Thursday, 19 February 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable President and members of the Senate in Parliament assembled: The petition of the undersigned shows: (1) The Agreement between the United States of America and Australia concerning the Joint Defence Space Research Facility at Pine Gap may be terminated by either Government on one year's notice from 19 October 1986. (2) In the event of war between the United States and the Soviet Union, access by the United States to Pine Gap's facilities makes it a probable nuclear target. (3) Access by all nations to Pine Gap's capacity to monitor and verify compliance with existing and future nuclear limitations treaties could contribute to world peace and security. (4) The people of Australia are entitled to be consulted, through their representatives in Parliament, on any extension or modification of the Agreement affecting their lives, security and welfare. And your petitioners humbly pray that: (1) The Agreement between the United States and Australia concerning the Joint Defence Space Research Facility at Pine Gap be terminated one year from October 1986. (2) Public discussion and inquiry be instituted into the feasibility of negotiating a new agreement with the United Nations during the International Year of Peace offering the verification facilities of the Pine Gap base to all nations. (3) Any agreement concerning the future use of Pine Gap be referred to Parliament for ratification. by Senator Robertson (from 35 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 Robertson (from 21 citizens). To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: 1. That the Bill of Rights will have the power to override and negate our Common Law within five years of its enactment. 2. Because the Bill of Rights is based on an International Covenant this will take the control of our country out of the hands of the people and their democratically elected representatives, giving the power to those outside Australia. Your petitioners therefore pray: 1. That the Senate rejects the Australian Bill of Rights and all cognate Bills. 2. That as our representatives, you protect our Australian Heritage and Christian culture and values, both in the Education System and though the media. And your petitioners as in duty bound will ever pray. by Senator Robertson (from 10 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 radio- active substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Senator Georges (from 11 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 Robertson (from 38 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 your petitioners are gravely concerned that in the International Year of Peace, young Australians face an uncertain future due to: 1. a continuing arms race between the super-powers which threatens to extend into outer space 2. military expenditure continuing at ridiculously high levels 3. continuing testing and stockpiling of nuclear weapons Your petitioners therefore humbly call upon the Federal Parliament to do everything possible to make our future more certain, by: 1. encouraging peaceful dialogue through diplomatic channels as the means of solving issues. 2. persuading all developed countries to spend less on armaments, and more on basic needs like food, health, shelter and education for all people of the world. 3. promoting the extension of agreements to reduce testing and stockpiling of nuclear weapons. And your petitioners as in duty will ever pray. by Senator Robertson (from 79 citizens). We, the undersigned concerned Australians, hereby petition the Honourable Senators to totally reject the current proposals for an I.D. Card and the proposed Data Protection Agency. We believe that they represent potentially undesirable interference in the lives of honest Australians. Provision for protection of privacy cannot be guaranteed as Statutes are easily altered by future Governments. We believe that there are more efficient methods to prevent fraud in the areas of Social Security and Taxation without the use of these two proposals, which go well beyond the reach of the true role of democratic government. i.e. That citizens may live quiet and peaceable lives. The I.D. Card and the Data Protection Agency have strong potential under this or future administrations to interfere with the quiet and peaceable lives of its subjects. We your humble petitioners in duty bound ever pray. by Senator Robertson (from 36 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: 1. That the proposed Australia Card legislation is an infringement of privacy. 2. That the bureaucracy created by the introduction of the Australia Card will be a further burden to Australian Taxpayers-one that they can ill-afford in the present economic climate. 3. That the Australian Card will not tackle the problems of tax evasion, welfare fraud and illegal immigration successfully. Your petitioners therefore humbly pray that the Senate in Parliament assembled should: Continue to reject the Australia Card Bill preventing a gross waste of taxpayers' money and a significant infringement of privacy. And your petitioners as in duty bound will ever pray. by Senator Robertson (from four citizens). To the Honourable the President and Honourable members of the Senate assembled. The petition of the undersigned in the State of Queensland showeth that the electoral system in Queensland, based on a 4 zonal weighted system, is an affront to democracy. The National Party under the leadership of Sir Johannes Bjelke-Petersen is always returned to Government with no opportunity for the voting public to bring about change. Your petitioners point out that under the Queensland voting system the National Party at the State Elections on 1 November 1986 managed to achieve 55 per cent of the seats with only 39 per cent of the votes. This demonstrates that 61 per cent of Queenslanders do not want a National Party Government yet received one. Your petitioners therefore earnestly pray that the Federal government legislates as a matter of urgency to bring about a democratic system of voting in Queensland State elections based on the principle of one vote one value. And your petitioners as in duty bound will ever pray. by Senator Colston (from 37 citizens). To the Honourable the President and the honourable members of the Senate in the Parliament assembled. The humble petition of the undersigned electors of the Commonwealth of Australia respectfully showeth that: (1) Australians are offended by taxation evasion and welfare fraud which has the effect of increasing the taxation burden of honest Australians. (2) The community has shown its overwhelming support for the Government's decision to proceed with a national identification system known as the Australian Card. Your petitioners therefore pray that your honourable Senate will: continue the fight against taxation evasion and welfare fraud and restore fairness and equity to the tax and welfare systems by supporting the Australia Card Bill. by Senator Richardson (from 16 citizens). To the Honourable the President and the members of the Senate in the Parliament assembled. The Petition of the undersigned respectfully showeth: (1) That the Government's proposed Identity Card is the greatest threat to civil liberties in the history of this country; (2) That the I.D. card will be a costly and unnecessary method of attacking tax evasion and social security fraud; and (3) That the proposal will impose yet another bureaucratic burden on the business sector. Your petitioners therefore humbly pray that the Senate reject the Government's legislation to introduce the Australia Card or any other identity card system. And your petitioners as in duty bound will ever pray. by Senator Parer (from 268 citizens). To the Honourable the President of the Senate and senators in Parliament Assembled: We, the undersigned citizens of Australia, believing that Australia should not host nuclear weapons in its territory or in Australian waters; and that the presence of nuclear-armed warships makes a priority nuclear target of ports being visited; and that the safety precautions for handling and deployment of nuclear weapons are inadequate to guarantee safety from accidents; We therefore call upon the Australian Government to: prohibit the entry of nuclear weapons to Australia; and to deny access to Australian ports of foreign warships unless an assurance is received that they are not carrying nuclear weapons; and to require that foreign warships participating in the anniversary of the Royal Australian Navy not be carrying nuclear weapons in Australian territorial waters. And your petitioners as in duty bound will ever pray. by Senator Vallentine (from 170 citizens). To the Honourable the President and members of the Senate in Parliament assembled: This petition of concerned citizens of Australia respectfully showeth that: Uranium mining and processing is dangerous to the health and well-being and ecology of the Earth and its citizens, By-products of uranium are toxics for periods of up to 500,000 years, and are an intrinsic part of the production of nuclear weapons, Existing safeguards are inadequate, and are not properly monitored. The policy of the Australian Government permits the entry into Australian territory of vessels and aircraft without the assurance that they are not nuclear powered or armed, Such vessels pose a threat to both the security and well-being of Australia and its citizens. The presence of foreign military and communication bases on Australian soil seriously endangers the health and well-being of Australia and its citizens. Your petitioners therefore humbly pray that your honourable Senators will take cognisance of the above and take immediate action to remove the above dangers. Your petitioners as in duty bound will ever pray. by Senator Vallentine (from 395 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia shows support for a resolution passed at a Public Meeting held in Canberra on 29th October 1986, convened by the Council of Civil Liberties (ACT) and Rupert Public Interest Movement, calling on the Federal Government: (i) To urgently restore the Australian Bill of Rights to the Parliamentary agenda with a view to enactment; (ii) To give consideration to extending the Bill to the states and territories of Australia in the same was as the Commonwealth; and (iii) To take the necessary steps to continue the operation of a Human Rights Commission from 9 December 1986. And your petitioners in duty bound will ever pray. by Senator Vallentine (from eight citizens). We, the undersigned concerned Australian citizens here-by petition the Honourable Members and Senators to totally reject the current proposals for an I.D. Card and the proposed Data Protection Agency. We believe that they represent potentially undesirable interference in the lives of honest Australians. Provisions for protection of privacy cannot be guaranteed as Statutes are easily altered by future Governments. We believe that there are more efficient methods to prevent fraud in the areas of Social Security and taxation without the use of these two proposals, which go well beyond the reach of the true role of democratic government, i.e. That citizens may live quiet and peaceable lives. The I.D. Card and Data Protection Agency have strong potential under this or future administrations to interfere with the quiet and peaceable lives of its subjects. We your humble petitioners in duty bound ever pray. by Senators Sir John Carrick (from 18 citizens) and Haines (from 41 citizens). To the Honourable the President and members of the Senate in parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:- (1) That we are totally opposed to the introduction of the Labor Government's Identity Card. (2) That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combatting the growing problems of tax evasion, illegal immigrants or social security. (3) That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life. (4) That we call upon the Labor Government to improve management systems within the Australian Taxation Office and other departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Haines (from 19 citizens). To the Honourable President and senators in Parliament assembled: We, the undersigned are seriously concerned about the impact of the Fringe Benefits Tax on the following grounds: 1. It is unjust for any person to be liable for tax on benefits received by another person. 2. Compliance with FBT will increase administrative costs for all employers, including Local, State and Federal Government Departments. 3. FBT is an inefficient tax, which will require the Tax Office to employ an army of bureaucrats. 4. FBT is inequitable because liability arises regardless of capacity to pay. 5. The FBT laws are extremely complex. We therefore most earnest petition you to repeal the Fringe Benefits Tax Legislation forthwith. And your petitioners as in duty bound will ever pray. by Senators Peter Baume (from four citizens) and Sir John Carrick (from 27 citizens). To the Honourable the President and members of the Senate in parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: (1) That we are totally opposed to the introduction of the Labor Government's Identity Card. (2) That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combatting the growing problems of tax evasion, illegal immigrants or social security. (3) That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life. (4) That we call upon the Labor Government to improve management systems within the Australian Taxation Office and other departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Messner (from 306 citizens). To the Honourable the President and the members of the Senate in Parliament assembled The humble Petition of Citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the World in their efforts to achieve a Nuclear Free South Pacific, and such Decision being endorsed by the people at a General Election. Your Petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the United States Government to impose economic or other sanctions on New Zealand in retaliation for their stand on Nuclear Vessels. We further urge the Australian Government to urgently implement its Policy to promote the development of Zones of Peace and Nuclear Free Zones in the Indian and Pacific Oceans. by Senator Vallentine (from 216 citizens). To the Honourable, the President and members of the Senate in Parliament assembled: This petition of concern to Australian citizens asks that: If there is to be legal process against alleged war criminals resident in Australia, the foundations of justice should be clear and equitable. 1. Let the term, ``war crime'', be first clearly defined. 2. Let specific prosecutions be swiftly launched against those individuals alleged to have committed them, thus releasing the rest of their co-nationals from unwarranted slur and suspicion. 3. Let an Australian tribunal hear the charges. Nobody should be deported to face the ``tender mercies'' of any foreign government. 4. Let the presumption of innocence until proved guilt be clearly established. 5. Let all evidence obtained from the Soviet or any other communist government be set aside and totally disregarded. 6. Let all the costs of any person charged and found not guilty be paid by the Commonwealth Government so that innocent people are not financially ruined in the course of establishing their innocence. And your petitioners as in duty bound ever pray. by Senator Robertson (from 11 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: The Plant Variety Rights Bill 1986, now before Parliament, should be withdrawn because: 1. There is growing concern about the economic concentration of the seed industry and the loss of traditional food plant varieties in overseas countries with this legislation. 2. Genes, seeds and other plant genetic material should remain a public resource. 3. The demand for uniformity, imposed by P.V.R. legislation, reduces genetic variability and could lead to the loss of traditional genetic material. 4. P.V.R. will discourage the free exchange of information, seeds and genetic material and is therefore likely to adversely affect Australia's public breeding programmes. 5. Our choice of food, its quality and nutritional value will increasingly be determined by the interests of large overseas companies rather than those of the Australian consumer. 6. There is no requirement in the bill for superiority or for merit testing of varieties to protect the interests of our farmers. 7. The bill can be interpreted to allow the registering of ``discoveries'' of previously unknown Australian native plants, many of which may have great social and/or economic value. 8. P.V.R. will mean higher costs for the farmer and the consumer and an increased burden on the Australian taxpayer. Your petitioners humbly pray that Parliament recognise the widespread community opposition to P.V.R. and promote alternative incentives for plant breeding in Australia. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 388 citizens). Petitions received. Senator REID(Australian Capital Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the figures released last week which show an increase in the number of unemployed people in Canberra; (b) demands that the Labor Government change its misdirected priorities, namely, its inability to provide the young people of Canberra with real employment opportunities and, in particular, its failure to provide adequate places at the Canberra College of Technical and Further Education Hospitality School; and (c) calls upon the Government to immediately redress this situation. Senator COONEY(Victoria) —Pursuant to standing order 109a, I give notice that, at the giving of notices on the next day of sitting, I shall withdraw Business of the Senate Notices of Motion Nos 1 and 2 standing in my name for three sitting days hence, concerning disallowance of the Nature Conservation (Amendment) Ordinance 1986 and Public Service Board Determination No. 81 of 1986. I seek leave to make a brief statement. Leave granted. Senator COONEY —The Nature Conservation (Amendment) Ordinance provides for the preparation of plans of management for reserved areas in the Australian Capital Territory. The Committee was concerned that the Ordinance did not provide sufficient opportunity for Parliament to oversee the declaration of such areas and making of such plans which can have long term effects. The Committee expressed its concern to the Minister for Territories (Mr Scholes) and he agreed to provide for the tabling and disallowance of plans of management, declarations of reserved areas, and wilderness zones. The Committee thanks the Minister for his undertaking in this matter. The Public Service Board Determination No. 81 was made retrospective for 18 months in order to pay certain allowances to employees. The explanatory statement did not explain the need for such extensive retrospectivity in delegated legislation. The Committee expressed its concern to the Chairman of the Public Service Board, who explained to the Committee's satisfaction why retrospectivity was needed in this case. He also undertook to ensure that, in future, statements would contain proper explanations for lengthy retrospectivity. Such an initiative will greatly facilitate the Committee's scrutiny. The Committee thanks the Board for its assistance in this regard. In keeping with the Committee's usual practice I seek leave to incorporate in Hansard the Committee's correspondence on these two matters. Leave granted. The correspondence read as follows- The Hon. Gordon Scholes, M.P. Minister for Territories Parliament House Canberra A.C.T. 2600 Dear Minister, At its meeting on 13 November 1986, the Committee considered the Nature Conservation (Amendment) Ordinance 1986 (being A.C.T. Ordinance No. 65 of 1986, tabled in the Senate on 23 October 1986). The Committee seeks your comments and advice on the question of parliamentary control of plans of management and declarations of reserved areas for the A.C.T. Under new sub-section 52G of the Principal Ordinance the Minister may revoke a declaration that an area is to be a reserved area under sub-section 51 (1). That revocation is, of course, quite properly made the subject of positive parliamentary oversight. Section 52H provides for tabling and disallowance of the gazetted revocation notice which may not come into operation until the day after the last day on which relevant parliamentary proceedings could have been taken but were not. The Committee notes however, that the actual declaration of a reserve under section 51 does not appear to be subject to any parliamentary procedures. Also, there appears to be no similar parliamentary control over adoption, amendment or revocation of the plans of management referred to under section 52A and 52B. The Committee understands that because of their important environmental nature and far-reaching national implications, analogous declarations and plans are normally subject to tabling and disallowance. This is certainly the case regarding plans of management under the National Parks and Wildlife Conservation Act 1975 (section 12), plans of management under the Fisheries Act 1952 (section 7C), zoning plans for marine parks under the Great Barrier Reef Marine Park Act 1975 (section 75) and modifications or variations to the plan of lay-out of Canberra under the Seat of Government (Administration) Act 1910 (section 12A). The Committee may have overlooked the relevant tabling and disallowance provision. In any event the Committee has been unable to draw any distinction of degree or kind between the plans referred to above, over which Parliament has provided that it shall exercise final control and the plans referred to in the Nature Conservation (Amendment) Ordinance 1986, over which the Parliament may have no control as a result of an Executive decision. The Committee is at present of the view that it would be contrary to principle for A.C.T. plans of management and declarations of reserved areas, and amendments and revocations of them, to be placed beyond the scope of parliamentary control by means of an Ordinance not providing for such control. The Committee is surprised that no such provisions are easily identifiable and acknowledges that its advisers may well have overlooked the provisions providing for such important procedures. The Committee would greatly appreciate your comments and advice on this significant issue. Yours sincerely, Barney Cooney Chairman Senator B. Cooney Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA, A.C.T. 2600 Dear Senator Cooney, Thank you for your letter of 18 November 1986 concerning the A.C.T. Nature Conservation (Amendment) Ordinance 1986. The power under the Nature Conservation Ordinance to declare reserved areas and approve plans of management for them is vested in me as Minister. The amendment in question was intended to ensure that a decision to declare a reserved area, once made, should not be lightly departed from. This is done by enabling either House of the Parliament to disallow the revocation of a declaration. I agree that the initial declaration of a reserve area and the adoption of a management plan for the area are also executive acts of considerable significance. By analogy with modifications to the plan of lay-out of Canberra, under the Seat of Government (Administration) Act 1910, there is a case for these executive decisions also to be subject to Parliamentary scrutiny. Therefore I propose to have the Ordinance amended to extend the power of disallowance to declarations of reserved areas (section 51). I also consider that declarations of wilderness zones (section 52) should be subject to disallowance, as should management plans for reserved areas (sections 52A and 52B). Where I amend or revoke plans under section 52F, my decision will also be subject to Parliamentary scrutiny. I consider it desirable that either House, instead of exercising the power to disallow a plan of management, should be able to recommend amendments of the plan to me, and in that event a plan which I have so amended will be subject to the further scrutiny of Parliament. I trust that the foregoing meets the Committee's concerns. Yours sincerely, GORDON SCHOLES Dr Peter Wilenski Chairman Public Service Board McLachlan Offices BARTON, A.C.T. 2600 Dear Dr Wilenski, At its meeting on 20 November 1986, the Committee considered Public Service Board Determination No. 81 of 1986 (tabled in the Senate on 11 November 1986). The Committee seeks your assistance with one important matter relating to retrospectivity. The Determination is made retrospective to 25 May 1985, a period of almost 18 months. However, there is no explanation in the accompanying Explanatory Statement to explain the need for this retrospectivity which, the Committee notes, is beneficial to Commonwealth employees. It has generally been the practice for many years in Defence Determinations that either the Explanatory Statement or a separate ministerial letter to the Committee, explains why retrospectivity is needed, particularly where retrospectivity of more than six months is involved. In its Twenty-fifth Report (PP 188/1969, page 225) the Committee set out guidelines observed by it in its examination of delegated legislation which is retrospective. Thus, the Committee's legal adviser makes a special examination and report on all instruments which are retrospective because such legislation will prima facie attract the attention of the Committee and be subject to close scrutiny where payment of money is involved. In that Report, the Committee wrote that it ``regards retrospectivity beyond a few months as objectionable. It is recognised, for obvious practical reasons of an admi-nistrative character, that some retrospectivity is inevit-able. The Committee believes that such retrospectivity should be of the shortest period practicable.'' These guidelines have been adopted by the Committee under successive administrations and have been repeated in numerous subsequent reports including the Seventy-seventh and Eightieth Reports (PP 172 and 241/1986). The Committee would be grateful if you could advise why retrospectivity was needed in this particular case. Yours sincerely, Barney Cooney Chairman Senator Barney Cooney Chairman Standing Committee on Regulations and Ordinances The Senate Parliament House CANBERRA ACT 2600 Dear Senator Cooney, I refer to your letter dated 25 November 1986 to Dr Wilenski regarding Public Service Board Determination No. 81 of 1986. You requested advice as to why retro- spectivity was needed in the operation of the Deter- mination as the Explanatory Memorandum was silent on that aspect. The Determination provided an allowance for certain employees of the Royal Australian Mint engaged in asbestos removal work. The allowance was determined following consideration of representations by the Royal Australian Mint that these employees were engaged in work equivalent to that performed by employees in another area in respect of whom the Conciliation and Arbitration Commission had awarded an allowance. The claim raised new issues and the Public Service Board needed to satisfy itself not only of the merits of this particular case but also the way in which it related to the broader framework within which the Board's pay policy operates, namely compliance with the National Wages Case principles. In addition, asbestos and its removal are sensitive industrial and occupational health and safety issues and the subject matter of the claim therefore had general ramifications which needed to be considered. As a consequence of these considerations the Board's examination of the claim took some time. During this period the employees were carrying out the asbestos removal work and in these circumstances the Board believed that prospective payment of the allowance would have been to their disadvantage. The employees concerned are not covered by an award of the Conciliation and Arbitration Commission. As Mr Glenn indicated in his letter to you of 7 October 1986 regarding the Board's determination- making power under section 8B of the Public Service Act, the Board shares the Committee's concern about the potential problems arising where a determination has retrospective effect. However, as recognised by the Committee's Twenty-fifth Report to which you referred in your letter, there are indeed often practical reasons of an administrative character which make a degree of retrospectivity inevitable. For example, increases in rates of allowance are often implemented following an increase awarded by the Conciliation and Arbitration Commission. Such awards frequently have retrospective operation. Other changes flow from agreements negotiated with staff associations. It is quite possible that a retrospective implementation date will form part of a negotiated agreement. In future the Board will ensure that reasons for retrospective operation of determinations are adequately addressed in the accompanying memoranda. Yours sincerely Peter Kennedy Acting Commissioner Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. Industrial democracy and employee participation-policy discussion paper. 2. National Occupational Health and Safety Commission-annual report 1985-86-together with the Auditor-General's Report-pursuant to section 63M of the Audit Act 1901. 3. The Australia-Japan Foundation-annual report 1985-86-pursuant to section 25 of the Australia Japan Foundation Act 1976. 4. Snowy Mountains Engineering Corporation-annual report 1985-86-pursuant to section 52 of the Snowy Mountains Engineering Corporation Act 1970. 5. Housing Loans Insurance Corporation-Annual Report 1985-86-pursuant to section 39 of the Housing Loans Insurance Act 1965. 6. The Defence Force Retirement and Death Benefits Authority-annual report 1985-86-pursuant to sub-section 16 (2) of the Defence Force Retirement and Death Benefits Act 1973. 7. Departmental of Immigration and Ethnic Affairs-annual report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922-together with a report on the operation of the adult migrant education program 1985-86-pursuant to section 12 of the Immigration (Education) Act 1971. 8. Australian Institute of Multicultural Affairs-annual report 1985-86-pursuant to section 63M of the Audit Act 1901. 9. Australian Bicentennial Road Development Program-annual report 1985-86-pursuant to section 27 of the Australian Bicentennial Road Development Trust Fund Act 1982. 10. Department of Health-annual report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922. 11. Health Insurance Commission-annual report 1985-86-together with the Auditor-General's Report-pursuant to sub-section 42 (4) of the Health Insurance Commission Act 1973. 12. Commonwealth Serum Laboratories-annual report 1985-86-pursuant to section 44 of the Commonwealth Serum Laboratories Act 1961. 13. A.C.T. Electricity Authority-annual report 1985-86-pursuant to the sub-section 33 (4) of the Australian Capital Territory Electricity Supply Act 1962. 14. Phosphate Mining Company of Christmas Island Limited-annual report 1985-86. 15. Australian Film Commission-annual report 1985-86-pursuant to section 44 of the Australian Film Commission Act 1975. 16. Australian National Parks and Wildlife Service-annual report 1985-86-pursuant to section 52 of the National Parks and Wildlife Conservation Act 1975. 17. Department of Local Government and Administrative Services-annual report 1985-86-pursuant to sub-section 25 (8) of the Public Service Act 1922. 18. Australian Institute of Sport-annual report 1985-86-together with the Auditor-General's report-pursuant to section 41 of the Australian Institute of Sport Act 1986. 19. The National Standards Commission-annual report 1985-86-pursuant to section 19C of the National Measurement Act 1960. 20. An investigation of the transport of bulk packaged salt-Inter-State Commission Report-pursuant to section 10 of the Inter-State Commission Act 1975. 21. Veterans' Children Education Scheme-pursuant to section 117 of the Veterans' Entitlement Act 1986-together with a brief explanatory statement. 22. Export concessions-Industries Assistance Commission report. Consideration resumed from 18 February. The Bill. Senator DURACK(Western Australia)(10.08) —When the Committee reported progress last night we were discussing, if discussing is the right word, the definition of `associated technology' in clause 4 of the Nuclear Non-Proliferation (Safeguards) Bill. I had been particularly concerned about the situation of private nuclear research by academic research workers in a university, particularly in relation to a matter of great difference between the Government and Opposition, namely, Australia's role in the development of the nuclear fuel cycle, and particularly the enrichment of uranium for peaceful purposes. The Government's policy is very much opposed to that. It has directed that the Australian Atomic Energy Commission, soon to become known as ANSTO, in short, should not pursue enrichment research in Australia or pursue the subject of enrichment with any commercial development in mind. The Opposition has a fundamentally different view from that of the Government about that matter. When we were in government we actively pursued the development of the uranium enrichment industry in Australia and considerable progress was being made in that direction when we went out of government in March 1983. The concern that we in the Opposition have about this legislation is that this Bill, under this Government's policies, may be used to prevent private research in this respect in Australia, either in universities or in companies which may be interested in the future. On our return to government they may wish to resume this development, which is of great economic significance to Australia. Great economic benefit is being denied to Australians by this Government's irrational policy dictated by its loony Left and encouraged by people in this chamber such as Senator Sanders and Senator Vallentine and a few others of that ilk outside the chamber. It is a very important issue that I have raised. I am very pleased that, despite a certain irritation that the Minister for Resources and Energy (Senator Gareth Evans) seemed to feel last night when I raised this matter, he did say very clearly on behalf of the Government that the Government's policy would be to permit this type of research and development activity to take place in Australia, provided it was within the confines that I have mentioned, namely, for peaceful purposes and not in any way a covert means of diversion to purposes such as the development of nuclear weaponry, to which of course the Opposition is totally opposed. I applaud the answer that I received last night, albeit with some difficulty, from Senator Evans. My other concern is that people in that situation, probably in universities-the most likely place where this might occur-should be aware of the possible application of this legislation to them. They should be aware that they should apply for a permit and that the Government will, in accordance with what Senator Evans has said, grant the permit providing it is satisfied that the research is all genuine. We also had the assurance from Senator Evans last night that the Government would not be bureaucratic and would not hold people up, that the administration would be smooth. All these things, hopefully, would be carried out if this matter was put to the test. However, in the light of the answers I received from Senator Evans, I still have some concern. He was somewhat reluctant to give a clear-cut definition of what the Government meant by the wide definition of `associated technology'. He hedged his bets a bit in the answer he gave me on that. It may be that if the Government were to inform universities or people interested in this area in similar terms, they would not be very must assisted in knowing what to do. Apparently the universities have all been advised of this Bill and its application to them. I would be interested in seeing the terms of the Government's advice, the document that has been circulated to them. If such a document is available I would be pleased if Senator Evans would table it, either in this debate or as soon as possible, so we can see just how they have been advised on this matter. It may well be that they should be advised further in the light of last night's statement by Senator Evans in answer to my questions. Senator SANDERS(Tasmania)(10.14) —We have been listening to this particular point of discussion for probably some 45 minutes. What Senator Durack is actually asking would be the equivalent of trying to ask the people framing legislation for motor drivers licences exactly how each licence would be issued. He wants a detailed analysis of how each permit will be issued. There can be no such answer. The only conclusion I can draw from this is that Senator Durack loves to hear the sound of his own voice. Over and over again the Minister has explained this matter. I am afraid that Senator Durack did not bother to examine in Hansard the Minister's explanations, which have been lucid. Senator Durack has been on the same point, hammering away and wasting the time of the Committee. At this time I will not waste the time of the Committee any more except to point out that we have important legislation before us. This is an important piece of legislation-we have other pieces such as plant variety rights. I urge Senator Durack to do some homework so that we can get on with the business of the Senate. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.16) —I am indebted to Senator Sanders for his contribution although I am not sure that it will serve any purpose in calming down Senator Durack. I do not think that I can add a great deal to what I said last night. As far as the definition of `associated technology' is concerned, obviously questions will arise in practice as to whether or not it is applicable to a particular situation. All I can do is repeat that the correspondence that has already gone from the Australian Safeguards Office to the universities-I am afraid I do not have a copy of it with me-was, I am advised, correspondence which spelt out the language of that definition and asked universities and others to whom it was directed to get in touch with the ASO if they thought there was anything in their possession in the nature of this kind of technology, as well as material and equipment, which satisfied the definition. In that case there would be further discussions, and decisions would be made as to whether a permit was required and, if so, in what terms. As I have indicated, as yet there has not been any response to that letter, as far as I am advised, from anyone who thinks that he might come within the realm of the definition. If, as a result of this debate and the further stimulus that Senator Durack has given the issue, there is such a response it will be dealt with sensibly and in accordance with the spirit of the legislation-I assure him and anyone else interested-by the Government. I make the further point which I did not make last night that if anyone is unhappy about the application of the permit requirement to something which that person thinks does not come within the terms of the legislation, or is unhappy in particular if a permit should be refused in relation to something which clearly comes within the terms of the legislation, in either event appeal is available to the Administrative Appeals Tribunal under the terms of this legislation. So this is not just a matter of people being subject to the discretionary whim of the Government; there are appropriate administrative appeals procedures which will enable the issue to be resolved. I do not want to get into a debate on the larger issue of uranium enrichment technology and whether it is appropriate for that to be pursued. I simply make the point, as I have done on other occasions, that the enrichment technology that was being pursued by the Australian Atomic Energy Commission was the centrifugal technology which may still have a continued use in the future notwithstanding the latter day enthusiasm for laser technology of enrichment. Even within the area of centrifugal enrichment technology the evidence seems to be that the Commission's research was lagging a number of years behind comparable research in other countries. For that reason it does not seem likely that there will be any chance of immediate commercial spin-offs, even in the absence of the Government's concern for policy reasons, to which Senator Durack adverts, about Australian participation in this kind of research. That is really a debate for another occasion. This legislation clearly is designed not to inhibit research in any way but simply to ensure that if there is to be any research, and more particularly communication of that research, which is of proliferation significance and sensitivity, because of Australia's international obligations to supervise such matters it will be necessary for it to come within the terms of this regulatory arrangement. That is why the matter comes up. It is not because of any particular desire on our part to pursue other policy objectives through this legislation. On the contrary, the objectives of this Bill are as I have described them. I thank Senator Durack for his acknowledgment that I have answered as best I can the question he raised. Senator DURACK(Western Australia)(10.20) —Again I express my satisfaction with Senator Gareth Evans's approach on the subject last night as well as this morning. I do not think we can take that matter any further. However, I ask that the letter that was sent to all institutions be made available. I think it ought to be tabled or incorporated in Hansard. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.21) —I am happy to do that. Mr Chairman, while I am on my feet and since we are considering the Bill as a whole, it might now be an appropriate point for me to move the amendments standing in the name of the Government. I seek leave to move together the amendments to clauses 22 and 23, the addition of a sub-clause in clause 26 and the further addition of a sub-clause in clause 72. Leave granted. Senator GARETH EVANS —I move: (1) Page 20, clause 22, line 7, leave out ``(1) or''. (2) Page 21, clause 23, at the end of the clause add the following sub-clause: ``(6) Sub-section (1) does not apply to the possession of associated technology by a Commonwealth officer in the course of- (a) the performance of a function or duty, or the exercise of a power, under the Patents Act 1952 or regulations under the Act; or (b) the performance of duties in the Patent Office.''. (3) Page 23, clause 26, at the end of the clause add the following sub-clause: ``(4) Sub-section (1) does not apply to the communication of information by a Commonwealth officer in the course of- (a) the performance of a function or duty, or the exercise of a power, under the Patents Act 1952 or regulations under that Act; or (b) the performance of duties in the Patent Office.''. (4) Page 46, clause 72, at the end of the clause add the following sub-clauses: ``(4) Without limiting the generality of sub-section (1), the Minister may delegate to the Director the Minister's power to grant permits under section 13 or 16 or to grant authorities under section 18. ``(5) If the Minister delegates to the Director the Minister's power to grant permits under section 13 or 16, the following provisions have effect: (a) section 12 applies in relation to any application for a permit that is dealt with by the Director pursuant to the delegation as is paragraph 12 (2) (b) and sub-section 12 (3) were omitted; (b) sections 14 and 15 do not apply in relation to any application for a permit that is dealt with by the Director pursuant to the delegation but the Director- (i) shall not grant a permit under section 13 to the owner or operator of a nuclear facility unless the Director is satisfied that- (A) the person applying for the grant of the permit has provided the Director with all information that the Director has required the person to provide in relation to the application pursuant to paragraph 12 (2) (a); (B) appropriate procedures can be applied at the facility for the implementation of the Australian safeguards system in relation to nuclear material and associated items to be located at the facility; and (C) adequate physical security can be applied to nuclear material and associated items at the facility; (ii) shall not grant a permit under section 13 in relation to nuclear material or an associated item that is to be held otherwise than at a nuclear facility unless the Director is satisfied that the person applying for the grant of the permit has provided the Director with all information that the Director has required the person to provide in relation to the application pursuant to paragraph 12 (2) (a). ``(6) If the Minister delegates to the Director the Minister's power to grant authorities under section 18, the following provisions have effect: (a) section 17 applies in relation to any application for an authority that is dealt with by the Director pursuant to the delegation as if paragraph 17 (2) (b) and sub-section 17 (3) were omitted; (b) sub-section 18 (2) does not apply in relation to an application for an authority that is dealt with by the Director pursuant to the delegation but the Director shall not grant an authority unless the Director is satisfied that the person applying for the grant of the authority has provided the Director with all information that the Director has required the person to provide in relation to the application pursuant to paragraph 17 (2) (a).''. I table the explanatory memorandum relating to those amendments, and simply mention that I believe they are all uncontroversial and, for reference, they either address particular matters of concern raised by the Scrutiny of Bills Committee or deal with a particular question that arose about the exemption of the Patent, Trade Marks and Designs Office from the permit requirement, which again appears to be uncontroversial, or relate to the procedural matter about delegation, which is equally in that category. One further matter is that I seek leave to amend the text of one of those amendments. There, unfortunately, is a misprint. The second amendment, which refers to sub-clause (6) (a) of clause 23, refers in its last line to `regulations under the Act'; the language should read `regulations under that Act'. The reference is to the Patents Act 1952. Leave granted. Senator GARETH EVANS —I commend the amendments to the Senate. Amendments agreed to. The CHAIRMAN —There are four more amendments-three from the Opposition, which I think are all related, and one from the Australian Democrats. Senator DURACK(Western Australia)(10.22) —Mr Chairman, the Opposition amendments to which you have referred have been circulated. I think they are a code in themselves, and I seek leave to move them as such. Leave granted. Senator DURACK —I move: (1) Page 10, after clause 8, insert the following clause in Part I: Act not to apply to visiting allied forces ``8a. (1) This Act does not apply in relation to- (a) ships, aircraft or equipment of a visiting allied force; (b) a member of a visiting allied force acting in accordance with the member's duty; or (c) a member of the Defence Force or a Commonwealth officer associated with a visiting allied force acting in accordance with the member's or the officer's duty. ``(2) In this section, `visiting allied force' means an armed force of a foreign country declared by the Minister, by notice in writing published in the Gazette, to be a visiting allied force for the purposes of this section. ``(3) A certificate, signed by the Minister, certifying that a member of the Defence Force or a Commonwealth officer is or was associated with a visiting allied force or is or was acting in accordance with the member's or the officer's duty is evidence of the facts stated in the certificate. ``(4) Where the Minister considers that it is necessary, for the purpose of preventing, detecting or investigating an offence against a law of the Commonwealth or of a State or Territory, or for the purpose of proceedings in relation to such an offence, that a provision of this Act apply in relation to a person or thing referred to in sub-section (1), the Minister may, by notice in writing published in the Gazette, declare that a provision of this Act so applies to the extent and for the time specified in the notice, and the provision shall apply accordingly.''. (2) Page 28, after sub-clause 40 (1), insert the following sub-clause: ``(1a) Where, at any time before or during the hearing of proceedings before a court in relation to an offence against this Act, there is submitted to the Judge or Magistrate a certificate signed by the Minister certifying that the proceedings involve or may involve matters relating to- (a) ships, aircraft or equipment of a visiting allied force; (b) a member of a visiting allied force; or (c) a member of the Defence Force or a Commonwealth officer associated with a visiting allied force, the Judge or Magistrate shall make orders- (d) that all members of the public be excluded during the proceedings; (e) that no report of the proceedings be published; and (f) prohibiting access, before, during or after the proceedings, to any affidavit, exhibit, information or other document used in the proceedings that is on the file in the court or in the records of the court.''. (3) Page 28, sub-clause 40 (2), after ``sub-section (1)'', insert ``or (1a)''. The Opposition regards the first amendment very seriously indeed. It deals with a matter which I raised in my remarks on the second reading of this Bill. Although I also raised the question of the effect of this Bill on private academic research, as I have said, I have been satisfied that no suitable amendment is possible to cover that question. That is why I have been at some pains to have the Minister express the Government's attitude to the way it will administer that definition of `associated technology'. However, in the case of the other major matter of concern to the Opposition, namely, the way this legislation may affect our defence arrangements, the Opposition believes than an amendment along the lines which I have moved and to which I have referred is desirable and an effective amendment along those lines can be suitably incorporated into this legislation. I am most conscious of the difficulties of this legislation. It is one of the most technically complicated pieces of legislation with which I have had to deal in my time in the Senate, including my time in government. It is complicated because it is dealing with a highly technical scientific subject which has many facets to it. We recently debated the enormously difficult scientific question of the difference between the development of enriched uranium for peaceful purposes as against weaponry. The Bill is difficult and the issues are difficult from a legal point of view. There are all sorts of reasons for this which, the Committee will no doubt be pleased to know, I do not propose to go into. But it is difficult and very complicated. A further complication is the fact that this legislation seeks to give effect in Australian domestic law to a number of treaty obligations in this area. In particular, of course, it seeks to give effect to the Treaty or the Non-Proliferation of Nuclear Weapons itself, the agency agreement that Australia has entered into with the International Atomic Energy Agency and, indeed, all of our bilateral safeguards agreements, as they are called, with countries with which we trade in respect of the export of uranium. In particular, the difficulties which arise in the schedules set out in the back of the Bill have to be enmeshed and given effect to in domestic law. It is quite well known and understood, although it is perhaps not so easily extracted, that those international instruments are concerned only with the question of preventing the diversion of uranium used for peaceful purposes in the nuclear fuel cycle to the development of nuclear weaponry. The technical language which has evolved includes the term `safeguardable material'. `Safeguardable material' has a particular meaning which is understood by the experts, the cognoscenti, the apparatchiks and so on. They understand it is but it is very difficult for other people to understand it. In my view it might be even very difficult for judges to understand if they were ever called upon to interpret this legislation. What this legislation is clearly not intended to deal with is the situation that could arise if an ally of Australia which possesses-and, as far as these international agreements are concerned, quite lawfully possesses-nuclear weapons either sent a warship into Australian waters or brought some nuclear material to this country. I know that one only has to mention this to get a reaction from a lot of people in this place. I can see that Senator Coleman is already looking daggers at me from across the chamber. I know that Senator Vallentine is listening to what I say. It is a wonder that Senator Sanders did not completely explode at even my mentioning this totally unmentionable thing. The fact of the matter is that, as the rest of us in this chamber understand, both Government and Opposition senators, an enormously important matter as far as Australia's defence is concerned is the ANZUS Treaty and the other no doubt less formal but traditional alliances with our other allies, some of which-and I am trying to be as neutral and as unprovocative as I possibly can-do in fact possess nuclear weapons. They have-horror of horrors-ships that carry nuclear weapons. They actually think that they have to cart these weapons around the world on ships. They also have nuclear powered ships and so on. Whether or not some people like it, it happens to be the Government's policy to allow those ships to come to Australia, and indeed to welcome them. It is certainly also the Opposition's policy to do so. But as we well know, a number of people in Australia-some of whom are in this chamber and some of whom I have mentioned-take very active steps to protest about these visits. There is a very small and probably declining element in the Australian community who are prepared perhaps to go to very extreme steps to make their objections to this known and who, I suggest to the Government, would even be prone to taking legal steps to try to prevent this occurring. It seems to me-I would be very interested to hear Senator Gareth Evans's views on this-that we could well have a situation where the interpretation of this legislation could be put in question, for very clear political reasons, by certain people in Australia. If that situation arose I think there would be difficulty. There may well be a difficulty in explaining to a court exactly what is intended by this legislation and by the international instruments to which it gives effect. There seems to be an extraordinary reluctance on the part of some judicial officers these days to give executive government very much of a hearing on certain matters. The Government had a very recent example of that in the New South Wales courts. I am concerned that we should make it clear as daylight that this legislation does not apply to our defence arrangements, particularly our defence arrangements dealing with our nuclear allies. For that reason I have moved the amendment that has been circulated in my name. I do not propose to read it-it speaks for itself anyway-and I hope that I have explained the Opposition's purpose and intention in moving it. One other aspect of the second amendment, which may be more controversial than the first amendment, is that it deals with proceedings before a court relating to an alleged offence under this proposed Act-that is, the offence of possessing or transporting nuclear material-where the court should be closed. Again I know that there is a clause in the legislation which will give the courts powers to have a hearing in camera in relation to proceedings under this legislation. However, my objection to that is that it is giving a discretion to the courts. As I have already said, I am not happy about the way in which that might be exercised by some judicial officers. When all is said and done, these proceedings could take place in a great variety of jurisdictions, from the highest to the lowest. In view of the way in which some judicial officers have been exercising discretions in relation to very sensitive material-until recent years no court would ever have dreamt of questioning the bona fides of an executive order-and in view of the developments in that area, I am not prepared to see these discretions in relation to such sensitive matters left to judges. Therefore, I think it ought to be quite clearly laid down in the legislation in this way. For that reason, I have moved the amendment standing in my name. Senator VALLENTINE(Western Australia)(10.34) —I rise to voice my complete opposition to the amendments suggested by Senator Durack concerning what he euphemistically calls Australia's defence arrangements which would allow forever free entry to nuclear warships coming to Australian ports. He makes nuclear weapons sound almost friendly, harmless, and very welcome in our ports. I remind Senator Durack that nuclear weapons are for fighting nuclear wars. That has very clearly been said by the New Zealand people over and over again who have rejected the entry of nuclear weapons bearing warships into their ports. That is the purpose of building nuclear weapons. Deterrence is a myth and any sensible person knows that. There is no known weapons system in the history of humanity that has not been used eventually. We are playing with the fate of the earth if we continue to allow nuclear weapons to be built and to come into our ports. It is absolute insanity. Senator Durack would like to paint the opponents of nuclear weapons coming into Australian ports as extremists. We are not extremists; we are very reasonable human beings who are concerned about the fate of the future of this planet. We are not prepared to jeopardise the future of this planet and the future of our children by allowing such dangerous weapons to come into our ports. As I said yesterday, neither are we such a small minority group as Senator Durack would like to suggest. It is a growing minority of Australian people, soon to become a majority, who will oppose nuclear weapons coming into our ports. I remind Senator Durack, members of the Opposition and members of the Government that there are millions of Americans who refuse to allow nuclear weapons to go into highly populated American ports. The case of nuclear reactors going into American ports such as New York and San Francisco does not even arise and yet we allow nuclear reactors to come into certain Australian ports, or very close to them in the case of Fremantle. That situation does not even arise in the United States of America. The question about nuclear reactors going into highly populated American ports is not even asked. Nuclear weapons on board United States warships are not welcome either in many American ports. I will give one example only to illustrate that point. For over three years a debate has been raging in New York about the home porting of the USS Iowa, one of the Second World War warships that has been brought out of mothballs and fitted with Tomahawk cruise missiles-a most destabilising nuclear weapons system to be put on board any ship, surface or submarine. The people of New York reject having the USS Iowa home ported in New York because they realise the extreme danger to the city of New York should there be an accident with one of the weapons on board that or any other warship in the harbour of New York. It is total lunacy to allow these weapons to come into our harbours. Environmentally they are extremely dangerous. Accidents do happen. We are stupid in the extreme if we allow our people to be put at risk when the American people in highly populated ports do not allow themselves to be put at a comparable risk. Why on earth should Australians put themselves at that kind of risk? We are concerned not only about the environmental risks however; the major concern of people who oppose the visits of nuclear warships to our ports is a moral one. As well as being concerned about our health, the welfare of our people and our environment, we are concerned about the moral implications of allowing nuclear weapons into our ports. As I have said, nuclear weapons are for fighting nuclear wars, and many Australians are opposed to Australia having any involvement at all in that. Mainly for that reason, I totally object to the Opposition's amendments to this legislation. Senator SANDERS(Tasmania)(10.39) —The Australian Democrats also reject the Opposition's amendments because nuclear disasters respect no nationalities or national boundaries. Why should we exempt some nuclear material coming into our harbours simply because it happens to be American and have safeguards over others? The argument was brought up by Senator Durack that somehow this legislation would affect our defence arrangements. I do not know on what he bases his contention because I doubt very much whether he has had direct communication with the planners in the United States of America on this matter. I have had occasion to write a letter to the Center for Defense Information-CDI-in Washington, DC, which consists of a group of retired admirals, generals and people from other military ranks from the Navy, the Marine Corps and the Army who have joined together in a campaign to eliminate nuclear weapons. They understand that nuclear weapons are not usable in modern war because once a person uses a nuclear weapon, he has lost the war, his country and, perhaps, the earth. They realised that they are not viable weapons. I asked this specific question: What is the strategic or military necessity for nuclear armed and powered ships coming into Australian ports? The answer I received was compiled by Captain James T. Bush, a retired United States Navy captain, who is Associate Director of the Center for Defense Information. He stated: As a naval officer with 25 years experience in naval operations, including service as Executive Officer of two submarines and Commander of the USS Simon Bolivar, a nuclear-powered submarine, I can say with confidence that port visits have nothing to do with training naval forces for combat operations at sea. Port visits are wonderful opportunities for rest, recreation and personal adventures, but they don't contribute to military readiness. I repeat: Rest, recreation and personal adventure. Maybe those sailors would like to see Kings Cross, but it is not necessary militarily or strategically for those nuclear armed and powered ships to enter our harbours. He continued: I would like to add that the U.S. Navy's neither confirm nor deny policy cannot be justified on the basis of denying information to the Soviet Union. The extensive publicly available information about the U.S. Navy's nuclear arsenal plus Soviet intelligence capabilities means that if anyone knows which U.S. ships are likely carrying nuclear weapons, it is the Soviets. The former captain in the United States Navy-and I urge Senator Durack to listen-stated: Australia, like New Zealand, is more than entitled to exercise its right to make its nation a nuclear free zone if it wishes. This is particularly the case when this right can be respected without detriment to the military readiness or national security of any of the parties to the ANZUS treaty. Those are the words of a former captain in the United States Navy. So the denial of the right of passage to nuclear armed and powered ships to our ports will have no strategic impact whatsoever. These amendments are not necessary; in fact, they are harmful. The proposed sub-clause which would close courts during hearings on these matters is particularly abhorrent. What we need is more information on nuclear matters, not less. Therefore, the Australian Democrats will oppose these amendments. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.42) —I will make clear what is the Government's position before the debate proceeds further. The Government's policy on access to Australian ports by ships of allied forces that may or may not contain nuclear weapons is well known. There is no question of the Government accepting any of the reasoning, if it may be so described, of Senator Sanders and Senator Vallentine in their approach to the Opposition's amendments. Senator Sanders and Senator Vallentine seem to assume that without the amendments the legislation, as it presently stands, could somehow be construed as prohibiting or in some way hindering the access of such ships. As a result, Senator Durack's amendments, which are designed to remove any such hindrance are, for that reason, opposed by Senator Vallentine and Senator Sanders. The starting point for the Government's approach to this is quite different. We accept, as I say, the propriety of such ship visits occurring. It is a necessary incident of an alliance relationship. Whatever we may think about the desirability of removing nuclear weapons from the face of the globe, which is an aspiration that we, of course, share with Senator Sanders and Senator Vallentine, the present state of the nuclear balance is such that that is obviously not possible at the moment. While we are in the process of achieving that desirable millennium, there is, in the Government's view, a need for nuclear deterrence and that means necessarily access to nuclear weapons and the carriage of nuclear weapons by allied naval forces and, in some instances, military aircraft as well. That is the starting point. Our approach to this legislation is that there is no need for Senator Durack's amendments to immunise allied forces from the operation of the legislation because they are already immunised from its application by virtue of the common law doctrine of sovereign immunity. There is simply no question of this legislation being applicable to a visiting allied force, and that threshold objection could and would be taken right at the outset of any court proceedings that might be attempted to be set by anyone who wanted to use this legislation, as Senator Durack indicated might conceivably occur, to put barriers in the way of the visits of such forces. If such litigation were to be initiated, either in civil or criminal jurisdiction, the procedural objection could readily be taken with a certain prospect of success. It is not necessary to get into the question of closing courts in order that the nature of the technology or whatever involved might be the subject of scrutiny behind closed doors. Without needing to do any of those things a straightforward procedural objection could be taken which would undoubtedly be upheld. Furthermore, so far as individual military personnel are concerned, as distinct from the allied country itself, they are already immune from prosecution for actions pursuant to their duties by virtue of the Defence (Visiting Forces) Act 1963. So that combination-the common law doctrine plus that explicit statutory protection-in the circumstances of the operation of this legislation we believe is sufficient not to require any explicit amendments of the kind that Senator Durack is proposing. I might say that this issue was considered in very close detail in the course of the preparation of this Bill, and a lot of consultation occurred between my Department, the Department of Foreign Affairs, the Department of Defence and the Attorney-General's Department in order that there might be agreement on this particular matter, because there is no doubt that we share the views that have been expressed by Senator Durack as to what ought to be the case so far as the application of this legislation is concerned. We were absolutely ad idem on that; it is just a question of whether or not there is any need to go further. If we do go further and try to put it in legislative form in circumstances where we are doing no more than, in a quite redundant way, dealing with a situation that will not in practice arise, other problems do show up. The certificate procedure that Senator Durack's amendment envisages is clearly premised on the assumption that any visiting allied force or ship may well be nuclear armed. For us to issue a certificate or to apply the gazettal provision in the way that this amendment envisages would be no doubt construed, in some quarters at least, as an acknowledgment or an assertion by the Australian Government that the ship or task group in question was in fact nuclear armed; yet, of course, under the `no confirm or deny' policy no such assumption can be made and certainly the Government does not want to get itself into a position of doing anything which could be construed as drawing conclusions which are inconsistent with that `no confirm or deny' approach of our allies. Again, there is a further problem-perhaps it is a minor one-in that the exemption for members of the Australian defence forces and Commonwealth officers associated with a visiting allied force creates perhaps in some people's minds the inference that Australian personnel may well be in possession or control of, or have access to, nuclear material and technology of visiting forces and in some way be thus, albeit indirectly, involved in actions which are manifestly contrary to this nation's, this Government's, policy of not ourselves having anything to do with nuclear weaponry. So we get into the sort of jungle of inferences being drawn. We get into the further problems that have already been adverted to about closing courts and the basic issues of principle that are involved whenever one goes down the particular path of closing courts to public access. I do not deny that there are circumstances where such closures are necessary, but this is not one of them, by reason, I repeat, of the application of the common law doctrine of sovereign immunity, which we are all absolutely satisfied, having had a careful look at it and taken the best available advice, would apply as a threshold objection to any possible attempt to make this legislation applicable in the circumstances to which Senator Durack referred. In those circumstances-and not for any of the reasons, with the utmost respect, advanced by Senator Sanders and Senator Vallentine-the Government does not accept the Opposition's amendments. Senator JESSOP(South Australia)(10.50) —I wish to comment on the safety of nuclear armed ships in port compared with the safety of conventionally armed ships. I have made a few inquiries about this matter and discussed it with ballistic experts. I understand that if a ship is armed with nuclear weapons those weapons are not attached to the trigger mechanism which is required to make that weapon a dangerous ha-zard. The trigger mechanism is not attached until the extremely unlikely event of that particular weapon being used in active warfare. On the other hand, the conventionally armed ship is far more hazardous because, when exposed to fire or accidental explosion, those weapons can explode. But that is not so with respect to nuclear armed ships. I thought that I would make that comment because some of the arguments used on this topic are somewhat fallacious when confronted with advice from ballistic experts. Senator VALLENTINE(Western Australia)(10.52) —I would like to correct that. I have never said that nuclear weapons are likely to accidentally explode; let me make that clear. I have said that they are dangerous, but have never said that they would accidentally explode. I agree with Senator Jessop's point that they are not triggered for explosion, but they are subject, as are conventional weapons, to fire. They are subject to fire and to implosion if the vessels are rammed, if there is a collision, and then the radioactive substances would leak out. Is Senator Jessop so stupid as to suggest that that would be less dangerous than a fire from a conventional weapon? Maybe Senator Jessop does not understand the qualitative difference between conventional weaponry and nuclear weaponry. The results of an accident with a nuclear weapon by fire or by collision would be absolutely catastrophic in any city. This is the very reason why the citizens of New York and San Francisco will not allow nuclear weapons to go into their harbours. There is a qualitative difference, which perhaps some Opposition senators do not understand, in the kinds of results that would occur if there were a fire on board ships carrying nuclear weapons and the nuclear weapons were ignited. I am not saying that they would explode accidentally; I have never said that and I do not like the inference drawn by Senator Jessop. That is a misrepresentation of the point. I have never said that they would accidentally explode, but I do say that, if they were to catch fire or to be damaged by collision, radioactive substances would leak out and cause contamination such as would never result from any kind of conventional weapon fire. Senator MacGIBBON(Queensland)(10.54) —I do not wish to go into a debate on nuclear weapons technology, particularly with such an uninformed audience as we have on the other side and among the Australian Democrats at the moment, but some outrageously ignorant statements need to be corrected for the public record. Senator Sanders —What would you know about this? Senator MacGIBBON —A hell of a lot more than you do, Senator Sanders. Current generation nuclear weapons possessed by the United States and by the Western powers are infinitely safer than they were a generation ago. There have been enormous advances in the safety inherent in the storage and transport of those weapons. In the early 1960s when an American Strategic Air Command aircraft crashed near Malaga in Spain the clean up program ran for years. It involved the removal of soil from the Spanish countryside as a consequence of radiation from the crash of that aircraft with nuclear weapons on board. Such a thing cannot happen today. Despite what Senator Vallentine says, one can burn nuclear bombs and nuclear missiles and not have a problem. The design of the casing is so good that those disasters are now avoided. As Senator Jessop said, they do not explode accidentally. I would be much more concerned about having a ship like the USS Missouri, if I were concerned at all. I am prepared to accept that risk because it is so low as to be minimal, but one is much more at risk having a conventionally armed battleship tied up in Sydney with its load of conventional high explosives than one is with a modern United States warship with nuclear weapons on board. As for all this claptrap about ships in American harbours, I was in San Francisco last month. The nuclear powered aircraft carrier USS Enterprise is in dry dock in San Francisco at present. In San Francisco harbour there are nuclear capable cruisers and destroyers. Their weapons are on board and there is no objection from the council or good citizens of San Francisco-which, after San Diego, is probably the second biggest United States navy port on the West Coast. I think that the Enterprise probably is disarmed with respect to nuclear weapons while it is in dry dock, but I do not think the weapons would be terribly far away. Let us have enough of this fear tactic and preying on the ignorance of the Australian people. Let us go into a few facts in this debate. Senator SANDERS(Tasmania)(10.56) —I will not delay the Committee for very long, but would like to point out that all these impossible things were said about Windscale-it was impossible that there would ever be a disaster there. It was a billion to one chance that there would ever be the Three Mile Island disaster. It was a billion to one chance that there would ever be the Chernobyl disaster. We are always told that these things are impossible, and when they happen it is said: `Oh well, these things just happen'. It turns out that the most likely form of accident which could happen anywhere with a nuclear weapon is not the detonation of the bomb itself but the detonation of the high explosive detonator, which, after all, is subject to all the difficulties of high explosives. If the detonator exploded the bomb would not, there would be no sustainable chain reaction, but the plutonium in the bomb would be widely dispersed into the environment. This is a finite danger. Another danger which has not been mentioned is the human element. These things have a number of failsafe devices but, given the stress that military personnel are sometimes under, the high use of alcohol and of dope in the military, which is still happening today unfortunately, it is conceivable with a smaller weapon that an irate, misguided or unhinged person could, perhaps with someone else and for spite, detonate a weapon. It is possible; it is not impossible. This is another reason for keeping these weapons away from our shores. Senator MacGIBBON(Queensland)(10.58) —I did talk about the technology involved in weapons, but there has been as much research put into human behavioural actions and means of securing command and control of the weapons systems as has gone into the technology. People who handle nuclear weapons are very rigorously screened from a personality point of view; they undergo very rigorous training. There are all sorts of things like permissive active links which require complex and duplicated chains of command before the weapons can be detonated, let alone released. To go down that path is to show one's ignorance of contemporary nuclear technology. I come to a point that is very dear to the hearts of the Australian Democrats and the Australian Labor Party-that is, the comprehensive test ban treaty; the belief that if we ban the testing of nuclear weapons, which is attractive to a lot of us in many ways, somehow or other we will be safer. The need or ability to test nuclear weapons has resulted-- Senator Gareth Evans —On a point of order, Madam Temporary Chair: I do not mind Senator MacGibbon having a word or two on the subject of the test ban treaty, but I suspect that in doing so he will stimulate another debate in this place. This point is of exceedingly marginal relevance to the Bill and the amendment now before us. I ask you to draw his attention to the question of relevance. Senator MacGIBBON —I hope that I have not opened a Pandora's box on this, but quite simply the ability to test new generations of weapons has resulted in the far safer storage of those weapons than we have had. The TEMPORARY CHAIRMAN(Senator Giles) —I suggest that the honourable senator is straying a little wide of the matter under discussion, which is the set of amendments before us. I draw that fact to the attention of the chamber generally. I am sure that there will be an opportunity to discuss the question of a nuclear test ban treaty on some other occasion. Senator VALLENTINE(Western Australia)(11.02) —I must make another point about a matter that Senator MacGibbon raised, not about the nuclear test ban treaty but about the personnel involved in handling the weapons. It is very important that this matter be addressed, even if briefly. Ex-Naval Commander Michael Lynch, who was in the Royal Australian Navy for 20 years and for 2 1/2 years was in charge of naval visits to Western Australia before his retirement, had a great deal to do with the people who came off the submarines and other nuclear ships. He said that the more he saw of these people the more he became concerned about their mental welfare. This applied particularly to those who came off the nuclear submarines. They had been at sea, under water, for something like 60 days or more and he said that when they came off those ships they were like walking zombies. They had their five to seven days leave in the port and when they got back on their ship having had, as Senator Sanders said earlier, their rest, recreation and other adventures, they were in an even worse state. Commander Lynch was extremely worried about the mental state of these people who were controlling nuclear weapons in the submarines. He had a great deal of experience and he was doing his job as a loyal member of the Royal Australian Navy, but that was one of the things that forced him to have less and less confidence in the visits of these ships, serving either our welfare or the welfare of any people anywhere. He was extremely concerned about the mental and physical well-being of those people. Also, there have been studies done in the United States of America on the personnel serving at the bottoms of the missile silos-people who are under an extreme amount of pressure. These personnel have to change regularly because they are found to be on drugs and highly involved in alcohol consumption because of the enormous pressure which they know they face day by day. If the orders come through to launch nuclear weapons those people must ultimately make the decision whether to follow the orders or not. They are under extreme pressure, and that kind of pressure makes people crack. I doubt very much the statement that Senator MacGibbon made about the sanity of the people who are involved. The pressures that they serve under are just too great for them to remain sane even if they go in having had all sorts of psychological tests. I do not have any confidence whatever in the people who are controlling the nuclear weapons, either on land or at sea. Senator MacGIBBON(Queensland)(11.05) —For the benefit of the Manager of Government Business (Senator Gareth Evans), I undertake to leave this chamber after I have made this point. The TEMPORARY CHAIRMAN(Senator Giles) —Senator MacGibbon, I have been fairly lenient in allowing this line of debate to continue. I suggest that we return to the amendment before the Committee. I do not see any point in allowing this particular line of debate to be further proceeded with. Senator Durack —I take a point of order, Madam Temporary Chair. I would like to speak to your ruling. The fact is that you have allowed this matter to be introduced and fully debated by Senator Vallentine. In the circumstances of your having allowed that to be a relevant matter, you are now inhibiting Senator MacGibbon from answering the point. I believe that Senator MacGibbon should be permitted to speak again in this debate and answer the point that you have allowed to be made. Senator Coleman —Madam Temporary Chairman, further to that point of order, could I just make the point that Senator MacGibbon introduced this subject into the debate and was interjected on by Senator Sanders and Senator Vallentine, who then took it upon herself to get up and exacerbate the situation which was developing. I just suggest that the matter has absolutely nothing to do with the Bill before us at the moment and nothing to do with the amendments. Senator MacGibbon does not require additional time to put his case. May we now get back to the Bill and pass it without amendment? Senator MacGIBBON —By any reasonable standards I am entitled to answer a fallacious argument and a misrepresentation of a point of view-- The TEMPORARY CHAIRMAN —I agree, but I and, I believe, the Committee would be grateful if you would be brief and keep the matter relevant to the amendments before us. Senator MacGIBBON —Thank you, Madam Temporary Chairman. I will be brief, succinct and relevant. I want to deal with this allegation about personality aberration in servicemen responsible for nuclear weapons in the United States Navy. There is random drug testing of every member of the USN, from the Chief of Naval Operations down to the lowest sailor. The drug problem no longer exists in that Navy the way it did 20 years ago. Furthermore, the United States Navy is a dry navy. Not only is it dry at sea, but also it is now almost completely dry on land. It is a gross peddling of Soviet disinformation to raise concern in the community by saying that the people who look after nuclear weapons are as irresponsible as Senators Vallentine and Sanders. Senator SANDERS(Tasmania)(11.07) —I am not going to respond to Senator MacGibbon's personal abuse but I have some points I wish to contribute briefly. The TEMPORARY CHAIRMAN —Senator Sanders, you may do so if what you have to say is relevant to the debate. Senator SANDERS —Madam Temporary Chairman, it is relevant to the amendment. It concerns the passage of nuclear powered and armed ships. I was talking earlier about the dangers of weapons exploding. I have a passage here from a United States Navy evaluation. A 1981 Pacific Fleet instruction states: Detonation of high explosive components of a nuclear weapon, in addition to exposing personnel to blast, thermal and toxic gas effects, may spread radioactive material, thereby contaminating casualties and the incident/accident area. This matter concerns the United States Navy and it should concern us. The hazard which could be posed by nuclear weapons accidents of this type is outlined in the Defense Nuclear Agency's Nuclear Weapons Accident Response Procedures Manual, which states: There is a very real possibility of radioactive conta-mination at the accident scene, and extending many miles downwind. The risk is real. Senator DURACK(Western Australia)(11.08) —I want to return to the mainstream argument on this matter. I do not agree with Senator Coleman; I believe that the debate that has taken place between Senator Vallentine, Senator MacGibbon and others has been totally relevant to the matter, but it is not the mainstream element in the amendment. The amendment inserts in the legislation a provision which makes it quite clear that this Bill and all the international instruments with which it deals will not apply to our defence arrangements and in particular to those arrangements with allies who are nuclear armed. As those allies do not wish to confirm or deny that nuclear arms are being carried on their warships or on their aircraft when they come into Australia, this Bill could potentially have a very serious effect on those defence arrangements. That is why I wanted the point made clearly in the legislation itself that this is not the case. I want it to be clear that the legislation does not apply to that situation, that it cannot be successfully argued that it could apply. I am pleased that Senator Evans has acknowledged on behalf of the Government that that is the case. Not only is it not intended that the legislation should apply to those defence arrangements, but also as a matter of law it will not apply to them. The Minister quoted some legal argument to that effect. I am in agreement with the legal arguments that Senator Evans has advanced. I have worked in courts and watched their processes for a long time and in recent years have done so from the vantage point of this place. I have seen a whole lot of legal doctrines which I thought were pretty secure go by the board both at the lowest and highest levels of the courts. I have already made some reference to this. Although I cannot say that I feel nervous that such a thing might happen in this case the fact is, as I said earlier, that this is a very complicated piece of legislation. One does not know in what courts it will arise or the quality of the judge or magistrate who will be asked to interpret it. One thing that is perfectly clear from this debate-it is crystal clear-is that the people who are so vehemently opposed to our present defence arrangements, like Senator Vallentine and Senator Sanders, represent a small group in the community which is hell bent on taking every step possible to upset these arrangements. If such people cannot upset the arrangements by the ordinary process of parliamentary government and so on they are likely to do so through other means such as through the courts. They will take every step they can through the legal system. I am concerned that they may well succeed at least to some extent. The purpose of my amendment is to make it absolutely crystal clear and beyond doubt to any judicial officer who may be called upon to interpret this legislation that as a matter of law it does not apply to defence arrangements-moreover it was never intended to apply to them. The fact that the Government, through Senator Evans, has confirmed all that, is some comfort for the future and hopefully will add to the strength of the otherwise powerful legal arguments that would be advanced in courts by the Government if the eventuality that I fear did occur. I still believe that it would be wise for this Parliament to make its own view crystal clear. That is why I have moved the amendments on behalf of the Opposition and that is why I propose to persist with them even though the Government does not think it is necessary. Question put: That the amendments (Senator Durack's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 37 —— Majority . . . . . . . . . 8 —— Alston, R. K. R. Knowles, S. C. Archer, B. R. Lewis, A. W. R. Baume, Michael MacGibbon, D. J. Bjelke-Petersen, F. I. Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Reid, M. E. Carrick, Sir John Sheil, G. (Teller)Collard, S. J. Short, J. R. Crichton-Brown, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Kilgariff, B. F. Aulich, T. McKiernan, J. P. Black, J. R. Macklin, M. J. Bolkus, N. Maguire, G. R. Childs, B. K. Mason, C. V. J. Coates, J. Morris, J. Coleman, R. N. Powell, J. F. Colston, M. A. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Elstob, R. C. Ryan, S. M. Evans, Gareth Sanders, N. K. Foreman, D. J. Sibraa, K. W. Gietzelt, A. T. Siddons, J. R. Giles, P. J. Vallentine, J. Grimes, D. J. Vigor, D. B. Haines, J. West, S. M. Jones, G. N. (Teller) Zakharov, A. O. McIntosh, D. J. Messner, A. J. Cook, P. F. S. Chaney, F. M. Tate, M. C. Baume, Peter Button, J. N. Newman, J. M. Walsh, P. A. Question so resolved in the negative. Senator SANDERS(Tasmania)(11.19) —We circulated two amendments. One has been rescinded. I do not know whether any copies of it are floating around the chamber but I would like honourable senators to destroy the old amendment, which was numbered A28723S at the top. The new amendment basically is to establish a mechanism for a report to be issued yearly on the location and status of Australian fissionable material in all its stages. This has not been done before, but it has not been because the Australian Safeguards Office, or indeed the Government, has been trying to hide anything; it is just that, as I understand it, there was no mechanism to do it. I realised that there was a necessity for this when, as I have mentioned previously in this chamber, I discovered that Australian uranium was going to Finland by way of France where it was converted into uranium hexafluoride, Russia where it was enriched and then Europe again for conversion to fuel rods. It finally ended up in Finland. No one really tried to hide this information from me, but there was no way for me to get it either without asking a specific question of the Minister. This amendment is to establish a mechanism whereby the location of all Australian yellowcake and uranium can be traced. I will not take this any further. This amendment will be welcomed by all of us who are concerned over the use, and certainly the end uses, of Australian uranium. I hereby move the amendment and recommend it to the Committee. I move: Page 32, clause 51, after subclause (1) insert the following subclauses: ``(1A) A report shall include the following information in respect of the period to which the report relates: (a) for all nuclear material and associated items of Australian origin transferred from Australia to any foreign jurisdiction or between foreign jurisdictions: (i) the total quantities in each stage of the nuclear fuel cycle; and (ii) the intended end-use; of the nuclear material and the items transferred to each jurisdiction; (b) the quantities, categories and intended end-use of all nuclear material and associated items within Australia; and (c) any unreconciled differences in quantities of: (i) nuclear material of Australian origin, wherever situated; or (ii) nuclear material within Australia, regardless of origin; and an explanation of those differences. ``(1B) In subsection (1A), `foreign jurisdiction' means a foreign country or the European Atomic Energy Community.'' The CHAIRMAN —Is the Committee familiar with the amendment which is actually being moved? It is an amendment to clause 51. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.21) — The Government will accept this amendment. It has been the subject of considerable discussion between us and Senator Sanders. The original draft proposed by Senator Sanders has been modified in the course of that discussion to make it workable in practice and technically such that it will stand up to close scrutiny. The kind of reporting that is here envisaged through the Australian Safeguards Office is that which I guess the Safeguards Office would have been doing anyway, but this does make it explicit, puts it out on the public record and is clearly in conformity with both the spirit and the actual letter of the rest of the legislation. Under those circumstances the Government will happily accept it. Senator DURACK(Western Australia)(11.22) —Apparently the amendment with which we are dealing is not the amendment which the Australian Democrats circulated some time ago; it is a separate bit of paper that has been floating around in the last day or so. Is that the position? The CHAIRMAN —It is an unnumbered sheet of paper. The Parliamentary Counsel's attention will be drawn to that again. It starts with the words `Page 32, clause 51', inserting two sub-clauses. Senator DURACK —There is a fundamental difference between this particular amendment and the one which was circulated by the Democrats in this chamber and which has been in our possession for some time as the Democrats' amendment. With the assurance that the Democrats are now moving a fundamentally different amendment from the one that they circulated and it has been watered down, the Opposition will not oppose it. We were certainly strongly opposed to the first amendment of Senator Sanders. It proposed what would have been an impossible task for the Australian Safeguards Office and had other undesirable features, as one comes to expect from Senator Sanders and the Democrats. Seeing that they have been brought into line, presumably by the Government, and the thing is now in reasonable shape, we will not oppose it. I say simply that the Opposition would have preferred to have left the legislation on this subject as it was. With this legislation we are setting up a body of high standing, which indeed our Safeguards Office has been; we are giving it statutory authority; and we are upgrading the position of the Director. I thought we could have left it as the Government's Bill originally provided-that it would give a report. I thought we could have trusted it to give a report in perfectly suitable terms. If the Government now wants to have some more detail inserted in the terms of this amendment, so be it; that is for it to decide. We will not oppose it. Senator SANDERS(Tasmania)(11.24) —I point out that there really is very little difference between the old proposed amendment and the new one. I am afraid that Senator Durack just used this as a vehicle for some gratuitous abuse. If he would take the time, with his fine legal brain, to analyse the two proposed amendments I think he would find that they are in fact quite similar. Amendment agreed to. Bill, as amended, agreed to. Bill reported with amendments; report adopted. Bill (on motion by Senator Gareth Evans) read a third time. Debate resumed from 1 December, on motion by Senator Walsh: That the Bill be now read a second time. Senator COLLARD(Queensland-Leader of the National Party of Australia)(11.26) —I rather thought that the debate on the Plant Variety Rights Bill 1986 would be a little flat after the passions that have been aroused, particularly in the Committee stage, by the Nuclear Non-Proliferation (Safeguards) Bill 1986 but, looking at the list of speakers on this Bill, I rather suspect that some passions might be aroused before we get to the end of it. This Bill has been around for some considerable time, but those on our side of the House and those now fortuitously on the Government side of the House are in agreement that there is much necessity for a plant variety rights Bill or, as most speakers will refer to it throughout the debate, a PVR Bill. First of all, the main reason is to stimulate breeding efforts in Australia and to encourage the development of new varieties of plants for our domestic industries and for our exports. There is an added quid pro quo to that, and that is the added benefit for Australian farmers and horticulturalists in that, with the legislation, they will have access to many of the varieties which are being developed overseas but to which they would not normally have access without this legislation. The PVR scheme would be similar in many respects to the existing rights which are granted under copyright and industrial patents legislation. In this instance, however, built into the legislation are particular provisions for the protection of food supply to the consumers. Plant breeding is an expensive business, as is any business which has a research and development scheme set up. It is felt, and it has been felt by some of us for some considerable time, that to encourage people to partake of this expensive research and development in plant breeding they should be able to recoup some of the high development costs-in other words, reap the benefits of their initiative and their work, the same as anybody in industry is able to do. We believe that the lack of PVR has held back the development of better plants and horticulture in Australia in the last few years. We also think it is very necessary if we are to maintain our high level of productivity and competitiveness. When other countries have it but we do not we are up against a major problem in the international market, and that has been debated many times in both Houses of this Parliament. To compete and maintain our competitive advantages, such as we have left to us, we have to continue to develop new strains. It must be recognised, and it will undoubtedly be borne out in this debate, that some sectors of the community are quite philosophically opposed to the concept of private ownership of plant material. Be that as it may, I still hold to the fact that it is very necessary. If this step is not taken, better strains will not be developed. We will be left behind, as indeed, we are being left behind in the world scene. This Bill will allow people, whether foreign or Australian, to register as property distinct varieties of plants that they have developed. The Bill sets up an office within the Federal Department of Primary Industry for registering varieties. An advisory panel will oversee the whole PVR network. It is interesting, as I have just indicated, that this proposal has not come up in the last few weeks. I think as far back as 1960 it was first mooted that we needed PVR in Australia. In 1976 an Industries Assistance Commission report on rural research advocated PVR. In 1979 my colleague Peter Nixon, the then Minister for Primary Industry, drafted the first PVR Bill. In 1981 he introduced the draft Bill into the House of Representatives. That legislation was passed. Many of the then Australian Labor Party Opposition members spoke against it. But when it came to the Senate, the Australian Labor Party and the Australian Democrats sent it to the Senate Standing Committee on National Resources. That Committee reported in 1984. It recommended that we should proceed but it proposed what it said were about 22 improvements on the original Bill. Interestingly, in 1985 the IAC report on the apple and pear industries advocated PVR. In 1986 the IAC report on the vegetable industry also advocated PVR. Also in 1986, as a result of the Senate Standing Committee report, the current Minister for Primary Industry, Mr Kerin, gave Professor Lazenby a brief to look at PVR in all its aspects. His report recommended unrestricted PVR legislation. That is a brief chronology of the events and that is where we are at this point. New Zealand has had PVR legislation for 12 years. In that time there has been an increase of 500 per cent in available plant varieties. New Zealand has also developed a $40m a year export industry in pasture and crop seeds. As I indicated, this PVR legislation could have been in this House four years ago and passed if it had not been for the obstruction of the then Labor Party Opposition and the Australian Democrats in this place. At least 23 countries, including Sweden, Hungary, Czechoslovakia and the Union of Soviet Socialist Republics, now have PVR legislation. As I indicated, PVR will give some relief to our primary producers who are at present under the twin assault of corrupt world prices and rising costs at home. I have indicated in many debates-indeed, I did so yesterday-the effect that interest rates are having on business and, of course, farming is a major business. This is not to mention the indexation of the fuel excise, the fringe benefits tax and all of those other costs that have been added to the rural sector by this Government. So about the only light on the horizon is this PVR legislation which will at least let primary producers develop new strains of high yield seeds. Of course, the main opponents of PVR have indicated, quite rightly, that the European Parliament passed a resolution expressing concern that PVR may give control over genetic resources to multinational corporations. Significantly, the European Parliament did not at any time substantiate those claims, nor have the opponents of the Australian Bill. I was rather bemused when we thought that this legislation would come into the Senate last year to read a circulation called the Primary Industry Newsletter. An article in the 24 November 1986 edition of this document numbered 1031 was headed `Opposition backs Government'. The document stated: In a last-minute change of heart, the federal Opposition last week decided to support the Government legislation to introduce plant variety rights in Australia. Until the last minute, it had seemed certain that the coalition parties would stick to their stand against the legislation. How anybody could deduce that at any time since this change was first mooted over 20 years ago has got me beat. But there it was. Some person by the name of Kenneth Randall, who puts out the Primary Industry Newsletter, has got the bull by the horns which, I might add, is not unusual for the Press, as we have seen in the last few days. If ever anything was the direct opposite of what was actually the case, it is that article in this rural industry newsletter. I just draw to the attention of anybody who is interested in this Bill that never at any stage have the Liberal and National parties opposed this legislation. Indeed, because the legislation was so long in coming and has had to run the gauntlet of a Senate committee, my colleague Senator Hill introduced a private member's Bill in 1985 supporting PVR. I point out that that Primary Industry Newsletter is completely wrong. We have consistently supported PVR from the outset. Indeed, as I said, it was my colleague the Hon. Peter Nixon who introduced the first legislation into the House of Representatives. Senator Powell was kind enough to give my office a whole heap of amendments that the Australian Democrats will be moving to this legislation. Included in this list was a pious amendment to the second reading motion and others that will be dealt with at the Committee stage. It is the opinion of my colleague the Hon. Ralph Hunt and me that this legislation has been put off for far too long. Indeed, I point out that as there is no dissension between the Government and the Opposition this legislation could have been quite adequately dealt with and passed last year had not the Democrats indicated that they were going to filibuster and bring in a whole host of amendments. If one looks at the speakers list, one will see that there is certainly going to be a filibuster on issues in respect of which both the Opposition and the Government are in agreement. We will not be supporting any of the amendments moved by the Australian Democrats for the pure and simple reason that we believe this Bill has been around long enough. Members of the public have had the opportunity to make an input into many forums. Professor Lazenby and the Senate Standing Committee have reported to the Parliament. We believe that the best thing we can do for the horticulturalists and plant breeders in Australia is to get this legislation through without any delay-without one or two amendments being carried, having to go back to the House of Representatives and then coming back to the Senate again. We support the Bill. We will not be supporting any of the amendments. Senator POWELL(Victoria)(11.37) —In entering this debate on the Plant Variety Rights Bill 1986 I state at the outset the Australian Democrats' continuing total and unequivocal opposition to this most damaging piece of legislation. I also point out that we are not alone in our opposition; the people who join us are not by any means only people who live in urban Australia. In fact, just yesterday in contemplation of this legislation coming before the Senate, several persons from rural Australia, ranging from Western Victoria to Tasmania to southern New South Wales, contacted me and expressed the view that there was considerable concern in their local areas. These representatives of the media were commenting on debates that have taken place in local regional media. I point in particular to an editorial in the Wimmera Mail Times, in the heartland of the wheat belt of Victoria, just two weeks ago. Along with those rural people who have expressed concern-concern that we share-are groups such as the Australian Conservation Foundation, the Australian Federation of Consumer Organisations, the Australian Council for Overseas Aid, a range of action groups formed at local levels in regional, urban and rural areas, Friends of the Earth, the Australian Council of Churches, and this week the Uniting Church in Victoria's Social Justice Committee. There is a whole host of others. So it is not just the Australian Democrats who are concerned about this and it is important that these concerns be voiced. Once again the Government has let its obsession with economic matters and in particular its subservience to foreign interests override the responsibilities which it has, or should have, to Australia's farmers, to our small producers and to the overriding ethical and environmental issues in Australian agriculture. Among the claims that the Minister for Primary Industry (Mr Kerin) made in his second reading speech are the claims that plant variety rights will encourage the development of new varieties for our domestic industries and for export, enable Australia to compete more effectively on world markets, and provide improved access to new varieties. When we look at the evidence of two or three decades of experience with this type of legislation in other countries, we see that the Minister's claims are not worth the paper that they are written on. Indeed, when we look at the current situation in Australia concerning vegetable and plant exports and our access to new varieties, we see no justification for plant variety rights. Surely we should be drawing on the experience from overseas. When this type of legislation was introduced in Britain, Europe and in North America, without exception in a very short time small seed companies which, like those we have in Australia, had lobbied for legislation, were progressively taken over, in many cases, first, by larger concerns at local levels in their own countries and, second, by the multinational conglomerates that dominate this industry internationally, concentrating their marketing strategies on a regional basis and, therefore, reducing effective competition in the oligopoly situation. Since 1970, 839 seed companies, mostly in Europe and North America, have been bought by international corporations such as Shell. This area of concern will be addressed more deeply by one of my colleagues later in the debate. But when the Minister speaks in his second reading speech of this increased competition he is really saying that Australia will see massive takeover competition for the small seed companies, firstly, perhaps, by larger Australian companies and, secondly, by foreign corporations; and then those companies will comprise a group of about 20 or so major companies which will control the market-companies such as Elders IXL Ltd, Continental Grain and Cargill from the United States of America and the agrichemical and petrochemical companies such as Union Carbide, Ciba-Geigy, Sandos and the big Royal Dutch Shell. Up until now these companies have been able to control and monopolise the market by producing hybrids-a de facto form of patenting. When this legislation is passed they will simply have another string to their bow. The view that Australian breeders and farmers are denied access to new overseas varieties has long been denied by many people in this country. One of the leading plant breeders in Australia, Dr John Gladstone, who is Western Australia's principal plant breeder, has long been on record, and continues to be on record, on this score. At the moment growers and small nurseries that wish to obtain varieties from overseas gain access through a range of services from institutions such as State departments of agriculture, the Commonwealth Scientific and Indus- trial Research Organisation, universities and, in many cases, private companies. I was contacted this week by a very prominent member of the stone fruit industry who is a board member of one of our major fruit canning companies and has been an executive member of his industry organisation. He wanted to let me know that, in the initial stages of the lobbying for this legislation a decade ago, one grower in the Gippsland area of Victoria had been persuaded by the arguments that there was a problem and supported the initial moves towards plant variety rights. But one thing he decided to do was to look into it a little more, and he and his colleagues got together, formed a group and investigated the whole issue. The upshot of their investigations was that they discovered, much more readily than they had been able to before, that they could actually get breeding stock from the United States. They now have United States catalogues and get their stock on a regular basis from the United States. This grower wanted me to know, and he wanted me to inform the Senate, that, from a position of supporting plant variety rights through his own research and through making contact himself, along with some other growers, he had discovered, in his words, not only that PVR is irrelevant but also that it is a con. Those are not my words; those are the words of a grower in one of the industries which is said to be at such a disadvantage. Of course, one of the problems we have is that very often farmers, who we know do not have great resources, are not in a position to undertake their own research and sometimes swallow other research leads hook, line and sinker. I am finding that more and more people are undertaking that sort of independent analysis and are coming down on the side of opposition to plant variety rights. There have been restrictions on access, but a major part of those restrictions has been our quarantining process-a process which provides the highest quality plant material for Australia, which, of course, is crucial. Only in recent years, because of an expectation that plant variety rights would be introduced into Australia, has it become a business decision for owners of varieties patented overseas to withhold them from the Australian market in the short term until they can be patented in Australia and sold more profitably in the long term. The New South Wales Department of Agriculture's Marketing and Economic Division noted: If overseas breeding companies believed that Australia would not adopt PVR, they would have nothing to lose by releasing their PVR-patented varieties to Australia, especially if they could conclude licences with all, or the dominant Australian distributors, or could sell the first release of reproductive material at a high price. So it is not the lack of PVR which has caused some lack of access to new overseas varieties, but the threat of a PVR scheme itself which is the problem. I note that already in the debate we have heard raised the plight of our vegetable and nursery industries, and I am sure we will hear it again. In recent years, contrary to a lot of what we have heard and, I am sure, will hear, there has been a phenomenal increase in the vegetable and nursery component of our agricultural industries. For example, the vegetable industry, which is supposed to be in such dire straits because we do not have plant variety rights, is now worth almost $700m a year-an increase of 900 per cent over the past eight years. That is a growing industry-with $100m of those dollars coming from overseas export sales. In the Australian of 17 February 1987 we were told that Britain's largest mixed retail chain, Marks and Spencers, is keen to import fruit, flowers and vegetables from Australia. Add to this the potential income of another $100m expected from European importers under a similar plan worked out with the New South Wales Government, and the future of these industries looks very good indeed. There is ample evidence of innovation and of people taking an entrepreneurial attitude and not sitting on their hands and saying: `We cannot do anything until we have this new system'. Just last week and late last year we have had examples in the Press of people gathering Australian flowers and seeds from the wild and exporting them. These people are not sitting down and moaning and saying `We need something', which at the very least is questionable in its impact and questionable in any economic terms. Along with the monopolisation of the world seed trade, which I have mentioned, and the requirements under the legislation for uniformity and stability under plant variety rights, comes a decrease in the varieties ultimately available to farmers, home gardeners and, of course, consumers. As well, experience has shown that, because of the links in the industries which are so heavily involved in an international capacity, increasingly new varieties of plants have less resistance to disease and pests and there is a requirement for increased use of chemicals, insecticides and fertilisers, which are produced, of course, by the same companies that market these chemicals. As far as the comments that I have made about the reduction in availability are concerned, it is a fact that in 1984 alone seed companies in North America dropped 263 of their existing varieties of open pollinated vegetables from their catalogues. In 1980 Britain lost 500 vegetable varieties from its catalogues. Those varieties are not available any more. Since plant variety rights type legislation was introduced in these countries, that loss has been staggering, so much so that, as Senator Collard remarked, the European Parliament issued a resolution in 1986 expressing alarm and concern at the loss of genetic diversity in cultivated plants throughout European countries and throughout the world. It is clear from factual experience that plant variety rights, plant patenting or whatever name one gives it, is responsible to a large degree for the disappearance of many of our older or heirloom varieties which constitute our agricultural wealth and heritage. This is repeated again and again from flower plants, vegetable and grain varieties through to fruit and nut trees, with modern marketing methods exacerbating the difficulties for commercial growers to sell anything except a handful of varieties. I noted late last year just a small item in a newspaper which pointed out that Dutch clogs are in danger of disappearing because farmers have been planting a new type of fast growing poplar whose wood is too brittle and porous for making that footwear. One of the reasons suggested for that has been the promotion of this kind of new product over old products and the potential disappearance of the original, traditional and, as I have said, heirloom varieties. This leads to vulnerability in genetic diversity because without the seed and stock of the traditional varieties the production of new varieties is not possible. In 1979 the Global 200 report to the United States President commented on this problem. It stated: If we continue at our present rate along our present path, then by the year 2,000 approximately 25 per cent of all known species on earth will be extinct. The future of 25 per cent of the gene pool on which we survive depends on our individual actions in the next few years. As to the argument that seed banks can preserve our agricultural heritage, there is ample evidence to show the enormous vulnerability of seeds which are left in seed banks in an unnatural situation. There is evidence that there have already been huge losses. When growing has been attempted it has been found that seeds have not been able to grow in that unnatural environment. The best place to retain genetic diversity is, of course, in the wild, in wilderness areas, and material must be available in order that new varieties can be developed. The ethical issue underlying this whole PVR legislation, and the opposition to it was alluded to by Senator Collard, is the privatisation of what is a natural resource, a resource which should be available to us all. It ought not, on the grounds of morality, ethics and justice, to be handed over to private hands for private profit. Indeed it is the public breeding sector which must be protected, maintained and stimulated, and it is the breeding sector which will be a loser under this legislation. It is misleading for the Minister to claim, as he did in his second reading speech, that the public plant breeding effort overseas has benefited overall from PVR. Evidence before the United States House of Representatives committee on agriculture, 10 years after the United States Plant Variety Protection Act came into being, showed that of the 562 variety certificates issued under that legislation only 9 per cent were issued to public universities and agricultural government stations-the public breeding sector in the United States. It was further stated: Movement of plant-breeding research away from public institutions and into private industry has some dangerous side effects. Among them is an increase in vulnerability to pests and diseases in the new patented varieties. The United States Office of Technology Assessment also stated before the House: The assumption that commercial seed companies could do the necessary plant breeding research while maintaining pest resistance has proven incorrect. The assumption, however, has resulted in a reduction of funding for plant-breeding research by the US Department of Agriculture. That is, PVR type legislation has resulted in a reduction in the United States of public plant breeding. In Europe, where various countries have experienced this type of legislation for some 20 to 30 years, the same is true. When plant varietal legislation comes into force all the profitable sectors of plant breeding, that is, those that deal with crops whose seeds bring in large profits, involving large sales and therefore guaranteeing large royalties, move over to the private sector and the public breeding sector becomes starved of input and resources. The situation becomes one in which the public breeding sector carries out the basic, hard and expensive research and, as happens in most cases, a multinational company is able to make simple cosmetic changes, create new varieties, obtain a patent and, through its extensive marketing networks and advertising fund, swamp and corner the market and reap the profit. Further evidence for the reduction in public breeding comes from Europe where in Denmark, Holland and West Germany-countries with the longest history of plant patenting-no public breeders are releasing new varieties directly to growers. The profit motive-a perfectly correct one in the commercial sense and the basis of the private sectors interest in plant breeding-is clearly evidenced by the following statement by a representative of Ciba-Geigy Australia Ltd, one of our big seed companies: . . . I see research divided into the discovery phase, and the exploitation phase. I believe that most of the discovery work in plant breeding such as genetic resistance to disease . . . will continue in public institutions. Conversely, I believe that the exploitation of the research can best be done by private enterprise. The practical result of this kind of division of labour is to lower the investment needed by companies to develop varieties, and this amounts to a public subsidy of private enterprise where private enterprise pulls in the dollars. Every report and statement available on Australia's public breeding sector has expressed praise of its activities and an insistence that the public sector programs must be maintained and expanded. Dr Gladstones stated: If PVR were introduced, public breeding institutions might be expected initially to continue producing public varieties, but would inevitably come under pressure from treasuries, and from business opposition, to be made to pay their own way via royalties. It is most unlikely that these pressures could be resisted for long. He further stated: PVR will greatly reduce progress by public breeding, by endangering the basis for collaboration among States and institutions and by imposing extraneous requirements on breeders to meet the special needs of PVR. Commercial lobbies can be expected to seek the reduction and perhaps eventual elimination of competition provided by public breeding programmes. I remind honourable senators that that is the experience in Europe. Finally, Dr Gladstones stated: For most farmers in Australia . . . no advantage of any sort can be demonstrated for plant variety rights. Costly, major disadvantages are certain, especially in the long term. Dr Gladstones's opposition does not stand alone; it is backed up by many people who are involved in plant breeding. I recently received a letter from the daughter of a successful wheat breeder, now deceased, and I would like to read an extract from that letter. It states: My father was Professor Walter L. Waterhouse of Sydney University, and he was one person who would have benefited financially from such legislation as that proposed; he developed important wheat varieties such as Gabo, and he totally altered the wheat-growing situation in New South Wales with his work on wheat disease and wheat breeding. He heard of some such proposal as the new Bill before his death, and he was totally and utterly opposed to it in principle, let alone how it would work out in practice. For him, the financial return could not possibly make up for the situation where varieties were not freely available to all. ... ... ... He it was who bred the wheats which opened up the North-West of NSW to wheat growing, and his work benefited Australia to an enormous extent, and financially brought millions of dollars into the country via wheat exports, especially those of high quality, the premium wheats . . . It was always very important to him that his new varieties should be freely available, the only restriction being the time it took to multiply the seed wheat sufficiently for distribution, once it had been thoroughly tested. As the Government's Bill which we are debating today stands at the moment, it does not even provide for merit testing. I am disappointed that the Opposition is not prepared to pick up the amendments which we are proposing to make such testing mandatory, particularly in the case of varieties coming from overseas. I will move those amendments in the Committee stage. As I say, I am disappointed that the Opposition, which says it represents the farming sector in Australia, is not prepared to support amendments which will be absolutely essential if primary industry in this country is not to be saddled with varieties which have not been sufficiently tested for the environment in which they will be grown in Australia. The report of the Lazenby Inquiry into Australia's Plant Breeding Needs has been mentioned in the context of public breeding. While Professor Lazenby recommended plant variety rights, he believed strongly that it was vital to maintain a strong public breeding sector. At the same time, he noted: No set of recommendations can prevent governments from doing as they determine. While I do not agree with Professor Lazenby's support for PVR, I could not agree more with that statement. We need only look at the actions in Great Britain of the Thatcher Government which has recommended the selling off to private enterprise of Britain's plant breeding institute. The only real guarantee for our public breeding sector to be maintained, developed and to grow would be not to have plant variety rights legislation. The Minister in his second reading speech stated: All species and genera of plants will be potentially eligible for the granting of rights. However, no species will be included in the scheme at the outset. That statement is misleading, in light of the Minister's statement that the Government intends Australia to apply for membership of the International convention for the protection of new varieties of plants, known as UPOV, whose articles are part of the Bill. No doubt, as the Minister has said, Australia will apply for membership and no doubt it will be granted. The requirements under the Convention are that at least 10 genera or species will be registered within three years, at least 18 within 6 years, and at least 24 within 8 years. So PVR has the potential to apply to an enormous number of our plants and crops. This is a major concern to some of the largest sectors of our agricultural industry. They are concerned that under this legislation they do not have sufficient control over which species will be able to be part of the scheme. Again, as part of our amendments, we have proposed changes to the advisory committee which would give farmers a greater voice. We certainly share their concerns, particularly, as I said, given that the Government intends to seek membership of UPOV, the international organisation which places very firm regulations upon the plant variety rights legislation of countries which belong to it. I am very pleased that so many of my colleagues intend to contribute to this debate. The issue is a very wide one. As I have said, it is not one which either the Government or the Opposition should believe is not resisted very strongly by a wide range of people in the community. I think that it is not really surprising that the primary industry newsletter, as Senator Collard told us, should have got things rather back to front when it said that the Opposition backs the Government in regard to this legislation. After all, given the performances which occurred during the Budget session-no doubt this will continue-one cannot blame anyone for wondering who is supporting whom. This is just another instance of a government which, in opposition, opposed legislation, but now that it is in government, it is proposing similar legislation. Other aspects of our amendments pick up a great many parts of the amendments which Mr Kerin, as primary industry spokesperson when in Opposition, tried to introduce to amend the original Nixon Bill. We believe that those provisions picked up some of the major public interest issues such as the environmental and nutritional aspects of varieties to be patented. Again, I think it is really up to the Opposition and/or the Government to pick up those which I believe would have been positive additions to the Nixon Bill. We propose to bring those forward in the Committee stage. We know that the votes of six Democrats cannot block this Bill. We are unhappy about that. But we do wish to use this debate to bring forward the major issues involved in this legislation and to make it clear that there is widespread opposition. That opposition extends deeply in the farming community, as well it should, because this is a piece of legislation which will not be of advantage to an independent agriculture section in Australia. Senator SIDDONS(Victoria)(12.05) —Plant variety rights legislation has been before the Senate for a long time. I recall first debating this issue when I entered the Senate in 1980. At that time members of the Australian Labor Party were against the concept of patenting plant varieties. Now that they are in government, they seem to have done another backflip and have completely changed their attitude. They claim, of course, that the current legislation has been modified and is different from the previous legislation. But this concept remains: Is it morally right and is it in the best interests of farmers and of this nation to try to control plant varieties by allowing monopolies to gain control of variations of seeds and plants? As the legislation has been before us for such a long time, I have had plenty of opportunity to research this issue in great detail. I will oppose the legislation. I was opposed to the legislation that was introduced in 1980, and I am still opposed to this Government's legislation. I believe the Government cannot escape the criticism that it is most likely motivated by a desire to keep close to powerful interest groups in the community in an attempt to gain their support in fighting elections. I believe this is another example of the Government abrogating its responsibility to look after the interests of Australians, and allowing private corporations, mainly multinational corporations, to ride roughshod over the interests of the Australian people, in order to make profits for themselves. There is, I believe, an alarming trend throughout the Western world for large corporate interests to recognise areas of potential profit within what should be the public sector. They have been able to force governments in many countries to allow their interests to take precedence over the public interest. This had been to the great detriment of the population at large. I suggest that there is no clearer example of this than the PVR legislation. Surely, plants are the heritage of the human race. They are not something to be placed in private hands for profit. The notion that someone can own a seed is, I believe, immoral. The plant diversity upon which we all depend for our survival is part of our heritage. It should not be handed over to those who seek to use it to make private profit. The basis upon which this legislation is formulated, I think, is very problematical. The concept of patenting a seed has a very shaky foundation. Plant varieties are not something that can be miraculously created by a company, a corporation or an individual. Plants are the culmination of an evolutionary process of nature and the work of a great many individuals and institutions over many years. Those who develop a plant variety do so by working on varieties developed over many years, over generations, by their predecessors. The proponents of PVR want large corporations to be able to appropriate the work of these institutions and individuals for their own profit. When PVR legislation was introduced to Europe some 20 years ago it had disastrous consequences. The facts are that small breeders in Europe, and in North America, have virtually disappeared from agricultural seed production which has now been handed over to a very few large corporations. Within months of the PVR legislation being introduced in Great Britain multinational petrochemical companies had bought up all the small seed breeders. One might ask: Why petrochemical companies? The answer is quite simple: Petrochemical companies produce fertilisers and pesticides; what better way to ensure a stable growth path than to develop seeds which need a healthy dose of both? Plant genetic diversity is threatened by the dominance of large companies in plant breeding. If small producers disappear their genetic stock also tends to go and the varieties produced by the corporate giants come into widespread use. The plants are often hybrids and so their seeds are sterile or tend to become sterile. Thus the whole world's agriculture becomes dependent on a shrinking genetic base which cannot be added to-- Senator Walsh —What absolute technical rubbish. If they are sterile hybrids they have their own protection without PVR. Why cannot you understand something as simple and elementary as that? Senator SIDDONS —I intend, Senator, to introduce a few practical examples to substantiate what I am saying. It is not technical rubbish at all. It is in fact capable of being verified. The points I am making have been verified by the experiences in North America and in Europe. Senator Walters —Rubbish! Senator SIDDONS —Well, let us just look at one case. In Turkey, for instance, a German company recently took over most of the plant breeders and a monopoly ensued. All the native varieties of sugar disappeared in a very short time. Within a few generations the variety manufactured by the seed company became so weakened that the input from older varieties was needed and the company had to scour all the vegetable gardens in the Turkish countryside looking for survivors of the old varieties. The Turkish example is one simple case of the greed of one company, which had a monopoly in one country, nearly causing a disaster for a very big agricultural industry in that country. Of course, PVR will change the breeding dynamics and damage the system that we have in this country which has served Australia so well over many years. At present, most of the seeds are developed by State government bodies and by Federal institutions such as the Commonwealth Scientific and Industrial Research Organisation. They look to the interests of agriculture in their breeding programs and they try to breed new varieties of seeds which will survive in our particular environment and have a long and robust life because of the diverse genetic makeup. Seed growers then distribute these seed developments commercially, continuing to use these varieties for many years to come. This system, as can be very easily demonstrated, has bred robust varieties and makes quantitative jumps in the quality of the seeds used in this country. The motive of the private seed producer is quite different from these government instrumentalities. They want to make large profits-and they want to do that with the smallest outlay possible. This means that they take a variety partly developed by, say, a public breeding institution and develop it to the marketing stage as quickly as they can, Rather than spending 10 years and a lot of money developing further varieties from a wide genetic base it makes good business sense for them to get a variety on to the market as quickly as possible and then to make small variations in that variety yearly if they possibly can. This way they keep generating market interest and sales. The problem is, of course, that each generation from a limited genetic base becomes less resistant to disease. The other danger of PVR is that governments will use it as an excuse to wind back the very good public work that has been done in breeding plant varieties in this country. This is precisely what happened in the United Kingdom, and I think Senator Powell alluded to that. As soon as the Thatcher Government introduced PVR legislation it set about handing over the public seed breeding institutions to private monopolies. I think Senator Powell also alluded to the European Parliament's recent pronouncement on seed breeding. I do not think she actually quoted from it. I will do so now. The European Parliament noted: 1. The seed trade is becoming increasingly monopolised and dominated by a small number of multinational producers. 2. In recent years there has been a serious loss of local plant varieties and species. The European Parliament said this; it is not something that has been dragged out of some journal that may not have a good scientific base. The third thing the European Parliament said is this: The decrease in genetic diversity may give rise to a lower resistance of monocultures to disease and less choice to consumer. So there is concern in other countries about the patenting of plant varieties and I would have thought that we should have taken heed of it. I can see no reason for this legislation to be pushed through the Parliament. There is no great demand from the rural community as far as I can ascertain. In fact, many people within our rural community have expressed to me personally grave concern about this legislation. I have had literally hundreds of letters over the last few weeks from farmers expressing concern that the whole basis of plant breeding in this country is about to be turned on its ear. Will plant variety rights give farmers cheaper seeds? I do not believe so. Once a product can be patented so that the rural community can be made dependent on it, of course, the game is then wide open to produce slight variations of the patented product and, of course, jack the price up at every opportunity. In fact, prices have risen alarmingly in countries where the PVR legislation has been enacted. One argument that we hear often in favour of this sort of legislation is the claim of its proponents that if we do not have it we cannot get access to new strains being produced by multinational plant producers in other countries. Let us have a little look at this argument to see how sound it is. In the first place, it is a fact that many overseas agricultural crops are just not suited to Australian conditions and have to be modified very substantially before they can be successfully grown in Australia. As I have said, we have been very successful in breeding varieties that suit our conditions and our climate. We should not be importing varieties that have inferior qualities. The second point I make about the argument of greater access to overseas varieties is that it does not take account of the very strict quarantine regulations on importing plants into Australia. They are very stringent indeed. In some cases a period of up to 10 years might elapse before a plant variety can leave quarantine in this country. Of course, 10 years is more than enough time to breed a new variety right here. The facts of the matter are that Australia misses out on very little by not having PVR legislation and gains much in terms of genetic diversity, soundly based breeding programs and healthy food. It is claimed that genetic engineering can come to the help of plant breeding and overcome the loss of genetic diversity which occurs with plant breeding overseas. This is simply not the case. I quote from the journal of the Australian Institute of Agricultural Science in November 1986: It is clear that genetic engineering lends itself to making small genetic changes in a well adapted genotype and may well produce a character that is rare and undetectable in its natural environment. What genetic engineering cannot do is to bring about new multigene re-combinations of characters to build a completely new range of adaption. Classical plant breeding can, and often does, recombine groups of characters into better adapted genotypes. This is not a role of genetic engineering techniques for higher plants-a point that seems to be forgotten . . . The Institute concludes by saying that genetic engineering will not solve this problem. It is sad that this legislation in its present form appears destined to be passed by the Parliament without amendment. I cannot understand how National Party members, who are supposed to represent farmers' interests, can possibly support this legislation, knowing, as I do, from the mountain of correspondence I have had from the rural community how many of their supporters are so strongly opposed to it. I cannot understand how the Government, which is supposed to keep the brakes on multinational profiteering, can take this course when it is against the interests of ordinary Australians, particularly ordinary farmers. It can only be on the basis that the Government's record of trying to support multinationals in this country is still well and truly alive. It is more interested in that than in the long term interests of plant breeding in this country. Senator BOSWELL(Queensland)(12.23) —My contribution today will be short because I do not want to hold up the Plant Variety Rights Bill any more than it has already been delayed. I was dismayed by some comments of the two previous speakers in this debate. One honourable senator, an ex-Democrat, and the other Australian Democrat who contributed, made many erroneous statements. I find myself hard pushed to agree with Senator Walsh on most things, but I supported his interjections today when he said that it was a lot of rubbish. Senator Walsh —On technical grounds. Senator BOSWELL —On any ground it was a lot of rubbish. The facts of the matter are that every peak rural producer organisation in Australia is clamouring for the plant variety rights legislation and has been doing so for 18 to 20 years. I have letters from the National Farmers Federation and from the Livestock and Grain Producers Association of New South Wales, and telephone calls from horticulturists in my State, asking me to support this legislation in Parliament. They should have known that I would support the legislation because I was one of those senators who, with Senator Zakharov and Senator Georges, were fortunate enough to be a member of the Senate Standing Committee on National Resources which investigated the subject of plant variety rights and took evidence throughout Australia. We visited Western Australia, Adelaide, Canberra, New South Wales and Victoria and overwhelming support for plant variety rights legislation was indicated. The Committee had 229 submissions in all, and I estimated that 210 of those submissions favoured the introduction of a plant variety rights scheme for Australia. Some well-meaning people who opposed the legislation did so on religious grounds. I do not knock them for that, they are entitled to their opinion, but when we took evidence that opposition did not stand up. Many people said that we would ruin the agricultural industries in Third World countries. That argument did not add up either. Professor Lazenby alluded to that matter in his report. Any plant variety rights that will increase production can only be to the benefit of Third World countries. Any plant variety rights that will increase the production of varieties in Australia can only add to Australia's export industry. I should mention the comments made in a letter I received from the Livestock and Grain Producers Association of New South Wales in order to offset some of the comments made by the Democrats. The letter talks about the Australian nectarine producers who found themselves competing with patent varieties and nectarines from New Zealand which had been bred for their superior size and colour. The New Zealand nectarines were at least twice the size and had a far better texture. A check of the Department of Primary Industry's figures on imports of stone fruit from New Zealand since the PVR legislation was introduced there showed an incredible increase in imports. The letter says that, naturally, Australian fruit growers are suffering from a lack of the same genetic material as their competitors. That is happening not only in the nectarine industry, but in the sweet corn industry and indeed throughout the whole horticultural industry. It is having a very serious effect on a rural producing industry that could develop overseas markets and increase our export earnings if we were able to receive into Australia these genetic banks of material that would give us increased production. Already our vegetable industry is increasing, as previous speakers have said. As the growing season in Australia occurs when many overseas countries are in winter, it gives us an advantage in those overseas markets for flowers, vegetables and other products, but we cannot develop those markets unless we have the same benefits and materials as do some of these other countries. I believe that most other countries have already adopted plant variety rights legislation. This applies to countries on both sides of the political fence. The Union of Soviet Socialist Republics has adopted plant variety rights legislation, as has Hungary and other Eastern Bloc countries and also Great Britain and certain European countries. Therefore, this legislation is not representative of any particular type of political thinking. It is not surprising that the Democrats will not support this legislation. The Democrats have displayed on numerous occasions that they are even more anti-rural than is the Australian Labor Party. That is a bold and brave statement to make, but I can make it with confidence. Some of the legislation and committees introduced, or sought to be introduced, into the Senate by the Australian Democrats have had a terrible effect on rural producers in Australia. The Democrats introduced an animal welfare committee which has allowed $20m worth of live sheep exports to be lost to Australia. By voting with the Australian Labor Party on a number of issues, the Democrats have aided and abetted the fringe benefits tax, the capital gains tax, the quarantining of farm losses and other costs on rural Australia. They voted with the Labor Party to remove tax writeoffs from water conservation expenditure and last year, only two or three months ago, they cost Queensland farmers alone $12m when they would not support the imported fertiliser subsidy. Senator Zakharov —Is that relevant to the Bill? Senator BOSWELL —It is very relevant. It shows that the Democrats have no feeling or support for rural Australia. Senator Walsh —I thought you were a Joh man. I thought you were for cutting government expenditure. All I ever hear from you are complaints that it has not been increased. Senator BOSWELL —I understand that Senator Walsh will be making a contribution to the debate later in the day. I would appreciate it if he would let me develop my argument here. Senator Walsh —Joh announced a wild spending spree yesterday-$400m. Senator BOSWELL —I would appreciate it if Senator Walsh would let me make my contribution. I support this legislation; I believe that every rural organisation in Australia supports it. There may be the odd farmer here and there who does not support it or who has some reservations about it, but the people who have research available to them, such as the National Farmers Federation, which has research people, have obviously looked at the Bill and they are happy with the legislation. They want it passed at the earliest opportunity. Senator VALLENTINE(Western Australia)(12.32) —My opposition to the Plant Variety Rights Bill 1986 is based on a concern that the increasing monopolisation which it encourages is bad for the world's food supply. I believe that with more equitable distribution of resources the world's people could be fed. But we will be moving further away from that vision of the world's people being adequately fed if Australia joins the international Union for the Protection of New Varieties of Plants-UPOV-and that is part of the legislation which is before the Senate at the moment. Currently, 95 per cent of the world's food products are derived from only 30 plant species, and with the advancement of genetic erosion it is expected that in India, for example, by the year 2000 there will be only 50 varieties of rice compared with the 30,000 varieties that existed at the turn of this century. Over time there has gradually been an increasing monopolisation and an erosion of the diversity of plant varieties available to the world's people, and this will only be encouraged by this PVR legislation. Of course, this type of legislation is in place in many countries throughout the world but that is no excuse for Australia joining in. The companies that stand to profit from this legislation are enormous transnational petrochemical companies. I think we are already in the grip of multinational and transnational companies to such an extent in other areas that we do not need to move into this area as well. The European Parliament has recently shown disquiet about plant variety rights. Among other reasons it cited increased monoculture and environmental interference. It has also expressed a concern about the serious loss of plant varieties and species throughout the world. Senator Walsh —What has all that got to do with this Bill? Senator VALLENTINE —It has a lot to do with this Bill because Australia, if it joins UPOV, will be part of this whole international regime in allowing monopolisation of seeds. I believe that, as Senator Siddons said, the seeds that are available for the world's food supplies are the property of all and should not be subject to profiteering by private individuals and large companies at the expense of adequate varieties being available to the world's people. I support the comments that Senator Powell has made. I shall listen with interest to the debate as it unfolds, but my opposition to this Bill is total. Senator WATSON(Tasmania)(12.35) —I believe that all the significant and lengthy debates have already taken place on plant variety rights. The concept has also been supported by numerous major authoritative reports. It is our responsibility to see that the Plant Variety Rights Bill 1986 receives a speedy passage through the Senate because of the benefits that the legislation will bring to the Australian community, particularly to the Tasmanian horticultural industries. Senator ZAKHAROV(Victoria)(12.36) —This is an issue which has been before the Parliament in some form since a 1976 recommendation by the Industries Assistance Commission. A Bill put forward by the previous Government reached the Senate in 1982 and was referred to the Senate Standing Committee on National Resources at that time. On my election to the Senate in March 1983 I became a member of that Committee. I already had some knowledge of the issue and proceeded to read all the previous evidence as well as studying submissions which came to the Committee during its 1983 hearings. Thus I claim to have a reasonable knowledge of the issues involved, better I suspect than most in this Parliament. The National Resources Committee reported to the Senate in May 1984 and Senator Georges and I dissented from that report. I wish to quote briefly from the beginning of that dissenting report. Senator Hill —Are you going to vote against the Bill? Senator ZAKHAROV —I will come to that later. The dissenting report said: We do not believe that the evidence before us established a need in the sense of providing a benefit for most Australians. There are grave risks attached to any further limitation of access to any factor in the food production cycle. Marketing practices and the growing power of large transnational companies have already led to restrictions of access, particularly in Third World countries, but also in Australia. The introduction of PVR would, in our opinion, further restrict the rights of consumers and growers. Thus we concluded that the implications of a PVR scheme can be summarised as possible financial benefit to a small group in the community, and probable disadvantages for a very large group of consumers and growers. For the sake of brevity, I seek leave to have the major part of that dissenting report incorporated in Hansard. Leave granted. The report read as follows- 4. We believe that the introduction of PVR may have similar effects on the consumers of ornamentals but, by definition, nobody eats ornamentals and so the risks attached to PVR are not going to affect anyone's health or survival. Although we have some doubts as to whether PVR will stimulate growth and the export market for the ornamentals industry, that industry believes that it will (for example, Australian natives) and since our objections to PVR in the food-production industries do not apply to ornamentals, we have no objection to the introduction of PVR for that group of plants. 5. We note that the report makes no mention of the motivation of those giving evidence. When so much of the argument, on both sides, is backed up by insufficient hard evidence it is very relevant to look at the motivation of opponents and proponents of PVR. The private sector interests could have much to gain financially from the introduction of PVR. They also have the resources to present their case in the best light-staff, travel expenses, paid lobbyists. The opponents of PVR, on the other hand, have nothing personal to gain. As the report states: `These issues [possible impact on public sector breeding, genetic resources, Third World countries, market structures, ownership of food resources] should be of general concern, but this concern was almost invariably expressed by groups opposed to PVR' (paragraph 3.2). We believe this fact to be significant. 6. There are two main arguments which are advanced to demonstrate that PVR is necessary in order for Australia to obtain the following benefits. A. Stimulation of plant breeding by Australian private breeders, particularly of open-pollinated crops. B. Increased access to overseas varieties, particularly varieties protected by PVR in Europe, UK and the US. 7. Other arguments put forward were that PVR will: C. `provide the opportunity for Australian plant breeders to gain access to overseas markets for their newly developed cultivars' (Evidence, p. S150); D. `provide plant breeders with similar equitable rights already available to inventors and owners of copyright' (Evidence, p. S151); and E. `bring Australia into line with the world's leading agricultural countries, which are often our main competitors on world markets' (Evidence, p. S151). 8. We propose to deal only with the two main arguments in any detail, since they are the stronger of those advanced in favour of PVR. A. Stimulation of Plant Breeding 9. In the Committee's report, the claim that PVR will stimulate plant breeding is backed up by reference to European and UK experience, where there is some evidence that private corporations noticeably increased their plant breeding activities after the passing of acts granting PVR (e.g. Plant Varieties and Seeds Act 1964 in UK). The assumption of PVR proponents is that this increase in `private' breeding activity has had universal benefits. `Benefits' for whom? It is clear that the UK and US Acts have allowed large agricultural chemical corporations to make considerable profits out of plant breeding (Evidence, p. S1006). The evidence offered does not establish that there have been proven benefits to the consuming public or the growers. Some evidence suggests that there has actually been a deterioration in the flavour and nutritional properties of food which have been `improved' by breeding under PVR legislation (Shapiro 1983) 10. In the case of the US, which has had PVR since 1970, Dr L. J. Butler of the University of Wisconsin-Madison has been engaged in a very thorough study of the effects of the plant Variety Protection Act. He has found that there is no evidence that PVR `has triggered large investments in plant breeding research and development nor of large improvements in either techniques or in plant quality' (Letter 13 October 1983). 11. The BAE, which is favourably disposed to the introduction of PVR legislation (on the basis of its cost-effectiveness), has this to say about the argument for the presumed benefits of an increase in private plant breeding research: `This argument assumes that increases in the research effort would generate net gains to society. However, this point cannot be easily established by economic analysis' (Evidence, p. s38). 12. Even if it were shown conclusively that PVR has increased private breeding overseas1, Australia's situation is not parallel. There has been a long history here of strong direct government intervention in the economy, which is exemplified by the existence of large numbers of government-financed plant breeding research agencies. Unless the activities of these agencies are severely restricted subsequent to the introduction of PVR, the small size of the Australian market would certainly restrict the opportunities for profit-making from private plant breeding aimed at this market. Given the long, successful history of government plant breeding and improvement in Australia and given the unconvincing nature of the evidence tendered concerning the likelihood of benefits of increased private plant breeding in Australia, it would be an act of the most wilful vandalism to diminish the plant breeding activities of agencies such as CSIRO or State departments of agriculture (See Evidence, pp. S1002-1003). 13. Taking these arguments to their logical conclusion, there is the risk that a Government committed to `small government' and privatization of the economy may remove all potentially profitable research from the government sector. 14. An alternative, equally undesirable outcome is suggested by the Free Access to Seeds Committee which quotes Byron Beeler, Vice-President of Ciba Geigy (Canada): Personally, I see research divided into the discovery phase, and the exploitation phase. I believe that most of the discovery work in plant breeding such as genetic resistance to disease . . . will continue in public institutions. Conversely, I believe that the exploitation of the research can best be done by private enterprise. (Evidence, p. S970, our emphasis) The practical result of such division of labour is to lower the investment needed by companies to develop patentable varieties. B. Access to Overseas Varieties 15. The second supposed benefit advanced by the supporters of PVR legislation is also not supported by convincing evidence, that is, the claim that with PVR the Australian seed and nursery industries will have vastly increased access to overseas varieties. 16. The DPI document `Restriction of Access to Overseas Varieties' (Appendix 3) lists instances where Australia has been refused access to plant varieties (on the basis of our lack of PVR) which, according to the Department, are held under patents in overseas countries. 17. In all of the instances listed there is a lack of documentation (listing of patent nos., etc.), to support the Department's contention that these varieties have been refused to the Australian industry because of the absence of PVR here. As the Plant Diversity Protection Committee has pointed out, in its further supplementary submission to the Senate Committee, neither the DPI document nor any of the other instances cited of restriction of access to overseas materials give details as to `where, and to whom, and under what legislation, exclusive rights were held' (Attachment to letter, 8 October 1983). C. Export of Australian Cultivars 18. The other arguments for PVR offered by the Industry Committee for Plant Breeders Rights raise as many questions as they purport to answer. The ICPBR gives, as the rationale for its claim that PVR will give access to overseas markets for cultivars newly-developed in Australia, the potentially `favourable position [of Australia] to produce high quality seed of a wide range of crops suitable for overseas production' (Evidence, p. S150). 19. In the very next paragraph evidence is offered that some Australian seed companies have already successfully exported cauliflower seed to the UK and parts of Europe. 20. We suspect that it is international seed companies rather than Australian ones which would take advantage of our `favourable position' to grow seed crops for re-export to other countries under PVR; in that case, very little benefit would accrue to our national economy. The transfer-pricing techniques and other restrictive trade practices of multi-national corporations have been well documented by various UN studies. The effect of these practices is to leave very little added value in the country subjected to them. D. Rights Equivalent to Patent and Copyright 21. Next, to argue for PVR on the basis that it provides plant breeders with rights already available to inventors (through patents) and owners of copyright is to assume that the benefits of a patents and copyright law are self-evident. However, this is not the case. 22. Mandeville et al. have reported that `this study leaves little room for doubt that the benefit/cost ratio for the patent system in Australia is negative, or at the very best, in balance' (Mandeville et al. 1982, p. 213). The authors also state that `there is no economic justification for extending patent monopolies by lengthening the term, or by widening the grounds for either infringement of patentability (for example, Plant Variety Rights or computer programs)' (Mandeville et al. 1982, p. 213). Earlier in their study, the authors showed that over 90% of recent successful Australian patents are held by overseas patentees (Mandeville et al. 1982, p. 69). This lends weight to our contention that the overseas-based multinational agricultural corporations have most to gain from PVR in Australia (See also Evidence, p. S82). 23. As stated in evidence to the Committee: `at least 90% of patents taken out by foreigners or transnational corporations in developing countries are not used: their purpose is to prevent local manufacturing substituting for imports' (Evidence, p. 1239). E. International Agricultural Competition 24. This argument cannot logically stand on its own without the foregoing arguments A to D. 25. At least some of the ills which PVR claims to be able to cure are embedded in the marketing system rather than at the point of production. A prime example is the take-over by the tasteless, tough tomato, Floridade, produced for easy transport and packaging, with no regard for the needs of the consumer. In the export sphere, the balance of payments against countries which are potential markets is one significant factor restricting the market. Conclusions and Recommendation 26. We cannot agree with the majority report's recommendation that wide-ranging PVR legislation be enacted. 27. WE RECOMMEND THAT ANY PVR SCHEME BE RESTRICTED TO ORNAMENTALS AND THAT OTHER MEANS BE INVESTIGATED (FOR EXAMPLE IMPROVED MARKETING PROCEDURES) TO OVERCOME THE DIFFICULTIES CLAIMED AS THE RATIONALE FOR PVR. G. Georges...A. O. Zakharov Endnote 1. Even the evidence cited by Mr P. W. Murphy, former Controller of Plant Variety Rights in Great Britain, is to say the least, tenuous. In an address given to the 14th Ordinary Session of the UPOV Council, Geneva, October 15, 1980, he had this to say of private plant breeding in the UK: `It is very difficult to get figures from companies indicating their investment programmes in plant breeding . . . but here again the British Association of Plant Breeders collected certain information which showed that there had been a 500% increase in investment in plant breeding over the last five years. This is a very substantial increase. Unfortunately we do not have access to the actual figures . . .' (Evidence, p. S201). Senator ZAKHAROV —I thank the Senate. The views contained in that dissenting report remain pretty much my position. Unfortunately, this a very complex issue which I believe is not well understood by most parliamentarians on either side of politics. In saying that I am not being critical, but that very complexity guarantees that busy senators and members with many pressing issues on their agendas have tended to neglect this issue. It has also been clouded by the steam and heat generated on both sides of the debate, but particularly by those who see PVR as a solution to Australia's export problems and a panacea to the ills of the rural sector. At the outset I outlined the history of this legislation which shows that it is not true, as has been claimed in some of the huge volume of letters I have received opposing PVR-interestingly, I have not had one recent letter supporting it-that this Bill, the Plant Variety Rights Bill, is being rushed through Parliament without sufficient opportunity for public discussion. The general public for its information, like most members and senators, is dependent on the Press and on activists over the issue. There has been very little Press interest in PVR until recent weeks. Indeed, there was virtually none, unfortunately, when the Senate report was tabled. From memory, only the Australian Broadcasting Corporation approached me, as the author of the dissenting report, in the years between mid-1984 and late 1986 when this Bill was introduced. The Senate Committee advertised for submissions but most people lacked the time and confidence to make a submission, even when they could make a very valuable contribution. The large lobby groups, and particularly the industry groups, had the advantage of time and resources to put into a submission. It is a very great pity, some would say a tragedy, that a major effort by a large number of informed and committed people to contribute to knowledge on this issue has come at the very end of the parliamentary process. It is also a pity that the Australian Democrats, who clearly have a strong and united view of the Plant Variety Rights Bill, were not a part of that Senate inquiry. Clearly, I have very grave reservations about the consequences of this Bill but, of course, I will not vote against it. I am willingly bound by the democratic decisions of my Party and its parliamentary Caucus. Our Party is democratic, we come to democratic decisions and we stick by them. Senator Archer —What will you say in the electorate? Senator ZAKHAROV —I have explained this to people in the electorate time and time again in recent weeks and they have understood. They understand the difference between my Party and the parties on the Opposition benches. But I feel bound to express my concerns which are shared by many others in the community who have no axe to grind. This is an important issue but I do not share the apocalyptic fears of some of the Bill's opponents. For example, I do not share the belief expressed in some letters that I have received that PVR is more dangerous than nuclear weapons. In this speech I hope to present a realistic assessment of some of the dangers inherent in the legislation. Others are included in the report, part of which I have had incorporated in Hansard. First, I will point to the safeguards included in the Bill, safeguards which were absent from the two previous Opposition Bills. I want to emphasise that this legislation is much superior in both clarity and safeguards to the previous Government's 1982 Bill or to Senator Hill's private member's Bill. This Bill takes into account the recommendations on safeguards of the Senate Standing Committee on National Resources. Indeed, it goes further. I give due recognition to the willingness of the Minister for Primary Industry (Mr Kerin) to consult within and without the Australian Labor Party and the Parliament, particularly by his setting up of an independent inquiry under Professor Lazenby. Unfortunately, that inquiry's terms of reference were confined to relatively technical matters and, I believe, did not give sufficient regard to the consumers of plants and their products and to the possible alternatives to PVR which could improve incentives to breeders, such as were put forward by Professor Gladstone, one of Australia's foremost plant breeders, and by my colleague, Mr Peter Milton, MHR. What are the safeguards in this Bill? I will refer to the main ones as I see them. The grantee of a plant variety right will be obliged to make the variety available publicly in `reasonable quantities and at reasonable prices'. An amendment to the Trade Practices Act will enable this to be enforced. Thus it possibly will be no easier than it is now to restrict the market. The success of this safeguard depends on the interpretation of `reasonable' and the will of any future government to take action under the Trade Practices Act. I believe that clause 39, which refers to demand, may prove too inexact, particularly in view of claims made here by the Opposition at times that demand is not there if people buy the alternatives offered. Of course people will buy what is available if there is no alternative. Most of us are forced, however unwillingly, to buy the tasteless tomatoes which are bred for their carrying qualities, because the true tomatoes are not available in shops. That is not to say that there is no demand for good tomatoes. The Minister in his second reading speech has proposed a review of the effectiveness and impact of the Bill after five years. It is unfortunate that that review could not be included in the legislation. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Walsh) agreed to: That, unless otherwise ordered, till 2 p.m. this day, matters of public interest may be discussed by senators, provided that no senator shall speak for more than 15 minutes. Senator KILGARIFF(Northern Territory)(12.45) —Mr Deputy President, I wish to take a few minutes of the Senate's time today to raise two matters which are in no way connected other than that they both demonstrate the way in which the Ministers of the present Federal Government are prepared to grandstand to the detriment of many of those Australians whom they purport to represent. In the past I have taken the opportunity to raise the issue of the new University College of the Northern Territory and the refusal of the Federal Minister for Education, Senator Ryan, to recognise the College. The Minister's stock responses to my questions and comments have been either that the University College is too expensive or that it will detract from enrolments at the Darwin Institute of Technology, DIT. I would like to provide the Minister with some information which I hope will convince her that she has been wrong on both counts. Firstly, the Minister's claim that the College will detract from DIT enrolments just does not stand up when you look at enrolment figures for this year. DIT is already operating at full capacity. This year's advanced education enrolments stand at 1,468, which comes down to 1,100 effective full time students. The Commonwealth Tertiary Education Commission's quota for this year's effective full time enrolments was 1,070, so enrolment at the Institute is already over this figure by some 30 students. Even if the 20 University College places that the Minister was offering had been provided, the Institute would still have been over its quota. Enrolments for the University College stand at 225 and are rising. It is expected that they will reach 250. Thirty of these students are from South East Asia. It is quite clear that there is no way in which the Institute could accommodate the University College students. Its facilities, including the library, are fully utilised. A number of demountable buildings are in use. Hundreds more Territory students-there were 364 in 1986-will be attending interstate universities and colleges of advanced education this year to study courses that are still not available in the Northern Territory. These figures speak for themselves and make a mockery of the Commonwealth's offer to fund only 20 places at DIT in 1987. The Minister's second argument against the University College is, as I have mentioned, its cost. But this argument is fallacious. Obviously the initial cost per student is going to be high because of establishment costs, but in future years it will decline through economies of scale as student numbers increase and students progress through their second and third years of study. In fact, as I see it, the cost per student at the University College for this year, its first year of operation, will be about $30,000 but it can be expected, as the College comes on stream with second, third and fourth year enrolments, to be reduced dramatically, to the point where even in its second year, 1988, the cost per student will have been reduced to about $17,000. Senator Ryan last year, in supporting the establishment of a university college in western Sydney, accepted the fact that: New autonomous institutions can cost anywhere up to $30,000 in operating costs per student compared with existing funding levels for established institutions in the vicinity of $8,000 per new student place. Apparently a figure of $30,000 is acceptable to Senator Ryan in New South Wales but not in the Northern Territory. One can only guess why that should be the case. Unless Senator Ryan has come up with some new reason for refusing to recognise the University College I would urge her to abandon her petty and vindictive denial of Austudy and Abstudy benefits to Territory students, who are already disadvantaged geographically. It is totally unjust for the Commonwealth to deny them benefits that they would receive if they were studying at the Institute of Technology on benefits which students studying the same courses at the University of Queensland are already receiving. The Warden of the University College and the Director of the Institute of Technology have approached the provision of tertiary level studies for Territorians in a co-operative way. A memorandum of understanding which rationalises courses at the two institutions has been signed. It is a pity that the same level of co-operation, in the interests of young Territorians, who after all are young Australians, is not forthcoming from the Commonwealth on this issue. The second matter that I wish to remark on today received quite extensive media coverage in Monday's national papers. I suspect that most honourable senators saw the smiling face of the Minister for Transport, Mr Peter Morris, in the papers earlier this week associated with the story that the road from Adelaide to Alice Springs, the Stuart Highway, had finally been sealed. The story went that the last stretch of sealing had been completed at the weekend, with the Minister giving a helping hand. The road has been approaching completion for the past few months and, naturally, the people of the Territory have been looking forward to having finally an all-weather road to Adelaide. It is anticipated that the sealed road will provide encouragement for more people to visit the Northern Territory by road. Perhaps people who are unable to visit the Territory by air because of prohibitively high air fares will now be able to see that part of the country. South Australians have also been looking forward to the completion of the road with the prospect of seeing an increase in traffic from the Northern Territory-more people travelling south by road on holidays and on business. Not surprisingly, the tourist authorities of both South Australia and the Northern Territory have been eagerly anticipating the completion of the south road, as this stretch of the Stuart Highway is known in the Territory. In fact, both tourist bodies have organised a joint celebration of the completion of the road, to take place in late March or early April-when construction of the road is scheduled to be completed, properly completed. How then did the Minister come to be declaring the road fully sealed-I stress fully sealed-last weekend, as if construction had been completed? It seems that the Minister will not be available to do the job until some time late next month, or in April when the road is in fact to be fully sealed. He decided to do it on the weekend to fit in with his undoubtedly busy schedule. Of course, by doing so, he left all of the various organisations most interested out of the situation completely. So while the newspaper reports had the Minister helping to seal the last stretch of the Stuart Highway he was, it now transpires, only involved in putting down the first sealant to keep the gravel down. The road is far from completed. Some 40 kilometres remain unsealed. Cattle grids are missing and another month or so of work is needed to complete it, even if everything goes to schedule. Mr Morris clearly subscribes to the theory that any publicity is good publicity. If he is prepared to declare a road completed when it is not, simply to ensure that he gets his picture in the paper, the situation is quite laughable, I suppose a petty sort of thing that would not warrant comment but for the fact that in his grab for glory, the Minister has pre-empted the publicity which the tourist authorities of the Northern Territory and South Australia could have expected from the launch they had planned when the road was actually finished. I feel sure that they would have included the Minister in their guest list. If he had already had other engagements which meant that he could not attend, I would have thought he could have accepted the situation in good grace. It strikes me as most unbecoming of him simply to choose a month earlier to declare this road sealed, when it is not, for his own purposes. His behaviour brings to mind that other infamous character who stole the thunder of the New South Wales Premier, Jack Lang. Jack Lang was gazumped in opening the Sydney Harbour Bridge in 1932 by Francis de Groot who charged ahead, honourable senators might recall, on his white horse, slashing the ceremonial ribbon. There are not too many white horses in the outback but, Mr Deputy President, there are a lot of bush donkeys. Senator TEAGUE(South Australia)(12.55) —Mr Deputy President, this, the first week of the 1987 sittings, seems an appropriate time to look back and reflect on the International Year of Peace and, in particular, on one contribution that was made to the International Year by members of this Parliament. I refer to the Parliamentary Disarmament Forum, which was organised by the Parliamentary Disarmament Group, in September of last year. The Forum involved delegations from the five nuclear armed nations-Britain, France, China, the United States of America and the Soviet Union-coming before honourable members and senators to explain the attitudes of their governments to disarmament and arms control. The delegations were headed by these nations' ambassadors to Australia and included arms control experts who were flown to Australia for the Forum by their respective governments. Should there ever be a global nuclear war it would be the weapons contained in the arsenals of these countries that would devastate the earth. I think it was an extremely valuable exercise for parliamentarians to hear and assess the presentations that were made by the representatives of these countries at the Forum. Each delegation took a different approach in its presentation. We had five different presentations, five different views, on such vital questions as why the world is packed full of nuclear weapons and why there has been so little progress in making new arms control agreements. The presentations made by the five delegations contained statements that were often crisply honest. I refer in particular to that of the delegation from France. But they also contained statements that simply tipped out tired propaganda. In particular, the approach by the Soviet delegation was deeply disappointing. For example, we were told by one Soviet delegate: The Soviet Union is not developing something similar to SDI. On the contrary, we have been saying that if we were forced to do something about this system or this kind of weaponry, we will certainly be forced to do something. This is an extraordinary statement for an arms control expert to make when it is a well established fact that, for instance, the Soviet Union has been conducting laser experiments and tests against satellites; that much of the American research, for example on particle beams, is parallel to what the Soviet Union was doing in the 1960s and 1970s. Also during the Forum, another Soviet delegate, Mr Federov, said: The Soviet Union does not have any naval base or any other military facility in Cam Ranh Bay or any other port in Vietnam. That statement was subsequently repeated in a letter sent to the Australian by Mr Valerie Zemskov, the Minister-Counsellor of the Soviet Embassy in Canberra, which stated outright that there was no Soviet military base in Vietnam. This outrageous claim is all the more serious and requires careful evaluation because of its being also directly reflected here in the Senate by Senator Gareth Evans, in his capacity as Minister representing the Minister for Foreign Affairs and the Minister for Defence, when unconvincingly answering questions concerning Cam Ranh Bay. In Question Time last October, Senator Evans, representing the Minister for Defence, said: The Government has no evidence that the Soviet Union has deployed weapon systems in Vietnam which directly endanger Australia. Senator Evans was replying to a question concerning a Liberal Party publication on peace issues. That publication, Living in a Nuclear World, said that the Soviet Union had deployed weapon systems in Vietnam which directly endangered Australia. Senator Evans said this reference was `just another rerun of some outdated theories and neuroses which do not deserve wider currency'. I contested Senator Evans statements at that time and pointed out that they were in fact also directly contrary to answers given to the Parliament by Mr Beazley, the Minister for Defence. It was interesting to see that yesterday the Minister took on notice a question regarding Cam Ranh Bay. What a change to the ready responses we had from him in October! I wonder whether the Minister, in the light particularly of intelligence recently released by the United States of America, is now prepared to admit that he was wrong. This material, including high resolution photographs of Cam Ranh Bay and its airfield that were taken by United States satellites, is conclusive proof of not only the existence of the base but also the presence of Soviet nuclear missile-carrying aircraft and submarines. In fact, the widely held claim that this base is the largest military facility outside the Soviet Union has now been more than demonstrated. The photographs, which have been splashed across the front pages of the Press in the past few days here in Australia, confirm the permanent deployment of one squadron of the latest MiG 23 Flogger fighters and a squadron each of Bear and Badger long-range bombers. As has been pointed out by the defence editor of the Australian, Peter Young, some of these bombers are deployed as strike bombers and are armed with long-range cruise missiles. They are capable of reaching Australian cities. One satellite photograph of Cam Ranh Bay shows the presence of three submarines, one of which has been identified as a 6,200 tonne Echo 2 class cruise-missile submarine. The Australian said that since the Americans had left in 1975 the number of piers at the base had grown from two to seven-these are clearly visible in the satellite photographs-and that there was evidence of new warehouses, fuel and other support facilities and ammunition dumps, which were believed to contain the latest cruise and surface-to-surface missiles. The Australian also published this month, on 10 February, an interview with the Commander-in-Chief of the United States Pacific fleet, Admiral James Lyons. Admiral Lyons confirmed the existence of Soviet-built warehouses, fuel and ammunition dumps, anti-aircraft missile batteries and an electronic warfare intelligence monitoring station. He also warned of the buildup of Soviet naval facilities at the Kampuchean port of Kompong Son. The information published in the Australian and other newspapers directly and convincingly refutes the statements regarding Cam Ranh Bay that were made to the Parliamentary Disarmament Forum by the delegation from the Soviet Union. It is depressing for me, as the co-ordinator of that Forum, to have to say now to the Senate that such a blatantly false claim was made by the Soviet delegation in this Parliament House in this genuine peace forum in front of the representatives of all political parties in Australia, in the International Year of Peace. I should underline that the Soviet delegation came expressly from Moscow to the Forum in Canberra and was directly appointed by and represented, the Soviet Government. The conclusion that this false claim was made by the Soviet delegation in these circumstances is a grave reflection on the credibility and intentions of the Soviet Union. It is also pretty poor propaganda. This Parliament must be above propaganda and must expose propaganda that comes from any quarter. I make the observation in this case that this whole episode flies in the face of General Secretary Gorbachev's own more recent and outspoken statements that the Soviet Union must reject lies and go back on unsound Soviet procedures and rhetoric of recent years. I am happy also to make the observation that at no stage has the Soviet Ambassador to Australia, Dr Samoteikin, ever identified himself with these objectionable Cam Ranh Bay claims, whether by the delegation from Moscow or by Mr Zemskov. In this whole episode I am reminded of the clear remarks made at the Parliamentary Disarmament Forum by the British High Commissioner, Sir John Leahy: Our approach to disarmament is essentially down to earth. We seek real progress. To use an old English expression, `Fine words butter no parsnips'. Disarmament and arms control, in our view, can only be really brought about by painstaking, detailed and patient negotiations. I have to say that I fear `the Greeks', especially when they bring gifts. That, I'm afraid, is our approach . . . I am bound to say that we judge the intentions of others not by what they say half as much as by what they do. I return to the question of the Soviet denial of the presence of the base, not only in Mr Zemskov's letter but also at the Parliamentary Disarmament Forum. The Soviet delegation made a number of other denials that were then open to question and now must be viewed with doubt. Let me cite an example: One delegate told the Forum that with regard to Soviet fishing deals with South Pacific nations the Soviet Union had: no ambitions for some strategic military presence here. All those deals we have with those small island states are of a purely commercial character. To put it bluntly, we need fish, they need money. Here is a second example. In relation to SDI, the Americans have claimed that the Krasnoyarks radar complex in the central Asian part of the Soviet Union is directly involved in anti-missile defence and has been built in direct contravention of the 1972 ABM Treaty, yet the Soviet delegation told the Forum that the radar `will deal only with searching for peaceful satellites for exploration of outer space . . . It could not be used for military purposes.' Thirdly, the delegation claimed that NATO had more men under arms than did the Warsaw Pact nations. This is directly contrary to the view held by most countries. It is my conclusion then that, in the light of so much contrary evidence on each of these claims and in the light of this episode regarding Cam Ranh Bay, we must doubt each and every one of them, yet the Soviet delegation spoke of the need for a new and fresh approach to be made in East-West relationships. It is a pity, however, that the Soviet delegation and the government that it represents fails to adopt an honest and open approach when dealing with the West and with a forum within this Parliament. How can they expect us to trust them when they make a presentation before members of this Parliament which, quite frankly, contains outright lies? We would all like to see the barriers between East and West broken down. We would all like to see mistrust and suspicion put aside. We would all like to see a positive building on the more recent affirmations of General Secretary Gorbachev, but until one can see evidence that there really is a fresh approach on the part of the Soviet Union, one cannot be optimistic and hold out real hope for any easing of the tensions that now exist between the super-powers and their allies. I urge the Soviet Union to adopt the approach professed by it at the Forum and also the more recent emphases expressed by General Secretary Gorbachev. Finally, I ask Senator Evans and the Ministers for Foreign Affairs and Defence, when the Government answers the question about Cam Ranh Bay put by my colleague in the Senate to Senator Evans yesterday-to which we expect an early response-to address themselves to these remarks. Senator BOSWELL(Queensland)(1.07) —I rise today to speak about the recently independent Republic of Vanuatu. I am sure that all Australians feel great sympathy for our South Pacific neighbours in Vanuatu as they go through this extremely difficult time, having suffered tragic loss of life and extensive destruction in the recent cyclone. The Republic of Vanuatu became independent in 1980 and since that time has had a government headed by Prime Minister Father Walter Lini, the leader of the majority party, the Vanuatu Party. Vanuatu consists of about 80 islands and lies between the Solomon Islands and New Caledonia. It also lies 1,000 miles off the north Queensland coast. Vanuatu and Australia have enjoyed a long and respectful relationship, both while it was a condominium under joint British and French rule and since independence. Many Australians live and work in Vanuatu and many Australian tourists visit it every year. There exists a strong and mutual feeling of goodwill between the two countries. Therefore, it is of enormous concern to Australians that last month a fishing agreement was signed between Vanuatu and the Soviet Union. Of particular concern is the fact that the agreement includes port access and shore facilities for Soviet ships and their crews. The gaining of port access is a giant step forward for the Soviets in the Pacific. Last year's agreement with the Pacific nation of Kiribati has now ended because the Soviets wished to have the royalties that they were paying. The agreement with Kiribati involved the payment of $2m and access for 16 Soviet trawlers. It did not involve any on-shore access for the Soviets. The new Soviet agreement is to net Vanuatu US$1.5m and involve eight Soviet vessels operating in Vanuatu waters. The new development is the provision of port access for boats and crews. The boats will be able to call into ports for repairs and supplies and will have the use of facilities on the island of Santo. We have been told by Prime Minister Lini that the agreement could also lead to landing rights being given to the Soviet airline, Aeroflot, at Vila, the capital of Vanuatu. Our Minister for Foreign Affairs, Mr Hayden, has had very little to say about the Vanuatu-Soviet agreement and the fact that shore rights have been granted. Even when Prime Minister Lini admitted that, as well as port facilities, probably landing rights for Aeroflot in Vanuatu would be involved, Mr Hayden declared he would not comment on a hypothetical situation. Because of Australia's traditional role as the largest nation in the South Pacific, it has a responsibility to make its views known, particularly in regard to assuring other South Pacific nations of its complete and total support. The Soviets are stepping up their interests in the Pacific. Japan is concerned about it. The establishment of the Soviet base in Cam Ranh Bay means that a Soviet fleet is located with the proximity necessary for deployment into South Pacific areas. The Soviet Embassy in Canberra has revealed that it has sent to all South Pacific countries an invitation to negotiate fishing deals. The United States of America can see that the Soviets are now after more than fish. I am sure that Australians can see the potential threat to their region from these soviet so-called fishing deals. How is a line to be drawn between a fishing boat and an intelligence vessel? Australians know that Soviet trading ships visiting Australia always have a political officer. Even the Australian seamen's unions do not bother to take on Russian political officers over union pay and conditions, as they do with officers of other foreign ships. Last year, in Fiji, the Minister for Foreign Affairs, Mr Hayden, stated that Australia would be more concerned if island countries provided the Soviets with shore facilities. Now that this is actually happening in Vanuatu, he is silent about Australia's concerns. In July of last year he acted differently when he said: Past experience strongly suggests that a toe-hold encourages the Soviets to engage in things beyond normal commercial interests which are not always in the best interests of the host country. It is the best interests of the host country, in this case the Vanuatuans, that I want to bring to the attention of the Senate. If the Minister were to follow up his words of last year with equally strong words now, he would show the South Pacific nations that they had a friend in Australia. Those nations are concerned about the Soviet's new toe-hold in the Pacific, but no one is more concerned than are the people of Vanuatu themselves. They do not want an agreement with the Soviet Union. They signed petitions opposing the Soviet links. These were presented to the Government but were ignored. The Vanuatuan people have been alarmed at the direction that their Government was taking. Since independence, in 1980, Cuba has established diplomatic relations with Vanuatu. In fact, Cuba sponsored Vanuatu's membership of the non-aligned movement. The ties with Cuba are strong. A non-resident Cuban ambassador to Vanuatu has been appointed. Colonel Gaddafi's Libya has hosted training programs for Vanuatuans. Only recently the Libyan Government took a number of Vanuatuans back to Libya for training. Doctors from Vietnam are being brought in to staff the hospitals. Then, last June, Vanuatu established diplomatic relationships with the Soviet Union. So we have Cuba and the Soviet Union appointing ambassadors to Vanuatu, and Vietnamese and Libyan influences in evidence. Under last month's Soviet agreement, eight so-called Soviet fishing vessels will be travelling around the waters of Vanuatu. Soviet personnel will have access to land and travel throughout Vanuatu and its 80 islands. The Soviet airline, Aeroflot, will be making regular landings in Vanuatu. It is a shame for the Vanuatuan people that their new-found independence sees them in a position in which they have a great fear about the new influences being imposed on their country by Cuba, Libya and the Soviet Union. The period after independence is always difficult for a new country. The people of Vanuatu have found that instead of the gaining of independence meaning greater control over their own destiny they are now in the Cuba-Libya-Soviet Union camp. When it comes to issues that really affect their day to day lives, they find their standard of living falling not improving. As their leaders take counsel from, and aim to please, their new Cuban, Libyan and Soviet friends, the average Vanuatuan is left with fewer places in the schools for his or her children. The standard of health has deteriorated since independence as less funds have been put into the health service. The basic needs of the country are being neglected while their Government, contrary to the people's wishes, flirts with these communist countries. This only brings fear to the average Vanuatuan. At the moment Vanuatu is out of step with the thinking of the rest of the South Pacific nations. However, there is a potentially destabilising problem in the whole South Pacific area in that the Soviet Union is actively seeking fishing agreements with all South Pacific nations. This should particularly concern Queenslanders because that State includes the archipelago of the Torres Strait islands, whose people are of Melanesian and Polynesian descent but are also Australians and Queenslanders. Sir Julius Chan, the Deputy Prime Minister of Papua New Guinea, has told the National Press Club of the pressure exerted via Australian companies, acting on behalf of the Soviet Union, to negotiate so-called fishing agreements with Papua New Guinea. Australia has a large role to play in the South Pacific. It enjoys an enormous goodwill on the part of all of the people of the region, but those who would really like to see Australia take a stronger stand are the Vanuatuans. They appreciate Australia's role as the dominant country in the region. They are disappointed and afraid of their Government's change in direction away from their traditional allies to strangers such as the people of Cuba, Libya, Vietnam and the Soviet Union. They do not wish to see Russians, Cubans, Libyans and Vietnamese influencing their institutions, living and working in their country and alienating them from their brothers in the South Pacific. Australia's bilateral aid to Vanuatu in 1986 and 1987 will amount to approximately $5.6m. Australians made an immediate response to needs created by recent cyclone disaster. The Vanuatuan people feel very alone as their leaders take them away from their traditional allies and open up their country to Cubans, Libyans and Russians. It is to be hoped that, unbeknown to us, the Australian Government is playing a strong role in the Pacific region, as it should, as the Soviets attempt to negotiate fishing expansion agreements with other Pacific nations; also, that, despite the Vanuatuan Government's action in aligning itself with Soviets, Cubans and Libyans, the Government is aware that the Vanuatuan people are greatly concerned about where their newly independent country is being taken. Sitting suspended from 1.19 to 2 p.m. Senator CHANEY —My question is addressed to the Minister for Industry, Technology and Commerce. I note that yesterday the Minister refused to accept the suggestion that the Australian economy is in a crisis. I refer him today to part of Australia's economy, namely, the car industry. I ask the Minister: Does he accept that there is a crisis in that industry, given the loss of sales of some 150,000 cars last year, the fact that in that year total new vehicle sales hit a 14-year low, that it was the worst year for passenger vehicles since 1968, and that an estimated 12,000 people lost their jobs in vehicle retailing? I ask whether the Minister is aware that an industry newsletter, `AIM', has recently described the situation in these terms: At no stage in its history has the industry had so many government-induced negative factors-sales tax, FBT, devaluation and unleaded fuel-going against it without compensating factors. What can and what will the Minister do to assist the industry by reducing the Government's contribution to this alarming situation in an industry for which he is so directly responsible and with which he is so closely identified? Senator BUTTON —I have not seen that particular newsletter, `AIM'. On a number of occasions I have said that the car industry has been going through a very difficult and serious period, and there are a number of reasons for that. I do not think it is quite accurate to blame what are described as government-induced factors. There have been enormous effects of the depreciation on the car industry and there has been a decline in the purchasing power of wage earners, as a result admittedly of Government policies in some respects; but I think a whole complex of factors is responsible-we have had recent discussions with the industry about that-which does not entirely reflect the view expressed in the `AIM' newsletter in terms of the factors which have been responsible for the 1986 results. I certainly accept that things such as the changes to unleaded petrol and the method of calculating sales tax affected, in the early part of 1986, the purchasing habits of consumers of motor vehicles because those things led to an increase in price-of some $240, for example, for a six-cylinder car. That is correct. But those factors are relatively small compared with the impact of the depreciation on the motor vehicle industry. The unleaded petrol issue is not a consequence of any decision of this Government. The changes to the sales tax merely involved a method of calculation of sales tax which was requested by the Commissioner of Taxation because the then existing regime of sales tax had been badly abused and not implemented adequately by the Taxation Commissioner. So a variety of factors in respect of the matters listed in the article have to have some qualifications placed upon them. All those factors added together, I think, are small compared with the total impact on consumers as a result of wage moderation and the effect of the depreciation of the dollar on vehicle prices. Senator CHANEY —Mr President, I concede that this is not the time to debate the Minister on the response which he has given, but I ask a supplementary question which I preface by saying that we have never sought to oversimplify this and we agree that there are many factors, many of which are government influenced and controlled. I ask again: Given the seriousness of the situation, given the fact that sales tax, for example, was increased in the last Budget, not just modified in the way the Minister described, and the fringe benefits tax is having some impact, does the Minister propose to take any action in these areas which are directly affected by his Government to ease the position of an industry which employs many tens of thousands of Australians? Senator BUTTON —Senator Chaney says he does not want to debate the question, but he has introduced a new method of debating the question in his supplementary question. It is not true to say that sales tax was increased by this Government in the last Budget across the board-- Senator Chaney —I did not say it was across the board. Senator BUTTON —I know, but let us look at the facts. It was in respect of luxury vehicles, all of which are imported and the importation of which does not affect employment in the local car industry. Senator Chaney —Tell that to the dealers. Senator BUTTON —I concede that it may well affect employment in certain dealerships in respect of imported cars. In terms of the local industry and the Australian manufacturing industry, the additional sales tax on luxury vehicles was, I think, welcomed by members of the local industry because it has a beneficial effect for them in terms of their share of the market. In respect of most imported vehicles there has been a detrimental effect, no doubt. In respect of some-the best quality vehicles-it does not seem to have happened at all. Senator CHILDS —My question, which is directed to the Minister for Veterans Affairs, relates to the organisation of the Vietnam Veterans Counselling Service within the Department of Veterans' Affairs. The Minister will be aware of complaints that counselling services in the Department were not reaching out to the client population and their families and that insufficient resources were being made available. Would the Minister care to comment? Senator GIETZELT —The Vietnam Veterans Counselling Service is now entering its fifth year of operation and has proved to be one of the most popular innovations in the Department. I am pleased to say to Senator Childs that there is no suggestion at all that there will be any curtailment of the activities of the Counselling Service. In fact, sufficient funds have been made available to extend it and to maintain the high level of counselling essential to many Vietnam veterans. The Veterans' Entitlements Act that the Parliament passed last year formally established it as a permanent feature of my portfolio. On average, we are making contact each month with some 2,000 veterans who served in Vietnam. A constantly increasing number of veterans seek its services. We provide advice on a whole range of matters-legal, financial and employment matters and child management problems-and stress management workshops are organised as well as assistance with psychological problems. We have women's groups that operate in the organisation; social programs have been established; and, as I have indicated to the Senate previously, we have established in Queensland the first half-way house as a pilot scheme to provide those veterans who have above-normal stress with an environment in which they can sort out their problems. I was informed at lunchtime today by one of the New South Wales representatives who came to see me that another one is in the pipeline for New South Wales in a rural pursuit. These are all designed to meet the requirements of Vietnam veterans. While I am on my feet, Mr President, I would like to take this opportunity of congratulating a former employee of the Vietnam Veterans Counselling Service, Graham Edwards, whom I met in my first year in the Ministry, who subsequently became the selected and endorsed Australian Labor Party candidate for the State Parliament in Western Australia and who was elected only this week to the Western Australian Cabinet. It is the first occasion on which a disabled veteran has been elected to such an office. It is a great tribute to him that the Western Australian division of the Labor Party has been able to promote him to the Cabinet. He resigned from his position with the Counselling Service to contest the election. He is obviously the first such person to reach such high office in our community. Senator BROWNHILL —Is the Minister representing the Minister for Housing and Construction aware that the Housing Loans Insurance Corporation, the largest mortgage insurance agent in Australia, has had an increase in claims of 150 per cent? Is the Minister further aware that approvals for new homes fell by 6.3 per cent in the three months to November last year? Given that interest rates are at their highest since the Depression and that this is the International Year of Shelter for the Homeless, what steps is the Government taking to ease the burden on home buyers other than confident predictions by the Prime Minister that interest rates would fall significantly this financial year? If interest rates in fact do not fall, what alternatives will the Government provide to the many thousands of people who will be forced to walk out of their homes or off their farms because of an increasing inability to meet interest payments? Senator RYAN —I have some information on the Housing Loans Insurance Corporation. The Corporation recorded its highest ever total claims level in 1985-86. Claims paid totalled $3.2m and the increase in the provision for impending claims was a further $4m. The $3.2m pay-out figure translates to only around 200 cases across Australia for the whole of the year. Most of these claims were in respect of home ownership loans. However, most people who fall behind in their mortgage repayments and are forced to sell their homes still usually make a profit. Although the level of claims appears high relative to the 1984-85 level, which was $3m, there was an abnormally low claim rate in that year. As a proportion of loans insured, claims in 1985-86 were only about 0.26 of one per cent-less than in 1981-82 and less than in 1982-83. While the number of loans resulting in claims involved grants under the first home owners scheme, on a proportional basis these cases were broadly in line with the number of first home ownership cases insured. Claims were mainly in Queensland, interestingly enough, and to a lesser extent in New South Wales. Since the end of the 1985-86 financial year, the numbers have continued to rise in all States with New South Wales showing the highest rate of increase. Through the mortgage and rent relief scheme, the Federal Government provides funds to the States to assist borrowers experiencing genuine short term difficulties in meeting their mortgage commitments. Senator McKIERNAN —My question, which I direct to the Minister for Veterans' Affairs, relates to a Press release issued last weekend by the Opposition spokesman on Veterans' Affairs in which he stated that during the parliamentary recess he had personally become aware of, and indeed inspected, reconstruction work at the Kanchanaburi war cemetery in Thailand. Will the Minister inform the Senate of the true facts of the situation? Senator GIETZELT —I am aware that Mr Fischer has been busy over the Christmas recess period visiting many exotic parts of Asia, including the Philippines and Thailand, and that when he was in Thailand he discovered some difficulties with respect to war graves at Kanchanaburi that had been disturbed by workmen acting on behalf of the public authorities in October last year. I say `discovered' quite advisedly because I had issued a Press statement about that matter at the time the incident occurred and noted the apologies of the Thai authorities. I answered a question on this matter that was asked of me by Senator Robertson, the Government Whip. However, it appears that those important matters had escaped the scrutiny of Mr Fischer at the time. So during his holiday period, at taxpayers' expense, he discovered the issue which had been well and truly resolved. The graves that had been disturbed during certain demolition work carried out by the Thai authorities have been repaired. In fact, I advised Senator Robertson about that matter on 11 November last year. I therefore find it interesting that Mr Fischer should be commenting on these matters when he is silent about all of the other things that might be happening in respect of my portfolio. Senator MASON —My question is directed to the Minister representing the Minister for Communications. I refer to an answer to my question on notice, No. 827, which states: Section 101 of the Telecommunications Act 1975 provides that proceedings do not lie against Telecom or its employees or contractors in respect of loss or damage suffered by a person by reason of default, delay, error, or omission in relation to the provision, maintenance or operation by Telecom of a Telecommunications service. Hence I ask: Is it not a fact that many Australians have been seriously disadvantaged by this immunity from court action which Telecom Australia enjoys and which bears, indeed, more heavily on the community because Telecom is a monopoly? Would a private organisation or company providing a similar telecommunications service enjoy the same immunity under the law as does Telecom? If in this case the answer to that is no, will the Government institute an inquiry which will give telephone subscribers some legal recourse in cases where Telecom or its staff have been plainly deficient? Senator WALSH —I must confess that I do not remember question on notice No. 827 or the answer to it. I apologise for that culpable negligence but I have a piece of paper that says that there are no relevant statistics and, therefore, Telecom is not in a position to comment on the assertions made by Senator Mason. As a matter of interest, most major telecommunications administrations have provisions in the legal instruments establishing them similar to the section 101 prescription in the Telecommunications Act of 1975. Senator MASON —I ask a supplementary question. With respect to the Minister, I find his answer gibberish. What possible relationship can the question of statistics have to the question I asked? Will the Minister answer my question as to whether the Government would institute an inquiry which would give telephone subscribers much needed legal recourse where Telecom employees are in fact deficient? Senator WALSH —I will put the proposition about an inquiry to the Minister for Communications, but I think the answer is probably no. If the Australian Democrats were in government, we would have inquiries into everything. Those inquiries would proceed endlessly, and nothing else would be happening. As to whether it was gibberish, Senator Mason asserted that a privately owned corporation would not have the indemnification that Telecom has. I am advised that that is not true, that there are legal instruments similar to section 101 in most countries whether the undertakings are privately owned or not. I will refer the other specific questions he asked to Mr Duffy to see whether he can supply any information. Senator McINTOSH —I refer the Minister representing the Minister for Foreign Affairs to the sinking last year of the boat the Southern Raider by the French Navy and the subsequent conviction of the crew, including Australian citizens, for illegal fishing. Is the Minister aware of a report in the Australian today in which the French Defence Minister has admitted that the boat was not fishing? Given this and the admission in October by Prime Minister Chirac that he personally ordered the French Navy to open fire on the Southern Raider, I ask the Minister whether the Government has sought a formal explanation from the French Government on the reasons for the sinking of the Southern Raider. If not, will he now do so? Senator GARETH EVANS —No formal explanation has yet been sought from the French Government, although the Australian Government has been continuing to monitor the situation quite closely on the ground. The question of whether an explanation will be requested is still under consideration. The vessel was registered in Panama and it may be in fact appropriate for that country to make a formal request. Senator Dame MARGARET GUILFOYLE — My question, which I direct to the Leader of the Government in the Senate, concerns yesterday's disclosure that Australia's gross foreign debt now exceeds $100 billion. Can the Minister confirm that this figure has trebled since the Hawke Government came to office? Is it a fact that almost 20 per cent of Australia's export earnings now have to be devoted to just paying off the interest on the money Australia owes to overseas lenders? Does the Minister agree with the Chairman of the Business Council of Australia, Sir Roderick Carnegie, who last week described the level of debt as alarming and said that there was no end in sight to the deteriorating situation? Senator BUTTON —I have not examined this, but it may be correct to say that the level of debt has trebled since the Hawke Government came to power. I think that the level of borrowings has continued at the same level in real terms and that 62 per cent of that increase in debt is due to the devaluation effect. I also make the point in passing that the highest level of increase in overseas borrowings has been in respect of State and local government and that the private sector increase is consistent with the level of government borrowings-the private sector increase between 1983-84 and the September quarter 1986 being $34 billion and the growth in public sector borrowings in the same period being $23 billion. Having said that, again I have not made the calculations as to whether 20 per cent of Australia's export earnings will pay interest on foreign debt. Not having made that calculation myself, it does not sound dramatically wrong to me. I neither accept nor deny that calculation; I believe that it would be reasonably accurate. I did see that Sir Roderick Carnegie had described the level of foreign debt as `alarming' and had said that there was `no end in sight'. I do not know what he means by using the expression `no end in sight'. I note that a recent Economic Planning Advisory Council paper, which was generally regarded as a considered paper, put the end in sight as being something like four or five years in which the external debt could be stabilised at a relatively respectable level of gross domestic product. I do not have the EPAC paper in front of me; I am just referring to it because I think it has a slightly different emphasis from the statement made by Sir Roderick Carnegie, which might quite correctly be interpreted as `no end in sight in the next few years'. And if that is what he is saying, I think he is probably right. Senator COLEMAN —I refer the Minister for Finance to a Press release put out earlier this week by Senator Michael Baume on behalf of what purports to be the coalition's Waste Watch Committee, although one might question the use of the word `coalition' at this stage. In that Press release Senator Baume makes claims of fraud in respect of invalidity retirements amongst members of the Commonwealth superannuation scheme and suggests an even worsening trend in the number of invalidity retirements. Are Senator Baume's claims true? Can the Minister provide any additional information which could shed light on the matter? Senator WALSH —In response to the second last part of the honourable senator's question-are Senator Baume's claims true?-the answer is no. Senator Baume has yet again fiddled the figures. Indeed the Waste Watch Committee's Press releases are about as reliable as a Patrick Partners prospectus, and the Waste Watch Committee Chairman spends a great deal of his time trying to explain away the errors in the latest Press release that he has put out. More specifically, Senator Baume claimed-and I will not go through all the tedious detail in the Committee's Press release-that the number of invalidity retirees from the Commonwealth Public Service or, more accurately, contributors to the Commonwealth superannuation scheme, which covers large authorities such as Telecom Australia and Australia Post as well as Public Service Act employees, exceeded the number of other retirees. What he had omitted was the number of retirees who had taken a reduced pension and had retired earlier than the compulsory retiring age. Therefore, the ratio between the number of invalid pensioners and other pensioners was 0.71-not something over one, as Senator Baume had asserted. It is worth noting perhaps that in 1977-78, when, if I remember correctly, Senator Baume was a back bench member of the Fraser Government, that same ratio was 3 : 1; that is, there were three times as many invalidity retirees at that time as there were other retirees. Some unusual circumstances were operating at that time and that was a peak figure, but Senator Baume did not seem to be concerned about it then. However, the Government has been aware of and suspicious of the justification for some of the invalid retirements that have taken place. Long before the Waste Watch Committee decided to have anything to say about this I had started action through the Public Service Board, which then took a survey of invalidity retirees and particularly the earnings of people who were receiving invalid pensions. If one believed, as I believed, that there were some people on invalidity retirement pensions who should not be, basically there were two things that one could do: One could try to tighten up the medical procedures or go the financial route. The Government decided on the latter, because the problem with the medical procedures is that there are too many doctors around who will sign anything that is put in front of them. Indeed, there was recently a case, which is one of the clearest cases of malingering that one is ever likely to find, where the malingerer in question had a certificate signed by a specialist stating that he was unfit for duty and could therefore continue to receive sick leave. The problem is that there are doctors who will sign anything that is put in front of them, and it soon gets to be known who those doctors are. The Government, therefore, chose the financial route; that is, to impose a limit on the earnings from exertion that anybody on an invalidity retirement pension could receive without having that pension reduced. That legislation was passed in the last session of Parliament. It should be noted that these figures are early, but it has been our experience-not since the passage of that legislation but in the first six months of 1986-87 when it was known that this legislation was coming up-that the ratio of invalidity to age retirements fell from 0.71 to 0.67. There is one possible important problem in administering the new arrangements: Although the Act now requires the individual to supply to the Commissioner of Taxation a statement of earnings, until such time as the social security and income tax system can be effectively linked and the identity of all individuals effectively determined, there remains the opportunity to evade the provisions of the new Act by a pensioner being employed under a false name, or even being employed under his own name without disclosing that fact, and knowing that there was a reasonable chance of getting away with it because the effective identity check was not in place. If Senator Baume or anyone else in the Opposition is concerned about that I suggest that he votes for the Australia Card the next time he gets the opportunity to do so. Senator WATSON —My question is directed to the Minister for Education. To what extent has the imposition of the $250 administration fee had an impact on enrolments of students attempting to gain tertiary qualifications on a part time basis? Is the loss of part time students expected to affect adversely the operations of departments that traditionally have a large percentage of part time students? Has the impact of the fee affected the quality of enrolments? Senator RYAN —Senator Watson is somewhat premature in expecting an answer to his question. He may not be aware that some weeks ago I made an announcement that the Government, through the Commonwealth Tertiary Education Commission, is funding a research project which will investigate precisely those matters which he has raised. It will research the effects on enrolments of participation by certain groups but, in particular, by part time and external students. When those results are known, which will be fairly soon, they will be discussed by a monitoring committee which has on it, apart from members of the Government, representatives of the vice-chancellors and the college principals committees and representatives of student organisations. Based on the findings and recommendations of that Committee the Government will be in a position to take any steps that may be necessary. Senator Newman —When will that be made public? Senator RYAN —The research results will be available to us by, I think, the end of March. We will then need a period to examine them. I certainly want the information to be available to me at the beginning of the budgetary process so that if it is necessary to make any adjustments-I am not making any predictions about that-the Government will have the relevant information so they can be made. But I point out with respect to part time students that a number of rather erroneous claims have been made and given some publicity in the media. I think one such claim was implied in part of Senator Watson's question. There is an assumption that students who enrol on a part time basis are worse off in some way as a group than students who enrol on a full time basis, whereas information which CTEC has available as a result of its investigations into distance education demonstrates that about 88 per cent of part time students are in employment. Certainly, the group to which Senator Watson's question referred-public servants-are, by definition, in employment. I think it would be a very confused argument that said that a person on a public servant's salary is in a worse position than a student who has very little means of income other than-- Senator Newman —What about the nurses' upgrading in employment? Senator RYAN —I know the Opposition is not very keen on facts about this matter and that it feels extremely touchy since we know that its true intention, should it ever get into Government, is to charge full cost fees. The whole question of $250 will fade into insignificance when students are faced with paying several thousands of dollars every year. In contrast to this, our Government is conscious of the need to have more people in higher education, to have a better skilled and better trained work force. We already have an outstanding record in this respect. If we are to be rational in the application of policy we should not listen to claims such as that all part time students are the most disadvantaged. If there are public servants in my Department or any other department, or in State education departments, who are on good salaries and who are in many cases upgrading an already existing tertiary qualification, it is simply foolish to say that that group of people is more disadvantaged than the people who are not in paid employment. Let us get some rationality into this debate. Opposition senators interjecting- Senator RYAN —I have been asked about the married women. Similarly, it would be foolish, and it would not contribute at all to equitable public policy, to suggest that all married women are poor. They simply are not. We will be looking at the circumstances of women without an income, but the fact of the matter is that many married women students-we do not know exactly how many-are married to men who are on high incomes. If Senator Newman or Senator Vanstone wants to say that their needs are greater than, say, those of single supporting parents who are living on a pension, let them say it, but it is not a position that has any rationality. As I have said, the Government will be examining closely the results of the research which will demonstrate the facts about participation of part time and external students. It is worth knowing too that as far as full time enrolments are concerned there has been no drop off at all of applicants. In fact we are being told that we have an inadequate supply of places. Before these people who are in such a tenuous position of having a semi-secret agenda of full cost fees start ranting and raving about some people being required to pay $250, it is better for us to get the facts and to make any necessary or desirable policy adjustments on the facts. Senator BOLKUS —I ask the Minister representing the Minister for Foreign Affairs: Has the Australian Government received a request from the Government of Vanuatu for financial assistance for the upgrading of the airstrip at Port Vila? If so, what has been the Australian Government's response to this request? Senator GARETH EVANS —The Government did receive on 6 February a request from the Vanuatu Government for financial assistance for upgrading the Bauerfield Airport strip at Port Vila. I am pleased to be able to announce on behalf of the Minister for Foreign Affairs-if he has not beaten me to it-that that request was approved a couple of days ago. Work will commence immediately upon completion of existing rehabilitation work late this month or early next month. Approval of this request entails the commitment to Vanuatu of over $1m in additional aid funds this financial year. The project will cost $1 1/2m and will enable the upgrading of Bauerfield Airport to Boeing 767 standard. In approving the project the Minister took particular account of the priority accorded to it by the Vanuatu Government, the importance of the tourist sector to Vanuatu and the fact that the Vanuatu Government has maintained its priority for the project in the context of the demands on its national resources caused by the rehabilitation needs of the recent cyclone. Senator HAMER —Has the Minister representing the Minister for Transport seen reports that crew levels in some Australian-manned ships are to be sharply reduced to levels only slightly higher than international standards? Though this would be a welcome improvement, is not the problem of crew numbers only one of the manpower problems which seriously affect the economic viability of Australian-manned ships, which have very high total manpower costs? What is being done to ensure that Australian crews do the same amount of maintenance work as do the smaller crews from countries which have a higher standard of living than ours? Does not this failure by Australian crews to do reasonable maintenance work impose heavy additional shipping costs on Australia? Is not the third problem the extraordinary leave entitlements of Australian seamen-six months a year-so that in Australia one needs 48 men to fill 21 places on a ship? Why should Australian seamen have by far the highest leave entitlements in the world, double those of Norway and West Germany and nearly four times those of Japan? What is being done to stop these outrageous rorts, which are doing great harm to the Australian economy? Senator GIETZELT —I started to think that we were listening to a second reading debate on transport. Obviously, the matters that have been raised by Senator Hamer fall very much into the policy area of the Minister for Transport. He has asked me a very detailed question and I am not obliged or required to answer it in such detail. Of course, I am very happy to refer those matters to the Minister for Transport to see whether he considers that they require policy consideration. I am not suggesting that they are not worth some consideration; they are matters that may have some particular validity. I will certainly undertake to refer the question to my colleague Mr Peter Morris to see whether he is prepared to respond. Senator ELSTOB —Is the Minister representing the Minister for Aboriginal Affairs able to say whether the Government is satisfied with the number of Aboriginals who are undertaking further education in order to establish professional careers in the community service areas of health, education and welfare? Can the Minister say how the present number of trainee professionals compares with those under the previous Liberal Government? Senator RYAN —In answer to the first part of Senator Elstob's question, I would have to say that I am not satisfied with the overall numbers of Aboriginals in higher education and professional training. But, having said that, I add that I am satisfied with the progress our Government is making in improving what was a pretty disastrous situation when we came to office. We certainly accept that there is a critical need to increase the numbers of Aboriginals who are undertaking training in areas such as education, health and welfare. Until we can train an adequate number of Aboriginals in those areas I think we will not break the back of the chronic problems from which Aboriginal communities suffer. In 1983, our first year in government, there were only about 700 students enrolled in higher education courses leading to awards. That meant that the participation rate for Aboriginal students at that stage was only one-fifth of the rate for the overall population. By last year, 1986, as a result of a number of initiatives taken by our Government, numbers had more than doubled to 1,500-that is, 1,500 Aboriginals in higher education-and a further increase in enrolments of 20 per cent is expected this year. That is something we will be able to tell the Senate about soon, although it seems that honourable senators opposite are more concerned about privileged groups and their access to higher education than they are about Aboriginals. We have, for example, provided over the 1985-87 triennium 1,100 additional places for Aboriginals in higher education institutions. We have provided significant additional funding under Abstudy for special course initiatives; for example, bridging courses, student support systems and technical and further education initiatives. I point out to Senator Elstob and to other interested senators that these are very important because we cannot expect Aboriginals who have had such dreadful problems in completing secondary education to move straight into higher education without, perhaps, a TAFE or bridging course. So those courses are part of the whole picture, too. In every year since 1984 we have funded a special intake of 100 special teacher training awards in line with our target of having 1,000 trained Aboriginal teachers in schools by 1990. So while the overall participation rate has therefore improved significantly, we certainly recognise that more needs to be done if Aboriginals are to achieve equity in higher education. We will be maintaining priority in future Budgets for Aboriginals in these programs. I should point out, too, that government decisions that have already been taken on a new range of significantly increased allowances under Abstudy for students in formal courses will further improve this situation when the new increased rates come into effect in 1988. In conclusion, the situation is certainly not satisfactory to us. We clearly want to do a great deal more. But, quite obviously, the situation has improved enormously over our period of office and we intend to maintain that rate of improvement. Senator TEAGUE —My question, which is also directed to the Minister for Education, concerns the higher education administration charge-the reintroduction of tertiary fees by the Hawke Government. Why does the Minister evade an answer by projecting her explanation to a future monitoring report, when the patterns of applications for enrolment are now fully available? Has an article in the Canberra Times this week been drawn to her attention? The article states: The registrar, Dr Rosalind Dubs, said there had been a `significant drop' in the number of part-time students this year and that she `suspected' that this was a result of the fee. `We suspected that this would happen and I think that all universities expected that (part time students) would be the ones that would be pushed out first . . . Why does the Government still demand the same $250 fee for part time enrolments as for full time enrolments? More particularly, and finally, why does the Government prohibit higher education institutions from determining for themselves whether the Hawke Government administration charge should not be reduced or eliminated for part time and external students, accepting, of course, the financial consequences? Senator RYAN —I must say it is absolutely extraordinary that somebody who professes a great interest in higher education could ask such a garbled series of questions, displaying such an ignorance of the Commonwealth's role in funding higher education institutions. But for the benefit of honourable senators, I point out that it is not the practice of our Government to make policy decisions based on the suspicions of one person. Senator Teague quoted from an article in the Canberra Times, which, I point out, is not our main source of information when arriving at policies, anyway. The article outlines the suspicions of one person in one institution and the fact that her suspicions might be shared by people in other institutions. Fortunately for higher education in Australia, there is absolutely no chance of the organisation which currently calls itself a coalition coming to government. I can only say that it is greatly in the interests of higher education that that should never happen, if we would install a group of people who make policy in such an important area based on the suspicions of one person. As I pointed out in my answer to Senator Watson, it is our intention to look at the results of a properly conducted, properly structured research project, which will look in a proper way at the participation of different groups, not only at the Australian National University, but at the other 18 universities and 46 colleges of advanced education throughout Australia. When we have that information available to us-it will be available as soon as it can properly be made available-we will look closely at it. In answer to Senator Teague's other question, as to why an administration charge is being levied at the same rate on part time students as on those full time students who are required to pay-of course, many of them are not required to pay-the answer is that the charge is related to the administration of enrolments; it is not related to tuition. The business of enrolling a part time student for a subject costs a great deal more than $250. Senator Teague is merely displaying a disappointing ignorance of the administrative costs and practices of higher education institutions. It would be preferable for Senator Teague to inform himself properly about matters before he tries to ask these questions. In conclusion, I do not think I have a lot to add to the answer I gave to Senator Watson. There is a properly conducted research project in place. When we have the results of that available to us-results which we will happily share with those interested and properly informed members of the Opposition whom we may find-we will make decisions. But in the meantime we are not making decisions based on anyone's suspicions, nor are we making decisions on false claims about the economic circumstances of part time and external students. Senator TEAGUE —Mr President, I ask a supplementary question. The Minister in her answer used the words `in the meantime'. In the meantime, are part time and external students to suffer? Senator RYAN —I suppose that people attribute their own meanings to words. But I would not attribute a proper meaning of `suffering' to a situation in which a well paid public servant or somebody in a teaching service in Australia-somebody who may already have a tertiary degree or diploma-is required to pay $250 for the benefits of a place which, if it is a full time place, could cost in the vicinity of $8,000 or $12,000, or, if it is a part time place, could cost in the vicinity of $4,000 for a single subject. I think that to ask somebody who is already in receipt of a great deal of education and who is in receipt of a proper salary to make the modest contribution of $250 to this process cannot, in my understanding of the English language, be said to be suffering. Senator HARRADINE —My question is directed to the Minister representing the Minister for Immigration and Ethnic Affairs. I draw his attention to an article in today's Australian, wherein the Department of Immigration and Ethnic Affairs announced that acquired immune deficiency syndrome sufferers are banned from entering Australia. The article states: . . . although there was no specific policy on AIDS, the Government's policy on infectious diseases prevented any AIDS sufferer from obtaining a visa. Is it not a fact that AIDS is sexually transmitted and, of course, can be contracted by sharers of intravenous drug needles and syringes, and that it can be in no way compared with, for example, chicken pox or cholera? On what basis has the Government's decision been made? In any event, will the Government give humane consideration to applications for visas from AIDS sufferers who are dying and who wish to see their families? Senator GARETH EVANS —I am not quite sure of the extent to which the brief I have answers the range of questions that Senator Harradine has put to me. I can say that the possibility of AIDS screening of entrants into Australia is under discussion with the Department of Health. A number of practical difficulties are adverted to in the brief, but as to the particular points Senator Harradine has made it might be better for me to seek a detailed reply from the Minister and to give it to the honourable senator as soon as possible, hopefully tomorrow. Senator POWELL —My question is directed to the Minister representing the Treasurer. In view of the fact that Australians owe over $100 billion to foreigners and that most Australians have no personal overseas debts but that all Australians are suffering high interest rates, high inflation and bleak employment prospects because of this massive accumulation of overseas debts, I ask: How much of the corporate component of this debt is made up of borrowings used to finance takeovers which, through negative gearing procedures, enable a corporation to write off the interest bill incurred in the company taken over against the profits made from other companies owned by the same corporation? Will the Minister provide an estimate of how much revenue is lost to the Treasury as a result of such procedures so that Australians who have no personal foreign debts will know how much they are being used to subsidise this horrendous level of foreign debt which threatens to destroy the Australian economy? Senator WALSH —I am not sure whether the specific information that has been sought is available, but I will try to get an answer on that from the Treasurer. The question is predicated on the assumption that our foreign debt-which is, of course, the net accumulation of current account deficits-is caused by borrowing for takeovers. That is a very commonly believed fallacy, which regrettably is sometimes repeated by people who ought to know better. I would not expect the Australian Democrats to know better. The Democrats basically believe in fairies at the bottom of the garden. Unfortunately, some people who ought to know better do not seem to. The current account deficit is caused by the imbalance of interest payments and imports of goods and services as against receipts for the export of goods and services and interest received overseas and so on. If nobody was borrowing privately overseas for any reason at all, either the Reserve Bank of Australia, a merchant bank or some other trading bank would have to borrow the same amount of money. I believe there are other undesirable associations with this rash of takeover activity, not the least of which, of course, is that it feeds and encourages the casino mentality, just as peddling the belief that the current account deficit is caused by borrowings for foreign takeovers feeds the casino mentality, but in a different sort of way. It fosters the self-delusory notion that this is a problem which can be easily fixed up, that all one has to do is stop overseas borrowing for takeovers and the current account problem will disappear. Well, it will not, and the sooner that is realised the better. If Senator Powell and others of the `fairies in the bottom of the garden' brigade want to do something useful for the country I suggest that they stop peddling that sort of nonsense and start telling people the truth. Finally, one small qualification should be made to what I have said. To the extent that people who are selling shares or making windfall gains from the casino through raiding and takeover activity and that sort of speculation squander the money derived from those sources, or indeed from any other source, on luxury imported motor cars, overseas holidays, French perfume, French wine and all that sort of thing more than it would otherwise have been squandered on those sorts of self-indulgences, the current account deficit problem is marginally aggravated. Senator CROWLEY —Has the Minister for Education examined the Opposition's education policy statements, including the difference between those policies as expressed by various factional spokespeople from the Opposition ranks? Can she say how the cost implications of those policies would affect education for Australians? In particular, could she comment on what the effect would be on the dramatic increase in secondary school retention rates that has occurred under this Government? Senator Chaney —Mr President, I raise a point of order. It appears to me that that question is out of order on a number of grounds. For a start, it is a question which directly relates to an Opposition policy, although the questioner concedes that she is not asking a question about any official policy but about a number of different statements that might have been made. Quite clearly this is not a matter of public affairs within the administration of this Minister, and I would suggest, Mr President, that, like a question you ruled out of order yesterday, the question is in general out of order. If the honourable senator had stood up with some document and said `What would this cost?', that matter might be within the Minister's competence to give a reply, but the question in the terms used by this honourable senator, I would suggest, is not. Senator Crowley —Mr President, on the point of order: Watching the Leader of the Opposition yesterday jumping up and down like a yo-yo opposing all sorts of things-I am not sure whether to have them struck off air or to get himself time-I gave some thought to this question because in fact I was proposing to ask it yesterday. Mr President, I put to you that to ask a Minister whether she has examined statements or Opposition policies is not a question outside her portfolio, but is entirely appropriate for her to answer. Secondly, to ask a Minister what kind of cost implications those policy statements have also seems to me to be entirely within the ambit of a ministerial portfolio. Also, to ask what effect they might have on a specific part of government policy seems to me, again, entirely appropriate for the Minister to answer. I think Senator Chaney rose too quickly. Having heard me say something about Opposition policies, he failed to know that I had written this question in such a way as to ask the Minister about that which I thought it was appropriate for her to discuss and to take into account precisely the points that you ruled on yesterday. The PRESIDENT —There is a degree of validity in the point of order taken by Senator Chaney in that the majority of the question did refer to Opposition policies. I will allow it on the basis that the Minister answers only that part of the question that dealt with her portfolio and the Government's policy. Senator RYAN —As I pointed out to the Senate yesterday, the Commonwealth is currently spending in the vicinity of $5.2 billion on education relating to schools-government and non- government-higher education institutions, technical and further education programs, student allowances and a number of smaller programs that the Commonwealth is involved in. If there were to be any reduction of the Commonwealth role in education and in that $5.2 billion-there have been a number of suggestions that such reductions should take place, suggestions which have not come exclusively from members of the Opposition; they have also come from the Premier of Queensland and other sources such as journalists and so forth-I would need to know exactly which part of the Commonwealth's programs were to be axed. I think that the general public would want to be aware that, for example, the dramatic increase in school retention rates which has occurred during the period of our Government can be linked in quite a close way with the increases our Government has made in the levels of student assistance to 16- and 17-year-olds from poorer families. For example, if there were to be a reduction of the Commonwealth's role in the payment of student allowances, I believe it would have a very deleterious effect on the progress we are making in increased retention rates. Senator Chaney —Mr President, I raise a point of order. I think the Minister has reached the limit that you set for this answer. I point out that she has just said that if something happened something else would follow. I suggest that she is entering into a hypothetical area in terms which are barred by standing order 99 and, to the extent that it is not hypothetical, it is a matter of argument or inference, which is also barred by standing order 99. We have had the benefit of the Minister's views about the value of assisting poor students, a matter which was commenced by the Fraser Government. I suggest that you rule the Minister out of order and ask her to conclude her answer. The PRESIDENT —I uphold the point of order and ask Senator Ryan to finish her answer to the question. Senator RYAN —I will do that, Mr President, in response to your request. I cannot help but notice in passing, though, the particular sensitivity of the Leader of the Opposition in the Senate today on matters relating to education policy. I can well understand that, because the $5.2 billion that we are spending on Australian students of all ages in programs to assist Australian students and to improve the quality of Australian education is causing great difficulty for the Opposition. We have made enormous progress in this area. We are getting endorsements from business leaders and from educators all round Australia for the expenditure of that $5.2 billion. Senator Chaney —Mr President-- The PRESIDENT —Order! I call Senator Chaney. Senator Chaney —I was about to say that the Minister was clearly debating the question, but I think that she is tweaking all our tails and she has now resumed her seat. Senator BUTTON —Yesterday at Question Time Senator Peter Baume asked me a question about the current level of interest rates, and I undertook to provide him with precise details. I think that Senator Baume could have obtained the information by reading any one of the daily newspapers, but I did not have them with me at the time so I was no better informed than he was. I advise the honourable senator that statistics published by the Reserve Bank indicate that in January 1987 bank home mortgage rates were 13.5 per cent for loans advanced prior to the April 1986 housing package, and 15.5 per cent for loans advanced since. Bank overdraft rates for amounts less than $100,000 varied between 17.5 per cent and 20.5 per cent. Bank overdraft rates for amounts greater than $100,000 varied between 17.5 per cent and 18.25 per cent. Building society home mortgage rates were on average 15.63 per cent. Senator BUTTON —At Question Time on 27 November, Senator Newman asked me a question about jobs created since this Government came to office. On re-reading the Hansard I think I gave an excellent answer to Senator Newman's question, but I undertook to check some figures and to provide any additional information available. I have that additional information and seek leave for it to be incorporated in Hansard. Leave granted. The answer read as follows- The figure of 671,000 jobs created quoted by Rydges is employment growth from May 1983 to May 1986 according to the Australian Bureau of Statistics (ABS) Labour Force Survey but without any adjustment for a change to the definition of employment introduced as from April 1986. The adjustment results in growth of 646,000 over the period in question. I understand that the figure of 205,000 for ``Government sector'' jobs created over the same period relates to total employment growth in public sector dominated industries (electricity, gas and water, communication, public administration and defence and community services). This figure, however, includes both private and public sector jobs created in these industries. Private sector jobs have constituted a substantial component of new jobs in the community services industry in particular. A more accurate measure of public sector employment growth is available from the ABS Employed Wage and Salary Earners series, which has a different coverage and methodology to the Labour Force Survey. This survey shows an increase in public sector employment over the three years to May 1986 of 104,500. Although, as pointed out, the two series are not completely comparable, the available data imply that the proportion of job growth over the period accounted for by the public sector was around 16 per cent. I would add that since the Economic Summit in April 1983 up to December 1986 total employment growth (Labour Force Survey, seasonally adjusted) has been 708,800. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I seek leave to make a statement on the Prime Minister's recent overseas visit. Leave granted. Senator BUTTON —I further seek leave to incorporate the statement in Hansard. Leave granted. The statement read as follows- Mr President, I wish to report to the Senate on the visit that the Prime Minister undertook from 23 January to 3 February to Jordan, Cyprus, Israel, Switzerland and Egypt. Before this visit, no Australian Prime Minister had visited the Middle East for three decades. Yet that region is not only one of major international importance, but also one of growing direct interest to Australia. Australia's interest in the region stems in part from the pivotal importance of the Middle East in international affairs; in part from its massive oil reserves; in part because it straddles our principal communications, trade and travel routes. Further, the Middle East is a growth area for Australian trade, taking exports totalling $1.8 billion in 1985-86 and providing imports worth $1.2 billion. Our multicultural society includes several communities with strong links to the region. And, not least among these interests, Mr President, Australia has sincere concerns of principle in the region: We regard the conflict in Lebanon as a human tragedy; we support the principle of self-determination of the Palestinian people; and like successive Australian governments we see moral as well as political imperatives in our commitment to the security of Israel and its right to exist within secure and recognised boundaries. Accordingly, the objectives of the Prime Minister's visit to the Middle East were clear. The first objective was to demonstrate that, despite our geographical distance from the region, Australia recognises the significance of the Middle East, both in international affairs and specifically in relation to Australia. Secondly, the Prime Minister sought to acquire at the highest level an appreciation of the political problems and prospects of the region, projecting Australia not as a party principal to the resolution of the various issues, but as a responsible and concerned nation bringing to those issues a balanced and principled policy. Third, the Prime Minister sought to cement friendly and constructive relations with the leadership and people of Israel and in the two key moderate Arab nations, Jordan and Egypt. This friendship had already been enhanced by visits to Australia by Middle Eastern leaders, most recently by President Chaim Herzog of Israel. The Prime Minister's fourth objective was to develop our good bilateral relationships with these countries to our mutual benefit and, in particular, to assist Australia's commercial interests. In Cyprus, it was the Prime Minister's intention to discuss with the Cypriot leadership the problems besetting that island and to underline Australia's hopes for settlement of those problems. The visit also symbolised the friendly relations existing between Australia and Cyprus, not least as a legacy of migration and settlement. Finally in Switzerland, the objective of the Prime Minister's visit was, at the World Economic Forum meeting in Davos, to highlight the precarious state of the international trading system, to argue the need for reform of agricultural trade and to promote Australia as a focus of increased foreign investment and as a trading partner. All these objectives of the visit were fully met. The Middle East On its election to office, the Government undertook a review of policy towards the Arab-Israeli dispute and reaffirmed the basic principles which have guided Australian policy. These principles are: Recognition of the urgent need to achieve a just, comprehensive and lasting settlement to the Middle East dispute. Fundamental commitment to the security of Israel and its right to exist within secure and recognised boundaries. Recognition of the central importance of the Palestinian issue for any settlement. Acknowledgment of the rights of self-determination of the Palestinian people, including their right, if they so choose, to independence and the possibility of their own independent state. During the Prime Minister's visit to the region, he presented this policy to all his interlocutors, as an integrated whole. It was accepted by them all as a credible, principled, balanced and legitimate position. In the Prime Minister's discussions in the Middle East-which were thorough, detailed and invariably most friendly-a fundamental theme that emerged was the desire for peace of the Governments of the three countries he visited. The sincerity of this desire was marked not just by a yearning for the absence of conflict but by a perception that real and lasting peace will permit economic development and yield improvements in the quality of the everyday life of the peoples of all nations there. However, there are differences among the parties concerned on the ways of achieving such a peace. In particular, there are differences on the question of the suitability of an international conference as a means of resolving the differences among the parties. Some parties want such a conference involving the five permanent members of the Security Council, the nations of the region, and the PLO. They do not envisage it imposing solutions on the parties concerned but rather providing a framework in which negotiations can take place between the parties principal. In this sense the gap between the concepts of an international conference and of direct negotiations may well not be as great as is frequently suggested. Australia sees merit in such a proposal. Determining details, such as the precise methods of procedure in such a conference, remains a complex task, but this is not a reason for the key players withholding positive consideration of the concept. The Prime Minister was impressed during his visit by the commitment of both Israel and Egypt to maintaining the peaceful relationship they established through the Camp David process. He commended both countries for the courage and creativity of Camp David which remains a landmark in efforts to achieve peace in this troubled region. Egypt and Israel are prepared to build further on the spirit of Camp David. At their Alexandria summit last September, 1987 was designated by them as a Year for Negotiations and I believe everyone in this Parliament would wish that this hope be realised. A central requirement in any resolution of Jordan's relations with Israel is to determine the future of the Palestinian people. In a number of the discussions the Prime Minister had in the Middle East, he encountered an emerging, important and strongly held view that the most likely and appropriate outcome for the Palestinian people is a confederation with the state of Jordan. While he was in the Middle East he had discussions with Palestinians themselves about the problems they face on the West Bank and in Gaza, including restrictions on their political and economic freedoms. The Prime Minister also heard from the Jordanian Government its plans for a program of humanitarian assistance to the West Bank. He was pleased to give this program the moral and political support of the Australian Government and told the Jordanians that we would also, in our budget context, consider giving it material support. A central obstacle to progress in resolving the Middle East dispute is that factual realities are not fully reflected in formal positions. It is clear that there is no organisation at this point which speaks for the Palestinians more than does the Palestine Liberation Organisation, not just in the West Bank and Gaza but more broadly in what can be thought of as the Palestinian Diaspora. The PLO may not have an exclusive representative status but it does have a representative status. This is not a value judgment about the PLO but simply a statement of fact. This fact seems to be understood in Israel. It is equally clear that Israel's antagonists, including surely the PLO or at least the more sane elements of the organisation, now accept that Israel exists and will continue to exist as an independent and viable state in the Middle East. They know this is a fact. But these realities are not yet explicitly recognised in the stated policies of those parties involved. Progress towards peace in the region could be made if both sides were to issue a simultaneous statement acknowledging each other's existence-if in effect each was explicitly to state what at present it tacitly believes. What is required is for the PLO for its part to issue a formal statement of position which would entail (i) acceptance of resolutions 242 and 338 as a basis for negotiation and thus (ii) recognition of Israel and (iii) renunciation of terror in favour of the process of negotiation. For its part, Israel would be required, in the context of such a formal statement of position, to recognise the PLO as a party appropriately to be included in the negotiating processes. In addition to this central Arab-Israeli dispute, the Prime Minister's discussions in the Middle East also covered two other regional conflicts of very great concern to all the government leaders he met: the continuing tragedy of civil violence in Lebanon and the ceaseless and senseless slaughter and destruction in the war between Iraq and Iran. On Lebanon, the Prime Minister put Australia's view that all foreign forces should be withdrawn except those which are in Lebanon at the request of the Lebanese government and whose presence is necessary to allow the development of conditions which can allow social, economic and political stability to be re-established within Lebanon and the authority of the Lebanese government to be asserted. The Prime Minister made the point that the presence in Australia of a large and valuable Lebanese community, with close links to their country of origin, brought the tragic situation in Lebanon home to our national consciousness in a very graphic way. On the Iran-Iraq war, Australia has maintained a position of strict neutrality. Neutrality is not, of course, disinterest, On the contrary we have tried wherever possible, notably at the United Nations, to contribute to a solution. We shall continue to do so. Mr President, Australia has long proven its credentials as a country sincerely concerned for peace in the Middle East. To the extent possible we have been involved in measures to achieve it: we have for instance contributed personnel to peace keeping activities in the region and we have used multilateral forums and bilateral links to advance the cause of peace wherever possible. However, it would be idle to pretend that easy solutions exist in the region, or that Australia has any direct role in the peace process itself. To sum up, the Prime Minister's visit took place at a time when the path to resolving the Arab-Israeli dispute again seemed obstructed. There are not immediate prospects for a breakthrough. At the same time he was encouraged by the fact that the commitment to peace by the parties concerned has not died. Indeed, he detected a sense of realistic determination to continue, slowly but persistently, the search for progress. Moreover, as has been described, there seem to be ideas and concepts which, if pursued, would offer a way ahead. The Prime Minister has said that Australia seeks no mediating or other role in the Middle East peace process. However, as he made clear during his visit, we are willing, if requested, to do all we can to help bring peace to this divided yet fundamentally interrelated region. No Australian Government can or should offer less. Bilateral Relations with Jordan, Israel and Egypt I said at the outset of this report, Mr President, that Australia had several important interests in the Middle East. In Jordan, Israel and Egypt the Prime Minister was keen to advance the bilateral links Australia has with each of those nations. Australian trade with Jordan is currently weighted heavily in our favour. In the Prime Minister's talks in Amman, the Jordanians expressed their desire to increase exports of phosphate rock, potash and other fertilisers to Australia. They believe there may be scope for this as our current sources of supply diminish. The Prime Minister undertook to study a draft trade agreement prepared by Jordan. Prospects exist for significant joint ventures, which will be further explored by both countries. These include the provision of fresh chilled sheep meat based on the importation of live sheep from Australia for fattening in Jordan, and Australian involvement in railway or road development and phosphate fertiliser industries. The Prime Minister also flagged Australia's interest in becoming a coal supplier to a new Jordanian power station. Australian aid to Jordan consists principally of support for a Dryland Farming Project. Funding for this project is due to expire at the end of the year; however the Prime Minister told the Jordanians we would be prepared to consider a modest extension of this project. Beyond these government to government links, Australia is well represented in Jordan through its archaeologists. The Prime Minister inspected the site of Pella, one of the most important archaeological sites in the Middle East, which is being revealed to the world through the capable involvement of an Australian team headed by Professor Basil Hennessy of the University of Sydney. In Israel, the Prime Minister agreed with Prime Minister Shamir to establish a Working Party to examine the possibilities of further economic and trade co-operation between Israel and Australia. The Working Party's tasks will include the investigation of Prime Minister Shamir's expression of interest in industrial and agricultural co-operation with Australia and the Prime Minister's suggestion of further coal exports to Israel. Australia and Israel also signed a Science and Technology Agreement during my visit. This is a result of the valuable contacts established by the Minister for Science and Technology, Mr Jones, during his visit to Israel in 1985. In a meeting with the mothers and relatives of refuseniks-Jews who have been denied exit visas by the Soviet Union-the Prime Minister agreed to raise at every appropriate opportunity the issue of the Soviet treatment of Jews. The Prime Minister took steps to investigate the particularly pressing case of Sofia Landver, who told him in this meeting that she wanted to visit her terminally-ill mother in the Soviet Union. She was subsequently granted permission to enter the Soviet Union, but, as the Prime Minister has learnt only this morning, tragically her mother died before Mrs Landver was able to travel to see her. One consequence of the efforts made on her behalf is that two other relatives of Mrs Landver have apparently been given exit visas by the Soviet authorities. This is a significant human rights issue but, to revert for a moment to questions of the Middle East peace process, the issue also has a political significance. A major factor in Israel's willingness to accept an International Conference involving the Soviet Union will clearly be whether the Soviet Union is prepared to improve the positions of Soviet Jewry. The Foreign Minister and the Prime Minister will raise this and other matters with the Soviet Foreign Minister, Mr Shevardnadze, when he visits Canberra next month. Mr President, ties between this Parliament and the Israeli Knesset are very close. There was also widespread approbation in Israel of this Parliament's unanimous call last October for a rejection of the United Nations General Assembly resolution equating zionism with racism. It was apparent throughout the Prime Minister's visit to Israel that one of the strongest links between our two countries is formed by Australia's large Jewish community. Its contribution to Australian society at all levels has been incalculable and invaluable, and its close contact with Israel has done more to promote understanding and goodwill between our countries than any policies, words or deeds by Governments could have achieved. In Cairo, as in Amman, a principal area of concern was the strong trading imbalance. Egypt is one of Australia's principal markets for wheat. But Egypt exports little to us. The Prime Minister assured Egypt we will do all we can to expand Egypt's opportunities to export to Australia. A Joint Committee will be established between the two countries, not only to foster trade but to help develop the bilateral relationship generally. He also agreed with the concept of establishing a joint business council, but this is in the final analysis of course a matter for the business community itself. The idea is being investigated. Closer agricultural co-operation is in prospect as a result of the talks, and Australia's ability to supply technology and raw materials to projects such as the 2400 megawatt Zafarana coal fired power station was noted. Australia also indicated that efforts would be made to encourage increased Australian tourism to Egypt. Egypt's tourist attractions are of course well known already. But they will be even better know as a result of the very generous offer made by Prime Minister Sidky: that Egypt would be pleased to participate in our Bicentennial celebrations next year by providing a pharaonic exhibition. We are of course delighted at this offer and look forward with great anticipation to seeing the exhibition. Cyprus In the Prime Minister's visit to Cyprus, he had detailed talks with President Kyprianou. They both noted the excellent relations that exist between Australia and Cyprus. Tens of thousands of Greek and Turkish Cypriots now live in Australia and continue to make valuable contributions to our multicultural society. The substantive discussion with President Kyprianou focused almost exclusively on the tragic problems facing the divided island of Cyprus. Australia has been active in the search for a solution, both in the United Nations and through the Commonwealth. We strongly support the independence, sovereignty, territorial integrity, unity and non-aligned status of the Republic of Cyprus, as provided for in United Nations Security Council resolutions 541 and 550. The Prime Minister also expressed our support for the UN Secretary-General's efforts to find a solution, while noting that none of his proposals had so far proven acceptable to all parties. Australia believes all sides should co-operate with the Secretary-General and take no action which could jeopardise his efforts. The President welcomed Australia's support for a solution and reiterated his Government's gratitude for Australia's role in providing personnel to the United Nations Force in Cyprus. The Prime Minister took the opportunity to meet Australia's contingent of police and to express the Government's appreciation of the contribution they and their predecessors have made to the people of Cyprus, to the United Nations and to Australia's reputation as a co-operative and effective member of the international community. Switzerland In Davos, the Prime Minister attended and, at the invitation of the organisers, delivered the keynote address at, the World Economic Forum symposium. He saw this annual conference as a valuable opportunity to highlight the achievements and potential of the Australian economy and to present before an exceptional audience of corporate and Government leaders our case against the spreading plague of protectionism in world markets. His keynote address focused on the urgent need to free up world trade, particularly the trade in agricultural products. Agricultural protectionism, as practised by the United States, the European Community and Japan, is damaging not only efficient agricultural producers like Australia and third world economies which are heavily reliant on agricultural trade. It is also damaging the protectionist nations themselves. Accordingly, the Prime Minister launched at the symposium a proposal to freeze the level of subsidies and to reduce the gap between world and domestic agricultural prices, so that market forces can again provide greater rationality to agricultural trade. These proposals are now being followed up bilaterally with other Governments including through the efforts of the Primary Industry Minister, Mr Kerin and the Trade Minister, Mr Dawkins. Also at the symposium the Prime Minister and I made a special presentation describing the significant investment and trade opportunities that exist in Australia as a result of my Government's economic policies. The Prime Minister outlined the strengths of the Australian economy and the principal elements of the Government's economic strategy, while I detailed the specifics of our industrial and investment policies. In Geneva, the Prime Minister took the opportunity to discuss with the Secretary-General of the Conference on Disarmament, Mr Miljan Komatina, in particular, our hopes for progress on a Comprehensive Test Ban Treaty, a Chemical Weapons convention and a halt to the escalating arms race in outer space. Australia has been active in pursuing each of these issues, including in the Conference on Disarmament. Mr Komatina praised the constructive role Australia has played, stressing the high-level political commitment we have demonstrated, the practical and effective attention we have devoted to important issues such as verification, and the dedication and professionalism of our Ambassador for Disarmament and other Australian representatives. Mr President, as a result of the Prime Minister's visit our relations with the key Middle Eastern states of Israel, Jordan and Egypt have been strengthened. On behalf of the Government, the Prime Minister invited King Hussein and President Mubarak to visit Australia. These invitations were accepted. Our commercial and other links with each of the three countries seem set to multiply and diversify. Our understanding of the Middle East in general has been deepened and our commitment to fair and principled policies in support of peace affirmed. Our friendly relationship with Cyprus has been fortified. Our arguments against protectionism have been advanced and our attractiveness for foreign investment and trade has been highlighted. Senator BUTTON —I move: That the Senate take note of the statement. Senator CHANEY(Western Australia-Leader of the Opposition)(3.04) —Opposition senators have not had a chance to read this statement and there will not be an opportunity this afternoon to debate it. Therefore, I want to make a number of preliminary comments before seeking leave to continue my remarks. There are of course a number of things in the statement which are welcome to the Opposition; there are a number of areas of shared concern, and we express the hope that there will continue to be bipartisan support for the view that Israel's right to exist must be recognised by all parties in that troubled region and also bipartisan support for the proposition that there is indeed a Palestinian problem and a need for a just and peaceful solution which takes account of the fundamental rights of the Palestinians. There are a couple of matters in the statement which caused me some concern and to which I should like to refer at this first opportunity to comment on what the Prime Minister (Mr Hawke) has had to say. I noted with approval the Prime Minister's acknowledgment of the importance of Australia's participation in peacekeeping. The Prime Minister expressed himself as being impressed during his visit by the commitment of both Israel and Egypt to maintaining the peaceful relationship they established through the Camp David process. I note that with some satisfaction because the Camp David process occurred during the time of the Fraser Government, and the outcome of that process had the support of that Government. At the request of the participants, Australia volunteered to be part of that peacekeeping force which was established to try to ensure that the Camp David accords had a practical impact on the Middle East and would lead to peace. I note that the Prime Minister in his statement accepts credit for the fact that Australia has participated. He said: . . . we have, for instance, contributed personnel to peacekeeping activities in the region . . . I remember when we went through the difficult process of determining that Australian troops should be sent overseas to that troubled region, a decision not lightly taken by any government. We did so in the hope that it would amount to a substantial contribution to keeping peace in the Middle East. Last year Senator Peter Baume led a group of Liberal parliamentarians and one National to Israel. This followed a number of visits by Labor members of parliament, and it was at the time when the Australian peacekeeping force was still involved in the Middle East. The view was put to us very strongly at that time that both the Egyptians and Israelis were anxious to see the maintenance of the Australian contribution to that force. I would like to record my disappointment at the fact that, notwithstanding the Prime Minister's endorsement of the value of our participation in these matters in the Middle East, the Prime Minister and his Government saw fit to end that contribution. I am pleased that neither the Israelis nor the Egyptians chose to make a great deal of that, but it was quite clear that that occurred against the wishes of those participating countries. I record the rather odd tone of this statement with its apparent support for our history in this region and yet this Government's failure to proceed, to deliver and to continue to support what has been a most valuable contribution to maintaining peace in the Middle East. Senator Button —All good things come to an end. Senator CHANEY —The Leader of the Government interjects that all good things come to an end, and nobody is suggesting that there should be a permanent Australian presence in the Middle East. But the reality is that at the time the peacekeeping force was withdrawn there were still difficulties in the region, in the sense that elements of the Camp David accord were still being worked through. It was the view of the countries concerned that the Australian contribution was valuable. Indeed, it was put to us that the Australian peacekeeping force had been unusually valuable because of its capacity to work easily with all the other participating nations. It was flattering as an Australian to be told that our Australian contribution had a peculiar value in that force because of the high regard that all the other participants had for the Australians. I record that withdrawal as one of the negatives in what otherwise in many respects has been a continuation of good relations between Australia and countries which themselves have considerable differences in the Middle East. The other matter that is worthy of comment at this stage is the part of the Prime Minister's statement that refers to his address to the World Economic Forum symposium. I understand that he was accompanied there by Senator Button. The statement says: . . . Senator Button and I- that is, the Prime Minister- made a special presentation describing the significant investment and trade opportunities that exist in Australia as a result of my Government's economic policies. I outlined the strengths of the Australian economy and the principal elements of the Government's economic strategy, while Senator Button detailed the specifics of our industrial and investment policies. I do not think the Minister for Industry, Technology and Commerce (Senator Button) has any grounds for complaint that the Opposition, either within Australia or without Australia, or indeed in any forum, has sought to obstruct the positive elements of industrial policy which go to trying to produce a more outward looking, internationally competitive and more efficient set of industries in Australia which have a chance of competing and exporting. The Opposition's continuing concern is that there remains so much to be done internally in Australia if those industry policies to which we have given support are to make sense to the people we are asking to invest in industry in Australia. Again, it seems to me to be of limited value to make speeches about the desirability of having an internationally competitive economy when we have interest rates that are something like twice the average that people are likely to see overseas and taxation rates which many business representatives say are simply not competitive. For example, one industry leader suggested that a return of 25 per cent in Australia was required for the equivalent of an after tax return of 14 per cent in Hong Kong. Senator Button —That would probably be right. Senator CHANEY —Senator Button says that that would probably be right. I make this point because it is necessary to expand the area of bipartisanship in this matter rather than diminish it. The point on which we are able to get any clear acknowledgment from the Government is that all of these areas-interest rates, inflation, movements in wage rates, productivity, taxation and the rest of it-unless one can say that Australia is offering a genuinely competitive situation, a great deal of the efforts which are being made by the Government and which have had the support of the Opposition are simply irrelevant to our future welfare. The Prime Minister is again talking about the strength of the Australian economy and our capacity to attract international investment. I use this opportunity to remind the Government that it has a huge distance to travel if it is to provide a genuinely competitive international environment for Australia. We talk a great deal about the straight labour costs. The Government is at present arguing this matter before the Australian Conciliation and Arbitration Commission, where it has had a falling out with the Australian Council of Trade Unions and where there has been a clear breach of the accord because of differences between it and the trade union movement about what the economy can afford. It is important to note that if one looks at the costs of most industrial establishments one finds that direct labour costs tend to be a relatively small percentage of the total costs. Tax costs, capital costs, material costs and transport costs impose burdens which are simply heavier in Australia than in the countries with which we are competing for investment. I express some disappointment that the Government's overseas rhetoric in these matters is not matched by a comprehensive policy approach to deal with these other areas of policy which are so fundamental to our economic recovery. That moves a long way from the Middle East which is, of course, the prime issue dealt with in the Prime Minister's statement. In this area, as in other areas, the Opposition makes no attempt to create artificial differences between us and the Government. I am sure that there is a clear recognition, both internationally and within Australia, that basic support for the existence of the state of Israel, for example, and a basic concern that there should be a fair resolution of the problems and difficulties facing the Palestinians, are continuing strands of policy which, one would hope, would continue to maintain considerable bipartisan and non-contentious status in this country. However, I believe that the economic side of the statement is one which has all the hallmarks of the deficiencies of this Government. It has had the great benefit of a co-operative Opposition in such major matters as floating the currency, deregulating the financial market, adopting a more open approach to the question of tariffs and an approach to industry policy which is traditionally difficult in Australia but which has been supported by us; yet it has totally failed to acknowledge the need to provide that genuinely competitive framework for our industry which would give meat to the skeleton which is described by the Prime Minister in his speech. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MASON(New South Wales) —by leave-The Australian Democrats feel that the statement by the Prime Minister (Mr Hawke) is realistic and in many respects courageous. Senator Hill —Are you speaking for all the Democrats? Senator MASON —I think so. We have a fairly common view on such matters, regardless of propaganda to the contrary. As I said, the Democrats feel that this statement by the Prime Minister is realistic and in many respects courageous because it addresses some of the vital issues in what is plainly one of the most important areas of tension and conflict in the world-the Middle East. I say this with the advantage of a state visit to Israel which the Government of that country kindly offered me last year. In this context I must thank the Israeli Government and all the Israelis I met for the diligence, thoroughness and honesty with which they were prepared to discuss issues of importance to that country. In recent years Israel has not been engaged in major wars against its neighbours, nor has it suffered from major patterns of insurgency. At first a casual visitor might be forgiven for perceiving simply a prosperous and hard-working community whose major problem is an increasingly serious shortage of water, but closer contact reveals the enormous tension under which the events of the last decades have placed the region. I was fortunate enough to have half an hour of discussion with the Israeli Prime Minister, Mr Shamir. I will confirm, as Senator Chaney said, that Mr Shamir raised with me the question of the cancellation of the Sinai force. I do not think that he overstated it. It did not appear to me to be a matter of grave consequence between the two countries. It was the Democrats' policy, and the Government's, that the force should be concluded at that stage. I put to Mr Shamir the view that basically the force was becoming semi-permanent and only a certain amount of time could elapse in which such things could be carried out. Among other things, it was an economic burden to Australia. I feel that that was clearly understood. Senator Hill —But it was a worthwhile contribution. Senator MASON —I concede that it was a worthwhile contribution. Senator Hill —We should have been prepared to pay the cost to make a worthwhile contribution in one of the most troubled areas in the world. Senator MASON —If we were to do that in every troubled area of the world we would have great difficulty. It is a question of priorities. Mr Shamir agreed that the force had been a valuable contribution. However, I felt that the Israeli Government was prepared to put the matter in the past and that it would not be a major issue. More important from our discussion-I repeat this with Mr Shamir's permission-was his belief that the main enemy, the main threat, to Israel now is Syria. He spoke with great emotion, passion and intensity about his belief in Syria's intention to pursue Israel, even to the extent of saying-here again I have his permission to state this publicly-that he believed that the Syrian Government was planning to use Russian missiles to attack Israel at some future time with biological weapons. At that stage I raised with him my view that surely no such atrocity could be tolerated by the rest of the world, but he still maintained his view that that was a likely possibility. Whatever one might feel about the possibility of such an attack, it is important that an Israeli Prime Minister should feel so strongly about it. That is, of course, due at least in part to the Israeli feeling that the nation is in a virtually permanent state of seige. This highly charged atmosphere, this tension, somehow must be relaxed and in this context I feel that the Prime Minister has displayed perception in the statement that we are debating. He spoke of the need for a Palestinian homeland and this is something with which I would agree. Certainly, short term visitors to any place should be cautious as to how they comment about that place, but it does seem self-evident that a good deal of tension would disappear from the Middle East if a homeland could be provided for the Palestinians-for them to achieve, after all, no more than what so many Israelis fought and died for with such determination and passion. There is a view among Israel's neighbours-I found this too-that Israel is land hungry and that she wants to acquire southern Lebanon. Some of these neighbours point out that whenever Israel has gone to war she has acquired territory which she has hung on to. That also, of course, is true and needs to be said. The tension in the Middle East would probably be greatly alleviated if Israel voluntarily yielded back land to provide a Palestinian homeland, and I find the Prime Minister's comment on page 5 of his statement that it might well be in confederation with Jordan to be a perceptive one. While it would seem that in the interests of the city itself Jerusalem should remain totally under the control of a single government-I think the history of Jerusalem certainly indicates that as being desirable from the point of view of the city and all its communities-other areas of the West bank, territory which indeed even now is legally Jordanian, could perhaps become such a homeland. It could be considered at least for such a homeland. Of course it is mainly desert but there are important exceptions, such as the land along the Jordan River and in particular the fertile section around the city of Jericho. I am glad to see that the Prime Minister discussed trade contacts with Israel at the highest level possible. While I was there, as it happened, a unilateral decision was taken by a senior Israeli official to cancel very considerable contracts for Australian coal. If that cancellation had been maintained it would have resulted in very considerable additional unemployment-even in my own electorate in the New South Wales coalfields from where, as it happened, that coal would come. I was able to make some small contribution-at least some forceful comments-on the view that I thought this Parliament, and certainly the people of New South Wales, would have on that especially since those contracts had been maintained through times when they were advantageous to Israel. I put the view to Mr Shamir and others that it would seem rather bad if they were cancelled purely because of cheaper oil prices and the feeling that at this stage there was some economic advantage in cancelling them. Of course the oil situation might not last into the future. Happily, that decision was reversed. This is an interesting example of the extent to which such matters require constant minding in the very competitive international market. The agreement signed by the Prime Minister and mentioned by him on page 9 of the statement has obvious value in that context. I especially refer to the agreement on science and technology which, as the Prime Minister points out, was trail blazed by the Minister for Science, Mr Barry Jones. I visited the Weisman Institute and other places in Israel and was greatly impressed-as anybody who went there must be-at the extent and value of the Israeli research effort and at its initiative and personal view of things. It actually blazes the trail in important areas. It does not follow other areas of research. The fact that a small nation like Israel, working in such an unfavourable and poor piece of terrain, can achieve prosperity, even wealth, for its citizens in spite of the huge demands that defence has made on it, begs the question as to why a resource-rich favoured nation like Australia without heavy defence commitments can do so badly, and we are doing extremely badly. I commend this thought to the Leader of the Government: Perhaps we could do with some Israeli advisers in Australia to tell us how to get together effective competitive export industries, how best to use our resources and perhaps how to motivate our people to be successful. I put that thought to the Government seriously. Senator SIDDONS(Victoria)(3.23) —I move: That the Senate take note of the paper. I have read this government paper with a great deal of interest because I have put the Employee Participation Bill before the Senate and it is awaiting debate. I can only say that I was bitterly disappointed to read the paper. I am sure I speak for many people interested in this area who also will be bitterly disappointed. It is a government cop-out. It says: `The approach should be gradual'. It says that there should be a gradual introduction to employee participation and industrial democracy when there is a vital need for its rapid introduction. The Government makes it clear that it will commit no substantial funds to encourage its introduction. Substantially it has fallen for the same trap as did the Bullock Committee report in the United Kingdom. The Government is caught up in two quite separate issues. One is power sharing: Unions sharing power with bosses. That is an aspect I call industrial democracy. The other aspect is employee participation; that is, involving employees in the work they do during the eight-hour work day. The second approach, employee participation, is not contentious. It is generally agreed in the community that it is a good thing and that the employee participation approach has been fundamentally responsible for the success of Japanese industries. As I have said before, the Toyota company, as an example, processed 1.9 million suggestions from employees last year. That has nothing to do with power sharing but it is to do with using the brain power, technical expertise, initiative, drive and innovative ideas of the work force during the eight-hour working day. This paper will do nothing but confuse people. It is designed to slow down the introduction of employee participation saying that the matter is complex and we must hear a lot of submissions from all sides of industry. It says that the Government is not prepared to define what employee participation is and is not prepared to move in at least one or two areas. In the Bill before this Parliament there were five clearly defined criteria. If people had been encouraged to adopt the criteria immediately that would have a dramatic effect on the efficiency of industry. One of the criteria is profit sharing and another is employee share ownership, sharing the dollars and rewards of the employees' participation in the industry with the work force. They are two clearly defined areas. Another area is the cellular system or having autonomous working groups so that people can relate to each other and get away from this terrible hierarchy that so besets Australian industry. The fourth criterion is having small group activity. This is modelled on the Japanese approach which is well established and should be encouraged immediately by this Government. The fifth area is to have financial incentives offered by the Government. My Bill says that the Government should allow an eight per cent reduction in corporate tax for those companies that could convince a small board that they had applied at least four of five criteria set down. That is a very powerful and positive incentive which would have the effect immediately of encouraging industry to develop approaches to employee participation in line with the defined criteria and we could have got off the ground straight away. This paper will be read. It gives the Government the excuse to do nothing about the matter forever. The real problem is that the Government is not prepared to confront the trade union movement to try to get agreement. The Bill I introduced in 1982 had the approval of Cliff Dolan and the Australian Council of Trade Unions. They agreed to support it in the Senate. If we go back to that Bill at least we have a base to get started. As it is now, the whole gamut of the issue is canvassed in this report. It talks about sharing power with the trade union movement. Agreement will never be reached quickly with employees. It is a whole new and very complicated ball game. Why do we not just take the simple approach-get encouragement to involve employees in what they do in the eight-hour working day and there would be dramatic returns in efficiency to industry. I conclude by imploring the Senate to debate industrial democracy and employee participation. Senator CROWLEY(South Australia)(3.28) —I find it interesting to have heard Senator Siddons's remarks because very largely they are in conflict with my assessment of this very constructive and useful report. I also find it interesting that he finished up by pleading with us to take the simple approach. This certainly is a line that the Australian Democrats often use. It is a point that I think this Government resists from time to time. We cannot address complex issues in a simple way. That does not suggest that some of the points he raised were not a matter of serious concern and importance. Also, I object to his suggestion that those matters are not of concern to the Government. I also object to the honourable senator's understanding that the document will distract and dissipate any energy or focus in the area of occupational health and safety, the costs associated with it and the need to look at the very best ways to tackle that. Anybody examining the annual report 1985-86 of the Worksafe Australia National-- Senator Lewis —I take a point of order. As I suspected, Senator Crowley is making her usual speech that she makes about any report. The only trouble is that this time she is on the wrong report. We are dealing with the industrial democracy and employee participation paper about which Senator Siddons was talking, not the National Occupational Health and Safety Commission report. The ACTING DEPUTY PRESIDENT(Senator Giles) —Thank you, Senator Lewis. That was just becoming apparent. Senator CROWLEY —I stand corrected. I object to the honourable senator's description of me, but I will wait to speak on the correct paper. Senator LEWIS(Victoria)(3.30) —This policy discussion paper on industrial democracy and employee participation is somewhat timely and welcome, although on some aspects of it I agree with Senator Siddons. The Opposition is concerned that this should not be used as a vehicle for extending union power. It would strenuously oppose any government proposal to extend union power which is already too great. Nevertheless, I acknowledge that this Government has been putting a massive amount of work into this area. When I looked at the Australian Government Publishing Service bookshop in Melbourne the other day I was surprised to see a whole window set out with reports on industrial democracy and employee participation. So, clearly, a lot of bureaucratic work is going on in the area. I, and I am sure Senator Button also, would urge managers around Australia to adopt some of the techniques being posed by these discussion papers. I certainly believe that any manager who is managing a business properly would have a large number of these techniques incorporated in his management techniques. One of the great pities is that managers in this country seem to have adopted the Army technique, that the colonel in charge says what the Army does instead of having a discussion with his troops about how the Army might do it better. That is what industrial democracy and employee participation are all about. It should not be about the unions gaining greater control over the management of an organisation. On the other hand, I have to say that industrial democracy and employee participation is not a panacea for the shortcomings in our industrial relations system. We in the Opposition believe that nothing short of a major overhaul of our outmoded system will achieve the flexibility required. I might add that the paper acknowledges certain benefits in the Opposition's industrial relations policy. We intend to bring greater flexibility into the system by taking decisions on wages and conditions back to the work place or enterprise level where they should be the subject of discussion and agreement between employees and their employers. We have proposed incentives for employee share participation and profit sharing schemes as a means of giving employees a greater stake in the success of their firms. However, we would not support restrictive legislation, as envisaged in option 1 in the paper, and we would not support the creation of further government bodies to talk about issues that are more properly dealt with at the work place level. Senator MASON(New South Wales)(3.32) —The Australian Democrats support Senator Siddons in the attitude that he has taken towards this policy discussion paper on industrial democracy and employee participation. We believe, and have always believed, that a useful system of industrial democracy and employee participation is indeed a long way towards a panacea for Australia's industrial problems and that our problems are probably due basically to the perception by so many people in this country that money is automatically there, that a guaranteed amount of money is handed out every week or every fortnight, regardless of how much work is done, regardless of how productive a worker is and regardless of the fact that a worker may do one-tenth of the work that has been done by the person next to him. Anybody who thinks that any society can continue reasonably and prosperously on this sort of basis is having himself on. There is no doubt about that at all. The proof of that is that the other successful industrial nations, unlike the unsuccessful ones-the absurdly unsuccessful, the brilliantly unsuccessful ones-such as Australia, have systems of industrial democracy and employee participation, for the perfectly simple reason that they have perceived that in this world of the 1980s and the 1990s, not the world of the 1850s, the 1880s and the 1890s, there is not the old sense of conflict and struggle between worker and boss. In this country worker and boss go to the same bowling greens, golf clubs and things like that; there is a need for co-operation between them. That co-operation can come by perceiving that people consult their own self-interest. Even the best of us do that; so do people who work. Those who work hard ought to be paid more; those who are not prepared to work hard ought to be paid less. It is as simple as that. That ought to be built into a self-regulating system. It can be done by a sensible system of industrial democracy in which work groups are self-disciplinary and will say to a bludger-a lazy man or woman in its midst-`Either work or get out because you are affecting what we are going to get'. I regard that as absolutely fair and reasonable and the only kind of industrial situation which can even begin to succeed with the difficult economic problems that we face now. We are not in the dear old casual days of the 1950s and 1960s when anything went, when we could get money for virtually nothing because that money was not coming from the productive effort of this country-of course it was not, ever-it was coming from the bonanzas from our primary produce and the sale of our minerals including coal. Let us face the truth at last. For heaven's sake, let us face the truth that it is not that kind of world any more, that we have to have a sensible system of industrial democracy and employee participation. Somehow we have to address the industrial relations problem and see that we can make it work. It is not working now. The fact that this country is ranked alongside Mexico with the third highest rate of debt in the world ought to give us cause for concern; it ought to get us out of the polemic and tired old political positions of the past. I have observed casually some enterprises in this country which use industrial democracy, including Senator Siddons's companies. They work; they are effective; they make money; they do not have industrial trouble. I suggest that the Government, in association with the Australian Council of Trade Unions, for heaven's sake, put policy discussion papers such as this aside; they are not necessary. Already it has been established throughout the world how these things can be done. All we need is the humility and good sense to adopt in our country some of the principles which have been proved to work in other parts of the world. Senator COONEY(Victoria)(3.36) —This is an interesting policy discussion paper on industrial democracy and employee participation. All of the remarks that have been made so far have been very pertinent, including those from Senator Crowley. She made a very good point when she said that Senator Siddons, in his very good contribution, treated the matter somewhat simply. Senator Siddons, who has, as Senator Mason has said, a very good record in this area, made one of his uncharacteristic errors in saying that this is a very simple area; that we simply pay those who work hard a reasonable amount and pay those who do not work hard enough very little or nothing at all. Senator Siddons then said that if the rest of the world can do it so can we. He held the Japanese up as exemplars. One of the problems is that we are not Japanese or some other nationality from the other side of the world; we have our own particular culture and, as far as industrial relations go, a very particular culture which has been built up over the decades. We have an arbitration system; we have a particular culture between employer and employee which has been built up over the years. Whatever we do about industrial democracy and employee participation, it is certain that there ought to be equality of power between employer and employee. The only way the employee can get equality of power is to have a union-a strong union-behind him. Senator Lewis, whom I much admire, said that the unions have too much power. That proposition is often put in this chamber and, in my view, is put too often and wrongly because it creates an impression that somehow unionism is evil and ought to be in some way crushed. The only thing one has to do to condemn something is to say that it is attached to unionism. I am not saying that these are the words Senator Lewis used, but I say that it is the sort of approach taken and is the sort of climate created, and it is very poor. On the other side of the chamber I see Senator Parer, formerly a captain of the mining industry. I have spoken to him about these things. He sees a place for unionism, but even he at times transgresses. At times he condemns the unions in such a fashion that a climate is created which attracts hostility. I am sure he does not intend that, but that is what he does. Senator Parer —They start it. Senator COONEY —The unions do not start it all. They do not have too much power. Certain unions commit transgressions as do certain employers. The fact that they commit these transgressions does not mean that that is the essence of either the union movement or the employer organisations. The unions represent their members before tribunals. They set up superannuation funds for them. An objective of the unions is to help the family. The unions represent their workers in workers compensation cases. They provide counselling. They disseminate information and carry out research. They perform function after function. This work can only be called admirable. If these facts were recognised by senators on both sides of the chamber there would be universal acclamation. Unions are necessary if we are to have industrial democracy and employee participation. Unions ought to be encouraged and given praise in this chamber more often than they are. Unions are not given enough recognition for the great good they do. Instead, they are seen to be whipping boys or whipping girls-I do not want to be sexist-and I think that is a great shame. So I simply make two points: First of all, industrial democracy and employee participation are not simple matters-Senator Crowley was right about that; and secondly, in approaching this complex problem, we have to create a climate in which unions are given the proper respect for their contribution to society. Senator McKIERNAN(Western Australia)(3.42) —Like previous speakers, I too think that the paper on industrial democracy and employee participation is a timely release. There are people in the trade union movement who would have wished that the paper had been released earlier. However, I think its delay in publication and presentation to the public for discussion and input is but a measure of careful preparation that has gone into producing the paper. It shows that we have not fallen for the trap of automatically picking up some bright new flashing light scheme that operates overseas and seeking to impose it on the Australian population. I think Australia's industrial history has proved that those things just do not work. In the words of Senator Cooney, who spoke so eloquently in this debate, it just does not fit into the psyche of the Australian population. We all know the tremendous Irish influence that is in that psyche-we Irish have to claim credit where we can. We do not live in a perfect world. Senator Parer knows that is the case in respect of the coalition at the moment. If there is a science of industrial relations, it is a complex and extremely difficult science to work with. This is because we are dealing with the most unpredictable medium-that is, human beings. I am reminded from time to time of what it is like in this chamber when we hear the sabre rattling that takes place from one side to another. I think the other reason why there has been a timely release of the document is that the paper puts a very real alternative to the sabre rattling in industrial relations that is going on at the moment. We read headlines on a daily or weekly basis of how representatives of the Opposition will crush unions. We read about the particular individual who wants to lead this nation while he is destroying his own State. I refer to the Premier of Queensland. We also read about the representatives of the New Right in this country who want to crush the trade union movement and the workers. They want to turn them back into slaves and serfs. Of course, the Australian population will not sit back and let this happen. One of the reasons this will not happen is, as Senator Cooney said, because we have a strong trade union movement. I am glad to see that Senator Lewis is awake. Maybe he will contribute at a later stage and say a little more than he said earlier. However, I agree with some of the points that were made by Senator Lewis. I want to take up and follow through the issue concerning the New Right because one of its leading representatives is actually turning working people into serfs and slaves. I am referring, of course, to Robe River in the Pilbara region of the State which I represent. The dispute at Robe River has been the scene of conflict since the middle of last year. That conflict is ongoing and will continue for quite some time to come. The minds of people in this area have been coloured. Irrespective of whether there was an immediate settlement on every matter in dispute and irrespective of which side won, the animosity, fear, bitterness and hatred will remain with us for a long time. Copeman and the people he represents will in turn be making Australia pay an awful price for what is happening there. I particularly want to mention something which is not making the headlines in the Australian or the Sydney Morning Herald or even the West Australian. I refer to the dehumanisation of workers that is taking place in that area at the moment in the name of industrial relations and in the name of what Copeman and company would call productivity. They have what is known as a grot squad. Never before have I heard a more appropriate name for a practice that would drive working people right down to such dehumanising levels. The grot squad consists of-it changes from day to day and in some cases from hour to hour-human beings who are employed by Robe River. These individuals are picked up and told to go and clean up somewhere else. They could be skilled tradespersons; they could be semi-skilled people; they could be highly experienced drivers of very expensive equipment. They are picked out of their jobs and told what to do. For fear of being sacked they have to subject themselves to humiliation. I ask people to read the paper on industrial democracy and employee participation, to get different views from different organisations and to compare what is proposed or what is offered as an alternative within this discussion document to the humiliation of human beings that is happening in Robe River today. What is happening there would be more likely to happen in 1887 rather than the present day. Unfortunately, though, that is the political scene in which we live today. People have the money and power which they are prepared to use and abuse to serve their own ends. I trust that this sort of thing will come to a speedy halt in the very near future. Question resolved in the affirmative. Senator LEWIS(Victoria)(3.47) —I move: That the Senate take note of the paper. I say at the outset, of course, that the Opposition recognises the importance of occupational health and safety. We deplore the loss of life and we recognise the economic cost of the problems of health and safety in occupations. We deplore the estimated cost of industrial accidents which is about $6 billion a year. On the other hand, we point out that these are matters for the States. They have the statutory responsibility for employers and factories and other work places. They have over 160 statutes covering occupational health and safety. It was assumed that the National Occupational Health and Safety Commission could perform the work of smaller bodies more effectively. I ask: Where is the evidence that it is doing so? I point out that the parliamentary appropriation for this body is now $18m a year. I wish Senator Walsh was here or listening to his radio so that he would know that this body is now costing $18m. What does it achieve which could not be achieved by direct interministerial and departmental contact between the Commonwealth and the States. It seems to me that this Commission, which already has a staff of over 200, is a burgeoning bureaucracy. The following statement is made at page 17 of the report: A firm base has been laid upon which to build co-operative effort. To me that suggests that that body has growth ambitions. I point out, for example, that it has immediate access to international and other data bases. This is all set out on page 45 of the annual report. It seems to me difficult to understand why it should re-engage a senior staff member who was apparently on extended leave in the United States. I note that she was given six-months work in the United States to liaise with the United States and Canadian occupational health authorities. What sort of cost was that and what did it achieve? There is nothing in the report to suggest what it achieved. It is just reported that she was over there and that, while she was there, we used her for six months and gave her six months' pay. Yet the Commission has this access to these databases in its own very extensive computer network. It could have got the information from those databases because it has access to Dialog and ESA-IRS, which are United States data bases. I suggest to the Senate Estimates committee that it should carefully scrutinise this, together with the passing reference on page 50 of the report that staff have attended overseas conferences. The first thing we do when we create a bureaucracy is to send people overseas because they have to go overseas to attend these conferences and things, and that is all in the first six months of its operation. I note the relatively brief references in the report to research that has been carried out. I accept that this is an important function, and it is clear that those working in this field are dedicated. But could this not have been equally carried out by purpose grants given to universities or State instrumentalities? I also support the grants and post-graduate scholarships, but I question whether there is a need for a commission to award those grants and post-graduate scholarships. Surely the Department could have done that. Finally, if we look at page 50 of the report we see clearly that the Minister's decision to centralise the body in Sydney failed to take into account the lack of a suitable single site location. This has resulted in the location of administration in St Martin's Towers, with other accommodation scattered at the University of Sydney and the University of New South Wales and with further costs to come with the Commission's long term objectives of a single site location-all this simply to duplicate State functions. Senator CROWLEY(South Australia)(3.52) —Madam Acting Deputy President, I think I have it right this time. I would also like to thank my colleague Senator Cooney for so ably drawing the comments I made under the wrong heading into the right area. I found it interesting to listen to Senator Lewis's comments. I think we have to be very thoughtful about costs. We have to ask the questions he poses. The Government has asked those questions. I notice that Senator Lewis said that the cost of the lack of occupational health and safety-that is, the disease and death to workers in this country-is estimated at $6 billion in round figures. I draw his attention to the fact that when Mr Macphee was the Minister in 1982 the estimated figure he gave us then was $4 1/2 billion. In five short years-probably only four-there has been an increase of $1 1/2 billion in that estimate, and that is something on which we ought to focus our minds. Another question that Senator Lewis asked was why the States and Territories could not address all of this. Firstly, although those State and Territory statutes and requirements are in place, quite clearly they are not sufficient. It is the Government's understanding that some kind of Federal overview of all those bits and pieces, plus the other things that are reported in this very good annual report of the National Occupational Health and Safety Commission, is the way in which the Government prefers to go to try to make sense of information throughout the country and to draw together many of those bits and pieces of information to try to improve the very appalling statistics we have of death and disease in this country. The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! The time for the consideration of Government Papers has expired. Senator JONES(Queensland) —by leave-On 9 May 1985 the following matter was referred to the Standing Committee on Science, Technology and the Environment: The question of whether an urgent investigation should be undertaken into the crown of thorns starfish threat to the Great Barrier Reef. This reference arose as a result of debate on 28 March and 9 May 1985 on a motion by the late Senator Missen relating to the preservation of the Great Barrier Reef. On 30 April 1985, Mr Peter Milton, Chairman of the House of Representatives Standing Committee on Environment and Conservation, wrote informing me that the House of Representatives Committee had decided to investigate the impact of the crown of thorns starfish and the impact on the reef of erosion from the Daintree Road. Mr Milton indicated that the areas outlined in Senator Missen's motion would be included in the investigation. Our Committee decided that it would take no action in this matter as it was being investigated by the House of Representatives Environment and Conservation Committee. That Committee tabled its report entitled `Protection of the Great Barrier Reef' in November 1985, and I understand it is now being considered by the Government. The Standing Committee on Science, Technology and the Environment believes that, as this matter has now been investigated and reported on by the House of Representatives Environment and Conservation Committee, it should no longer continue as a reference. Senator KILGARIFF(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator ROBERTSON(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator JONES(Queensland) —by leave-I move: That the following matter be referred to the Standing Committee on Science, Technology and the Environment- 1. The capacity of the Australian Development Assistance Bureau to: (a) assess the environmental impact of proposed projects; and (b) ensure the environmental sound management of such projects. 2. The adequacy and effectiveness of Australia's participation in the decision-making process of the international banks and multilateral aid agencies of which Australia is a member in relation to the environmental aspects of development projects. The Australian Government funds many development projects overseas. It is involved in choosing, designing and implementing many of these. Many projects involve major changes in agricultural, forestry, fishery and rural development practices. As such they are projects which often have major conservation and environmental implications. In recent times there has emerged an increased awareness of these implications. Discussion has arisen in relation to the need for conservation and environmental issues to be considered by donor agencies when they are considering supporting proposed projects as well as during the implementation of projects. The intention of this inquiry is to examine the environmental assessment policies of the donor agencies with which Australia is involved. The main agencies involved would include the Australian Development Assistance Bureau-ADAB-the Asian Development Bank and the World Bank. ADAB is the agency responsible for the implementation of Australia's bilateral development assistance program. The World Bank has one of the biggest programs of rural and transmigration assistance. Question resolved in the affirmative. Motion (by Senator Coates)-by leave-agreed to: That the time for presentation of the Standing Committee on Finance and Government Operations report on the Sales Tax (Exemptions and Classifications) Amendment Bill (No. 2) 1986 be varied to provide that the Committee report as soon as possible. Senator KILGARIFF(Northern Territory) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Consideration resumed from 19 November 1986, on motion by Senator Kilgariff: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 19 November 1986, on motion by Senator Robertson: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 19 November 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 26 November 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 26 November 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 26 November 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 4 December 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 4 December 1986, on motion by Senator Vigor: That the Senate take note of the papers. Question resolved in the affirmative. Consideration resumed from 4 December 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 4 December 1986, on motion by Senator Vigor: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 17 February, on motion by Senator Michael Baume: That the Senate take note of the papers. Question resolved in the affirmative. Consideration resumed from 17 February, on motion by Senator Peter Baume: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 17 February, on motion by Senator Peter Baume: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 17 February, on motion by Senator Michael Baume: That the Senate take note of the paper. Question resolved in the affirmative. Debate resumed from 18 February, on motion by Senator Kilgariff: That the Senate take note of the paper. Debate (on motion by Senator Kilgariff) adjourned. Senator ARCHER(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator ARCHER(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator PARER(Queensland)(4.09) —At the request of Senator Messner, I move: That the Senate, condemning the Hawke Labor Government for its mismanagement of the Australian economy which has resulted in- (a) huge rises in the cost of living, particularly in food prices which have increased by 8.6 per cent for the 12 months to December 1986; (b) the highest interest rate regime in the Western world, in particular, home loan interest rates which are at their highest levels since the Great Depression, resulting in a drastic downturn in home ownership in Australia; (c) huge increases in the prices of motor vehicles of approximately 40 per cent since 1983 which are a direct result of misguided Government policies, the depreciation of the Australian dollar and the introduction of the fringe benefits tax, resulting in lower sales and reduced job opportunities; (d) falling disposable incomes for the majority of Australians caused by higher taxes as taxpayers move into the higher Keating tax brackets; (e) lack of job growth and continuing high levels of unemployment, particularly amongst our youth who are experiencing an unemployment rate between 21 and 23 per cent; (f) continuing high current account deficits, averaging in excess of $1b. per month on our balance of payments caused by inappropriate cost containment policies; (g) low levels of investment in new job creation industries such as import replacement and export industries; (h) rapidly increasing foreign debt which has trebled since 1983, currently approximately $100b. and is estimated to increase by a further 50 per cent over the next 3 years unless Government policies are changed, calls upon the Hawke Labor Government to introduce a mini-Budget to include lower and flatter rates of income tax, significant reductions in Government expenditure, and the abolition of the fringe benefits tax, capital gains tax and the lump-sum superannuation tax. Because of the great concern of all Australians, and thus the Liberal-National Opposition, about the economic crisis inflicted upon us by the Hawke Labor Government, I am aware of a long list of honourable senators who wish to speak to the motion. By every known statistic Australia is in an economic crisis. Today I intend to speak briefly on some of the items raised in Senator Messner's motion and to allow my colleagues and those following to enlarge on those matters. I will touch just briefly on the cost of living. The cost of living, as measured by the consumer price index, is our inflation rate. In relation to Organisation for Economic Co-operation and Development countries, Australia is behind only New Zealand in regard to inflation rate levels. The inflation rate is close to 10 per cent, which is almost double digit inflation. More importantly, in relation to the cost of living, food prices in particular have increased by a factor of 8.6 per cent for the 12 months to December 1987. We must compare the inflation rate in Australia with the rates in comparative countries. Let us look at some of those figures: In West Germany the rate is 0.2 per cent; in Switzerland, 0.7 per cent; in the United States of America, 2 per cent; in France, 2.7 per cent; in Great Britain, 3.4 per cent; and in Canada, 4.2 per cent. In fact, the big seven industrialised countries experienced an average rate of 2 per cent a year, compared with 3 per cent in 1985, so the rates in those countries have all dropped. I believe, from the figures that I have, that Australia was one of only four OECD countries to experience an increased inflation rate in the last 12 months. Breadwinners, housekeepers, farmers and small businesses do not have to read official statistics to know that a great many of their number are now compelled to use their savings, if they are lucky enough to have any, to survive. Those without savings are living from hand to mouth. The only benefit of cost of living statistics is that individuals learn that their very real problems are not caused by their own inadequacies; they are shared by many other people in Australia. They are suffering because of policies that have been brought down by this Government. They are old socialist policies that have been tried in the past and found wanting, and are being tried yet again. The Government, in order to divert attention from the failures which it has inflicted upon us, and egged on by the Australian Council of Trade Unions, in an attempt to blame someone else and to wash the blood from its collective hands, adopts another ploy and appoints a watchdog committee on prices. It is a transparent and cynical exercise which fools no one. Prices are established in a competitive market. The whole basis of advertising essential products such as food is based on price competitiveness. The same cannot be said of the monopolised, inflexible labour market. Another critical factor is the level of interest rates. It is believed by most that interest rates will be the cause of death of the present Labor Government, just as it is causing the financial death of every family and every small business in this country. The Minister for Finance, Senator Walsh, who is at the table, has a habit of saying that the current sustained run of high interest rates has not reached the level experienced under the previous coalition Government. Let me lay that to rest once and for all. Senator Walsh —Twenty-two per cent. Senator PARER —Thank you, Senator Walsh. Senator Walsh referred to a solitary, short-lived blip in 90-day bank bills in early 1982. It is the classic use and abuse of statistics and, to some extent, can be categorised almost as statistical dishonesty. The interest rates which affect business, and thus investment and employment, are overdraft rates. The highest overdraft rate under the last coalition Government was 14.3 per cent in 1982-83. Since the Hawke Government came to power the figure has risen to a level of 10.5 per cent. With those sorts of interest rates, it is just not possible for businesses in Australia to compete with those in the rest of the world, where interest rates are far below 10 per cent. Of course, it is important to note that, in an international context, if interest rates are so high, the inability of the business sector to be able to carry out investments because of the level of interest rates affects the employment rate, the manufacturing industry, farmers and every small business. The other point, of course, is the level of housing interest rates. Under the Hawke Labor Government housing interest rates have risen to over 15.5 per cent. This figure makes it absolutely impossible for young people in receipt of average weekly earnings to buy their own homes. Perhaps that is the Government's idea. Growing numbers are walking away from their homes because they just cannot afford the repayments. This is reflected in the growth in the number of claims lodged with the Housing Loans Insurance Corporation. The other area that is affecting everyone is the level of taxation. Australians have been taxed into submission. The Hawke Labor Government has squeezed the taxpayer orange dry and is now trying to squeeze the pips. The tax reductions given late last year, and those to occur in June, if they do occur, have already been overtaken by bracket creep; that is, people are moving into higher tax brackets. What has happened to the amount of tax paid by a family man with a dependent wife and two children? Let me cite some figures. When the Hawke Government came to power in 1983, average weekly earnings were $366.53. That figure has risen, in 1986-87 estimates, to $441.28. Let us look at the amount of income tax paid by a man with a dependent spouse and two dependent children, with deductions. I think everyone should remember that the figure has changed as follows: In 1983-84, the amount of tax paid by a man in receipt of average weekly earnings was $2,743. In 1986-87 that figure will be $4,042. When the Hawke Government came to power, the percentage as a proportion of total earnings was 14.3 per cent. It is now 17.6 per cent. The figure we should look at is the marginal rate paid on the last dollar earned. When the Hawke Government came to power the marginal tax rate on the last dollar earned by a taxpayer with a dependent spouse and two dependent children was 30.416c in the dollar. In 1986-87 the figure is 45.395c in the dollar. Senator Walters —No wonder the people are revolting. Senator PARER —Thank you, Senator Walters. I think people are at the end of their tether. It is not surprising, really, that their concern may be such that they are prepared to follow anyone who will offer them some relief, irrespective of the fact that perhaps the offers being made are snake oil. I will refer briefly to the current account deficit. The latest balance of payments surplus was $1.2 billion. The average figure is over $1 billion a month. Put simply, our exports are not paying for our imports. The collapse of our currency was supposed to solve our problems. The hypothesis of the J-curve theory-about which, to his credit, the Minister for Industry, Technology and Commerce, Senator Button, was very guarded-was put to me by Labor theorists. They say: `We will try to organise the dollar to collapse and it will solve all our problems'. The theory is that the dollar goes down, the value of our traditional exports goes up, manufacturers respond, we get import replacements and maybe we export some manufactured products and, presto, we have a cure-all for our balance of payments problems. It did not happen. I agree that our terms of trade collapsed. But, as a person who was involved at one time in the export of commodities, that did not surprise me; the level at which our commodities are priced in an oversupplied market will deteriorate when there is a reduction in the dollar's value because the buyers are in the happy position of knowing that they can squeeze the price down. However, if one asks any manufacturer in Australia why he has not responded to the devaluation of the dollar-it is a good question-one will always get the same answer: High interest rates. They say: `How can we compete with interest rates offered in other parts of the world?' As an example I cite Singapore whose interest rate is today at 6 per cent. In Australia today, adding on the bank charges, for a normal bank overdraft the rate is about 21 per cent. Let us look at our inflation compared with the rest of the world. The rest of the world is going down to zero; we are going up into double-digit inflation. We face uncertainty about the dollar, which is a reflection of uncertainty about this Government. That is a very important factor. We face high transport costs, particularly at the wharves. I know some efforts are being made to do something about what are called restrictive work practices. However, these efforts have not touched the outlets and inlets of this country. Australia is an island continent which relies on exports and imports; yet the costs of loading goods from a wharf to a ship and transporting those goods overseas, particularly if we use our own vessels, make this prohibitive. The only people I know who are successful in this regard send their goods by air and use non-union labour. The final factor is militant unions, and this comes up in discussions with every group of manufacturers. They will say: `Yes, things have been a bit quiet in recent times because of the state of the economy, but if things improve can we be sure that they will not attack us?' I refer to comments made by the Prime Minister (Mr Hawke) during the visit here by the Japanese trade mission. Of course, he told the mission all the good things that he thought would attract the Japanese to invest in this country. I see that Senator Siddons is in the chamber. He has had experience in Japan and he would recognise the significance of the remarks made by Mr Amaya when he left. They do not inspire a lot of confidence, but I will return to that later. Mr Hawke talked about lifting the burden of government regulation and reforming the tax system to provide incentive to our manufacturing industry. We have the fringe benefits tax and the capital gains tax; the foreign tax credits have gone and there is no negative gearing. What sort of tax incentive is that? The Government rearranged the tax system and hit the manufacturing sector and other productive sectors. The Prime Minister talked about our industrial relations. This was embarrassing to the Prime Minister because while the mission was here there was a coal strike. The Prime Minister said: If you exclude coal mining, a sector in which some intractable industrial issues have to be faced, the underlying trend in industrial disputation generally speaking has been downwards since 1983. This is the man who, in the mid-1970s, went to the Bowen Basin in Queensland and forced the companies, by blatant union muscle, to settle on terms and conditions of employment which flowed on to the rest of Australia and contributed to the demise of our manufacturing industry. Of course, what he did not mention when he told the mission all the good things was our interest rates and our inflation compared with Japan. The members of the mission know that; they are not silly. I was intrigued by the response of Mr Amaya as he left the country. He said that while Australian agriculture had proved very competitive internationally, the same could not be said of manufacturing. He said: So far it is like a swimmer in the hotel pool . . . he now has to swim in the Pacific Ocean, which is . . . rough. That is a nice Japanese way to say: `You will not make it unless you do serious things to improve your productivity and competitiveness and unless you get an attitude within the trade union movement that will enable you to be more competitive'. He also said that he respected the manufacturing abilities in the pool-the small domestic Australian market-but he had serious doubts about the ocean. Of course, he has serious doubts about the ocean. Our own people have serious doubts about the ocean. A lot of work has to be done. As I said earlier, noises are being made about correcting some of our restrictive work practices, but the very people who installed them-some of whom have been put in this place by those very militant trade unions-have taken the view that we will do something about it but it will take a little time. We in Australia do not have that time. I turn to the issue of foreign debt. Not content with throwing taxpayers' money around as drunken sailors would, this Government is intent on mortgaging every Australian to the hilt. The Treasurer of the Labor Government, Mr Keating, is now being referred to as the hundred billion dollar man. This figure of $100 billion is too large for the average Australian to comprehend. What does it mean? It means $6,300 for every man, woman and child in Australia. Every newborn baby gets a little mortgage ticket around its neck to say `I owe you $6,300'. What a great start in life! Such people will not be working for 20 years. If this Government is still in power they will not be working at all. That $100 billion figure means over $14,000 for every taxpayer and over $25,000 for every family in this country. Just to service the debt, just to pay the interest, requires over 40 per cent of our total export income. The Australian Chamber of Commerce said that the problem is greater than the debt headaches of the banana republics of Mexico, Argentina and Nigeria. As an Australian I do not like those comparisons. I am appalled that we should have allowed this country, with all its inherent wealth and all the abilities that we have to offer, to slip to such a stage that we really are not able to pay our way. High taxes, big government and militant trade unions are the root causes of the problem. The majority of people are fed up. I think this is reflected in the concerns we are seeing around Australia. The sort of thing we see when people become bankrupt, for whatever reason, is that they do chase Messiahs. They will chase any Messiah, even a false Messiah. Senator Walsh —Who do you have in mind as the false Messiah? Senator PARER —Let me say, Senator Walsh, that it is not you. This Government, if it is serious, must introduce a mini-Budget. It really has no choice and it must provide lower and flatter rates of income tax so that we can provide more incentive for people and so that there is not a disincentive to work. That is the case in this country today: There is a disincentive to work. We need significant reductions in government expenditure and fiddling around with the edges just will not do. In fact, sometimes I think the Labor Government would be wise to give Senator Walsh his head, because I think he might do something. But he is outmanoeuvred by some weirdos out there who make life difficult. But I think he might succeed. The disincentives to investment must be abolished. We must get rid of disincentives to investment such as interest rates which are too high, capital gains taxes, negative gearing restrictions, foreign tax credits measures and so on. The labour market must be opened up to the competitive world so that disincentives to work and to the creation of jobs are removed forever. The Hawke Labor Government in its economic management of Australia has not been left with a feather to fly with. People are desperate and the desperation is reflected throughout the length and breadth of this country. Senator MAGUIRE(South Australia)(4.30) —In speaking to this General Business motion, I would point out to the Senate that there is no government anywhere in the world that is tackling inflationary price rises with more vigor, imagination and determination than this Labor Government in Australia. This afternoon we are debating a motion which claims that food prices are rising by some 8.6 per cent a year. It is important to bear in mind that when the Fraser-Howard Government left office at the beginning of 1983 inflation was not 8.6 per cent but 11.5 per cent a year. The Labor Government inherited double digit inflation. When Mr Howard, the current Leader of the Opposition, was Treasurer, after five Budgets he left the Australian people with inflation running at 11.5 per cent. Yet this afternoon Opposition senators have had the gall to move a motion claiming that inflation is running at 8.6 per cent and blaming this Government for it. The Liberals' stated policy in the 1970s, as I remember well, was `Fight inflation first'. That is the slogan they took with them when they went around the country, and the policy they put to the Australian people. Members of the community were told that they had to tighten our belts and make sacrifices in the name of the policy of fighting inflation first. The Liberals brought out their gurus from various obscure overseas institutes to tell us that we did have to make sacrifices. It was summed up in the statement that there was no such thing as a free lunch, which was one of the major statements in the 1970s in the name of fighting inflation first. That policy was a failure and Mr Howard, as Treasurer, was a failure in fighting inflation. After five Budgets we in Australia were left with double digit inflation-it was running at 11.5 per cent. All the sacrifices were in vain. There were cuts in government spending and government services were reduced in the name of fighting inflation first. it was a complete and utter failure. Therefore, we could not rely on the Liberals, in the unlikely event that they come to occupy the treasury bench, to do anything about inflation. Based on their past record, they are quite hopeless at fighting inflation. Their record is there for all Australians to see. Mr Howard and his Liberal colleagues are going around Australia now claiming that they will reduce inflation from the current 9.8 per cent, but we are entitled to inquire: `Who put it up to 11.5 per cent in 1983?' This Government got inflation and price rises down to 9.8 per cent compared with the 11.5 per cent when Mr Howard was Treasurer. I am not satisfied with an inflation rate of 9.8 per cent. It is far too high, and the Government believes that. But we have the policies that can reduce the inflation rate. Agreements with the trade union movement through the accord were successful in reducing inflation in the first three years of the Government. The rate came down significantly, but it ran into the difficulties caused by the devaluation of the Australian dollar-and the consequent impact on import prices-which has amounted to some 40 per cent against the American dollar in the past two years. We are a trading nation and that effect is unavoidable. Some 15 to 20 per cent of Australia's gross domestic product, effectively, is in traded items. Therefore, the effect of a devaluation forces up the Australian dollar price of those traded items so that that price effect spreads throughout the economy and must have an effect on the overall measures of inflation, including the consumer price index. A significant element of the CPI is higher import prices. It is ridiculous to blame this Government for the effect of devaluation in forcing up prices as a result of higher import prices. The period of office of the Liberals was characterised not only by double digit inflation. Mr Howard, as outgoing Treasurer in 1983, also left Australia with double digit unemployment. The jobless rate in that year peaked at a level of 10.4 per cent. That put one person in 10 in the labour force out of work and looking for employment. We are entitled to ask why that was the case and how it happened. The reason was the alarming fall in employment levels in this country during 1982 and at the beginning of 1983. In the last 12 months that Mr Howard, the current Leader of the Opposition, was Treasurer, from March 1982 to March 1983, some 157,000 Australians were thrown on the industrial scrapheap as a result of his policies. That was all in the name of fighting inflation first. The policy of bringing down the inflation rate was the centrepiece of Liberal policy in those years. The Liberal Government tried to moderate price rises in the community by regulating the level of unemployment. It was as simple as that. That Government used the unemployment level in the community as a tool to try to regulate the rate of inflation and of price increases. It failed dismally in achieving that goal. This motion today claims that there has been a lack of job growth. The motion has been moved by a member of the Liberal Party, a party which presided over the loss of 157,000 jobs in 1982 and 1983 but which now claims that there has been a lack of job growth under the present administration. That is absolute nonsense. It is totally hypocritical for Liberals to come into the Senate today and chastise and berate this Government about alleged job losses when their record in the Fraser-Howard Government was the worst in this country since the Great Depression in the 1930s. Senator Archer —Look at 1972 to 1975. Senator MAGUIRE —That was the case, Senator Archer. Senator Archer continues to show his ignorance of the facts, and I suggest that as a shadow Minister he should be well aware that the unemployment rate in 1982 and 1983 was well above the levels in the mid-1970s. That happened because Mr Howard's policy as Treasurer was to attempt to regulate the inflation rate by regulating unemployment. He depressed the economy to try to reduce the inflation rate, and failed. He left Australia in a situation in which one person in 10 was out of work in 1983. That was his record of achievement after five years as Treasurer of this nation. This motion is an absolute nonsense in claiming a lack of job growth under the present administration. The fact is that in the 1983 election we promised to create 500,000 jobs in three years. I well recall members of the Liberal Party scoffing at that pledge by Mr Hawke in that election. They said that it could not be done; they ridiculed it, and said that it would be impossible for the Labor Government to create 500,000 jobs in its first three years of office. That is what they told the Australian people; and I suppose that that attitude could be explained as being based on the Liberals' record. Their record meant that some 157,000 jobs were lost in their last year of office. The record is that we created 500,000 extra jobs with months to spare-well within the three-year time horizon. Up to and including January of this year, from the National Economic Summit in April 1983, the figure has now reached 727,000, a stupendous record. Yet we have this hopeless, divided Opposition, racked with internal division, coming into the chamber and, in a motion, claiming a lack of job growth. Under the Hawke Government more than 700,000 jobs have been created. Mr Howard, in his last year as Treasurer, destroyed 157,000 jobs. Senator Cooney —How many? Senator MAGUIRE —It was 157,000. Senator Walsh —Who did that? Senator MAGUIRE —It was Mr John Howard, who was the Treasurer of Australia from 1978 to 1983 and who brought down five Budgets. He was the Treasurer who left Australia with double digit inflation and double digit unemployment. We inherited an unemployment rate of over 10 per cent. It peaked at 10.4 per cent in 1983 but by January this year it was down to 8.2 per cent. That is a quite significant reduction in the jobless rate in Australia. As a member of the Labor Party, I find an 8.2 per cent unemployment rate unacceptably high, but it is certainly vastly preferable to the 10.4 per cent that resulted from the Fraser-Howard recession of 1982-83. This motion is a nonsense in other areas. I note that it refers to taxation, claiming that at present taxes are high in Australia and that we in the Labor Party are members of a high taxing Government. I refer to Budget Paper No. 1, the definitive part of the Budget in which the economic and statistical calculations are all set out. It is very interesting to look at the taxation record of the Fraser-Howard Administration as set out in Budget Paper No. 1. Let us look at the role of taxation under that Liberal administration-the administration that said it would cut taxes, reduce the overall burden of taxation in Australia and reduce the load on the backs of Australian taxpayers. When one compares the share of Australia's gross domestic product which went in taxation at the end of Mr Howard's period as Treasurer with the share of gross domestic product going in taxation at the beginning of the period of the Fraser Government, one sees that that share had risen, not fallen. In seven years in office the Liberals did not bring taxation down as they today claim they did and as they say they would in the future. In fact, the share of Australia's gross domestic product going in taxation under the Fraser-Howard Government rose by 1.7 percentage points. At the end of that period of office the share of our national income, our gross domestic product, was more than 1 3/4 per cent higher than it was at the beginning of that Government's period in office. This Government has introduced a major reform of taxation in Australia. It is the only Government in the post-war period which has shaken up the taxation system. It is an absolute nonsense for the Liberals to claim that the Australian Labor Party is a high tax party. I simply refer to the income tax scales with which we are all familiar, as we are all taxpayers here-or I hope we are. It is interesting that in Mr Howard's last Budget as Treasurer in 1982 the lowest tax rate paid by Australians was 30c in the dollar. That was the lowest marginal tax rate. Under the Labor Government the bottom tax rate is not 30c in the dollar or even 29c in the dollar; it is 24c in the dollar. There is a major reduction in marginal tax rates. Let us look at the tax free threshold, the exemption from taxation for all taxpayers. Under Mr Howard that exemption applied to income up to $4,595; under this Government the threshold will rise to some $5,100. That is a major increase in that indicator of taxation levels. One of the important characteristics of the tax package was that it led to a much fairer and much more equitable taxation system in Australia. That was what it was all about-getting rid of all the rorts and ramps in the Australian taxation system under Mr Howard and introducing more fairness into the system. One of the matters we debated in the last 18 months was the end of the tax subsidised lunch, the so-called free lunch which was enjoyed by businessmen around Australia at taxpayers' expense. The rest of us paid for it because the expense claims were allowable as a deduction from income. The end of that device is now netting the Government some $300m extra a year-a great improvement in the fairness of the tax system. A much more equitable tax system has resulted from that measure. It is interesting to look at the claims that were made in this place and elsewhere by Liberal and National Party members at the time of the introduction of that tax. They claimed that Labor's crackdown on the tax subsidised lunch would wreak havoc in the Australian economy and destroy the hospitality and restaurant industries. Some amazing claims were made by the Opposition spokespersons in this place and elsewhere about the impact of that measure on industry. Those sorts of claims and their lack of credibility have been totally exposed. They undermine completely the current claims that are being made by Liberal and National Party spokespersons about the Australian economy and taxation. I wish to refer to some of the claims that were made in this place and elsewhere when this Government courageously cracked down on the tax subsidised lunch and saved Australian taxpayers $300m a year. On 3 December 1985 Senator Messner, the Opposition tax spokesperson, said that 11,000 jobs would be lost in the restaurant and hospitality industries because the Labor Government was cracking down on the free lunch. Senator Knowles, who comes from Western Australia, in her speech at that time said that some 5,000 workers in the restaurant industry had already been sacked. That was the claim she made following Labor's crackdown on the lurks and perks of a select group in the community. Senator Boswell, who is a National Party senator from Queensland, said on 4 December 1985: . . . I believe it will be around February or March- there he means February or March 1986- There will be a massive fall in the industry. That is, in the restaurant and hospitality industries. Senator Boswell was making a categorical claim. He went on to say that some 14,000 jobs would be lost in the restaurant industry. Then we had Senator Short claiming that almost 20,000 persons could be put out of work in the restaurant industry. He is a former officer in the Treasury, the most important financial department in the land. He claimed that almost 20,000 jobs could be lost in the restaurant industry as a result of this Government's far sighted and fair crackdown on the free lunch. Then we had Mr Hodgman, who is a member of the other place, claiming that not 11,000 jobs, not 5,000, not 14,000 and certainly not 20,000, but 80,000 jobs would be lost in the restaurant industry as a result of this Government's reform of the taxation system. Then Senator Jessop, a member of this place, said: . . . early in 1986 we will see the demise of many restaurants throughout Australia. That was a very categorical statement by Senator Jessop, who comes from my own State of South Australia. I hope that he read the article in the Adelaide News on New Year's Day this year which carried a big headline `Our restaurant trade thriving'. This article examined in great detail the health of the restaurant industry around Australia and came to the conclusion that, following Labor's crackdown on the free lunch, the restaurant trade was thriving. It quoted Mr Eric Risstrom of the Australian Taxpayers Association, who said: I don't know of one restaurant in the Melbourne city area that has closed. Senator Short comes from Victoria and has his office in the metropolitan area of Melbourne. He claimed in his place on 4 December 1985 that almost 20,000 jobs would be lost in that industry. Members of the Opposition have absolutely no credibility. This afternoon I have exposed all these ridiculous claims about what would happen to this industry. Those claims were made by Liberal and National Party senators about Labor's tax reforms in a key part of the tax system. Those claims have all been exposed as ridiculous and nonsensical. Now those opposite move this motion which claims among other things that there are higher taxes, a lack of job growth in Australia and other items. That is absolute nonsense. I suppose that those are the only things on which those opposite can agree at the moment and that is the reason for moving this motion. The internal divisions and tensions in the coalition are such that the only thing those opposite can agree on at the moment is attacking the Government and making such absolutely nonsensical claims as have been made this afternoon. Senator Parer is a senator for whom I have some respect. He led this debate this afternoon and talked about Australia's foreign debt. I may be wrong but I listened very carefully-and I read articles on foreign debt very carefully-and I do not think Senator Parer this afternoon referred once to the fact that the great majority of Australia's overseas debt has been incurred by private corporations. The thing that really concerns me about the Opposition at the moment is this misleading rubbish it is pushing, that somehow all of Australia's overseas debt has been incurred by the Federal Government. He did not chastise Sir Roderick Carnegie or other industrialists in Australia. The clear import of the remarks and notes of all the speakers opposite, which are clearly coming from their national secretariat, is that somehow this debt has been incurred by the Federal Government. Senator Archer —He did not say that at all. Senator MAGUIRE —I ask the honourable senator to show me some contributions made by honourable senators in his Party which put at the very forefront of this problem the fact that this debt has been incurred by private corporations. A major article in the Sun-Herald of 15 February points out that Broken Hill Proprietary Co. Ltd alone, not the Federal Government of Australia-not the Hawke Government-is responsible for 4.8 per cent of Australia's foreign debt. So one-twentieth of Australia's foreign debt has been run up by the Broken Hill Proprietary Co. Ltd, the pillar of the Melbourne establishment. It is that company that has run up the debt, not Mr Hawke and Mr Keating. For Thomas Nationwide Transport, the transport group which is a major shareholder in Ansett Transport Industries Ltd, the foreign debt incurred in 1985-86 rose by 49 per cent. That is the company that is managed by Sir Peter Abeles. News Corporation Ltd, Mr Murdoch's international vehicle, incurred not a 49.1 per cent growth in foreign debt in 1985-86, not a 59 per cent growth, not a 69 per cent growth, but a whopping 122 per cent growth in foreign debt. CRA which used to be known as Conzinc Riotinto of Australia Ltd, a major mining group based in Melbourne with whom Sir Roderick Carnegie has been associated for many years-and I heard Senator Dame Margaret Guilfoyle in the chamber this afternoon parrot off some statement made by Sir Roderick last week in which he said he was alarmed about debt, but he did not mention that CRA, his own company, was one of the major players in this drama-in 1985-86 incurred a massive 52 per cent growth in foreign debt. That is what is going on. These are not borrowings by the Commonwealth of Australia or by the Australian Labor Party but borrowings by people who are held up in the community as leaders and far-sighted entrepreneurs carving out the world for free enterprise. These are the fellows who are putting Australia into hock. Elders IXL Ltd, the vehicle of Mr John Elliott, the Federal Treasurer of the Liberal Party, has incurred a massive increase in foreign debt in the last year. Mr Alan Bond's Bond Corporation Holdings Ltd did not increase its foreign debt by the 49 per cent the TNT group increased it by, or the 122 per cent that News Corporation increased it by; he trebled it in one year. We are getting blamed by the imbeciles on the other side, the Opposition, for this debt which was incurred by these people who support the Opposition. This massive increase in debt is being incurred by such people. This motion is incredibly backward-looking in one particular area. I refer to point (g) on page 2 of the motion which calls for the development of new import replacement industries. One of the problems that Australia has at the moment is that we have far too many import replacement industries. That is one of the big legacies that was left to the current Federal Government and State governments to deal with-that our industrial structure is far too heavily dependent on import replacing activities. That is what happened in Australia in the 1950s and 1960s under Liberal Premiers like Bolte and Playford who went around the world every year looking for more import replacing industries to attract to Australia. They scrambled overseas to get those industries to come to this country. Now we are paying the legacy of having those types of industries. We have too many factories making rubber tyres and too many car plants. We could name other industries where there has been a proliferation in the numbers of plants, with high costs of production and short production runs so that they do not get economies of scale and heavily tariff dependent. One has only to look at the industrial structure of Victoria which was bequeathed to the people of Victoria by Mr Bolte's Government. It has the most tariff dependent industrial structure in Australia. One of the reasons for that is the mad scramble that used to go on in the 1950s and 1960s with the Liberal State Premiers going around the world attracting very inefficient plants to Australia. We have a car industry which is incredibly fragmented as a result of having too many producers and plants. The effect is small production runs and high costs of production. This afternoon I noticed that after all the palaver in this motion it goes on to call for the abolition of the fringe benefits tax, the capital gains tax and the taxation on lump sum superannuation. But I cannot see any reference there to the end of the free lunch. After the way Liberal and National Party members and senators in 1985 went out on a limb saying that they would overturn Labor's crackdown on the free lunch-when we courageously went about ripping that rort out of the tax system and putting more fairness into it by ending the tax subsidised lunch and the Liberals saying that they would overturn Labor's initiative in that area-I would have thought that we would find a commitment in this motion to restore the tax-subsidised lunch. But I fail to see it. I see a commitment to do other things but it seems that the Opposition, as in so many areas at the moment, is hopelessly divided. It does not know where it is going and its members are unable to agree on a taxation policy. Senator VIGOR(South Australia)(5.00) —We have heard a very sad tale from both sides-of failure by Liberal governments, which Senator Maguire has put out, and failure by Labor governments, which Senator Parer has put out. I believe the commencing statement by Senator Maguire that Labor had approached the problem of the economy with imagination can be interpreted only in the way that it imagines that it is doing a good job in this area. None of the statistics which have been put forward in relation to this motion and which are supported by the actual figures, by what is happening in the community, are a compliment to the Government. Senator Maguire spent considerable time making excuses, basically comparing the performance of the Labor Government with the pathetic performance of the previous Liberal Government. I believe that is not good enough for the people of Australia. People who are excellent at making excuses are seldom good at anything else. That is the problem with this Government. It is very sad when members of a government come to this chamber and act like an opposition and spend most of their time justifying their government by attacking the government before it. This Government has been in sufficiently long to be able to be responsible for the state which we are in. I believe it cannot hide behind the mess that the previous Government left it, although I do agree that it left the country in a mess. It is because of this that the Australian Democrats will be moving an amendment to the motion which we have before us today. It is because we believe that neither the Labor Party nor the coalition has any solutions. We agree with their diagnosis of the problem, and we have heard a lot about that diagnosis-I will come back to some of those points-but we have not had solutions. I certainly do not believe that the solutions that are proposed at the end of the motion that we have before us today from the Opposition are any type of solution to the economic morass that we are in. It mentions lower and flatter rates of income tax. We agree that there should be significant reductions in government expenditure. We cannot see how the abolition of the fringe benefits tax, capital gains tax and lump sum superannuation tax would have very much effect on all the other things in the motion, such as the massive foreign debt and the current real problems of trade. Senator Walsh —Modified snake oil, watered down snake oil-that's all it is. Senator VIGOR —It is because of this that the Democrats are suggesting specific solutions to the problem. It might do Senator Walsh some good to listen to some of these solutions. I move: Leave out all words after ``include'', insert: ``lower rates of income tax for Australians, and measures to encourage export-directed industries with a high value-added; control flows of speculative capital in and out of the country, including introduction of a tax on moneys leaving the country implement a significant and cost-effective reduction in government expenditure; close off the taxation rorts of transfer pricing and negative gearing on interest paid on money borrowed for company takeovers; and calls on all parties and all Australians to unite in an effort to overcome the current economic crisis facing Australia.'' Senator Parer —You always want to spend more money. Senator VIGOR —We are moving to encourage export directed industry with high value added. We will spend money to earn money. That is what business is about. That is what people on the honourable senator's side of the House are supposed to understand. Senator Maguire —How are you going to do that? Senator VIGOR —We will tell the honourable senator about that a bit later. We will also try to protect the Australian economy from the types of distortions about which Senator Maguire has told us-the distortions which Mr Murdoch, Elders-IXL, Mr Bond and such people and companies have introduced into our economy by borrowing so much money abroad and now being subsidised-- Senator Walsh —How have they blown out the deficit? Senator VIGOR —They have borrowed abroad and they are being subsidised, Senator Walsh, by the taxpayers of Australia, and with your collusion. That is exactly what is happening. The major problem that we have is that the Government does not have the guts to act against those people. Its members stand up here and say `It's their fault, it's their fault', and continue to allow them a complete free-for-all. For a Labor government to allow that free-for-all does not accord with the policy principles which are passed from time to time at its policy conferences. The second area at which we are looking is that of controlling the flow of speculative capital into and out of the country. I believe we could make it very uncomfortable for those people who are misusing the foreign exchange fluctuations in Australia and distorting our economy by having a tax on moneys leaving the country. It would not have to be a very large tax. If, every time people have large numbers of dollars flowing out of the country, we took some percentage of that money and put it into the general coffers of the government we would be able to cut taxes for ordinary Australians-the type of thing that most of us would want. I would expect a Labor government with the bureaucratic background that socialism always brings with it not to want to cut government expenditure; it would want the public sector to grow. But we have to cut down on the ineffective parts of the public sector. We have to make cost-effective reductions in the public sector. We also want to close off the taxation rorts-not the silly little taxation rorts of people from time to time sneaking a free lunch, but the enormous, horrific taxation rorts of transfer pricing and negative gearing on interest paid on moneys borrowed for company takeovers-when the people of Australia are subsidising large corporations, in many cases large overseas corporations, for their particular entrepreneurial and speculative activities. I believe it is important that the Government should protect the people of Australia against this type of manipulation. In the Democrats' amendment, we call upon all parties and all Australians to unite in an effort to overcome the current economic crisis facing Australia, instead of fighting. We have this Parliament divided in itself, with members fighting one another, calling one another names, with no solutions. Here the Democrats are offering some solutions. Senator Parer —What are they? Senator VIGOR —That is what I am about to point out. The Government has under its control five factors with which it can control the problem if it has a determination to act. I believe it has to act immediately for the benefit of the Australian economy and for ordinary Australians. These particular factors are: The interest rates; the money supply; the taxation levels; direct and indirect incentives to business through bounties, grants, training and education; and the cutting of government expenditure on useless bureaucratic activities. Senator Parer —On what? Senator VIGOR —I am coming to that, Senator Parer. I am coming to where we can have some cuts. We have so many quangos around that are doing very little that we really need to look at them in some areas. Senator Messner —We know all that. Just tell us which. Senator VIGOR —I will tell you some. The Opposition has a waste watch committee. Single-handedly sometimes I have to sit in on the Estimates committees to find out some of this waste, and the Opposition has to its credit taken up some of it. I believe we have to continue this type of pursuit of waste in the Public Service. The interest rates in Australia are well above those in other industrialised countries. The Government will not force them down because it feels this would discourage foreign investment. It may also be that interest rates are kept high to please the large commercial investors. When a corporate debtor in the system controls 75 per cent of the daily print media in the nation-that is just one that has been mentioned to us-we have a potential force in politics for keeping inflation up because debtors benefit, rather than lose, from inflation. Foreign investment in Australia, as we have seen recently in the famous takeover battles, is doing nothing for Australia-nothing at all. Currently that sector of the private sector is being subsidised by the taxpayer because of the slackness of the Government that is sitting currently on the treasury bench. Australia is paying out an amount equal to 28 per cent of its current monthly exports just to cover its debt. This is a higher percentage than Chile with 23 per cent; the Philippines with 21 per cent; Indonesia with 21 per cent; Mexico with 18 per cent; Brazil with 14 per cent; and Argentina with 13 per cent. We are not in a very reasonable state. Senator Alston —The United States? Senator VIGOR —The United States is exploiting the system currently as well. Inflation is being kept high by high interest rates and also by rises in the price of manufactured goods, increases in medical fund contributions and other charges for services. On the whole, it is also being kept high by various types of taxes-consumption taxes like the wholesale sales tax and the petroleum excise. The report of the Bureau of Industry Economics on `Manufactured Exports and the 1985 Devaluation', released in October 1986 pointed out that the manufacturing sector has run down its productive capacity, in the interests of rationalisation, to such low levels that it is now unable and unwilling to expand for import replacement, let alone for increased exports. Australia is now not a very comfortable place to be if one is a manufacturer. The Government can affect interest rates through the bond rate. The money supply is another area which is related to that. Disposable income is being kept low by inflation, high interest rates and high unemployment. Consumer prices rose 2.6 per cent in the September quarter to reach a level of 8.9 per cent above the level a year ago. For example, fuel costs rose 6.3 per cent; lamb and mutton costs rose 11.8 per cent; and the cost of fresh fruit and vegetables rose 13.2 per cent. Wages are further depressed by the perception that they are a primary inflationary factor in the economy. This is the real problem. This Government, because it has a direct tap into the unions, is actually acting against the interests of the people whom it purports to represent-that is, the ordinary working man in Australia. The Government is actually depressing the wages with respect to other factors in the economy. Indeed, it is a common misconception that wages are an independent variable and that prices follow wages. One has a real problem if wage increases exceed productivity increases because the relative value of the goods in the monetary system goes down. Monetary and fiscal measures, in conjunction with labour cost movements, should be able to control prices. The Government has been unwilling-maybe unable-to carry this out. I believe that this is an indictment of the Government's economic management. In fact, in Australia, wage price rises usually lag well behind price increases and are not an independent variable. But limited income is also named as a causative factor in the sluggish demand for consumer goods. Inflation was running at 8 to 9 per cent in the six months to September 1986. Real average earnings and household disposable income fell. Household consumption expenditure increased a little through a decline in the household savings ratio; that is, people had to take out of their own savings to live. That is what is happening to Australians-they are having to put their money into their pockets to finance this Government's high tastes and the high tastes of those industrialists who are milking the system through using negative gearing in their takeover bids and by overheating the stock market. With the slow growth of disposable incomes, there seems little hope for any real growth in private sector consumer spending for the rest of this financial year. So there is little hope on the horizon. Wage rises, to the recently agreed first tier increase of $10, which is about 2 per cent of average weekly earnings, plus 3 per cent on an industrial basis, means that there will be a total wage increase of 5 per cent. This amounts to a wage erosion of 4 per cent when compared with an inflation rate of 9 per cent per annum. In fact, what is happening is exactly what the Opposition is suggesting should happen. But, really, this will not be very good for the ordinary workers in Australia who have lost 4 per cent of their real purchasing power. Tight money means continued slow domestic demand and a very slow domestic outlook. It also means that there is an inability for industry to invest in export capacity or even to go into import substitution. Tight money is putting an enormous strain on the building industry. It is keeping interest rates and unemployment up and employment down. Another contributory factor in our current economic system is the level of taxation. Taxation on production is high but there is little taxation on consumption. I believe that somehow we have to change that balance. But we have to change it in a way that is fair for the poorer people in our community. We cannot end up with a broad-scale consumption tax as has been proposed in one of the leaked Opposition tax packages. If this were to happen we would disadvantage the poorer and medium income earners in our community who are the backbone of the Australian economy. It is extremely important that we should give these people incentive and that we should not put taxes on the necessities of life. The Democrats will make certain that no such iniquitous taxes will be allowed to develop. However, that does not mean that we should not be decreasing or lowering income tax and removing completely payroll tax, both of which are directly against the interests of improving production in Australia. We must also try to develop some entrepreneurial skills in our businesses. We need to put money into direct and indirect help or subsidies to industries. We need to improve our product research and the quality of our products. We need to develop products which are aimed at specific export markets, particularly ones that we can transport exports to rather easily. The confidence in the manufacturing sector depends on low interest rates and on a certain and constant economic outlook. Indeed, this confidence can be built up by the Government in training people to take risks and to understand the process of being entrepreneurial, allowing business to go out to try to sell overseas and giving it the advantage of as much Government backup as possible. I am very pleased that Austrade has been set up and that that body provides some new facilities in this area. But we need to be much more dynamic in terms of developing our own shipping and in terms of developing our own insurance or reinsurance industry which a Bill of mine is designed to handle. We must be much more dynamic in terms of recognising products and infant industries on which we can spend money, in which the Government can be an investor or a supportive force. We need to do this if we are actually to have some products to export in the next decade. If we just go for the quick buck now we will go down the tube. What we are suffering from now is the fact that people went for the quick buck during the 1960s and the 1970s instead of investing in the future. We are also suffering from the branch office syndrome. We believe that everything that is overseas and in head office is so much better and we cringe about something that is developed in Australia. We have to overcome this. That is part of the training and the leadership that have to be given by this Government, and also by this Opposition. Instead of talking the economy down we should be talking it up. We are all in this together. This is a real problem. Senator Newman —Keating has been trying that for years. Senator VIGOR —Why does the honourable senator not help? We should help govern the country instead of just knocking people. We have to stop the wastage that is occurring. The Australian Democrats are the only party that is against the enormous expenditure and extravagance on the new Parliament House. We have been against the growing bureaucracy in a number of areas. We support the Opposition's view that the fringe benefits tax and the complex tax laws have led to enormous numbers of people in the Public Service and an enormous growth in quangos. Each of these needs to be investigated and its cost effectiveness determined. The Government can take action in all these ways: We can educate people to have a `volunteer mindset' and to actually do more than just go to a 9 to 5 job, but they will not do this unless the Government turns this into something which is thought to be an Australian way of doing things. It is extremely important that we should be boosting the money supply sufficiently to be able to allow new value added industries into the area and to improve our technology base. This means that we will have to distort in some way the distribution of money to be able to advantage those industries which can earn us foreign exchange and use our labour force. We have in the Commonwealth Scientific and Industrial Research Organisation, in the universities and in other organisations really brilliant people who have a lot of ideas. However, what happens when they develop these ideas? The wool spinning technology and Interscan, which were both potential earners of hundreds of millions of dollars, were lost overseas because the Government did not purchase the Australian products. I believe that the Government's attitude to purchasing goes right through to the public servants. The public servants cannot be blamed for not buying Australian if the Government is doing no more than the type of cosmetic exercise it is doing now with its Buy Australian campaign. It has to get into this area and give us the lead. That is what we are here for. We have plants that are empty, such as the General Motors-Holden's Ltd plant at Woodville in my State of South Australia. These plants could be used. There are people who are willing to use them and who have ideas as to how to use them. But when they come forward they are asked by bankers and by the Government: `What asset backing do you have?' The only way a person can get into a high-tech industry now is by hocking his house, by hocking his car and by leaving himself completely open to the vagaries of the financial system. If we could give our technologists the type of support that they need they would repay us a thousandfold. I believe it is also important that we should lower the taxes. We should introduce new types of taxes which are fairer than the current ones and which will not support-- Senator Messner —What sort are they? Senator VIGOR —I am just going to tell the honourable senator about some of them. Let us just take an example. If we had a corporate turnover tax we could collect sufficient revenue to replace the current income tax system. A tax of just 1.5 per cent to 2 per cent of corporate gross turnover would allow us to replace the total income tax area for private citizens. I am not saying that this would do a lot for business. What we have to do in order to make such a tax sensible within our community is to exempt labour from this tax and to exempt materials on which the tax has already been paid. That is fairly easy to do with normal accounting systems. It would give us a non-progressive tax which we call a materials added tax and which would have the advantage of giving an incentive to manufacturing industry-- Senator Messner —What if you aren't making any profit? Senator VIGOR —If a person is not making any profit that person should not be in that type of business. We are not trying to give a tax on profit. A person should organise his business and take the tax into account at that stage. I believe that it is extremely important to have such a tax in conjunction with income tax because that will cut out the cash economy. All businesses would declare every skerrick of labour which they employed, so there would be no free labour market to feed the cash economy. It would also mean that all accounts would be available on all types of goods. That would be a necessity. It would have a devastating effect on organised crime. It would cut it down because those records would be available to government. The tax would be simple to administer, not like the vast complexity of the current income tax and sales tax provisions which we now have. In the last couple of minutes available to me I would like to deal with foreign debt. We are now facing a foreign debt of $100 billion. Last month Australia had to borrow a further $2,687m to cover the outflow of the Australian dollar. A large part of this outflow comes from the seeking of speculative gains through the devaluation of the dollar. In terms of debt repayment, as a percentage of current monthly export income Australia's debt is way above that of a large number of comparable countries that we would consider to be Third World countries. If we had a tax on moneys leaving the country-even a small percentage-this would act as a brake on speculative outflows of money from Australia and it would also tax net imports into Australia while not penalising the importation of manufactured components for re-export. Essentially, we would have a free trade area in terms of components coming in and going out, but we would tax the net flows of money across the border. The private sector debt has resulted, in a large part, from the increased takeover activity and we need to do something in the taxation system to stop the rorts associated with negative gearing and transfer pricing. In terms of reduced government expenditure, which I have very little time to discuss, we have to be ever vigilant and we have to look at the net cost benefits of departments. For example, the Department of Communications is a net earner of money for the Government because it is selling our airwaves to people. We should note that fact and not cut its funds but we should ask for a better performance. I commend the amendment to the Senate. Senator ALSTON(Victoria)(5.30) —I rise to support my colleague Senator Parer, who has moved the motion before us. I think it is worth saying at the outset that there does not seem to be a general awareness or an acceptance in this chamber of the proposition that the business of government is about taking tough decisions. It certainly seems to be becoming increasingly accepted by people such as the Treasurer (Mr Keating) and the Minister for Industry, Technology and Commerce, Senator Button, who in this chamber not so long ago accepted the proposition put by Sir Roderick Carnegie that there are many tough years ahead. If we accept the Treasurer's prognostications, it will probably be another 10 years. The question is whether that is really a function of government or whether it is due to matters beyond the Government's control, bearing in mind that it has now been in office for almost four years. I do not want to go back over the past because I do not think it is relevant to the present. Certainly, one can look at a range of Government actions in recent times to see whether there has been the capacity for the Government to take tougher action to correct what I think are now generally recognised as very serious economic difficulties. Probably a useful starting point is the area of wages policy because that is the area in which the Government has trumpeted great success, the area in which it has an accord based on an arrangement with the trade union movement. The renegotiated mark 3 version is no more than a pea and thimble trick. It has now resulted in a two-tier wage system which has led the Australian Council of Trade Unions to seek a $20 a week wage increase plus a second tier wage increase of at least 4 per cent at the national wage case. If anything were calculated to cause a run on the Australian dollar it is the prospect of that sort of claim succeeding. One would hope that the Australian Conciliation and Arbitration Commission will have the good sense not to capitulate to the ACTU in the way the Government has clearly encouraged the unions to press for the claim. Perhaps one of the most depressing quotations that I have seen in a long while is one that was handed to me not so long ago. It gives an example of why the trade union movement is prepared to embark on wholly irresponsible claims and somehow to pretend that others should be sharing the burden. There is still no shortage of trade union leaders who will say that somehow they should not be copping all the blame and that others should wear it. Honourable senators should listen to this: The Prime Minister (Mr Hawke), when ACTU Federal President and the Federal President of the Australian Labor Party, stated in August 1974: We know inflation is at 16 per cent and we believe it's quite likely to reach 20 per cent in the next two quarters. But we will not indulge in a trade-off in wages for some conjectural reduction in inflation. That is a tragic indictment. Unless the Prime Minister has completely transformed his thinking, he continues to believe that inanity. If he has done so, then by his example he has encourage others to behave in a totally irresponsible manner. The end result in terms of wages policy is that there is no prospect of Australia achieving a sensible reduction in wages to make us more competitive. As a result we have a 9.8 per cent inflation rate which, as we know, is a multiple of that of our trading partners. I think Japan and West Germany now have negative inflation rates. In the United Kingdom and the United States of America inflation is very close to zero. Yet we have a rate that shows no signs of going in the required direction. That is one of the first and most obvious areas of Government neglect and default. Probably enough has been said about the level of foreign debt, but it is quite clear that again it has not come about accidentally. It is not due to factors beyond our control except to the extent that the terms of trade have gone against us and our export prices have been pushed down fairly dramatically as a result of an oversupply in primary commodities. But again that is a question of the Government not having taken action to provide incentives to manufacturing to export more. That is tied in with wages policy and tied in generally with the economic climate. No one would suggest that somehow we could have ridden through the current crisis given the accumulation of over-protection and the way in which the economy has been allowed to ossify. Certainly, in the last four years there has been precious little attempt to come to grips with the real difficulties the country faces. It should be no surprise to us that we face record levels of foreign debt. If we look around the world to our major trading partner, it is quite obvious that it will be faced with the same sorts of problems. There have even been estimates that it could reach a foreign debt level of $800 billion by the turn of this decade. If that were so, it would probably be in the top 10 Third World nations in terms of indebtedness. If one has debt service ratios such as that one is in big trouble. I do not know whether it is about to lose its AAA rating but it certainly suggests that-- Senator Gietzelt —Somebody must have a lot of capital out. Senator ALSTON —It is probably spending beyond its means. We know that it is in certain areas such as defence, but the end result is that Germany and Japan have massive trade surpluses. Senator Gietzelt —The United States, the United Kingdom, Japan, West Germany. Senator ALSTON —The United States is one of the largest debtor nations in the world at present so it does not have the capital surplus to redistribute. The problem is that if it does the right thing and gets its house in order it will reduce world demand for its imports. Again, that would have an impact on us. Senator Gietzelt —Nobody tells us whom they owe it to. Senator ALSTON —Whom they owe it to? Senator Gietzelt —Who owns the capital and lends it out? Senator ALSTON —I suppose it is a whole set of creditors around the world. But what has happened in many ways is that with its level of interest rates it was able to attract capital into that country long after it should have flown elsewhere. We will have the same problem here. I understand why we have record rates of interest across the board extending into all areas. I think Senator Button cited not so long ago the bank home mortgage rate of 15.5 per cent, which is a fixed figure. It would probably be higher if it were allowed to float. Bank overdraft rates for amounts under $100,000 range from 17.5 per cent to 20.5 per cent and building society mortgage rates stand at 15.63 per cent. They are all at horrific levels. The reason for that is that the Reserve Bank of Australia has been forced to set rates sufficiently high to attract overseas investment. Unfortunately, most of it is highly speculative; a lot of it is Japanese capital that went back home very smartly in January, causing a run on the dollar and requiring the Reserve Bank to step in and prop it up in a massive way. That action was probably justifiable, but obviously there is no prospect of the Reserve Bank's being able to continue it indefinitely. If we have the traditional national average of about three months imports in our foreign exchange reserve there is not much we can do to underpin the value of that dollar. The Reserve Bank cannot get into the business of targeting the exchange rate, and nor should it. Therefore it is a matter of time before either the dollar falls significantly once again or interest rates go even higher, and I do not imagine that that is likely to happen in an election year. As a result we are looking down the barrel. There are other areas in which the Government can be held responsible for not having taken the tough action that is required. A lot has been said in recent days about cutting government expenditure. I do not think any serious commentator would pretend that that is not necessary. The thesis of the Business Council of Australia in its submission yesterday was that the Treasurer underestimates the climate for change. I think that is absolutely right. Everyone in this country understands the magnitude of the problem, and people would be much more willing to accept the sorts of cuts that even a few years ago might have provoked howls of outrage and caused governments to be accused of being callous. A range of options is open to any government that wants to act sensibly and present a May expenditure statement to introduce those cuts. Certainly, in the area of education, I do not quarrel with an administration charge of $250. We could probably go a lot further. We need to make allowances for those who genuinely cannot afford to pay, but it has been proven beyond doubt to be a fallacy that by providing free tertiary education we somehow make it harder for those on lower income levels. The fact is that it has been business as usual except that the taxpayer has been picking up a mammoth bill. I would not have too many difficulties with a proposition that allowed people to borrow in the course of their studies and to repay that money if and when they got into a position in which they could afford to do so. It seems to me that that would not discourage those who are seriously interested in obtaining tertiary qualifications, and it would put the burden where it ought to be. It is a system that applies in places such as West Germany with a minimum of fuss. It is in many ways common sense, but it has not come about because governments have been too frightened to follow it down the track. The proposition of the Minister for Finance, Senator Walsh, of $1,000 per student, in the current climate I would have thought, is well worth another look. But I cannot see this Government doing it; nor can I see it biting the bullet in areas such as health, in which the Centre of Policy Studies suggested there might even be savings of up to $10 billion. Instead of taking the responsible course and looking seriously at fair work proposals, we will have a community volunteer program, which will probably not do much more than its predecessors. The community employment program has probably resulted in something in excess of $1 billion being spent on make-work programs. In the current climate, I think people would be prepared to accept that there must be a quid pro quo for government payouts and government transfer payments of that order. I think the Government can be held responsible for not cutting back on the size of the public sector. If we look at the public sector borrowing requirement, the latest figures suggest that if the Government manages to achieve its $3.5 billion deficit, the public sector borrowing requirement will fall marginally to about 4.6 per cent of gross domestic product, as against the 5 per cent figure for the preceding year. The probabilities are that the deficit target will be exceeded and, as a result, there will be little or no reduction in the public sector borrowing requirement. If that is so, one must ask whether there are options open, and that is why the Treasurer has been belting the States around the head in recent days, and justifiably so, I might add. He could in particular single out Queensland as a State that has been squirrelling away much more than it has needed. Again, it has been words rather than action. The submission of the Business Council of Australia makes it very clear that not only is the climate right, but it would be irresponsible of the Treasurer not to cut back the amount of funds available to the States at the next Premiers Conference. A one per cent cut would involve a reduction in the State authorities' global limit from $6.3 billion in this financial year to about $4 billion next year. Those are very big amounts. The Business Council says that the forward estimate of 3.5 per cent growth is overly optimistic. If one takes a more realistic growth rate of 2.2 per cent, the deficit will be $5.2 billion instead of the currently projected $4.5 billion and the quaint Budget figure of $3.5 billion. There is a dramatic need to reduce the level of current Commonwealth government outlays. If one accepts that the States' deficits will rise in aggregate terms by about $2 billion in 1986-87, that will, in any event, substantially offset any reduction in the Commonwealth deficit. So there is a very urgent need to achieve at least a one per cent cut in that borrowing requirement. The States offer a target in the sense that they are an integral part of the economy and should bear their fair share of the burden. A number of economic indicators are referred to in the motion that almost speak for themselves. They are a litany of tragedy as far as the economy is concerned. The fact that we have the highest interest rates regime in the Western world says it all. It is the reason why we have been able to live on borrowed time for as long as we have. It does horrific things for savings ratios and investment levels. Those who pretend that somehow companies should be spending more in the current uncertain times really are ignoring reality. They will certainly not be interested in embarking on any more perilous ventures at the moment, when they are fighting for survival. I say in passing that I was intrigued to hear Senator Maguire trot out the by now trite line about private sector overseas borrowing being a matter for criticism, and in some way excusing the Government's current economic policy. Maybe the people he talks to think that in the past it was all the fault of the public sector but if one analyses the figures I think the ratio is something like 60-40 in favour of private borrowings. But that does not excuse the Government. The reason why those sorts of moneys are borrowed overseas is simply interest rate differentials. A company would be crazy to borrow funds in this country at the rate of 20 per cent when it can borrow funds overseas at the rate of 6 per cent or 7 per cent. Companies will continue to do that. They would be acting irresponsibly, not in the interests of their shareholders, and with a very misguided sense of patriotic duty if they sought somehow to continue to borrow in this country. Those who pretend that one can somehow impose limits on the extent of overseas borrowings-in the way in which King Canute from the Australian Democrats suggested it could be done, by closing off foreign takeover borrowings-are ignoring the realities of life. Money is a very fungible commodity. It is not a very difficult task for a company simply to readjust its balance sheet so that it is borrowing overseas for a whole range of other activities, and it then finds magically that it has enough money in the domestic kitty to enable it to embark on a takeover proposition. It is simply a matter of switching funds around. There is very little that governments can do to stop it, other than putting the whole corporate sector into a straitjacket. I am sure this Government recognises that, and that is why the Treasurer, to his credit, resisted those sorts of suggestions from the New South Wales branch of his own Party, and Mr MacBean in particular. It is another nonsense. It shows a lamentable misunderstanding of the way in which the economy works. Senator Messner —It is a form of xenophobia. Senator ALSTON —Yes, I think that is right. It is a matter of just identifying multinationals and all of those others in the demonology as the reasons for the problem, rather than accepting responsibility for it. The end result is that one can certainly say that that sort of borrowing will continue; that companies will continue to locate overseas. Pacific Dunlop's recent record profit level was in large part due to its decision to go off-shore. I am sure we will see more of that. I am not critical of any company that finds itself in that position. If Elders IXL Ltd embarks on a takeover for the Guinness company and succeeds, that will simply be in part because it has outgrown the size of the Australian market and because there are precious few investment opportunities left in this country. I think we should welcome companies of our own making that aspire to be genuine multinationals. The world economy is shrinking and there is no reason why they should not be doing that. They may in fact be borrowing domestically to invest in takeovers in other countries. It is simply the reverse side of the coin, and it is the way in which the world economy will continue to operate. I refer again to the indicators. Motor vehicle registration figures for the past 12 months to December 1986 fell by 24 per cent. We know there is a combination of factors for that, but certainly the depreciation of the Australian dollar must have had a very significant impact. The imposition of the fringe benefits tax is by now legendary. It is quite clear that the sorts of massive declines in motor vehicle registrations and the massive increases in the price of motor vehicles will combine to depress that vital sector of the economy. Retail sales fell by 0.9 per cent in November over the figure for the previous month, and rose by only 1.5 per cent in the three months to November. If one accepts that inflation has been rising at a rate which is above those levels, that implies a negative rate of real growth for retail sales. Again, that is pretty depressing stuff. Building approvals have been well down in recent months. They were down 9 per cent for the five months ending November 1986. It is really a pretty depressing state of affairs. Certainly there is no light at the end of the tunnel in the current environment. Disposable incomes for the majority of Australians have been falling because of higher taxes as taxpayers move into the higher Keating tax brackets. Again, we know the tragic figures and we know why it was that the Government felt the compulsion to convene a tax summit. The proposition was that in 1954-55 a person had to earn 17.6 times average weekly earnings to be in the top marginal tax bracket. In 1984-85, 30 years later, he had to earn only 1.6 times average weekly earnings. I think the current estimate is that by the end of this financial year more than half of the taxpayers of this country will pay the top marginal tax rate, once that rate is reduced to 49c. Again, it is a very depressing state of affairs. It is brought about by a combination of factors, but the important thing is that there are things that governments can do to rectify it. That is why it is so tragic to hear of Mr Keating's hypocritical about face, and to see that we have run the race of tax reform and that this Government is no longer interested in restructuring and providing incentive. It has simply given the game away; it has all gone into the too-hard basket, like the trilogy which has also been consigned to the dustbin of history. A consumption tax has been ruled out; there will be no changes to tax rates. I would just like to refer back to what the Treasurer said at the time of the Tax Summit because it is instructive to do so, given his breathtaking hypocrisy of recent days in suggesting that somehow a consumption tax is not achievable in the current economic climate. He was not saying that when he was doing his best to withstand the onslaughts of his mates in the trade union movement aided, certainly, by some business interests. In regard to a 12.5 per cent consumption tax he said that he had heard all the criticisms and that: There have been no basic effective frontal assaults on it and unless there are a whole lot of arguments we've not heard, I'll be surprised if there is. He went on to say that he simply blamed the noise and static of special interest groups, and he and the Prime Minister said that they were parting the veil of special pleading and special interest groups. They made it abundantly plain that they believed that was the course of economic rectitude, that it was a responsible path to follow and that it was in no way contingent upon prevailing economic circumstances. Yet we now find that it is all too hard; it will not be adopted by this Government in an election year, all because it is not prepared to try to put some more `incentivation' back into the system. It is tragic for Australia. It is quite clear that this Treasurer has run his race. I would like to touch briefly on one aspect of tax reform policy which I think is also neglected; that is, the incentive effects that can flow from a reduction in taxation rates. Even the Australian Financial Review does not understand that fact. It scathingly dismissed the effects of the Laffer curve in its editorial last Friday by suggesting that the United States experience had been that no beneficial effect flowed from a substantial reduction in top marginal rates. The fact is that in 1981-82 the top rate was brought down from 70c to 50c in the United States of America. About two years later it was seen that the group paying at the top marginal rate was paying $8 billion extra. It had gone from $34 billion, which one would have expected under the prevailing regime, to $42 billion. The latest assessments of that phenomenon are that it is about one-third due to the increased incentive effect and two-thirds due to the reduced incentive for tax avoidance. So there are very real benefits to be gained by substantially reducing the top rate of tax. It is not simply a matter of benefiting the poor; it is in fact a matter of getting more revenue in for government which can then embark on its income redistribution to the extent that that is justified. So the whole notion of a progressive tax system I think needs to be rethought. Whilst I suspect the Treasurer well understands that in private, I am sure we will not see any move in that direction in public. So in a number of ways this Government has simply given up the game. It will go on with all those sorts of problems which are by now manifest and which not only warrant but make essential a mini-Budget. I see that Mr Keating has said he is still contemplating the proposition. Again, I am sure that he would like to do it; it is only if he is talked out of it on the basis that it might jeopardise election prospects that he will not do it. Significant reductions in government expenditure, again, are in precisely the same position. The Government knows that they are necessary, but it is a question of whether it can cope with the flak. I am sure it does not want gratuitous advice from me, but I would have thought that in the current climate the electorate would cop a lot more by way of responsible expenditure reduction than it might have done in previous years. I want to deal briefly with the fairy tale stuff that the Australian Democrats have served up by way of amendment. The first part calls for measures to `encourage export-directed industries with a high value-added'. I suppose it is better than Senator Maguire's idea. He thought we had too much import substitution going on in this country. It is an incredible proposition if he is really suggesting that he wants more imports at the current time with the current account deficits we have had. I think the December trade figures showed an export surplus for the first time in about 14 months; but Senator Maguire wants somehow to reintroduce a whole new protection regime. The Democrats have not gone that far. They have talked about encouraging. If that means moral encouragement, that is a fairly trite proposition. If it involves subsidies then the Democrats have learned nothing either. The cost to revenue would simply not be justified and I hope that no-one would take that suggestion seriously. The Democrats want to `control flows of speculative capital in and out of the country'. Again, as Senator Messner said, that is simply a xenophobic reaction. They want to reimpose exchange controls; they want to get back to the unreal world that operated before the currency was deregulated-one of the great decisions that have been taken in the history of this country, because it has made us face up to the realities of life. The Democrats obviously do not share that view of the world. They want to reimpose exchange controls. Presumably they would tighten up the Foreign Investment Review Board, they would probably put withholding taxes on interest and they would make the economy suffocate. They want to `implement a significant and cost-effective reduction in government expenditure'. I suppose we could say that their heart is in the right place, but it seems to be somewhat vague and to talk about a `cost-effective reduction' is somewhat tautologous. They want to `close off the taxation rorts of transfer pricing and negative gearing on interest paid on money borrowed for company takeovers'. I cannot do much better than refer them to the eloquent answer of the Minister for Finance this afternoon in answer to one of their own number. Certainly I think the logic of what he had to say is compelling. It is breathtaking in many ways to hear it from a Labor government, but the fact is that those sorts of money flows are a function of the state of the economy. I think the Minister implicitly accepts the Treasury view that takeovers are in no way harmful to the economy except in certain areas-certainly not as a general rule. They tend to make the economy much more efficient and competitive. That applies from the largest companies in the land to the smallest. I think one can therefore say that no parts of the Democrats' amendment deserve support and really do not assist the debate in this area. I would like to conclude by urging the Government to be firm, to not sacrifice economic responsibility on the altar of electoral expediency, to once again rethink the very significant economic attractions of having a lower and flatter income tax regime, and to undertake the cuts in government expenditure in very many areas-not across the board as the Premier of Queensland was arguing in 1985, but in certain targeted areas. I do think, and I am sure most others also think, that there are substantial savings to be made in the areas of welfare, Medicare, tertiary education and unemployment. Senator MICHAEL BAUME(New South Wales)(5.58) —In discussing the mismanagement of the Australian economy under this Government, let us get one thing absolutely clear: It is a nonsense to try to pretend that it is all bad luck and that this has all suddenly happened because of an unexpected deterioration in the terms of trade. That is the arrant bunkum that is being spread around by a government which is desperate to look for an excuse, as it always is, for its own incompetence. The fall in the terms of trade was clearly warned of by the Treasury in Statement No. 2 of the Budget Papers two years ago. There was a clear warning that this Government chose to ignore. In fact, what has happened to this nation is a direct consequence of ignoring the clear warnings, given not only by the Treasury itself, but by this Opposition, by experts in the financial markets and by experts overseas. But this Government knew more; it knew everything; it could handle it all. It could in fact carry on in a ratbag and irresponsible way, as this Government did, in the hope that if things did go badly it could then blame something else. So it is blamed on something else. It is said that it is all the fault of a worsening in the terms of trade, something that was clearly warned of by the Treasury and by any expert in this area. Let us look at what this Government was saying just a couple of years ago in an extraordinary document called `The Accord: the First Two Years', in which the Government congratulated itself on its extraordinarily clever management of the Australian economy, because it said that it had been able to prove that the rest of the world was wrong and that it was the only nation in step. It said that it was the only nation to discover the way in which one could solve inflation and unemployment at the same time and how one could have massive economic growth without the consequences that inevitably have flowed from that economic mismanagement-that massive increase in government spending, that reckless disregard for economic reality. This publication, which describes the accord as a `bold and innovative' approach to economic management, said: . . . the Accord strategy has been the foundation of Australian economic management. So now we know what to blame-the accord. The publication goes on: With the Accord the improvement in our economic performance has been remarkable- That is ironic, is it not? It continues: . . . with record growth, falling inflation and dramatically rising employment. Living standards have been maintained or improved, with the main improvements targeted at those most in need. Because of the Accord the Government has been able to reduce unemployment and increase the social wage without fears of worsening inflation. Is there, and has there been, any greater nonsense than that? And how speedily disproved it was. The important thing is that not only did the Government smart-Aleck about how it had the answer; it also smart-Alecked about how every other country was totally out of step. I quote from the same accord document: In following this course, in contrast to many other countries, the Australian Government is determined not to revert to the orthodox response to devaluation of using contractionary economic policies to reduce inflation. It also rejects calls for the dismantling or destruction of our wage indexation system. Wage indexation systems overseas have been recently interrupted or suspended, with no one system escaping unscathed through the 1980s. In other words, the thing that distinguished Australia from the rest of the world was the fact that Australia was the only nation out of step and that this Government's policies were deliberately aimed at doing the impossible-and it proceeded down that track, despite what events in the rest of the world were clearly showing even the most incompetent of observers. I wonder whether the Government, in ignoring what was happening in the rest of the world was, incompetent or mischievous. Surely it was not as incompetent as all that-it could not have been. It could not have believed the nonsense it was putting out in reports like this, which are now shown to be disastrous. The important thing for the people of Australia is that whatever the motives-and I presume that they were the vulgar political ones that one could expect from the people opposite-no matter what the ultimate cost to Australia, and we are now paying that cost, the reality is that the Government proceeded with these policies and boasted about them. It boasted about how it was the only one in step at a time when it was clear that those policies would lead to disaster-and they have led to disaster. Having seen the Government's boast, let us now look at reality. Instead of all the things we saw in that report on the accord, we now see that interest rates have gone up, that inflation has gone up, that taxes have gone up, that debt has gone up-but that the dollar has gone down. The only thing that has gone down has been the dollar. This means that the living standards of every Australian family, farmer, and small business person have been squeezed. Naturally and sensibly, they are crying out for a change of government and they want the failed Labor experiment to end. I stress: The problem was not simply because there was a well-predicted worsening in the terms of trade. It was because the Government persisted with smart-Aleck policies which were doomed to failure and which failed. Let us see what has happened to economic growth-the basis, the engine room, on which employment and everything else depends. We have had negative or negligible economic growth over the last year. There was something like a 0.5 per cent growth in the 12 months to the September quarter, and this is the first effective contraction since the middle of the disastrous drought and world economic recession of 1983. What has happened to inflation? Instead of going down, it has risen dramatically. The accord document said: `Don't worry, we know how to fix this without running the risk of worsening inflation'. But what has happened? Inflation has risen dramatically, particularly since the last election when it was about 5 per cent. It is now just under 10 per cent. This is dreadfully serious; it is absolutely disastrous for Australia. To hear a man like the Minister for Finance, Senator Walsh, who is supposed to have a responsible position, say `Oh, but it is not nearly as bad as it was under the previous government' establishes very clearly to this chamber and to the people of Australia what self-deception, self-delusion, and stupidity are guiding this country. What Senator Walsh studiously avoids is the fact that we now have the worst relative inflation rate in Australia's history. Never before while the figures have been collected have we had a situation where Australia's inflation rate and its costs are going up at such a massive rate relative to the rest of the world. Although Senator Walsh is seeking to mislead the nation about the reality of inflation, which he does consistently because he has great difficulty in distinguishing between fact and faction-and perhaps one should not criticise him because no doubt it is some inherent defect that prevents him understanding the difference between reality and the sort of rubbish he spreads around this chamber-the fact is that we now have an inflation rate near to 10 per cent while the inflation rate in the Organisation for Economic Co-operation and Development is just over 2 per cent. Ours is five times as bad as the average inflation rate of the developed world. People like Senator Walsh come in here and try to pretend: `Ah, but it was worse under the previous Government'. Let us test Senator Walsh's integrity in his use of figures. Let us look at 1982-83, when Australia's inflation rate was 11.5 per cent. What was the OECD's rate? It was 6.3 per cent. In other words, Australia's rate was far less than double the OECD rate. It is now five time as high. Yet people like Senator Walsh deliberately and mischievously seek to mislead the people of Australia about the seriousness, the disastrous situation, in regard to inflation that now affects us. I do not know whether ever before in our history we have had such a relatively bad inflation rate. All I know is that since the OECD was formed 25 years ago, the figures have never approached anything near the disastrous situation we now face. This represents another broken promise. What did the Prime Minister, Bob Hawke, AC, MP, say on 20 November 1984? I shall quote what he said as it was appropriate at an election time. He said: We expect inflation will be less than five per cent in the year ahead and we are determined to keep it below five per cent. That is just another of Bob Hawke's promises that are recklessly indifferent to the truth. Senator Lewis —What about the trilogy? Senator MICHAEL BAUME —What trilogy indeed? But let us stick to these promises relating to specific things like inflation where he has just proved himself to be 100 per cent wrong. Instead of 5 per cent inflation, it is 10 per cent inflation. He was prepared to say anything, like Senator Walsh, in order to win an election. Can one believe this man? The reality is that obviously one cannot. Let us have a look at the balance of payments and the current disasters that are happening there. In this booklet on the accord the Government said these things would not happen because it knew what it was doing. In May 1986 Paul Keating said: Overall, 1986 is emerging as a year of slower, but still satisfactory growth, a year in which we see consolidation of the very strong gains of the past three years and in which the economy can deal with the imbalance of our external account. Mr Keating said he could deal with it, but it has dealt with him. It is now an absolute and unmitigated disaster with the latest monthly figures confirming the fact that the Government's nonsensical claims about having resolved this problem are absolute bunkum. We are not exporting enough and we are importing too much. The main reason for the disastrous look of these figures is the massive interest bill which emerges from the fact that under this Government our foreign debt has trebled. The Government cannot go around blaming the previous Government. It has been in office for four years now; for four years it has misdirected the economy of this nation. In the accord booklet the Government has told us that it can fix everything, that its policies, although totally contradictory to those of the rest of the world, are the only ones that are right. Now we see the price. The current account deficit-that is, our relations with the rest of the world-as a percentage of gross domestic product is the highest in 35 years. We have the worst situation on our external payments relationships overseas in 35 years-6.2 per cent. There is only one nation in the Organisation for Economic Co-operation and Development that is worse than us, and that is Norway. The forecasts are that Australia will remain the second worst in the developed world in the current year. The January deficit certainly shows that the previous two months were a false dawn, despite the fact that they were so enthusiastically welcomed by the economic illiterates on the other side. There is no significant improvement in prospect and, if Mr Keating still talks and thinks about the J curve, I recommend to him a cartoon in the Australian newspaper this morning which suggested where his J curve is probably hurting him most. What about foreign debt? I mentioned that one of the major elements of this disastrous current account figure is foreign debt. In June 1983, three months after the previous Government lost office, the foreign debt was about $36 billion. That was too high. It is now treble that in gross terms. Under this Government our foreign debt has trebled. That is the most appalling indictment of any government which claimed that it had everything under control, that it knew what it was doing and that even though it was out of step it was really the only one in step. Three years later the foreign debt has trebled. That debt is increasing by something like $1,000 every second. We now need something like $6,000 from every man, woman and child to pay off our foreign debt. It is this rapid rise in our foreign debt and the fact that this Government in particular has led the fray in borrowing-its borrowings have led to some really significant rises in borrowing in recent times-that led to Paul Keating being the first Treasurer in Australia's history to preside over the downgrading of Australia in international markets from AAA to AA. He was the first Treasurer to preside over such a disaster. What about interest rates? Let us consider another of these broken promises on interest rates. In an address to a business lunch in Adelaide on 20 November 1984-it is curious how all these cheerful comments seem to have come just before an election-Bob Hawke said this: At present, the outlook for interest rates is as bright as it has been for more than a decade. Australia and Australians will during 1985 reap the interest rate rewards that are flowing from successful policies of the past 20 months. We have ploughed the fields and sown the seeds. In the near future we will harvest the crop. I can tell honourable senators that there is plenty of fertiliser there to help it. That is the most arrant fertiliser I have seen for a long time. Here we have a Prime Minister promising something like that on interest rates, having been once bitten already. What has happened since then? Savings bank home loans have gone up from 11.5 per cent to 15.5 per cent. Certainly, Australians seeking to buy homes know how misleading, disgraceful and irresponsible this kind of ratbaggery by the Prime Minister has been. How disgraceful such a promise before an election has turned out to be. We have seen the prime rate go from 13.5 per cent to 18.25 per cent. We have seen the small overdraft rate, which affects most ordinary Australians, go from 14.5 per cent to 20.5 per cent, and 90-day bank bills from 11.5 per cent to 16.8 per cent. In effect, these are increases of up to 50 per cent in the cost of borrowing money under a government led by a Prime Minister who was re-elected on the promise that the outlook for interest rates was just great. This kind of deception is arrant nonsense. There can be no reduction in interest rates until this Government resolves the current account and foreign exchange problems that its own policies have created. We must keep our interest rates high in order to keep attracting foreign money to pay for our external bills, many of which were originally generated by this Government's excessive spending, by its reckless indifference to economic reality, by its sticking to the nonsensical policies outlined in this booklet on the accord. I intend to stop now because I would very much like Senator Hill to have the opportunity to say a few words about this disastrous situation. I simply conclude by saying that the Hawke Government has dishonoured almost every promise on the economy it has made to the Australian people. It has dishonoured its promise on inflation, we have seen that; on interest rates, on the 13 1/2 per cent interest rate ceiling. By the way, I wonder what the Government will do about the housing interest rate subsidy which is due for renegotiation at the end of next month. If it does not continue that subsidy there will be an even worse disaster in the housing industry than that which has already occurred and, if it does maintain it, there will be an added burden on the deficit, which will also be disastrous. The Government has broken its promise on petrol prices and on the trilogy. What trilogy? It has been broken so often that it is honoured more in the breach than in the observance. I instance promises concerning the value of the Australian dollar, the capital gains tax, simpler tax laws, the delaying of tax cuts, interest withholding tax, 10,000 Priority One traineeships, housing, the balance of payments, the Button car plan and how devaluation was going to create 100,000 new jobs. These are basic promises which were broken, every one of them, by a government which varies between incompetence in the area of economics and the deliberate misleading of the Australian people about the causes of the present and worsening disaster in the economy. This, quite properly, has encouraged the Opposition to move this motion condemning the Hawke Labor Government for its mismanagement of the Australian economy. Senator HILL(South Australia)(6.19) —There are only a few minutes left in this debate, but it has given us an opportunity to review the Government's economic performance, which indicates a picture of total failure. In fact, any reasonably objective assessment of the figures produces a most depressing picture. All statistics on the economy at the moment, as they become available, have one thing in common-they are all bad. In the few minutes that remain in this debate, let me run through a few of them. The Government will hear them over and over again this year. Let us look at some statistics. In 1986 Australia's economic growth was down to a pitiful low of 1.3 per cent. It was the third lowest of all Organisation for Economic Co-operation and Development nations and surpassed only Greece and New Zealand. Our entire interest rate structure is unbelievably out of step with other Western nations. Australia's interest rates for long term Government bonds are way above those of our trading partners. Let us look at the figures briefly. They are: Australia, 13.75 per cent; Canada, just over 9 per cent; France, 9 per cent; Germany 6 per cent; Japan 4 per cent; the United Kingdom 10 per cent; and the United States of America just over 7 per cent. How can we become more competitive with this interest rate structure? Business investment is an important part of sustained economic growth but with high interest rates, high inflation, rising labour costs, the new fringe benefits tax and the increase in the company tax rate it is not hard to see how real rates of return are now down below the levels of the late 1960s and early 1970s. It is not surprising that business confidence in investment is down. Australia's business investment, as a proportion of gross domestic product, compares abysmally with other major economies. In 1985 the figures were: Australia, 9.9 per cent; the US was over 13 per cent; the UK 15 per cent; France over 15 per cent; and so one can continue. Those are abysmal figures for Australia. Australia's foreign indebtedness is growing, as we all know. As our current accounts deficit turns into a yawning gap our reserves of gold and foreign currencies are also at very low levels. Australia's reserves are now less than a host of nations with generally much smaller populations; for example, Austria, Sweden, Norway, Belgium and Switzerland. The motor vehicle industry suffered a massive 25 per cent slump in registrations of new vehicles. The figures are far lower than those for the global recession of 1982-83. In nearly all cases the contributing factors are government-caused: High interest rates, fringe benefits tax, sales tax changes and so on. Australia's labour costs are significantly out of step with those of our major trading partners. It is no wonder that when the latest unemployment figures were announced Ralph Willis sought to caution the unions against excessive wage increases. What happened? The Government said today that it will accept a $12 rise in the first tier of the new two-tier system-totally out of step with reality. January 1987 was another record month for the current account deficit-the worst January figures ever. But there are a few more records. Our balance of trade was in deficit for an unprecedented 17 months from July 1985 to November 1986. In the 46 months that Labor has been in power we have had 22 months in which the current account deficit exceeded $1 billion. From May 1985 to October 1986 every month, with only two exceptions, had current account deficits of $1 billion or more. Prior to the Hawke Government, the monthly current account deficit never exceeded $1 billion. Current account deficits of the order of 6.2 per cent of GDP under the Hawke Government were last experienced in 1951-52. The current account deficit has almost doubled from $7.3 billion to somewhere around $14 billion anticipated this year. The average yearly figure under the Fraser Government was only $4.7 billion. Australia's current account deficit as a percentage of GDP in 1986 was exceeded only by that of Norway-Senator Michael Baume also said that, but it is worth reminding the Senate. Australia's situation is unlikely to improve quickly and certainly will not under this Government. Our ranking as a world exporter has now declined from eighth in 1953 to twenty-third today. When Labor came to power Australia's ranking was fourteenth. What a dramatic decline. So one can continue through the whole range of indices. Our foreign debt of $101 billion now represents some 42.9 per cent of annual GDP. We are looking at an interest bill on that of $9 billion annually, or about 3.5 per cent of GDP. That is more than the Federal Government spends on each of health, education and defence in each year. What a depressing picture that is. To put the size of the debt in personal terms, it is the equivalent of $26,000 per family in Australia. It is as if we each had to add a second or third mortgage of another $26,000 per family. That foreign debt is two and a half times the value of our annual exports. That reflects our capacity to service the debt. Where does that put us among debtor nations of the world? I regret that I have to advise the Senate that with that ratio we now exceed such debtor countries as Nigeria, Malaysia, South Africa, Turkey, Venezuela, Indonesia, South Korea and Thailand. What a frightening statistic that is. How long will it be before the International Monetary Fund representatives pay us a visit; how long before we have to start talking of debt rescheduling? This is not surprising because taxation continues to rise as does government expenditure under this Labor Government. Federal tax receipts are at a record of 20.5 per cent of GDP. Similarly, expenditure is at record heights at an average of 29.9 per cent. The trend is undeniable since Labor has come to power. As well, there is an 85 per cent growth in sales tax collections. So it is worth remembering that not only income tax has been rising in real terms under this Government but also under the index system sales tax has gone up 85 per cent since Hawke came to power. Australia's inflation rate of 9.8 per cent is a disgrace. It is now five times that of our trading partners and is the sixth highest in the OECD. It is the highest level in Australia in the last four years. Let us just compare the figures with those of a few of our trading partners. We are at 9.8 per cent whereas Canada has 4.5 per cent, United Kingdom 3.5 per cent, the OECD average is 2.2 per cent, France 2.1 per cent, United States of America 1.3 per cent, Japan minus 0.3 per cent and Germany minus 1.2 per cent. Greece and Australia stand out as the only two OECD nations that have failed to markedly cut inflation since 1980, according to a recent article in the Economist. It is possible to continue and look at the effects of these high interest rates upon housing. For example, interest rates on new housing loans are 4 per cent higher than in 1985. Home loan repayments have risen from 22.3 per cent of an average family's income in 1985 to 26.5 per cent now. My State of South Australia, under another Labor Government, can claim that it is at the top of the table. What effect does this have on our exchange rate? Goodness only knows what it is today but since the election of the Hawke Government the Australian dollar has fallen 23 per cent against that of the United States, 30 per cent against the trade weighted average and 51 per cent against the Japanese yen. If I had time we could go on looking at index after index and see more of this deplorable economic record that the Hawke Government has given us. Let me just end with bankruptcies. I suppose that that is the bottom line. They are at a record level. In the first half of 1986-87 they were up 35.6 per cent. What a depressing note that is to end on. As I said in opening, this is a picture of total failure. If ever a government deserves to be thrown out on its economic record it is this Government. For the sake of Australia I can only hope that it is sooner rather than later. The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —Order! The time for the discussion of General Business has expired. Sitting suspended from 6.29 to 8 p.m. Debate resumed. Senator ZAKHAROV(Victoria)(8.00) —Before the debate was adjourned I was saying that the Minister has proposed in his second reading speech a review of the effectiveness and impact of the Bill after five years. It is unfortunate that that review could not be included in the legislation as there is a possibility, however remote, that this Government may not still be in power in 1992. Farmers and home growers will be able legally to retain the seed from protected varieties for next year's crop-that is, of course, provided that the seeds are not hybrids which therefore cannot be used to propagate. That is a problem that we have now with many varieties, particularly vegetables. So the rumours, claims that we will no longer be able to give our sons and daughters cuttings from our favourite shrubs or be able to give vegetables to our neighbours if the plants are of a protected variety, are vastly exaggerated. It is only the sale of such material which will not be allowed. Lovers of alfalfa and bean shoots will also be relieved to know that allowing a plant to sprout before eating it is not an infringement of a plant variety right. Reproductive material-seeds, cuttings, et cetera-can be used for research and further breeding without infringing plant variety rights. There is to be an advisory committee, and this committee will have on it a representative of breeders, a representative of growers and a representative of consumers. I certainly welcome consumer representation because I think consumers have to watch very closely the consequences of this legislation, and I know the Minister will ensure that that representation is genuine. Again I fear that some future government might appoint a token consumer, as has been the frequent practice of conservative governments in the past. There is also a public interest provision, but only on ministerial discretion, and again I have reservations about some future Ministers who may choose never to exercise that discretion in the public interest. Other safeguards are in the legislation, in the right of appeal to the Administrative Appeals Tribunal and the 20-year limitation on rights, a shorter period than applies in the case of copyright on other types of properties. I welcome all these safeguards but, on the other hand, I fear that many of the hoped for benefits of PVR are most uncertain. Dr Gladstones, to whom I referred earlier, a very eminent Western Australian plant breeder, has said: It strains one's credulity that anybody should be so naive as to think . . . that seed companies will continue to promote varieties after they have made their main seed sales, and stand to gain little more profit from them; the more so when this will be at the expense of seed sales of their `new improved' models, which by then . . . must be on the market if the company is to stay in business. In other words, continuity of supply of seeds may be uncertain. Dr Gladstones also believes there would be no profit for the big companies in developing improved seeds specifically for the Australian home market, where climate conditions differ markedly from those overseas and even differ in different regions in Australia. Farmers here, particularly grain growers, can usually safely store their seeds, so the seed trade is relatively small and is thus not an attractive specialist market to the private breeder. Hopes of the legislation reviving the export trade to Europe, raised particularly in Tasmania by prospects of PVR, are, I believe, doomed to disappointment. Europeans eat, for example, mainly granny smith and jonathan apples, but they are grown by their own subsidised producers. New varieties of apples will not help this situation. Any major boost to the export trade in fruit or vegetables is more likely to come from better marketing. Recent examples of success in this area are sales of fresh grapes from Victoria in the European winter and sales, again by a Victorian firm, of vegetable seeds to China. A Press release this week by the Minister for Science (Mr Barry Jones) refers to a multi-million dollar wildflower export industry in Western Australia. Paradoxically, we are also now selling cherries to the land of the cherry blossom, Japan. I believe the cut flower export trade, particularly to Europe, could be greatly expanded. The home market, too, has not been fully exploited. For example, Tasmania grows apple varieties which are not available on the mainland and which, I am sure, would sell there, and tropical fruits are often difficult to obtain in southern States. Contrary to the claims of those who see PVR as a panacea, new varieties of fruit and vegetables can be, and are, introduced now without reciprocal PVR rights. An example is the yellow nectarine. At the time of the Senate Committee inquiry this variety was claimed to be desirable but unobtainable by growers because we lacked PVR, but it is now grown widely at the expense of the white-flesh nectarine, to the disappointment of consumers like me who prefer flavour to appearance. Not only consumers and home gardeners but also farmers are concerned about this legislation. For example, I have spoken recently with wheat growers who are concerned that market changes may necessitate buying new patented varieties, at a higher price, to replace their stored seed. Again, I emphasise that I welcome the Minister's proposed review at the end of five years. One of my major fears about the consequences of this legislation in the hands of a possible conservative government is that public breeding will not receive the support it requires. One of the models presented by the proponents of PVR has always been the continued activity and reputation of the public breeding institutes in the United Kingdom in the years following the introduction of PVR there. Prime Minister Thatcher is now in the process of selling those institutes to the private sector. The threat of that happening here is very real if the present Opposition, or any part of it, were to gain power and pursue its policy of privatisation. The present Government has increased assistance to public breeding and will, I am sure, maintain that support, but attention also needs to be paid to the education of future breeders. Dr Pugsley, an eminent retired plant breeding expert from Melbourne University, in a circulated comment on the Lazenby report, had this to say: With respect to teaching the universities have the sole responsibilities in this field, for future progress depends largely on the initial training they provide. In Victoria, one senior lecturer has the sole responsibility for formal teaching in agriculture, horticulture and forestry within the plant breeding discipline. It is suggested that at least one university should be asked to develop a fulltime course in plant breeding. Australian governments, both State and Federal, must maintain support for not only public breeding but also for training. A commitment to the public sector of plant breeding is, I believe, the real hope for growers who want better genetic material without the fear that new varieties will depend for their development and availability on the profit motive. Finally, I would like to say to all those in the community who share my reservations about this legislation that the time for their objections to be really effective is now past. Lobbying at the level of that in the last few weeks might have effectively educated and changed the opinions of decision makers if it had come one or two years earlier. I urge all those concerned about the legislation to obtain copies of it and use the safeguards that are contained in it, such as the right to object if their commercial interests-as, say, vegetable growers-are affected by the grant of a plant variety right; monitor the operation of the PVR scheme, as a grower and/or as a consumer; and let parliamentary representatives know if people are not happy with the way it works or with its consequences. I sincerely hope the fears about this legislation will never be realised and that it will bring some positive benefits, not just to the large seed companies but also to farmers, home gardeners and consumers. Senator MACKLIN(Queensland)(8.09) —I join my colleagues in the Australian Democrats to express our wholehearted opposition to both the principle of plant variety rights and the Plant Variety Rights Bill 1986 which is brought before us tonight. While the issues involved in this legislation are many and varied and complexities are numerous, as those who have engaged in this debate over the years in this place are well aware, in my contribution to this debate I wish to draw attention to one important aspect, and that is the February 1986 resolution of the European Parliament, dealing with the genetic diversity of cultivated plants and trees, which, amongst other things, said: Stresses with concern that in the last few decades there has been a serious loss of local plant varieties (and species) throughout the world . . . Given the ramifications of this resolution of the European Parliament, I find it astonishing that the Minister for Primary Industry, Mr Kerin, has chosen to make no reference in his second reading speech to the work of the European Parliament. This is not because he is unaware of the resolution of the European Parliament. it is not because he is ignorant in the matter but rather that he, like so many others, is chasing a phantom fast buck at the expense of the fast diminishing genetic diversity of the world's cultivated plants. In this Bill we are not talking only about a natural resource; we are talking about survival and we are talking about ethics. This is recognised by the European Parliament when it reports that 95 per cent of the world's food products are derived from only 30 plant species and that, with the advancement of genetic erosion, it is expected that in India by the year 2,000 there will be only 50 varieties of rice compared with 30,000 that existed at the beginning of the century. I think it is an extraordinary fact that only 50 varieties will be left out of the 30,000 varieties that were being grown at the beginning of the century. The most horrifying disaster that genetic erosion can lead to is demonstrated by the well known potato blight in Ireland in the last century when the entire crop was lost. Millions of people died of starvation simply because many Irish farmers had relied on one variety of potato which succumbed to the disease and had not planted other varieties that were available in Ireland at that time and which certainly would have survived the disease, as they did in some parts of that country. The staple food of the people of Ireland was wiped out and millions died. In 1973-74 Bengali farmers lost 80 per cent of their rice crop, plus seedlings for their next crop, when they planted a new supposedly high yield rice variety supplied by several overseas companies. These were destroyed by the weather conditions at the time which other traditional varieties survived. Among the hopes that are held by proponents of plant variety rights are the expectations that PVR will benefit Australian breeders and that the private sector will increasingly contribute to Australia's plant breeding needs. Further, the proponents believe that this supposedly increased activity will bring financial rewards to the industry in general, to the private sector and to the country. Professor Lazenby and other PVR proponents either choose to ignore or refuse to accept the fact that overwhelmingly the majority of recent successful Australian patents have been held by overseas interests. If plant variety rights are introduced it will be the overseas-based agricultural corporations that will have the most to gain, and in fact will gain, in terms of their place in the Australian industry. The European Parliament made an interesting point on this matter when it said: The seed trade is being increasingly concentrated in a few hands thereby eliminating the small-scale producers from the market and in addition the seed trade is now regulated by a small number of multinational producers who engage in both research and marketing, and can therefore determine which plant and crop varieties are brought on to the market. With PVR in Australia, we can expect more takeovers of Australian firms by multinationals and the small Australian breeders will be out of business in very rapid time. As was recognised in a resolution of the European Parliament, the increasing concentration of the world's seed production in the hands of a few, and a wealthy few at that, means that they can determine which plant and crop varieties are brought on to the market. The ability to do this also gives them the ability to withhold whatever seeds they so choose. As the resolution of the European Parliament noted: Hundreds of small-scale businesses have been forced out of the market by the big dealers who in addition to seeds also produce fertilizers, pesticides and preservatives. The dominant position of these enterprises is maintained by various means, including the system of registered trade marks. This activity, combined with the increasing use of monoculture throughout the world, along with environmental and ecological changes and the resultant damage that had been caused, and the practice of various seed companies that prefer superior biotechnologically produced varieties to the supposedly inferior natural varieties, has led to an alarming decrease in the genetic resources available to the world. The European Parliament had this to say on the genetic diversity point: (a) Less choice for consumers who have access to a more limited number of species or varieties bred for reasons connected with production and marketing rather than flavour and nutritional value; (b) Lower resistance of monoculture to disease, leading to: Greater need for the use of pesticides and the inherent dangers to health and the environment; greater risk of disasters occurring. (c) Elimination of the small seed-producing firms as a result of the tendency to restrict trade to a handful of varieties and thus create monopolization of the market; (d) Increased costs for farmers. I think the last point is a very interesting one. It is one that has been noted by some farm organisations in Australia but unfortunately not by the major ones. If, indeed, there are profits to be made, they must be derived from somewhere and someone will have to pay for them. In the first instance, undoubtedly Australian farmers will have to pay more for seeds. Another input cost would have to be paid at the very time when, in terms of the agricultural development of this country, we cannot afford one more input cost. The concerns expressed by the European Parliament in respect of increased costs to its farmers were in fact derived from the experience of European counties with regard to their own plant variety rights legislation. In 1982 the European Court stated that the exclusive rights provisions of European plant variety rights legislation had led to unfair competition and excessive seed prices. The Court ordered that all European Economic Community members with PVR-type laws-that was, in fact, most of them-must remove the exclusive right clauses from their legislation. I think that was a very interesting and important ruling. Unfortunately it is one that has not been taken note of in the legislation before us. We are in fact doomed to repeat the type of mistakes that have been made in the legislation of other countries-countries with experience of PVR legislation which have had the advantage of hindsight to see how it worked. The trend that occurred in the European countries has also been evident in the United States of America since the introduction of that country's Plant Variety Protection Act in 1970. Speaking before a congressional sub-committee in 1980, Mr Wilson from the United States National Farmers Union said: Along with the acquisition of seed companies, seed prices have risen rapidly since 1970. All farm production costs have been rising faster than the general rate of inflation during the past decade and seed costs have been one of the leaders in the price rise. That is an inevitable trend. It is a trend which will occur in Australia, and the farmers will bear the brunt of this piece of legislation. They will be the ones who will be providing the profits for the multinational companies. Mr Wilson continued: According to the United States Department of Agriculture reports of farm production expenditures, the total cost of seeds and plants to United States farmers rose by 150 per cent in just five years between 1972 and 1977 . . . Although the practice varies from one type of seed to another, major seed companies often specialise in certain varieties and concentrate their strategies on a regional basis. This practice reduces effective competition. That is one of the things that I would have thought the Opposition parties would have been attempting to promote. Mr Wilson continued: The growing potential for price manipulation may cost- it will undoubtedly cost, and has cost- American farmers hundreds of millions of dollars each year. The European Parliament's resolution has also acknowledged the importance of maintaining genetic diversity in Third World countries and further recognises the dangers arising from the rapid erosion of diversity in the genetic resources of these countries. Plant breeding continues to be very dependent on the germplasm or seed collections which originally came from nine areas of genetic diversity in the Third World and which are collected by developed countries and, increasingly, by the large seed corporations. For a variety of reasons, including urbanisation and deforestation, these centres of diversity are rapidly diminishing. Add to this the storage of this germplasm in North American and European seed banks, the rapid movement by the large petrochemical corporations into the seed industry and the lobbying for patent protection of varieties developed from the germplasm and we have a recipe for disasters for many of the developing Third World countries. The germplasm which originates in these Third World countries not only provides the basis for the huge profits of the agri-chemical and petrochemical companies but has also saved many industries in the West. Let me give some examples. The United States wheat plant introduction No. 178383 has saved farmers in the American north-west an estimated $US3m per annum from losses due to stripe rust. This particular variety originated in Turkey and was collected in 1948. Wild hops have made a major contribution to the high alpha-acid content that has given British beer that bitter taste. The estimated value of this item to the United States economy is $20m per annum. Hops, of course, came from Manitoba and some parts of California. Cherry material is estimated to have saved the United States industry, worth $US10m. Of course, that material originated in China and was collected only a few years ago when the cultivated cherry was losing its potential on the United States market. The only known perennial form of wild maize, which has been estimated by agronomists in the United States to be worth billions of dollars to their industry, originated in and was collected-and is still collected-in Mexico. We in Australia are well aware of lucerne because it is bred in Australia. It is estimated to be worth millions of dollars every year to the Australian agricultural economy. The particular varieties that are currently used in Australia were collected in the late 1970s in Libya. So we can see that these developing countries have contributed their genetic resources to other countries which are now patenting them and which are now deriving profits from them without providing those developing countries with any return. If we look at the motion by the European Parliament concerning this matter we see that at least one multinational body has expressed its concern in very clear and forceful terms. I wish to quote Dr Bennett from the United Nations Food and Agriculture Organisation with regard to the dangers of plant variety rights. She said: The actual effect of plant breeders' rights . . . is a simple one . . . it hands over a natural resource, that is genetic resources, to private hands for those private hands to use for private profit . . . We must ensure the populations of the countries of the Third World are guaranteed a food sufficiency for all in the shortest possible time and these objectives are obstacled quite unequivocally by the existence of plant varietal legislation or by any kind of legislation which places into the hands of organisations or individuals resources which belong to the human race. That is a very interesting statement coming from someone who has a responsibility in the area to try to develop food resources for Third World countries. Dr Bennett probably knows slightly more about this than Senator Walters, who tried to interject earlier. She is working constantly in this area to try to ensure that those people have food on their plates. Senator Walters, of course from Tasmania, being a newly-found expert in this area of food requirements for Third World countries, finds herself greatly in sympathy with the multinational companies that are handing over these resources to private hands. The concern of the United Nations Food and Agriculture Organisation that I have spoken of is reflected in the European Parliament's resolution. Indeed, when I was at the European Parliament that item was currently being developed and there was a lot of input from the UN organisation because of its genuine concern for food and food development in Third World countries, as distinct from the bleating from some honourable senators in this chamber. The resolution of the European Parliament demands: Germplasm of all varieties of plants should not be regarded and treated as private property. I believe that that is a simple, basic position which we in the Australian Democrats support but which is not supported in this legislation. The European Parliament's resolution further calls on member states of the European Community to adopt the Food and Agriculture Organisation's international undertaking on plant genetic resources, which states its concern in the following terms: The UPOV Convention, which confers proprietal rights upon new-developed plant varieties and grants certain persons or institutions exclusive rights of distribution for defined periods, was having a restrictive impact on the distribution not only of new-developed varieties, but also upon their categories of germplasm . . . It states a further concern with regard to the FAO, as follows: . . . through its genetic conservation programme and the numerous governmental contacts throughout the world arising from this programme, was already fully committed-and still is-to a policy of full and free exchange of germ plasm in the common interest. For Australia to take a responsible position in respect of Third World countries and the continued free exchange and availability of germplasm, we ought to support the FAO and not proceed with the membership of the club that we are about to enter into with this piece of legislation. The European Parliament's alarm at the extent of genetic erosion in the world last year led to a call for submissions, which closed at 1 January this year. The call was on the extent to which genetic erosion has affected cultivated plant varieties in the community over the last three decades. That report is currently being compiled within the European Parliament. As a result, I move the following amendment to the motion for the second reading of the Bill: Leave out all words after ``That'', insert ``the Plant Variety Rights Bill 1986 be withdrawn pending the outcome of the study by the Commission of the European Parliament into the extent to which genetic erosion has affected cultivated plant varieties in the European Community.''. We would then have a basis upon which we could make a much more reasoned judgment as to the likely effect that this piece of legislation will have on a society such as ours which depends so heavily upon agricultural production. In conclusion, I want to quote a statement by a number of United States religious leaders regarding this matter. It makes an alternate point, a point which I think is important for those who are considering support for this legislation. It states: . . . stewardship of land and life itself are both symbolically and naturally joined in the life generating capacity of the seed. We must preserve for ourselves and for future generations the genetic variety of plants necessary to protect humanity . . . We are also disturbed by the acquisition of seed companies and patents by multinational corporations. The control of seeds, because it implies also the control of food production, and indeed of life itself, should not be appropriated to itself by any company or nation. Senator MASON(New South Wales)(8.32) —I support the amendment which has been moved by Senator Macklin. It is far and away the most rational thing that has been put forward in this debate. This is the last opportunity members of the Opposition and the Government have to get a little sanity back into the whole question of plant variety rights. Passing the Plant Variety Rights Bill 1986 would be an act of total irresponsibility. As far as the Labor Government is concerned, I make the prediction now that if the Hawke Government is defeated at the next election, its decision to put forward this legislation and have it passed this session could well be the fine balancing point which defeated it. Some of those on the other side may have reason to remember my words. I say that not out of lack of knowledge but because I have moved around to a very great extent among the public interest groups in New South Wales, in my own electorate, who are opposed to plant variety rights. Those people are far more numerous than the Government appears to understand. The interesting thing about them is that very few of them are Australian Democrats voters. Up to now 95 per cent of them have been Australian Labor Party voters. I have talked to those people and said: `The Hawke Government may well sell you out on this matter'. I have had many such conversations. They have said: `We do not think they will in the end. We have good people talking in the Caucus. They will not sell us out'. Every one of them has said to me: `If the Hawke Government sells us out on this matter, we will vote against it'. The fact that they may feel that they have only an ultimate vote for this side will not save them. There is a difference between an established area, such as this side which we know will support a Bill of this kind, and an area such as the Government's where such a move could be widely and rightly seen as a disgraceful, unprincipled dishonest sell-out of every principle that honourable senators opposite ought to hold dear. There is a very strong parallel in this situation with the Labor Government's introduction of foreign banks. It is well worth drawing and is very relevant to this debate. I can recall when a decision was made by the Treasurer, Mr Keating, to allow the introduction of foreign banks into this country. I have filed away a Press release from Mr Keating which is about 15 months old, and I put that Press release out in my name. Every one of the arguments in it was an argument that Mr Keating had put 15 months earlier. Subsequently, I put out another Press release stating that the words used were not my words; they were the words of the Treasurer. We predicted then that bad consequences would follow the introduction of those banks-I refer to higher interest rates-and, of course, they have. That move was to the detriment of the Australian community. The Government sold it out then and it is selling it out again. How long does the Government think it can do this and get away with it? How long does it think a smart and slick media, which might support it, will keep the knowledge of this sort of thing from the public? How long the Government thinks it will get away with that I do not know, but it is certainly trying its luck with this legislation. I have listened to this debate very carefully. I have seldom found the Government more defensive on an issue, and reasonably so. I have listened to my Democrats colleagues, who have studied this matter carefully. They have put forth argument after argument as to why this Bill should not go through. Not one of those arguments has the Government tried to answer. There is not one of them which it can answer, because they are unanswerable. If the Senate persists in passing this Bill it will really bring the banana republic archetype to pass. The Government is taking on an issue which many years ago was introduced in other parts of the world. In poor old banana republic, Rip van Winkle, Australia, the forward looking Hawke Government, when everybody else in the world is having doubts about PVR, thinking that it will not be useful or good, that it is bad-and time and time again it has proved to be bad in countries where it has been introduced-says: `We will have plant variety rights legislation now. It is the time for it.' We wonder why some of the Government's senior Ministers talk about Australia becoming a banana republic when the Government behaves like that! I must apologise to significant numbers of members of the Labor Party because it is very evident to me, both from discussions I have had with them privately and from the comments made by Senator Zakharov, that those members of the Labor party who have really done their homework on this legislation are opposed to it. It got through the Caucus, I suspect, because many of those opposite were just too plain lazy to study it and went along with the Government's top people, who can sell anything to them. That is obvious. Button, Hawke, Walsh and Keating can sell honourable senators opposite anything. They swallow it hook, line and sinker. Why? Is it because it is indifferent or because it is too lazy to study the issues for itself and come to its own conclusion? Something like that is going on. Senator Zakharov has done her homework and demonstrated it in her speech. What she said in opposing the Bill was as convincing as anything we have heard here tonight. She said that she would vote for the legislation because of her deep conviction that democracy, as she sees it, within the Labor Party compels her to vote against her principles and according to principles which have been imposed on her by a small junta in her own Party, as she knows full well. What sort of democracy and integrity, is that? What sort of leadership is offered to this country, with all its problems and crises at the moment? What sort of example is it to this country that you sell out? People are not stupid. They know that a few years ago members of the Australian Labor Party were talking against plant variety rights. You were talking against foreign banks. All the things you are speaking about, you are coming back to. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! Senator Mason, you should address your remarks through the Chair. Senator MASON —Through you, Mr Acting Deputy President, I say that those members of the Labor Party know that what I am saying is perfectly true. The Bill is totally irresponsible. The Government will get into trouble over it. I assure the Government that its voters will turn against it as a result of this legislation. I was first approached concerning plant variety rights legislation in 1979, soon after I was elected to the Senate. At that time I did not know very much about it. But those people in the community interest groups explained to me what the evidence was and showed it to me. I found the concept of patenting a life form nebulous and rather frightening. It is perfectly proper and reasonable, I think, that something which is mechanical or material should be patented. If somebody designs something like that on a drawing board which does something different for and valuable to society, that is a creative act for which he or she has every reason to expect some reward from society. But somebody may look not only at life itself, but at respon- sibly improving life for the benefit of the human race. This may be done largely in the public area, by scientists who have no axe to grind and no financial interest in the matter. I am concerned that they may take that process, which has already been highly developed, modify it slightly, patent it, and then have the right to sell that process for whatever price they want to sell it, or to withhold it. I propose to move an amendment to clause 38 of the Bill. I hope that, if the Bill is passed, the Senate will accept that amendment, because that amendment states that after the patent is granted, the material should be offered within two years or it reverts to the public domain. I hope that that amendment will be agreed to, so that there is no question of people being able to withhold varieties in the interests of selling something else which suits the grower or the patentee better, while the better product is patented and withheld. I think it is extraordinarily naive of the Government to leave this matter to ministerial discretion, which is the present provision of the Bill. Members of the Government probably trust the discretion of their Minister. But they are legislating for the future. Frankly, a future government which wants to be in the pocket of plant breeders and big multinationals will have it all its own way. The Bill is absolutely wide open to abuse. If that has not occurred to members of the Government, they should ask their draftsmen to have another look at it. Anyway, I will move my amendment, which has been circulated, and discuss it further, in the Committee stage. As I say, this question of patenting life is a very uncomfortable one and should properly be so to any human being, because the precedent is too important. The possibility of its being used as a precedent, perhaps to extend it eventually to animal life, even to sub-human forms, is far too definite to ignore. This is not fanciful, nor is it unpredictable. Over the last few decades we have seen realised as fact a number of powers of science, to the terrible detriment of the human race. They would have been barely credible if they had been written in fiction before they had happened. Anybody here could think of examples of that kind. It is our duty in this place, I imagine, to have vision, to see that we do not allow that precedent to be set unreasonably. Is it unreasonable? I think it is unreasonable. I listened to Senator Macklin and Senator Powell very carefully. They brought forward argument after argument which demonstrated quite plainly and clearly that there is no reason for this legislation. In all honesty that worries me deeply. It makes me worry so much about the motivation of the Hawke Government. Why is it bringing this legislation forward? If honourable senators argue it rationally, if they look at the arguments against it, and if they look at what is happening in the Common Market, they will be forced to the conclusion that there is only one possible reason why the Hawke Government is bringing it forward and that is because it has an axe to grind for somebody. That is a very serious thought. It is a serious accusation. I invite Government senators to answer the points rationally and reasonably that have been put forward by the Australian Democrats against the legislation. If they can answer those points one by one, rationally, reasonably and coherently, our view may change. But as it stands at the moment, it looks very much, as I say, like the foreign banks issue. Suddenly, the Government has changed its opinion by 180 degrees. It has given no reason for it. When governments do that, they are justly and reasonably criticised. The Opposition and I are here to remind the Government that if it puts forward that appearance, that is an appearance which is not an attractive public one, and not one which will allow the public to show any confidence in it. The Minister in his second reading speech seems to imply that the opposition by some sectors of the community to the concept of private ownership of plant material should be overcome by the fact that the debate in Australia has occurred at a time when most other Western democracies have introduced legislation for the patenting of plant varieties. This brings us back to the point. I cannot see that that follows, anyway, but even if it did, many of those Western democracies are experiencing great problems with such legislation. They are finding that all the things that were said against it by the interest groups are true, that it does attract multi- nationals which make chemicals and fertilisers to buy whole areas of seed production and to concentrate on those seeds and plants which will only be of benefit when their product is used. That is a legitimate enough economic tactic in the world of big business, but not one I would have thought a Labor government would fall for quite so easily. Is the Government so naive as to believe that it has happened elsewhere in the world, but it will not happen here? Does it think that the Bill provides sufficient safeguards to prevent it happening? I do not think so. In fact, I know that that is not the case. Senator Powell, Senator Vigor and I will put forward laborious amendments which we will argue strenuously and energetically. We will expect coherent, properly worked-out and thought-out replies from the Minister for Finance (Senator Walsh) as to why those amendments are not accepted. We will present our rationale for them and we will want answers. Let me warn the Senate that we will continue to ask until we receive them. If it takes us until the end of next week, we will get those answers. The point is, of course, that other countries, as I said, are now bitterly regretting the fact that they have introduced this legislation. In Europe last year I talked with a number of people in the agriculture section of the European Economic Community. They had best remain nameless in this connection, as some of them were very senior. They were very unhappy about the concept of plant variety rights. When I said it was likely to be introduced here, do honour- able senators know what their reaction was? They laughed. The Government's action is seen in Europe as being laughable, because it is so naive and so silly. Even without a plant variety patenting system in this country, Australian plant breeders still have access to necessary breeding material from overseas. This material is now available and it will continue to be so until this Bill is defeated. I want honourable senators to understand this point: Overseas plant breeders who have withheld any material from the Australian market have done so in anticipation of a PVR system being introduced in this country, under which they will be able to make more money. That is a perfectly reasonable commercial decision. But if those same overseas plant breeders are made aware that no such system will be introduced in this country in the near future, they would reasonably make the material available in this country so that they are able to make as much profit from it as possible without a PVR system. Surely, that is self-evident. It is not necessary for us to tie ourselves into this situation, any more than it is necessary for us to tie ourselves to the patents system for articles and objects in any other field. Another major area of concern is an area which is perhaps more subjective than has been brought forward so far in the debate, but I still think it is important. I refer to the likely effects of the legislation: What will happen to Australians, and what they will get as a result of it. The word has been spread about that plant variety rights is great. We will get great new apples and peaches-wonderful things which have been evolved in the garden of the Hesperides and the other parts of the world and which must be marvellous as a result. We will have them here and that will be tremendous for all of us. Of course, that is not the case. The assumption has been made that if growers have the right to patent varieties, particularly of fruit and vegetables, a better product will be available to consumers. This is, of course, not-I repeat, not-the case. It has been proved not to be the case already in this country. The producer will evolve and market what is most profitable and easiest for him to grow and process, not what is most wholesome and palatable. A classic example of this which has happened already, for other reasons, in this country is the appalling fate of the tomato, which nobody in this chamber, I feel, who is at all fond of eating tomatoes, especially raw tomatoes, could have overlooked. Once it was possible to buy good tomatoes in this country. They tasted like tomatoes, even though they came in odd shapes and sizes. Now we have perpetrated on us that perversion of a tomato almost universally sold, especially through the winter months, and coming, I gather, from Queensland. It has been admitted that this variety was evolved because its tough skin made it easy to handle-and most unpalatable to eat. It does not ripen naturally. Worst of all, it is almost flavourless. I have read articles in which it has been admitted that this was known to the breeders and that the motivation was not to provide a palatable, pleasant foodstuff-that was not the motivation at all-but to provide something which could be mass produced and handled quickly and easily by the growers. Hence, we all have to eat tough-skinned and unpleasant tasting tomatoes unless we go to special lengths to get the old varieties. In Sydney a few astute growers have reverted to the old varieties, and I have been out to Mona Vale on the weekend where there are long queues of cars and people queuing up to buy these old varieties of tomatoes because they are sick and tired of what they are being given by the mass market. That mass production market, of course, wants PVR, because it will have the opportunity to force even more people to have what they do not want. A few generations will pass and our grandchildren and great grandchildren will never know what a decent tomato, peach or plum tasted like. They will have vanished from the face of the earth. Any honourable senator who has been to the United States of America, Hawaii or anywhere like that will be aware of the beautiful looking, rosy, large peaches one can buy which taste like cottonwool. He will be aware of the huge strawberries which are sold in California which taste like mud. They look great from the outside. These are the productions of the ingenious people who will be using this Bill once the Government puts it through. Senator Brownhill —You don't eat cottonwool, do you? Senator MASON —Senator Brownhill, sometimes the dentist-you know, the molar mangler-puts it in one's mouth. One knows what it tastes like; it tastes just like American peaches. Senator Brownhill —But you don't keep on eating it. Senator MASON —No, one does not-far from it. Senator Brownhill —They don't taste any good; therefore you will not keep on buying them. Senator MASON —That is right, and that is what has happened to tomatoes now. A point I made a few minutes ago, Senator Brownhill, was that once we have got a couple of generations downstream people will not know any more; they will accept the taste as being what that food should be like. But there will be people in the country who will be watching that. Senator Brownhill —I was going to say bull dust. That's tomato dust. Senator MASON —Well, I hope that Senator Brownhill, like me, will continue growing grosse lisse tomatoes and a few other things like that in his back garden so at least such varieties are preserved. Indeed, quite a few fruit retailers I have discussed this matter with deplore what has happened. They say they cannot get anything else; they cannot get any other kind of tomatoes. That meets the point which Senator Powell, by interjection, made a minute or two ago. This is because growing the new varieties gives a slight economic edge, of course. This is the real point. As a result, all growers are compelled to grow them because of the market prices. But there are other ways. Senator Brownhill —But people will not buy them if they don't like them. Senator MASON —They do not; that is perfectly true. Many people do not. I do not buy tomatoes in winter any more; I just could not bear to. Senator Powell —That is not good for the farmers, is it? Senator MASON —It is not good for the farmers. It would be good for the farmers if they had what people wanted-diversity in variety and what is known to be good. For instance, a big breeder or grower, as I was saying, could make sure he held patents on the more palatable varieties and then withhold these from the market. Under the Bill as it stands that is perfectly feasible. The grower would have to give some sort of reasons to some sort of government. But who is the Government to guarantee that there will not be a government in the future that would not allow such people everything that they wanted. It is the Government that is letting this Bill through. It is highly deficient in that sort of area. The argument has been put that overseas owners are afraid that if they release patented material here they will lose control over it and find it exported back to the country in which they are patented. This is arrant nonsense. The purpose of PVR legislation is to give the holder of the patent exclusive control over marketing of the patented variety in a country. If anyone tries to market overseas patented material in the country of origin that person would be successfully prosecuted in that country. So that is another argument which has been put forward that is absolute nonsense. This, again, is another reason why the legislation is not needed. Plant material from overseas is a potential source of exotic pests and diseases. For that reason, most plant reproductive material must go through quarantine. In the main, only vegetable and forage crops are not on the restricted list of entry. They require only inspection and treatment after entry. Because of this the Division of Plant Quarantine of the Federal Department of Health imposes strict limitations on the importation of plant reproductive material. Only a limited number of Australian institutions are allowed to import varieties. Only a limited amount of reproductive material of any variety is imported. Varieties may remain in quarantine for long periods; and the number of new varieties that can be imported each year is limited. Because of these limitations the process of obtaining, importing and making available to growers new varieties from overseas is carefully controlled by a process of liaison between growers and State departments of agriculture. This system works extremely well. For instance, in the fruit industry a system of importation, quarantine, virus testing, evaluation, supply and storage is undertaken by the State departments of agriculture under the co-ordination of the Fruit Variety Foundation Committee. This system already ensures that farmers have the highest quality plant varieties in their orchards. They know what they are getting and they do not need to invest time and money carrying out their own assessment of the large number of varieties potentially available. This scheme also ensures that material is available without restriction to all those who wish to use it or who want to multiply it and sell it. When one goes around the world-whether to Israel, London or Amsterdam-one finds Australian fruit on sale, competing well with what is available from PVR areas. In fact, my relatives in Utrecht buy Australian fruit. They are not Australians, as it happens, but they buy Australian fruit because it is better than what they are getting from Europe. It is better than what we are getting from Europe partly because we do not have a PVR system. We have tried established varieties which are known to be good, which are known to be useful and which have proved themselves over and over again. When one buys the stuff produced in Europe one finds it is in all cases inferior. PVR, then, will not promote the introduction of new varieties of wonderful fruit into Australia. All this pie in the sky stuff is nonsense. The limit on the number of varieties that can be imported and the rate they can be released is set by the resources of quarantine. The money raised by PVR will not go to expanding these resources, as I understand it. The evaluation, distribution and storage functions of the Fruit Variety Foundation Committee are all done at public expense and will not be funded by PVR. This work will amount to a public subsidy of private companies which can take advantage of the system and then use the excuse of ownership rights, granted under PVR, to control the price and distribution of their varieties to their own advantage-not according to the needs of Australian agriculture. It is an echo of the point I raised in debate the other day with Senator Gareth Evans, the Minister for Resources and Energy. When I went to Lucas Heights some years ago I found that the Commission was handing out isotopes at below the cost price to private business to make lots and lots of money. The same thing is happening here. Again, I ask why. Why is this sort of concession being made? Patented varieties could, of course, be taken directly from quarantine to the nurseries licensed to sell them, in which case farmers would find themselves faced with varieties for which they have no independent evaluation to determine their suitability for Australian conditions or their worth as opposed to other varieties on sale other than the information made available by the variety's owner. That is the kind of world we will introduce, not one of careful study and scrutiny by our own scientists who have responsibilities in their public offices, but a let the buyer beware situation where in fact people will, if they feel like it, in a normal business sense get away with what they can. Honourable senators will see that this will happen if this Bill goes through. That, obviously, is one plain, bottom line area in which PVR will have a very detrimental effect upon this country. Over the years of debate over PVR there have been claims that Australian agriculture suffers because we rely too heavily on public breeding of plants. This is not true. Our public breeding programs are effective and responsive, and what we sell overseas is regarded as among the best fruit and vegetables in the world. Why then is the Government bringing in this PVR legislation? Why can it not look at something that is good, useful and an export market instead of trying to destroy it, because that is what the Government is doing? Why does it not improve and extend the systems that already exist? They are suited to this country and have been established here for nearly 200 years. They have been established by responsible scientists, some of whom are household and indeed world names. Some of the products of this country, like the granny smith apple, are names that are known the world over. I can only repeat, in conclusion, that this is one of the nastiest, worst, most unpleasant, most untimely and unjustified pieces of legislation I have ever seen come forward in nine years in this Parliament, and that is saying a lot. I listened to Labor senators' views on this matter when they were in opposition. Many Labor members and senators speaking at public interest groups put forward arguments against PVR. To me the present situation is extraordinary. It is like being in cloud-cuckoo-land to think that a Labor government is bringing forward PVR legislation and perpetrating it on this country at this time. If the Government passes this legislation, I believe it will be to its electoral cost. We shall not let the Government forget it in the community, nor will the interest groups. I know now why the Government brought on this legislation. It thought that it would get the Bill on as early in the session as it could and get it out of the way before an election so that the public would forget it. But the people I am talking about are not that short-sighted. They will not forget it, and we shall certainly not let the Government forget it. Senator BROWNHILL(New South Wales)(9.02) —Having heard the Australian Democrats in this debate, I wonder whether they have ever sown a seed, or propagated a plant, new or old variety. I am sure that they are attempting to filibuster the Plant Variety Rights Bill. I wonder whether the cottonwool tasting varieties that Senator Mason has just talked about have been propagated in his head rather than in his taste buds. The garbage he has spoken would most probably be better used to help grow a plant than to be issuing from his mouth. The PVR debate has had a long history in this country. As early as 1971 the horticultural industries initiated an official campaign to have PVR introduced into Australia. As early as 1977 the Australian Agricultural Council discussed PVR and accepted it in principle. I was talking to Senator Sheil just recently and he said: `What are you doing after dinner tonight?' I said: `I'm going into the chamber to talk about the PVR Bill'. He said that it was interesting to realise that the subject was being debated in Parliament some 10 years ago, most probably at this very time. Now, probably 10 years, 15 hours and 36 minutes or so later, we are still discussing the matter. There have been several changes of government in the meantime, several changes in attitudes, several reports, several committees and several re-examinations. I do not think I need to detain the Senate in listing all the committees which have investigated, reported on and recommended PVR. Needless to say, it has been a long struggle. In fact, it is 10 years since the Agricultural Council first recommended acceptance of this Bill. Therefore, for the Democrats to call for yet another study is ridiculous. It is even more ridiculous for the Australian Government to be waiting on what the European Parliament decides, as the Democrats' amendment suggests. I am aware that some Democrats would like the European Parliament to control a whole range of things in Australia-kangaroos and the live sheep trade especially. But I cannot accept that we need further studies. Senator Sanders, who is not present at the moment, would like the European Parliament to decide for us what we should do about the maintenance of kangaroos in Australia. It is even more ludicrous to compare the Australian situation with Europe, given that the Australian PVR is markedly different from that in Europe. A criticism of PVR overseas is that there has been a reduction in legally marketable varieties due to PVR. This belief stems from the fact that national listing has eliminated the marketing of varieties under several names, so in fact there has not been a reduction of legally marketable varieties. In any case, national listing is not a part of PVR in Australia. The Democrats are therefore once again making amendments just to waste the time of this chamber. The issue of plant variety rights has attracted a great deal of emotive rhetoric, not just from the Democrats, and so I think I should point out several important aspects of the Bill. For a start, participation in PVR is voluntary, so that any grower or plant breeder can apply for proprietary rights over any new variety they may develop. What it basically does is provide a patent or a protection to the breeder, similar to protection provided to anyone who invents a new product. The second important fact to realise is that many countries have PVR. It applies in the United Kingdom, the United States, West Germany, Japan and New Zealand-in fact, all our major trading partners and competitors. Australian farmers and horticulturalists have therefore been the losers by not having a PVR scheme. Many superior varieties of fruit, vegetables and flowers that are available overseas are not available here, simply because there is no protection for the breeder if they come to this country. Therefore, we have shackled our farmers and our horticulturalists over the years in a period when increased competitiveness, increased efficiency and superior crops are vital. Recently the closer economic relations inquiry has shown that because of PVR New Zealand has a distinct advantage over Australia. Recently I received, as I am sure did many other senators, an article from K. S. Lindsay, Treasurer of the Mackay branch of the Rare Fruits Council. It is an interesting letter, if only to demonstrate the sort of emotional nonsense and paranoia that has surrounded the PVR debate over the years. He claims that this legislation could be `the most devastating legislation likely to come before Parliament'. I can only suggest that if he thinks on those lines he does not spend much time listening to Parliament. His argument basically is that, if PVR is introduced, one of the dreaded multinationals will develop a hybrid potato that is so appealing that none of the 50 or so other varieties available will be grown by anyone-and especially anyone in a Third World country. These stories always seem to involve a multinational and a poor Third World country-a little like the standard pantomime with the goodies and the baddies: These Third World farmers will grow only this new hybrid as supplied by the multinationals, and then one day a virus comes along and wipes out the whole variety. Senator Walters —Remember Ireland and the potato crop? Senator BROWNHILL —That is right-if there are no potatoes, whole poor Third World countries starve. All that can happen, he says, because of PVR legislation being debated in the Senate today. With that sort of nonsense coming from what should be a more informed body, it is little wonder that other people get swayed by spurious arguments. Other arguments are put forward in opposition to this legislation. It has been argued that Third World countries will suffer because the difference between developed agricultural countries and undeveloped countries will increase. Progress can never be made by keeping back those in front to wait for those who come behind. If PVR provides improved varieties, increased production and superior quality food, all the world will benefit. There is no benefit to anyone in going back to agricultural methods and techniques that were in force a hundred years ago. Those who oppose PVR also claim that private breeders will breed for chemical dependence or fertiliser dependence because all the new breeders will be the chemical and fertiliser companies. This argument is in the same paranoid category as the previous story from the Rare Fruits Council. In fact a whole range of misconceptions has developed about PVR over the years. To allay the fears of the Democrats, who obviously have fears about everything and want to send everything away to inquiries every time anything is being debated in this place, and of others in the community who feel that PVR is to be feared, I should point out that PVR will not restrict the number of varieties available to primary producers, nor will it be illegal to grow any variety. The legislation will not prevent any grower from saving seed from a protected variety. Growers will still be able to grow such a variety without paying royalties providing they do not sell it. The granting of PVR protection will not be in the hands of the breeders, but under the control of the Australian Agricultural Council. PVR will not affect seed prices. There will be no national list, and PVR will not be granted to any existing variety currently available in Australia. PVR is voluntary and in no way will it restrict or affect the work being done by the Commonwealth Scientific and Industrial Research Organisation or others in plant breeding. Monopolies will not be created by owners of protected varieties because under PVR a variety must be available to anyone who wants it. Neither will PVR lead to a proliferation of genetically inferior or dependent varieties. The fact that the industry is highly competitive ensures that this cannot occur. The number of farmers and horticultural bodies in favour of PVR is endless, as one would expect, and these people far outweigh the number of authoritative groups who oppose it, including the Australian Democrats. The legislation has an inbuilt safeguard. It is wanted by those most affected by it-the farmers and the horticulturalists-and it will assist Australia in its fight to regain its position on the world commodity market. I support the legislation and reject the Democrats' amendments, which have obviously been moved in order to filibuster this legislation, which has been the subject of so many inquiries already. Senator JESSOP(South Australia)(9.14) —The purpose of the Plant Variety Rights Bill 1986 is to establish a national scheme which will allow plant breeders to apply for proprietary rights over any new variety of plant which they develop. The objective of providing proprietary rights is to stimulate the plant breeding effort in Australia and to encourage the development of new varieties of plants for our domestic industries and for export, which is most important. It will also improve Australia's access to new varieties from overseas. As the Minister for Finance (Senator Walsh) pointed out: These factors are expected to provide a significant boost to Australian agricultural industries and allow our farmers and nurserymen to compete more effectively on world markets. We can only expect an overall genetic improvement in our plant industries. The Government has based this legislation on the findings of a study by Professor Lazenby, who was commissioned in 1985 to conduct an inquiry into Australia's plant breeding needs. Senator Watson —A very distinguished scientist from Tasmania. Senator JESSOP —Yes, he was from Tasmania, as Senator Watson says. I quote from Professor Lazenby's findings. Senator Tate —He was also a very distinguished vice-chancellor. Senator JESSOP —Yes. All Tasmanians applaud the eminence of this gentleman. He said: It is my view that, on balance, the benefits for Australia stemming from the PVR scheme considerably outweigh any possible adverse effects which have been ascribed to it. It is neither desirable nor logical for Australia to stand outside the mainstream of developed countries in the hope of providing intangible benefits to Third World countries. Accordingly, I recommend that legislation for a plant variety rights scheme be enacted in Australia. Countries which have PVR schemes number about 23. I have a list of them here and, with the approval of the Special Minister of State (Senator Tate) and the Senate, I seek leave to have that list incorporated in Hansard. Leave granted. The list read as follows- Austria, Argentina, Belgium, Czechoslovakia, Denmark, Federal Republic of Germany, France, Hungary, Ireland, Israel, Italy, Japan, Mexico, The Netherlands, New Zealand, Romania, Spain, South Africa, Sweden, Switzerland, United Kingdom, United States of America and the USSR. Senator JESSOP —I thank the Senate. Among these countries are Austria, Argentina, the United States of America and the Union of Soviet Socialist Republics. I wish to talk about the opposition to the PVR scheme. Plant variety rights legislation is supported in Australia by an overwhelming majority of farmers, nurserymen, gardeners, plant breeders, agricultural industries, government departments and scientists. Therefore, it is interesting to note where the opposition to PVR stems from and on what ground. This Bill is notable because it has brought together in the open the three most powerful lobby groups in Australia to publicly oppose the majority view. Those three organisations are the Australian Federation of Consumer Organisations-- Senator Powell —Hear, hear! Senator JESSOP —Yes, that is right. I hear the `Hear, hears'. The other organisations are the Australian Conservation Foundation and the Australian Council for Overseas Aid. Not surprisingly, the Australian Democrats, who `Hear, hear' all the time, have joined these three largely middle class activist organisations in opposing this Bill. Senator Powell —You have forgotten the Australian Council of Churches. Senator JESSOP —I will come to that, do not worry about that. It is just as bad as these other organisations. Senator Powell —It won't like that. Senator JESSOP —I do not care, because it is true. These three organisation, together with the Democrats, are trying to undermine private enterprise in Australia and destroy our economy. These organisations are heavily financed by taxpayers. They get money through the Government's largesse. They represent three of the best examples of what one commentator called `PAGUTs', which stands for political advocacy groups utilising taxes. The Democrats also stand for that. The major arguments used by these three groups and regurgitated by the Democrats can be summarised as follows: First, PVR legislation will concentrate seed production in the hands of a small number of multinational companies, particularly petrochemical companies. Secondly, it will allow these multinational companies to breed varieties of plants which will require the increase use of pesticides and herbicides which they, of course, will also supply. Thirdly, it will restrict the availability of seeds in Third World countries and increase the plight of the starving. Fourthly, it will reduce genetic diversity and increase the vulnerability of food crops to new disease strains. Obviously the Democrats and all these other organisations have never heard about genetic engineering, which has the capacity to alter the structure of wheat varieties, for example, in order to introduce an automatic pesticide. When an insect attacks those plants the insect dies. That eliminates the use of pesticides. The arguments against PVR, which, have been repeated ad nauseam, were all put forward in a book called `Seeds of the Earth: A Public or Private Resource', written by the Canadian P. R. Mooney and published in Canada. According to H. R. Harding and Professor D. J. Anderson in an article on the subject in Current Affairs Bulletin of May 1982, the book was imported into this country by another lobby group of doubtful ancestry, the Australian Council of Churches. Professor Lazenby, addressing these criticisms, stated: Unless the total cost to the farmer of the supposed package of pest and disease susceptible varieties and chemicals from the companies provides a greater economic return than the resistant varieties requiring less chemical control, they will not be purchased. Some chemical companies have recognised the increasing concern about the widespread use of chemicals in agriculture and have diversified into plant breeding to develop resistant varieties. For further details, honourable senators should read Professor Lazenby's report, particularly page 132. I have suggested that these diversities in plant breeding of developing resistant varieties are happening in Australia right now. An understanding of private enterprise in the market-place cannot be expected of the Australian Federation of Consumer Organisations and its most powerful member, the Australian Consumers Association, which publishes Choice magazine. Multinational companies have been declared public enemy No. 1 by these organisations. Senator Sanders —Hear, hear! Senator JESSOP —There is a `hear, hear' from the Democrats, which I would expect. When accused of being anti-business, what is the standard reply of the Democrats? It is that they are pro-consumer. Senator Haines —Pro-Australian! Senator JESSOP —No, it is pro-consumer. Senator Haines —You don't think that the consumer has any rights. Senator JESSOP —The left wing of this side of the Senate is starting to rear its head because its members ought to be feeling guilty about this matter. Australian consumers need to be very careful that under the guise of protecting consumers these anti-business pressure groups do not damage Australian business to such an extent that all consumers, and the country as a whole, are worse off. In other words, a balance needs to be kept in business regulation between protection and productivity. I am far from convinced that the Australian Federation of Consumer Organisations and the Australian Consumers Association pay due regard to the need for such a balance. After reading the statements of prominent members of the consumer movement I have come to this conclusion. Professor Ted Wheelwright, a member of the governing council of the Australian Consumers Association and founder of the transnational corporations research project-- Senator Sanders —Hear, hear! Senator JESSOP —That is right, and he was the founder of the political economy course at Sydney University-once referred to as a Clayton's degree-and has been the spiritual leader of the anti-business forces in Australia. At a conference of the International Organisation of Consumer Unions of which the AFCO are members, Professor Wheelwright-- Senator Haines —Shock, horror. Senator JESSOP —Well, he is a communist, is he not? The honourable senator is supporting him. He is a Marxist economics professor at Sydney University and he has been sacked. Senator Childs —He is a life-long member of the Labor Party. Senator JESSOP —Is he? Well, he is a fellow traveller of the Communist Party and he was a member of the Communist Party. I notice that the left wing is starting to raise its head to defend the fellow. As far as I am concerned he is an enemy of private enterprise and of the economic development of Australia. Senator Michael Baume —He is the one who recommended that Monash get no money. Senator JESSOP —Exactly, and what a great fellow he is to have advising them. When discussing business practices, he stated: What we are saying is that modern capitalism is frightfully undemocratic-- Senator Haines —You are not wrong. That is absolutely true. Senator JESSOP —The pseudo fellow travellers of the Communist Party are here. He continued: . . . whereas transnational or local, let's get it clear that the capitalist system is the cause of the problem. The consumer movement prefers all plant breeding to be carried out by the public sector. One of the main reasons for this is that it considers the public sector to be more subject to centralised regulation. Senator Crichton-Browne —They say the same thing about human breeding. Look at the public sector. Senator JESSOP —Of course, and it is therefore very ironic to see, in a letter to the Australian Financial Review on 27 November 1986, the Australian Consumers Association oppose the PVR Bill on the basis that taxpayers should not have to support another government bureaucracy. Senator Powell —Hear, hear! Senator JESSOP —`Hear, hear' say the Democrats. The Government has estimated the cost of the PVR legislation to be approximately $700,000 in the first three years of operation with $150,000 of that being recoverable. That does not include the benefits of PVR to agricultural industry in Australia. This figure of $700,000 pales into insignificance when it is compared with the estimates made by the Government's Business Regulation Review Unit that the overall cost of business regulation in Australia could be as high as $40 billion to $80 billion annually, equivalent to 15 to 30 per cent of Australia's gross domestic product. I have not noticed Choice, on behalf of the Australian Consumers Association, complaining about the financial burden of such regulation on the Australian consumer. The third major argument used by the big three PAGUTs is that PVR legislation will restrict the availability of seeds in Third World countries and increase the plight of the starving. Professor Lazenby makes the point that where better yielding varieties of seeds are available there can be little doubt that farmers in all parts of the world will replace less productive varieties. That is quite sensible. This will occur with or without the presence of PVR and regardless of the ownership of the new varieties. Therefore he concludes that it is difficult to see how a PVR scheme in Australia would significantly affect Third World agriculture and, in any event, it is inequitable to expect any country to forgo the advantage of adopting new, high yielding varieties `in the process of preserving traditional landrace varieties'. I received a plea from the Australian Council for Overseas Aid to reject or delay this legislation on various grounds, one of which was the effect of PVR legislation on the Third World. This Council is noted for its support of the communist regimes in Vietnam and Nicaragua and its involvement with the New People's Army in the Philippines. Senator Sanders —Human rights-rights for blacks, rights for humans. Senator JESSOP —I like to acknowledge the interjections from the supporters of those regimes that I have mentioned. It is perhaps appropriate that those honourable senators should note the following quote from the editorial of the Australian Financial Review on 21 November 1986. It states: PVR legislation has been in operation in most advanced countries for an extended period. Over that same time, agricultural production in most of the Third World has grown steadily, the exceptions being principally in areas with doctrinaire Marxist governments which produce artificial famines through civil war, relocation (of population), and imposition of unsuitable forms of agricultural organisations. Senator Sanders —Who said that? Senator JESSOP —That was in the Australian Financial Review. It really explodes the honourable senator's argument emphatically. The fourth major argument of these PAGUTs is that a PVR scheme would reduce genetic diversity and increase the vulnerability of food crops to new disease strains. Professor Lazenby has concluded that there appear to be no hard facts supporting the contention that PVR does or will hinder the conservation of plant genetic resources. In fact, he contends that a considerably greater gene pool will become available following the advent of the private breeder with his characteristic world-wide connections. The professor is supported by O. H. Frankel in his paper `Conservation of Genes, Gene Banks and Patents' in chapter 15 of the book edited by Harry Messel called the Biological Manipulation of Life. Countries around the world already maintain gene pools and the conservation of plant genetic resources, either in situ or in gene banks. This is recognised world-wide as an area requiring major effort. This is independent of whether a country has a PVR scheme, as evidenced by the Indian experience which was related by the Minister for Primary Industry (Mr Kerin). India had 30,000 varieties of rice in common usage at the turn of the century but now uses only 30 varieties. Indian rice breeders obviously have used the best rice genes available to develop those varieties. As a result, India is largely self sufficient in rice despite its massive population increase since 1900. Senator Vallentine displayed a bit of ignorance this morning in the Senate. She supported her emotional pleas with her usual misuse of facts and selective quotations. The honourable senator knows the facts because the Minister not only provided her with the rice gene information she quoted but also pointed out that India maintains a rice genetic resource centre containing 34,000 accessions under the International Board of Plant Genetic Resources network and has access to a collection of some 56,000 varieties at the International Rice Research Institute in the Philippines. Senator Vallentine also omitted to tell the Senate that the dramatic decrease of rice varieties now in use in India has occurred in a country without plant variety rights legislation. In other words, any decrease in the number of usable varieties is not a function of PVR legislation but rather is the result of the normal ambition of mankind to improve his well-being. It is quite true that the Vavilov centres, established in Third World countries to preserve the genetic diversity in those countries, have all but ended, but the Australian Department of Primary Industry pointed out in its information paper `Plant Variety Rights in Australia': It would seem wrong and unreasonable to place the responsibility for the preservation of these traditional varieties on peasant farmers, and by denying them access to improved varieties, keep them in a state of depressed agriculture. Organisations such as the Total Environment Centre and its Plant Diversity Protection Committee have implied that PVR will lead to plant breeders producing more hybrid varieties which are more vigorous and productive but which are also often infertile and do not breed true to type. This has thrown a scare among some farmers who are concerned that the use of hybrids will prevent them from using part of their harvest as seed. In fact, plant breeders use hybrids as an inbuilt biological protection against others reaping the benefits of their research. Under PVR there is less incentive to produce hybrids as a protective device because new varieties can be patented. The Total Environment Centre, which is another organisation spawned by the Australian Consumers Association and staffed by Kate Short, a member of the ACA, has-- Senator Sanders —A very knowledgeable person. Senator JESSOP —That is what the honourable senator says! Senator Sanders —She is. Senator JESSOP —The honourable senator tries to grab all these organisations, with the hope that he might survive in the Parliament, but I can assure him that his demise is quite imminent. This Kate Short has also suggested that it will be illegal for community groups to grow vegetables, herbs, fruits and flowers for the purpose of selling them at fund raising activities. Have we ever heard such nonsense? I challenge the Australian Democrats to support that ridiculous argument. Any suggestion that a PVR scheme would undermine the fund raising capacity of so-called community groups would cause the mobilisation of the thousands of single-issue groups around this country. Senator Sanders —It has. Don't you read your mail? Senator JESSOP —My mail predominantly supports the legislation with which we are dealing. If the honourable senator were honest, he would admit the same thing. However, an increasing number of political advocacy groups are being federally and State funded to the extent that they no longer rely on fund raising. That is one of the problems that is facing this Government, as Mr Hawke said in Adelaide last year. This applies particularly to the three large organisations combining to oppose PVR legislation. The Australian Federation of Consumer Organisations received $200,000 from the Attorney-General's Department this year and $170,000 last year. The Australian Consumers Association has a gross annual income of about $6m from its Choice magazine subscriptions, but it still chases successfully after State and federally funded grants such as the community employment program. The Minister for Health (Dr Blewett) and his Department of Health even gave it $90,000 to do a study on food irradiation after experts of the National Health and Medical Research Council had spent five years on such an investigation. It has experts, but all Choice has is literary people who run around the country spending $90,000 on gathering literary contributions so that they can use them as evidence of the problems with which they are trying to deal. The Australian Conservation Foundation received $145,000 this year from the Department of Arts, Heritage and Environment. Attempts by me and others to find out what other funds have been made available, such as through the CEP, are usually diverted by Government Ministers in, I think, a disgraceful disregard for the Freedom of Information Act. One estimate published in the IPA review of winter 1986 had the ACF receiving more than $1m in direct grants alone from State and Federal governments. The Australian Council for Overseas Aid is an umbrella organisation for about 75 non-government aid agencies and church groups. Just as the ACA is the largest organisation within the Australian Federation of Consumer Organisations, Community Aid Abroad is the most influential member of the Australian Council for Overseas Aid. Community Aid Abroad, along with other aid agencies under the ACFOA umbrella, such as World Vision of Australia, Australian Catholic Relief, Freedom from Hunger Campaign and the Australian Council of Trade Unions aid agency, were recently reported to have given $1.3m in government aid to Vietnam and Kampuchea. One can only wonder about ACFOA's motives in aiding the communist dictatorship of Vietnam, on the one hand, and doing its best to harm Australian agriculture on the other. Senator Sanders —They are saving starving people. Senator JESSOP —I note that the Democrats support that proposition. In conclusion, this Plant Variety Rights Bill will provide Australian agricultural industry with benefits that will far outweigh any of the unsubstantiated disadvantages propagated by the noisy array of political advocacy groups utilising our taxes. I endorse Professor Lazenby's conclusion: I have little doubt that if the private breeder could be encouraged, through PVR, to increase investment in plant breeding in Australia, the result would be of overall benefit to Australian agriculture just as it has been to the agriculture of the United States, Europe and New Zealand. I contend that the world eventually benefits from such plant breeding research carried out largely by the developed countries. I am pleased that after nearly 15 years the Australian Labor Party has come to believe in the advantage of plant variety rights. The inordinate delay to this legislation is a measure of the influence which these political advocacy groups have had on the policies of the ALP. Senator WALTERS(Tasmania)(9.38) —In early 1981, the then Minister for Agriculture, Mr Nixon, brought into the Parliament plant variety rights legislation. It was then laid on the table, where it stayed for nearly 12 months, for full public debate. Indeed, that debate took place. Following that discussion, it was brought back to the Parliament and was passed by the House of Representatives. It was then brought to the Senate where the Australian Labor Party, then in Opposition, and the Australian Democrats in league refused to pass the legislation and sent it off to a Senate committee. That committee was the Senate Standing Committee on National Resources. The stupidity of Senator Walsh, who was then the shadow Minister in charge of the Bill in this place, and the Labor Opposition, along with the Democrats, had to be seen to be believed. Australia has been penalised for five long years while we have been waiting for the Labor Party to come to its senses and introduce this Bill-five long years when we could have had the plant variety rights that we are now debating in this Senate. I remember the previous debate very well. On 24 August 1982 Senator Walsh said: Finally, on the question of whether plant breeding ought to be concentrated and ought to remain in the public sector, as it is and always has been in Australia, or whether it should be partially or wholly transferred to the private sector, I guess to some extent that it is a matter of ideological preference. It is no secret that the preference in the party that I represent, other things being equal, would be that it remain in the public sector. That is what Senator Walsh said in 1982. He went on to say: . . . the Labor Party has a great number of doubts about this Bill. He said that of course the Labor Party's ideology would mean that plant breeding would stay in the public sector. Of course, that has not come to pass because this Bill allows for anyone in the private sector to take up this arrangement. The Government has taken five years to overcome the grave doubts that were expressed in 1982. Mr Kerin, in dealing with the Bill in the House of Representatives, said: We are opposed because it will cause a diminution in, if not complete disruption of, present Australian public plant breeding. We are opposed because it poses dangers to Australia's agricultural producing and marketing systems and institutions. We are opposed because it will subject Australian primary producers to inadequately tested so called `new' varieties bred either locally or introduced from overseas. What absolute rubbish! It has taken five years for the Government to come to its senses. Of course, the Australian Democrats are quite irrelevant in this debate. They are completely irrelevant and they have no place in it at all. However, the hypocrisy of the Labor Party has meant that many of our agricultural industries have been penalised over that period. Oodles of committees have inquired into this subject. The Industries Assistance Commission carried out an inquiry in 1976. Inquiries have also been conducted in respect of the apple and pear industries and the vegetable and vegetable product industries. We have had a committee of inquiry into the grape and wine industries. Professor Lazenby, whom Senator Jessop quoted at great length tonight, also inquired into this matter. The matter has also been considered by the Australian Agricultural Council. The whole gamut of people have looked into this matter and have recommended very strongly that-- Senator Archer —How many were against it? Senator WALTERS —Not one was against it. All of these committees have looked into an arrangement that we could have had five years ago. It is a disgrace that we have had to wait for so long. Let us have a look at some of the advantages that we have missed out on. Plant breeders in this country have been denied any return for the years of work that they have put into their breeding and the costs that that has entailed. New Zealand has had plant variety rights for just on 12 years during which time there has been an increase of 62 per cent in the number of plant breeders in that country. What incentives have been given to Australian breeders? There have been absolutely none. Horticultural groups say: `We did not even bother trying to bring forward new varieties. It was not worth it to us'. Imagine what plant variety rights would have done for Australia if such a system had been introduced when we developed rust-free wheat. Imagine what a great boon that would have been. It was a boon to the world food production but Australia did not get a cent out of it. Australia was once in the forefront of agricultural plant breeding. Now, we are so far behind that we cannot compete. The financial benefit to Australia of this legislation will be unlimited once research has established new varieties. I would like to give the Senate just one example-the essential oils in Tasmania. Research carried out by the University of Tasmania into new plant varieties-spearmint oil, peppermint, parsley herb, boronia, caraway seed and the blackcurrant bud extract-now has reached the stage where we are expecting up to a $6m industry with 200 new jobs being directly created. Already 70 growers are planting hundreds of hectares of essential oil crops. When this legislation is passed, Tasmania will at least have the ability to earn export dollars for all of the years of work and the expense by the university. The research has generated varieties which are world leaders. They are so superior to the varieties grown elsewhere that their products are bringing prices 20 per cent above the world ruling rates. Last year, 70 per cent of our essential oils were sold to Europe. This is just one example of one of the benefits of PVR to my State. Senator Powell —But that was done without plant variety rights. Senator WALTERS —We cannot sell our new varieties overseas. We cannot get any benefit at all from the research that has been carried out in the University of Tasmania. We cannot import varieties that could be put with our varieties to improve them even further. The honourable senator is living in the dark ages. She is suggesting, as she did earlier, that we should go back to the bush and gather our wildflowers. She said that we do not need plant variety rights for that. She was talking absolute rubbish. We have just heard that an export market in the United States of America has been created for a new variety of raspberries that we have established. As a result of this legislation we will be able to develop those varieties and sell them overseas. Not only will we be able to sell the fruit but also we will be able to get the export dollars that will result from this legislation. I do not want to highlight just that side of it. Australian growers are being denied access to new varieties that other countries will not allow into Australia. Senator Zakharov said that these varieties were freely available. She said that we could get them and that there was no need for any concern. Let me put the position from Tasmania's point of view. West Germany refused to supply newly bred cool climate grapes to the Tasmanian Department of Agriculture. A cherry grower of Flowerpot in Tasmania had been refused supply of the dwarf cherry rootstock Colt. The Tasmanian Department of Agriculture was refused apple varieties from Washington. Again, the Tasmanian Department of Agriculture has obtained the Malling Kent and Malling Suntan apple varieties which were not available for commercial trials due to an agreement with the National Seed Development Organisation at Cambridge limiting them to scientific tests only. The Northrup King Co. was also refused permission to supply eight varieties of green bean to Tasmania. Commercial blackcurrant growers from Glen Huon, Tasmania, made personal visits to the National Seed Development Organisation in Cambridge to obtain blackcurrant varieties. They were refused all three-Ben Lomond, Ben Nevis and Ben More. Those varieties were released, of course, to the Tasmanian Department of Agriculture on condition that they were not grown commercially. The University of California refused a request by a commercial nursery at Flowerpot, Tasmania, to import a range of new day-neutral strawberry varieties. This is evidence that these varieties are not allowed into Australia. Indeed, why should they be? Why should overseas countries that have done all the work allow these varieties into Australia when they will not get a brass razoo in return? Of course they will not! We are behind; we cannot export, and have not been able to export for ages, the variety of strawberries that are demanded by Japanese customers. New Zealand has been exporting strawberries to Japan. Australia has not been able to compete because we have not been allowed to import strawberry varieties into Australia. The varieties we have been getting are all the old varieties that are no longer under patent; they are the 20-year-old varieties-and those are the only ones that we can legally import into this country for subsequent export. Evidently, Senator Powell also said that new plant varieties were freely available. Of course, this is just not true. Let us look at those countries that have plant variety schemes going. They are: Austria, Argentina, Belgium, Czechoslovakia, Denmark the Federal Republic of Germany, France, Hungary, Italy, Israel, Ireland, Japan, Mexico, the Netherlands, New Zealand, Romania, Spain, South Africa, Sweden, Switzerland, the United Kingdom, the United States of America and the Union of Soviet Social Republics. Australia and Canada are the last to introduce plant variety rights. Canada is also in the process of putting legislation before its Parliament. To be left behind, as the Australian Democrats want us to be, would be a tragedy for this country. Fortunately, the Australian Labor Party has now belatedly decided to allow us to have plant variety rights. Many emotional statements have been made by all the Democrats and by Senator Vallentine. Senator Vallentine, Senator Powell and others have been talking about the Third World countries being disadvantaged. Senator Archer —We are one of them. Senator WALTERS —We are, now that we are a banana republic under this Government; I admit that. Let us take India, for instance, Senator Vallentine said in a most emotional way that, at the turn of the century, there were 30,000 varieties of rice grown in India and that now there are only 30. She said that this was a tragedy. What absolute rubbish! Those 30,000 varieties of rice produced only one crop. The new varieties produce three crops a year. India, a Third World country, is now self-sufficient in food for the first time in its history. What absolute rubbish the Democrats have been talking. What absolute rubbish Senator Vallentine has been talking. We were told by Senator Zakharov that she does not agree with the Government's position. Although a member of the Government, she came out very strongly to say that it was doing the wrong thing, but she told us that she belonged to a democratic party. She could tell us here that she objected to the Government's policy. But when the vote is taken, her democratic party will expel her if she votes the way she thinks. That is the democracy of the USSR, and we find that in the Labor Party. That is the sort of democracy that honourable senators opposite talk about. The fellows opposite can stand up here and say what they think, but they cannot vote that way. They cannot cross the floor; they will be thrown out if they do. Where on earth is their gumption? Senator Powell —What about-- Senator WALTERS —Before the honourable senator came to this place I crossed the floor on issues about which I felt strongly. The honour- able senator should be careful about what she is saying. She does not have the experience of this place to know what goes on in our Party, so she should be very careful. The democracy of the Party opposite is the true democracy of the USSR. Honourable senators opposite can stand up and say what they like, but if they vote against Government policy they will be expelled. What wonderful democracy! Of course, that is the position in which Senator Zakharov put herself today. We all have been sent these little pamphlets, no doubt by Democrats supporters, stating: `If you read this you will find that it will become illegal to take cuttings from a plant when patented plants eventually replace others in the market-place'. Surely no one in this place would support that rubbish. It is complete rubbish and completely untrue. The pamphlets also state that plants will be designed to be attacked by pests and diseases so that one will be forced to buy a spray. What absolute rubbish! Any of the protected varieties will have to compete with the present varieties. They will be used only if they are better, if they are disease free and if they do not have to be sprayed; otherwise the farmers and the growers will use the old varieties. What we have heard tonight from the Democrats and from Senator Vallentine is nothing but rubbish. I have very much pleasure in supporting the Government's very belated Bill which, as I started off saying, we should have had five years ago. But at least it is better passed now than not at all. (Quorum formed) Senator HILL(South Australia)(10.00) —I do not wish to take too much of the time of the Senate because we have been waiting a long time for tonight. It is a particularly pleasing day for those of us who have finally prodded, provoked, pressed and coerced this Government out of its inertia to produce a Bill on plant variety rights. I guess we have all contributed to that in different ways. I did it through introducing into the Senate a private member's Bill on PVR which was mainly in the terms of the Plant Variety Rights Bill 1986. I then organised a deluge of representations from dozens of industry groups and supporters from all around the country who were in favour of the legislation. I believe that that galvanising of industry support played a considerable role although it was certainly of some annoyance to those of my colleagues who had to answer letters. Through that and other methods, this slow learning Government was finally made aware of the necessity of legislation of this type to keep our plant breeders competitive and also to learn of the new commercial opportunities that could arise from the implementation of this type of legislation. Since the introduction of the Fraser Government's PVR Bill there has been, regrettably, an unholy alliance between the Left of the Australian Labor Party and its bedmates, the Australian Democrats, to stop the enactment of PVR, in other words to keep our industry at a disadvantage vis-a-vis its overseas competitors. This alliance first exercised power through referring the Fraser Bill to a Senate committee. Despite the majority of that committee supporting plant variety rights, the incoming Hawke Government did not have the courage to proceed with legislation. It said that it would refer the matter to further inquiry through the auspices of the Australian Agricultural Council, and then delayed for months by refusing to appoint a person to carry out that inquiry. It was obvious to the industry that the Government was doing everything possible to delay having to face up to this issue because of the internal pressure within its Party. It was then that I introduced my Bill in the Senate, which was a refinement of the Fraser Government Bill and which took into account the Senate committee's recommendations. I was pleased that the Opposition saw fit to support me and I was particularly pleased at the support the legislation received from the horticultural industry. Spurred by the avalanche of letters and telegrams and the phone calls to which I referred earlier, and the lobbying that that amounted to, the Government finally appointed Professor Lazenby to conduct its inquiry. Of course, the age old method of delay that one sees so often is to refer a matter to an inquiry, a committee or some other body for consideration. However, we kept up the pressure by pressing my Bill in the Senate and it eventually received a second reading over the opposition of the Government. It got that second reading only because the Australian Democrats wanted to get the Bill into the Committee stage in order that it might be reduced to cover ornamental flowers only. They certainly did not vote for the Bill in an effort to help horticulturalists. Professor Lazenby then reported in favour of the introduction of PVR, consistent with so many reports and inquiries we have had on this subject. Finally, after all these years, the Government has responded to the inevitable pressure and despite vehement and continuing opposition from within its ranks, such as we heard today from Senator Zakharov, it has introduced this Bill into the Australian Parliament. I am pleased that it has done so; it is better late than never. The Bill provides for plant breeders to apply for and receive proprietary rights for new varieties of plants which they develop. In that respect there will be a parallel with existing intellectual property rights under copyright and patent legislation. By breeders being able to acquire proprietary rights, plant breeding will be stimulated. The resultant new varieties will enhance the competitiveness of the domestic industry and provide a potentially lucrative export opportunity. The existence of PVR legislation will also enhance access to new varieties from overseas. Plant variety rights legislation offers a means of boosting not only the private sector but, contrary to the understanding of some within the Government, public sector breeding by providing a return on the works to which it has committed public resources. Public breeding that in the past has been successful has been somewhat unrewarded. It seems a perfectly reasonable proposition that a plant breeder, whether he be private or public, should be able to recoup his efforts by selling his works. Such development costs can be so recouped under this legislation. So it is legislation that can benefit both public and private breeding. I do not wish to go through the many arguments that the Australian Democrats have put to the Senate today against this legislation. They are arguments that we have heard many times. I think it suffices simply to remind the Senate of the New Zealand experience to counter the arguments that the effect of PVR will, in some way, give great advantage to the multi-national corporations at the expense of small breeders. The experience in New Zealand-a country which has had PVR since 1974-indicates that there has been a 62 per cent increase in the number of individuals involved in plant breeding. So it can be argued that PVR will benefit small breeders who presently have little protection or opportunity to recoup their investments. Australia, by legislating for PVR, will become the twenty-fourth nation in the world to have done so. We will be joining such countries-I will not list them all but the following are within their ranks-as Austria, Argentina, Belgium, Denmark, the Federal Republic of Germany, France, Israel, Italy, Japan, Mexico, the Netherlands, New Zealand, which I have mentioned, Spain, Sweden, Switzerland, the United Kingdom, the United States of America and others. By joining the International Convention for the Protection of New Varieties of Plants, Australia will be joining 17 other nations to simplify the registration of plants in several countries and to avoid duplication of effort. The last point I wish to make is that I am pleased that the Government has picked up the Senate recommendation of a review. This Bill contains provisions for a review of the scheme. A review will take place after five years of operation. I personally have no doubt that the review will confirm the merits of PVR in Australia and any flaws in the design of the scheme-many of us could have suggested small changes today-- Senator Powell —Some of us have, Senator. Senator HILL —I know. We have the Australian Democrats' amendments to come. Any small flaws that are found through experience can be sensibly dealt with and overcome. Belatedly, I commend the Government for introducing this Bill. I only wish that it had been possible for it to have supported in the first instance the Fraser Government's Bill in, I think, 1982 and, after its refusal to do so, to support my Bill in the interim. Nevertheless, as I have said, this legislation is better late than never and therefore I am pleased to support it. Senator KNOWLES(Western Australia)(10.09) —It is rather pleasant at least on one occasion to be able to give wholehearted support to a piece of Government legislation. However, I ask why the Australian Labor Party Government has delayed so long in presenting such a necessary and sensible reform when it could have been proceeded with in legislation which was first moved, as my colleague Senator Hill just said, by the Fraser Liberal Government. For far too long the ALP has been prepared to pander to the irrational fears of pressure groups and to disregard the interests of Australia's horticultural industries. I am rather pleased to see that common sense has at last prevailed. Australian primary producers need access to improved strains of plants if our rural exports are to compete on the very much tougher world markets that we are seeing today. Plant variety rights legislation will both encourage this development locally and provide access to strains from overseas. Encouragement of private plant breeding in Australia can, of course, only be of benefit to the economy as a whole. Plant variety rights is not a new issue in Australia. It first emerged in the 1960s. In 1976 the Industries Assistance Commission strongly recommended its introduction. The Fraser Government can hardly be accused of rushing the matter, since draft PVR legislation was circulated for two years before it was formally introduced in 1981. Of course, unfortunately, it was then laid on the table for 12 months. Yet in 1983 the Hawke Government allowed this Bill to lapse and only now is PVR likely to become law. This legislation has the support of the Australian Agricultural Council. I think that is a very important aspect that should not be overlooked. For years it has had the wholehearted support of the fruit and vegetable growers in Western Australia, my home State. If we are to enjoy a profitable export industry-and heaven only knows how much we need more exports today, particularly in products such as stone fruits from the south-west of my State, because that is an important export industry not only to Western Australia, but to Australia-growers must have access to the benefits of PVR to improve standards of production. In an era in which the law has been changed to extend copyright protection into areas of intellectual property, in support of the principle that innovators deserve reward for effort and a right to some return for what they have created, a blanket exception cannot logically be made for plant material. We would all accept, I think, that impediments cannot be put in the way of effective and stable food production in Australia and the world. But nothing in this legislation would suggest that any adverse consequences will result, despite what the Australian Democrats might put forward in this debate. This Bill will apply only to new plant inventions. It simply cannot hamper existing food production. This simple fact seems to escape the opponents of PVR. As I say, it escaped the intellect of the Australian Democrats. Patents will last for 20 years. The scheme will be voluntary and open to overseas breeders. Infringements will be met by private prosecution in the Federal Court of Australia, which is the established practice for infringement of property rights. So there is real protection along the proper courses in which protection should lie. The Bill provides for an advisory committee that will be able to iron out difficulties over the admission of species-bearing in mind that they must, of course, be actively bred and not simply discovered-and technical administration. The scheme, of course, will be reviewed after five years. It is extremely moderate and flexible legislation which should be supported. It should also be stressed that farmers and home gardeners who use a variety protected by PVR will be able to retain seed and propagating material for their own use. Material can be used for research purposes. Objections to plant variety rights seem to arise from the fear that new strains of essential food crops subject to PVR will replace existing varieties, so that producers and consumers will be in the thrall of multinational companies which hold stocks of both seed and the chemicals that control them. I found it quite amazing to listen to the debate and the arguments put forward by the Australian Democrats today that the big threat was that the dreaded multinationals would take over in this area. That is simply not so. We might lay aside one salient fact: PVR will have its impact on minor breeding in horticultural industries rather than on our major economic crops that have traditionally relied on public breeders. Be that as it may, all of these scenarios presuppose an incredible degree of shortsightedness by producers, which I do not think is prevalent, or by Third World governments, and leaves us to doubt the wisdom of forgoing necessary legislation in order to guard against some remote possibility. The second reading speech of the Minister for Primary Industry (Mr Kerin) notes the fact that at the turn of the century India had 30,000 varieties of rice in common usage and it now has 30. Critics of PVR are very vocal about such a diminution of varieties. Nonetheless, we can ask what validity this criticism has when India is self-sufficient in rice, so that the 30 varieties represent the best value to growers and consumers. At the same time, all strains are preserved in a rice genetic resource centre, just in case the multinationals start plotting. That plot is the consistent cry of those who are opposed to this legislation. But there is provision to prevent any plotting in this legislation. Equally, we should be sceptical of claims that strains developed through PVR will be chemical dependent in order to further the interests of multinationals. It would be logical, surely, for the market-place to be more responsive to disease-resistant varieties that may be developed and that will save expenditure on chemicals. Hopefully, the establishment of PVR in Australia will encourage the growth of private plant breeders who, even in the demonology of the far Left, cannot be described as the dreaded multinationals. So much of the opposition which is now fighting a rearguard action against this legislation, and which for far too long had too great an influence over this Australian Labor Party Government, stems from this attitude noted in the Minister's speech: . . . some sectors of our community are philosophically opposed to the concept of private ownership of plant material. Some collectivist thinkers dislike the free enterprise ethos so much that they automatically assume that the activity of private breeders is destructive and malign. It is interesting to note, I suppose, that the only letters that senators have received in opposition to this legislation are in connection with the multinationals having a say in the ultimate decisions of plant varieties. The breeders themselves are certainly not vocal in their opposition. Those who are worried about the influence of the multinationals are the most vocal. The plant diversity protection committee, which has been active in its opposition to this Bill, circulated last July a critique of the report of the Lazenby Inquiry into Australia's Plant Breeding Needs that gave support to PVR. In comparing private to public plant breeders, it is stated that public breeders turn out a product more suited to farmer needs, not those of the market-place. Surely, that is the point that we should be addressing today-not what is important to the market-place, but what is more important to farmer needs and requirements. Of course, this is the war cry of the collectivist who does not trust Australian farmers-or any Australians, for that matter. Australian farmers, we all know, are suffering dearly under this Government and under the tax imposts that have been placed on them over the last three years. We must make sure that we are making their lives easier instead of more difficult. This legislation will certainly bring that about. If the same market-place shows a preference for the products of public breeders, so be it. In any case, for the foreseeable future it will be the role of the private breeders to supply those areas of demand which public breeders are unable to meet. The same dubious logic is applied when it is argued that there is no need for PVR to protect imported plant material against piracy, because there is no evidence that this has occurred in the past. Such a bland and meaningless assertion can hardly be expected to impress overseas commercial breeders, who are withholding material from a country in which the absence of PVR legislation means that their rights simply cannot be protected. It is not good enough for Australian primary producers and our horticultural industries to be denied the stock that they need because it is not being produced locally or because it cannot be imported through tardiness in introducing PVR. It is an unacceptable further difficulty for wine producers. Wine producers have been hit hard over the years. In the last Budget, of course, they were hit even harder by increased taxes. I suppose they have not fared well at the hands of the Government, which has introduced a 20 per cent tax on their products. But the worst impact, of course, is not on bulk wines but on the specialist producers who have pioneered wine growing in the south-west of Western Australia. It is wrong to place any obstacles in the way of Western Australia's fruit industry, which in 1984-85 earned $10.5m in export income and can be expected to earn at least $12m presently. Markets in South East Asia, however, are subject to competition from overseas varieties. New strains are becoming very prominent. A growing export industry needs all the help that it can get. Again, I am sorry that PVR could not have been instituted earlier to assist these very same people. The priority that is now finally being given to the needs of rural producers ahead of the fears and fancies of the collectivist lobby is most welcome, but of course it is rather sad that it is also very belated. I am glad the Liberal Party of Australia got its priorities right long before the Government in that it put the PVR legislation up in the first place. This legislation will safeguard both producers and consumers, which now, I am pleased to say, the Government is prepared to recognise. In closing, I certainly hope that the Senate will pass this piece of legislation with great urgency and minimum debate in terms of opposition from the Australian Democrats. Senator TOWNLEY(Tasmania)(10.21) —I rise to speak very briefly about the Plant Variety Rights Bill 1986, because I have spoken about PVR on other occasions in this chamber when a report from the Senate Standing Committee on National Resources was debated. Of course, we have discussed PVR within the Parliament on different occasions for some 10 years and there have been attempts by different governments to have some form of PVR introduced into this country. As I implied a moment ago, I was a member of the Senate Standing Committee on National Resources which brought in a report a couple of years ago in support of PVR. I am therefore very pleased to see this Bill here before the Senate. I do not want to delay the Senate because I believe that we should pass this Bill as soon as possible. In fact, I think there has been more talk about it today than I would have liked. I know many people have had to put their position on the record. I believe mine is on the record by way of the report of that Senate Committee which, incidentally, had two dissenting members. I believe PVR will be, first of all, of great assistance to my State of Tasmania. I believe it will be of assistance to the whole country. I refer those who are interested in this matter to that Senate Committee report that was brought in a couple of years ago. I would like to see this legislation passed. Many previous speakers have detailed their reasons both for and against it, and I believe the arguments for the legislation far exceed those against it. I hope that we will even get past the second reading stage this evening. Senator CRICHTON-BROWNE(Western Australia)(10.23) —I shall make my riveting contribution brief. I think the most significant contribution I can make to the implementation of the Plant Variety Rights Bill 1986 is in being brief so that its passage through the Parliament will be expeditious. I want to say from the outset that it is a grave indictment of this delinquent Government that it has taken so long to recognise the value and the virtue of plant variety rights legislation and finally to manage, after its internecine factional fighting, to negotiate its way through some compromise to the point where we now have legislation before us, notwithstanding the fact that it is deficient in a number of areas and that there are some amendments to be moved by the Opposition. It is worth recalling that this legislation is a reflection in large part of legislation which was introduced by Mr Peter Nixon, the Minister for Primary Industry in, as I recall, 1981. It lay on the table for a period of 12 months to allow those who had views to express them to the government of that day. Subsequently, there have been a number of reports, not least of which being the outstanding contribution by the Senate Standing Committee on National Resources, a fine body of men and women who examined the question of plant variety rights. Senator Powell —Are you one? Senator CRICHTON-BROWNE —Yes, as a matter of fact. I was too modest to read the names out. Had I done so I would have left my own out, I can assure honourable senators. That report was presented in May of 1984. It was a full, detailed and comprehensive report, the culmination of a great deal of evidence taken from and received by people who were both in favour of such legislation and people who were opposed to it. That evidence was distilled into recommendations, and the majority of that Committee came down strongly in support of plant variety rights legislation of one type. Then there was a further report, commissioned by the present Minister for Primary Industry, Mr Kerin. It was to be written by Professor Alec Lazenby. Obviously, that report was intended to provide breathing space for the Government to allow it to negotiate its way through the imbroglio into which the Government had been plunged as a result of the factions within it. We have, as we all well know, three governments in one. It is the dastardly trinity. The Left, of course, because of ideological obsession, was totally opposed to the legislation; the Right was for it; and the Centre Left was as confused as it inevitably is. The legislation we have before us is the lowest common denominator agreement that was arrived at between the three. Mr President, I seek leave to continue my remarks later. Leave granted; debate adjourned. Bills received from the House of Representatives. Motion (by Senator Button) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Button) read a first time. Second Readings Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.30) —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- TAXATION LAWS AMENDMENT BILL (No. 5) 1986 This Bill will give effect to another of the measures in the Government's tax reform package by introducing an instalment system for the payment of provisional tax, and contains several other measures. One of these gives effect to the decision of the Government announced by the Treasurer on 18 February 1986 to treat as assessable income certain realised foreign exchange gains of a capital nature and to allow corresponding income tax deductions for foreign exchange losses. The Bill also contains a related amendment to the capital gains and losses provisions of the income tax law to exclude from those provisions foreign exchange gains and losses under certain hedging contracts. It will also implement the decision announced on 7 April 1986 to treat short term redeemable preference shares as debt for income tax purposes. Finally, the Bill will exempt from tax the income of the British Phosphate Commissioners Banaba Contingency Fund. Mr President, I will now outline in greater detail the proposals dealt with in the Bill. Instalments of Provisional Tax This will provide the legislative framework for the introduction from 1987-88 of a system for the payment of provisional tax by instalments. When the new system is fully implemented in 1988-89, taxpayers whose provisional tax for the previous year exceeds $2,000 will pay 4 instalments during the year in which the income is derived. The earliest due dates for the instalments will be 1 September, 1 December, 1 March and 1 June respectively. In the 1987-88 year, the earliest due date for the first instalment will be 1 December, when two quarterly instalments will be combined into one payment. The total amount of provisional tax paid by instalments in any year will generally equal the amount that would be payable under the current single payment system. Mr President, by spreading the payment of provisional tax in this way, provisional taxpayers will be brought more into line with salary and wages earners, whose incomes are subject to PAYE tax deductions at source. There are, or course, significant economic and monetary policy advantages in spreading provisional tax payments. The large seasonal fluctuations in liquidity that have been an annual concomitant of the concentration of provisional tax payments from late March through the June quarter will be diminished, with beneficial effects on short term interest rates and the exchange rate. As a general rule, each of the first three quarterly instalments will be one-quarter of the provisional tax payable in respect of the previous year's income. The final instalment will be calculated as the balance required to make up the taxpayer's full liability for provisional tax for that year, calculated in the same way as at present. Where a taxpayer `self-assesses' his or her provisional tax by making an estimate or taxable income, rebates, et cetera for the current year, instalments will be based on the taxpayer's estimate. An estimate may be made for each instalment, regardless of whether estimates have also been made in respect of earlier instalments. To ensure that estimates are reasonably based, penalty tax for substantial underestimates will be payable at the rate of 20 per cent per annum for the period of the underestimate. Taxpayers-for example, some primary producers-who do not derive income evenly throughout the year will be catered for by an alternative 2-instalment scheme under which one-half of the year's provisional tax will be payable no earlier than 1 February and the balance no earlier than 1 June. To qualify for this, a taxpayer must satisfy the Commissioner of Taxation that more than three-quarters of his or her assessable income will be derived after 1 December. The legislation contains special measures to counter possible exploitation of the 2-instalment arrangement. As at present, provisional tax instalments paid in respect of the income of a year of income will be credited against the actual tax payable on assessment. Where a taxpayer is required to pay instalments in a year of income, any balance of tax payable on an assessment for the previous year will be due for payment no earlier than 1 February. Because full details are provided in the explanatory memorandum that has been circulated, I need not dwell further on the proposed system. While the measure is revenue neutral in that it will not increase provisional tax collections, it is estimated that collections of $90m will be brought forward to 1987-88. Depending on interest rate assumptions, it is also estimated that annual expenditure savings of up to $100m will result from the need to issue fewer treasury notes. Foreign Exchange Gains and Losses In February last year the Treasurer announced the Government's decision to allow income tax deductions for foreign exchange losses of a capital nature and to treat as assessable income corresponding foreign exchange gains realised after 18 February 1986 in respect of borrowings or loans contracted for after that date. Equivalent treatment was foreshadowed for gains and losses resulting from exchange rate effects between the date of acquisition or sale or assets contracted for after 18 February 1986 and the payment or receipt of the purchase money, the time delay in payment being equivalent to a loan. The proposed amendments will mean that exchange gains and losses on borrowings or loans of a capital nature will be treated in the same way as such gains or losses on borrowings or loans of a revenue nature. As with such gains or losses on borrowings of a revenue nature, the amendments will only apply where the borrowings are for the purpose of producing assessable income. There are clear economic advantages in treating all foreign exchange gains and losses in respect of borrowings and loans in the same way given the economic similarity between interest payments and expected exchange rate effects over the period of a foreign currency-denominated debt contract. Consistent with this, foreign exchange losses incurred on a borrowing to finance a rental property investment are to be treated in the same way as interest payable on the loan for the purpose of the negative gearing provisions relating to rental property investments, and foreign exchange gains of this kind will be treated as rental property income. Exchange gains and losses under forward exchange contracts and other hedging contracts entered into to guard against exchange rate losses are to be treated as assessable income or allowable income tax deductions respectively in the same way as such gains and losses under the primary contract. For the purposes of the proposed measures, the contract date of each borrowing on or after 19 February 1986 under a drawdown facility contracted for before that date is to be treated as a borrowing under a contract made on the date of the drawdown. Corresponding treatment will be extended where a pre-19 February 1986 loan is rolled-over, or extended, on or after that date. To avoid retrospective application, these measures are not to apply if the taxpayer was contractually bound before 19 February 1986 to make the drawdown, roll-over or extension. The Bill includes safeguards against use of these provisions for tax avoidance purposes. Capital Gains and Losses The Bill also proposes a complementary amendment to the provisions of the Income Tax Assessment Act relating to capital gains and capital losses. This will have the effect that those provisions will not apply to a capital gain made, or a capital loss incurred, under a hedging contract entered into to guard against currency rate fluctuations in relation to another contract, where any actual gains or losses from such fluctuations on that other contract would be outside the scope of the capital gains and losses provisions. The change will apply in respect of capital gains derived at any time after the commencement-on 20 September 1985-of the capital gains tax provisions. As regards capital losses it will only apply in respect of contracts entered into after 28 November 1986. This will ensure that taxpayers are not retrospectively denied a deduction for losses incurred under contracts already entered into. Short-term Share-based financing arrangements On 7 April 1986, the Treasurer announced that the income tax law would be amended to remove the tax advantages arising from the use of short term redeem- able preference shares as a substitute for debt. The Bill will give effect to that decision. Under the existing income tax law, interest on debt finance is generally deductible to the payer and taxable to the recipient. Dividends are not deductible to a paying company, but the rebate allowable on intercorporate dividends makes them free of tax in the hands of the company receiving them. This different tax treatment of dividends and interest has given rise to a number of share-based financing arrangements designed to attract the taxation treatment of equity for what essentially amounts to debt, with a consequential loss to the revenue. The amendments contained in this Bill will ensure that dividends paid on shares used in arrangements for the provision of finance for a period of 2 years or less will be no longer eligible for the intercorporate dividend rebate. Reflecting the mischief described in the Treasurer's announcement, these measures are not confined to redeemable shares strictly so-called, but will apply to any shares used in a short term financing arrangement where it can reasonably be concluded that the dividend paid is equivalent to the payment of interest on a loan. Dividends that are denied a rebate of tax by these amendments will be deductible to the paying company, subject to the same rules that govern the deduction of interest on borrowings. Trustees of corporate unit trusts and public trading trusts that are treated as companies for income tax purposes will also be subject to these new measures. The amendments will apply to dividends paid on relevant shares issued after 5 p.m. Australian eastern standard time on 7 April 1986. Safeguarding provisions will ensure that these measures are not circumvented by the use of shares issued before the operative time in a short term financing arrangement entered into after that time. The revenue saving arising from these measures is indeterminate. The Banaba Contingency Fund The Bill will amend the income tax law to exempt from tax the income of the British Phosphate Commissioners Banaba Contingency Fund. The Fund was established on 1 June 1981 to meet any future claims for compensation by former employees of the British Phosphate Commissioners in respect of phosphate mining operations on Banaba-formerly Ocean Island. Those operations ceased in 1980. Income of the British Phosphate Commissioners, as representatives of the Australian, New Zealand and United Kingdom governments, is exempt from tax under the doctrine of sovereign immunity and, if the Commissioners were in a position to administer the fund, income of the fund would also be exempt. However, the affairs of the Commissioners are in the process of being wound-up. The amendment proposed in this Bill will provide the exempt that would otherwise be available for the Contingency Fund. It will apply to income derived by the Fund from its inception on 1 June 1981. The cost of providing the exemption is estimated at $50,000 in a full year. Mr President, a detailed explanation of the provisions of the Bill is contained in the explanatory memorandum that has been circulated to honourable senators. I commend the Bill to the Senate. INCOME TAX AMENDMENT BILL 1986 The Bill will amend the Income Tax Act 1986 to formally impose provisional tax for the 1987-88 financial year. The amendment complements the proposed introduction of the instalment system for the payment of provisional tax, by the Taxation Laws Amendment Bill (No. 5) 1986 about which I have just spoken. It provides for the application of the instalment system in 1987-88. Details of this Bill are also set out in the explanatory memorandum circulated to honourable senators. I commend the Bill to the Senate. Debate (on motion by Senator Sheil) adjourned. The PRESIDENT —Order! It being 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Senator PETER BAUME(New South Wales)(10.30) —On 9 October 1986 Mr Ted Grace, the Australian Labor Party member for Fowler, launched a strong attack in another place on the Delany Hall nursing home which is situated in the electorate of Barton. In the course of that attack, Mr Grace accused the administrator of the nursing home, a Mr Moschella, of being, among other things, firstly, a `cheat', secondly, a person who had been described by an officer of the Department of Community Services as a `dill' and one of the `sleaziest and slyest nursing home operators in the business'; and, thirdly, he accused him of being an `idiot'. Fourthly, Mr Grace accused him of being a person who has `harassed and threatened elderly people to get more money out of them to line his own pockets'. Fifthly, he described Mr Moschella as `a crooked ghoul' who had threatened `to remove a sick man from his home . . . for not paying a bill which in fact had been paid'. Honourable senators may gather that Mr Grace did not have a great regard for Mr Moschella. The trouble was that in that speech Mr Grace provided no evidence to support these serious allegations and this outrageous slander of Mr Moschella, and it is now necessary to put the record straight. The allegations were made on the basis of statements made to Mr Grace-and I imagine that he received them in good faith-by the wife of a resident in the nursing home. Fortunately, the facts have been brought to my attention by Mr Bob Gemmell, the Liberal Party candidate for the seat of Barton in which the Delany Hall nursing home is situated. The attack was made on 9 October. So far as one can tell, no action has been taken by Mr Gary Punch, the member for Barton, who has been contacted, to set the record straight or to try to answer what are groundless and baseless accusations against Mr Moschella and the Delany Hall nursing home. Mr Gemmell is a formidable campaigner. He is the same Mr Gemmell who came within 57 votes of unseating the Premier of New South Wales, Mr Unsworth, in the seat of Rockdale. Let me deal with the allegations in turn, because they were serious and deserve to be answered one after the other. My refutation of these will expose the hollowness of Mr Grace's slander of Mr Moschella in October. Perhaps I should point out first that the Delany Hall nursing home is the only private facility in the southern suburbs of Sydney in my electorate which accepts wandering and demented persons. This is a very difficult task to undertake. It would be done by a nursing home only in line with a sense of commitment and mission. The Delany Hall nursing home has both commitment and a sense of mission. The home has always been accorded the greatest respect by the Department of Community Services and by the Department of Health as being a speciality unit for Alzheimer's disease, which honourable senators will know is a form of dementia. In specialising in this field the proprietor disadvantages himself financially because residents with Alzheimer's disease and with dementia can be extremely destructive. The matter raised by Mr Grace relates to the residency of a Mr Joseph Dries at the Delany Hall nursing home. Mr Dries was admitted to Delany Hall on 26 March 1986. He had been transferred from a nursing home in the Blue Mountains after his family became distressed regarding his care. The transfer was fair enough; the family wanted Mr Dries to be taken to a new nursing home. Prior to his transfer, there had been problems between Mrs Dries, his wife, and the administrator of the Blue Mountains nursing home regarding the non-payment of fees. In the case of the Delany Hall fees-and fees are payable by the relatives of patients-Mrs Dries began to neglect her responsibilities to pay her husband's account some time around April/May. Mr Grace made great play about a particular payment of $515.30. In fact, that was receipted in June-there is no question of that-but there were numerous other fees which accumulated and which the patient's wife had not paid. Far from being a poor and harassed elderly person, as Mr Grace claims, Mrs Dries had a substantial income; and she admitted this to the Department of Community Services. She used it on herself, her own maintenance, and was required to use some of it for the support of her husband. Her daughter had informed the Delany Hall nursing home that her mother was earning about $600 per fortnight from payments of board, from baby sitting fees and from two pensions, her own and that of her husband. So in all, she had about $600 a fortnight. I have with me a copy of the ledger sheet for Mr Dries's time in Delany Hall nursing home. I can see a number of receipted accounts, but I can see that throughout the period from June onwards up to the time Mr Grace made his attack-information which he could have obtained had he tried-there was a balance owing to the Delany Hall nursing home of always around $1,000, and sometimes going as high as $1,500. After Mr Grace made his complaint, officers of the Department of Community Services went and called on Mrs Dries. On 2 December they wrote her a short letter in which they set out the extent of her indebtedness. I seek leave to incorporate in Hansard the letter from the Department of Community Services, which I have not shown to Senator Walsh. Leave granted. The letter read as follows- COMMONWEALTH OF AUSTRALIA DEPARTMENT OF COMMUNITY SERVICES G.P.O. Box 4292, Sydney N.S.W. 2001 Telephone: Telex Mrs Dries 3 Leigh Place Ashcroft NSW 2168 Dear Madam I refer to the visit to your home by two officer's of this Department on 18 November 1986, to check Mr Dries accounts and receipts for care and accommodation at Delaney Hall Nursing Home. A thorough check of your accounts, and the nursing home records revealed that there were no discrepancies. The outstanding account at 18 November 1986 to 30 1986 November for Mr Dries accommodation is $1284.33. Matron Wylie of Delaney Hall Nursing Home has been advised of our findings. Yours faithfully H. WOOD Admissions, Inspections & Approvals New South Wales Region Senator PETER BAUME —The letter sets out that a $1,284.33 debt was owing. In fact, it is clear that Delany Hall was owed money at the time Mr Grace said that there was no money owing. It is owed money now. Money has been owed at all stages since the May-June period. It is apparent that Mrs Dries had access to money and that the nursing home had every right to ask that money owing for Mr Dries's residency in the home be paid and it had every right to let the relatives know that it was not being paid. In fact, Mr Dries's daughter Sue, in a responsible way, is now attempting to pay off some of the money owed to Delany Hall herself. She herself is in a difficult financial situation but she is sending the occasional cheque for $100. On looking at a note she sent to the nursing home, I see that she acknowledges a balance owing of $1,000. Her note gives the lie to what Mr Grace was saying. Clearly, Delany Hall has not been harassing anyone but has merely been asking for what is rightfully its own. It has given very generous help to Mr Dries. Apart from some clothes his daughter bought for her dad at Christmas time, the nurses themselves have been buying him clothes and beer. Mr Grace is completely wrong in suggesting that accounts have been paid up to date and in suggesting that Mr Moschella is trying to rip off aged people to line his own pockets. I am not blaming my friend Mr Grace. I suggest that he talk to his staff about bad staff work and about inadequate research that went on before he came to the Parliament and made outrageous suggestions against an innocent person who could not defend himself. Secondly, I would like to refute Mr Grace's comments, which he attributed to the Department of Community Services, that Mr Moschella was a dill, sleazy and sly. The Department has vigorously denied making any statement about Mr Moschella and requested of Mr Grace the name of the person who it is alleged made these statements. No name has been offered, and we cannot assume that such a claim was ever made. Thirdly, I wish to refute the accusation that Mr Moschella was intending to throw Mr Dries out into the street. Those were Mr Grace's words-that he would be thrown out into the street. Despite the advice that Mr Moschella received from the Department of Community Services that Mr Dries should be discharged for non-payment of fees, throughout the entire time Mr Moschella insisted that Delany Hall would carry the debt and that under no circumstances would this elderly patient have his quality of care reduced or endangered or be thrown out. This is just one example of how Mr Moschella is guided in his decision-making by his strong commitment to the mission and purpose of Delany Hall in line with his own strong Roman Catholic faith. Finally, I refer to Mr Grace's suggestion that Mr Moschella does not properly look after his patients and, in particular, that he ignores Mr Dries. Mr Grace alleges specifically that Mr Dries was `allowed to wander at will'. It is quite true that on one occasion he jumped over the fence and went straight to the Penshurst Hotel where the locals filled him up with ale, but they then brought him back to the nursing home after he had had a few beers. It is the policy of the nursing home not to tie the patients to chairs, even if they are demented or have Alzheimer's disease. It does not sedate them like zombies. Also, government policy does not allow the nursing home to lock its doors or gates. If one is not trying patients up or locking the doors, it is clear that one cannot prevent some of them from leaving from time to time. So Mr Grace's suggestion that Mr Dries was not being properly looked after clearly needs a better basis than the evidence that he has offered. In conclusion, I wish to look at the result of this completely inaccurate, unfounded, unwarranted and unfair attack upon Delany Hall and Mr Moschella. Mr Grace did not bother to check the ledgers of Delany Hall before he launched his attack. I have checked them. Those ledgers would have told Mr Grace all he needed to know-that he was wrong, that the people who brought the story to him were wrong, that he was being given a line of nonsense and that he should not have brought it into the Parliament before he had checked it out. His only contact with the nursing home was through a Mr Mountford-perhaps a member of Mr Grace's staff-who contacted the home on the day the speech was made and in fact had an argument with the matron. She says that he actually called her a liar. The result of this baseless attack has been to demoralise the nursing staff of Delany Hall. They are gentle and caring nurses who try to do their best. They are looking after an extremely difficult group of patients. These patients need care and the nurses are giving it to them. They have been smeared by this scatter-gun attack. I am told that these nurses clean up incontinent patients and that they work eight hours a day. They could earn more money as check-out counter people at Franklins, but they are never too busy to provide love and care to the Delany Hall residents. Members of this Parliament will know this because some of them have relatives being nursed in this nursing home. Some of them represent some of the areas around Delany Hall. I believe that nothing short of an apology from Mr Grace to Mr Moschella and Delany Hall can set the record straight. I invite him to offer such an apology. I believe that he acted on information he was given and that it was wrong information. The time is now right for him to apologise and if he will not do so I invite the Minister for Community Services (Mr Hurford) to set the record straight on behalf of the Government and make clear to this nursing home that there was a debt in terms of the document which I have incorporated in Hansard and that most of the other claims made by Mr Grace were groundless, baseless and without any evidence. Senator WALSH(Western Australia-Minister for Finance)(10.44) —Very briefly, I do not know anything about the specifics of the alleged case that Senator Peter Baume has just outlined, but I will have it referred to the appropriate Minister. Question resolved in the affirmative. Senate adjourned at 10.44 p.m. The following papers were tabled: Acts Interpretation Act-Correspondence and Statement relating to extension of specified period for presentation of the Australian Broadcasting Corporation Annual Report 1985-86. Customs Act-Notices 1987- Nos 1-3-Specified rate in respect of the diesel fuel rebate, dated 16 January 1986, 3 February 1987 and 12 February 1987. Defence Act- Determinations- 1986- No. 90-Overseas Living Allowance. No. 91-Travelling Allowance and others. No. 92-Expense of Office Allowance. No. 93-Mackay Allowance. No. 94-District Allowance and others. No. 95-Temporary Rental Allowance. No. 96-Airconditioning Allowance. No. 97-Bindoon Allowance. No. 98-Common Duties Allowance. No. 99-Overseas Living Allowance and others. No. 100-Reserve Allowance. No. 101-Overseas Living Allowance and others. No. 102-Charge for Rations and Quarters. 1987- No. 1-Travelling Allowance and Education Assistance Overseas. No. 2-Cadet Forces Allowances. No. 3-Woomera Allowance. No. 4-Salary of Permanent Force Members. No. 5-Attendance Allowance and others. No. 6-Post Allowance. Excise Act- Declarations (3) in respect of rebate and amount of rebate in respect of Bass Strait Oil, dated 12 December 1986, 13 January 1987 and 10 February 1987. Notices 1987-Nos 1-3-Specified rate in respect to the diesel fuel rebate, dated 16 January 1986, 3 February 1987 and 12 February 1987. Lands Acquisition Act-Statement by the Minister describing land acquired by agreement under sub-section 7 (1) of the Act, for public purposes. National Health Act-Principles formulated under sub-sections 39A (6) and 40AA (3C), dated 5 December 1986. Nursing Homes Assistance Act-Principles formulated under sub-sections 3a (6) and 4 (3C), dated 5 December 1986.