatever motive, by members of the Opposition, conspicuously the shadow Minister for Defence, as he likes to call himself, Mr Sinclair, on this question of thefts from ordnance depots. None of them have amounted to anything more, so far as I have been briefed and advised, than the minor thefts that are associated with any significant industrial establishment. They do not point to the need for any fundamental reappraisal of the security arrangements of those establishments, although there is, of course, a continuing review of these things. They certainly do not call for massive additions to the Federal Police or the other agencies of this country of the kind that Senator Jessop is proposing. Senator McINTOSH —I direct my question to the Minister representing the Minister for Foreign Affairs. Has the Minister's attention been drawn to recent media reports detailing Soviet initiatives in support of a nuclear weapons free zone in the Baltic Sea region? Does the Minister have any further information on these reports? Is he able to comment on the significance of this in terms of progress on arms control? Senator GARETH EVANS —The Australian Government, of course, supports nuclear weapons free zone proposals provided they reflect an initiative of, and have the support of, the countries of the region concerned. The idea of a nuclear weapons free zone encompassing the Baltic region is not new. It has been proposed since the 1950s, with regular support and encouragement from the Soviet Union and varying degrees of interest and support from other countries in the region. There have been obvious difficulties inherent in the proximity of the region to the frontiers of strategic nuclear confrontation between the Soviet Union and the West. It is a region, as we of course are all aware, of extensive deployments of nuclear weapons. It is the case that on 13 November a leading Soviet Politburo member, Yegor Ligachev, is reported to have announced at a Press conference in Helsinki that the Soviet Union was cutting certain nuclear deployments in the neighbourhood of the Nordic region. Press reports from Sweden, however, suggest that the nuclear weapons Mr Ligachev was referring to were withdrawn some time ago in the context of modernisation of Soviet nuclear forces in the area. As to the question of the significance of this in terms of progress in arms control, the Australian Government considers, in line with its view that nuclear weapons free zone proposals should, as I have said, have the support of countries of the region concerned, that this is primarily a matter for the countries of that region to assess. Senator WATSON —Does the Minister representing the Treasurer agree that, in situations where there are no cost bases and therefore no benefit of inflation adjustments, the capital gains tax rates can be the highest of any developed country in the Western world? Senator WALSH —I am not sure that I understood the question properly; I am not sure that anybody could, for that matter. These are people who, for example, believe that they would like to have the Reagan tax policy in preference to the Australian tax policy. If I remember correctly, that policy taxes the nominal gain at a rate of 34 per cent. In other words, it is a 34 per cent tax on inflation. The rate of capital gains tax in Australia can be higher than 34 per cent as from 1 July 1987, and could be as high, but not necessarily as high, as 49 per cent, but only on the real gain. It is certainly not difficult to find capital gains taxes in other countries at which the rate is lower, but the tax is levied on nominal gains not on real gains. Of course, the effective rate of tax is, in most cases, higher than the Australian rate. Even worse, it is a very unfair type of tax in that very substantial taxes can be levied after disposal of assets upon which there has been no real gain at all. In other words, there is always that uncertainty about the effective rate of capital gains taxation in just about every other country, an uncertainty, of course, which, until this Government's tax reform package, also existed with respect to the taxing of capital gains in Australia; nobody could be absolutely certain that on the disposal of an asset he would not have had tax levied under section 26 (a) of the Income Tax Assessment Act, again, on the nominal gain. That section will no longer be applicable. What Australia now has, in the taxation of capital gains as in the taxation system generally, is a system which is fair and the outcome of which is known. Senator WATSON —I ask a supplementary question. Given the Minister's answer and given the circumstances of my question, does the Minister therefore concede that there is a full gain at marginal rates on a nominal basis? Senator WALSH —As I said, I am not sure that I understood the question and I doubt whether that is my fault. Section 26 (a), over which Mr Howard, for example, presided as Treasurer for five years could, under circumstances which could not be foretold with any certainty, have taxed the nominal gain at the full marginal rate. The capital gains tax which this Government introduced to replace that uncertain and unfair provision of the old Act will tax only the real gain. Senator MAGUIRE —I direct my question to the Minister representing the Minister for Defence. Does the Government have information on the number of armed service personnel who have been killed or injured in road traffic accidents in recent years? Are service men and women more at risk to road accidents than the whole community? Is the matter of road accidents among service personnel of the greatest possible concern to the Government? What action has been taken or is contemplated to reduce road accidents by service men and women? Senator GARETH EVANS —The Government is very concerned about the accident rate among all Australians, and no less among service men and women, no matter how relatively high or low that rate may be. Accident rates among service men and women cannot be readily assessed against the rates in the civilian community as the records are not maintained in similar formats. However, I have available some statistics, provided to me by the Minister, covering recent years of the involvement of service personnel in road accidents which I seek leave to have incorporated in Hansard. Leave granted. The table read as follows- Navy Fatalities Injuries Army Fatalities Injuries RAAF Fatalities Injuries 1981* ... 38 311 9 180 1982 ... 8 293 40 275 17 236 1983 ... 6 589 28 334 8 235 1984 ... 2 452 22 371 9 168 1985 ... 15 454 18 283 10 164 1986 ... 1 158 15 252 4 88 * 1981 figures not available on short notice. Note 1: RAN figures are for Fiscal Year, others are for Calendar Year. Senator GARETH EVANS —The services are constantly highlighting road safety issues among their members and conduct private vehicle checks prior to leave periods to ensure their roadworthiness. The services also vigorously discourage drink-driving and promote sensible driving habits. As an example, the Army has recently launched an initiative to permit service personnel travelling long distances on leave to utilise Army units for rest stops. These rest stop units have been designated in Queensland, New South Wales, Victoria, South Australia and Western Australia. Senator PARER —The Minister for Resources and Energy will be aware that a sub-committee on coal of the Caucus resources and trade committee has recommended the examination of the feasibility of the establishment of a national coal authority. I ask the Minister: Is the Government studying the feasibility of a national coal authority? What would be the proposed purpose, structure, duties and responsibilities of such a coal authority? Senator GARETH EVANS —The Government is considering, as it has been for some time since it is a matter of long-standing Party policy, the feasibility and desirability of establishing a national coal authority. It is far too early to say what the outcome of those deliberations will be. I point out only that there are a multitude of different models one could choose between if one wanted to go down that track. There is a very big difference between a national coal marketing authority performing some function along the lines of the Australian Wheat Board at one end of the spectrum and, at the other end of the spectrum, by way of contrast, a body established, perhaps, along the lines of the Steel Industry Authority existing essentially to monitor the direction of the industry and to give advice to the relevant government as to policy changes and so on that might appropriately be implemented. There are a number of models in between, perhaps involving some variation in the kinds of powers and functions that are exercised by the Commonwealth-New South Wales Joint Coal Board that might also reasonably be taken into account in such an evaluation. It is an issue which the Government is looking at. We are conscious that there are strong differences of view within the industry about the utility or desirability of a body of any such kind, with the coal owners by and large being solidly against it, with the coal mining unions being very much in favour of it and with something of a mixed reaction so far as the relevant State governments are concerned. It is an issue which the Commonwealth will continue to look at seriously. I am not in a position to advance the public debate any further than that. Senator COATES —I refer the Minister representing the Minister for Social Security to the headline of the front page story in the National Times on Sunday alleging that one in five of unemployment benefit recipients is a cheat. Is it not true that the survey on which the story was based was directed at specially targeted groups in specially targeted geographical areas; that some recipients merely had the rate of benefit adjusted, rather than cancelled altogether; and that, while the body of the story mentioned these matters, the headline was totally misleading and an insult to the overwhelming majority of genuinely unemployed job seekers in this country? Senator GRIMES —I did read the article. As Senator Coates said, it referred to the Budget initiatives taken in which both the Minister for Social Security and the Department set up review teams in specific areas targeting specific groups of people where there was considered to be a high risk of people cheating on unemployment benefit. As a result of that, the first reviews were done of about 3,300 people and 677 were taken off a benefit to which they were not entitled. To do what the article did in the headline and what Mr Blunt, the shadow Minister, did in his Press statement and extrapolate those figures to the national figures and say that one in five people, or whatever the figure is, is cheating on the dole is nonsense. It is fairly typical of the response of Mr Blunt in these areas. We targeted a specific area. We targeted specific groups of people and that targeting has been very successful. But that is only stage one of the reviews that will be conducted. As the reviews go further the percentage of people found cheating will be lower and lower. Mr Blunt is known for Press statements of this type. He put out one recently, on 23 November, which said that we had cut the number of social security field officers by 64 when this Government has increased the number by 130. Six hundred people have been assigned to service social security budget initiatives. He said that field officers do not have the power to investigate welfare fraud. Under legislation not only do they have that power but clients must answer the questions they ask under that power. Mr Blunt said that we eliminated the work test. We have not. He said that the Labor Government had let personal lodgment of unemployment claims lapse. It was not this Government but the previous Government that did that. I also remind honourable senators that only last year Mr Blunt was a vigorous supporter of the Australia Card because he claimed, rightly, that that card would be very effective in overcoming social security fraud. It is unfortunate that the article, as Senator Coates said, casts a cloud over the vast majority of honest people on unemployment benefit. These are the sorts of hysterical responses we get from the shadow Minister in the other place. Senator SANDERS —I ask the Minister representing the Attorney-General: Is it a fact that the Commonwealth could have ensured the consideration of the entire stage 2 of Kakadu National Park by proclaiming the area under the World Heritage Properties Conservation Act, therefore bringing the area under the protection of section 10 of that Act? Is it also a fact that section 10 (e) of that Act prohibits exploratory drilling in a proclaimed area and therefore would override the order of the Federal Court of Australia? Finally, did the Government purposely fail to proclaim Kakadu stage 2 to give the mining companies the opportunity to block the listing while the Government appeared to back the conservation movement? Senator GARETH EVANS —As usual in reply to Senator Sanders questions I have to tell him that the world is not quite as simple as the one he perceives. It is not appropriate for me to embark on some dissertation, even if the Standing Orders were to allow it, on the legal principles that govern this matter. I simply say that on the advice available to the Government, as I am aware of it, the course chosen by the Government and pursued by it to date has been the only realistic one available. To the extent that difficulties have arisen as a result of interlocutory injunctions being obtained, they will be resolved in the way I indicated earlier in Question Time. There is no question but that the Government will honour the commitment we have made to ensure that no mining activity takes place in Kakadu stages 1 and 2. There are a variety of ways in which we can achieve that objective. There are a variety of legal and statutory weapons available to the Government to pursue that result. We will not be rushed or pressured into any course by the hairy advocacy of Senator Sanders. Senator CROWLEY —Has the Minister for Industry, Technology and Commerce seen media reports of a major national survey released at the weekend by the Metal Trades Industry Association, which indicates that investment in new plant, machinery and equipment by the metal and engineering industry will rise by as much as 26 per cent in 1986-87? Does this increase seem to be industry-wide or are some sectors performing better than others? Senator BUTTON —I have seen media reports, but I have also seen a copy of the survey itself which was released by the Metal Trades Industry Association on Sunday. The national survey was conducted in September and October this year. It covered 729 companies operating in nine different sectors of the metal and metal engineering industry. It showed that manufacturers have commenced significant re-equipment programs, which are expected to raise the industry's investment by about 26 per cent in this financial year. The survey suggests that large companies-those with a turnover of more than $50m-account for a major share of the expected 26 per cent investment rise. Expenditure by these companies is expected to increase by 34 per cent, following a rise of 27 per cent in 1985-86. The anticipated result in expenditure on new plant, machinery and equipment by these companies is large compared with the national figures as provided by the Australian Bureau of Statistics. Those figures show that spending on plant, machinery and equipment by all sectors of Australian industry is expected to rise by 1 per cent in nominal terms in this financial year and the expected increase for Australia's total manufacturing sector as being 7.5 per cent. As the MTIA has pointed out, the findings of the survey are significant for two reasons: First, the fact that the metal and engineering sector is a major segment of the Australian manufacturing industry, accounting for half of the value added produced by all manufacturers in Australia; and, secondly, the results provide insights into how decision-makers in the metal industries view recent and expected economic developments. The perceptions of the respondents are important, for it is these respondents who make decisions as to who must invest, what products to produce, what efforts to put into selling goods overseas, whether Australian goods can be substituted for imported alternatives, and so on. Decisions on those issues will be quite crucial to Australia's economic performance in the near future. To that extent, and having regard to the fact that all surveys, whether gloomy or optimistic, must be qualified, to some extent, the survey conducted by the MTIA is very encouraging. Senator WALTERS —Can the Leader of the Government in the Senate say how much of the latest 8.2 per cent yearly increase in full time adult ordinary time earnings is attributed to the cashing out of the fringe benefits tax by employers? Does the Government expect further fringe benefits tax increases to show in the next quarter? Senator BUTTON —As I understand it, it is very difficult, on the basis of published information, to determine to what extent that figure represents cashing out of fringe benefits and to what extent it represents a degree of salary drift. I do not think there is any precise information available on that question at present. If it becomes available, I will certainly make it available. Senator Walters —Would you answer the second part? Senator BUTTON —I do not think the second part stands up without the first part, Senator. Perhaps the honourable senator would like to ask it again. Senator REYNOLDS —Is the Minister for Community Services aware of allegations made by the Queensland Minister for Welfare Services, Mrs Yvonne Chapman, that the Commonwealth is depriving Queensland families of their full share of funds under the new family support programs? Does Mrs Chapman have anything to boast about, given that Queensland has the lowest per capita figure for welfare spending? What are the facts relating to the Federal Government's family support program initiatives? Senator GRIMES —It has come to my attention that Mrs Chapman has sent out letters to Queensland organisations which are funded under the family support services scheme, suggesting that despite her best efforts-I think that is the expression she used-the Commonwealth is depriving Queenslanders of their fair share of family support funding and allocating it to other States. To say the least, Mrs Chapman is telling fibs. I can assure honourable senators that under the new family support program Queensland has been allocated its exact per capita share of the available expansion funds. Queensland has approximately 16 per cent of the population and gets 16 per cent of the funds available for new or expanded services under the agreement that I have negotiated with the States. The only aspect of the new program arrangements which might be seen to disadvantage Queenslanders is the distribution and indexation of funds to pre-existing family support services, some of which were funded by the Commonwealth and some of which were funded by the State. It is to these pre-existing services, originally funded by the Commonwealth under a variety of arrangements and for a range of purposes, that Mrs Chapman is referring when she accuses the Commonwealth of providing less funding than Queensland has claimed as its entitlement. What she does not state is that Queenslanders are greatly disadvantaged relative to people of other States in respect of pre-existing family support services because the Queensland Government would not provide them with any funds. The Queensland Government provides only $488,000 or 6 per cent of total State assistance made available to family support despite the fact that it has 16 per cent of Australia's population and despite the fact that in some areas, particularly with teenage illegitimate births, it has much higher rates than any other State. Mrs Chapman is trying to overcome, as she often does, her own Government's inadequate expenditure in this area. The letter is obviously and plainly misleading to say the least. In fact it tells lies, but that is what we have come to expect from that Minister and that Government. Senator Chaney —Mr President, I think that is unparliamentary. The PRESIDENT —The Minister is referring to the actions of a Minister in another parliament, a member of another parliament, and I ask him to withdraw. Senator GRIMES —I withdraw that, yes. The letter itself tells lies, not the Minister; if that suits the honourable-- Senator Chaney —That is not a meaningful withdrawal. Senator Grimes is referring to a letter from the Minister, as I understand it. Senator GRIMES —I will withdraw. I hate to see Senator Chaney upset so early in the week. Senator GARETH EVANS —Mr President, on 20 October, Senator Lewis asked me as Minister representing the Minister for Defence a question about defence co-operation with Indonesia. The Minister for Defence has now provided the following answer: Indonesia has advised that it does not wish to take up offers of places on courses at the Joint Services Staff College, the Royal Australian Air Force Staff College and the Army Command and Staff College in 1987. No reasons have been indicated for these particular decisions. This should not be interpreted as a `clear breach' in our relationship with Indonesia. Countries from time to time and for various reasons decline positions on Australian training courses. It is also relevant that our officers continue to be welcome at Indonesian staff colleges. The Australian Government desires to maintain a sound and constructive defence relationship with Indonesia. This derives from our shared strategic interests in the security of our region. Australia and Indonesia have undertaken a range of defence activities over many years and the Government continues to be willing to support activities such as training in Australia where these are sought by Indonesia. Senator GARETH EVANS —On 11 November Senator Sibraa asked me a question about the diversion of a Qantas aircraft from Syrian air space. In the course of my answer I said that `as a result of these manoeuvres the aircraft then made an unscheduled stop at Bahrain to take on fuel'. I have now been advised by the General Manager Operations for Qantas that this answer needs supplementation, which I now put on to the record. The flight was in fact able to continue on to Bombay without the necessity of a refuelling stop as Qantas aircraft carry additional fuel over the sectors transiting Syrian air space because of the possibility of diversion and disruption. On the occasion in question, a fire in the Bombay terminal appeared to indicate that the aircraft may have had a problem with arrival in Bombay and this was the reason for considering refuelling at Bahrain; but in the event it was not necessary to do so. So lest any air travellers be concerned that some manoeuvring around the Middle East of the kind that might be necessary from time to time will put at risk the capacity of Qantas planes to fly the distance home, I am happy to clarify the record. Senator MASON(New South Wales) —by leave-I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to repeal the Koongarra Project Area Act 1981. Senator LEWIS(Victoria)(3.11) —I move- That the Senate take note of the paper. Firstly, let me say that I praise the layout of the 1985-86 annual report of the Department of Territories. It is a new layout and it is a great improvement. The report has in it a set of statistics which provides a lot of excellent information and the Department is to be commended for the general way in which it has gone about setting out this report. I do say about the statistics that I am sorry that, while much information is provided, in fact there is no clear identification of the total number of employees in each branch nor of the number employed as day labour. There are some areas where some minor criticisms may be made and that is one area I was concerned about, but all in all I think it is a great improvement. Secondly, let me say that I am interested to note that the consultants, Peat Marwick Mitchell and Co., have apparently been involved in the preparation of a corporate strategic plan for the Department. This report is only to 30 June 1986 and I have an idea that much of that strategic plan has already been implemented. We will look forward to seeing the results of that. I commend the development of management programs which, as I understand them, enable managers to be now responsible for program performance, program funds and staff resources. I do think it is a pity that these references in this report have not been expanded and that I am unable to understand the language used which is not the jargon used by various people in business management. Nevertheless, we do look forward to reports as to these so-called improvements in the management of the Department. I might very quickly criticise some of the waste and duplication which seem to me to occur in the welfare services. In particular I refer to the health area and to the handling of the dispute with salaried doctors, the current waiting time for elective surgery and the shortage of nursing home beds. The Government, as mentioned in this report, has adopted the policy, which we adopted when I first took responsibility for this portfolio, of giving the one Minister responsibility for all related activities in the Australian Capital Territory, and I commend it for that. On the other hand, I would like to condemn Minister Blewett for his continued interference in Australian Capital Territory health matters. I raise, for example, the issue of the inordinate length of time to consider the John James Memorial Hospital's request for a 60-bed extension. This does not involve any Federal capital or recurrent funding, yet that hospital has not been able to get this request dealt with. I have been concerned about the public in-fighting between the Department of Territories and the National Capital Development Commission and I hope they have now resolved their differences. I also mention the very long delays which people who are trying to register their motor vehicles in the Australian Capital Territory have to put up with. I think it is quite ridiculous and some simple solution to that problem could be found apart from the construction of an new station. I would like to make other criticisms about that area but I am running out of time. There are still some shortcomings in the report which naturally tends to gloss over the problems and fails to address the very real problems facing Christmas Island at the present moment. Senator KILGARIFF(Northern Territory)(3.16) —I commend the Department of Territories for its 1985-86 annual report which it has made available to the Minister for Territories (Mr Scholes). It is a very complete report and after perusing it one sees there could be many hours of debate on it. I will speak just briefly to some aspects of it. Of course, the report includes the Cocos (Keeling) Islands and it refers to the first report of the Commonwealth Grants Commission on the Cocos (Keeling) Islands inquiry, to the relativities between those islands and other places to bring about an appropriate standard for funding. There is also some reference to the Northern Territory and the movement by the Northern Territory to statehood. This in itself is another subject and would take some considerable time to debate. But I will comment just briefly on it. Very shortly the Territory will be treated by the Federal Government as a State in relation to funding. There is now every reason for the Northern Territory and the Federal Government to take a very realistic look at the Northern Territory to see where it is going, I believe that it has only one future and that is statehood. The report also mentions Ashmore and Cartier Islands, the islands which at one stage were part of the Northern Territory. It is being stated that those islands still belong to the Northern Territory. I think this is a reasonable statement. Another matter to which I wish to refer is Christmas Island. I have been there recently as Christmas Island and Cocos (Keeling) Islands are part of the Northern Territory electorate. I was able to spend some time-quite insufficient time, of course-with the people of both areas. It is not a very easy place to go to or to leave and it takes some considerable planning to be able to spend any reasonable time there. I am very interested in the economics of the future of Christmas Island. One sees from the report that under the prevailing circumstances a phosphate mining operation would be uneconomic and the Phosphate Mining Company of Christmas Island Ltd should be wound down by the end of 1986. Of course, that is not quite accurate. With the further deposits of phosphate-it is considered that phosphate can be economic-it appears as though the mining side can last for, say, another four to five years. Even so, there are considerable problems at Christmas Island and the people there have my complete sympathy because several hundred of them will have to find another means of making a livelihood. They are now looking at the possibility of gradually swinging over to tourism. I believe that tourism has a very real part to play in bringing about a living for the people once mining is discontinued. There has been a suggestion of a casino project and other tourist projects. It is with some disappointment that I note the answer to a question I received only yesterday. I asked: `Is the Government considering upgrading the airport at Christmas Island and, if so, would it foot the expense?'. In answer to that question, I was told: `No, that is not going to be at Government expense. If the airport is to be upgraded the cost will be charged to the operator of the casino project'. I think the casino project is going to be very costly. I believe that the Government, in trying to find another means of livelihood for the people of Christmas Island, must come forward and play its part. While it is essential that the airport be upgraded for the purposes of tourism and for the casino, I believe that there are other considerations. The Government must look at its responsibilities in respect of the future of Christmas Island and at least encourage the upgrading of the airport. As I have said, there are many aspects of this very comprehensive report. I hope that time will be made available to us on some future occasion to debate the various aspects of it. Senator VIGOR(South Australia)(3.21) —Quite a deal of effort has gone into the production of this annual report for the Department of Territories. It has an excellent layout and there is indeed a lot of very interesting material in it. I would like to commend those responsible for its general presentation, as this is really one of the better presented reports. However, when we examine the subject matter closely we find that there are a number of errors of omission and of commission, and the most glaring of these relates to the self-government legislation which this Government has failed to bring on for debate in the Senate. Echoing the Government's publicity efforts, the Department of Territories seems to confuse the moving of amendments to legislation with opposing the legislation. It mentions the extraordinary proposal that the Attorney-General vet all laws made by the Australian Capital Territory Council and the power of the Commonwealth Government to dismiss the Council without any safeguards at all. These were two most obnoxious elements in the Government's original proposals for self-government and were indeed condemned universally within the Australian Capital Territory. There is also a great deal of apprehension about the future financial arrangements, given that the promise was made by the Minister for Territories (Mr Scholes) to have some type of financial guarantees and that this Minister has broken quite a number of promises during this saga of self-government for the Australian Capital Territory. The terms of reference of the Commonwealth Grants Commission involve allowances for the national capital role for Canberra in the making of various calculations. They do not specifically pick up the regional role that Canberra plays in the provision of health and other services to the surrounding regions of New South Wales. In fact about a quarter of the hospital bed use in the Australian Capital Territory is by people from the surrounding districts and by visitors to the national capital who might come here on public business or as tourists. These are matters which people of the Australian Capital Territory quite rightly want to be taken into account properly in terms of calculating what moneys they should get. The Department omits such points in its glossy treatment of the future financial arrangements under self-government. The Department also blunders badly when it comes to electoral matters. This is a matter that I wish to mention in some detail. Some honourable senators will recall the Department's earlier efforts in this regard in trying to justify the 13 single member electorate system, which was proposed by the Government. In the annual report the Department maintains that the amended proposal, which has never been put to this Senate or to any other parliamentary House, is similar to the West German system. The only similarity between the West German system and the system which has been proposed is that we have one of the groups of people elected at large and the other group elected on single individual electorates. The West German system goes to enormous pains to ensure that there is a fair distribution of the seats among parties in accordance with their vote. That is exactly what it is all about. It says: `We will elect all these people in single member electorates and then we will go through and top up so that the parties get what they really deserve'. The West German system is very effective in doing this and sometimes even produces more people being elected than were expected because of the distortions of any single member system. It does not give much choice to voters. In the system proposed by the Government we have the worst possible iniquities of both systems. The proportional representation part of the system-not on the very fair Hare-Clark model anyway-is completely swamped by single member electorates, which means that the Labor Party can control with less than 40 per cent of the vote. This is quite comparable to the iniquitous system which exists in Queensland, which was set up by the Labor Party and which is exploited by the current Queensland Government. It seems very strange that the Government should be worried about this and support a similar system in the Australian Capital Territory. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator HARRADINE(Tasmania)(3.26) —by leave-I move: That the Senate take note of the paper. I would like to comment upon some of the many features of the 1985-86 annual report of the Public Service Board. However, as is usual with papers of this character, it is virtually impossible for honourable senators to address the very important issues that come forward from statutory bodies such as the Public Service Board. I want to focus on a matter in this report that I have drawn attention to year after year, and that is the question of youth employment or, better still, youth unemployment and the fact that the Public Service Board still is not giving youth a fair go in employment in the Public Service. This Government has said that youth are priority No. 1. Yet it is not giving youth a fair go in the very area for which it has responsibility. That is a condemnation of each and every member of the Ministry. A number of the members of the Ministry are concerned that they cannot give youth a fair go in their areas of responsibility because of the attitude of the Public Service Board. I know this because I have spoken to them. Last year I pointed out that 20 years ago, in 1966, youth comprised 22.2 per cent of the Public Service staff. This figure declined to 6.3 per cent in 1984 and last year a Public Service Board document projected that it would decline in 1985 to 5.5 per cent-the lowest on record. The annual report presented last year by the Public Service Board contained a special section, which I appreciated, entitled `Youth Employment in the Australian Public Service: A Statistical Profile'. Admittedly, the information contained in that profile was a self-condemnation of the Board. Lo and behold, this year the Public Service Board did not include that youth employment profile in its annual report. Therefore, it is somewhat more difficult to extract the information one would require in order to have an intelligent debate on this question. One thing can be said, and that is that youth are still not being given a fair go. There is no dramatic improvement in the situation of youth as a proportion of the permanent Public Service staff. There is reference to a number of youth trainees being employed-- Senator Crowley —How about Priority One? Senator HARRADINE —The honourable senator's Government is not giving priority one to youth in the Public Service. Why, in the term of her Government, has there been a decline in the number of youth in the permanent Public Service-- Senator Crowley —That is why we have traineeships. How about the Priority One traineeships? Senator HARRADINE —Traineeships! Why does the honourable senator not give them a fair go for permanent employment? The point is that the Minister said last year that the traineeships would mean more opportunity for more youth to be employed in the Public Service. I want to know where the proof is of what the Minister said to me on 12 September 1985, last year- The ACTING DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator CROWLEY(South Australia)(3.32) —I move: That the Senate take note of the paper. I am pleased to speak on the annual report 1985-86 of the Australian Institute of Family Studies. Those of us who have had any interest in this area would, of course, have talked to the Australian Institute or its personnel over this period and certainly since. As the report points out, the Institute was speaking to us to a greater degree than usual because of the considerable difficulties the Institute faced during that year. There was the prospect that the Institute would cease to exist at all. This annual report covers this very difficult period when it had to face significant operating difficulties arising from Budget cutbacks and a requirement to undergo a review which looked at alternative ways of reducing Budget costs or outlays in the Attorney-General's Department and which tried to decide whether there was a better way of providing the research and support in the Attorney-General's Department. The Government decided to establish the review to examine the operation of the Institute of Family Studies, along with the Law Reform Commission, the Human Rights Commission and the Australian Institute of Criminology, and to report on the existence, overlap or duplication within the Attorney-General's Department or any other body, the reduction in staffing that could be effected and the possible amalgamation of research bodies in the portfolio. As a consequence, the annual report lists how much of the 1985-86 year was devoted to that review and how much of the Institute's time and effort went into that so that it was drawn away from its aims, objectives or principal reasons for its existence in the first place. The report states: . . . the outcomes were both gratifying in terms of assessment of past performance, and positive as far as the future is concerned. The difficulties of course meant, apart from its time away from its preferred work or its specific objectives, it also had to face considerable Budget constraints. That is listed in the report. I do not need, in the few moments we have, to run through the actual cutbacks that the Institute struggled to manage under last year. The point it makes is that while there are constraints on the operating costs what worried it most was that the impact was principally on the reduction in the amount of research and publications it could produce in the 12 months under review. This it sees as a matter of the gravest concern and it makes this point a number of times throughout this report. It is concerned that its principal objective or task of statutory responsibility, the `identification and development of understanding of the factors affecting marital and family stability', should continue to be researched and continue to be promoted through the publication of that research. As one of many politicians around the country who have benefited from research documents produced by the Institute of Family Studies, I think it is a matter of some disappointment that its allocation was reduced in 1985-86 as a consequence of the review and the budgetary constraints. However, we look forward to better times. I am not sure how soon the Institute will see itself back on full bore, as it were, to what it was before 1985-86, but the rest of this report gives some idea of the areas covered by the Institute and is, I think a very good justification for its continuation. It is not only looking at what is seen to be a matter of immediate concern to families but also is looking to other broader factors in society that do impact on the family. In particular, it is looking at the effect of work and equal opportunity within work and how they affect the family. I am very pleased to see a study such as that coming from a responsible research authority. It may well dint some of the prejudices that are claimed in this area. The Institute states in this report that it was pleased to see in the census the appearance of some of the suggestions that it was able to put to the Australian Bureau of Statistics and that these were taken up and included in the census to provide more useful data to the Government and to society on the family in general. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator SIBRAA(New South Wales) —On behalf of the Joint Committee on Foreign Affairs and Defence, I present the report on disarmament and arms control in the nuclear age, together with the transcript of evidence and extracts from the Committee's minutes of proceedings. Ordered that the report be printed. Senator SIBRAA —by leave-I move: That the Senate take note of the report. I have great pleasure in presenting the report from the Joint Committee on Foreign Affairs and Defence entitled `Disarmament and Arms Control in the Nuclear Age', together with its companion volume `Recommended Strategies and Policies'. This second volume provides a summary of the major conclusions and recommendations contained in the full report and has been published as a separate document in order to facilitate a more widespread dissemination of the Committee's analysis and findings. This report is the most extensive yet done by the Committee. It represents the culmination of nearly three years work in which the Disarmament and Arms Control Sub-Committee of the Joint Foreign Affairs and Defence Committee considered a large number of submissions from interested groups and individuals, conducted public hearings across Australia and held detailed discussions with Australian Government officials, delegations from both the United States and the Soviet Union and numerous Australian and internationally known arms control specialists. From the beginning of the inquiry, the Sub-Committee was conscious of the considerable and growing interest being shown by Australians in nuclear matters, on the one hand, and the absence of detailed information or discussion in this country of many of the issues involved, on the other. As a result, this report was written: First, to provide a compendium of factual information on our current nuclear circumstances and our continuing efforts to control and eliminate nuclear arms; secondly, to describe and analyse Australia's contributions to disarmament and arms control and the maintenance of international peace and security; and thirdly, to help prepare an agenda for informed debate on our future direction and policies for reducing the risk of nuclear war. The report is divided into five parts. Parts 1 to 4 deal with the world as we know it today and provide a summary of our global nuclear circumstances as well as a description of Australia's current role in seeking disarmament and arms control at both the international and regional levels. It also describes some global and regional issues of importance to Australia. These include the strategic defence initiative-popularly known as Star Wars-nuclear testing and the comprehensive test ban treaty, the joint facilities, the South Pacific nuclear free zone, and uranium mining and Australia's role in the nuclear fuel cycle. Part 5 of the report goes beyond our current circumstances to examine future options and policies. It begins with an overview of where we are at present and where we are heading. It then describes some of the possible options and approaches that have been suggested for avoiding or reducing the risk of nuclear war in the future. Part 5 ends with the Committee's own recommended strategies and policies as well as a summary of the principal findings of the earlier chapters of the report. The recommended strategies and policies cover both the short and the longer term. Our immediate goals should be to stabilise our current nuclear circumstances and begin moving towards a position of mutual deterrence at a reduced level of armaments. While nuclear weapons remain deployed, we must also pursue policies which minimise the chance of nuclear war breaking out. These objectives can be achieved by following four basic strategies. The first and most important strategy would seek to arrest the spread of and continuing competition in nuclear arms. The second basic strategy would seek to minimise the risk of nuclear war occurring by accident or miscalculation. The third basic strategy involves establishing mutual deterrence at a significantly reduced level of armaments. The fourth basic strategy for minimising the risk of nuclear war in the immediate future is to seek to improve United States-Soviet relations. The greatest danger facing mankind today is the threat of nuclear war. We will be safe from this threat only when nuclear weapons have been abolished. Our overall objective, therefore, should be to eliminate all existing nuclear weapons, set in place a means of preventing their reappearance at some time in the future, and replace deterrence with a less threatening and destructive means of avoiding nuclear war. Contrary to the opinion of some, total nuclear disarmament is not a simple matter to effect. Nuclear weapons now exist in large numbers and have been integrated into the conventional force structures of both sides. More importantly, nuclear weapons are equated with national security and the right of sovereign states to use military force to protect their basic interests. The reality is that total disarmament can occur only if individual states are satisfied that their security interests are not jeopardised. To be effective, the disarmament process has to set in place alternative and acceptable means of guaranteeing national sovereignty and international peace and security, both during and after the weapons are abolished. A basic finding of the report is that there are no such measures currently in prospect. Concepts of world government are generally unacceptable as they would effectively amount to a world dictatorship. The role of the United Nations as an international peacekeeper is currently undermined by the veto powers of the major weapons states. Concepts of common interest or common security, while fine as philosophical ideals, are not easily translated into modes of action. A reliance on a system of non-nuclear deterrence could lead to a further expansion of the arms competition and the development of a new generation of conventional armaments which may be no less destructive than low-yield tactical nuclear weapons. These problems and difficulties do not negate the importance of seeking alternative means of facilitating disarmament. What they suggest is that there is no simple or quick solution to the problem of eliminating the threat of nuclear war. A measure of nuclear disarmament can be achieved through negotiations between the super-powers. Total nuclear disarmament, however, is a vastly more complex undertaking which would require no less than altering our present international political institutions and value structures. Such changes may take many decades, or even centuries, to achieve. The second issue I want to say a few words about is the South Pacific nuclear free zone. The agreement which was signed on 6 August 1985 has been criticised by some for undermining our current security arrangements by restricting future United States access to the region, and by others for not going far enough in preventing the stationing or transit of nuclear weapons or related facilities in or through the zone. I would argue that the first criticism is not sustainable. As noted in the report, the South Pacific Nuclear Free Zone Treaty in no way constrains the rights of sovereign powers to operate in international waters and air space. It allows each nation to determine for itself whether it will allow visits by nuclear-powered or nuclear-armed vessels and aircraft, and it does not constrain military co-operation between Australia and the United States. The second criticism is theoretically true but misplaced. As the report makes clear, the nature of the zone itself-comprising predominantly international waterways-and the fact that any such treaty had to take account of the varying security concerns of the different states involved, made it impossible to establish a more radical proposal. The critics of the agreement tend also to underestimate the political importance of the Treaty. As noted in the report, the SPNFZ Treaty plays a useful role in extending the non-proliferation regime and in preventing the future stationing of nuclear weapons within the South Pacific. Subject to the concurrence of the nuclear weapon states, it also formalises United States and Soviet assurances that nuclear weapons would not be used or threatened against zone states. The SPNFZ also refocuses attention on the role of nuclear weapon free zones, places further pressure on the French to halt nuclear testing in the Pacific, and could stimulate the development or progress of other zone proposals, especially those affecting the adjoining areas in the Indian Ocean and South East Asia. I note that the report contains three dissenting reports. This is something of a record for the Committee as the three reports involve 16 out of the 28 members of the Committee. The vast majority of reports produced by the Joint Committee on Foreign Affairs and Defence are bipartisan. As I remarked to the Committee, no wonder the super-powers cannot reach agreement on disarmament when 28 people come up with four different points of view. However, the dissents are only in relation to parts of the report and not the total report. In conclusion, I must pay tribute to the members of the Sub-Committee who laboured many hours not only in hearing witnesses, but also in considering the issues. In particular, I would commend David Charles, the Chairman of the Sub-Committee in both this and the previous Parliament, who has over three years listened to the arguments and, after considering them, come up with this most comprehensive report. I hope that the Charles report will become a much quoted document. The Deputy Chairman, Senator Teague, and the other members of the Sub-Committee are to be complimented for their contributions. Senator Teague was responsible for the very successful disarmament seminar that was held in Parliament House recently. I must also thank the staff of the Sub-Committee. Dr Graeme Cheeseman, who served as the Adviser for the duration of the inquiry, Mr Peter Grundy, Dr Lee Kerr, Mr Ian Booth, Julie Kinnane and June Andersen all made valuable contributions, as did the team of typists, Sue Loughton, Kelly Edwards, Sharon Fisher, Monica Barry and Wyn Kieweg who were so ably organised by Dianne Morrison, Margaret Tie and Pat Arentz. Finally, I mention Jack Cassells and Margaret Ray for ensuring that the administration went smoothly. I also thank Phil Bergin, the Secretary of the full Committee. The report is a magnificent achievement, not only for the Committee but also for the Parliament. I look forward to the debate on the report and the Government response to it. Mr Acting Deputy President, I seek leave to have the full speech incorporated in Hansard. Leave granted. The speech read as follows- I have great pleasure in presenting the report from the Joint Committee on Foreign Affairs and Defence on `Disarmament and Arms Control in the Nuclear Age' together with its companion volume `Recommended Strategies and Policies'. This second volume incorporates the last two chapters, namely chapters 21 and 22, of the full report and provides a summary of the major conclusions and recommendations contained in the full report. The second volume has been published as a separate document in order to facilitate a more widespread dissemination of the Committee's analysis and findings. The report is the most extensive yet done by the Joint Committee. It represents the culmination of nearly three years work in which the Disarmament and Arms Control Sub-Committee of the Joint Foreign Affairs and Defence Committee considered a large number of submissions from interested groups and individuals, conducted public hearings across Australia, and held detailed discussions with Australian Government officials, delegations from both the United States and the Soviet Union, and numerous Australian and internationally-known arms control specialists. From the beginning of the inquiry, the Sub-Committee was conscious of the considerable and growing interest being shown by Australians in nuclear matters on the one hand, and the absence of detailed information or discussion in this country of many of the issues involved, on the other. As a result, this report was written: (i) To provide a compendium of factual information on our current nuclear circumstances and our continuing efforts to control and eliminate nuclear arms; (ii) To describe and analyse Australia's contributions to disarmament and arms control and the maintenance of international peace and security; and (iii) to help prepare an agenda for informed debate over our future direction and policies for reducing the risk of nuclear war. The report itself is divided into five parts. Parts 1 to 4 deal with the world as we know it today. Part 1 is largely descriptive and provides a summary of our global nuclear circumstances. It begins with the two super-powers, describing their current military arsenals, their strategic nuclear doctrines and policies, and their past and present attempts to regulate their arms competition through the disarmament and arms control process. It then examines the spread of nuclear and non-nuclear weapons beyond the super-powers, and the threat and consequences of both nuclear war and the very high and continuing world-wide expenditure on armaments. Part 2 describes Australia's current role in seeking disarmament and arms control at both the international and regional levels. It also analyses some of the major criticisms that were raised during the inquiry. A number of these issues are treated in detail in Parts 3 and 4 of the report which respectively cover `some global issues of importance to Australia' and `Regional issues'. They include the Strategic Defence Initiative-popularly known as `Star Wars'-nuclear testing and the comprehensive test ban treaty, the joint facilities, the South Pacific nuclear free zone, and uranium mining and Australia's role in the nuclear fuel cycle. Part 5 of the report goes beyond our current circumstances to examine future options and policies. It begins with an overview of where we are at present and where we are heading. It then describes some of the possible options and approaches that have been suggested for avoiding or reducing the risk of nuclear war in the future. Part 5 ends with the Committee's own recommended strategies and policies as well as a summary of the principal findings of the earlier chapters of the report. Let me now turn to the Committee's findings. There is insufficient time for me to describe all the conclusions and recommendations that have been made. There are 58 final recommendations. I remind senators that these are summarised in the companion volume `Recommended Strategies and Policies'. I will instead confine myself to providing a brief synopsis of the major findings of the report and its principal recommendations. The problem of avoiding nuclear war is one of the most important and most difficult intellectual questions of all time. It is important because nuclear weapons pose an unprecedented threat to mankind. The detonation of a single thermonuclear device over a city would result in hundreds of thousands of deaths and at least an equal number of injuries. A full-scale nuclear exchange would completely destroy the combatant nations and could probably end civilisation as we know it. We must do all we can to ensure that nuclear war, particularly war between the super-powers, does not take place. This basic objective is easily stated and non-controversial. The major and most difficult question is how to achieve it. Some argue that the sheer consequences of nuclear war are sufficient to prevent it from ever occurring. No sane political leader would either initiate a nuclear war or take steps which could increase its danger substantially. They claim that the fear of nuclear war has been instrumental in preventing direct military conflict between the super-powers for 40 years and that it will continue to do so in the future. A finding of this report, however, is that while we may have managed to avoid nuclear war to date, there is little room for either congratulations or complacency. To begin with, the costs of existing policies and approaches are exceptionally high. The United States and the Soviet Union have continued to engage in an expensive arms race which has resulted in the deployment of increasing numbers and kinds of weapons of mass destruction. Wars have continued to be fought across the globe, not least as a result of the competing ideologies and interests of the super-powers. World-wide military expenditure is now approaching $900 billion per annum. More importantly, nuclear weapons, or the technologies for their production, have now spread well beyond the recognised nuclear powers. Basic trends in the development and deployment of the super-powers' nuclear arsenals are making the military component of their relationship less manageable and more difficult to control. The political relationship between the United States and the Soviet Union remains strained and is being complicated by developments in the third world, and by the deployment by each side of more threatening weapons systems. Deterrence The Committee has found that in the short term, we have no alternative than to continue with the concept of nuclear deterrence provided it is combined with substantial mutual force reductions. The principal advantage of deterrence is that, properly managed, it can provide us with the time to find a more lasting and less dangerous solution to our nuclear predicament. We must also recognise, however, that the continuation of nuclear deterrence, even at reduced levels of armaments, will not eliminate the risk of nuclear war and so does not provide an adequate basis for global peace and security in the longer term. To achieve this, we need to develop a universal commitment to total nuclear disarmament. Our long-term goals should be to eliminate all remaining nuclear weapons and to replace deterrence with a doctrine of collective or common security. How are these objectives to be achieved? Let me take the short term goals first. As I have indicated, the report concludes that we have little alternative other than to continue with the concept of nuclear deterrence as the basic means of avoiding nuclear war in the immediate future. The principal question is: What form should deterrence take? The report describes in some detail the strategic nuclear doctrines of the two super-powers and the different schools of thought that have characterised both the development of, and the continuing debate over, deterrence in the United States. It further notes that there appears to be some disagreement within the Australian Government over how deterrence should be carried out. The Minister for Foreign Affairs and his Department seem to favour a system of deterrence based solely on the concept of assured destruction-sometimes described as basic deterrence. However, evidence presented to the Committee by the Department of Defence suggested that it supports an extended system of deterrence which is close to the present United States `countervailing' model. This latter form of deterrence emphasises `counterforce' capabilities and doctrines and countenances the idea of fighting a limited nuclear war. It is also very similar in practice to the current Soviet approach. The report acknowledges that there are problems associated with both basic and extended deterrence. In particular, it expresses reservations about the continued stability of the `countervailing' theory of deterrence-and its Soviet counterpart-and its suitability for facilitating progress towards nuclear disarmament. Under this approach, the United States and its allies seek to deter the Soviet Union from attempting to achieve a range of foreign policy and defence objectives by demonstrating an ability to deny the Soviets' victory at whatever level of aggression they may choose. While the `countervailing' theory of deterrence may provide greater flexibility than assured destruction, it is far more complex to manage and encourages a continuation of the arms race since it seeks to provide a counter to a broad range of possible Soviet activities. In the view of the majority of the Committee the continuing development and increase in nuclear capabilities are serving to decrease rather than enhance international security. The world would be far safer if the nuclear weapon states were to reduce and ultimately remove their reliance on nuclear weapons as instruments of national policy. The report does not advocate a return to basic deterrence per se, although it argues that mutual deterrence should be sought at much lower levels of armaments than currently exist; that both super-powers should reverse the trend towards the `conventionalisation' of nuclear weapons; and that they should agree to return to a situation where nuclear weapons are maintained only to deter nuclear attack by another nuclear power. Our immediate goals then should be to stabilise our current nuclear circumstances and begin moving towards a position of mutual deterrence at a reduced level of armaments. While nuclear weapons remain deployed, we must also pursue policies which minimise the chance of nuclear war breaking out. These objectives can be achieved by following four basic strategies. The first and most important strategy would seek to arrest the spread and continuing competition in nuclear arms. The report concludes that this could be achieved by: 1. Reaffirming existing arms control agreements especially SALT II and the 1972 ABM Treaty; 2. Freezing the further production of fissile material for use in nuclear weapons; 3. Concluding a comprehensive test ban treaty. It should be noted here that the report concludes that a CTB could be adequately verified using existing technologies, and that it would not undermine deterrence or prevent some modernisation of the strategic forces of either side; 4. Strengthening the nuclear non-proliferation regime; and 5. Prohibiting certain destabilising technologies in particular the further development and deployment of anti-satellite weapons, the continued deployment of the Cruise missile, and the unilateral deployment of space-based ballistic missile defences. On the question of the Strategic Defence Initiative, the report has concluded that `the continued pursuit of SDI will not lead to a more stable system of deterrence nor would it result in the abolition, or significant reductions in, nuclear weapons. Rather, SDI-or any similar Soviet program-is likely to set in motion a chain of events and reactions that would destabilise the current strategic balance and undermine the limited progress that has been made in arms control to date'. The report further argues that the United States `should be prepared to defer further progress in the SDI program in return for similar assurances by the Soviet Union and progress in negotiations in Geneva on mutual reductions in offensive forces', and it recommends that Australia should decline to participate in the SDI research program. In fact, the most frightening aspect of SDI and possibly the biggest threat to world peace could well be if it actually works. Let us enter that fairyland for one moment. We have a perfect space-based defensive shield in place. Both sides have the technology, that is, the United States has shared its SDI technology with the Soviet Union, warts and all. This, of course, is a near impossible feat in the first place as the US would have to relay all of the weak spots about SDI as well as its strengths and its working technology. Well, then, what happens next? Something that man has been doing since the start of time-trying to find a crack in his opponents' defences. Man has put up walls, castles, moats, indeed anything and everything to help defend himself. However, that proverbial crack has always been found-and so it will be in space. The second basic strategy would seek to minimise the risk of nuclear war occurring by accident or miscalculation. As long as nuclear weapons continue to exist, there is a chance that they may be used in combat. The greatest danger is that a future international crisis involving the two super-powers may get out of control and lead to direct military confrontation and conflict. The report encourages the two super-powers to institute a range of measures which would prevent any political crisis from escalating out of control. The third basic strategy involves establishing mutual deterrence at a significantly reduced level of armaments. The United States and the Soviet Union have far more nuclear weapons than they need for achieving nuclear deterrence. Accordingly, the Committee considers that both super-powers should seek to move to a position of mutual deterrence at much lower levels of armaments than currently exists. The report does not attempt to specify what this position should be, although it provides an analysis of the latest Soviet and American proposals and advances some thoughts on the preconditions for any successful reduction agreement. These include the view that any future proposal for a reduction in armaments should be: 1. Significant enough to represent a real change, but without threatening to upset the strategic balance or undermining the security of either super-power. Here an overall reduction of 50 per cent of existing forces was considered to be a reasonable initial target; 2. Needs to facilitate progress towards significant nuclear disarmament. This can be best achieved by aiming to simplify the roles, categories and characteristics of the residual nuclear forces; and 3. Should be feasible and achievable over the short and middle term. This is likely to require that the reductions be fair, verifiable and avoid as much as possible arguments over technical detail. It was also recognised that, in practical terms, a successful arms reduction proposal should allow for a degree of modernisation, enable each side to structure its own forces in accordance with its particular national security requirements and perceptions, and take into account all categories or types of forces which have a bearing on the strategic balance. An important consideration in seeking nuclear arms reductions is that they do not increase the risk of conventional war between the super-powers since any protracted armed conflict would probably see the introduction of nuclear weapons. One issue of particular concern to the Committee was the question of chemical and biological weapons. The report notes that there are increasing incidents of alleged chemical weapons usage throughout the world. Further, the present CBW arms control regime and efforts to extend it are being subjected to pressures which could undermine it and lead to the vertical and horizontal proliferation of chemical and biological weapons. The report concludes that, like nuclear weapons, chemical and biological weapons pose a serious and unnecessary threat to the civilian populations of countries in which this kind of warfare would take place. Unlike the case of nuclear weapons, however, there are no reasons why existing stocks of chemical weapons could not be rapidly disposed of and the current CBW arms control regime be strengthened by an agreement banning all further development, possession and use of such weapons or related products. The fourth basic strategy for minimising the risk of nuclear war in the immediate future is to seek to improve United States-Soviet relations. Many of the policies and changes that are required even in the short term will not be possible without a significant improvement in the relations between the super-powers. Such a change will not be easy. The two societies are quite different and cannot be treated on equal grounds or in equal ways. Moreover, the respective national leaderships of the United States and the Soviet Union are subject to a range of domestic and international pressures which serve to limit their freedom of action in determining and announcing public policies. For many years now, the official relationship between the United States and the Soviet Union has been characterised by a high degree of mutual suspicion and distrust. The two countries have also become locked into a confrontationist stance which is being reinforced by the continued development of powerful and threatening strategic arsenals, and by an uncompromising political dialogue which has tended to portray the super-power competition in terms appropriate to a new `Cold War'. The report notes that relations between the United States and the Soviet Union have improved marginally over the last year or so. However, despite this progress, the relationship remains strained and is entirely susceptible to internal political pressures, or the international behaviour of either side, or even statements by the two leaders or their representatives. Any real progress towards arms reduction and eventual total disarmament will require political will. It is interesting to note that the former United States Secretary of State, Henry Kissinger, has written along similar lines over the past few years. The technocrats will have to eventually be directed to find a solution by the political leadership. If this does not occur, we will languish in the maze of long and never-ending arms control negotiations and related conferences. Turning now to the longer term, I stated at the beginning of this speech that the greatest danger facing mankind today is the threat of nuclear war. We will only be safe from this threat when nuclear weapons have been abolished. Our overall objective therefore should be to eliminate all existing nuclear weapons, set in place a means of preventing their reappearance at some time in the future, and replace deterrence with a less threatening and destructive means of avoiding nuclear war. Contrary to the opinion of some, total nuclear disarmament is not a simple matter to effect. Nuclear weapons now exist in large numbers and have been integrated into the conventional force structures of both sides. However, unless the correct policies are in place, any reliance on a system of non-nuclear deterrence could lead to a further expansion of the arms competition and the development of a new generation of conventional armaments which may be no less destructive than low-yield tactical nuclear weapons. It therefore becomes imperative to select the `correct' strategies and policies to follow in the short term. It is particularly important that these policies lead toward the goal of eliminating nuclear weapons, not away from it. Additional actions to facilitate progress towards total nuclear disarmament in the longer term should involve establishing a mechanism for facilitating total nuclear disarmament. Initially this would mean seeking significant reductions in nuclear arsenals and reducing the different types of nuclear weapons and forces. Ultimately, we should aim to: (i) Replace the present system of deterrence by one based solely on the deployment of defensive weapons systems, including defences against ballistic missile attack. Unlike President Reagan's SDI proposal, the ballistic missile defences would be restricted to ground-based systems which would be put in place only after the super-powers-and other nuclear weapon states-had abolished their nuclear stockpiles; (ii) develop in all countries and among all peoples a belief in the need for disarmament and a commitment by all nations to achieve it. A crucial element in developing such a consensus is really to understand the nature and scope of the threat posed by the existence of nuclear weapons and by modern war generally; and (iii) transform the focus of international relations from military confrontation to co-operation and non-military competition. This involves improving both the existing super-power relations and the social and economic condition of all nations. Equally important is the need to reduce the prospect of major conventional war. In the past, the presence of nuclear weapons has served as a restraint against conventional conflict between nuclear weapons States. The removal of, or a significant reduction in, nuclear weapons could possibly lead to an erosion of this restraint. Before turning to Australia's role, I would like to say a few words regarding one of my major concerns, horizontal proliferation. The Committee heard about the possibility of an `Islamic' bomb and the concerns of many people regarding the spread of nuclear weapons to a number of States not at present in the nuclear school. Horizontal proliferation could well cause major longterm problems as the entry of more States into the nuclear field complicates our global circumstances. Both vertical and horizontal proliferation are important areas to tackle, however, if one concludes that the super-powers can manage their relationship, then the stopping of nuclear activity among other states, particularly those in sensitive areas, becomes of paramount importance. Further, the accidental start of a global conflict in a similar way to 1914, is more likely if nuclear weapons have a significant horizontal spread over the next few decades. I wish now to say a few words about Australia's contribution to ensuring peace in the nuclear age. It is a matter of public record that successive Australian Governments have placed increasing emphasis on pursuing disarmament and arms control initiatives at both the international and regional levels. Our continuing efforts and activities in the disarmament and arms control arena are documented in the report and were the principal focus of the submissions that were made in the inquiry. I believe that it would be fair to say that the majority of submissions from the public were supportive of many of the policies of the Australian Government, particularly those relating to nuclear testing, chemical weapons control, and limiting the extension of the arms race into outer space. It was generally recognised that Australia could only exert a small amount of influence in the super-powers but that we are probably doing more than most equivalent nations in seeking to enhance global peace and security. This is reflected in Australia's standing within the international arms control community and the status we enjoy in the Conference of Disarmament. This is due in no small part to the continuing efforts of the Minister for Foreign Affairs and his Department. The Foreign Minister should be congratulated for his work on disarmament and arms control; in particular, his elevation of the issue to a relatively high level within his Department and the Government since his election in 1983. Whilst I have already dealt with the question of deterrence, it is worth noting that while many submissions were critical of deterrence they were unable to suggest an alternative means of avoiding nuclear war in the short term. When questioned on this matter, most advocated an approach similar to that of this report. On the other matters, the report makes the following recommendations and observations: 1. that greater publicity be given to Australia's present efforts to achieve global nuclear disarmament, as opposed to arms control; 2. that the Government identify appropriate unilateral initiatives that could be made by each super-power to help break the current impasse in arms control, and exert political pressure on them to undertake such moves; 3. that the concept of a nuclear freeze is a valid means of curbing the development and potentially destabilising effects of new weapons systems and technologies. It should be kept in mind that a freeze needs to be considered in concert with other initiatives or proposals which seek to provide for stable deterrence at reduced levels of armaments; 4. that it is in Australia's interests to continue its alliance relationship with the United States; 5. that Australia should join with other like-minded states to present a concerted view on issues of common concern and to develop means of improving the relationships between the super-powers; 6. that the Government should do more to inform the Australian public at large of disarmament and arms control issues and the rationale for its present policies and approaches; and 7. that the Government establish either a separate body similar to the Office of National Assessment or an office within the Department of Foreign Affairs similar to ADAB which would be responsible to the Minister for Foreign Affairs and which would be required to develop and oversee Australia's disarmament and arms control policies. This Office would also provide specialist advice to the Government on issues relating to disarmament and arms control, and provide liaison with the Australian community. The report also examines a number of specific policy issues of concern to Australia. These include strategic defences and the ABM Treaty; the Strategic Defence Initiative; verification technologies and anti-satellite warfare; the joint United States-Australian defence facilities; the South Pacific nuclear free zone; uranium mining and Australia's role in the nuclear fuel cycle; and peace education and peace research in Australia. The report's findings and recommendations relating to some of these issues have been dealt with earlier. The first issue I would like to deal with is verification. Like deterrence, verification is a key consideration in Australia's approach since it provides the justification and rationale for much of what we do and say. It is true that arms control agreements are not possible unless the parties to that agreement can verify their adversaries' compliance with the terms of the agreement. This view underlies the Government's current policy on verification and is acknowledged by the report. It is also true, however, that no arms control agreement is perfectly verifiable. This may be due to the basic limitations of the measuring techniques or because the provisions to be monitored either have not or cannot be defined precisely enough. Thus there will always be risks involved in establishing arms control agreements. The principal issue is to decide how much risk is acceptable. This is largely a matter of judgment and is determined by how much we value arms control and what we think are the motives and intentions of our opponents. The majority of the Committee believes that monitoring standards should not be so exacting as to foreclose agreements, since such agreements can deliver substantial benefits in terms of limiting the arms competition or channelling it in certain directions. Moreover, these mutual benefits, together with the political costs of violating an internationally recognised agreement, reduce the incentives to cheat. In line with this view, the report concludes that the verification tail should not be allowed to wag the arms control dog. Verification standards should be sufficient, or adequate, to use official jargon, to prevent violations that would undermine the basic purposes of an agreement or threaten the strategic balance. This level of verification can be achieved in most areas using existing national technical means supplemented by various co-operative measures such as on-site inspections. I wish to make it quite clear that the Committee is not advocating arms control agreements at any price. Rather it sees agreements becoming increasingly difficult to reach as unnecessarily high obstacles are placed in their path. The report further notes that Australia's public statements on verification tend to advocate both effective and adequate means of verification without defining exactly what it means by these terms. The report recommends that the Government release a detailed statement on Australia's verification policy including the basic aim of verification, the minimum standards required, means of satisfying these standards, and Australia's own contribution to verification. Given the agreed importance of verification to arms control, the report further argues that Australia should continue to contribute to the development of independent means of monitoring compliance with bilateral and multilateral arms control treaties. The second issue I want to say a few words about is the South Pacific nuclear free zone. The agreement which was signed on 6 August 1985 has been criticised by some for undermining our current security arrangements by restricting future United States access to the region, and by others for not going far enough in preventing the stationing or transit of nuclear weapons or related facilities in or through the zone. I would argue that the first criticism is not sustainable. As noted in the report, the South Pacific Nuclear Free Zone Treaty in no way constrains the rights of sovereign powers to operate in international waters and air space. It allows each nation to determine for itself whether it will allow visits by nuclear powered or nuclear armed vessels and aircraft. Further, it does not constrain military co-operation between Australia and the United States. The second criticism is theoretically true but misplaced. As the report makes clear, the nature of the zone itself-comprising predominantly international waterways-and the fact that any such treaty had to take account of the varying security concerns of the different states involved, made it impossible to establish a more radical proposal. The critics of the agreement tend also to underestimate the political importance of the treaty. As noted in the report, the SPNFZ Treaty plays a useful role in extending the non-proliferation regime and in preventing the future stationing of nuclear weapons within the South Pacific. Subject to the concurrence of the nuclear weapon states, it also formalises United States and Soviet assurances that nuclear weapons would not be used or threatened to be used against zone states. The SPNFZ also re-focuses attention on the role of nuclear weapon free zones, places further pressure on the French to halt nuclear testing in the Pacific, and it could stimulate the development or progress of other zone proposals, especially those affecting the adjoining areas in the Indian Ocean and South East Asia. I shall make a few comments regarding the coalition's dissent on this matter a little later. From Australia's viewpoint, one of the major findings of the Committee is the recommendation to establish a separate office for disarmament and arms control within the Government, similar to ONA or ADAB. My preference is for the ADAB model, that is, a separate office within the Department of Foreign Affairs. The new office would report directly to the Foreign Minister in a similar fashion as ADAB does at present, and not through the various channels of the Department as all other areas of foreign affairs must do. I believe the separate office would be able to gather a growing number of highly qualified and professional people in the area of disarmament and arms control. As a united and independent unit they would be more responsive and responsible to the Minister and thus the government of the day. They would also provide specialist advice and provide liaison with the community. `Effective' and `efficient' are the key words and I believe a separate office for disarmament and arms control would be able to provide these key elements to government. Unfortunately many people believe that simple notions such as port visits for ships, dismantling the joint facilities or the banning of uranium mining would solve Australia's and the world's nuclear problems. Such simplistic nonsense should be dismissed out of hand. I do not doubt the sincerity of the vast majority of these people, whether they are involved in the peace movement or not. However, there is a small and influential element that deliberately pursues and promotes these topics purely in an attempt to destabilise the Western alliance as a whole. When people have placed before me the so-called achievements of the New Zealand Government's ship visits policy, I have simply asked: Has the New Zealand policy of the banning of port visits added one morsel to the cause of disarmament or arms control, particularly in our region? The simple answer is, of course: No, it has not. Simplistic answers are not to be found for this great issue. The report makes that clear and basically supports the government's views on the issues of port visits, the joint facilities and uranium. A few words regarding the coalition's dissenting report: the coalition's opening paragraph states: The coalition categorically rejects one of the primary assumptions on which this report is based, namely the equation of the two super-powers on the same moral level. The adoption of such a spurious `even-handedness' defies history, morality and our basic national security interests. During the three years of the inquiry, that question was never raised by any coalition member of the Committee. The coalition therefore appears never to have had any intention of investigating the many issues involved in disarmament and arms control objectively. They have, quite obviously, viewed the whole subject from the viewpoint of the goodies and the baddies-I assumed we were the goodies. From the opening comments of its dissenting report and indeed a reading of its whole dissent, the coalition seems to indicate that the `west' has never been wrong and the `east' has never been right. It reminds me a little of President Reagan's `evil empire' speech. The Committee states quite clearly its position on this subject. It is stated at the start of chapter 22, paragraph 22-3, which, in part, says `the report attempts to take, as far as possible, an objective approach'; further, `it can be argued that it is not possible to discuss the threat of nuclear war and the methods of preventing it, without pointing out the vast difference between the member countries of the Warsaw Pact and Western societies'; and finally `Australia is part of a community of nations that shares certain values and ideals and that we should be prepared to defend those values'. I believe I have made my point. However, I must add that, notwithstanding Australia's natural starting position and its place in the Western alliance, no report could be credible if it did not at least attempt to objectively look at all the issues involved in a subject that affects everyone through the world. The coalition's dissent on the South Pacific nuclear free zone has a number of incredibly big holes which a reading of the report quickly puts to bed. My major concerns are on page 701, when the coalition states that the treaty, firstly, `creates the conditions for eroding the capacity of the U.S. to match growing Soviet power in the Pacific' and, secondly, `rejects the maintenance support role for U.S. deployment of nuclear-armed ships and aircraft'. Further on page 702 it states: `It undermines existing security arrangements-particularly ANZUS'. All three statements are total eyewash and after a careful reading of the report I am sure the majority of primary school students could shoot holes in all of those statements. As the Chairman of the Disarmament and Arms Control Sub-Committee in both 33rd and 34th Parliaments, I would like to thank the other members of the Sub-Committee for their perseverance and hard work over the course of the inquiry. I am particularly indebted to the Deputy Chairman, Senator Baden Teague from South Australia. I would like also to thank the members of the present Sub-Committee for their participation and frank expression of sometimes divergent views. These are Senator Crichton-Browne from Western Australia, Senator Jones from Queensland, Senator Hill from South Australia, the member for Sydney, Mr Baldwin, the member for Riverina-Darling, Mr Hicks, the member for Prospect, Dr Klugman, and the member for Calwell, Dr Theophanous. While the final report contains dissenting views on a number of specific issues, the extent of bipartisan agreement is quite significant given the complexity and scope of the inquiry topic. It should also be noted that the dissents to the report are all from the so-called `Left' and `Right' of the political spectrum. I have therefore concluded that the report will be substantially supported by the vast majority of Australians. As an old political saying states, `If you are being attacked from both extremes of the political fence, you must have done something right'. Finally, I would like to place on record the Sub-committee's gratitude to those who have assisted in the conduct of this very long arduous, but very important inquiry, and who have contributed to the production of the report. The list, though not exhaustive, includes. Dr Graeme Cheeseman, the defence adviser to the Committee, who served as specialist adviser to the Disarmament and Arms Control Sub-Committee throughout the inquiry; Mr Peter Grundy from the Department of Foreign Affairs and formerly of ONA, who assisted the Sub-Committee in its considerations between September 1985 and April 1986; The Secretary of the Joint Committee, Mr Phil Bergin, for his continual assistance and guidance. The members of the Disarmament and Arms Control Sub-committee secretariat, especially Dr Lee Kerr and Mr Ian Booth, who both served as Secretary to the Sub-Committee, and Ms June Andersen, for their dedication and hard work in editing and preparing the final report; and All those witnesses who appeared at public hearings and those who made submissions to the inquiry; in particular, Mr Richard Butler, Australia's Ambassador for Disarmament and the officers from the Departments of Foreign Affairs and Defence who briefed the Sub-Committee and provided evidence and submissions on Australia's role. Senator TEAGUE(South Australia)(3.49) —`A nuclear war cannot be won and must never be fought'. These are words from the November 1985 summit meeting between President Reagan and General Secretary Gorbachev. These words are echoed in the very foundations of the report by the Joint Committee on Foreign Affairs and Defence which has today been tabled in the Parliament. It is the view, which the report consolidates through the enormous amount of evidence we have been able to gather and evaluate, that a nuclear war cannot be won. The report is dedicated to the goal of ensuring that nuclear weapons will never be used and that there is peace and security not only for Australia and our region but throughout the world. These are wonderful concepts but they require concern on our part for foreign affairs and defence matters, enormous concentration on detail and a genuine sense of strategy and not just soft-headedness and warm-heartedness as we approach goals that we all seek to achieve-peace and security. In this International Year of Peace we have this important bench mark put before the Parliament to which the 28 members of the Joint Committee on Foreign Affairs and Defence have subscribed. As Senator Sibraa has said, I had the privilege of being Deputy Chairman of the sub-committee that carried out the inquiry and brought our draft report before the Committee. I join with him in thanking the Chairman, David Charles, a member of the House of Representatives, other members of the Committee and our staff for the effective way we went about the inquiry. It was a three-year inquiry. It required an enormous amount of concentration and goodwill on the part of all those concerned. There were days and days of evaluating together the material that had been submitted to us and that we had sought out. The extent of the report has already been referred to and is manifest in the very large book before us here. There are 22 chapters in five parts, more than 700 pages and about 60 specific recommendations. Nevertheless, all this is summarised in a volume about one-tenth the size and can easily be handled by an Australian reader-it is pocket-sized. The 22 chapters deal comprehensively with disarmament and arms control in the nuclear age. The first part deals with the extent of nuclear weapons in the world and their deployment. It also deals with the deployment of and unfortunate trade in conventional weapons. It sets out clearly the extent of budget allocations in various countries for military programs and the acquisition of conventional and nuclear weapons. Nuclear weapons account for less than 10 per cent of the military spending of the United States and the Soviet Union but that does not mean that they are a minor matter. We are concerned with not only nuclear weapons but also the full range of military capabilities. The report contains a chapter on the important and centuries old concept of deterrence which is analysed most carefully in terms of the development of that concept over the last 30 years. The second part deals with Australia's role in these matters and examines and evaluates our policies, including a criticism of Australia's current policies-not only those of this Government but also those of preceding governments. The third part concentrates directly on some global issues of importance to Australia. There is a chapter on strategic defence-the strategic defence initiative program in particular-and on the importance of verification. There is also a chapter on the comprehensive test ban. The fourth part deals with regional issues, including the joint Australian-American facilities, particularly at North West Cape, Nurrungar and Pine Gap. Other regional issues dealt with concern the South Pacific, uranium and peace education and research. The last four chapters conclude by looking at options before us and the world in strategic thinking and set out the Committee's conclusions on all the matters that I have tried to summarise. The basis of the report is that Australia has a contribution to make and we should act in concert with our ally, the United States, and in co-operation with the other nations of the world, including nuclear-armed nations-the United States, the Soviet Union, the United Kingdom, China and France-and some so-called threshold states such as Israel, which do not publicly profess to have nuclear weapons but which have or are near to gaining a nuclear capability. We reject the notion that we should leave these important strategic matters that make for the security and peace of the world to those in the nuclear club. We assert most strongly from the very beginning that Australia has a constructive role to play. The contribution is evaluated so that we can give some guidelines on what we can and should be doing. The focus of the report is on nuclear weapons. It is interesting to note that our conclusions and all the recommendations were formulated in the 12-month period between the two most recent summits when President Reagan and General Secretary Gorbachev met in Geneva in November 1984 and in Reykjavik in October last. In the interval between those two summit meetings the conclusions and recommendations of this report were formulated. It is important to note that we have given every constructive support to the 50 per cent cut in nuclear weapons that was foreshadowed and, in large, agreed to in principle by the President and the General Secretary at the summit meeting a year ago. We looked towards the benchmark proposals put down by President Reagan and General Secretary Gorbachev at Reykjavik on strategic inter-continental ballistic missiles-in particular on their complete elimination-and the importance of seeing significant reductions, aiming towards the elimination of intermediate nuclear weapons and the reassurances that would be necessary in terms of reductions in conventional military capacity to make that outcome feasible. Also of importance is the strategic defence initiative and, finally, the absolute importance of verification of all these matters on that agenda. In this report we welcome the progress that has been made in those important summit meetings but, nevertheless, we are impatient to see genuine action and results flowing from those discussions-not just more words. In the few minutes remaining to me I note that the findings of the report are what I would describe as mainstream Australian conclusions. These findings are that the Australian-American alliance is of the utmost importance to Australia and that we must retain our link with our principle ally, the United States. ANZUS is essential to our defence and security. Also, the Australian-United States joint facilities, specifically at North West Cape, Nurrungar and Pine Gap, are of the utmost importance to the defence of Australia and our region and play a crucial role in verification and deterrence for the whole world. The report also accepts the importance of allied ship visits, whether nuclear-powered or nuclear-armed, and sees this as an important part of Australia playing its role within ANZUS and within the Western alliance and ensuring that that alliance is in place and that we contribute to deterrence. Deterrence, as it is currently understood, is the basis for ensuring peace in the current circumstances. There is a reiteration of the importance of deterrence. Amongst the other conclusions there is a consolidation of the view that Australia's uranium is required for the energy needs of the world and that its peaceful uses, and Australia's export of uranium for peaceful uses, should continue, with the safeguards that have been well established. With regard to disarmament, as I have said, a mainstream conclusion of the report is that there must be action towards the goals of disarmament. There must be significant cuts in the number of nuclear weapons held by the nuclear nations, particularly the United States and the Soviet Union. But these cuts must be mutual and verifiable. This report endorses multilateral disarmament, not just by words, but by action. The report looks for disarmament in another area, that is-and it may be achievable in the short term-the complete elimination of chemical and biological weapons. The move in which Australia is currently so involved, to see a universal treaty to ban chemical and biological weapons, was very high on the agenda of the Committee in putting down this report. It is distinctive to Australia that all members of the Committee also call for a comprehensive nuclear test ban. Naturally, without any surprise, we also call for a strengthening of the Nuclear Non-Proliferation Treaty that has served the world well for the last 15 years. We believe there should be even more signatories to it, and it should be seen to be actually followed, not only by the super-powers, but by all signatories. Of course, the Treaty is signed by Australia. This report is meeting a particular need, that is, that there be a much higher profile in Australia, in debate, discussion and commitment by Australians, in regard to the goals of this report. There needs to be, in Australia, a better informed debate. The massive amount of material that is provided here will assist in that regard. Also, we need a more coherent Australian approach. There are criticisms in the report that the Australian Government-that is, the Hawke Labor Government-does not have coherence in the way in which it speaks about deterrence and the way in which its defence policies relate to the fundamental concept of deterrence. We call for more coherence. Similarly, there is a call for more coherence and more soundness in the way in which we go about education for peace, or peace research. In many areas we want not only a better informed debate in Australia, but also a more coherent outcome. We are looking for actions, and not just words. A cynic could look at this 700-page report and say that it is adding 700 more pages of words. We could say that, I suppose, about any report and, indeed, all of our speeches in this place. But our sincere resolve is that this report, the debate and discussion that flow from it in Australia, and the inducements offered by Australia to nuclear-armed nations, will lead to the outcomes that we seek-that is, action in the short term to see the elimination of nuclear weapons in the world and the stable prevention of any use of nuclear weapons. I conclude by saying that our resolve is to see Australia act realistically and effectively in this central area of disarmament and arms control, and to act effectively in regard to our own and the world's peace and security. To this end, some of the central steps that we have set out are the enactment soon of a complete ban on chemical and biological weapons, the enactment soon of a comprehensive nuclear test ban, and the achievement soon of the proposals that have been on the agenda of the summit meetings-that is, a 50 per cent reduction in the number of nuclear weapons held by the United States and the Soviet Union as a first step towards the complete elimination of nuclear weapons. These achievements are all predicated on the basis that they are mutual, that is, multilateral, and that they are verifiable. I seek leave to continue my remarks later. The DEPUTY PRESIDENT —Leave is not granted as Senator Sanders wishes to speak. Senator SANDERS(Tasmania)(4.05) —I have listened carefully to Senator Sibraa and Senator Teague. It would seem from their remarks that this report of the Joint Committee on Foreign Affairs and Defence preserves the status quo. It does not sound like it has broken any new ground. It certainly does not sound like it has given us any commitment to peace. Senator Sibraa said that the South Pacific Nuclear Free Zone Treaty had been criticised by some as not going far enough. I am certainly one who would make that criticism. But he said that it would be impossible to make it go any further because one could not control international waters, and also one could not ban nuclear weapons in parts of the area, for security reasons. Whose security was he referring to? Certainly not ours; we do not need nuclear weapons here to defend us from anyone. I found that statement quite curious. He also said that the Committee had agreed to put pressure on the French and that the Government was putting pressure on the French. I wonder how we are putting pressure on the French if we are happily selling them uranium which, of course, is the material of war. Is that putting pressure on the French? Is that leading to peace? I say that it is not. Senator Teague referred to the often quoted statement that a nuclear war cannot be won and must never be fought. Why do we in Australia support nuclear weapons? Why do we support them by having them in our harbours in the form of nuclear-armed ships? Why do we welcome the United States bases? Senator Teague said that the majority of Committee members agreed that the bases should stay. So North West Cape-he mentioned these specifically-Nurrungar, and Pine Gap should stay. They are not actually peaceful bases. They are not in any way keeping the peace. They are destabilising the whole area. They are tempting the United States to consider a policy of first strike, because they would allow the United States to carry out a first strike. We know that United States military leaders favour a first strike. Any military leader would favour a first strike because, if one can destroy the enemy's military potential before he gets a chance to use it, that makes very good military sense. Of course, the United States leaders wish to carry this out. The bases contribute to that goal. North West Cape, of course, is the means by which the United States can communicate with its nuclear submarines. Pine Gap is a base which, amongst other things, can detect any breakdown in the Soviet communications system. It would make it attractive to launch a first strike if the Soviets could not then communicate the results of that first strike. Nurrungar, of course, is another base which actually functions to perceive or detect the launching of missiles in Russia, and can be used in its own way as a first part of star wars. So we see that the United States bases are not present on Australian soil for peaceful purposes. They suit the purposes of the United States. The United States presents quite a strong military posture and a strong offensive posture. The bases have no role in verification. They can be used for verification but there are far better methods. If we ever do get a test ban and a limitation on nuclear weapons, the best and most foolproof form of verification is on site verification. There could be arrangements so that Soviet Union scientists could visit the United States and United States scientists could visit the Soviet Union actually to see what was in the silos and the missile launching areas. That is the kind of verification we need. The bases are not necessary in this type of verification. Senator Teague said that this report reflected mainstream Australian conclusions and thinking. It probably does, but I do not think that it necessarily should. A committee report such as this should actually look beyond what people have been thinking in the past and look toward what they should be thinking in the future. As I said before, it is a status quo report. It breaks no new ground. It merely takes a very comfortable position and requires no one to think very much about nuclear war. Senator Teague said that the Australia-United States alliance was important. It is certainly important to the United States. I do not think it is really all that important to Australia at the moment because the United States is using Australia as a kind of patsy in the area. We do a lot for the United States; and it does very little for us. Under ANZUS, we have to match our defence equipment with that of the United States. We have to buy equipment from the United States. It has to be compatible in manoeuvring terms with United States materiel, the United States nuclear navy. ANZUS links us to United States adventurism wherever it may be. We saw that in Vietnam. The United States-Australia alliance is very much to the detriment of Australia. ANZUS is not essential, as Senator Teague has said it is, to our existence. The ANZUS Treaty was established in the early 1940s to protect us from the Japanese. I do not think anybody here can say that we need protection from the Japanese at this time. The Committee report welcomes nuclear-armed or powered ship visits. I have spoken before on this. In the United States retired United States Navy admirals and a retired nuclear powered submarine commander say that nuclear ship visits are not essential to the United States for any security or military reasons; they are simply to show the flag and a means of providing rest and recreation for the crews but in a military sense they have no real meaning. So there is no need for these ships to come here. They make us nuclear targets, as the bases make us nuclear targets. I feel that the Committee is neglecting the area of what the bases and the ship visits may do to our status as nuclear targets. Senator Teague said that the Committee found that uranium must continue to be mined. Uranium is not a peaceful mineral. There are no real peaceful uses for uranium. It is a mineral of war and destruction. We have seen in Hiroshima and Nagasaki what can happen when it is used in war. We have seen what can happen when it is used for so-called peaceful purposes-at Windscale, Three Mile Island and, most recently, at Chernobyl. Uranium must be kept in the ground. It is a genie which, once let out of its bottle, cannot be controlled. It will be around long after this Government, the Opposition or even this Parliament. The net results of our uranium mining will be polluting this earth for 250,000 years. We must keep it in the ground. Senator Teague said that one of the goals of the Committee was the establishment of a chemicals weapons ban. That is a fine goal. He talked of a nuclear test ban and a 50 per cent reduction in nuclear arms. But there is nothing new in these. We have always been committed to these. I am very disappointed that neither Senator Sibraa nor Senator Teague really enunciated the Australian will to ban nuclear weapons and to ban nuclear war unilaterally, which must start with our refusal to allow nuclear weapons in Australian waters or on Australian soil and which must continue by the banning of uranium mining in this country. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator REID(Australian Capital Territory) —On behalf of the Joint Committee on the Australian Capital Territory, I present the report on the hospitality industry in the Australian Capital Territory, together with the transcript of evidence and minutes of proceedings. I seek leave to make a statement relating to the report and to have incorporated in Hansard the Chairman's tabling statement. Leave granted. The statement read as follows- TABLING STATEMENT FOR REPORT ON HOSPITALITY INDUSTRY IN THE A.C.T. On 22 January 1986 the Minister for Territories, the Hon. Gordon Scholes, MP, wrote to the committee suggesting that the committee inquire into and report on the state of the hospitality industry, its capacity to meet demand, prospects for its future and desirability and extent of government regulation. The Minister's request was made in the context of hospitality and tourism being vital industries in the A.C.T. economy and furthering the government's objective of diversifying the territory's economic base. The committee adopted the Minister's suggested terms of reference in February this year and conducted three public hearings as well as formal and informal inspections in Sydney and Melbourne. The committee's inquiry is important in that it addresses major issues which have to be faced in the hospitality sector of the A.C.T. economy. This must be done in a way which will maximise the tourist potential generated by events surrounding the opening of Parliament House and bicentennial celebrations in 1988 and subsequent expansion of tourism in the territory. Tourism is one of the main growth areas in the A.C.T. employing 4% of the workforce in A.C.T. restaurants, hotels and clubs. However, the industry's capacity to generate employment is greater than figures would indicate. Existing shortages will be aggravated by the completion of a number of new projects by 1988 including the New Parliament House, the Hyatt Hotel, formerly Hotel Canberra, the Pavilion Hotel on the site of the former Wellington Hotel and the White Industries Hotel convention centre. These new facilities could require as many as 1500 staff. The question of staff shortage throughout the hospitality industry and the adequacy of existing training practices and facilities in the context of staff shortages and anticipated increase in demand for staff is examined in detail in the committee's report. The committee found that the state of the hospitality industry varies significantly from one area to another. Accommodation is undergoing a period of significant expansion. Other areas such as restaurants are said to be experiencing stress resulting partly from excess capacity. The committee has examined the question of oversupply of restaurants and considers that this is a question best solved in the market place. As well as commenting in turn on the various sectors included within the hospitality industry, the committee also examined in detail a new administrative structure to co-ordinate tourism and economic development in an effective manner. A major recommendation of the committee is to amalgamate the present Canberra Tourist Bureau and the Canberra Development Board. The new board, to be known as the A.C.T. Development Board, will be responsible for promoting, developing and providing economic assistance to tourism and hospitality in the A.C.T. In order to overcome past difficulties, this body should be established independently of the department of territories and have sufficient autonomy to react to changing needs and to provide immediate assistance to business when required. The new board should be seen by private operators as a friendly and responsive organisation with sufficient flexibility to respond quickly to new developments and not be hampered by unnecessary bureaucratic procedures. It should also have direct access through its chairman to the Minister for Territories. The need for this body has been reinforced by the abolition of the House of Assembly. To consolidate this new approach there is also a need to prepare a tourist development plan to indicate how planning and development policies affecting the hospitality industry may be co-ordinated in the interests of further development. The tourist development plan would concentrate on overcoming deficiencies of present small scale and dispersed investments in tourism and identify areas where co-ordinated investment might yield the best returns. The committee would like to ensure that the opportunities and challenges posed by the developments leading up to 1988 and the potential associated with the predicted growth in tourism in that year should not be missed. Canberra in its role as the national capital is an obvious focus for a range of activities associated with the bicentennial celebrations and the opening of the New Parliament House. So that Canberra itself may derive maximum benefit from these developments it is essential that the key areas examined in this report, namely training and promotion, be addressed so that Canberra's economy may benefit from the domestic, national and international market potential. Senator REID —I thank the Senate. The hospitality industry inquiry was set up at the request of the Minister for Territories (Mr Scholes). It was suggested that the Committee look into a number of things relating to employment awards and practices in the industry, the capacity of the industry to meet the demands, training of employees, the general health of the industry and its relation to tourism, which of course is an important part of the economy of the Australian Capital Territory. There are 22 recommendations but I certainly will not be referring to all of them, merely to some of them. Their thrust is the relationship between the hospitality industry and tourism and the need to promote both of them to assist in developing a more diverse economy in the Australian Capital Territory. The Committee report refers, of course, to the fact that during the bicentennial year the new Parliament House will be opening. We recognise that that will add an attraction. We also recognise that, unless it is promoted, many Australians will not really appreciate that it is there. We do not believe that the new Parliament House will promote itself, as has been said on occasions. We certainly recommend the promotion of Canberra in the bicentennial context. We have suggested that an Australian Capital Territory development board be set up incorporating the Canberra Tourist Bureau and the Canberra Development Board. In a sense one might say that that is merely shuffling the chairs and to an extent it might be. We are suggesting that both of those bodies be extracted from the somewhat lowly place they have fallen into within the structure of the Department of Territories and have a status which is more meaningful to the job that needs to be done, both in terms of development of business in Canberra and the development of tourism. We recommend that this board have direct access to the Minister because in the States tourist bureaus have direct access to a Minister. That is not the case here and we feel it is one of the reasons why tourism does not have the necessary profile. We talk about the need for more low cost visitor accommodation. There are a number of beneficial recommendations on the hospitality industry which I trust the Government will implement quite quickly. We have suggested that the Australian Capital Territory Gaming and Liquor Authority be provided with the necessary resources to conduct adequate inspections of licensed premises. Associated with that is the need to police under-age drinking. The present situation in the Australian Capital Territory is that we do not have a police force large enough to undertake that itself. It is necessary and, given the income earned by the Gaming and Liquor Authority through the licensing system, we believe that resources should be made available to see that this form of inspection is done properly. We have raised again the need for the extension of the premises at the Canberra College of Technical and Further Education food school. That, of course, is nothing new. It was a big issue in 1982 and into 1983. It was with considerable disappointment that we found that that extension was not funded in the 1983 Budget because I think most people at the time recognised the need for it in relation to extending the facilities of the food school to provide training for young people in an area where jobs would be available, especially in 1988 with the opening of the new Parliament House and what we hope will be a boost to the tourist industry. We re- commend, as a matter of urgency, that that extension proceed, and that TAFE and the National Capital Development Commission give the highest priority to the project. It is not necessary to go over the correspondence back as early as 1981 and 1982 about the need for it. We have also dealt with the question of the need to make young people more aware of the good jobs offering in the hospitality industry. There is a bit of a problem in the sense that people tend to think of the hospitality industry as one in which people are merely waiters of one kind or another. That is certainly a very important part of the employment in the industry but it really goes a great deal further than that. It was the Committee's hope that by the time we have a five star hotel in Canberra there will be a general increasing awareness of the prospects within the industry. We feel that the Schools Authority can, within its system, help to promote an awareness of the hospitality industry. We certainly hope that will occur as we see very good prospects indeed for a number of skilled jobs in the industry as time goes on. We have dealt with another matter which is certainly not new, and that is that we recommended the introduction of a group apprenticeship scheme in cooking. A group apprenticeship scheme exists in Canberra in the building trade and is working most successfully. Many restaurants which are very good are quite small and a group apprenticeship scheme would mean that young people would get the opportunity to be apprentices in the industry and to get opportunities for learning in a number of different types of restaurants. I do not think I need spell out in detail how it would work, but certainly I trust that the necessary arrangements will be made for that to come into effect very quickly. We recommend the introduction in 1987 of pre-employment courses by the Canberra College of Technical and Further Education as part of a revised course structure. I know that it is not long until 1987 but I do hope that will be able to be implemented. We have recommended that arrangements be made within the Canberra College of Technical and Further Education to set up a scheme whereby the food school can earn revenue and retain it. At present, if the food school earns any money, it goes into Consolidated Revenue. There are many ways in which a food school needs to run services so that students get practice. We visited Ryde and had a lunch which the students had prepared and provided as part of the process of learning to present food and run a restaurant. The same thing could be done here without additional revenue cost to taxpayers if a scheme were devised whereby the earnings from such a place were able to be recycled. We have suggested a change in the ratio of apprentice cooks to chefs. It has been one to three in the past and we are suggesting that that be reduced in a way that will enable smaller restaurants to have apprentices, which has been overlooked in recent times. We want it done properly so that it is a quite legal arrangement. We have made recommendations in relation to junior rates of pay. Some of these things in relation to hours of employment, et cetera, have not gone as far as perhaps I would like to see them to nor as far as I would like change to occur when we are in government, but I recognise that that is not possible at present. It is my hope that what has been recommended, which, as I say, in some respects does fall short of what I prefer, will be implemented and be of benefit to those in the industry so that at least we can have some changes which will get on with providing more opportunities and more jobs in this area. We have suggested the waiving of payroll tax on the salaries of junior employees. We have urged permanent part-time employment in the industry and we have certainly urged the Department of Territories to look at the workers' compensation system in the Australian Capital Territory. Again that is not the first time that has been suggested, but we lend our weight to that proposal. It has been an extensive inquiry. I think it has gone a fair way and I certainly look forward to the implementation of the recommendations and an early response by the Government. I would be disappointed if most of them were not looked at quite quickly. I would hope that in time some of them would go further than they have. I wish to thank the staff who assisted the Committee with this inquiry. There were a number of submissions and witnesses. I note that the other senator for the Australian Capital Territory is present. I am sure that she would be very interested in this report when she reads it. Many of the things we have recommended are matters that I know are well known to her and I look forward to her using her influences to see to the early implementation of our recommendations. Senator LEWIS(Victoria) —by leave-As a member of the Joint Committee on the Australian Capital Territory, I had an addendum to this report in the nature of a minority report. I support most of the recommendations and I certainly support what Senator Reid has been saying, but I was concerned about one aspect of the recommendations which I felt should have been advanced and that was to do with the wage rates payable under the current wage system in the hospitality industry. The problem is that for the hospitality industry in the Australian Capital Territory to expand in the face of its travel problems-I will come to those in a few moments-and in competition with capital cities, it has to provide absolutely first class service at modest prices seven days a week and 24 hours a day, and the hospitality industry in the Australian Capital Territory needs to have that reputation known right around Australia and, indeed, internationally. The report makes it quite clear that that service is not available at competitive rates under the current wage system. The report concedes that inordinately high penalty rates at weekends and public holidays are a disincentive to the provision of services and hence to employment in the industry. I recognise that total deregulation of wages in the hospitality industry would create the fear in the minds of some people that it might lead to what is called `sweat shop' conditions, but I do believe that it is necessary in this industry to adopt awards which would enable an hourly rate of pay to be payable throughout the week-a week of seven days and 24 hours each day. It may very well be that, as a result of market forces operating, that wage would be variable at weekends and in the evenings, but that generally opportunities would be created for service if there were an hourly rate of pay payable as a minimum across the board 24 hours a day, seven days a week instead of these excessively high penalty rates that apply under the awards. What is happening is that employers in those circumstances are simply not employing staff over weekends or at night, so the service is not available. Accordingly, I have recommended that employers and employees in this industry in the Australian Capital Territory be free to enter into agreements as to wages and conditions outside awards, save that such agreements must provide for at least the relevant award rate of pay calculated at the hourly rate for ordinary weekly hours of work. I mentioned the travel problem for the Australian Capital Territory. It must be recognised that Canberra is off the main tourist routes but that it is an attractive venue for both Australian and foreign tourists. The problem is to keep the tourists in the Australian Capital Territory for more than a brief visit. There is more that tourists can see and do in Canberra than just take one hour to visit the National Gallery and one hour to visit the Australian War Memorial. That is not enough time to look at the national park and other areas around Canberra which are not currently on the main tourist routes. The de- restriction of bus services to Canberra will help very much but the major problem arises with the air fare regulation and control and, unfortunately, lack of promotion by the industry in the Australian Capital Territory. I was unable to make any recommendation in this area other than to draw the matter to people's attention. Finally, I have to say that I cannot agree with recommendation 19 which recommended that junior rates of pay apply only to permanent employees. That would mean that non-permanent employees who are of a young age would have to be paid adult rates of pay. That seems once again to be a total hindrance to opportunities being created for young people in the Australian Capital Territory to get into this industry. It is a growth industry; there are opportunities for good careers in it and I think that every opportunity should be taken for young people to be encouraged to go into it. The way to do that is to enable employers to employ young people at a rate of pay which is acceptable to the employer. There is a bottom which is created by unemployment relief. Young people would not be expected to work for anything less than the rate of unemployment relief. Nevertheless, if there were deregulation of junior rates of pay I am sure there would be many more opportunities for young people to enter this industry. Accordingly, I cannot agree with recommendation 19. Senator COLLARD(Queensland-Leader of the National Party of Australia) —by leave-I present the report of the parliamentary delegation to the Union of Soviet Socialist Republics and the Polish People's Republic 1986, together with two supplementary reports. I seek leave to make a brief statement in relation to the report. Leave granted. Senator COLLARD —The visit to the Soviet Union and Poland represents the third visit to the USSR in the last 20 years and the second visit to Poland in the same period by an Australian parliamentary delegation. The delegation spent 11 days in the Soviet Union visiting Leningrad, Tashkent and Samarkand in addition to Moscow. It then travelled to Poland for a further 11 days visiting major centres in the north and south of Poland as well as Warsaw. The report which I have tabled draws attention to the principal meetings in which the delegation participated and highlights the major issues raised. The report records a wide range of meetings during the visit at the national as well as regional levels. During these meetings we discussed a wide spectrum of subjects. However, throughout these meetings our common message was clearly our concern for peace and disarmament, for human rights and family reunions. In the Soviet Union this included the treatment of Soviet Jews. It was quite interesting that at just about every place we went at the conclusion of the speech by whoever was welcoming us we were given a dissertation on peace. If the parliamentary delegation visited a provincial town the mayor would welcome us, give us the statistics, tell us what a wonderful place it was and give us a lecture on peace. It was as though peace was something that belonged to the Soviet Union, something tangible that only it had in a little box and something that other nations should try to have. Every time we had an opportunity after such a lecture we told the Soviet Union that it could not have international peace unless it had international justice, unless people were free to worship as they wished and unless people were free to leave any country they wished. Other major topics of discussion included Australia's commitment to the Western alliance, the Chernobyl accident, industry and agriculture and the balance of trade with Australia. The delegation was indeed fortunate in being able to meet His Excellency Andrei Gromyko at the Grand Kremlin Palace in Moscow and General Jaruzelski at the Seym in Warsaw as well as senior government representatives and regional officials throughout the visit. On two occasions we had unofficial meetings, one in Poland and one in Moscow. These were in our own time and were not official. Firstly we met with the refuseniks and members of the Jewish community in Moscow and in Poland we met with members of Solidarity and the Catholic church. As an addendum to the report I have tabled are two supplementary reports dealing with those meetings. I would like to thank our hosts in the Soviet Union and Poland for the warmth and generosity of their hospitality extended to the delegation during its visit. We made no bones about the fact that Australia is very much part of the Western alliance. However, I think both countries sensed that Australia had a lot to offer the world and that we had an independent streak about us. I also pay tribute to the staff of our embassies in Moscow and Warsaw for the enormous efforts made and the assistance provided during our visit. I mention in particular Ambassador and Mrs Pocock, Mr Ahudja and Mr Denton in Moscow, Ambassador and Mrs Hughes, Mr McKenzie and Ms Wieniawska in Warsaw. On behalf of the delegation, I also express our gratitude to the staff of the Parliamentary Relations Office for their work prior to the visit and afterwards in getting the report together for tabling. I express gratitude to Dr Frank Frost and the Legislative Research Service of the Parliamentary Library for the enormous effort they put into the delegation brief. I doubt whether another delegation has gone overseas with such a good and comprehensive brief as that with which we were provided by the Parliamentary Library. I think all members of the delegation spoke of the effort the Library put into the brief and the depth of information in it. As the deputy leader of the delegation I pay tribute to Madam Speaker who led the delegation. At all times she was in charge and she let the government of whichever nation we were speaking to know that we were a delegation which had very definite views especially on its record on human rights. I recall some Soviet officials talking to her and saying: `But you are such a nice woman, why are you so tough?'. That was the way Madam Speaker played it and I pay tribute to her leadership. Obviously members on any parliamentary delegation are a diverse group; they come from many different political and philosophical backgrounds. In this instance, I pay tribute to all members of the group because when we were discussing various aspects with members of other governments we worked as a team; they saw us as a team because we let them know in no uncertain terms that even though we were from different political backgrounds there were certain matters on which we were one. The rest of the delegation played a good role. I express my personal thanks to all members of the delegation for their support and friendship during the visit. Senator SANDERS(Tasmania) —by leave-I was a member of the parliamentary delegation to the Union of Soviet Socialist Republics and Poland. I join Senator Collard in his appreciation of Mrs Joan Child as the leader of the delegation. She did a magnificent job in sometimes very difficult circumstances. She represented Australia very well and gave the governments of the Soviet Union and Poland a good insight into what a very tough and thoughtful Australian woman can do. I think we were amazed at the firmness with which she approached her job. I also thank Kieran Schneemann who wrote the report and accompanied the delegation. He was a pillar of strength. We worked very diligently and had very little rest. The delegation was held together by the actions of Kieran Schneemann. Senator Collard placed some emphasis on the Soviet's preoccupation with peace. I think with some justification the Soviets are preoccupied with peace because they lost 20 million people in World War II. If we as a nation had suffered as the Soviet Union suffered in World War II I think we would be far more interested in real peace than we are. We talk about peace, but we have never had our homes destroyed or members of our families killed. This was brought home most powerfully to us when we visited Leningrad. At the Piskarevskoye Cemetery we saw in an area of just a few hectares the mass graves of 640,000 people. So many people were killed in so short a time during the German siege of Leningrad that they could not be buried in normal cemeteries. Altogether the Russians lost one million people in Leningrad. We saw expressions of grief that people hold even now. It is customary for a wedding party to visit some cemetery or memorial and present the bridal bouquet because, as I mentioned before, everybody lost someone in that war. So they know the meaning of war. Therefore, universally, the people of the Soviet Union want peace. We may disagree with the way in which some of their military leaders want to obtain peace, the same as we disagree with the way in which some of the military leaders of the United States of America are trying to obtain peace. But I feel that the people of the Soviet Union sincerely do crave peace. I was interested to find that some of my conceptions about the Soviet Union were misconceptions. I found that the people in general-I would say about 90 per cent of them-are probably quite happy. They are certainly better off than they were under either the Tsar or Stalin. I would say that the average Russian, who is probably interested in soccer and perhaps a bit of vodka-and there is not as much of that flowing as there was-is probably quite happy. But probably 10 per cent are quite unhappy. Probably the part of Soviet life that distressed me most was the question of dissent. If I lived in the Soviet Union I would not be allowed to dissent in the way that I do in Australia. I brought this up with many of the Soviet leaders. I said: `Look, I think you are sincerely interested in peace, but you have to open up your society to those who disagree with the present policies'. I believe that this is in fact happening. I think Mikhail Gorbachev is actually trying to open up the society under his policy of glasnost. I think attempts are being made to remove the disadvantages that exist in Soviet society. It is interesting to note that in Tashkent a member of the Supreme Soviet of Tashkent told us that it was not enough simply to produce items. They could meet their production quotas but what they had to concentrate on now was quality. He told us that it was no good producing things that people would not buy. This was an incredible statement for someone to make in the Soviet Union. Just a few years back, anybody who said such a thing would be shipped off to Siberia. Such a pronouncement can now be made openly. So I think the Soviet Union is changing, and I think it is changing for the better. Certainly, there are restrictions on movement and speech. However, I think it is changing. It disturbs me really that we do not recognise this change. One thing that was particularly interesting to me, as a former American, was the reaction of the Soviet people to Americans. We attended the very moving opening of the Goodwill Games in Moscow. This was a complete spectacle-extravaganza. One of the features of the games was a mock re-enactment of the docking of the Soyuz and Apollo space vehicles when the Russian astronauts and the American astronauts actually met in space. This was done by means of full-size mock rockets going up cables which were attached to balloons and then a meeting of the two capsules on cables between the balloons. At the same time an astronaut from the Soviet Union who had been in Soyuz and an astronaut from the United States who had been in Apollo were brought in in open-top cars. They shook hands. Gorbachev was at the Games, along with 100,000 other people. At all times the United States and the Soviet Union were given equal billing. This would not happen in the United States. As an American, I was taught to hate all Russians and all communists. I was taught to despise them. The people of the Soviet Union are not taught to despise Americans. They are taught to despise Reagan and the Administration, but not the entire American people. I took this as a very positive sign. People are always saying to me: `Okay, you are always calling for world peace. You are always protesting at the presence of American warships and American nuclear weapons. Why don't you do something in Russia?' Well, I did so in the Kremlin. In the presidium of the Supreme Soviet I suggested universal disarmament. I Said: `Look, Mikhail Gorbachev has won great acclaim around the world with his test ban proposal. Why don't you go one step further and start withdrawing your weapons?'. As we know, there are 50,000 nuclear weapons around the world. All the military planners know that there are far more military weapons than are needed for any military victory and that we have enough to kill everyone on earth many times over. I said: `How about withdrawing your weapons unilaterally, because if you do so I am sure that world public opinion will pressure the United States to follow?'. I was interested in the response. One very old member of the Presidium across from me beat his fist on the table and said: `Nyet, nyet'. But the younger people looked thoughtful and nodded, which I took as a good sign. I think there is hope in the Soviet Union. I think we must understand that the Soviet society is changing. It is loosening up and it is changing for the better. I think we must also understand that our society is tightening up. I foresee a time when actually our two societies will be similar. We are losing our rights and our basic freedoms and the people of the Soviet Union are gaining more of theirs. We will probably end up at pretty much the same level in the next 10 years or so. I was impressed with Poland. I was somewhat surprised when I was told about the past lack of unity in that country. We learnt that Poland has been a complete country for very little of its history and for most of the time had been occupied by someone or other. It was very interesting to find how proud the people of Poland are to be a unified nation for the first time in many hundreds of years. I think this explained a lot about the Poles' fierce loyalty to their country. We were privileged to travel widely in Poland. We travelled some 3,000 kilometres by bus and were very well received by the Poles. I think we learnt a lot from them and I hope they learnt from us. More attention must be paid to Poland; it is a country in deep need. We must be more aware of its problems and more willing to help. The Poles are desperately in need of any kind of technological help we can give them. They are in need of outlets for their manufactured goods. We must do everything we can to help them rebuild their economy. Although the economy is shattered, there is great hope and potential in Poland. I will not delay the Senate. I am very thankful to the Parliament for making it possible for me to go on this trip. I learnt a lot-I hope we all did-and I am very thankful that this report has been prepared in the excellent way it has. Senator McINTOSH(Western Australia) —by leave-I would like to join my colleagues in thanking our hosts for their hospitality. I certainly enjoyed every day I spent in the Soviet Union and Poland. I was very pleased to be a member of the parliamentary delegation visiting the Soviet Union and Poland in June and July of this year. This was not my first visit to the Soviet Union; I was there 10 years ago. This was the first time I had visited Poland. The report of the delegation is a fair recollection of the findings of the delegation, and I commend the report to the Senate. I would like to make just a couple of brief reflections. Some members of the delegation had a unique opportunity to meet independent peace movement people in Moscow who were not involved in the official peace movement in the Soviet Union. It is no secret that the possibilities for open dissent in the Soviet Union are limited. This group of people had questioned their Government's increasing reliance on nuclear power and called on their Government, in a positive way, to look for other forms of energy generation. Those people made it quite clear to us that they were not against their Government but they wanted it to look at other sources of energy. They had demonstrated on this and had been charged with anti-Soviet activities, but they were able to use the Soviet judicial system and have their actions considered by the courts on much less drastic charges. I thought this was a most significant development because I doubt whether some years previously they could have used the judicial system in the manner in which they are using it today. I concur with Senator Sanders and say yes, there are changes, and I for one perceive many changes there. I would like to make a comment on human rights in the Soviet Union. The delegation at every opportunity raised human rights issues with the Soviet officials. It is true to say that the inquiries were not always entirely welcomed, but we were heard out, there is no doubt about that. I can say that the people who initiated the human rights questions were from the left wing of our Party. It is very easy to gain applause in this country for being prepared to raise in the Soviet Union the question of human rights. But there are enormous pressures operating against similar questions being raised against so-called friendly countries in our region. Instead, we are asked to excuse the unacceptable behaviour in those countries as being the result of cultural differences. I believe that justice and human rights everywhere are essential to the achievement of peace. Peace will be achieved only when we are prepared to ask the hard questions of our friends as well as of those who seem to be regarded by some as enemies. I would like again to thank the Soviet Union and Poland for their hospitality. I thoroughly enjoyed my stay there. I certainly learnt a lot in both countries, and for this I am grateful. Senator HARRADINE(Tasmania) —by leave-I move: That the Senate take note of the paper. I do so in view of some of the remarks which have been made, particularly those made by Senator Sanders, which need to be aired again in the Senate so that historical and other viewpoints can be put forward. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator HARRADINE(Tasmania) —by leave-I move: That the Senate take note of the report. I do so in view of some of the comments made by Senator Lewis. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator HARRADINE(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. 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 all or several of the Bills being put in one motion at each stage and the consideration of all or several of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator 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)(4.54) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- PIG INDUSTRY BILL 1986 The purpose of this Bill and the two associated Bills-the Pig Industry (Transitional Provisions) Bill 1986 and the Pig Slaughter Levy Amendment (No. 2) Bill 1986 is to restructure the statutory arrangements for the Australian pig and pigmeat industry. This Bill establishes an Australian Pork Corporation to replace the existing Pork Promotion Committee, and establishes an Australian Pork Corporation Selection Committee, to nominate suitably qualified persons for appointment to the Corporation, and an Australian Pig Industry Policy Council to provide a forum where matters of concern to the industry as a whole can be discussed and appropriate policy options developed. During the past ten years the Australian pigmeat industry has made many significant advances. These are best illustrated by the increase in pigs slaughtered from 3.4 million in 1974-75 to an estimated 4.5 million in 1985-86. The gross value of production in the same period has risen from $197 million to $450 million. Domestic per capita consumption of pigmeat has risen from 12.9kg to over 16kg. These are growth rates of which any industry would be proud. It is appropriate that such a dynamic industry should review its organisational structure to ensure that it is relevant to today's needs and the requirements of tomorrow. The Australian pig industry has been concerned for some time that the legislation creating the Pork Promotion Committee has not been sufficiently broad to enable that body to become involved in marketing initiatives on behalf of the industry as a whole. This has included such developments as Computer Aided Livestock Marketing (CALM) and the development of a National Livestock Language (AUS-MEAT). In both these initiatives the interests of the beef and sheepmeat industries have been represented by the Australian Meat and Livestock Corporation (AMLC). If the pig industry is to be fully involved in either of these schemes it will be necessary to place the responsibility in the hands of a statutorily funded body. In discussions with the industry on the most suitable structure for industry organisations, a number of options were put forward, one of which was to bring the marketing of pigs and pigmeat within the scope of the AMLC. Serious consideration was given to this option but in the end the pig industry decided it wanted to remain independent of the AMLC. After lengthy discussion with the industry the package contained within this legislation was developed and accepted by the Australian Pork Producers' Federation as the most suitable that could be achieved. The new Australian Pork Corporation will have a wider range of functions and powers than the present Pork Promotion Committee. This will enable it to become involved in marketing issues affecting the industry where it feels such involvement is necessary and desir- able. The Corporation is not intended to be a trading body or to involve itself in any form of price setting mechanism that would restrict competition in the market place. The Corporation will have the power, on behalf of the pig industry, to participate in and contribute financially to marketing arrangements such as CALM or AUS-MEAT should, if in the commercial judgment of the Corporation, such schemes appear to be in the interests of the industry. The Corporation will consist of seven members, there will be an independent Chairperson, a Commonwealth Government Member and five members selected for their expertise in such matters as pig production, pigmeat processing, product from promotion, marketing or appropriate commercial skills. The five members will be selected by an Australian Pork Corporation Selection Committee. This Committee will have four members; an independent Chairperson, two members nominated by the Australian Pork Producers' Federation and one member nominated by the National Meat Processors Association (NMPA). Policy development within the industry is to be strengthened by the formation of an Australian Pig Industry Policy Council. The purpose of the Council will be to enquire into and report to the Minister and the industry about matters affecting the well being of the industry and to develop recommendations and plans for measures to further the interests of the industry. The Council will be made up of: An independent Chairperson The President and Senior Vice-President of the Australian Pork Producers' Federation The President of the National Meat Processors Association The Chairperson of the National Smallgoods Council The President of the Stockfeed Manufacturer's Association of Australia The Chairperson of the Australian Pork Corporation (APC); and The Chairperson of the Pig Research Council. The new arrangements are to be financed from levies collected on pigs slaughtered in Australia for human consumption. There will be no implications for Commonwealth finances arriving from the legislative changes. The legislation governing the operations of the new bodies is in line with the guidelines laid down in the Governments policy statement ``Reform of Primary Industry Statutory Marketing Authorities'' which I tabled on 20 January 1986. The accountability of the Corporation has been strengthened by requiring the Corporation to report at least once a year to the executives of the APPF and the NMPA. At such meetings the whole range of APC activities can be discussed. This accountability to industry is in addition to the usual requirement for an annual report to Parliament. The APC is to be responsible for making recommendations to the Minister for Primary Industry on the rate of the pig slaughter levy for the APC. In making such recommendations the Corporation will be required to consult with the APPF and the NMPA and will be required to inform the Minister of the views of those bodies when requesting an increase. The APC will be required to prepare and submit for approval by the Minister for Primary Industry a three to five year corporate plan setting out its broad objectives for the period and its proposed strategies for achieving those objectives. In addition the APC will be required to prepare an annual operating plan setting out its strategies, programs and proposed resource usage for the year. Again this annual plan will need to be approved by the Minister for Primary Industry. The sections of this Bill Associated with the selection of the members of the APC come into force on the day it receives the Royal Assent and the rest of the Bill will be proclaimed when the selection process has been completed and the new Corporation is ready to proceed. In concluding I would like to pay tribute to those members who have served on the Pork Promotion Committee since its inception in 1975. The progress and achievement of the industry to which I referred earlier are, I am sure, in no small measure due to the work of the Committee and the promotional activities it has organised. I commend the Bill to honourable senators. PIG SLAUGHTER LEVY AMENDMENT BILL (No. 2) 1986 The purpose of this Bill which is associated with the Pig Industry Bill 1986 is to provide for the financing of the Australian Pork Corporation. The portion of the Pig Slaughter Levy that, until now, has been paid to the Pork Promotion Committee will, in the future be paid to the new Corporation. The Bill also raises from $1.00 to $1.50 per pig, the maximum rate of levy that can be collected for the new Corporation, although it is not intended to increase levies to that level at this time. The Bill has no effect on the operative rate of levy nor does it impact on Commonwealth expenditure or revenue. I commend the Bill to honourable senators. PIG INDUSTRY (TRANSITIONAL PROVISIONS) BILL 1986 The purpose of this Bill which is associated with the Pig Industry Bill 1986, is to provide a smooth transfer of functions from the Pork Promotion Committee to the new statutory structure for the pig industry detailed in the Pig Industry Bill 1986. The arrangements will have no impact on Commonwealth revenue as the Bill provides that costs associated with selection of members for the new Corporation will be met by the Pork Promotion Committee which is financed solely by a levy on pigs slaughtered. I commend the Bill to honourable senators. Debate (on motion by Senator Lewis) adjourned. Motion (by Senator Ryan) agreed to: That Government Business, notices of motion Nos 1 to 3 be postponed till 2 December 1986. Debate resumed from 20 November, on motion by Senator Walsh: That the Bill be now read a second time. Senator BOSWELL(Queensland)(4.59) —Before the debate on the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986 and cognate Bills was adjourned on Thursday night I was addressing the Senate on the Opposition's position on the Fertilisers Subsidy Bill 1986. I will just recap a little on my contribution. I was making the point that the Opposition would not support the Bill for various reasons, one of the main reasons being that the Opposition is concerned that the average $33 a tonne subsidy on the di-ammonium phosphate and mono-ammonium phosphate fertilisers would be transferred to the manufacturers of fertilisers and ultimately would not go to the farmers. I also drew the Senate's attention to the fact that we, in Australia, use 423,000 tonnes of MAP and DAP fertilisers but we produce only 67,000 tonnes, which means that there is a shortfall of 356,000 tonnes, which has to be imported. The Opposition believes that the fertiliser manufacturers in Australia would not be able to produce that additional 356,000 tonnes. Therefore large amounts of fertiliser would still have to be brought into Australia which would not attract the subsidy if this Bill were to pass through the Senate. I also pointed out that the Australian farming sector received Government subsidies of only 10 per cent, whereas the Australian manufacturing sector received something like 28 to 30 per cent in Government subsidies. I make this point because a number of people think that Australian primary producers are featherbedded and greatly assisted by government subsidies. This is not the case. Every Australian farmer pays something like $9,000 on average to support the jobs of workers in secondary industry-this is $9,000 in the form of tariff subsidies. The Fertilisers Subsidy Bill if passed would take away one of the few remaining subsidies left to primary industry. If the Government is genuinely concerned with the plight of the secondary industry worker it will have to bite the bullet and make some pretty hard decisions. The Government will have to face these decisions. Taking subsidies from primary industry and allocating that money to secondary industry will give only an artificial propping up of secondary industry jobs in Australia. The real concerns faced by Australian manufacturers are the 38 hour week, the automatic wage adjustment tied to the consumer price index, the redundancy issue, and the national superannuation issue. All these things add to the costs of the manufacturing secondary industries. Those concerns are costing jobs in secondary industries. They will also cost jobs in the fertiliser industry. They are making Australian fertilisers dearer to buy than the imported fertilisers. Taking the subsidy from the farmer and giving it to the manufacturer will make the farmer uncompetitive. We will have a lame duck farming industry as well as an uncompetitive fertiliser industry. We are told in the second reading speech of the Minister for Community Services (Senator Grimes) that one of the reasons the Government wants this legislation passed is that it will save $16m-I think that is the figure I come up with-on the balance of payments figures, and that it will meet Australian fertiliser needs. The Minister in his second reading speech fails to explain where the Australian manufacturer makes up the 356,000 tonnes of DAP and MAP. The phosphatic rock will have to be imported from the island of Nauru, or Florida or Morocco. The Australian National Line has a monopoly on carrying freight on these commodities. This adds a further $20m to the costs of Australian farmers. It is cheaper to bring in fertiliser from America or from Morocco than to bring in phosphate from Christmas Island which is only a third of the distance. It is $10 a tonne cheaper to bring in phosphatic rock from America than it is to import it from the closer places of Christmas Island and Nauru. So we also have to consider the additional freight and how that will affect the balance of payments. We also have to take into consideration that sulphur is imported from Canada. These two expensive items have to be considered in terms of our balance of trade payments. The statistics I have indicate that it takes two tonnes of phosphatic rock to manufacture one tonne of DAP or MAP fertiliser. So for every tonne of fertiliser manufactured in Australia two tonne of rock has to be imported. It would make it difficult for Australian fertiliser manufacturers to compete with their overseas competitors. Another statistic I have regards the manufacture of superphosphate. It takes only 0.58 tonnes of phosphatic rock to make one tonne of superphosphate. The cost of freight into Australia, the cost of the phosphatic rock, and the cost of the sulphur to manufacture DAP and MAP must be taken into consideration when the Minister says that it will save $16m in the balance of payments. The other factor that we must take into account is the capacity of the factories to manufacture MAP and DAP at the moment. Most of them are working to full capacity. Seventy-three per cent of the excess capacity of DAP and MAP manufacturing is in Western Australia. The cost of internal freight is extremely excessive. Imported fertilisers can be taken, for example, to ports nearest the wheat fields or the sugar cane fields in Queensland. On a recent visit to Geraldton in Western Australian I saw a ship unloading fertiliser. Ships also unload fertiliser in Townsville in Queensland and in Portland in Victoria. It is a very significant saving to bring the fertiliser into the ports that are nearest the fields where they will be used. It costs $19 a tonne to freight fertiliser from Brisbane to Dalby, a distance of only 200 kilometres. One has to ask what the cost will be of freighting fertiliser from Western Australia, Sydney or Newcastle to the canefields in Queensland. It would be excessive. It would be a disaster. If the Fertiliser Subsidy Bill were to pass the Senate it would add tremendous cost to primary industry when Australia needs primary industry desperately. Primary industry must have access to the cheapest possible inputs to be competitive. As I explained in my speech the other night, Australian farmers are competing not against a free market but against a very corrupt overseas market where we are caught in a trade war between the European Economic Community and America. If we are to be competitive in our primary industries we need to have the cheapest inputs to meet the world markets. I cannot support the Bill. I will be voting against it. Senator POWELL(Victoria)(5.10) —At the heart of this legislation, the Fertilisers Subsidy Bill 1986, there is a basic conflict in regard to what is really a single principle, on which most people in this place are agreed. The principle is that if government support is available it should be available to local Australian industry rather than to overseas industry. The Government's case-it is a persuasive case-as put by this legislation, has the support of some of my colleagues, as Senator Siddons has outlined. However, I will be voting against the legislation. I will do so on two major grounds. First, in most of the debate on this issue-debate since the Budget announcement and now debate on the legislation-it seems that we have lost sight of a fundamental fact. The original decision on the imported fertiliser subsidy and earlier decisions on fertiliser subsidies were made, as the Industries Assistance Commission continues to recognise, on the following basis: 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. Since then, that has been the basis for the development of a range of fertiliser subsidies for Australian primary industry. Reduction of the cost to the users-primary industry-was the motivation for the 1982 decision which the legislation proposes to change. As a result of the earlier legislation fertiliser prices were reduced to rural producers. Given the adverse conditions and circumstances confronting Australian farmers, it is even more important that nothing is done now which will reverse that reduction in price. Now is a particularly bad time to withdraw a subsidy which has successfully reduced the price of fertilisers to rural producers. Although I will be voting to retain the subsidy and, therefore, against the Government's legislation, I do not consider the current subsidy system to be the best of all possible worlds in the context of support for rural producers. My colleague Senator Macklin, the Australian Democrats spokesperson on primary industry, strongly suggested before the passage of the 1982 legislation that it would be preferable if payments related to the purchase of fertiliser, whether local or imported, were made by way of bounty directly to the rural producers whom they were introduced to assist. The second reason for my lack of support for this legislation is that if, as I fear, the result of withdrawing the subsidy is that production costs rise for our rural producers, the balance of trade may lose more from the resultant fall in exports than it will gain from the reduction in imports this legislation anticipates. On balance, the evidence persuades me that supporting this legislation will do more damage to rural producers and our balance of trade than Australia can gain from giving further protection to our own fertiliser industry. World prices for Australia's agricultural commodities are at their lowest levels since the Depression of the 1930s. Professor John Freebairn, a visitor to this Parliament last week, demonstrated as part of a seminar series for the Commission for the Future that prices for a range of commodities, such as cereals, meats, dairy products and sugar, are at a much lower level than they were even during the Depression. There has been an overall, gradual decline in export prices for those commodities and now they are in a very deep trough. This, then, is not the time to make what is a major decision which could have a major impact on an industry which is suffering so badly. It is a particularly bad time for the wheat industry which is being locked out of markets because of the trade war between the United States and the European Economic Community and which last week lost another market as Bahrain decided to import from its newly exporting neighbour, Saudi Arabia. On two fronts our cereals industry has a problem. Highly subsidised products are coming from some of the major traditional exporters and, due to development in previously importing countries, we have lost the Bahrain market. For the wheat industry fertilisers represent about 10 per cent of total production costs. The Government and Australian fertiliser manufacturers assure us that fertiliser prices will not rise as a result of this legislation. Indeed, some prices have been reduced so that Australian manufacturers can be seen to be passing on the extra $13m which will now be transferred to them. However, not all fertiliser prices have fallen. Imported fertilisers, in particular, will remain at the same price until current stocks are exhausted. When that happens, rural producers will pay up to $42 per tonne more for imported fertilisers. That fact is not one which I have dreamt up, nor is it one which has been put to me by a particular lobby group. Given the unsubsidised costs, that is the natural conclusion to draw from a Press release put out by CSBP and Farmers Ltd which contains a price list which includes the reductions to which I have just referred. The Press release concludes: Consequently, the price of DAP and Urea will remain unchanged while stocks of these products last. When it comes to sale time, most of us should recognise the line `while stocks last' as a warning that the reduced price will be available for only a limited time. I believe that Australian industry does not have the capacity to increase quickly its production of high analysis combination fertilisers. There have been claims from the industry that it can do so. It may be possible in the longer term. However, there is no doubt that the capacity does not exist now. As I have pointed out, this is a very bad time for such an adjustment to be made within the rural industry and, in particular, the wheat industry. This legislation will, therefore, discriminate very strongly against many farmers, especially grain growers who will have no option in the interim but to use imported fertilisers. When the subsidy is removed they will be forced to pay up to $42 per tonne more when the current subsidised stocks are depleted. What is worse, the market for Australian fertilisers will again be dominated by a few Australian producers who will be able to determine the prices of the fertilisers they manufacture and the fertilisers they will be importing-they will continue to import large quantities, both of completed products and of components for products which are produced here-because the Government is basically giving them back the whole Australian market. We should remember that in 1982 this subsidy introduced competition into the market which has, according to the President of the National Farmers Federation, reduced farmers' fertiliser costs by $70m. If it were possible to control the prices these manufacturers can charge we would not be so concerned. But does anybody seriously expect that local producers, with increased protection, will not seek to maximise their profits by charging the highest prices the market will take? There will be no competition to prevent them from doing so, and the Federal Government cannot control their prices. I am on the side of our rural producers who fear that the market control this legislation will give to domestic fertiliser producers will translate into a spiral of rising prices designed to maximise profit in what will virtually become a closed market, as was the situation before 1982. If the production costs of our products, such as wheat, rise in the current world market situation, we will sell even less and the export side of our balance of trade will decline. At the end of October, after the announcement of the Budget changes, Senator Button called for an urgent report on claims that fertiliser prices in southern New South Wales had increased by up to $40 a tonne. The price rise was to have been described as the removal of a transport subsidy. In the report in the Australian Financial Review on 29 October the Australian fertiliser manufacturer involved was described as deciding not to go through with the proposed price increase because it was a `concern politically'. The general manager was quoted as saying: `We gave some consideration to looking at prospects to increase prices but we have not done so'. According to that report, the involvement of Senator Button's staff who contacted the manufacturer had brought the issue under control. It is clear what the Australian manufacturers want to do. They have merely jumped the gun before the legislation is passed. I do not know how often the responsible Minister's staff can successfully prevent such price rises once the legislation has been passed. I draw attention to a Press release of 14 October 1986 from the Minister which drew attention to the fact that monitoring arrangements which had been in place for some time had been strengthened to reflect the reduced competition from imports which will result from the changes to subsidy payments. It appears that people in the Minister's office share the concern about which I have been talking. Redressing the concern in this instance would depend very much on the sort of action that would be available through the Minister's Department. Therefore, I understand the fear of Australian rural producers. In this situation, when we are choosing between making a government payment to advantage or assist the fertiliser industry or primary industry, I choose to support our farmers at this time, especially in those industries most likely to be affected-the grain and sugar industries-and place my vote on the side of rural industries which are at risk. Although there is certainly a need for considerable adjustment, I believe that this is not the time for it or the way for it to be done. Senator CRICHTON-BROWNE(Western Australia)(5.23) —I see no relationship between the Fertilisers Subsidy Bill 1986, to which I wish to speak, and the Bounty and Subsidy Legislation Amendment Bill (No. 2), the Bounty (Ship Repair) Bill, the Navigation Amendment Bill and the Subsidy (Cultivation Machines and Equipment) Bill which are being debated cognately. In my view they are all separate and distinct. I find no justification for their being debated cognately. We on this side chose not to disagree but my view is that one is a rural matter and the others are not. I am rather curious to know why the legislation is being shepherded through the Senate by the Minister for Industry, Technology and Commerce, Senator Button, and not Senator Walsh, who represents the Minister for Primary Industry (Mr Kerin). The Fertilisers Subsidy Bill proposes new arrangements for fertilisers. It amalgamates the nitrogenous fertiliser subsidy and the phosphate fertiliser subsidy in the one Act. The primary purpose of this legislation is to remove the subsidy presently paid on imports of nitrogenous and phosphatic fertilisers while maintaining a bounty for domestic manufacturers of those products. There has also been a slight shift towards increasing the present bounty for higher content phosphorus fertilisers. However, the various schemes to assist the production and consumption of phosphatic and nitrogenous fertilisers have operated in Australia since the early 1930s. Since 1963 assistance has been provided for the consumption of either one or both of these two fertilisers continuously, with the exception that the Labor Government in 1974 abolished the phosphate bounty which was reinstated in 1976 by the Liberal Government. Nitrogenous fertiliser consumption has been assisted continuously since 1966-including, as I recall, imports. There were some qualifications. Since 1982 the subsidy has extended to cover both phosphatic and nitrogenous imports without restriction. Before one debates the issue of whether the new arrangements or, for that matter, the subsidy or bounty as it now is, are the most effective or efficient way of providing assistance to the rural industry, the central argument of whether assistance of any form ought to be provided to the agricultural industry has to be addressed. I respond to that question in the most categoric way. Yes, the industry is deserving and in need of a form of assistance which in some small part, in my view, will compensate for the artificial cost imposts which are cast upon the industry by subsidised and, in many cases, inefficient industries-not to mention the very significant part played by rural industry in Australia's export earnings. Added to these burdens is the cost which the Government imposes upon the industry. As a general principle I am opposed to bounties and subsidies, as I suspect are most honourable senators on this side of the chamber. But we do not live in a perfect or pure world. We have to ask ourselves whether we want Australia under the circumstances of the world economic situation to maintain a viable rural sector. Rising costs and falling export prices, all quite outside the control of growers, have dramatically reduced farmers' net incomes. At the 1986 National Agricultural Outlook Conference it was revealed that this year 50 per cent of all farmers surveyed by the Bureau of Agricultural Economics will earn less than $5,900. Wheat farmers in Western Australia particularly have suffered seriously. Incomes for wheat farmers have fallen from an average of $41,425 per annum in 1983-84 to a minus $7,500 in 1985-86. In addition, incomes in the dairy industry have fallen on average from $21,259 to $8,000 for the same period, while the fall in incomes for livestock farmers has been from $26,519 to, on average, $4,500. As we would expect, the Government would have us believe that the blame lies exclusively with world prices. But that is just part of the problem. Until recently, and this still happens in many cases, rising farm costs have been the main factors that have led to dramatic reductions in farm incomes. It is estimated that almost half the increase in farm costs is a result of this Government's policy of deliberately increasing interest rates. High interest rates have increased the level of farm debt by 21 per cent to $7,250m over the 12 months to June 1985. The Government's decision to abandon its original oil parity pricing policy has meant that about 40 per cent of farm fuel costs-not costs for diesel-are subject to artificially high prices. The price of fuel has increased again by 5c per litre since the August Budget. The National Farmers Federation has estimated that the latest increases in the price of fuel will add between $70m and $75m to farm running costs. This will bring the total on-farm petrol excise to about $250m a year, not to mention the many other costs visited upon farmers by this Government. I turn to the question that I originally raised-that is, whether a subsidy or bounty on fertiliser is the most efficient or effective method of cushioning undue costs. I suspect it is not. I suspect that most honourable senators on both sides of the House would take the view that it is not the most efficient or effective form of providing assistance. In fact, the very reason that the subsidies or bounties were originally paid on fertilisers has changed. Reasons such as an incentive for increased productivity, or an encouragement to develop the less fertile or more infertile parts of Australia-in Western Australia, for instance, to the east and the south are no longer relevant. In many respects the bounty or subsidy on fertilisers has become simply a subsidy to reduce on-farm costs. Of course, its benefits vary from farm to farm and State to State. For that reason alone it could be easily demonstrated that it is not the most efficient or effective way of providing equal and rational assistance. However, until such time as governments commit themselves to reducing other farm costs incurred or imposed by distortions in the economy, the subsidy is reasonable and, in my view, legitimate. I need not remind the Senate that the overall level of assistance to rural industries is low by comparison with all other sectors. Figures from the Industries Assistance Commission, for instance, indicate-and they are supported by other figures-that the level of primary industry assistance is 9 per cent, compared with 26 per cent for secondary industries. Of course, the farm sector suffers a cost impost of about $9,000 per annum arising from the protection of secondary industries by tariffs, quotas and other mechanisms. That has been disputed by the Government, but I think there is now consensus amongst most people that the figure is somewhere between $7,000 and $9,000 per annum. The essential point at issue in this debate is the Government's decision to remove the subsidy from imports of fertilisers and provide it exclusively to local manufacturers. Of course, one might properly ask why the Government has chosen to exclude imports. The answer, at least as I see it, is quite obvious. The object is to assist the manufacturers and not the farmers. The Government would have us believe that the assistance of the manufacturers in no way detracts from the assistance that has been offered and has been available in the past to farmers. My view is that that will not, in the long term, be the case. We will find that the price of high analysis fertilisers will increase. The manufacturers will find themselves absorbing part of the benefits which were intended to flow to the end users-the end users, of course, being the farmers. One of the difficulties that local manufacturers perceive is the fact that there has been a significant movement away from the use of SSP-single strength phosphate-to the high analysis phosphatic fertilisers. Of course, the reasons are simple and obvious. In my State of Western Australia, for instance, many farmers, particularly those in the wheat belt regions, have found that mono-ammonium and di-ammonium phosphates are the most suitable fertilisers with respect to soil composition and crop needs. These fertilisers are rich in nitrogen and phosphate content, and both are required as a soil nutrient supplement in those wheat belt regions of Western Australia. While phosphate can be obtained from locally produced superphosphate, a far more efficient and effective method of applying these two compounds is in combination, as either MAP or DAP. As phosphate is found in a more concentrated form in these nitrogenous fertilisers than in superphosphate, more phosphate can be bought per tonne of fertiliser, and hence cartage costs are significantly reduced. In Western Australia, cartage costs are of paramount concern to all primary producers. Of course, by applying nitrogenous fertiliser, the user is saved from having to fertilise twice. As those who have some knowledge of the rural sector know, many farmers are now converting to air seeders, which are more inclined to accept DAP and MAP than superphosphate, as they do not have the same effect of blocking up the machinery. One reason that the local manufacturers are unable to compete with the overseas manufacturers of HAPF is that it is being produced more and more in large plants at the source of the rock phosphate rather than being established near the markets, as ours are. Of course, this is an inhibiting factor in terms of cost and the advantage which is granted to overseas producers. Because the principal product of Australian manufacturers in the past has been, as I say, SSP, the plants have been located near markets, with the material imports being transported to the plants. The distinction, of course, highlights the reason for the lack of world trade in single strength phosphates and the growth in world trade in processed phosphates. Quite naturally, where one has superphosphate, one has a low value, high weight content. It is uneconomical to transport or cart over long distances. It is not as economical and for that reason it is usually processed near markets. In 1960 about 15 per cent of the total phosphate trade was in processed phosphate. By 1977 this proportion had risen to 23 per cent. By 1982 it had risen to 40 per cent, which gives an indication of the attraction of DAP and MAP in terms of consumption and in terms of comparable price, because one gets the high analysis content per tonne and it is more economical. IAC figures show that the consumption of the ammonium phosphates in Australia increased from 365,100 tonnes in 1980 to 414,000 tonnes in 1984, while superphosphate consumption reduced from 2,969,000 tonnes to 2,481,000 tonnes during the same period. That, of course, demonstrates the significant movement away from superphosphate to the high analysis fertilisers. In order to meet the rising demand for nitrogenous fertiliser, imports have risen from 61,000 tonnes in 1980-81 to 361,000 tonnes in 1984-85. This represents a rise of almost 500 per cent in the volume of imported nitrogenous fertiliser over that four-year period. It ought not to be forgotten that this growth in imports has been maintained notwithstanding the significant devaluation of the Australian dollar against the United States dollar. Of course, one accepts, and it is acknowledged, that local manufacturers are required to purchase overseas certain United States dollar-related raw materials. There are other reasons for the inability of Australian manufacturers to compete with imports. If the Government were serious about assisting both local manufacturers and Australian farmers, it would direct its attention to those areas over which it has some control. Let us look at the question of sea freight and the particular role that the Australian National Lines plays in the cost of fertilisers in Australia. We find that, in terms of coastal shipping, which is restricted to Australian registered vessels, the situation has been exploited to the extent that the Australian National Line charges $30 per tonne to carry phosphate from Christmas Island, while it is possible to ship phosphate rock from Florida in the United States to Australia for only $16 per tonne. If we were using international shipping rather than Australian shipping freight costs from Christmas Island to Australia would be reduced to one-third of their present level. Other examples abound. For instance, bauxite can be shipped from Weipa to Japan at about the same price at which it can be shipped to Gladstone. In 1984 aluminium shipped from Bell Bay in Tasmania to Perth used to cost $125 per tonne for shipping but only $100 per tonne for shipping to Japan. A South Australian trader was quoted $2,600 to ship a 20 foot container from Melbourne to Devonport but only $1,600 to ship it from Devonport to Taiwan. Now we are asking Australian farmers to bear the burden of the inordinate and excessive costs of the Australian National Line. We are being asked to pass this bounty legislation which will have the effect of providing $20m of the $55m of subsidy to the shipping line. Almost half the subsidy we are providing will go not to the farmers but the shipping line. In 1983 the Chairman of the Australian National Line summed up the situation by saying: `We had overmanned ships, overmanned terminals and overmanned offices'. The Australian Coal Association estimates that two-thirds of the difference in cost between Australian and overseas shipping is due to manning. The statistics are well documented. Australian manning levels are far ahead of those of any other nation. And we wonder why the costs are so much higher. Of course, Australian wage rates are usually higher than those of our competitors. Finally, there is the requirement that crews work one month on and one month off. This means that Australian ships require two crews. For every position on Australian ships there are two crew members; for United Kingdom ships there are one and one-third crew members and for Japanese ships the figure is the same. The record of industrial disputation in shipping shows the enormous cost that is being cast upon Australian rural producers. The number of man days lost in the last two or three years has been reduced and the level of disputation has improved. Notwithstanding that improvement, it ought to be remembered that the Australian National Line has one entire ship unproductive for almost half the year. So shipping rock from Christmas Island is costing an additional $20 per tonne by using ANL instead of an international line. The report of Sir John Crawford's Committee on Revitalisation of Australian Shipping shows that 50 per cent of respondents indicated that they would not use coastal shipping even if the costs were the same or less than land freight. If we were terribly serious about this problem we would be looking at the cost of shipping to ensure genuinely and sincerely that costs are reduced for the rural sector and that manufacturers also are maintained at a viable level. I draw the Senate's attention to the very considerable conflict that has taken place in recent times in relation to the dumping of DAP and MAP. There have been many cries from local manufacturers that there was a significant level of dumping. The 1985 inquiry was precipitated by a number of Australian fertiliser manufacturers, including CSBP and Farmers Ltd from Western Australia, which have the capacity to manufacture DAP and MAP. It is not without significance that CSBP subsequently withdrew from the inquiry. The Customs assessments made-I might say, on the basis of two theoretical models rather than actual figures derived from available facts-concluded that the difference between the highest estimate of normal value and the export price was between $2 and $9. The Australian Customs Service made a judgment on its theoretical models from information provided from two American companies, which refused to disclose their names, that the difference between the normal value and the export price was between $2 and $9 a tonne. A number of interesting factors emerged from the inquiry. Domestic production of MAP and DAP actually declined between 1981-82 and 1983-84 from 62,100 tonnes to 53,500 tonnes. The decline was due to two companies actually withdrawing from the manufacturing process, notwithstanding the fact that until April 1984 anti-dumping action applied to imports of DAP and MAP. In other words, the company withdrew from manufacturing at a time when it was insulated from dumping. Unfair price competition therefore cannot be blamed as a cause of the decline in the domestic production of MAP and DAP, where normal values were applying. It was also interesting that Australian Fertilizers Ltd, which had previously withdrawn from production of DAP and MAP during the period when normal prices applied, as recently as January of this year announced that it intended to fulfil its promise on a cost-effective increase in the production of MAP and DAP and to meet 50 per cent of domestic demand by the end of 1985-86. One might well be legitimately moved to conclude that AFL's new-found enthusiasm for manufacturing high analysis fertilisers is due to the fact that in more recent times a number of non-manufacturing smaller companies have begun to import DAP and MAP. They have sold it at prices below the price at which the larger manufacturers have been importing and on-selling it. The domestic market share of MAP and DAP has remained at a constant percentage of total consumption over 1983-84 and 1984-85, at 21 per cent. That is, there has been no increase in market share even though dumping duties were removed in April 1984. So after dumping duties were removed there was no increase in demand in terms of market share. What has occurred is a substantial growth in imports by independent importers and therefore there has been a decrease in the market share of imports by domestic producers. The import levels have remained static. The import market share of the manufacturers has gone down because that proportion has been absorbed by new importers. Of course, that has become an immediate threat to the local manufacturers, who up until now have been quite happy to make their profit from on-selling imports. They have not bothered to manufacture in the past. They have simply imported, on-sold and made a profit. Now somebody else has woken up and is doing the same thing. Suddenly the domestic manufacturers have a real interest in manufacturing. The quick fix solution is to provide local manufacturers with further protection, remove the import competition and recommence or expand local production. I wonder what other reasons the manufacturers have. As I recall, CSBP advised the Industries Assistance Commission that it could not compete with imports at a figure of less than the equivalent of approximately $450 per tonne. I think that was the figure it told the IAC it would need before it would be competitive. As I understand the situation at present, one can buy MAP or DAP in Western Australia for $330 a tonne ex works. That is the price of last year's stock. There has been a decline in prices so, presumably, all things being equal, one should be able to buy imported fertiliser at a lower price than that. Yet suddenly CSBP wants to manufacture. I can only conclude that it will start manufacturing, it will receive added insulation because the imports will no longer attract the subsidy-it will now become a bounty-and in due course it will complain that it cannot compete and it will seek further and better protection. The Government seems well-satisfied that the removal of the subsidy from importers and transferring it conclusively to local manufacturers will not be to the detriment of the end users, the farmers. My view is that the benefit will not, in full, flow to farmers and that the net effect regardless will be a guarantee of increases in prices for high analysis phosphatic fertilisers. In the moments left I conclude by reminding the Senate of two conclusions made by the IAC: If the existing consumption subsidy were to revert to a bounty on local production, the f.o.b. price of MAP and DAP would be likely to rise by a further 12 to 13 per cent. Finally, I quote: Any action which would raise costs of imported fertilisers would reduce the international competitiveness of Australian rural industries, many of whose products must compete on world markets. The IAC has said that if we do what this legislation seeks to do, the price of fertiliser to farmers, whether it be imported fertiliser or domestically manufactured fertiliser, will go up and will have a detrimental effect on farmers. Yet we are told in this legislation that there will be no increase and that there will be some sort of prices surveillance scheme as we have had in the past which, for my part, has always been an abject failure. Senator GRIMES(Tasmania-Minister for Community Services)(5.53) —It has been a long and complex debate over all these pieces of legislation. I will attempt to pick up the points raised by various speakers and answer them. There will obviously be more debate in the Committee stage when the amendments are brought forward. Senator Chaney, in speaking on the Subsidy (Cultivation Machines and Equipment) Bill 1986 alleged that the Industries Assistance Commission may have miscalculated the tariff equivalent rate of the bounty and that the bounty should be increased to 11 per cent. Some industry representatives have raised concerns about the way in which the IAC arrived at its proposed bounty rate for cultivation machinery. They have specifically argued that the calculations in respect of wharfage and customs clearance were overestimated. In support of these arguments they have submitted a small number of specific examples and comments from one customs agent. These industry concerns have been discussed at length with IAC staff and, following re- examination of the basis for its estimates and after discussing these with a small number of importers, the IAC stands by its figures and in fact sees no substantive basis for significantly revising them. While there are differences between the IAC figures and the few examples proffered by industry representatives in support of their case, these have not been considered significant justification for varying the bounty rate arrived at by the IAC. One final point which Senator Button would like me to make is that even if the IAC's calculations on wharfage and customs clearance were out by the unlikely factor of 50 per cent, the bounty rate, following rounding, would still have been 10 per cent. It was also suggested that the Government should consider extending the bounty to exports. Notwithstanding the Budget related reduction in bounty rates, the intention underlying this whole bounty exercise was to introduce a scheme which resulted in a level of assistance similar to that prevailing before the changes were announced. It was decided not to include exports within this scheme because to do so would have meant that additional assistance to that prevailing before the commencement date of the Bill, in 1986, would have been accorded this sector. This issue is one, however, that will receive close attention in the course of the review of the long term assistance requirements of the agricultural equipment industry sector which it is anticipated the IAC will commence in the first half of 1987. Senator Chaney also sought an assurance that claims for payments would not be delayed. Claim forms relating to payments under this scheme are currently being drafted. The Australian Customs Service is aiming to have these forms available as soon as possible after this legislation has received royal assent. It is not anticipated that there will be any delays in the processing of claims. There was a request as to if and when a reference to the IAC on the long term assistance to the industry will be given. The agricultural equipment sector has not been subject to a detailed review since 1970 and it is the Government's intention to forward a reference to the IAC calling for a report on long term assistance requirements for this sector in the first half of 1987. On the Bounty (Ship Repair) Bill 1986 Senator Chaney claimed that the bounty was just a blatant attempt to buy peace on the waterfront and to provide an incentive for unions to misbehave in order to extract a large bounty allocation. The ship repair industry has been of concern to the Government for some time. Following representations from the Australian Chamber of Shipping, the Australian ship repairers group and ship repair unions concerning the long term viability and poor outlook facing the ship repair industry, Senator Button established a working group in June 1984 to examine the industry and to report back on possible alternatives to assist its rationalisation and restructuring. In his second reading speech he pointed out that the ship repair assistance package, of which this Bill is one element, resulted from the Government's consideration of the working group's report. It was not, as Senator Chaney has suggested, a result of the Australian Council of Trade Unions' ship repair campaign. The Government is well aware of the difficulties facing the ship repair industry, the significant excess capacity, the failure of the industry to invest in contemporary technologies and to adopt efficient work practices. Fluctuations in domestic demand have not provided a stable employment environment and have acted as a disincentive to investment. The introduction of this package is designed to increase throughout and provide a stable environment in which the industry can improve its efficiency. Senator Button also mentioned that registration criteria to be specified in regulations will include codes of business and industrial relations practices. The Government considers that it is essential that these codes include the adoption by the industry of arrangements which facilitate improved work practices and labour flexibility measures to enable labour and capital to be employed more efficiently with less demarcation problems. An important precondition to the implementation of this bounty scheme has been the agreement by the relevant unions to end their ship detention campaign. Clause 11 of the Bill, however, which provides a unique power to unilaterally suspend the bounty should the ship repair retention campaign be recommenced, is designed to ensure that the agreement is upheld. There is certainly no incentive for unions to misbehave in order to extract larger bounty payments. Indeed, quite to the contrary, union misbehaviour may lead to the suspension of the bounty with the result that no bounty is or will become payable for any repair work commenced during the period of suspension. It should be noted that although the cessation of the ACTU's ship repair retention campaign is an important factor impacting on this industry's reputation as a repairer, it is only one element of the package aimed at assisting Australia's ship repair industry in becoming a viable, technologically advanced and export oriented industry. On the Fertilisers Subsidy Bill 1986 Senator Chaney asserted that the original intention of the Bill was to give a consumption subsidy to assist farmers and that, therefore, the status quo should be retained. That is an interesting concept from a free enterprise person, but I accept that is what he is about. The intention of the subsidy is to increase the use of fertilisers. Senator Crichton-Browne —Increase their use? Senator GRIMES —It increases this intent, as the good senator says. It continues subsidies to the rural sector for consumption of fertilisers at $55m per year. It removes an inconsistency of Australia subsiding imports as well as giving bounty to domestic production, particularly at a time of severe balance of payments deficit, which I also understand was referred to by Senator Siddons and indirectly by Senator Crichton-Browne. It provides local manufacturers with indirect assistance through the potential to increase production. The Government, in reviewing the fertiliser scheme, has had to balance the interests of all parties involved-farmers, including the 25 per cent who do not use fertilisers, manufacturers, importers, taxpayers and unions. Senator Chaney also asserted that the proposed changes will have an insignificant impact on the balance of payments. Each small saving made by the Government assists towards the goal of reducing Australia's balance of payments problems. More importantly, what message are we giving manufacturers? If we continue to subsidise imports, the message is that we do not care if manufacturers stay in business or not. Hence the legislation. Senator Chaney also asserted that the administrative mechanisms will not be as effective as imports in restraining domestic prices. It is a pre-condition of recognition of premises and of the payment of the subsidy that the Comptroller-General of Customs must be satisfied that the manufacturer is passing on the full benefit of the subsidy. I refer to page 5 of the explanatory notes, to clause 10 and to clause 22 of the Bill, which relates to the registration of premises. Senator Chaney said that the Bill will adversely affect those farmers who must continue to purchase imports of high analysis phosphatic fertilisers. However, this problem will diminish. The manufacturers have already stepped up their production and have committed funds to increase their capacity. Nevertheless, other factors such as geography, climate, location of manufacture and ports and transport also impact on farmers' costs. It is important to note that all manufacturers have lowered their prices of all fertilisers and importers appear to be matching these prices. Senator Chaney and Senator Siddons expressed opposition to the Minister's discretion to refuse registration of premises or persons where it is considered that such registration would not promote the orderly development of the industry. The Government is on notice that the Opposition is apparently opposed to this discretion and will be opposing its inclusion in the various Bills under consideration, which Senator Chaney has correctly identified as containing this now standard provision. Senator Siddons has also put the Government on notice that the Australian Democrats also oppose the provisions in their present form and will be moving a series of amendments to make the Minister's discretion reviewable by the Administrative Appeals Tribunal. The Government remains committed to the continued inclusion of the orderly development provisions in their current form as a necessary facility to ensure that bounty assistance is available only to applicants who have made a clear long term commitment to the particular industry concerned. Given the monetary limits which are now universally placed on this type of industries assistance, the Government is of the view that unrestricted access to bounty to those who might have only a marginal commitment to the industry is entirely inappropriate. This discretion does not, as has been suggested, exclude new entrants to an industry from receiving bounty nor does it unfairly entrench existing bounty recipients. Provided new entrants are prepared to undertake the necessary commitment to the industry and meet the registration requirement, they will not be denied registration. The discretion is designed to improve efficiency and competitiveness in the industry. Using the ship industry as an example, prior to the orderly development amendment to the Bounty (Ships) Act in 1985 there were over 90 registered shipyards; yet the available market was nowhere near sufficient to support that number. As a result of the combined use of the orderly development provision and the new registration criteria the number of registered shipyards has been reduced to 30 today and throughputs have increased significantly. Senator Button —The alternative, Senator, is disorderly development. Senator GRIMES —My Leader points out that the alternative is disorderly development. Because the discretion implements an important element of government policy it is also the Government's view that it is inappropriate to have the Minister's discretion independently review- able. To make the discretion reviewable would- Senator Crichton-Browne —Hi, Solomon. Senator GRIMES —I reckon that the honourable senator ought to ask some of his colleagues who have previously been Ministers what they think of that. I have a strange view that governments are elected to govern, not to be governed by the AAT. To make discretion reviewable would have the potential effect of frustrating high government policy and, as such, the Government relies on the acknowledged exception by the Administrative Review Council to the reviewability of administration decisions which this category of decision-making represents. It is for this reason the Government cannot accept restrictions on the discretion which the amendments proposed by the Australian Democrats would represent. Senator Siddons raised a number of points on the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986 which I will deal with by indicating the Government's position on the various amendments to that Bill which have been circulated on behalf of the Democrats. I refer to the 20 per cent reduction in bounty. The Government cannot accept the amendments proposed to restore bounty and subsidy rates to their pre-Budget levels. Senator Siddons will be aware that Senator Button has indicated on a number of occasions that the reduction in bounty rates is a fiscal measure made to reduce government expenditure and for no other reason. In framing the 1986-87 Budget the Government considered a wide range of options for reducing outlays and exercising necessary expenditure restraint. It was the Government's view-it remains the Government's view-that such restraints should be borne by the community as a whole and a cut in bounty and subsidy rates is just one of the measures needed to achieve the Government's expenditure objectives. I turn to share ownership schemes and the proposal to make bounty payments conditional upon the establishment of employee share ownership scheme. The Government cannot accept at this stage the proposed amendments with regard to these schemes. It is the Government's current view that the introduction of these and other forms of employee financial participation should be undertaken voluntarily following consultation between companies, employees and unions, rather than being imposed by government which would be the effect if they were made a condition for receipt of a bounty payment. It is important that employee financial participation schemes are considered within the wider context of more effective employee involvement. This is the subject of the policy discussion paper on industrial democracy and employee participation to be released by the Government in the near future. This paper has been designed to stimulate community debate and includes the issue of employee financial participation. We would not be in favour of pre-empting that process of discussion by indicating at this stage a final view on this issue. I refer to the proposal to make bounty payments conditional on a 25 per cent local content requirement. Amendments to make bounty payments in 13 of the existing bounty and subsidy Acts conditional on a 25 per cent local content requirement cannot be accepted. Local content is already a feature of most bounties which are paid on a percentage basis of the in-house value added to the particular bountiable product by the local manufacturer. Those bounties commonly require a minimum of 20 per cent value added input by Australian manufacture in order to qualify for the bounty. Other bounties are specifically restricted to Australian products or processes specifically carried out in Australia, such as the Australian books in the Bounty (Books) Act 1969 or the printing of a pattern on fabric in Australia under the Bounty (Printed Fabrics) Act 1981. In addition, prescribing an arbitrary minimum threshold requirement for local content in the manner suggested might lead to the undesirable situation which was identified by the Industries Assistance Commission in its report on the metal working machine tools and robotics industries of 7 February 1984 and the old Bounty (Metal-Working Machine Tools) Act 1978 which had a 50 per cent local content rule. The Commission concluded that because of the local content threshold manufacturers were, at times, prepared to pay a premium for marginal components available locally just in order to qualify for the bounty. This was undesirable in the Commission's opinion as it effectively accorded the local component producers very high and unintended levels of assistance. It has also been noted that policing local content rules is a complex and costly procedure which is made particularly difficult when imports are bought from merchants who source both locally and overseas. In the same IAC report previously mentioned on the old machine tools bounty, the IAC concluded that one of the significant disadvantages of that scheme was the local content rule which created problems for the administering department in determining the origin of supply of materials and components. Other assertions were made about the Fertiliser Subsidy Bill 1986 which, I understand, will come up in later debate. I thank honourable senators for their contribution to this gripping, but very important, subject. I urge support for the legislation. I regret that some honourable senators have announced that they will not support all the legislation. Question resolved in the affirmative. Bill read a second time. The Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(6.11) —by leave-I move: (1) Page 4, clause 11, leave out all words after `by omitting sub-section (11)'. (2) Page 5, clause 12, leave out all words after `by omitting sub-section (11)'. The amendments seek to remove or delete the so-called orderly development provisions of the Bill which give the Minister discretion to refuse the registration of premises or persons if he believes that such registration would not be in the interests of the industry's development. When these clauses were introduced in 1985 I expressed reservations about them on behalf of the Opposition. I expressed reservations in the Senate 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'. The Opposition, having given this matter further consideration and noting that the Government is now taking this as a standard provision to give the Minister the power to restrict entrance into various industries, has taken the view that it should oppose these provisions. We believe that whilst the Government is acting with the best of intentions of trying to avoid fragmentation of Australian industry, it is in fact simply putting in place more bureaucratic interference with industry of a type which, in the past, has, in the end, simply added to costs and to the inflexibility of Australian industry. The Australian Democrats will be moving some other amendments. However, I have moved the amendments to clauses 11 and 12, which have been circulated in my name, for the reasons that I have just briefly outlined and for the reasons that are in the speech I made at the second reading stage. Senator SIDDONS(Victoria)(6.13) —The Australian Democrats have considered the Opposition's amendments. We are not able to support them for a very good reason. I think the Opposition's attitude is that it would like market forces to operate unrestrained. It is our view that this is not a market forces situation. The Government is interfering in the market-place by granting bounties. Therefore, we are of the opinion that the Minister should have some discretion. As I said in my speech during the second reading debate, we do not believe that the Minister should have absolute discretion or the power of life and death over the industries concerned. So, in order to try to reconcile the two opposite points of view-one by the Government and the other by the Opposition-we believe that we should move an amendment to give the industries concerned the right of appeal to the Administrative Appeals Tribunal, which seems to us to be the appropriate body to hear any unfair decisions by the Minister. After the Committee has voted on the Opposition's amendment, we will then move our amendment that any decision by the Minister should be subject to an appeal to the AAT. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.15) —The Government does not support the amendments moved by Senator Chaney, largely for the reasons stated by Senator Siddons. We inherited a shipbuilding industry in a total mess-an industry that was going out backwards with government money being poured into 90 different firms which were eligible for bounty at that time. It was in our view appropriate that there should be a contraction of the industry to fewer firms so that better investment, production and throughput could be achieved. That has in fact happened. There are now 30 firms eligible for the bounty. Most of them have full order books. I was told a fortnight ago that all of the ships being built in the yard of Australian Shipbuilding Industries (WA) Pty Ltd, which is in Senator Chaney's State, are to be exported. The payment of the bounty represents, of course, a degree of government interference. I think governments are entitled to intervene when they are making money available for support of industries of this kind. I believe that the intervention has been very important to the industry. It is not, as Senator Siddons perhaps unwittingly implied, entirely my decision or the decision of the Minister in respect of the registration or eligibility for bounty. Recommendations are made to the Minister by an arm's length committee and the Minister acts on the basis of that advice. In fact, the Minister has on occasions-this has happened in my case-changed one or two recommendations of the committee, but this happens very rarely. So the Government does not accept the amendments. If I might say so, I follow the spirit of Senator Siddons's suggestion; I am not against the spirit of it. But in terms of government policy, if a tribunal is leaning over one's shoulder and that body is not necessarily attuned to policy questions and is interfering with policy-it is, of course, unpalatable for Ministers to have anybody interfering and I suppose the intention of the amendment is to make a Minister's life more unpalatable-- Senator Siddons —We all have people breathing down our necks from time to time. Senator BUTTON —I assure the honourable senator that I have plenty. I just do not want any more. We would say that this decision making is in a category which is inappropriate in terms of a full review by the Administrative Appeals Tribunal. For that reason we cannot accept the restriction on the discretion which the amendment to be moved by the Australian Democrats would impose. Question put: That the amendments (Senator Chaney's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 28 Noes . . . . . . . . . . . 38 —— Majority . . . . . . . . . 10 —— Archer, B. R. Lewis, A. W. R. Baume, Peter 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. Puplick, C. J. G. Collard, S. J. Reid, M. E. Crichton-Browne, N. A. Sheil, G. (Teller)Durack, P. D. Short, J. R. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Jessop, D. S. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Knowles, S. C. Withers, R. G. Aulich, T. McClelland, DouglasBlack, J. R. McIntosh, G. D. Button, J. N. 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. Robertson, E. A. (Teller)Elstob, R. C. Ryan, S. M. Evans, Gareth Sanders, N. K. Foreman, D. J. Sibraa, K. W. Georges, G. Siddons, J. R. Giles, P. J. Tate, M. C. Grimes, D. J. Vigor, D. B. Haines, J. Walsh, P. A. Harradine, B. Zakharov, A. O. Alston, R. K. R. Bolkus, N. Bjelke-Petersen, F. I. Gietzelt, A. T. Hill, R. Jones, G. N. Teague, B. C. Richardson, G. F. Question so resolved in the negative. Senator SIDDONS(Victoria)(6.25) —The Australian Democrats have circulated essentially four groups of amendments to this piece of legislation, the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986. The first one deals with the proposed reduction of bounty and I seek leave to move amendments (2), (6) and (10) together. Leave granted. Senator SIDDONS —I move: (2) Page 1, sub-clause 2 (2), lines 10 and 11, leave out the sub-clause. (6) Page 6, clause 15, lines 3 and 4, leave out the clause. (10) Pages 7 to 14, Schedule 1, leave out the Schedule. The effect of these amendments is quite simple; it restores the 20 per cent cut in the bounty. I believe all that needs to be said about that has been said by me in my debate on the second reading speech. The reduction of bounty represents ad hockery at its worst. It creates a great degree of uncertainty not only for the industries concerned but for all manufacturing industry in this country. It places a great question mark on the fundamental policy of the Government, which the Australian Democrats would agree to, that it is better to have bounties than tariffs because bounties keep the price level constant, whereas tariffs have the effect of increasing the local price. We would support by and large bounties to replace tariffs, but not if the Government is going to do what it is doing in this Bill; that is, arbitrarily and suddenly reduce the bounty. If the Government is going to play that sort of game, industry will have no confidence in receiving a bounty. The whole effect of industry assistance by the Government is negated by that one fact. A bounty given today and taken away tomorrow is no use whatsoever to industry; it is worse than useless. It creates great uncertainty over the industries concerned and over all other industries. The worst possible environment for industry to operate in is an atmosphere of uncertainty. Industry cannot make investment decisions if it is not sure what the long term government policy is going to be. This has a double effect. It creates great uncertainty and indecision in industry and it demonstrates the great fear that industry has always had about bounties; namely, that they are there, ready and waiting for governments to cut back as soon as they feel there is some pressure on their budgetary requirements. For that reason we believe that the 20 per cent cut in the bounties, which was announced with the Budget, is purely to play to international money markets in the sense of getting the deficit down, and has no other purpose, as the Minister for Industry, Technology and Commerce (Senator Button) admitted when he said: `We were trying to get the Budget deficit down'. If that is not short sighted and against all the principles of long term planning, nothing is. We are attempting to bring some sanity back into the Government's initiative on bounties in place of tariffs and some long term stability in government policy. Senator CHANEY(Western Australia-Leader of the Opposition)(6.29) —As I mentioned during the second reading debate, we had some indication from the Australian Democrats that they were proposing to move these amendments. The Opposition will not support the amendments because we are not prepared to vote against the decision on the basis that it is a Budget decision and it would affect the revenue position of the Government. I do not think it is realised in the community just what a serious predicament the Australian economy is in. I do not think it is fully understood that our balance of payments situation continues to be drastically bad and that turning the situation around will be very difficult. One of the things the Opposition has continually asserted is that there should be reductions in government expenditure. It would be quite inconsistent with the general demand that we have been making on the Government that it reduces its expenditure if we then supported amendments in this Budget process which increased the expenditure. I would like to stress to the Minister for Industry, Technology and Commerce (Senator Button) that the reason we are not supporting the Australian Democrats' amendment is our overriding concern for the state of the economy and for the need to restrain government expenditure generally. I totally agree with what Senator Siddons had to say about this flying in the face of all desirable industry policy, and indeed flying in the face of the sorts of policies and approaches which the Minister at the table, Senator Button, has himself advocated over the last 3 1/2 years. There are in particular a couple of points that I wanted to raise with the Minister and on which I would seek his response. Sitting suspended from 6.30 to 8 p.m. Senator CHANEY —Before the suspension of the sitting I was indicating that whilst I supported the views that were put forward by Senator Siddons as to the undesirability of the 20 per cent bounty cut made by the Government in its Budget when examined from an industry policy point of view-the Minister has made no attempt to defend it on an industry policy point of view; he has made it quite clear that this was a decision that was based on the Government's need to reduce expenditures-there were a couple of points on which I sought the Minister's response. Unfortunately, the Minister cannot be with us now but I mentioned to him at the point of the suspension of the sitting the points I was going to raise. No doubt the officials will be able to assist the Minister for Community Services (Senator Grimes), who is at the table, with his response. I draw the Minister's attention to the fact that immediately after the Budget I raised the bounty cut with Senator Button and he said in response to a question without notice that he would examine the impact of the decision on particular industries. Subsequently, in a Senate Estimates committee Senator Button confirmed that this examination was under way. I asked the Minister to advise the Committee what progress, if any, there was to report. In particular I would be interested to know what examinations the Minister undertook to make. What action was taken by him? It is quite clear that different industry sectors have seen a substantial reduction in their properly estimated cash flow and the invalidation of some of their investment decisions made on the faith of the Government's undertaking to pursue particular policies. I would like to know precisely what the Government has done to carry out what Senator Button said he would do, namely to examine the impact of the decision on particular industries. The second point-and the Government is in the happy position of having the Opposition committed not to increasing its outlays in the course of dealing with this Budget legislation-is that the Government had shown itself prepared to review bounty decisions with respect to particular industries. One of the industries affected by the 20 per cent bounty cut is the book industry. The proposed book bounty legislation, which is before us and which I suppose I am not entitled to debate under Standing Orders, provides for a change in the treatment which the Government had undertaken to give the book industry. Although the Minister might respond by saying `we are adjusting the general regime of bounty assistance for books rather than the Budget decision' the fact is that book producers were faced with the situation where under the existing assistance arrangements there was a cut in bounty. That was then added to by the Budget cuts. The fact is that the Government has chosen to step back from the previously announced reduction which was part of the general scheme of assistance and has deferred the longer term consideration of that book bounty until it receives the report of the Industries Assistance Commission on Paper Pulp and Printing. There is another reference closely related to it and I make no objection to the Government considering those two things in tandem. The two points on which I seek comment from the Minister are first, to let the Committee know just what, if anything, has been done to meet Senator Button's earlier undertakings, and secondly, why is it that the Government sees itself able to make adjustments with respect to one industry but not to the rest? Senator GRIMES(Tasmania-Minister for Community Services)(8.05) —I am informed that the examination which the Minister for Industry, Technology and Commerce (Senator Button) had indicated to Senator Chaney before the dinner break would be made is in the process of being made, but it is too early at this stage to report on the effect of those cuts in particular industries. All bounty recipients have been considered equally and the Government will continue to monitor effects in this area. As Senator Chaney has answered himself and as I did in summing up on the second reading, this in fact was a budgetary decision. It was a fiscal measure made to reduce government expenditure. It was part of the changes that were made so that we could produce the reductions in expenditure that we wanted to and have those reductions borne across the community as much as possible. The proposed new Bounty (Books) Bill 1986 which commences on 1 January 1987 ensures that there has not been a double reduction in the book bounty which would have made difficulties for book producers. I assume that these changes were made to pick up that special case. The legislation, I am informed, repeats the rate reductions that were made on 20 August in the Budget. It does not make a further reduction. Therefore, those areas have been treated equally taking into account the difficulties that would have been raised if there were further reductions. I hope that means something. Senator CHANEY(Western Australia-Leader of the Opposition)(8.07) —I do not wish to prolong the debate, particularly as Senator Grimes, the Minister at the table, is not the Minister who is responsible, but I want to say a couple of things and pose one further question. The point made by the Minister about the double whammy, in effect, that has been imposed on the book industry is all very well, but the initial reduction is something that was already predicted, and was in place and expected by the industry. The book industry, in common with other industries, then found in the Budget that it was faced with a totally unpredicted and therefore unexpected reduction in bounty payments, so that the expectations of this industry have been no more disappointed than the expectations of all those people who are in receipt of bounties. I totally reject the fact that there is any logic in the Minister's answer. The reality appears to be that the impact on the book industry was seen to be too severe, but that underlines the importance of the review which the Minister undertook to make about the impact on particular industries. I have said in other places that there is a total lack of understanding within the Public Service, and hence often in government, on the need to assess the microeconomic impact of some of these decisions. Decisions which make a lot of sense in a macroeconomic context do not necessarily make any sense to the poor old people who are actually trying to conduct an industry on the ground. The Government owes it to the people who have been carrying on their business believing that the Government would keep to its word and not behave unpredictably in the industry policy area to indicate precisely what it is doing to meet the responsible Minister's commitment that these matters would be examined. The advice I have received from people who are in receipt of bounty is that no inquiry has been made to assess what the impact of the bounty cut would be upon them. What the Minister at the table has just said-I know that he said it as a result of the advice he has received from officials-is that the examination is in the process of being made, that it is too early to report, which I can accept, and that all bounty recipients have been considered equally. I ask the Minister to tell me quite precisely what procedures are being followed by the Department and/or the responsible Minister to carry out the examination that was promised by the Minister. I want to know who is doing it and how many people are doing it. I want to know what contact has been made with the affected industries. I want to know what is happening. I am not interested in words which are at a level of generality which would permit nothing to be happening other than for some idle clerk to be shuffling papers around in a file. I ask the Minister at the table to find out from his officials what is being done. Is a designated group of officers-is even a single officer-in the course of conducting an examination which, within a couple of days of the Budget, the responsible Minister said would be undertaken? I remind the Minister at the table that if it is not possible to answer that question the responsible Minister has misled both the Senate and this Committee. Either an examination is under way or it is not. I want a clear, straightforward and factual answer to my inquiry. Senator GRIMES(Tasmania-Minister for Community Services)(8.12) —First, I make a general comment. If one carries Senator Chaney's original impassioned words to their extreme, all industries receiving bounties would continue to get those bounties for ever. That is the only way one can have the predictable situation he talks about. He knows that is nonsense and he knows perfectly well that this measure is a fiscal measure. He knows perfectly well that is was introduced to cut government expenditure in this area. We have never pretended or said that it was otherwise. Secondly, as Senator Button has informed the honourable senator, the Department has, as part of its duty, generally to monitor the effects of such bounty changes and the effects of its bounties on the industries involved. It is my understanding that that will continue. In February when returns come in from the investigation of this matter we will have a better idea of the effects of the bounty and the bounty changes on the industry. I cannot tell the honourable senator specifically how many people are involved. I am informed that there is a continuing process. I will certainly endeavour to find out for the honourable senator specifically how many people are involved. I do not know at what levels they are. However I can find it out from the Minister when he returns. Senator SIDDONS(Victoria)(8.15) —I appreciate Senator Chaney's support in principle of our amendments but I am afraid that the logic of what he says insofar as the way the Opposition is going to vote on the amendments escapes me. We are led to believe that the Opposition cannot support the amendments because it is a fiscal matter and would affect the Government's revenues. I think I interpret Senator Chaney's remarks correctly when I say that. Yet the Opposition is to vote against the Fertilisers Subsidy Bill 1986, which is one of the Bills we will consider tonight and which will affect the Government's revenue by $13m, no less. So where is the consistency in the Opposition's stand? It says that it supports the reversal of the 20 per cent cut in bounties but it cannot vote for our amendments because they will affect the Government's revenue. Yet it is to vote against the Fertilisers Subsidy Bill which will affect the Government's revenue by $13m at least. I would also like to comment on Senator Grimes's remarkable statement-it seemed remarkable to me-that industry cannot expect bounties to go on for ever. Of course they do not. Most bounties are granted for a specific length of time and are then reviewed. That has been my experience with government bounties, anyway. What has happened in this case is that the Government has given industry a certain level of bounty and then, suddenly and arbitrarily, to meet its deficit requirements in a Budget, has cut the bounty by 20 per cent. As I say, that is ad hockery. Industry does not expect bounties to be in place forever but it does expect a firm guarantee that they will be in place at a certain level for a certain length of time. Senator CHANEY(Western Australia-Leader of the Opposition)(8.16) —Senator Siddons in his last few comments correctly put the position in response to what Senator Grimes had to say. There was no suggestion that people should have permanent bounties, but procedures which are laid down in the Industries Assistance Commission legislation-and, indeed, the Government's policies-predicate a degree of predictability and an inquiry before these matters are simply arbitrarily changed. From an industry policy point of view, certainly the Minister has not sought to defend the decision on the sorts of grounds Senator Grimes has used tonight. I point out to Senator Siddons that the attitude we are adopting on the Fertilisers Subsidy Bill is revenue neutral. The Government's changes to the fertiliser arrangements are expressly put forward on the basis that they do not represent a change in the outlays of the Government. There was a $55m subsidy under the existing system. The Government's legislation purports to redistribute that same $55m subsidy on the basis of a different pattern. The opposition to the legislation which is being taken by the Opposition simply retains the same level of financial commitment from the Government but maintains the old system of distribution. The Opposition would not have undertaken the course it has undertaken in regard to this legislation if the position was as set out by Senator Siddons. Senator Grimes's answer as to what is happening within the Department exposes the lack of any real examination of this matter by the Government. Again, in a sense, our hands are tied because of our decision with respect to the broader Budget implications of this legislation. In the view of the Opposition it is extremely unsatisfactory for the Minister to talk in terms of an examination and then have the sort of explanation we have had from Senator Grimes tonight. I do not believe that the explanation will satisfy the industries which are affected by this arbitrary cut in assistance. The Government will simply have to live with that. I do not wish to prolong debate on this point any further. Question put: That the amendments (Senator Siddons's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 49 —— Majority . . . . . . . . . 41 —— Haines, J. Powell, J. N. Harradine, B. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Archer, B. R. Knowles, S. C. Aulich, T. MacGibbon, D. J. Black, J. R. McIntosh, G. D. Boswell, R. L. D. McKiernan, J. P. Carrick, Sir John Maguire, G. R. Chaney, F. M. Messner, A. J. Childs, B. K. Morris, J. Coates, J. Newman, J. M. Coleman, R. N. Parer, W. R. Colston, M. A. Puplick, C. J. G. Cook, P. F. S. Ray, RobertCooney, B. Reid, M. E. Crichton-Browne, N. A. Reynolds, M. Crowley, R. A. Robertson, E. A. (Teller)Devlin, R. Sheil, G. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Georges, G. Townley, M. Giles, P. J. Vanstone, A. E. Grimes, D. J. Walters, M. S. Guilfoyle, Dame Margaret Watson, J. O. W. Hamer, D. J. Withers, R. G. Jessop, D. S. Zakharov, A. O. Kilgariff, B. F. Question so resolved in the negative. Senator SIDDONS(Victoria)(8.26) —I would like to move the amendments that have been circulated in my name in relation to share ownership being a condition of receiving a bounty. They are amendments (1), (3), (8) and (12). I seek leave to have the amendments taken together. Leave granted. Senator SIDDONS —I move: (1) Page 1, sub-clause 2 (1), line 8, after `sections', insert `16a, 16b, 16c,'. (3) Page 2, clause 5, lines 10 and 11, leave out `amended by inserting after sub-section (3b) the following sub-sections: ', insert `amended- (a) by inserting after sub-section (2) the following sub-sections: ``(2a) Bounty is not payable to a shipbuilder, being a body corporate, unless, within 12 months after the commencement of this sub-section, the shipbuilder establishes an employee share ownership scheme. ``(2b) In sub-section (2a), `employee share ownership scheme' means a scheme in accord- ance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.''; (b) by inserting after sub-section (3b) the following sub-sections:'. (8) Page 6, after new clause 16a, insert the following new clause: ``Amendments relating to employee share ownership schemes, &c. ``16b. The Acts specified in Schedule 4 are amended as set out in that Schedule.''. (12) Page 45, after Schedule 3, add the following new Schedule: SCHEDULE 4 Section 16b AMENDMENTS RELATING TO EMPLOYEE SHARE OWNERSHIP SCHEMES, &c. Bounty (Agricultural Tractors and Equipment) Act 1985 After sub-section 11 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Bed Sheeting) Act 1977 After sub-section 5 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Berry Fruits) Act 1982 After sub-section 5 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a producer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the producer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Books) Act 1969 Section 7- Add at the end the following sub-sections: `(4) Bounty is not payable to a person who contributed to the production of a book, being a body corporate, unless, within 12 months after the commencement of this sub-section, the person establishes an employee share ownership scheme. `(5) In sub-section (4), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Commercial Motor Vehicles) Act 1978 After sub-section 7 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to an assembler, being a body corporate, unless, within 12 months after the commencement of this sub-section, the assembler establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Computers) Act 1984 After sub-section 9 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (High Alloy Steel Products) Act 1983 After sub-section 7 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a producer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the producer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Injection-moulding Equipment) Act 1979 After sub-section 7 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Metal Working Machines and Robots) Act 1985 After sub-section 16 (3)- Insert the following sub-sections: `(3a) Bounty is not payable to a manufacturer or modifier, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer or modifier establishes an employee share ownership scheme. `(3b) In sub-section (3a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Paper) Act 1979 After sub-section 6 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Printed Fabrics) Act 1981 After sub-section 5 (3)- Insert the following sub-sections: `(3a) Bounty is not payable to a producer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the producer establishes an employee share ownership scheme. `(3b) In sub-section (3a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Steel Mill Products) Act 1983 After sub-section 8 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a producer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the producer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Bounty (Textile Yarns) Act 1981 After sub-section 5 (4)- Insert the following sub-sections: `(4a) Bounty is not payable to a producer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the producer establishes an employee share ownership scheme. `(4b) In sub-section (4a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. Subsidy (Grain Harvesters and Equipment) Act 1985 After sub-section 10 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to a manufacturer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the manufacturer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. After sub-section 11 (2)- Insert the following sub-sections: `(2a) Bounty is not payable to an importer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the importer establishes an employee share ownership scheme. `(2b) In sub-section (2a), ``employee share ownership scheme'' means a scheme in accordance with the regulations under which not less than 8% of the share capital of the body corporate is made available for employee share ownership.'. I will speak only briefly on these amendments since I ran over the point of principle during my speech at the second reading stage. It is not uncommon in Congress in the United States these days to make any government handout conditional on employee share ownership being introduced. That trend is very prevalent in the United States and the rationale behind it simply is that by ensuring that employees get a stake in the company any benefits of government bounties or handouts accruing to the company will be spread through a much greater number of people. This has the effect of being a much fairer way of assisting industry in that more people benefit from that government assistance. This principle is not new. It has been well and truly tried in the United States in particular. When Senator Button commented on these amendments just before the dinner suspension he said: `Well, the Government is going to bring out a paper on industrial democracy'. That paper has been promised now for over 12 months. I have addressed seminar after seminar on employee participation in which leading exponents of different initiatives in this area have commented. They are sick and tired of the Government's promises that it will do something on employee participation principles. The Government does nothing and keeps promising that if we wait a little longer it will bring out a paper and then it might do something. The amendments to the legislation before us at least give us the opportunity to put in place in a sector of industry without cost to the Government one of the most important principles in employee participation. I see no reason why there should be any delay. The only reason would be that it is against what the Government wants. The Government is not anxious to see a greater share of employee ownership in industry. We are rapidly being forced to that conclusion by the Government's dithering, delay and absolute refusal to commit itself in this area. But the Bounty and Subsidy Legislation Amendment Bill (No. 2) is before the Parliament. It is up to the Opposition whether it will support these amendments. If it does it puts the responsibility fairly and squarely back into the Government's corner. Whether we get a White Paper or a Green Paper on industrial democracy this year, next year or never, at least the Government has an amendment of which it must take notice. I appeal to the Opposition to support the amendments. Senator CHANEY(Western Australia-Leader of the Opposition)(8.30) —The Opposition is thoroughly supportive of employee share schemes and the need to promote direct employee interest in the success of an enterprise, either by way of employee share ownership, profit sharing arrangements, or whatever. But the Opposition is also quite clear in its view that the general industrial situation in Australia is one of excessive rigidity, too much direction and too little agreement. We are certainly not prepared to agree to a proposal that there be an element of compulsion in these matters. In other words, we do not see benefits flowing from employers being told that they have no choice. In this case, under the Australian Democrats' proposal, it is not absolutely compulsory, because the employer would have the option of not taking the bounty assistance. Of course, in a highly competitive industry, that really amounts to compulsion. For that reason we will not support the amendments which have been moved by the Australian Democrats. The reality is that there is a need to encourage employee share ownership. The starting point for the Government, in our view, should be to amend the taxation laws which make the issue of shares to employees a very difficult and expensive business, and not practical in many circumstances. We would prefer to see the problem tackled from that point rather than from the point of introducing the sort of element of compulsion that we believe is involved in the proposal which has been put forward by Senator Siddons. Senator GRIMES(Tasmania-Minister for Community Services)(8.32) —Briefly, for the reasons I stated previously, the Government does not oppose and, of course, is in favour of, employee share ownership schemes, profit sharing schemes and other schemes of that type. But we think it is certainly initially more sensible that they be introduced voluntarily, with consultation between companies, employees and unions, rather than being imposed by the Government. There are also other factors to be considered, not the least of which are the factors in the taxation area referred to by Senator Chaney. I am sorry that the paper on industrial democracy and employee participation is taking too long to be issued, in Senator Siddons's view. But I have been assured by the Minister that the paper is coming out. I believe it will outline all the problems that arise in this area and the sorts of solutions to them. I think that is a sensible way in which to proceed. Therefore, we also reject the amendments. Senator SIDDONS(Victoria)(8.33) —I can only say that I am very disappointed by the Opposition's attitude to the amendments. I did not find Senator Chaney's comments convincing. The facts are that the public is beginning to believe that the Government and the Opposition are paying lip-service to the principles of employee participation, but are not prepared to act on them. I can well imagine that the Government is not too keen to have too much employee share ownership. I can well imagine that many business leaders are not too anxious to have employee share ownership. We are trying to strike a middle course between unbridled socialism and unbridled capitalism-an alternative to either of those extremes. Lip-service has been paid to these principles. Ever since 1982 I have heard that there is agreement that there should be more employee participation, that we should respect what individuals have to say about their work situation, that they should have a slice of the action and be rewarded for their efforts in industry. We hear it time and again, but there has been no action. An industrial democracy Bill was passed by the Senate in 1982 with the support of the present Prime Minister, Mr Hawke, who was then shadow Minister for Industrial Relations, the Australian Council of Trade Unions, and Mr Cliff Dolan, in particular. I asked the Prime Minister, when he formed the Government, whether he would support the Bill that he had supported when he was in opposition. He told me: `Yes, it will be one of the first Bills off the rank'. That was in 1983. Three years later that Bill is still not off the rank. We do not even have the white, green or whatever colour paper it is that will eventually come out. I can assure honourable senators that people who have a more enlightened attitude to our industries and have respect for modern approaches to management of enterprises are becoming very disillusioned. This was an opportunity for us to force some immediate action. It costs nothing. Senator Chaney said: `We don't like the idea of compulsion'. He answered his own question-there is no compulsion. If companies do not want to initiate employee share ownership schemes, they do not have to accept the bounty. The whole thing is wide open. It is simply stating that these two things should be tied together. We should spread the benefits of government handouts to industry as widely as we possibly can. I have heard no argument as to why the amendments should not be supported. I think, if the truth were to be known, the real reason that it is not supported is that neither the Opposition nor the Government is prepared to say: `We will support any initiative, even if it doesn't come from us'. Senator MASON(New South Wales)(8.36) —I speak briefly in support of the amendments because I feel they are of considerable importance. I refute Senator Chaney's view. In fact, he was saying that if ever there is to be any industrial democracy in this country-and I doubt whether he or the Government wants it-there can be no incentive, because if there is an incentive those who do not want to take advantage of that incentive are being blackmailed or coerced in some way. That seems to me to be the logical conclusion to be drawn from what he has said. In this case the bounty is a benefit given by the Government to a particular group of industries. As Senator Siddons said, this is not a new idea which we have suggested off the top of our heads. It is done in the United States, which we regard as a brother or sister democracy, whichever way one likes to put it. It is necessary for there to be a carrot and a stick, if ever this country is to get out of the mud of its present industrial relations setup and do something. The inescapable conclusion, if both the Liberal-National Party coalition and the Australian Labor Party do not want to support this, is that, as I said, they do not want industrial democracy in this country. They pay lip-service to it, but when there is an attempt to try to introduce it in a small way-a valuable experimental way-they will have nothing to do with it. The conclusion I draw from that-a conclusion which, I am sure, the people of Australia draw from it-is that the old political parties have a vested interest in the old confrontative system of politics between the workers and the bosses. They want that to continue because, to a large extent, their livelihoods depend on it. Senator CHANEY(Western Australia-Leader of the Opposition)(8.38) —I am sorry to waste the time of the Committee, but the last contribution was so silly that it must be responded to. It should not be suggested that there cannot be an incentive. Indeed, our concern about the present tax system is that it poses a positive disincentive for the issue of shares to employees. I see that the Minister agrees with that comment. I think that is a problem that needs to be tackled. I hope that the present Government tackles it because, if it does not do so, the next one will. It is a change which clearly would encourage people to have that vested interest in the success of their employer. Nothing could be more valuable to Australia at this time than for the work force to have a greater sense of involvement in the fortunes of its employer. Senator Mason raised the spectre of industrial democracy. That is a quite different matter. No sensible person whom I know of is advocating that we should have the sort of system which is broadly described as industrial democracy, in which there is some sort of right on the part of the work force to take a certain role in the management of companies by way of some sort of statutory entitlement. What we are encouraging-and I think this needs to be made quite clear-is the idea that employers and employees should be encouraged to have a common interest. We think that would be promoted by schemes such as profit sharing arrangements and employee share ownership. But to add to what is already a grossly inflexible system of industrial relations a statutory requirement that an employer who is otherwise entitled to receive a bounty must have an employee share ownership system is, in our view, moving in entirely the wrong direction. I make no apology for rejecting the Australian Democrats amendments. We think that they are counterproductive and will not produce the sort of co-operation and harmony in the work place which I believe we should be seeking. Senator SIDDONS(Victoria)(8.40) —I do not wish to delay the Committee either but Senator Chaney introduced a new factor which I think requires an answer. He said that until the Government introduces tax incentives for employee share ownership we are wasting our time. That is not true. Senator Chaney —It is not what I said either. I said that there are disincentives. Senator SIDDONS —Senator Chaney said there were very serious tax disincentives to employee share ownership, if I heard him correctly. Senator Chaney —That is correct. Senator SIDDONS —The facts of the matter are that there are companies-I am chairman of one-which offer shares to their employees. The last offer of my company was taken up by over 90 per cent of the employees. So the tax disincentives are not very considerable. I agree that there could be substantial tax incentives but with the latest changes to employee share taxation, under which there is no tax on the appreciation of the shares during the time they are being purchased, it is a reasonable proposal under the existing tax legislation to offer shares to employees. As I said, employees have welcomed them in the case of the company I am chairman of and it is-- Senator Kilgariff —What was the mechanism for offering the shares? Senator SIDDONS —We simply offered shares to a trust and that trust sold the shares to the employees over a period of five years by weekly deductions from their salaries. There was no problem. The shares were issued at the market price to the share trust and the employees then bought the shares. The appreciation on those shares in the five year period is tax free under the amended tax legislation. So it is a perfectly straightforward procedure, one which could be and which is adopted by many more enlightened companies in the community today. So, I am sorry, but the excuses the Opposition is giving do not gel as far as I am concerned. Question put: That the amendments (Senator Siddons's) be agreed to. The Committee divided. Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 44 —— Haines, J. Sanders, N. K. Macklin, M. J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Powell, J. F. Archer, B. R. Kilgariff, B. F. Aulich, T. Knowles, S. C. Baume, Peter Lewis, A. W. R. Black, J. R. MacGibbon, D. J. Boswell, R. L. D. McIntosh, G. D. Carrick, Sir John McKiernan, J. P. Chaney, F. M. Maguire, G. R. Childs, B. K. Messner, A. J. Coates, J. Morris, J. Coleman, R. N. Newman, J. M. Collard, S. J. Parer, W. R. Cook, P. F. S. Puplick, C. J. G. Cooney, B. Reid, M. E. Crichton-Browne, N. A. Reynolds, M. Crowley, R. A. Robertson, E. A. (Teller)Devlin, R. Sheil, G. Durack, P. D. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Teague, B. C. Foreman, D. J. Townley, M. Georges, G. Vanstone, A. E. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Jessop, D. S. Question so resolved in the negative. Senator SIDDONS(Victoria)(8.50) —I seek leave to move together a series of amendments relating to Australian content of goods. They are Nos (1), (4), (7) and (11). Leave granted. Senator SIDDONS —I move: (1) Page 1, sub-clause 2 (1), line 8, after ``sections'', insert ``16a, 16b, 16c,''. (4) Page 2, clause 5, at end of clause, add the following new sub-section: `` `(3bc) Bounty is not payable in respect of the construction of a bountiable vessel unless the vessel has an Australian content determined in accordance with the regulations of not less than 25%.'.''. (7) Page 6, after clause 16, insert the following new clause: ``Amendments relating to Australian content, &c. ``16a. The Acts specified in Schedule 3 are amended as set out in that Schedule.''. (11) Page 45, after Schedule 2, add the following new Schedule: SCHEDULE 3 Section 16a AMENDMENTS RELATING TO AUSTRALIAN CONTENT &c. Bounty (Agricultural Tractors and Equipment) Act 1985 After paragraph 11 (3) (c)- Insert the following paragraph: ``(ca) the equipment has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Bed Sheeting) Act 1977 After paragraph 5 (3) (a)- Insert the following paragraph: ``(aa) the bed sheeting has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Books) Act 1969 Section 5- Add at the end of the following sub-section: ``(2) Bounty is not payable in respect of a book unless the book has an Australian content determined in accordance with the regulations of not less than 25%.''. Bounty (Computers) Act 1984 Section 9- Add at the end the following sub-section: ``(8) Bounty is not payable in respect of any bountiable equipment unless the bountiable equipment has an Australian content determined in accordance with the regulations of not less than 25%.''. Bounty (High Alloy Steel Products) Act 1983 After paragraph 7 (3) (a)- Insert the following paragraph: ``(aa) the bountiable product has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Injection-moulding Equipment) Act 1979 Paragraph 7 (3) (b)- Omit ``and''. After paragraph 7 (3) (b)- Insert the following paragraph: ``(ba) the equipment has an Australian content determined in accordance with the regulations of not less than 25%; and''. Bounty (Metal Working Machines and Robots) Act 1985 Paragraph 16 (4) (c)- Omit ``and''. After paragraph 16 (4) (c)- Insert the following paragraph: ``(ca) the equipment has an Australian content determined in accordance with the regulations of not less than 25%; and''. Bounty (Paper) Act 1979 Paragraph 6 (3) (a)- Omit ``and''. After paragraph 6 (3) (a)- Insert the following paragraph: ``(aa) the bountiable paper has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Printed Fabrics) Act 1981 Paragraph 5 (4) (b)- Omit ``and''. After paragraph 5 (4) (b)- Insert the following paragraph: ``(ba) the fabric has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Steel Mill Products) Act 1983 After paragraph 8 (3) (a)- Insert the following paragraph: ``(aa) the bountiable product has an Australian content determined in accordance with the regulations of not less than 25%;''. Bounty (Textile Yarns) Act 1981 Paragraph 5 (5) (b)- Omit ``and''. After paragraph 5 (5) (b)- Insert the following paragraph: ``(ba) the yarn has an Australian content determined in accordance with the regulations of not less than 25%; and''. Subsidy (Grain Harvesters and Equipment) Act 1985 Paragraph 10 (3) (c)- Omit ``and''. After paragraph 10 (3) (c)- Insert the following paragraph: ``(ca) the equipment has an Australian content determined in accordance with the regulations of not less than 25%; and''. I am conscious of the Committee's time. The Australian Democrats do not propose to divide on any other of these amendments. Just to speak to this series briefly, again we consider these to be amendments which could easily be supported by the Opposition. We believe there is no reason why there should not be 25 per cent local content as a condition of receiving a bounty. They are very sensible, simple and straightforward amendments and I hope that the Opposition will support them so that at least we can create a few more jobs in this country. Amendments negatived. Senator SIDDONS(Victoria)(8.51) —I seek leave to move together a final series of amendments to this Bill. They are Nos (1), (5), (9) and (13). Leave granted. Senator SIDDONS —I move: (1) Page 1, sub-clause 2 (1), line 8, after ``sections'', insert ``16a, 16b, 16c,''. (5) Page 5, after clause 13, insert the following new clause: ``Applications for review ``13a. Section 20 of the Principal Act is amended by omitting from paragraph (1) (k) `(other than such a decision made under sub-section 10 (11))'.''. (9) Page 6, after new clause 16b, insert the following new clause: ``Amendments relating to applications for review, &c. ``16c. The Acts specified in Schedule 5 are amended as set out in that Schedule.''. (13) Page 45, after Schedule 4, add the following new Schedule: SCHEDULE 5 Section 16c AMENDMENTS RELATING TO REVIEW OF APPLICATIONS, &c. Bounty (Agricultural Tractors and Equipment) Act 1985 Paragraph 345 (1) (m)- Omit ``(other than a decision made under sub-section 23 (9))''. Bounty (Bed Sheeting) Act 1977 Paragraph 21 (c)- Omit ``, not being a refusal by virtue of sub-section 11 (5)''. Bounty (Commercial Motor Vehicles) Act 1978 Paragraph 22 (t)- Omit ``(other than a decision made under sub-section 14n (8))''. Bounty (Computers) Act 1984 Paragraph 32 (1) (m)- Omit ``but not including a refusal under sub-section 20 (8)''. Bounty (High Alloy Steel Products) 1983 Paragraph 23 (1) (c)- Omit ``, not being a refusal by virtue of sub-section 12 (5)''. Bounty (Injection-moulding Equipment) Act 1979 Paragraph 22 (1) (u)- Omit ``but not including a refusal under sub-section 14t (8)''. Bounty (Metal Working Machines and Robots) Act 1985 Paragraph 40 (1) (m)- Omit ``(other than a decision made under sub-section 28 (9))''. Bounty (Paper) Act 1979 Paragraph 22 (c)- Omit ``, not being a refusal by virtue of sub-section 12 (5)''. Bounty (Steel Mill Products) Act 1983 Paragraph 24 (1) (c)- Omit ``, not being a refusal by virtue of sub-section 13 (5)''. Subsidy (Grain Harvesters and Equipment) Act 1985 Paragraph 35 (1) (k)- Omit ``(other than a decision made under sub-section 23 (9))''. These four amendments relate to the right of appeal in respect of registration of producers. As I have already outlined, our position in relation to them is that there should be some control over the Minister and that the Minister should not have the power of life and death over an industry without some mechanism for appeal. These amendments would make the Administrative Appeals Tribunal the arbiter if there were a dispute between an industry and the Minister. Senator CHANEY(Western Australia-Leader of the Opposition)(8.52) —The Opposition has considered these amendments but will not support them because it does not believe that this is an appropriate issue for AAT determination. The Administrative Appeals Tribunal is to do with administrative, not policy, matters. In the broad, therefore, we adopt the view that was put by the Minister in responding to the second reading debate. Amendments negatived. Bill agreed to. (Quorum formed) Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Consideration resumed from 12 November, on motion by Senator Grimes: That the Bill be now read a second time. Question put. The Senate divided. (The Deputy President-Senator D. J. Hamer) Ayes . . . . . . . . . . . 34 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 7 —— Aulich, T. Jones, G. N.Black, J. R. McIntosh, G. D. (Teller)Childs, B. K. McKiernan, J. P.Coates, J. Macklin, M. J.Coleman, R. N. Maguire, G. R.Cook, P. F. S. Mason, C. V. J.Cooney, B. Morris, J.Crowley, R. A. Powell, J. F.Devlin, R. Ray, RobertElstob, R. C. Reynolds, M.Evans, Gareth Robertson, E. A.Foreman, D. J. Sanders, N. K.Georges, G. Sibraa, K. W.Giles, P. J. Siddons, J. R.Grimes, D. J. Tate, M. C.Haines, J. Vigor, D. B.Harradine, B. Zakharov, A. O. Archer, B. R. MacGibbon, D. J.Baume, Peter Messner, A. J.Boswell, R. L. D. Newman, J. M.Carrick, Sir John Parer, W. R.Chaney, F. M. Puplick, C. J. G.Collard, S. J. Reid, M. E.Crichton-Browne, N. A. Sheil, G.Durack, P. D. Teague, B. C.Guilfoyle, Dame Margaret Townley, M.Hamer, D. J. Vanstone, A. E.Jessop, D. S. Walters, M. S.Kilgariff, B. F. (Teller) Watson, J. O. W.Knowles, S. C. Withers, R. G.Lewis, A. W. R. Bolkus, N. Hill, R.Richardson, G. F. Alston, R. K. R.Gietzelt, A. T. Bjelke-Petersen, F. I.Ryan, S. M. Short, J. R.Colston, M. A. Baume, MichaelMcClelland, Douglas Brownhill, D. G. C. Question so resolved in the affirmative. Bill read a second time. The Bill. Senator GRIMES(Tasmania-Minister for Community Services)(9.00) —by leave-I move: (1) Page 6, clause 11, leave out the clause, insert the following clause: Bounty not payable if ship detained ``11. (1) If the Minister becomes satisfied that a voyage of a ship is being prevented or delayed by an activity of an organisation of employees for reasons relating directly or indirectly to the repair of ships, the Minister may, by writing signed by the Minister, declare that bounty shall cease to be payable. ``(2) Notwithstanding any other provision of this Act, bounty is not payable in respect of any eligible repair commenced while a declaration is in force. ``(3) For the purposes of sub-section (2), where the dry-docking of a ship for the purpose of a known eligible repair being carried out has been commenced (whether or not it has been completed), that known eligible repair shall be taken to have been commenced. ``(4) Where a declaration is in force during the service period of a repairer for the purposes of a service contract, paragraph 10 (3) (f) does not apply in relation to eligible repairs carried out by that repairer pursuant to that contract during that service period.''. (2) Page 23, after clause 36 insert the following new clause: Transitional ``36a. Sections 23, 25, 26 and 28 do not operate so as to render unlawful anything done, or omitted to be done, before the day on which this Act receives the Royal Assent.''. The principal amendment, which has been circulated, is redrafted clause 11 of the Bounty (Ship Repair) Bill 1986 and gives power to suspend bounties should the union's ship repair detention campaign be recommenced. I mentioned in the second reading debate that a pre-condition to the implementation of the $6m bounty assistance package to the ship repair industry was the agreement by the relevant unions to end their ship detention campaign, Clause 11 of the Bill is designed to ensure that that agreement is upheld. The Senate Standing Committee for the Scrutiny of Bills, in its most recent Alert Digest, commented that the application of the clause was cast too broadly as it had the potential to affect ship repairers who have had no part in, or control over, any industrial action which might trigger suspension of the bounty. The proposed amendment addresses this criticism and seeks to provide a savings provision for work in progress at the date of declaration of suspending the bounty. This will ensure that ship repairers will not be deprived of bounty while a declaration is in force if the relevant repair work was commenced prior to the date of the declaration. I make it clear, however, that any work commenced by any repairer while a declaration is in force will not be eligible for the bounty. To do otherwise would negate the purpose of this package. The other amendment proposes the insertion into the Bill of new clause 36a to provide that the offence provisions of clauses 23, 25, 26 and 28 of the Bill will not operate so as to render unlawful anything done, or omitted to be done, before the day on which this Bill receives Royal Assent. The absence of such a provision was also brought to the attention of the Government in the recent Alert Digest of the Senate Standing Committee for the Scrutiny of Bills. The Government concurs with the view of the Committee and proposes the amendment to correct the position. Senator CHANEY(Western Australia-Leader of the Opposition)(9.02) —by leave-I move: (1) Proposed new sub-clause 11 (2), leave out ``commenced''. (2) Leave out proposed new sub-clause 11 (3). The Opposition supports the general thrust of the amendment which has been moved by the Minister for Community Services (Senator Grimes). However, we are concerned about one aspect of it. The amendment which I have moved removes the word `commenced' from proposed new sub-clause 11 (2) and deletes proposed new sub-clause 11 (3). The concern the Opposition has can be readily understood when one looks at the general history of this matter. Over a period of years maritime unions have carried out conduct which is really akin to extortion. Ships are being held up in Australia and are being forced to undertake repairs here and, on some occasions, the repairs were not required. In July of this year a fairly notorious case involved the Caltex company. The unions tried to hold up a ship and to have it repaired in Australia at a cost of almost $2m more than the repairs would have cost in Singapore. Ultimately, Caltex succeeded in having the ship released but the delay cost about $1.3m in charges. That is just a single example of a situation where Australia, a trading nation that is in a desperately difficult position about trade, is being subjected to quite unconscionable conduct. The amendment which was moved by the Minister provides that if the Minister becomes satisfied that a voyage of a ship is being prevented or delayed by an activity of an organisation of employees for reasons relating directly or indirectly to the repair of ships, the Minister may, by writing signed by the Minister, declare that the bounty shall cease to be payable. I stress that we support that proposition. We think that certainly the bounty should cease to be payable in those circumstances. Proposed new sub-clause 11 (2) states: Notwithstanding any other provisions of this Act, bounty is not payable in respect of any eligible repair commenced while a declaration is in force. The concern of the Opposition is that one may well have eligible repairs which may have been commenced prior to a declaration being made and, indeed, may have been commenced prior to any activity of the kind that I have described by the union and then, during the course of that repair, one could get action relating to the extension of the need of repairs, the delay of the repairing operation and so on and in general, the imposition of considerable additional financial obligations could be placed upon the shipowner during the course of that operation. The amendment that I have moved on behalf of the Opposition simply removes the word commenced and that removes the entitlement for repairs which are undertaken while a declaration is in force. The amendment is not an attempt to combat the spirit of the amendment which has been moved by the Minister. Rather it makes it a tighter amendment if the entitlement to the bounty is removed with respect to any eligible repair which is being undertaken while a declaration is in force. I have moved the amendment believing that it will enhance what is the expressed desire of the Government to ensure that this sort of conduct ceases in future. Senator GRIMES(Tasmania-Minister for Community Services)(9.07) —The Government opposes these amendments for the reason that they would have the effect of a capricious application on ship repairers who have no part in, or control over, any industrial action which might trigger the suspension of the bounty. This was the very matter that the Senate Standing Committee for the Scrutiny of Bills was concerned about and rightly criticised. It is the Government's belief that to remove the word commenced, while tightening the amendment in the way that Senator Chaney mentioned, tightens it with the side effect that it has this capricious effect on some ship repairers who have nothing to do with any industrial action of the type that we have rightly put in the legislation and which would trigger the removal of the bounty. For that reason I cannot accept the amendments on behalf of the Government. Senator SIDDONS(Victoria)(9.08) —The Australian Democrats will not support the Opposition's amendments. We are persuaded by the points made by the Minister for Community Services, Senator Grimes, and consequently we will support the Government. Amendments (Senator Chaney's to Senator Grimes's) negatived. Amendments (Senator Grimes's) agreed to. Senator SIDDONS(Victoria)(9.10) —I move: Page 5, after sub-clause 10 (2), insert the following new sub-clauses: ``(2a) Bounty is not payable to a repairer, being a body corporate, unless, within 12 months after the commencement of this sub-section, the repairer establishes an employee share ownership scheme. ``(2b) In sub-section (2a), `employee share ownership scheme' means a scheme in accordance with the regulations under which not less than 8 per cent of the share capital of the body corporate is made available for employee share ownership.''. This amendment also relates to employee share ownership. We do not propose to divide on the amendment. I imagine that the arguments that have already been put on the previous amendment in relation to share ownership apply equally to this Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(9.11) —For the same reasons as I indicated in respect of the last Bill, we will not support the amendment. Amendment negatived. Senator SIDDONS(Victoria)(9.12) —I move: Page 22, paragraph 34 (1) (g), line 10, leave out ``(other than such a decision made under sub-section 19 (11))''. This amendment relates to rights of appeal and the arguments that have already been put apply in this case as well. Amendment negatived. Bill, as amended, agreed to. Bill reported with amendments; report adopted. Bill (on motion by Senator Grimes) read a third time. Consideration resumed from 12 November, on motion by Senator Grimes: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(9.13) —This Bill complements the Bounty (Ship Repair) Bill 1986. It will give the relevant Minister the power to detain a ship on which the conditions are such as to present a clear hazard to safety or health. Those words are in fact the words used in the International Labour Organisation Convention No. 147. The Government has indicated that there will be tripartite consultation between the industry, unions and government and agreed criteria will be arrived at which warrant detention of a ship as being substandard. Those agreed criteria will be published as a marine order and tabled as a statutory rule and will be subject to parliamentary disallowance. Obviously such a Minister, if he were of the mind, could use the powers which he is being given and which are similar to the illegal exercises of power which have been undertaken by trade unions, as a very considerable weapon. I am just concerned to know from Senator Grimes to what extent it is possible that the substandard criteria which are to be laid down might be determined by people who, after all, have an interest in this matter as against independent experts who are concerned with safety or health. The tripartite consultations do not seem to involve anybody other than those interested parties. I ask Senator Grimes to state what, if anything, is being done by the Government to ensure that there is consultation with those who are professionally engaged in either or both health and safety. I also ask him to indicate to the Committee that the relevant conventions which will be considered by the Government are the Shipowners' Liability (Sick and Injured Seamen) Convention of 1936, No. 55; the Medical Examination (Seafarers) Convention of 1946, No. 73; the Prevention of Accidents (Seafarers) Convention of 1970, No. 134; the Accommodation of Crews Convention of 1949, No. 92; and the Food and Catering (Ships' Crews) Convention of 1946, No. 68. Are the criteria which are to be laid down to be related to those conventions or are there other conventions? Can the criteria be any more onerous than is laid down in those conventions? Our concern is simply to see that the power which is being taken or assumed by the Government and by the relevant Minister under this legislation is in fact used for the legitimate purpose which the Opposition supports, namely, ensuring that there are no hazards to health or safety, but not used to impose onerous conditions which go beyond the ILO conventions that I have listed. If there are any other conventions, could we be advised what they are? Senator GRIMES(Tasmania-Minister for Community Services)(9.17) —The International Labour Organisation conventions are the ones which will be used in determining the conditions referred to by Senator Chaney, who, quite rightly, expects the Government, the relevant Minister and the bureaucracy to maintain very high standards in administering these new provisions of the Navigation Act in the way that we all intend them to be administered. Having had the consultations with the various interested parties and the relevant department, there are further safeguards which will assist in the achievement of this high standard, as is the case with the existing seaworthiness provisions of the principal Act-the Navigation Act. Section 377 of the Act provides for a court of survey to determine disputed detention for failure to rectify defects. Section 211 provides for costs against the Minister for improper use. Additionally, there are administrative procedures for a quick review of decisions by departmental officers not connected with the original decision. On top of that, the marine orders, which are, as Senator Chaney says, statutory rules, will be tabled in the Parliament for parliamentary scrutiny and will be subject to parliamentary rejection if that is necessary. I can understand Senator Chaney's concern, in view of the history of this matter and the behaviour of some people and organisations, that the provisions should provide the safeguards that he referred to. I think they do. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Debate resumed from 22 October, on motion by Senator Gietzelt: That the Bill be now read a second time. Senator GRIMES(Tasmania-Minister for Community Services)(9.19) —I table an explanatory memorandum relating to the Subsidy (Cultivation Machines and Equipment) Bill 1986 in substitution for the one which was tabled previously. Question resolved in the affirmative. Bill read a second time. The Bill. Senator CHANEY(Western Australia-Leader of the Opposition)(9.20) —I move: Page 17, clause 23, leave out sub-clause (8). I do not need to speak at length on this matter. The amendment is in the same spirit as a previous amendment moved to other legislation tonight, which sought to remove from the Minister his power to control entry into an industry. The concern of the Opposition is that by controlling entry into an industry the Government in fact puts yet another clamp on the Australian economy in a way which will be counterproductive. In this case it is provided that the Comptroller-General of Customs shall not register premises: if the Minister has informed the Comptroller that the registration of those premises will not permit the orderly development in Australia of the industry manufacturing subsidised equipment. Our concern is that the history of governments and bureaucrats trying to direct the orderly development of industry is not one which gives us any confidence. In fact we believe that the best way to achieve the orderly development of the industry is to ensure that the levels of assistance provided are not such as to encourage people to enter this industry unless they believe that they can be competitive. We think that the pressure of competition should be the control on entry rather than some bureaucratic or ministerial direction. The matter has been debated on other legislation and I do not seek to debate it further now, but I urge the support of the Committee for the amendment which I have just moved. Senator SIDDONS(Victoria)(9.21) —The Democrats will oppose this amendment for precisely the same reasons that we opposed the amendment in a previous Bill. We believe that the Government should have some say over the money that it is handing out to industry. To accept the arguments that Senator Chaney has put forward, that governments have no right bureaucratically to interfere with the workings of industry, does not apply when government money is involved. Senator GRIMES(Tasmania-Minister for Community Services)(9.22) —I do not need to repeat the arguments I made in the summing up of the second reading debate. Amendment negatived. Senator SIDDONS(Victoria)(9.23) —Six amendments were circulated in the name of the Democrats in relation to the Subsidy (Cultivation Machines and Equipment) Bill. I will not be moving amendments (1) and (6). I seek leave to move amendments (2) and (3) together. Leave granted. Senator SIDDONS —I move: (2) Page 7, paragraph 9 (3) (c), line 22, leave out ``and''. (3) Page 7, after paragraph 9 (3) (c), insert the following new paragraph: ``(ca) the equipment has an Australian content determined in accordance with the regulations of not less than 25%; and''. These amendments relate to a 25 per cent Australian content being a condition of the Government granting a bounty. Senator CHANEY(Western Australia-Leader of the Opposition)(9.24) —I indicate very briefly that the Opposition agrees with the Industries Assistance Commission that to restrict bounty payments to certain producers would alter the pattern of assistance previously afforded by the tariff. The object of this change was not to alter that pattern of assistance and we will therefore not be supporting these amendments. Senator GRIMES(Tasmania-Minister for Community Services)(9.24) —Moi aussi. Amendments negatived. Senator SIDDONS(Victoria)(9.25) —by leave-I move: (4) Page 10, sub-clause 12 (1), line 3, leave out ``10%'', insert ``11%''. (5) Page 10, sub-clause 12 (2), line 7, leave out ``10%'', insert ``11%''. The effect of these two amendments will be to increase the bounty from 10 to 11 per cent. During our comments at the second reading stage we maintained that an arithmetical mistake had been made in calculating the amount of the bounty, and I now call on my colleague Senator Vigor to elaborate on these amendments. Senator VIGOR(South Australia)(9.25) —A fairly complex argument is involved in calculating the level of bounty. The level of bounty is calculated to replace a current 15 per cent general tariff on imported goods. In the process there has been an estimate of the calculation of the average value of freight insurance, wharfage and Customs clearance, and it is maintained by a number of people within the industry that this estimate has been wrongly calculated. In order not to spend too much time in the Committee stage, as I believe the arguments have been thoroughly canvassed, I will seek leave to incorporate a letter from Industry and Trade Consultants (Australia), which sets out the reasons for the calculation. Its main conclusion reads: We trust this information will lead to an urgent reconsideration of the bounty rate which should be 10.8 per cent. In view of the fact that the Democrats were not in any way happy with the decrease overall in bounties, which the Government introduced, we thought that the 10.8 per cent should be rounded off to 11 per cent in the amendment. The calculations are fairly rough, as has been shown overall, but are convincing compared to the calculations which have been made and given in reply by the Minister. We have moved these two amendments to change the bounty level so that that industry will not be disadvantaged. I now seek leave to incorporate the letter in Hansard. Leave granted. The letter read as follows- ITC (AUSTRALIA) INDUSTRY AND TRADE CONSULTANTS 88 Arthur Circle, Forrest, ACT, P.O. Box E134 Queen Victoria Terrace, ACT 2600, Australia. Telephone: (062) 95 2688. Telex: ITC AA61222. 20 October 1986 Assistant Secretary Engineering Industries Branch Department of Industry, Technology and Commerce Edmund Barton Building Barton ACT 2600 Attention: Mr L. French Dear Sir, We wish to acknowledge receipt on 16 October 1986 of the details of the IAC's calculations in determining the fob/1df ratio of 0.83. As you are aware, this information was the subject of our request dated 29 July 1986 and has reinforced our view that the Commission's assessment is incorrect as shown by the enclosed Attachments. We note the Commission's assessment was based on Customs records of Entry for Home Consumption for selected goods in 1984-85 and in respect of major tariff items and countries of origin (refer Attachment ONE). Any conclusions based on this approach should be qualified by the following: (1) an inherent bias is introduced by the inclusion of parts as distinct to complement machines which are generally shipped via container (2) a number of major importers are associated with their overseas suppliers and transactions are non-arms length transfer prices which will deflate the value for duty (3) the Commission has assumed the value for duty is synonymous with the fob value which is incorrect. High inland freight costs in many of the major countries of origin have lead importers to use the Brussells transaction definition of value for duty i.e. ex-factory selling price. (Inland freight can approach the magnitude of ocean freight in respect of imports from European and US sources). The value for duty is, therefore, understated. We note in Appendix G of its report, the Commission stated: ``The nominal rate of assistance provided on output by the current 15 per cent General Tariff on imported goods was estimated by calculating an average for freight, insurance, wharfage and Customs clearance to be 20 per cent of their value at world prices (fob). Duties are levied at free on board (fob); not at landed duty free (ldf) values. This gives a nominal rate of: df = 15% tariff x fob = 15% x 100 = 12.5% df = 15% tariff x ldf = 15% x 120 = 12.5% Therefore, the nominal (price raising) assistance on output is 12.5%.'' The enclosed attachments draw upon the practical experience of customs agents who are responsible for clearing large quantities of cultivation machinery for major importers. The information supplied by these agencies (refer Attachments SIX and FIVE) indicate the vfd/1df ratio is more correctly determined at 0.89 or 0.9. Attachments TWO, THREE and FOUR detail particular shipments of cultivation machinery and parts imported by local producers and this data supports the above conclusion that the vfd/ldf ratio is 0.9. A copy of supporting commercial documentation is included in Attachments THREE and FOUR. Additional examples are also being sought and will be provided over the next couple of days. We trust this information will lead to an urgent reconsideration of the bounty rate which should be 10.8 per cent. We look forward to the opportunity to discuss this matter further together with the question of a minimum eligibility criteria of 25 per cent local value added. Yours sincerely, GRAEME N. DAY Director Senator CHANEY(Western Australia-Leader of the Opposition)(9.28) —I would have been reluctant to grant leave to incorporate the letter in Hansard were it not for my reasonable satisfaction that I think the same representations were made to us. Although I have not seen the particular letter, I am sure I have seen the content of it in a similar form. I want to acknowledge that, having taken up really the same points with the Government on 10 November and having received a letter from Senator Button in response, dated 17 November, essentially the letter from Senator Button contests the facts which are contained in the representations which were made both to the Opposition and to the Australian Democrats. I advised the people making representations to me that because of the overall decision we had made with respect to the Budget it was not possible for us to move to increase the Government's financial liabilities under this legislation, but I did undertake to pursue the factual issues which were raised with us because I was concerned that there may have been an error which would be to the disadvantage of this industry. I think it is worth pointing out to the Committee that the manufacturers in this field I think in all cases are in a very difficult situation, and I am sure that has been part of the concern behind the moving of these amendments by the Australian Democrats. I share their concern. It is not surprising, given the very difficult situation of the Australian rural industries, that these manufacturers are themselves facing very real difficulties. What might seem to be a relatively minor thing, a change of one per cent to the proposed bounty rate, is something they see as being of considerable importance to them. Whilst the Minister's letter is, on the face of it, meeting the points which have been raised and answering them, albeit in fairly general terms, I am concerned as to whether or not the Minister has had a proper and full briefing on this matter. I am not suggesting any dishonesty on the part of the Minister, but he says in the fourth paragraph of his letter to me: The industry first raised this matter with my Department some weeks ago and it has been discussed with officers of the IAC. The IAC has in turn re-examined the basis of its estimates and also discussed these with a number of importers. There does seem to be some doubt, certainly in the mind of some of the manufacturers and their agents after making inquiries of the IAC, whether the IAC has conducted in any real sense a re-examination of these figures. I ask the Minister: Is he in a position to give us any assurance that in fact the IAC has re-examined the basis of its estimates and has the IAC had a discussion on this with a number of importers? If that is the case I would be interested to know with which importers these discussions have taken place. It is important to remember that this is not a situation where the industry is sitting around trying to blame its troubles on to the Government. The industry was receiving a level of assistance from the Government in the way of tariff about which, as far as I know, it was not complaining. It was the Government, as part of its rural package, which chose to turn the tariff assistance into a bounty. That was a change which the Opposition was quite happy to support because the desperate need of the rural community in Australia at the moment is to see a reduction in the cost of their input. The use of bounty assistance in this way as against the tariff is of significant assistance to the rural industry. The fact is that we are arguing about a difference between 10 per cent and 11 per cent as against what might have been an argument about 12 1/2 per cent and 13 1/2 per cent. I remind the Committee that the Government in a sense has broken its commitment, its word, on this matter because what it said to the rural community and to the industry was: `We will give you an equivalent in bounty protection to the tariff protection you were receiving'. Again, that is unexceptionable. It is something that the Opposition would say, and did say at the time, it supports. This has now got caught up with the general 20 per cent across the board reduction, so we have a situation where had tariff protection continued there would not have been any effect because tariffs were not affected by the Budget in the same way; it was only bounties that were changed because of the expenditure implications of the bounty. So these very beleaguered manufacturers are in a situation where, having been promised 12 1/2 per cent, or perhaps it was 13 1/2 per cent if one did the arithmetic differently, they are now arbitrarily faced with a 10 per cent level of assistance. It is yet another specific example of the rank injustice and of the highly undesirable nature of the change that was announced in the Budget from an industry policy point of view. The Opposition accepts that there is nothing it could do to reverse that, but we do seek a better assurance than we have had in the letter from the Minister of 17 November that the worrying arithmetic questions which were raised by people on behalf of the manufacturers have, in fact, been closely and carefully addressed. Is it a fact that the Minister and the Government can be really satisfied that the wharfage charges and the customs clearance charges which are part of the original calculations supplied by the Industries Assistance Commission do, in fact, stand up to a careful scrutiny? I should warn the Government that there are certainly some people out there in industry who feel that they have been short changed and who feel that the calculations have not been done accurately. That is really adding insult to injury as far as these people are concerned because they have, as I said before, without any warning at all, seen the loss of 20 per cent of the assistance which the Government promised them as part of its rural package. Senator GRIMES(Tasmania-Minister for Community Services)(9.35) —I only have available to me the letter which Senator Chaney received and the briefing from which I quoted earlier which assures me about the concerns of the industry that, in the calculations that have been discussed at length with the Industries Assistance Commission staff, they have re-examined the basis of their estimates and discussed the figures with a number of importers. I have not got their names. I will try to get some information for honourable senators on that. They have also made the claim that, even if the IAC's calculation of wharfage and Customs clearance were out by a most unlikely factor of 50 per cent, the bounty rate, following rounding, would still have been 10 per cent. I cannot give the Committee any more information than that, but I certainly will refer the matter back to Senator Button to see whether we cannot get more detailed explanations than have already been given. I am not sure whether that is possible but I will certainly refer it to the Minister. Senator VIGOR(South Australia)(9.36) —A copy of the letter that was sent to Senator Chaney by Senator Button was delivered to us. I went through calculations, with which I do not want to bore the Committee, which were given to me by the manufacturers. They believe that some of the figures were out by factors of around 200 per cent and by 300 per cent in some of the cases, on the figures they gathered. This would have brought the bounty up to 10.8 per cent even if the figures were conservative. I was much more convinced by the detailed figures that were given to me by the consultants and by certain industry people on a confidential basis; unfortunately I cannot reveal them because they would give information about the particular commercial activities of these people. I was convinced that there was a problem to be answered. On behalf of the Australian Democrats, I also ask Senator Grimes that the figures be given to us. Amendments negatived. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Debate resumed from 12 November, on motion by Senator Grimes: That the Bill be now read a second time. Senator VIGOR(South Australia)(9.38) —I move: Leave out all words after `That', insert: `the Bill be withdrawn and redrafted to provide for the payment of the bounty to the consumer rather than to the producer'. The Government in the Fertilisers Subsidy Bill is trying to do two things at the same time. I believe that the Government will achieve neither in this case. It says it is trying to support the local farming industry which is something it promised to do before the Budget and to produce out of the bag a local phosphate fertiliser industry. This I do not believe it will do by this type of process. I believe this Bill results from a misunderstanding of how the industry operates. We currently import phosphate rock which represents something like 70 per cent to 75 per cent of the total content of what are called locally produced fertilisers. This produces what is known as single superphosphate. It is very convenient to produce this local superphosphate very near to the place where farmers are. The legislation goes so far as to make it mandatory for the manufacturer to distribute the bounty to the farmers. But this imposition is only put upon local manufacturers. Importers under this scheme are no longer eligible to distribute the bounty. The Government in this way is discriminating against certain farmers who need particular high phosphate and nitrogenous fertilisers and who do not want the extra sulphate which is involved in single superphosphate. If the Government came clean and recognised the need for a subsidy to farmers to counteract the devastating effects of its high interest rates and undervalued dollar on exporters, including farmers, it would call this subsidy a farmers subsidy and pay it to the farmers openly and directly. The purpose of this amendment is to say that the Bill should be honest and recognise what the superphosphate bounty is. To make my point very clear, let us consider certain types of high analysis phosphates, such as di-ammonium phosphate, which contains soluble and available nitrogen and phosphorus. It does not contain sulphate which has, over the years, damaged certain areas through overapplication. Certain areas of Yorke Peninsula in my State require a special type of high analysis phosphate. This phosphate has been imported by the same companies which supply single phosphate. Seventy-five per cent of the fertiliser used in my State is supplied by Adelaide and Wallaroo Fertilizers Ltd. The other 25 per cent is supplied by Hi-Fert Pty Ltd, which is an importer of DAP. It has imported this phosphate on the basis of a need by farmers. If this subsidy is a subsidy for farmers, it is quite unfair that we should discriminate against the farmers of the Yorke Peninsula. A very strong principle built into Australian Democrats policy is that we should not support import industries by way of bounties. As the Government's Bill removes the subsidy on imported fertiliser, leaving it only on locally produced fertilisers, it follows Democrat policy. This leaves me in a quandary in terms of my vote. I have endeavoured to resolve the situation by getting a positive statement from the Government that the measure is a grant to farmers. If my amendment, which is a way of suggesting to the Government that it present this subsidy in a way which will be acceptable to me, is not supported, I will have to reconsider my vote on the Bill. It is very important that fertilisers be suitable for specific land. I seek from the Minister for Community Services (Senator Grimes) an undertaking that the Government will consider the matter of high analysis nitrogenous and phosphorous fertilisers in regard to the areas of my State where there is no local producer of DAP, yet there is a demand for DAP, and try to find some means of making this legislation fair for those farmers. Farmers are a very adaptable group. In this Bill we are cutting out one of their sources of fertilisers. They will try to adapt new technologies but will probably be forced back to old technology as a means of staving off the problems that will result from the likely hike in price of high analysis fertiliser. It is Luddite to discriminate against modern farming methods, which include the use of new types of fertiliser. To attempt to combine a manufacturing subsidy for fertilisers with what traditionally has been a subsidy for farmers is nothing short of a sleight of hand. Yet this sleight of hand is the inherent consequence of hiding a subsidy for farmers in the guise of a fertiliser subsidy. Let us be honest. Let us count the cost realistically of this measure which involves almost the last remaining subsidy to farmers. Until farmers are prepared to receive direct subsidies, which are their due, in compensation for the cost increases they face because of the protection of local manufacturers through the various tariff barriers and until they can honestly call a spade a spade and stop looking for backhanded subsidies which can be distorted and negated without the true cost being counted, as is the case with this sleight of hand, they will not get what they should get if we were properly encouraging their industry. We should pay the farmers directly. We should be straight. We should give them the money promised to them instead of processing it through a group of manufacturers who funnily enough, are the same people, in most cases, as the importers-the local phosphate producers are importers as well. Because of this, distortions will be introduced into the market by this Bill. I do not know what the distortions will be but they will be deleterious to the market. I seek the Government's view on how it will overcome the iniquity which this Bill will impose on the farmers of my community. Senator GRIMES(Tasmania-Minister for Community Services)(9.46) —There are several problems with Senator Vigor's amendment in regard to the Fertilisers Subsidy Bill. He is proposing that we pay a bounty to the end users of the product. There is a certain problem with that, called the Australian Constitution, which says that bounties shall be paid on the production of goods. It is contrary to the law to try to pay a bounty to the end users in this way. That is the first problem. The second problem is that Senator Vigor suggested that the bounty should be paid, somehow, by way of rebate, using the diesel fuel rebate mechanism. This presumes that a duty or an excise has been paid, and then a rebate given. In these circumstances no duties are paid so what is there on which to pay a rebate? The third problem is the sheer weight of numbers. There are 170,000 user-farmers in the community, which makes the administration of a rebate scheme of this type almost unworkable. It is one thing to come in here and advocate, as Senator Vigor does, that we should get rid of all this stuff and subsidise our farmers directly, honestly and openly. That would make for an interesting debate in this place by the free enterprise experts on the other side. Senator Vigor is of French origin and that is what is done all over Europe. We do not like it much there but I suppose that we could do it here and pay them back a bit. We are applying a bounty, but the condition of getting that bounty is that its advantages are handed on to the end user. I do not think that there is much subterfuge in that. It is in the legislation. Senator Vigor and I can work it out so it must be pretty clear. He worries that the Bill will adversely affect farmers who must continue to purchase imports of high analysis phosphatic fertilisers. We believe that this will diminish. The manufacturers who have already stepped up production in this area and committed funds to increase their capacity will be able to continue to do so. It is important to remember, as I said in summing up the second reading debate, that all manufacturers have lowered their prices recently and importers appear to be matching these prices. I do not understand some of the problems raised by Senator Vigor. I certainly do not see his suggestions of somehow paying a bounty to a consumer rather than to a producer as being constitutionally, economically or socially acceptable. It certainly is administratively not acceptable. Therefore the Government rejects the amendment. Senator CHANEY(Western Australia-Leader of the Opposition)(9.51) —I am somewhat puzzled by the amendment moved by Senator Vigor because he can achieve his end completely simply by joining the Opposition and voting against the Government's legislation. The effect of that would be to ensure that the payments which are made go to subsidising the consumption of fertilisers by farmers, including consumers of high analysis fertilisers in his home State of South Australia, to whom he referred in debate. Senator Grimes has raised a number of technical problems to Senator Vigor's amendment. It certainly appears to me to be absolutely beyond argument that one could not describe payments directly to farmers as a rebate in these circumstances. I would have thought that that was clearly so. Also, it would seem to be fairly obvious that when there are 170,000 users we would be setting off down a much more complex and hence expensive track if we did not use the mechanisms which have been in place for some years and which involve dealing with a relatively small number of manufacturers and importers. I would not on the run-and in breach of Standing Orders-offer a legal opinion on the first point made by Senator Grimes about a bounty to end users being contrary to the Constitution. On the face of it, it is not an absurd proposition. I simply reserve my position because I have not had the chance to consider that matter before. I appeal to Senator Vigor to achieve his objectives by joining the Opposition to vote down this legislation. I agree with him that there appears to be a confusion of objectives in what the Government is seeking to do. It is trying to support the local farming industry on the one hand and manufacturers on the other. The subsidy has always been seen as giving a measure of assistance to the farming community. It seems quite clear that if the Fertilisers Subsidy Bill is defeated that assistance will continue to be available to the whole family-farming community. I have no family farm or family in farming I hasten to say after that slip. I have no vested interest whatsoever in this matter. Since we are getting into that area I should say that I have a brother who may be involved with a fertiliser manufacturer but since I am voting against his interest-if he has an interest-there is no room for criticism. To return to the debate, I agree with Senator Vigor that there is some confusion in what the Government is trying to do. This subsidy is meant to be a subsidy to a consumer rather than to a producer. That is the view of the Opposition and the basis for its opposition to this legislation. Senator Vigor made the point that it is unfair to discriminate against high analysis fertiliser users. That point has been quite significant in terms of the Opposition's stance on this matter. I also agree with him that it would be Luddite to discriminate against high analysis fertiliser use in the sorts of circumstances that he has described. In view of all the doubts about his amendment and in light of the fact that it is an extremely complex way to get to the point he wants to reach I simply commend to him the rather simpler option of voting down this legislation. Senator Vigor has expressed concern about an element of policy of the Australian Democrats which relates to not providing a subsidy for imports; that is, for overseas manufacturers. I say to him with great respect that once he accepts, as he clearly does from his amendment, that the objective of the expenditure of the $55m is not to subsidise manufacturers but to look after the interests of farmers who are, as he said in his speech, very hard pressed in 1986, he can with a clear conscience follow the course that the Opposition is proposing because, as Senator Grimes pointed out, the legislation contains clear provisions which require those who receive a subsidy-the manufacturers and/or importers, and in many cases they are the same people, as Senator Vigor pointed out-to use that money to reduce the cost to the consumer. That is a clear statutory obligation. In other words, the money must be fed back directly to the consumer. The Opposition has some reservation about the capacity of any bureaucratic or legal framework to guarantee 100 per cent delivery of that subsidy to the farmer. We concede that some economic pressures may result in some of that being fudged, if one likes, or picked up by the manufacturers. The reality is that the Industries Assistance Commission examined that issue a few years ago and reported that the subsidy was going through to the farmers. There has been a proper examination of that issue by people who are not politicians with an axe to grind. In that examination the point that is the central concern of Senator Vigor is well dealt with. It is established that the subsidy gets back to the farmer. I urge that we not support the amendment moved by Senator Vigor but we vote down this legislation which will achieve precisely the effect that Senator Vigor has made clear that he wishes to achieve. It will ensure that the subsidy goes to the farmers, which is where it was intended to go, and it will not discriminate against high analysis fertiliser users and it will therefore not be Luddite. It will be administratively the simplest and cheapest way to achieve the objectives he is seeking. Therefore, I urge the rejection of this legislation and, of course, the amendment. Senator SIDDONS(Victoria)(9.58) —I rise to speak to Senator Vigor's amendment. I do not support it. I have great sympathy with his concern for farmers but the point I made originally in my speech at the second reading stage was that the $13m subsidy to importers that this legislation seeks to eliminate has already been passed on to farmers in the form of lower prices. The cost of single superphosphate has been reduced by $1.30 per tonne. TSP and DAP fertiliser costs have been reduced by $10 per tonne and MAP fertiliser by $11 per tonne. Farmers are benefiting from those price reductions as of now. The manufacturers of fertilisers negotiated with the Government and agreed to reduce prices. They have been reduced. There has been no price increase, as has been stated by some honourable senators in this debate. Farmers are getting the benefit of those reduced prices now. So the $13m subsidy taken from imports has been passed back to the farmer in the most direct, simple and straightforward way that is possible. The fact remains that if we defeat this legislation we are in effect saying that the Government should continue to subsidise an import. All honourable senators have expressed concern about the size of the Government's trading account deficit. The fact is that this country does not have the money to subsidise imports. We are the only country which has ever attempted to do so. For a country which is on the verge of bankruptcy to continue to subsidise an import is the height of irresponsibility, I would have thought. The price reductions that have already been put in place have considerably benefited, for instance, farmers in Tasmania. The facts in regard to imports of fertiliser to Tasmania are as follows: One hundred and twenty thousand tonnes of single strength superphosphate and 3,000 tonnes of high analysis phosphate fertiliser are imported. So the price reductions that have already been put in place have been, and will continue to be, in effect, a subsidy to the farmers of Tasmania because there is no way in which the industry can suddenly increase prices without reference to the Government. The Australian Customs Service polices these subsidies very closely. If the industry is being irresponsible and increases prices domestically above a level that does not reflect the full subsidy that is being granted by the Government, the Customs Service will move in and threaten to take the subsidy away. It is not an irresponsible industry. The industry is earning very low returns on its investment in comparison with most industries in this country. The fertiliser industry is very much a service industry. Its record shows that it is a responsible industry. Certainly, the administration of the bounty to the industry by the Government is policed continuously. There is no way in which irresponsible price increases can be effected. Of course, imports of fertilisers can still continue. Nobody is saying that we must stop importing fertiliser. All that is being said in this legislation is that the Government should cease to subsidise the importation of a product-in this case fertiliser-simply because it can no longer afford to do so. Senator CRICHTON-BROWNE(Western Australia)(10.03) —I cannot support the amendment that has been moved by Senator Vigor to the motion for the second reading of the Fertilisers Subsidy Bill 1986-although, of course, I am sympathetic to the spirit of his intention. I acknowledge the point that has been made by Senator Siddons that prices have, in the short term, come down. But in the short term they could do little else. The Government has offered manufacturers the exclusive right to the subsidy. The trade off in the short term had to be acquiescence to a reduction in prices. That is not the answer. We are looking for an answer to this question: What will be the result in the medium to long term when we find that the manufacturers still cannot compete? I would have thought that there would be a temptation for manufacturers to go back to the Government and ask for further and better assistance. As I said this afternoon, it is interesting that, when the anti-dumping duty was prevailing until April 1984, the two major manufacturers of high analysis phosphatic fertiliser withdrew from the market. I assume that they withdrew from the market because they could not compete, even under those circumstances, and they were able to make a profit by importing and selling. The difficulty they now face is that they are finding that a number of smaller importers are doing exactly the same thing, and more cheaply. Therefore, they find themselves threatened, so they now choose to recommence manufacturing. I refer briefly to the Industries Assistance Commission report of 27 January 1984 which looked at the question of anti-dumping. I put it to the Senate that it has not been demonstrated conclusively that all the benefits in the past have flowed to the end users. In fact, the IAC stated: The immediate benefits of the existing anti-dumping measures have mainly flowed to local producers of nitrogenous fertilisers-domestic production of which is, apart from the anti-dumping measures, in receipt of little government assistance. These benefits have arisen because the anti-dumping action has reduced import competition. On the other hand, user industries and consumers have been disadvantaged by having to pay higher prices for fertilisers compared to those that might otherwise prevail. I think that the point that the IAC was seeking to make was that, as long as there is competition, this will ensure that the local manufacturers are competitive. When there is no competition their competitiveness appears to deteriorate. The IAC, in its report of 21 October 1985, stated: Since assistance for phosphatic fertiliser consumption is now also paid on imports and considerable quantities of HAPF are now imported, there currently is even less scope for supplies to appropriate any of the benefits of the subsidies than there was in 1982. What it was saying is that, inasmuch as there are imports of considerable quantities, this keeps the local manufacturers honest. The local manufacturers argue, of course, that it does assist them, on the one hand, which is the Government's intention, and, on the other hand, they are also able to pass on the benefit. I remind the Senate how the IAC dealt with that argument. It stated: On the basis of this argument restricting the subsidies to domestic production was seen to benefit local manufacturers at a cost to importers rather than at a cost to farmers. That part is acknowledged. It continued: However, manufacturers also acknowledged that restricting subsidies to domestic production would result in a cost to users of HAPF. There would be an incentive for manufacturers of HAPF (which is subject to direct import competition) to use all or most of the assistance on HAPF to increase returns from the production of HAPF, with the cif price of imports determining the local selling price. It was saying that the temptation is for the manufacturers to absorb part of the benefit of the subsidy. I say to the Government that if it is serious about assisting both the manufacturers and the farmers it ought to look elsewhere. I remind the Senate of a matter on which I touched this afternoon-that is, the question of freight as it affects manufactured imports and as it affects phosphatic rock. In 1983-84 Australian payments for overseas shipping totalled a little over $2,000m. In 1985-86 the figure was $2,827m. That represented 21 per cent of the invisible deficit. In my view that is an area on which the Government ought to concentrate and examine with a great deal of care if it is worried about the balance of payments. In my view, it is absurd to suggest that the balance of payments is a major factor in determining one's view, particularly inasmuch as a significant number of components are, of course, imported, irrespective of whether the product is manufactured in Australia or overseas. There ought to be an incentive for local manufacturers to produce at source, whether it be at Mount Weld in Western Australia-which is, of course, close to the interstate railway line-or at Duchess in Queensland, and so reduce the cost of production but, more particularly, eliminate import costs by way of freight and reduce intrastate costs. One of the benefits of having imports going directly to points such as, in the case of Western Australia, Esperance and Albany is that it very significantly reduces the costs of freight within Australia. It seems to me that we have not yet faced up to the cost of Australian shipping in the equation of the cost of this item. It is not only the shipping itself; it has been put that only 14 per cent of Australian ship costs are crew costs. It has been put that the single biggest cost component of our freight bill is shore-based shipping costs-between 30 per cent and 50 per cent depending upon a variety of factors such as length of the voyage and the nature of the cargo. According to the Industries Assistance Commission, for instance, in 1977-78 it cost the Broken Hill Proprietary Co. Ltd between $20m and $25m more to use Australian flag ships than if it had used flag of convenience ships. They are the areas, if the Government is genuine in its purpose and endeavour to assist the manufacturers and the end users, the farmers, at which it ought properly to be looking. Amendment negatived. Original question put: That the Bill be now read a second time. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 32 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 1 —— Aulich, T. Harradine, B. Black, J. R. Jones, G. N. (Teller)Childs, B. K. McClelland, DouglasCoates, J. McKiernan, J. P. Coleman, R. N. Maguire, G. R. Colston, M. A. Mason, C. V. J. Cook, P. F. S. Morris, J. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Robertson, E. A. Elstob, R. C. Sibraa, K. W. Evans, Gareth Siddons, J. R. Foreman, D. J. Tate, M. C. Georges, G. Vigor, D. B. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Archer, B. R. Macklin, M. J. Baume, Peter Messner, A. J. Boswell, R. L. D. Newman, J. M. Carrick, Sir John Parer, W. R. Chaney, F. M. Powell, J. F. Collard, S. J. Puplick, C. J. G. Crichton-Browne, N. A. Reid, M. E. Durack, P. D. Sanders, N. K. Guilfoyle, Dame Margaret Sheil, G. Haines, J. Teague, B. C. Hamer, D. J. Townley, M. Jessop, D. S. Vanstone, A. E. Kilgariff, B. F. (Teller) Walters, M. S. Knowles, S. C. Watson, J. O. W. Lewis, A. W. R. Withers, R. G. MacGibbon, D. J. Bolkus, N. Hill, R. Button, J. N. Alston, R. K. R. Gietzelt, A. T. Bjelke-Petersen, F. I. McIntosh, G. D. Short, J. R. Richardson, G. F. Baume, MichaelRyan, S. M. Brownhill, D. G. C. Question so resolved in the affirmative. Bill read a second time. The Bill. Senator GRIMES(Tasmania-Minister for Community Services)(10.17) —I move: Page 21, after clause 38, insert the following new clause: Transitional ``38a. Sections 26, 28 and 30 do not operate so as to render unlawful anything done, or omitted to be done, before the day on which this Act receive the Royal Assent.''. The absence of this provision was brought to the attention of the Government by the Senate Standing Committee for the Scrutiny of Bills in its most recent Scrutiny of Bills Alert Digest. We concur with the Committee and propose this amendment to correct the position. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Consideration resumed from 20 March. AUSTRALIAN BILL OF RIGHTS BILL 1985 Motion (by Senator Gareth Evans) proposed: That further consideration in Committee of the Whole of the Australian Bill of Rights Bill 1985 be postponed. Senator DURACK(Western Australia)(10.19) —I wish to make some remarks in relation to this motion that has been moved by Senator Gareth Evans. I do so because the Committee should be reminded that when this group of Bills was last before the chamber we had already debated for some time the Human Rights and Equal Opportunity Commission Bill in Committee and we were then in the process of debating the Australian Bill of Rights Bill in Committee. At that stage the Government ceased further consideration of this matter and left it lying around for an indefinite period of time. It refused to tell anybody what it was going to do. There were conflicting statements by the Government from about March of this year until finally on 19 August, the day we resumed for the Budget session, Senator Walters asked Senator Gareth Evans a question as to what the Government intended to do with the Bill of Rights package in light of the six months in which nobody could get any sense out of the Government whatsoever. I remind Senator Gareth Evans that on that day, in answer to Senator Walters, he said: It is with deep regret that I advise the Senate that the Government does not propose to proceed with the Bill and will withdraw it from the Senate at the first appropriate opportunity. This is not due to any lack of commitment on the part of the Government to the principles underlying the Bill . . . So he went on and on for virtually another page of Hansard abusing everybody who opposed the Bill, claiming that there had been a filibuster on the Bill and so on in his best abusive self. Senator Puplick —Worst abusive self. Senator DURACK —Well, worst. We could debate that. In any event, it was a pretty sorry performance, not only by Senator Gareth Evans on that day but also by the Government over a considerable period of time. The Government, in the dying hours of this Budget session, even though at the beginning of this session over three months ago Senator Gareth Evans said that the Government was going to withdraw the Bill at the first appropriate opportunity, has now listed this legislation again and the first thing that Senator Gareth Evans proposes is the motion before us, that further consideration of the Australian Bill of Rights Bill in the Committee of the Whole be postponed. What about the commitment he made over three months ago that the Bill of Rights Bill was going to be withdrawn at the first available opportunity? Here is a golden opportunity for Senator Gareth Evans to carry out the undertaking that he gave. Senator Walters —Just one promise will do. Senator DURACK —Yes. We are giving him the opportunity of meeting the very firm commitment given on 19 August that I have just read out. Before we proceed any further with this matter-- Senator Gareth Evans —You know perfectly well that it is a procedural step on which we are proceeding, you old fool and windbag. The CHAIRMAN —Order! Senator Gareth Evans, you will withdraw that remark. Senator Gareth Evans —As long as I have had the benefit of getting it into Hansard, Mr Chairman, I would be delighted to withdraw it. Senator Kilgariff —You are a rotten sod, and I won't withdraw it. Senator Gareth Evans —I seek the withdrawal of Senator Kilgariff's contribution to the debate too, if I may. The CHAIRMAN —Order! We will deal with one matter at a time. Senator Gareth Evans, you will withdraw your remark. Senator Gareth Evans —On the basis that Senator Durack fully understands the procedural basis on which we are proceeding-- The CHAIRMAN —Order! It will be an unconditional withdrawal. Senator Gareth Evans —I will, of course, defer to your request, Mr Chairman. I also seek the withdrawal of Senator Kilgariff's remark. The CHAIRMAN —I did not hear Senator Kilgariff's remark. Senator Gareth Evans —`You rotten sod' was the expression. Senator Kilgariff —At your request, Mr Chairman, I withdraw. The CHAIRMAN —It is not at my request, it is at my direction. Senator DURACK —If Senator Gareth Evans wants to get back into the Committee stage of the Human Rights and Equal Opportunity Commission Bill, which I remind the Committee was exhaustively debated over six months ago, in order to reconsider that Bill, we will debate whether he should or should not, but that is another matter. Senator Gareth Evans says that I do not understand what he is doing. It is clear what he is doing. He has to move this particular motion to get back into the consideration of the Human Rights and Equal Opportunity Commission Bill. I started off by clearly explaining what the Government was doing. Indeed, what I am raising is that the Government said on 19 August this year that it was going to withdraw the Australian Bill of Rights Bill from the Senate. Three months has lapsed and we have heard nothing more about it. We come into this debate in Committee. We have to report what the Committee has decided and I think at the threshold of this question is that the Government should be telling us what it now proposes to do about the Bill of Rights Bill. This motion is the first motion being moved here. Senator Gareth Evans has got up and moved it. He has not explained what he is doing. There has not been a word as to what he is doing or what he is about. The Government put down on the Senate table some weeks ago a whole range of new amendments to the Human Rights and Equal Opportunity Commission Bill. There has been not a word of explanation from the Government on the public record as to what all those amendments are about, their meaning, their purposes or anything else. Indeed, the Bills were listed one day before any of these amendments were even put on the table. We have had no explanation from the Government as to what this exercise is about. We have now seen the amendments, but there has not been any explanation by the Government as to what it is about. Surely if major changes are proposed by the Government to the Human Rights and Equal Opportunity Commission Bill it would have been courteous to the Senate to put down a mini-second reading speech, so to speak, to explain what it has done. Senator Gareth Evans —I will in the next motion, you old windbag, if you will only sit down. The CHAIRMAN —Order! Senator Gareth Evans —I am proposing to do it in the next minute. The CHAIRMAN —Restrain yourself, Senator Evans. Senator Gareth Evans —You can't keep an agreement, you old humbug. Senator Kilgariff —He should withdraw the remark, Mr Chairman. The CHAIRMAN —The remark should be withdrawn. Senator Gareth Evans —I withdraw, Mr Chairman, but I really wish that Senator Durack would keep to agreements that are reached. I am perfectly happy to put down a full explanation, as I indicated I promised to do. The CHAIRMAN —Order! Senator Evans, you do not have the call. Senator Gareth Evans —What is more, I gave him the full text of it some days ago. Senator DURACK —The Minister has given it to me, but he has not given it to the Committee. We are commencing what is a quite major debate about amendments to a Bill which Senator Gareth Evans was perfectly happy with. The Government was perfectly happy with this Bill six months ago. It has been lying around for six months and the Government now wants to make major changes to it. I would have thought that it would have been at least courteous on the part of Senator Gareth Evans to have informed the rest of the Committee what he is about. Certainly he has given me a copy of what he intends to do. Senator Gareth Evans —Some days ago I gave it to you. The CHAIRMAN —Order! Senator Evans, you are interjecting far too much. Senator Durack has the call. Senator Gareth Evans —I am being provoked beyond tolerance, Mr Chairman. The CHAIRMAN —Senator Evans, you have to restrain yourself. Senator DURACK —I am simply asking that this debate be put on a proper, orderly footing by Senator Gareth Evans. Senator MacGibbon —Give him a valium. Senator DURACK —He certainly needs something more than advice or any plea for courtesy from me. I believe that is absolutely the first course the Government should take. At this stage of the debate it should have been telling the Committee how it proposes to carry out the undertaking Senator Gareth Evans gave on 19 August that it would withdraw from the Senate the Bill of Rights Bill, which is the Bill that we are in fact considering at this stage, when this matter was brought on this evening. Senator WALTERS(Tasmania)(10.29) —Mr Chairman-- Senator Gareth Evans —Oh, Jesus! Senator WALTERS —The time is now half past ten. Senator Gareth Evans can blaspheme as much as he likes but we have a long way to go on these human rights Bills. Once again the Australian Bill of Rights Bill has raised its ugly head in the form of this Human Rights and Equal Opportunity Commission Bill. Some time ago I asked Senator Gareth Evans whether all the commissioners of the Human Rights Commission were still active. Senator Puplick —Still alive. Senator WALTERS —I did ask him whether they were still active. He gave me a fairly garbled answer and then said that he would come back and tell me his proper answer once he had sought-- The CHAIRMAN —Order! It being 10.30 p.m., under sessional order, I put the question: That the Chairman do leave the chair and report to the Senate. Question resolved in the affirmative. The Chairman having reported accordingly- Senator GARETH EVANS(Victoria-Minister for Resources and Energy) —by leave-As I fully intended to do, I give notice that, contingent upon the passage through the Senate of the Human Rights and Equal Opportunity Commission Bill 1985 and the Human Rights and Equal Opportunity Commission (Transitional Provisions and Consequential Amendments) Bill 1985, I shall move: That the order of the day for the consideration in Committee of the Whole of the Australian Bill of Rights Bill 1985 and the Human Rights and Equal Opportunity Commission Amendment Bill 1985 be discharged from the Notice Paper. The DEPUTY PRESIDENT —The question now is: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 10.32 p.m. The following papers were tabled: Copyright Act-Declaration by the Attorney-General under paragraph 10A (1) (a), dated 21 October 1986. Customs Act-Regulation-Statutory Rules 1986 No. 328. Defence Act-Regulations-Statutory Rules 1986 No. 331. Export Control Act-Regulations-Statutory Rules 1986 No. 327. Fisheries Act-Fisheries Notice-No. 174-Prohibition relating to the use of the Rock Lobster pots off Western Australia, dated 10 November 1986. Health Insurance Act-Regulation-Statutory Rules 1986 No. 326. Income Tax Assessment Act-Regulations-Statutory Rules 1986 No. 325. Land Acquisition Act-Statement by the Minister describing land acquired by agreement under sub-section 7 (1) of the Act, for specified public purposes. National Health Act-Regulations-Statutory Rules 1986 No. 330. Naval Defence Act-Regulation-Statutory Rules 1986 No. 332. Navigation Act-Regulations-Statutory Rules 1986 Nos 334, 335, 336. Nursing Homes Assistance Act-Regulations-Statutory Rules 1986 No. 329. Seat of Government (Administration) Act- Notice of Variation of the Plan of Layout of the City of Canberra and its Environs (88th Series), dated 20 November 1986. Ordinances 1986- No. 73-Parole (Amendment). No. 74-Magistrates Court (Amendment) (No. 3). No. 75-Co-operative Societies (Amendment) (No. 4). Superannuation Act-Regulation-Statutory Rules 1986 No. 333. The following answers to questions were circulated: (Question No. 802) Senator Mason asked the Minister representing the Treasurer, upon notice, on 11 February 1986: (1) What percentage of the annual Australian inflation rate of 8.2 per cent as contained in the recently released Consumer Price Index figures, is the result of increased Federal and State Government charges in each State and Territory. (2) What were the main components of the increased Federal Government charges for the past year. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) It is not possible to isolate precisely the effects of government taxes and charges on the Consumer Price Index (CPI). While the Statistician's index of selected State and local government charges (a special grouping of selected items from the CPI regimen) provides some information on the effect of State taxes and charges, it does not pick up indirect effects or include the effects of Commonwealth charges. Moreover, in some cases, the effects on consumer prices of particular taxes or charges cannot be isolated from other influences. An approximation of the contribution of taxes and charges to the CPI can be compiled, however, using a combination of the Statistician's index and Treasury estimates of the effect of certain Commonwealth indirect taxes and charges. This approximation suggests these items contributed about 20 per cent (ie 1.6 percentage points) of the 8.2 per cent increase in the CPI over the year to the December quarter 1985. (2) Of Commonwealth Government indirect taxes and charges, the major item was the crude oil levy, which is estimated to have contributed 0.7 percentage points to the CPI increase of 8.2 per cent. Other Commonwealth indirect taxes (changes in sales tax and excise duty rates) are estimated to have contributed 0.3 percentage points, while postal and telephone charges contributed 0.1 percentage points. (Question No. 1091) Senator Brownhill asked the Minister representing the Attorney-General, upon notice, on 28 May 1986: (1) Has the Attorney-General's Department appointed any officer to supervise trustees appointed to administer the financial affairs of Mr Gordon Anthony Miller, of Henty Street, Culcairn, NSW, in the light of the long standing difficulties between various Federal Government Departments and Mr Miller; if not, will the Department do so. (2) If the answer to (1) is no, on what grounds is the refusal made. (3) Has an independent evaluation of the property holdings of Mr Miller determined that the property has substantially decreased in value since administration of the said property was taken over by the trustees appointed under Federal Government legislation. (4) What compensation is the Department liable to pay, under s.221 of the Bankruptcy Act, under these circumstances. (5) What steps can someone in Mr Miller's position take to ensure trustees appointed under Federal Government legislation to administer a property are doing their job in the most efficient manner, bearing in mind the extremely desperate financial position Mr Miller has been forced into through actions of the Federal Government. Senator Gareth Evans —The Attorney-General has supplied the following answer to the honourable senator's question: (1) There is no power, either in the Bankruptcy Act 1966 (the Act) or elsewhere, enabling the Attorney-General or his Department to appoint an officer to supervise trustees in bankruptcy in the performance of their statutory functions. Control over trustees is vested in courts exercising jurisdiction in bankruptcy. However, in Mr Miller's case, the Inspector-General in Bankruptcy has exercised his statutory discretion under section 12 of the Act to inquire into the conduct of the trustee of Mr Miller's bankrupt estate, The Inspector-General's inquiry did not disclose evidence of any misconduct by the trustee. (2) Not applicable. (3) The Inspector-General's inquiries have disclosed that: (i) Mr Miller's Statement of Affairs, sworn on 17 February 1984 and filed with the Registrar in Bankruptcy on 5 March 1984, estimated the value of the property at Beard Street, Culcairn at $30,000. There is no evidence that this estimate was based on an objective professional valuation. There is also no evidence available of the value of the property at the date of the bankruptcy, viz 20 August 1982. (ii) on 9 March 1983 the first mortgagee, the Minister for Industrial Development and Decentralisation, (NSW), informed the trustee that because Mr Miller had ceased to use the factory on the property he was arranging for the locks to be changed and for the property to be offered for sale by auction. There is no evidence to suggest that the property deteriorated in value between 20 August 1982 and 9 March 1983. (iii) between 4 June 1984 and 16 April 1985 three separate real estate agents valued the property at values ranging between $6,000 and $25,000. One agent, who valued the property at a figure not exceeding $20,000, qualified this by saying that ``the building has been constructed with secondary materials and the standard of workmanship is below par.'' On 7 February 1986, a fourth agent reported that the property was in a ``very run down and neglected state'' but did not give an estimate of its value. It is therefore apparent that the mortgagee, not the trustee, had been in possession of the property since 9 March 1983. The Inspector-General has received a copy of a letter from the Department of Industrial Development and Decentralisation which states that after an extensive advertising campaign the property was sold on 21 August 1986 by public auction for $5,000. It appears that the proceeds of sale will be insufficient to pay the balance owing under the mortgage. At common law, the mortgagee is entitled to realise its security as and when the mortgagee chooses provided that the power of sale is exercised in good faith. (4) Sec. 221 of the Bankruptcy Act contains the power which was exercised to make Mr Miller bankrupt. It is a general power enabling the Court to make a sequestration order where a debtor whose affairs are being administered, under Part X of the Act i.e., outside formal bankruptcy, fails to attend a meeting of creditors or to execute a deed of assignment or deed of arrangement and so on. The section makes no reference to the payment of compensation. There is no provision in the Bankruptcy Act of which I am aware which would impose a liability upon the Commonwealth in respect of any actions or omissions by a registered trustee in bankruptcy. (5) No actions have been taken by the Federal Government that have affected Mr Miller's financial position. In relation to trustees, Mr Miller may examine whether action under section 178 of the Act, or other action, is open to him. Under sec. 178 of the Act any act, omission or decision of a trustee is subject to review by the Court on the application of the bankrupt, a creditor, or any other person affected by the Act, omission or decision. (Question No. 1249) Senator Crichton-Browne asked the Minister for Communications, upon notice, on 19 August 1986: (1) What has been the amount of money spent by the Australian Broadcasting Corporation (ABC) for advertising on commercial television, with particular reference being made to advertisements by ABC Radio National. (2) What was the total number of advertisements for the ABC shown during broadcasts of Wimbledon tennis and what was the cost of each of these advertisements. (3) Was any approval given by the Minister for Communications for such advertising. (4) Has the ABC advertised on commercial television before and if so, what assessment has been made of the effectiveness of such advertising. (5) What has been ABC Radio National's share of radio audiences over the last five years. Senator Walsh —The following answer to the honourable senator's question, based on information provided by the Australian Broadcasting Corporation, has been supplied by the Minister for Communications: (1) The ABC advise that commercials for ABC Radio this year have cost $479,000. Proportionally the amount spent on advertising Radio National was approximately $116,000. Some of these commercials will continue to be shown on ABC-TV. (2) The ABC advise that a commercial was shown 3 times, in Perth only, at a cost of $1,120 each time. (3) The ABC advise that the Minister's approval was not necessary. (4) The ABC advise that the last national campaign promoted the 1979/80 cricket season on ABC Radio. No quantitative assessment was made of its effectiveness, but the ABC considered the campaign particularly successful. (5) The ABC advise that the shares were, by capital and in percentages: Sydney Melbourne Brisbane Adelaide Perth 1981 ... 3 3.5 4 3 3 1982 ... 3 3 3 3 3 1983 ... 2 2.5 3 3 3 1984 ... 2 3 3 3 3 1985 ... 2 2 3 3 3 1986 (1st 6 months) ... 2.5 3 4 2 3.5 (Note: Figures are not available for Hobart and Darwin) (Question No. 1363) Senator Macklin asked the Minister representing the Minister for Health, upon notice, on 16 September 1986: (1) Do any Derived Emergency Reference Levels (DERLS) exist in Australia to ban various types of food produce following radioactive contamination. (2) Will the Minister for Health establish and make public the DERLS Becquerel units for the following range of radionuclides in view of the Government's commitment to the nuclear industry: Strontium-89; Strontium-90; Cesium-134, Cesium-137; Americum-241; Iodine-125; Iodine-131; Iodine-133; Ruthenium-103; Ruthenium-106 and Plutonium-239 in milk, green vegetables, fruit, meat and water. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) At its 76th Session, in May 1973, the National Health and Medical Research Council adopted a statement on Emergency Reference Levels for Major Radiation Accidents, which was prepared by its Radiation Health Committee. These levels divide situations in which countermeasures are unlikely to be justified from those in which countermeasures are desirable if they can be carried out safely and effectively. The statement was published in its Session Report. The statement indicates that control of the use of contaminated foodstuffs should be considered when risks to the public from their consumption exceed 3 x 10-4. Assuming a linear dose-effect relationship, this corresponds to an effective dose equivalent of 20 millisievert (mSv). In 1984, the International Commission on Radiological Protection indicated that, in the intermediate phase of an emergency situation where members of the public might be exposed to radiation, additional countermeasures that are applicable include restricting the distribution and consumption of locally produced water and foodstuffs. Although, in general, there should be little penalty in not distributing fresh foods, including milk, it may be appropriate to control distribution of fresh foods if the projected dose within the first year would otherwise exceed the annual dose limit for members of the public. If alternative supplies are not available, it may be appropriate to allow a higher level of dose. The Commission suggests that a dose of 5 mSv is a value below which countermeasures are not warranted and a dose of 50 mSv is a value above which countermeasures are almost certain, as far as the consumption of foodstuffs is concerned. The NHMRC value falls between these two levels. Any countermeasures taken will depend on the concentration of radionuclides in the foodstuffs, their rates of consumption and the consumption rates of similar and other foodstuffs which are not contaminated. These factors need to be taken into account in determining concentrations at which foodstuffs should be banned from consumption. (2) The DERLS Becquerel units for the requested range of radionuclides have not been identified except for the following for water: Bq/L i Specified radionuclides Strontium-90 ... 1.0 Radium-226 ... 0.4 Gross Beta (in absence of Sr90 and Alpha emitters) ... 40 ii Unspecified radionuclides Gross Alpha activity ... 0.1 Gross Beta activity (including Sr90) ... 1.0 Other units would be identified when required taking into account the relevant circumstances. The Radiation Health Committee is reviewing the 1973 statement at the present time, and will revise it if considered necessary. In any revision, it will take into account any action taken and advice made available on contaminated foodstuffs in other countries. Acceptable maximum concentrations of the different radionuclides in foodstuffs can be derived on the basis of the doses likely to be received as a consequence of their consumption. (Question No. 1370) Senator Mason asked the Attorney-General, upon notice, on 17 September 1986: (1) What is the purpose of the Statutory Authority titled, Law Courts Ltd. (2) When was the Authority established and what has been its operating costs for each year of its existence. (3) How many staff have been employed by the Authority for each year of its existence. (4) What functions does each staff member perform. (5) Are there any plans to expand the Authority and if so, what do these plans involve. Senator Gareth Evans —The Attorney- General has provided the following answer to the honourable senator's question: (1) Law Courts Limited is not a statutory authority. It is a company limited by guarantee, registered under the New South Wales Companies Legislation and jointly owned by the Governments of New South Wales and the Commonwealth. The objects of the Company are stated in its Memorandum and Articles of Association but briefly they are to provide accommodation for New South Wales and Commonwealth Courts and associated activities. The Company has vested in it ownership of the joint New South Wales/Commonwealth Law Courts Building situated at Queens Square in Sydney. (2) The Company was established in 1974 and its operating costs for each financial year since then are as follows: 76-77...449,940 77-78...973,235 78-79...1,153,669 79-80...1,286,256 80-81...1,433,458 81-82...1,592,111 82-83...1,868,152 83-84...2,203,753 84-85...2,202,841 85-86...2,203,760 The building opened in January 1977. (3) 28 staff have been employed from 1977-1986 inclusive. (4) Staff currently employed are: Secretariat/Building Management Services 1 Company Secretary/Building Manager 1 Office Manager 1 Pay and Accounts Clerk 1 Stenographer 1 Office Assistant 2 Telephonists House Services 1 House Officer 1 Assistant House Officer 4 Commissionaires 6 Security Officers 2 Basement Attendants Building Maintenance 1 Plant Superintendent 2 Plant Operators 1 Fitter 1 Electrician 2 Tradesperson Assistants (5) There are no plans to expand the Company. (Question No. 1385) Senator Jessop asked the Minister for Communications, upon notice, on 22 September 1986: (1) Is Mr Andrew Kruger, initially a stringer for Australian Associated Press, located in New York, under contract with the ABC; if so, what are the terms of that contract. (2) Has the ABC paid Mr Andrew Kruger any remuneration for services or expenses since he arrived in the United States; if so, what moneys have been paid, and for what services and/or expenses. (3) Has the ABC ever paid Mr Peter Hayes, of the Nautilus Research Centre in Massachusetts, any moneys for services and/or expenses; if so how much was involved and what are the details. (4) How many ABC staff, both full-time and part-time, are stationed in North America, and what is the cost in salaries and support for this staff. Senator Walsh —The following answer to the honourable senator's question, based on information provided by the Australian Broadcasting Corporation, has been supplied by the Minister for Communications: (1) Mr Andrew Kruger is not under contract with the ABC. He is a freelance, covering, in the main, stories for Radio Australia on the United Nations. On occasions he has acted as a relief correspondent for ABC Domestic Radio. He also continues to freelance for Australian Associated Press. (2) Mr Kruger began freelancing for the ABC in May 1985. He has received a total of $US34,154 for his work with Radio Australia, Radio News and Current Affairs and Radio Rural. He does not receive any expenses from the ABC. (3) The ABC has paid Mr Peter Hayes and/or the Nautilus Research Centre the total sum of $US7,627 to provide research material for Four Corners, ABC Radio National and 2JJJ programs. (4) In North America, the ABC has offices in New York and Washington, which accommodate 12 full-time staff: New York : 6 Full-time staff Washington : 6 Full-time staff In addition, the ABC has one contract Radio Correspondent in New York and uses a number of freelance Sound Recordists and Video Editors for Television reports as the need arises. ABC Radio also uses some freelance Reporters from time to time. The three most frequently used are Andrew Kruger in New York, Bernard Mayes in San Francisco and Peter Benesh in Toronto, Canada. For the 1986-87 Financial Year, the ABC's North American Branch has the following budget: Salaries-$US452,266; Operations-$US523,050. (Question No. 1393) Senator Jones asked the Minister representing the Minister for Health, upon notice, on 25 September 1986: (1) Has the attention of the Minister for Health been drawn to the formation of a new group of doctors describing itself as ``Doctors Against Medicare Association''. (2) What are the stated objects and aims of this Association, which according to the Brisbane Courier-Mail of 4 September 1986, appears to have as its spokesman a Dr Blair Taylor of Biloela in Queensland. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) and (2) I know little of the so called ``Doctors Against Medicare Association'' other than the press report in the Brisbane Courier Mail of 4 September 1986. The Association does not appear to be registered under the Companies Act. I can say that three of the doctors linked with the group have had their practices reviewed by a Medical Services Committee of Inquiry and have been found to have overserviced to an extent that constitutes an abuse of Medicare. I should add that the doctors have recourse to a Medical Services Review Tribunal for a review of the determination by the MSCI should they wish to exercise that option. (Question No. 1402) Senator Reynolds asked the Minister representing the Minister for Health, upon notice, on 25 September 1986: (1) Is the Minister for Health aware that a major project concerning the development and characteristics of all children born in 1987 in the Townsville/Thuringowa district is to be conducted by the Education Department at the James Cook University of North Queensland in conjunction with local practitioners and medical and welfare groups. (2) Is it estimated that this will involve approximately 2,000 children who will be required to be seen initially 6 monthly and thereafter yearly by medical practitioners to record growth data and other medical characteristics; if so can the Minister undertake to examine the possibility of allowing these visits to the general practitioners to be bulk-billed as an item 7 consultancy so that no charge will be borne by the parents and to ensure the success of such a major project. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) Yes. (2) The project to which the honourable senator refers is sponsored by Professor Paul Berry, Head of the Education Department, James Cook University. In response to an earlier inquiry, Professor Berry has recently been advised by my Department that the proposed research project would come within the scope of sub-section 19 (5) of the Health Insurance Act which precludes the payment of Medicare benefits for screening services (ie. medical examinations or tests not reasonably required for the management of the medical condition of the patient) unless otherwise directed by me. Further, it would be inconsistent with the Government's budgetary strategy of restraint to permit the payment of Medicare benefits for medical examinations/tests performed on apparently well children. Medicare is a universal health care scheme established to assist eligible persons in meeting the cost of essential medical treatment. It was never intended, nor is it appropriate, for the Medicare arrangements to be used as a financial mechanism for subsidising, or partly subsidising research projects, regardless of the merits of the project. (Question No. 1403) Senator Kilgariff asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 7 October 1986: (1) Is the Minister for Aboriginal Affairs aware of claims that following the broadcast of a television program on Peppimenarti, the cattle operations at the station have been hindered by the activities of the Northern Land Council (NLC). (2) Can the Minister confirm that the Peppimenarti operation has been interfered with by the NLC preventing the mustering of Peppimenarti's cattle. (3) What action does the Minister propose, given the hard work, and measure of success, which has been achieved at Peppimenarti, to investigate these claims, and ensure that Peppimenarti continues to provide a lead for Aboriginal people. (4) Is the Minister aware of claims reported in the NT News of 21 September 1986 of a Mrs Petherick of Wagait that the NLC has robbed her family of more than $1m worth of cattle. (5) Will this claim be investigated; if so by whom. Senator Ryan —The Minister for Aboriginal Affairs has provided the following answer to the honourable senator's question: (1) Yes. (2 and 3) The ownership of cattle and buffalo on land vested in the Daly River/Port Keats Aboriginal Land Trust has been the subject of dispute for some time. S.25 of the Aboriginal Land Rights (Northern Territory) Act 1976 (the Act) imposes a statutory responsibility on the Northern Land Council to resolve disputes between Aboriginal groups in respect of Aboriginal land within the area of the Land Council. The Council is attempting to resolve this dispute. (4 and 5) My attention has been drawn to an article in the Sunday Territorian of 7 September 1986 reporting similar claims by Mrs Petherick. The matter of traditional ownership of the Wagait land was recently considered by the Northern Land Council and the Council determined in accordance with s.24 of the Act that Mrs Petherick's family were not traditional owners. On that basis the Pethericks have no entitlement to receive moneys from the use of the Wagait land under the Act. (Question No. 1436) Senator Kilgariff asked the Minister representing the Minister for Territories, upon notice, on 14 October 1986: (1) Does the Federal Government envisage any change in, or additions to charter services, in view of Christmas Island's attempt to encourage tourists, in relation to the present charter air services to Christmas Island, that is the Malaysian Airlines Kuala Lumpur to Christmas Island service, and the charter from Perth to Christmas Island to the Cocos (Keeling) Islands and return. (2) Does the Government intend to extend air services to Christmas and/or the Cocos (Keeling) Islands to include a regular public transport (RPT) air service. Senator Gietzelt —The Minister for Terri- tories has provided the following answer to the honourable senator's question: (1) There are no additions planned to the weekly air charter services to Christmas Island from Perth and a South-East Asian Port. Tenders have been called for the provision of a weekly service from a South-East Asian port to Christmas Island. The successful tenderer may not necessarily operate from Kuala Lumpur as at present. Negotiations are being held on a new long-term charter for flights operating out of Perth. (2) The developer proposing a hotel-casino complex on Christmas Island is seeking the establishment of RPT air services to the Island. The Departments of Terri- tories and Aviation have been involved in discussions with the developer and see no major obstacles to the issue of a licence for an RPT air-service. The existing charter services will be re-evaluated in the light of the developments in RPT services. Senator Gareth Evans —On 20 October 1986 (Hansard, page 1548), Senator Lewis asked the Minister representing the Minister for Defence the following question without notice: Can he tell us the reason why Indonesia has notified that it will not send students to the Joint Services Staff College next year and also that it will not send personnel to the Royal Australian Naval College at Jervis Bay, the Australian Staff College at Fairbairn? Does the Government have any policy-if so, what policy-to heal what is now a clear breach in our relationship with Indonesia? The Minister for Defence has provided the following answer to the honourable senator's question: Indonesia has advised that it does not wish to take up offers of places on courses at the Joint Services Staff College, the Royal Australian Air Force Staff College and the Army Command and Staff College in 1987. No reasons have been indicated for these particular decisions. This should not be interpreted as a `clear breach' in our relationship with Indonesia. Countries from time to time and for various reasons decline positions on Australian training courses. It is also relevant that our officers continue to be welcome at Indonesian staff colleges. The Australian Government desires to maintain a sound and constructive defence relationship with Indonesia. This derives from our shared strategic interests in the security of our region. Australia and Indonesia have undertaken a range of defence activities over many years and the Government continues to be willing to support activities such as training in Australia where these are sought by Indonesia. Senator Grimes —On 23 October 1986 (Hansard, page 1813), Senator Townley asked me, as Minister representing the Minister for Health, a question without notice concerning changes to the pharmaceutical benefits scheme. The Minister for Health has provided the following information: The Pharmaceutical Benefits Scheme was changed because of the Government's desire to provide specific assistance to those deemed to be most disadvantaged, the chronically ill high drug user or the family with one or more chronically ill members. Under the arrangements existing before 1 November 1986, there was no ceiling to the amount which these people could be required to pay for their essential medication. The new scheme places a ceiling on payments by the high user whilst at the same time ensuring that the occasional user is not seriously burdened. It is pointed out that pensioners continue to receive benefits free of charge whilst concessional beneficiaries (an especially disadvantaged group which includes the unemployed, pensioners without fringe benefits and low income earners) pay only $2.50 with entitlement to free benefits after the first 25 prescriptions. The average general beneficiary uses only four pharmaceutical benefit prescriptions annually while the average family uses only eleven prescriptions annually. The average family therefore can expect to pay approximately $80.00 a year under the new arrangements compared with $55.00 previously. The individual or family with a high and recurring demand for drugs will be considerably better off under the new arrangements. For example, a family with two asthmatic children requiring five prescriptions monthly for each child would have outlayed $600.00 a year previously. After 1 November 1986 the same family would pay approximately $183.00 to reach the 25 prescription threshold and nothing for the remainder of the year, a potential saving of over $400.00. The example quoted is quite typical of the disadvantaged family group who will be protected under the new scheme. It is confirmed that under the new provisions of the National Health Act children 16 years or over who are not full time students are not regarded as part of the family. Where a child turns 16 during the entitlement period any prescriptions obtained for that child during the remainder of the year count towards the family's 25 prescription threshold. Where the family has been issued with an entitlement card before the child turned 16, prescriptions obtained for the child in the balance of the year may be obtained without charge under the cover of the entitlement card. In excluding children 16 or over who are not full time students, the safety net scheme is consistent with the provisions of both Medicare and Family Allowance. It should be noted that a 16 year old who is neither employed nor studying full time may be eligible to receive unemployment benefits and, if so, would qualify in his or her own right to be issued with a Pharmaceutical Benefits Concession Card.