Tuesday, 26 May 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That we consider the 2 per cent discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term ``extraordinary circumstances of the economy'' given as the reason for the discounting. Your petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 October 1986 to 1 July 1987 so that pensions are restored to the 9 October 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners as in duty bound will ever pray. by Senators Alston (from 22 citizens), Button (from 35 citizens), Colston (from 39 citizens), Cooney (from 10 citizens), Durack (from 11 citizens), Gietzelt (from 112 citizens), Dame Margaret Guilfoyle (from nine citizens), Robert Ray (from six citizens) and Ryan (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: Moreton Island is an invaluable natural resource for Queensland and the world and that mining on Moreton would gravely compromise its unique flora and fauna and its outstanding recreational archaeological and scientific values. Your petitioners most humbly pray and the Senate in Parliament assembled, should: urge the government to use its proven constitutional powers to halt sand mining on Moreton by supporting the Moreton Island Preservation Bill. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 114 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 concern by farmers and consumers, about the proposal to irradiate food in Australia. Your petitioners, most humbly pray that the Senate in Parliament assembled, should: 1. Block the introduction of food irradiation into Australia. 2. Ban the import of Cobalt-60 and Caesium-137 and Caesium-134 to be used to irradiate food products. 3. Ban the import of all machinery used for food irradiation (electron beam, x ray etc.). 4. Ban the importation and sale of irradiated food in Australia. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 197 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens of Australia, strongly urge that the Australian Government prohibit the entry of nuclear-armed or nuclear-powered vessels into Australian ports or waters during our bicentennial celebrations and at any other time in the future. And your petitioners as in duty bound will ever pray. by Senator Ryan (from two citizens). Petitions received. Senator COONEY(Victoria) —On behalf of Senator Bolkus, I give notice that, on the next day of sitting, he will move: That the following matter be referred to the Standing Committee on Constitutional and Legal Affairs: (a) the nature, function, ambit and adequacy of income tax rulings issued by the Commissioner of Taxation; and (b) the process by which these rulings are formulated and disseminated. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That the second reading of the Broadcasting Amendment Bill 1986 be an Order of the Day for the next day of sitting. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That the second reading of the Sales Tax (Exemptions and Classifications) Amendment Bill (No. 2) 1986 be an Order of the Day for the next day of sitting. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That consideration of the Taxation Laws Amendment Bill (No. 5) 1986 in Committee of the Whole be an Order of the Day for the next day of sitting. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —Papers are tabled 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. Australian Broadcasting Corporation-Annual Report 1985-86-Together with the Auditor-General's Report-Pursuant to section 80 of the Australian Broadcasting Act 1983. 2. Building and Construction Industry Long Service Leave Board-Annual Report 1985-86-Together with the Auditor-General's Report-Pursuant to sub-section 63h (3) of the Audit Act 1901. 3. Australian Capital Territory Registrar of Co- operative Societies-Annual Report 1985-86-Pursuant to section 12 of the Co-operative Societies Ordinance 1939. 4. Canberra Public Cemeteries Trusts-Annual Report 1985-86-Together with the Auditor-General's Report-Pursuant to section 63m of the Audit Act 1901. 5. Outlook for the Aviation Industry-An information paper. 6. Australian Marine Sciences and Technologies Advisory Committee-Annual Report 1985-86. 7. Recombinant DNA Monitoring Committee-Annual Report 1985-86. 8. Advance to the Minister for Finance-Statement of expenditure for April 1987. Senator CHANEY —My question is directed to the Leader of the Government in the Senate. I refer to the fact that the Government has now postponed debate on the industrial relations legislation. I ask: In the face of united opposition to and condemnation of the industrial relations legislation by the Liberal Party of Australia, the National Party of Australia, the Business Council of Australia, the Confederation of Australian Industry, chambers of commerce, the National Farmers Federation, small business associations and other business and employer organisations, will the Government give an undertaking that this Legislation will be withdrawn and that clauses which place unions above the ordinary laws of the land will be totally deleted? Senator BUTTON —As always in this Government's policy making, it is prepared to consult and receive the views and opinions of various organisations. Senator Durack —You have done that? Senator BUTTON —Yes, we have. Let me make it quite clear that Senator Chaney gave me a list of organisations that expressed objections to the proposed industrial relations legislation. He might have included some trade unions as well. I am certainly not going to give any undertaking that the legislation will be withdrawn; that is not for me to do. However, there will be a further process of consultation about some provisions in the legislation. Senator Chaney mentioned in his list two groups of which neither the Government nor anybody else in the community took much notice-the Liberal Party and the National Party. In any decisions made by the Government, very little notice was taken of those two bodies-by us or anybody else in the Australian community. They were not a factor in the Government's deliberations. Senator JONES —In view of the reply of the Minister for Resources and Energy to my question on notice No. 1694 regarding the disposal of nuclear waste in Australia, I further ask him: With approximately 1,000 cubic metres of dangerous nuclear waste now in store in Australia-it is buried in every capital city and is increasing at 50 cubic metres a year-has any register been devised between the Commonwealth and State governments to show positively where dange-rous nuclear waste has been buried or otherwise disposed of? If such a register has been esta-blished, what procedures have been established to make certain local, State and Territory authorities are totally informed of any potential danger before allowing building approvals or land development in those areas? Senator GARETH EVANS —The Australian Science and Technology Council-ASTEC-in its 1984 report to the Government on Australian involvement in the nuclear fuel cycle recommended the creation, among other things, of a registry of radioactive tailings in waste disposal sites in Australia. The Government accepted that recommendation and in the middle of 1985 consultations were commenced with the States and the Northern Territory to determine what information should be recorded and how that registry should operate. It is my understanding that Commonwealth and State officials have now reached agreement on the kinds of details required in relation to each site for the registry, including the precise location and status of the disposal site and the wastes it contains. Information for specific sites is now in the process of being collected for the registry. I would expect that local, State and Territory authorities are already aware, at least in general terms, of the whereabouts of contaminated sites. However, the national registry will provide, in a highly accessible form, precise details on indivi-dual sites throughout Australia and, as I have said, precise details on the content of the material they contain. That exercise is a necessary prerequisite to the exercise in establishing a national low to middle order waste disposal faci-lity. As I have indicated previously to the Senate, that continues to be under very active consideration and it is the subject of joint consultation between the Commonwealth and the States with a view to identifying such an acceptable site and, ultimately, for good measure, transferring to it the material presently scattered around Australia. Senator DURACK —My question is directed to the Minister representing the Minister for Foreign Affairs. Does the Government know whether Fiji will be represented at this week's South Pacific Forum meeting in Western Samoa and, if so, by whom? Does the Government believe that the only appropriate representative of that country would be the democratically elected Prime Minister, Dr Bavadra, or one of his duly appointed Ministers? Does he agree that if Fiji is represented by other than Dr Bavadra, Australian Government participation would amount to de facto recognition of the post-coup arrangements? What does the Government intend to do in those circumstances? Senator GARETH EVANS —There have been conflicting reports on the likely attendance by Fiji at the Forum. As I was aware of the situation mid-morning-I have not caught up with it since-there is still very considerable uncertainty as to whether Fiji would seek to be represented at all at the Forum and, if so, by whom. Under those circumstances I do not think it is helpful to speculate further as to what the nature, extent or character of that representation might be. As to the second part of Senator Durack's question, we as a government agree that the only appropriate representative of Fiji at the Forum would be the properly and duly democratically elected Prime Minister or a representative of his Government-Dr Bavadra or his representative. It is a matter of profound regret that it does not appear likely to be the case that Dr Bavadra will be there, at least in that capacity. As to the third part of the question, whether Australia would find it appropriate to attend the Forum notwithstanding some purported Fijian official presence, that is essentially a hypothetical question which it would be inappropriate, for reasons I have indicated, to attempt to prejudge. But I draw attention to the fact that it has been normal multilateral meeting practice for parties to be willing to sit around the table notwithstanding the absence of recognition of other parties around the table. So if a decision were made to attend and participate in the Forum notwithstanding some sort of official Fijian presence, that would not in itself imply anything so far as Australia's recognition of the current regime is concerned. We have made it clear, and I do so now again, that we do not recognise the present regime, notwithstanding the figleaf of constitutionality that has been erected around it by virtue of the Governor-General purporting to be, in effect, the sole government of that country, albeit advised by a council of advisers. It is a very difficult policy question for the Government. One possibility that is being considered in the event that Fiji should turn up at the Forum is for Australia to be physically present but not actually to participate in the Forum meetings as such, thus allowing an opportunity for contact with the relevant countries in the normal array of bilateral meetings and multilateral meetings of the kind that traditionally accompany Forum meetings. There is no determined policy position on this matter. It is a matter of ongoing consideration by the Government. Mr Hayden will, no doubt, want to have a major say in this matter now that he is back in the country, just as he has had a major say in the course of events during his absence. I further mention just for the record that, as has been foreshadowed, I think, in this morning's media, in the event that Australia officially attends the Forum or goes on some other basis, Mr Hayden will accompany the Prime Minister and be there as an extended Australian delegation. Senator COLSTON —Could the Minister representing the Minister for Arts, Heritage and Environment advise which company has recently expressed an interest in mining on Moreton Island? Does the Federal Government have any power to prevent such mining from proceeding if the mined material is sold on the Australian market? Does the company have export licences for other mining products? If so, could those licences be amended to be conditional on the company agreeing not to mine on Moreton Island? Senator RYAN —I am advised that the company in question is Associated Minerals Consolidated Ltd. With respect to the second and third parts of the honourable senator's question, the Government is currently studying the powers that might be available to it to prevent mining from proceeding in the event that it is proposed to sell mined material on the Australian market. I am not, therefore, in a position to comment on what action the Government might take if mining for domestic purposes were to take place. The Government's position regarding mineral sand mining on Moreton Island is well known. It firmly opposes it. To disclose prematurely what action the Government may consider taking in the situation described by Senator Colston's question might not-I am sure he will agree-be the most prudent course. Senator POWELL —Is the Minister representing the Minister for Science aware of reports which suggest that the hole in the earth's ozone layer, first reported in 1979, is widening and could threaten to increase the rates of skin cancer amongst Australians? Can the Minister explain whether any correlation might exist between the sudden widening of that hole in 1985 and the much publicised `hole' which was `burnt' in the earth's atmosphere south of Tasmania by a United States space shuttle mission over the Southern Ocean, also in 1985? Senator BUTTON —Senator Mason asked me a question about this matter on 19 March and I responded to it on the following day. The answer to the first part of Senator Powell's question is the same as that provided to Senator Mason on 20 March. As far as I am aware there are no new developments. That is how I have been advised. The answer to the second part of Senator Powell's question, I am advised, is that there is no evidence of such a correlation. Senator ZAKHAROV —Is the Minister representing the Minister for Social Security aware that media claims that 16- and 17-year-olds may be denied any income support if they cannot find work are causing anxiety in the community? What provision has the Government made for school leavers who cannot find work? Senator TATE —I am aware of some anxiety in the community due perhaps to a misreading of some of the emphases to be derived from the Treasurer's May economic statement. It is necessary to put the support which the Government intends to give young people in the 16- to 17-year-old age bracket, as they leave the education system and seek employment, in some sort of perspective. It is very important that the Government not merely hand out an unemployment benefit without giving the support which these 16- and 17-year-olds require. Therefore, the emphasis in changing from the unemployment benefit to the job search allowance over the next several months will be on getting young people into jobs. They will be required to attend a Commonwealth Employment Service office each fortnight as part of their job search activities. If they do not find work or a training place within six months they will be recalled to the CES and subjected to a new activity test, which means that they will be required to accept referral to a suitable job, work experience, training program or job search training place. If unsuccessful after 12 months recipients will be provided with more intensive counselling and job experience offers by the CES. The Government will allocate $32m in 1987-88 above expenditure already planned and around $63m in 1988-89 to training programs directed primarily at disadvantaged groups. As honourable senators will be aware-perhaps it needs to be re-emphasised and put on the public record-whilst it is true that in January 1988 the unemployment benefit under that title disappears for under 18-year-olds, a job search allowance payable at that current junior unemployment benefit rate with an activity test after six months will be put in place. In March 1988 Austudy-type parental income tests will be applied to current and new recipients of that job search allowance which will be paid at a rate which can reduce to $25 a week depending on parental income. Senator BJELKE-PETERSEN —My question is directed to the Leader of the Government in the Senate. Is the proposed introduction of a $2 coin an admission by the Government that Australia's high level of inflation is to continue unchecked? Has this country arrived at a situation where what was once a pound, a respected unit of currency everywhere in the world, is nothing more than small change? Is the Australian public further to be burdened with the weight of extra coins in its pockets? Can the Government take action not to introduce a $2 coin and retain the present $2 note? Senator BUTTON —From time to time governments of all persuasions have made changes in currency in terms of the way it is minted, printed or whatever. There is no admission by this Government, nor was there by previous governments, of continuing levels of inflation bringing about such a situation. If Senator Bjelke-Petersen wants to look at really high levels of inflation, even though the current level of inflation in this country is too high, she has to go back to 1982 when the Fraser Government was in power. Then she will see how high levels of inflation can be. I would agree with the suggestion that the pound is not worth much any more because the pound was abolished in 1964. One of the grave difficulties of our country cousins from Queensland who represent the National Party of Australia in this place is that they are firmly locked into the policies and attitudes of the early 1960s, and perhaps the 1950s, rather than taking account of what is happening in this country today and what ought to be happening. That is one of the very real problems which National Party representation from Queensland brings into Senate and Federal parliamentary debates. If Senator Bjelke-Petersen is really concerned about people being weighted down with the new $2 coins and she finds that a personal difficulty, she can give all the $2 coins she gets to me. I will put them in my pocket and I assure her that I will be quite capable of carrying them. Senator GILES —I refer the Minister for Finance to reports of proposals put forward by the Queensland Government at yesterday's Premiers Conference for further cuts in public expenditure. I ask the Minister: If the standards of Queensland's fiscal discipline over recent years had been extended to the Commonwealth, what would have been the effect on the Commonwealth Budget deficit? Senator WALSH —I have seen the Press re-ports in which the Queensland Government called for further expenditure cuts and fiscal discipline. I understand that a booklet was handed out but I have not seen it. Senator Boswell —I will get you a copy. Senator WALSH —I thank the honourable senator. That is very kind of him. However, I understand that it is pretty long on rhetoric and pretty short on detail, which is just the sort of thing one would expect to come out of the Petersen regime. Looking at the record of the Queensland Government as distinct from the rhetoric, we find that in the six years from 1980-81 to 1986-87, Queensland State outlays have grown at 5.8 per cent real which is much faster than any other State and well above the average, almost 80 per cent higher than the average of 3.7 per cent for all States. The 1985-86 financial year, the last complete year, was the year of the really big blowout in Queensland when outlays grew by 9.8 per cent. Yesterday, Premier Petersen was berating the Commonwealth over alleged excessive spending by the Commonwealth but in this financial year, Queensland's Budget shows on-Budget expenditures increasing at 3.7 per cent real-almost a 4 per cent real increase. Of course, Queensland tax receipts, once the appropriate adjustment is made for taxes disguised as railway freights, are the highest of any State as well. The Queensland Government publishes no forward estimates of expenditure, a habit that was shared by the former Treasurer, Mr Howard. Of course, there were very good reasons why he did not publish forward estimates of expenditure, particularly in 1983, and they were because he did not want the public to know the truth. He did not want the public to know-indeed he deliberately concealed from the public-the truth about the Budget he had presented in 1982 and what it was leading to in the next financial year. The Queensland Budget do-cuments do not distinguish clearly-- Senator Chaney —Mr President, I take a point of order. The Minister has picked his words fairly carefully but he is clearly indicating that the Leader of the Opposition did not tell the truth and I think he should be asked to withdraw that statement. The PRESIDENT —The Minister said that Mr Howard deliberately misled the public. I ask him, therefore, to withdraw those words. Senator WALSH —Mr President, I withdraw them if you wish me to. I just refer people to what Mr Stone said at the time. In February 1983-it may even have been 1 March-he asked the then Government whether it wanted the forward estimates published. He was very quickly told `No, certainly not', and they were published after the event. But the Queensland Budget documents do not clearly distinguish between financial transactions and other revenues. Because of that it presents what it calls a `balanced' Budget, but it presents insufficient detail to make any realistic assessment of whether or not it is balanced. The overall deficit in Queensland for this financial year is estimated to be $1.1 billion-we cannot be certain of that fact because the Queensland Government conceals information-which is about double the deficit recorded by Queensland in the previous year. Of course, if the Commonwealth Government had followed that practice the Commonwealth deficit in this financial year would be of the order of $10 billion-the sort of deficit that Mr Howard left behind when he was kicked out of office. Senator MacGIBBON —I ask the Minister representing the Minister for Defence: Are the elements of the Operational Deployment Force on HMAS Tobruk positioned off Suva on active service? If so, are they entitled to all the benefits that active service implies? If they are committed to land operations, what are the rules of engagement, which must have been defined at this stage? Senator GARETH EVANS —I am not sure of the technical characterisation of their present status. I would need to check that with the Minister for Defence. I shall do so and respond as soon as I can to the Parliament. If there is anything in Senator MacGibbon's question to suggest that those servicemen embarked on the Tobruk, who by now should have transferred, of course, to other ships in the region-I am just not sure what the status of that transfer operation is; it may not be until later in the week-are doing something more than we have said they are doing, of course it is utterly without foundation. They are there for an essentially military police role-I think that would be the best way of describing it-to assist in any evacuation that might have or still may become necessary of Australian citizens and others from Fiji. It was only in the most remote contingency that any such participation in the process was deemed likely by our military planners but, nonetheless, it is part of any good planning exercise that all contingencies, however remote, are taken into account and properly planned for. It is in that particular context that these men have been embarked. It remains, of course, our profound hope that their use in any capacity to assist in an evacuation will not become necessary and our present assessment of the situation is, of course, that that appears less likely with each passing day but there is still a degree of real uncertainty about the situation in Fiji and so long as that uncertainty prevails the contingency plans will stay in force. Senator MacGIBBON —I wish to ask a supplementary question. I advise the Minister that there was nothing malicious or whatever word he used in my question. Senator Gareth Evans —That would be a precedent. Senator MacGIBBON —I do not want any back chat. The PRESIDENT —Order! Senator MacGibbon should ask his supplementary question. Senator MacGIBBON —My supplementary question to the Minister is: Why would there be a need to transfer those troops from the Tobruk to other ships of the Royal Australian Navy? Will he answer my question about the rules of engagement? Senator GARETH EVANS —I cannot answer that question any more than I could answer the earlier question about proper characterisation. One is linked with the other and the honourable senator will get a full answer in due course. The reasons why it is proposed to transfer the soldiers in question from the Tobruk is as was set out in the Press release, which manifestly Senator MacGibbon has not read, and that is that the Tobruk is on its way to Apia for the South Pacific Forum conference, where it is a crucial part of the logistics of the conference and, indeed, for the independence celebrations of Western Samoa, which it was originally planned to attend anyway, quite apart from the Forum situation. That is the context in which the Tobruk is steaming to Apia and diverging marginally to Fiji on the way. It is more or less a geographical straight line. If an evacuation contingency had arisen, it is quite probable that, during the period in which the Tobruk was in the area or in which it could be returned to the area, it would have been involved in that process along with the other ships in the region. Senator CROWLEY —My question is directed to the Minister Assisting the Prime Minister on the Status of Women. Is the Minister aware of claims that the income testing of family allowances for families with incomes over $50,000 will adversely affect women and will, over time, push many more families and women into the income tested area? Can the Minister say what the Government's response to these claims is? Senator RYAN —I am aware of a Press release put out by Senator Chaney on 21 March 1987 which referred to the issues raised by Senator Crowley. Senator Chaney claimed that the income testing of family allowances will bite into the disposable income of many more middle income families over time, primarily because `while the income test levels might appear high, there has been absolutely no commitment by the Government to index them'. He said: In a very short time inflation will push thousands more families into the phase-out zone and the ostensibly reasonable income test will extend its reach by stealth. In response to that claim, I refer Senator Chaney to page 37 of the May economic statement, where it says: The threshold- that is, $50,000 plus additional income disregard for more children- will be increased annually from January 1989 in accordance with the movement in the CPI between July and June in the previous financial year. Senator Chaney —And there will be no capital gains tax, uni fees or any of these other problems. Senator RYAN —Senator Chaney, of course, is rabbiting on now, embarrassed by this obvious, or deliberate, fault in his public statement. I suggest to Senator Chaney that he should acquaint himself with the May economic statement before making public statements which condemn government policy and which are based on spurious grounds. The facts are that 200,000 families will be affected by the family allowance decision, the threshold will be indexed, and those families that do lose all or some of their family allowance will be gaining very substantially from the tax cuts, as I set out for the benefit of the Senate last week. The Government has made difficult decisions in the May economic statement, including having high income earners forgo a very small proportion of their incomes so that those in the community who are most in need can gain some additional benefits. The Government's family assistance packages will, of course, address these issues further. I think Senator Crowley asked me to remind the Senate of what those tax benefits would be. From memory, I think it is the case that a single income family on $50,000 a year will be something like $69 a week better off from the combined tax cuts. A dual income family, where one yearly income is $30,000 and one is $20,000, will be in the vicinity of $39 a week better off. Senator Walters —But you are taking it away from the family allowance. The PRESIDENT —Order! Senator Walters, you are persistently interjecting. Will you let the Minister answer the question? Senator RYAN —Thank you, Mr President. Quite clearly, the loss of a few dollars of family allowance is more than adequately compensated for by the combined effect of the tax cuts for those high income families. Senator NEWMAN —My question is directed to the Minister representing the Minister for Defence and the Minister for Foreign Affairs. Did the Minister, as Acting Minister for Foreign Affairs, in conjunction with the Minister for Defence, agree to the dispatch of Australian troops to waters off Fiji? What are the objectives of this deployment? I recognise that he tried to skate around that point in answer to Senator MacGibbon's question; nevertheless, I ask him to state those objectives. Is the Minister satisfied that the strength and back-up of the force is sufficient to achieve the objectives? Were the troops dispatched at the invitation of, or with the concurrence of, Fijian authorities? If so, which authorities were consulted? Senator GARETH EVANS —I refer Senator Newman not only to what I said in answer to Senator MacGibbon but also to the Prime Minister's Press statement of 21 May, which sets out in loving and elaborate detail answers to all the questions that Senator Newman has just asked me. Senator MAGUIRE —My question is directed to the Minister representing the Minister for Transport. I refer to considerable Press speculation in recent days that the Chief Minister for the Northern Territory has been jumping the gun in relation to his claims that work on the 1,500-kilometre, $610m Alice Springs to Darwin railway is about to begin. In fact, I believe it is suggested that, despite official pronouncements, Japanese involvement in funding the project is non-existent. I ask Senator Gietzelt whether he can provide further information on this mooted project which, of course, could have implications for my State of South Australia. Senator GIETZELT —It would be obvious to most honourable senators that what the Northern Territory Government does in respect of any proposed Alice Springs-Darwin railway is a matter for that Government alone. If it considers that it is able to organise the funding and financial back-up essential not only to make the construction a success but also to create an economically viable link between those two important centres, that, of course, would be a matter of judgment to be made by the Chief Minister and the Government of the Northern Territory. As to the question of sufficient links between those two cities, the Commonwealth Government has contributed substantial funds to complete the Stuart Highway to a good quality bitumen road for its entire route. The Commonwealth Government is of the view that at this stage that is as far as it is able to go with regard to the contribution of funds for the movement of traffic-both goods and passengers-in respect of that portion of our country. The Commonwealth Government is not involved in proposals to construct a rail link. That is a matter of commercial judgment, which is clearly the responsibility of the Northern Territory Government. The Commonwealth Government is of the view that the first class highway meets the needs of transport at this stage, particularly having regard to the economic conditions facing the country. Senator HAMER —I address my question to Senator Gareth Evans in his capacity as Minister representing the Minister for Foreign Affairs and the Acting Minister for Foreign Affairs at the relevant time. Did the Government consider the use of sanctions against the military government in Fiji? Did the Government reject the use of sanctions as inappropriate at this time? Are Australian maritime unions, with the blessing of the Australian Council of Trade Unions, imposing their own sanctions on Fiji? Did the Minister try to have these bans lifted during talks with the ACTU on Sunday? If so, did he succeed? Is it acceptable that the conduct of a key area of our foreign policy should be conducted by the trade union movement rather than by the elected Government? Senator GARETH EVANS —The Government did consider the imposition of economic sanctions in the form of trade embargoes of either a general or a specific kind and it did, as Senator Hamer indicated, reject the appropriateness of those measures at this stage, although, as the Prime Minister has indicated on a number of occasions, those potential sanctions remain on the table for consideration should the situation further deteriorate and should the judgment be made that their effectiveness and utility would be such that in all the circumstances they should be employed. It is the case that the Government has made the judgment, until now anyway, that it is unlikely that broad-ranging or even narrowly targeted economic sanctions would be particularly effective, not least since the types of commodities of which we are talking, conspicuously petroleum products, are readily obtainable from other parts of the globe, and that action would be unlikely to generate any particular stress in the Fijian economy. To the extent that stress would be generated, there is always the argument of who one is hurting, and that factor must be taken into account along with many other considerations. The basic consideration that moved the Government-and I have indicated this on a number of occasions-is that the Fijian economy is so close in any event to self-destructing as a result of the events of the past 10 days that any further exercise of this kind would appear to be manifestly unnecessary in terms of placing any further pressure upon people in Fiji to behave in a more reasoned way. That has been particularly obvious in the context of tourism, but it is also becoming rapidly evident in the drying up of other forms of investment and business activity. It is the case that the trade union movement is presently maintaining a number of bans on shipping to Fiji. I was clearly advised last Sunday by senior representatives of the Australian Council of Trade Unions that those bans have been placed in response to specific requests from the Fijian trade union movement, because of the denial of rights to Fijian trade unions that had been associated with the Rabuka coup and its aftermath. As well as explaining at some length to the ACTU the Government's position on the sanctions question, I undertook to establish, as quickly as I could through the Government's communication facilities, just what the current state of play was in Fiji so far as continuation of bans on trade union activity was concerned and, in particular, what the situation was so far as the current views, expectations and requests of the Fijian trade union movement were concerned. Some effort has been made to clarify those points, and it would appear that at the moment the situation is rather fluid and there is a prospect-there is a prospect, I put it no higher than that, as matters stood earlier today-that the bans, limitations and restrictions on trade union activity will be completely lifted both legally and in practice and that as a result the key relevant unions in Fiji may well lift the request that is currently operative for such activity to be maintained by Australian unions. If that is so, to that extent that quite major prop, as it were, of the Australian trade union movement's reaction so far may well be removed, and the ACTU might well be expected to respond accordingly. I do not think it is helpful for me to speculate further as to what the course of events might be. Feelings are obviously, and understandably, running very high in the Australian trade union movement, just as they are in the Australian community as a whole-indeed just about everywhere in the Australian community except, it seems, in the bosom of the Opposition spokesman on foreign affairs, who has made a conspicuous fool of himself as we all know by his early reaction to the events in Fiji. But apart from him, and I think with the conspicuous exception of him, I think that everyone in this country has reacted with equally forceful indignation to what has been a very unhappy and distressing time and course of events in Fiji and I believe, as does the Government, it is perfectly understandable that the trade union movement should have reacted as it did in response to the specific requests that were put to it by fraternal organisations elsewhere. Senator HAMER —Mr President, I have a supplementary question. As I understood the Minister's answer, he said that the Government had-and I agree with it-rejected the use of sanctions at this time. I ask the Minister, as I asked before: Does the Government approve of the unilateral use by the trade union movement of sanctions against a country, such use not being in accordance with the policy of the Government? Senator GARETH EVANS —No, the Government does not approve of that, and that point was made perfectly clear to the ACTU. At the same time, the Government expressed its understanding, as I do now, of the trade unions acting as they did, not in the pursuit of some larger policy objective-which is a proper matter for government-but with the specific objective of responding to a fraternal request from a fraternal trade union organisation expressly designed to ensure the restoration of trade union rights. It is in that particular context that I have made the points I have. Senator ELSTOB —My question, addressed to the Minister representing the Minister for Health, concerns the present shortage of bodily parts for transplants. Will the Minister consider developing a public awareness campaign to encourage more donors to come forward? Could the shortage be eased by donors endorsing the use of any bodily part, as opposed to a specific part? If so, could the campaign encourage such endorsements? Senator TATE —Senator Elstob has raised a matter of great concern to him. It is not a matter of simple sentiment to be very moved when one hears, sees on television or reads about a person whose life has been saved because some other member of the community, either while still alive or in anticipation of death, has provided an organ which has had a life saving effect on that person who has perhaps been in an accident or is suffering from some chronic acute illness. Therefore, the question of the donation of bodily parts is something which should be pursued by Australian Health Ministers. I emphasise the word `Ministers' because arrangements for organ donation are seen, in our federal system, as being primarily a matter for the States and for the legislative framework that each State establishes. I know that the Australian Health Ministers Advisory Council is currently looking at various aspects of donor organ acquisition with a view to improving existing arrangements and achieving greater rationalisation of activity. I understand that matters being addressed in that Advisory Council include not only the number of potential donors, but also the various organisational, educative and legislative aspects. Insofar as Senator Elstob is concerned that there should be a public awareness program, clearly in the educative aspects of the questions being addressed by the Advisory Council, the question of a general awareness program perhaps needs more emphasis than it may be receiving at the moment. Certainly, I will not only take steps to ensure that that matter is brought to the attention of the Council, but also seek to ascertain whether the Council is looking at the question of permitting the donation of body parts in general-which is the sense of Senator Elstob's question-rather than potential donors having to specify the particular organs they wish to donate in the event of death. Senator JESSOP —My question is directed to the Minister representing the Minister for Fo-reign Affairs. I remind him of Mr Hayden's answer to the House of Representatives on 28 April, when he said that the Libyan People's Bureau would not be closed and that that decision had been made on grounds which were `sound' and which `continue to be sound'. What specific things occurred between 28 April, when there were no grounds for closing the Bureau, and 19 May when the Prime Minister announced that the Bureau would be closed-because it had `intruded into our domestic affairs, causing dissensions and confrontation between communities'-to show that this was causing deep concern and that it was `serving to facilitate Libyan de-stabilising activities'? With respect to each of these things which occurred between the two dates I have mentioned, when did each of them first come to the notice of the Government? Senator GARETH EVANS —These questions are not matters of black and white and are not circumstances where there were no grounds for doing something at one time and then a number of grounds for doing something at a later stage. Essentially it is a continuum of evidence that accumulates over time and there comes a point at which the balance of that evidence tips the Government over in the direction of making a particular decision which, until that point, it is not minded to make. A number of things occurred during the period to which Senator Jessop referred which tipped the balance in favour of the Government's making the decision that it eventually made last week. Let me mention some of those matters. First, there was the further evidence not only of the nature of Mr Mansell's visit to Tripoli but also of the subsequent course of action that he proposed to embark upon as a result of that visit in the way in which he was manifestly intending to use the Libyan connection as a continuing destabilising consideration in his conduct, and that of a number of like-minded people, of Aboriginal affairs in this country. Over this period there was the emergence to prominence of the abominable Mr Pash and his Matabah office in Melbourne which had made it perfectly clear that the extent to which the LPB in Canberra was exercising, as has been claimed in some quarters, some moderating influence on the conduct of Libyan Government activities in Australia, that moderating influence was clearly incapable of stopping the establishment of the Matabah office through this Australian citizen to whom I have already referred in this place in previous answers and about whom I do not find it necessary to say anything more. There was further evidence of destabilising activity in a number of forms by the Libyan Government through its various arms and agencies using, to some extent one can presume, the Canberra LPB as the channel of communication in various places around the Pacific. There was the consideration of the coup in Fiji, not because of any evidence to link anything that happened in Fiji with Libya but because it was a further demonstration of the fact that the troubled waters in the Pacific in which the Libyans are all too obviously anxious to fish were even more troubled than anyone had previously contemplated. There was the further consideration of an imminent meeting not only of the South Pacific Forum but also, preceding that meeting, the key group-the spearhead group, so called-of the Melanesian Prime Ministers from the Solomons, Vanuatu and Papua New Guinea. It was desired to make the point that Australia was willing to match its expressions of concern about Libyan activity in the Pacific with action of the highest form that we could reasonably adopt in our domestic environment. There was the further consideration of the visit to the region during this period of the senior Department of Foreign Affairs officer, Mr Sadleir, which was substantially completed by the time the Government made the decision. He reported, among other things, that the double standard question was continuing to arise, whether justified or not, around the Pacific and that it was difficult for Australia to make the points about dangers of Libyan activity in the Pacific as forcefully as it might want to while still retaining a formal diplomatic office in Canberra, albeit one that was established at a much earlier date and one that, when looked at purely in terms of its own activities, was not doing anything particularly outrageous, as Mr Hayden said. All those considerations, which between them, I think, amount to a fairly formidable list, not only were squarely relevant to the justice of the case for treating the LPB as we did but also go quite explicitly to the question of timing, to which Senator Jessop's question expressly referred. Let us hear no more of that particular canard. Senator BLACK —Has the attention of the Minister representing the Treasurer been drawn to a report in today's Melbourne Herald relating to a leak of the taxation policy document of the Liberal Party of Australia? Does the Government propose to implement these measures? What would be the implications for government policy if they were implemented? Senator WALSH —I have seen the report in today's Melbourne Herald. From that report it is not possible to be precise about all the details. However, I assume that the draft document was deliberately leaked-a toe in the water exercise by the Opposition to see whether it could con the public into believing that what it was proposing was credible. It is proposing essentially that just about everyone will have a big increase in his real after tax income because he will get a big tax cut. It is not telling us, of course, that there will be a huge and commensurate increase in the deficit because of it. It is clear that the draft document is not only failing to address the real economic problems of this country but also actually inciting the country to go in the wrong direction because it is fostering and fanning the belief that real average living standards can be improved. There is only one way that that can happen in the short term, and that is if foreign debt were to be accumulated at an accelerating rate, with dire consequences for the future, of course. Indeed, that is the sort of irresponsible policy that I would expect the present Opposition to put forward. Quite clearly, this is the toe in the water exercise to see whether the electorate is gullible enough to be conned into swallowing the line and the bait the Liberal Party is throwing out to it. Senator Messner —Tell us what this is all about, please. Senator WALSH —What it is all about, when one tacks it on to all of the other promises of the Liberal Party, is blowing out the deficit to about $16 billion. The document, in what it puts up, admits that there would be a net cost to revenue of $5.7 billion plus, of course, the losses to revenue from repealing the substantiation legislation, repealing the capital gains tax, repealing the quarantining of negative gearing provisions, repealing the fringe benefits tax, and all of those other irresponsible promises which this ragtag and bobtail of an Opposition has trickled out over the last couple of years. The net effect of all of that would be to blow out the deficit to about $16 billion a year, which is even more than John Howard left behind him when he was ignominiously kicked out of office. Senator PETER BAUME —I preface my question to the Minister representing the Minister for Health with a declaration of interest; namely, that I was, until I became a senator, a consultant physician in private practice. I draw to the attention of the Minister the item in the May mini-Budget which will limit rebates at consultant level to patients seeing consultant physicians to one initial and two subsequent consultations. I ask the Minister: What social goal is the Government pursuing with this measure? Is it the intention of the Government that patients with, say, chronic ulcerative colitis, chronic kidney failure, resistant heart failure or progressive crippling muscle diseases should be able to get consultant level rebates for only three visits? Is it the policy of this Government to shift the economic burden for sickness, especially sickness of this chronic kind, to the sufferers; that is, the sick and vulnerable in society? Senator TATE —I have seen claims in various organs of the media along the lines contained in Senator Baume's question. The Government does not believe that the changes in relation to consultant physician arrangements in the May economic statement will have a devastating impact on the chronically ill, as is suggested. Senator Baume would know that the original role of a consultant physician was to provide an opinion, with ongoing management of the patient being undertaken by the referring practitioner. That was the relationship between the general practitioner and the consultant physician. Yet one finds that 17 per cent of referrals between 1985 and the end of December 1986 resulted in consultant physicians providing four or more services in the one episode, and that is what has led to the changes that have been announced in the May economic statement. Fees at the consultant rate will be limited from 1 August to an initial consultation and two follow up visits for any particular episode. All services will continue to attract benefits but, after the first three consultations, at an appropriately lower rate. There is no justification for consultant physicians to abandon patients requiring ongoing treatment and to force them to attend public hospital clinics. It is stated in my brief that on Thursday, 21 May officers of the Department of Health had detailed discussions with representatives of the Royal Australasian College of Physicians to clarify misunderstandings. I understand that discussions with the College on the implementation of the changes will continue. Senator ROBERTSON —Will the Minister for Education advise the Senate whether the recent decision by the Queensland Minister for Education to disband the Queensland New Schools Committee and to push ahead with wide-ranging amendments to the Queensland Education Act will affect Commonwealth-State co-operation in education in Queensland? Senator RYAN —The answer to that question is yes. I have been disturbed by two recent decisions taken by the Queensland Minister: One-Senator Robertson referred to it in his question-was to disband the Queensland New Schools Committee and the other was to push ahead with wide-ranging amendments to the Queensland Education Act. Both of these decisions have been taken without any consultation with the Commonwealth or with the schools and groups which will be adversely affected. Both reflect a unilateral, disruptive, grandstanding, wrecking way of doing business which is inimical to the spirit of Commonwealth-State co-operation. By disbanding the Queensland New Schools Committee the Queensland Minister has removed an essential source of expert advice on the establishment of new non-government schools in Queensland. Queensland Catholic and independent schools will suffer directly from this decision. The Commonwealth is trying to organise alternative machinery for dealing with the new schools applications, but the Queensland Minister has made the job needlessly cumbersome and time-consuming. Only the Catholic and independent schools will be affected. I would have hoped that the Queensland Minister would have taken more account of their needs and rights. The changes to the Queensland Education Act are another blatant State government grab for power. They ride roughshod over the interests and concerns of the Catholic school sector, of Queensland independent schools and of the Commonwealth. We have always insisted that national objectives and priorities be pursued in Queensland, as in other States, and that the Commonwealth be able to account fully for money spent in Queensland. We will continue to do so, despite the niggardly attempts by the State Government to claim credit for what we have done and to disrupt the established machinery for consultation between the Commonwealth and the States. Senator TEAGUE —My question is directed to the Minister for Education. I refer to some of the education decisions announced in the May Budget statement. Given the Government's higher education cuts of $12m this year and $24m next year and the inflexible nature of the Government's higher education policy, does the Minister agree that the meagre growth of some 3,000 places in higher education this year will be reduced to no growth at all for the 1988-90 triennium? Similarly, I refer to the $30m cuts for the technical and further education sector next year, $45m cuts the year after and the consequent reductions to come in the numbers of TAFE students. Is it not true that the Minister has no remedy for the report by the Australian Vice-Chancellors Committee and the Australian Committee of Directors and Principals on unmet student demand released yesterday, which shows that between 13,000 and 20,000 Australians, net, have been locked out of higher education already this year? To take my own State as a typical example, how can the Minister justify the fact that more than one in four South Australians have been turned away from higher education this year? Finally, I ask: What are the Minister's precise estimates for the reductions in students numbers next year in universities, colleges of advanced education and TAFE institutions? Senator RYAN —Senator Teague has asked a gaggle of questions but I will try to give information in response as concisely as I can to the Senate. The May economic statement's reduction of one per cent of funding for higher education institutions, amounting to $12m in the financial year, will not be achieved by reducing places, to answer the last part of Senator Teague's question. It will be achieved by increased efficiency in areas such as administration within the institutions. Nor is the decision inflexible in the sense that not each institution will have to achieve a precise one per cent reduction, but, rather, the $12m saving will be gained from the sector. The Commonwealth Tertiary Education Commission is currently considering ways in which the cut can be spread fairly throughout the sector. Some institutions are more able to achieve efficiencies than others. Some have already achieved greatly improved efficiencies and ought not to be disadvantaged for having done so. So there is flexibility in the way in which that $12m financial year saving will be achieved. With regard to the TAFE cut, I point out that there was a $30m reduction from the fees reimbursement element of the Commonwealth's TAFE funding. As was pointed out in the review of TAFE funding, that $100m fee reimbursement grant did not necessarily flow into the State systems. It went to State governments for use as they saw fit. However, most of the $32m of new money which Mr Willis has for spending in the training area will flow directly into TAFE institutions. So TAFE institutions should have expanded Commonwealth resources coming into them. The question of unmet demand for higher education has been raised by Senator Teague. The Vice-Chancellors Committee has estimated that between 13,000 and 20,000 applications were not able to be met, although in discussions with CTEC I have formed the view that the real figure is closer to 13,000 than it is to 20,000; but 20,000 would be the outside figure. Senator Teague must bear in mind that one of the reasons why the true figure would be closer to the lower rather than the upper end of the range is that both New South Wales and Queensland use very broad definitions of eligibility in estimating the numbers of eligible applicants who have missed out on a place. For example, this year Queensland has deemed eligible for admission to higher education courses all higher school certificate holders whereas in 1986 it deemed only the top 60 per cent of applicants eligible. So quite clearly, amongst those unsuccessful applicants were students at the very bottom of the range of HSC marks who may not have had the capacity to complete a course successfully. Of course, that is not the case for all those students but it needs to be borne in mind. Unmet demand is calculated on the basis of an individual student's identification of the course for which he or she wishes to apply. Consequently, there are students who did not get the place of their choice and who would have been successful had they nominated other courses. There is some spare capacity in our institutions. CTEC advises that some 10 institutions appear to have student loads below their planning ranges in teacher education, nursing, some applied sciences and post-experience teacher education. But all that said, certainly there is the problem of unmet demand. Volume 1 of CTEC's report has now been made available to the Government and it addresses ways that unmet demand can be overcome. We will be considering this advice in the Budget context, and I believe there will be a further growth in the number of higher education places in the next triennium. In conclusion, I remind Senator Teague and other honourable senators that since we have been in government we have created some extra 40,000 places in the same time in which the Fraser Government created only 8,000 places. I also remind honourable senators that as far as we know Liberal Party policy still states that any new places in higher education are to be created through the payment of full cost fees by students. Senator TEAGUE —I ask a supplementary question. I refer the Minister to that part of my question that referred to 13,000 to 20,000 being the net unmet demand. The actual gross figure is 44,739 for individual students being turned away. I refer to the reference I made to my State of South Australia where for the first time more than one in four students have been turned away already this year from enrolment, and that is without the cuts. The Minister has not given any indication of a remedy for that situation. I put that to the Minister. Senator RYAN —I simply repeat that the figure of 13,000 to 20,000 is just an estimate. It includes students who had only one choice, and who could have achieved other places. There are places still available in some South Australian institutions. The PRESIDENT —Order! I point out to honourable senators that some of the questions being asked from both sides are approaching the length where they ought to be put on notice. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs) —I seek leave to make the Government's response to the inquiry into the hospitality industry report by the Joint Committee on the Australian Capital Territory, incorporate the statement in Hansard and move a motion relating to the statement. Leave granted. The statement read as follows- For the information of honourable senators, I report on the action taken by the Government to implement the recommendations arising from the Joint Committee on the Australian Capital Territory inquiry into the Australian Capital Territory hospitality industry. The Committee was asked to inquire into the ACT hospitality industry because of its importance to the development of the local economy, and to identify problems affecting that development. The ACT economy is heavily reliant upon the public sector. The private sector is almost entirely dependent upon government expenditure and the demands for goods and services from the local community. It is therefore vulnerable to changes in the local level of economic activity. Development of the tourism and hospitality industry will provide an important diversification of the local economic base. This is particularly important as the local economy feels the effect of a slowdown in construction activities in 1988-89 and beyond. The Committee's terms of reference were to require into and report on the state of the hospitality industry, its capacity to meet demand, prospects for its future, and the desirability and extent of government regulation of and involvement in the industry. Particular emphasis was placed on employment awards and practices, training arrangements, the health of the industry, and measures that would enhance the growth of the industry in Canberra. The inquiry received strong industry support. The Committee received 13 submissions from hospitality industry organisations, government departments, unions and other agencies. Forty-one witnesses appeared at three public hearings. In preparing the Government's response, wide consultation was undertaken between interested departments and agencies and the unions. The Government has already taken action on a number of major recommendations, and these are described in detail in the attached report. The establishment of the new Canberra Development Board recommended by the Committee was announced in April 1987. The Board will provide a strong forum to address not only hospitality industry issues but also broader economic development issues in the ACT. It subsumes the functions of the Canberra Tourist Bureau and the former Canberra Development Board. The Board will be provided with support services from the Department of Territories and is in a form which will enable it to act quickly and more flexibly in response to economic and industry circumstances. A national institutions program for the promotion of Canberra during 1988 will be developed before the end of 1987 under the guidance of a high-level industry-government committee. A strategic development plan for the ACT is under preparation by the Canberra Development Board. The National Capital Development Commission has commenced preparation of a tourism plan as input into this broader strategy plan. The Government has also taken action on recommendations relating to employment and vocational training programs. I have asked my colleagues the Ministers for Education and employment and Industrial Relations to accord a very high priority to those recommendations involving their portfolios. A number of programs addressing the needs of particular groups in the ACT, such as young people and the long term unemployed, have been established by the Minister for Employment and Industrial Relations. Work placements in the hospitality industry will be the highest priority for the disbursement of funds under the adult training program in the ACT during 1987. A model for group apprenticeship courses has been developed by the ACT Tourism Training Committee which will be implemented with industry support. Similarly, a program for pre-employment courses has been developed, and funding of industry-initiated courses is available from the Department of Employment and Industrial Relations. The possibility of developing a short course for restaurateurs is being addressed by the Minister for Education through the Office of ACT Further Education. The Industry Training Committee is adapting a New South Wales course model and my Department is assisting through the ACT Small Business Bureau. This Government supports the development of incentives to encourage employers to employ and train juniors, but in respect of recommendation 20 (in relation to the waiving of payroll tax), believes that avenues other than payroll tax exemption for juniors should also be explored. The Government is reluctant to support a recommendation which would confer upon the ACT a taxation advantage not enjoyed elsewhere. Other industry reforms suggested by the Committee are commended. This Government regards the diversification of the ACT employment base as an important objective for the economic future of the Territory. The hospitality industry presents significant and positive development options for the ACT. The timely report of the Joint Committee highlights issues of major concern within the industry, and its recommendations represent a major step towards the recognition of the industry's employment potential. This Government is committed to the enhancement of career prospects for young people and the long term unemployed, and the Committee's recommendations relating to vocational training for these groups are particularly encouraging. I am heartened by the action already in hand to implement the recommendations. In particular, the establishment of the Canberra Development Board will ensure that the needs of the industry are addressed in a systematic and comprehensive manner. I am confident that a co-ordinated approach to hospitality issues will facilitate a significant contribution to the ACT economy. I commend this paper to honourable senators and the attached report on the implementation status of the Joint Committee's recommendations. ATTACHMENT INQUIRY INTO THE HOSPITALITY INDUSTRY IMPLEMENTATION STATUS OF JPC RECOMMENDATIONS Following is a detailed accounting of the implementation status of each of the Committee's twenty-two applications: Recommendation 1 The Committee recommends that the Federal Government recognise the importance of Canberra as the National Capital and that with the opening of the new Parliament House as part of the Bicentennial celebrations take responsibility for developing early marketing strategies to promote Canberra's role in 1988. (a) A National Institutions Program should be developed before the end of 1987. I have written to the Ministers responsible for the relevant National Institutions to secure their support for the concept and for a National Institutions promotional program for the next three years. This will be an ongoing program which needs to be set in place during 1987/88 in order to have effect beyond the Bicentennial year. (b) Officers of the Department of Prime Minister and Cabinet are planning the opening ceremony for the New Parliament House. Steps are being taken to maximise the tourist opportunities provided by this event and to link them with the overall ACT tourism strategy. (c) The Bicentennial travelling exhibition will provide a Canberra focus for regional tourism. (d) Future uses for the provisional Parliament House are the subject of deliberations by an Inter-Departmental Committee. Tourism options are among those being canvassed. (e) The National Capital Development Commission is preparing a new promotional exhibition at the Regatta Point Planning Exhibition focusing on the Bicentennial theme and the future of Canberra. The exhibition will include new audio-visual and display material. (f) Another proposal currently being considered is the staging of a high-quality photographic exhibition in 1988 which will tell the story of the evolution, present and future of the National Capital. There is potential scope for arranging that the exhibition be held in major Australian cities as part of Canberra's contribution to the Bicentennial celebrations. Recommendation 2 The Committee recommends that an ACT Development Board incorporating the present Canberra Tourist Bureau and the Canberra Development Board be established to promote, develop and provide economic assistance to tourism and hospitality in the ACT. This body should be established independently of the Department of Territories and have sufficient authority to react to changing needs and provide immediate assistance when required and have direct access to the Minister. (a) A new Canberra Development Board has been ministerially appointed. It represents a range of economic, community and educational interests, and comprises a Chairman (Mr Fulton Muir) and 10 other members. I have determined (i) a charter for the new Board and its committees; (ii) the composition of membership of the new Board and committees; and (iii) the need to better co-ordinate tourism, commercial and industrial development activities in Canberra. Recommendation 3 The Committee recommends that the NCDC, in consultation with representatives of the tourist and hospitality industry, should prepare a tourist development plan for the ACT aimed at achieving positive development of the plan from 1988 onwards. (a) The Government supports this recommendation but the preparation of a Tourist Development Plan by the National Capital Development Commission needs to be considered as one component of a larger Strategic Development Plan for Canberra. Planning for tourism growth must be addressed within the context of an overall strategic development policy which combines all sectors of development activity and city management. This strategic overview will be co-ordinated by the Canberra Development Board with input from the National Capital Development Commission and the Department of Territories. (b) The National Capital Development Commission has engaged a consultant to analyse current and future trends in tourism, identify opportunities for the ACT and the actions required to realise these opportunities. The consultant's study due in June will provide the basis for industry discussion and the preparation of a Tourist Development Plan Report in August. (c) This Report to be prepared by the National Capital Development Commission will form the basis for discussion between representatives of the tourist and hospitality industries in order that some positive results be achieved before the end of the year. The Report will provide input into the broader Strategic Development Plan to be prepared by the Canberra Development Board. Recommendation 4 The Committee recommends the development of more low-cost visitor accommodation in the ACT by the immediate release of land for low-cost accommodation and the promotion of low-cost accommodation options by the ACT Development Board. The Committee further recommends that the National Capital Development Commission give greater encouragement to developers to provide more camping sites in the ACT. (a) Substantial progress has already been made in the provision of low-cost visitor accommodation in the ACT. Through the Strategic Plan outlined above the full range of accommodation plans for the ACT will be further addressed, particularly as they relate to the tourism infrastructure in Civic. (b) Beyond Central Canberra, a number of initiatives are being taken by the Department of Territories and the National Capital Development Commission during the next twelve months. Sites have been identified by NCDC at Gold Creek and North Watson. The Gold Creek site, which forms part of the Commission's planning proposals for the development of Gungahlin, will provide opportunities for motel and camping site developments. The Commission will be seeking public comment on the Gold Creek development as part of public consultation on the Gungahlin draft Policy and Development Plan to be released in a few months. (c) Opportunities for low-cost visitor accommodation have also been identified in the North Watson area incorporating several motel/caravan/camping sites. Sites are expected to be made available by mid-1987. (d) NCDC has also identified a number of sites for camping grounds within the rural National Capital Open Space System. The sites identified are at Woods Reserve (on the Corin Road), Riverview (on the Naas Road south of Cuppacumbalong), the Molonglo Gorge, Sherwood Forest (north-west of the Cotter) and at the Stromlo Pine Forest. (e) In identifying these sites the Commission recognises the need for a range of low cost accommodation to meet different demands including lightweight tenting, heavyweight camping, group camping, campervans, caravans and cabins. (f) NCDC is currently carrying out preliminary landscaping at Woods Reserve and Riverview camping sites. It is proposed that the other sites be released in stages with Woods Reserve and Sherwood Forest in about three years and Riverview in about five to eight years. Consideration is being given to the need for staging of a site at Stromlo Forest. Recommendation 5 The Committee recommends that a short course be made available to provide assistance to prospective restaurateurs. The Committee regards the Industry Training Committee (ITC) as the most likely authority to conduct such a course but acknowledges that once the nature and resources of the Hospitality Industry Management Committee become clear, that body may emerge as the most appropriate provider of such training. (a) Training for restaurateurs is considered a high priority task. I have written to my colleague the Minister for Education in order to secure an appropriate course through the Canberra College of TAFE. (b) In addition the ITC has access to an appropriate course for restaurateurs which has been developed in New South Wales in conjunction with the liquor licensing authority, and can be readily adapted for ACT purposes. (c) Further, the ACT Small Business Bureau is investigating the possibility of developing a training course for restaurateurs during 1987. Recommendation 6 The Committee recommends that public health ordinances in the Australian Capital Territory be amended to bring penalties for breaches of the ordinance into line with those in the comparable New South Wales legislation. (a) This recommendation is supported. Although the penalties in New South Wales are not necessarily appropriate for the Australian Capital Territory, legislation is being prepared which will significantly increase penalties in relation to the handling of food, so that parity with the States is maintained. (b) This has a high priority within the Australian Capital Territory Health Authority, and should be implemented in the first quarter of 1988. Recommendation 7 Further, it recommends that the Gaming and Liquor Authority be provided with the necessary resources to conduct adequate inspections of licensed premises. (a) The thrust underlying this recommendation is supported. The principal impediment to the conducting of adequate inspections has been identified and will shortly be resolved. The Liquor Ordinance 1975 is being amended to streamline the prosecution procedures in relation to underage drinking offences (present procedures are particularly time-consuming). This will enable Australian Capital Territory Gaming and Liquor Authority staff to divert more time and resources to the routine inspection of licensed premises. Recommendation 8 The Committee recommends that extensions to the School of Catering Studies at Canberra College of TAFE be built as a matter of urgency. To this end it will be necessary for TAFE to accord the highest priority to the project within its building program and also for the NCDC to allocate this the highest priority. (a) The NCDC on behalf of the Office of the Australian Capital Territory Further Education is undertaking design work on the provision of accommodation for the School of Catering Studies and the Department of Meat and Allied Trades at the Canberra College of TAFE. The building is proposed to be located to the east of the existing College buildings. Design studies are currently being carried out and subject to funding in the budget context it is envisaged that tenders will be called in early 1988. (b) The total project incorporates two new kitchens, training bars and service areas, guest lounge, restaurant and liquor service areas, office and reception area, lecture facilities and student and support staff areas. Extensions proposed for the Butchery include new meat cutting areas, coolrooms, meat processing areas, classrooms, staff amenities and offices. Recommendation 9 The Committee supports any College initiative to extend the utilisation of available facilities and recommends that staff levels be increased and specifically allocated to the Food School to allow full utilisation of these facilities outside hours of present operation to include evening classes. (a) I have written to the Minister for Education to ensure that the provision of appropriate resources be accorded a high priority. (b) In addition, it may be possible to increase the capacity of existing facilities at Canberra College of TAFE in the short term through variation of the length and nature of the traditional period in which daily tuition is provided, or through variation to the academic year. (c) With the introduction of the new Associate Diploma in Business (Hospitality) the numbers of Dining Room Service, Liquor Service and Practice of Catering subjects have doubled between 1986 and 1987. (d) A new group of trainees (Waiting) commenced in February 1987, increasing numbers to twenty-five, and the implementation of traineeships for Front Office Reception (Hospitality) is expected to commence in the second semester 1987. Consonant staffing resources have been provided for these new training programs. Recommendation 10 The Committee recommends that the Canberra College of TAFE and the Industry Training Committee investigate the possibility of seconding institutional kitchens on a part-time, short-term basis to assist in staff training and that a comprehensive search for kitchen facilities suitable and available for short-term training be made. (a) The Industry Training Committee has and will continue to seek access to institutional and other industry kitchens/facilities for training purposes. Private sector facilities are used by the Industry Training Committee to conduct short training courses (on a contract basis) under the Department of Employment and Industrial Relations Adult Training Program and other industry-initiated training. However, commercial kitchens are generally unsuitable for training. For example, the commercial kitchen at Canberry Fair is available for five months of the year when the establishment is closed for the season, but the facilities are small and best suited to a teacher/student ratio of one to five. Recommendation 11 The Committee recommends that the Department of Territories and the ACT Schools Authority within existing resources promote awareness of the hospitality industry through the provision of information in secondary schools in the ACT, reporting back to the Committee about the means by which this will be achieved, and the inclusion in the Australian Traineeship Scheme of both occupation-specific courses to address immediate skill needs and courses offering broader-based training. (a) Action to address this need was initiated late in 1986. The Industry Training Committee organised an information session on the hospitality industry for all ACT and Queanbeyan Careers Co-ordinators in November 1986. This session was well attended by Schools Authority, Tourist Bureau and Departmental personnel. (b) Three classes in Dining Room Service are to be offered in 1987 to Hawker College students as an introduction to the hospitality industry. The ACT Schools Authority is to provide staff hours with other costs for technical staff, linen and foodstuffs costing $3,000 per annum. In addition the Canberra Tourist Bureau is sponsoring a Young Achievers Company through tourism education foci at Dickson and Copland Colleges. (c) The Aboriginal Trainee Tourist Officer Program has been piloted through the Canberra Tourist Bureau. The Program, which provides comprehensive training in all aspects of the tourist industry for young Aboriginal and Islander participants commenced on 3 November 1986. (d) The ACT has also contributed $20,000 towards a national tourism education campaign through the Tourist Ministers' Council. (e) The Department of Employment and Industrial Relations provides a number of resources for use by ACT schools. As part of national policy the Commonwealth Employment Service Schools Program utilises CES Youth Officers, the Careers Reference Centre, and industry-specific information resources including two videos covering Tourism and Careers In Food, and additional written and audio-visual information on fifteen to twenty hospitality careers. (f) The objectives of the Australian Traineeship System are to provide relevant and accredited training to young people which will extend their employment prospects within industry. A prerequisite to receive Commonwealth assistance is that a traineeship offer both occupationally-specific and broad-based industry training. (g) Two Industry Working Groups cover the tourism/hospitality industry in the ACT. Both are tripartite sub-committees of the Industry Training Committee. The capacity of industry to develop and implement new traineeships is promoted and reviewed in an ongoing manner. Current relevant traineeships are Hospitality (Waiting) and Office Procedures (Front Office/Reception). Both comply with ATS objectives. The first intake into the Hospitality (Waiting) Traineeship occurred in 1986 and currently nineteen trainees are in place. Further intakes are planned for 1987 and thereafter. The first intake into Front Office/Reception took place in February 1987 with six trainees. (h) Further developments are expected in 1987 dependent upon industries' capacity to absorb trainees and deliver quality training. The Australian Traineeship System will remain the highest priority of the Department of Employment and Industrial Relations during 1987. Recommendation 12 The Committee recommends the provision of one-off funding by the Department of Employment and Industrial Relations for Industry Training Committee courses offered under the Adult Training Program in the ACT over the next 18 months. (a) This recommendation was implemented in 1986/87. The Department of Employment and Industrial Relations negotiated to contract the Industry Training Committee to develop and deliver a series of short training courses utilising Adult Training Program funding during 1986/87. Further negotiation to cover 1987/88 is being undertaken. (b) During 1986/87 the following courses were negotiated and funded: Housepersons*, August/September 1986. Kitchenhand, October 1986. Houseperson, November 1986 Kitchenhand, January 1987 Houseperson, February 1987 Kitchenhand, April 1987 Laundryworker/Cleaner, May 1987 Kitchenhand, June 1987 (*separate agreement) (c) As a consequence of the Inquiry a package agreement for $76,055 was negotiated with the Industry Training Committee to conduct seven courses for a minimum of 75 trainees. Total cost to the Department of Employment and Industrial Relations excluding advertising and CES resources was $101,468 (including trainee allowances). (d) Current indications are that a similar agreement with the ITC for 1987/88 will include eight courses for 85 trainees at an estimated cost of $79,000. Resources are expected to be available from existing/projected budget allocations. (e) CES services are used to identify participants from the Adult Training Program target group and to place successful participants within industry. (f) Over 90% of those completing training have been placed. (g) The ACT Office of the Department of Employment and Industrial Relations rates this as its highest priority for utilising Adult Training Program Funds. ACT personnel have contacted new enterprises to offer the full range of CES services. These include input into advertising, preselection/interview scheduling, training packages in the Australian Traineeship System and the Adult Training Program, vacancy distribution and the provision of appropriate resources through the Hospitality Service. Recommendation 13 The Committee recommends the introduction of a group apprenticeship in cooking. (a) The Industry Training Committee has established a steering committee comprising industry representatives, Canberra TAFE, the Liquor Union and the Department of Employment and Industrial Relations, to investigate the potential for a group apprenticeship scheme for cooks. (b) Further development and progress towards a feasible group apprentice scheme must originate from the Industry. Once a proposal is developed, the funds which have been provided by the Government for this purpose can be used. Assistance is based on the number of apprentices to be taken on, and includes gradients for growth of a scheme. Assistance arranges from $38,000 for up to 25 apprentices, to $160,000 for 200 apprentices, effective from 1 April 1987. Recommendation 14 The Committee recommends the introduction of pre-employment courses by Canberra College of TAFE in 1987 as part of a revised course structure. (a) An assistant cooks course could be implemented by the second semester 1987 subject to the successful adaptation of existing interstate curricula to ACT requirements. A twelve-month development phase would be necessary in the development of a new curriculum. (b) Such a course could probably accommodate 24 students in two groups per year. (c) The Government would encourage the development of such an initiative by industry in response to its own needs. Recommendation 15 It further recommends that pre-employment courses not be restricted to the trade of cooking but offered for all hospitality industry trades. (a) Formal pre-employment courses within other trades will be supported if industry perceives the need. The Government would encourage the development of courses with recognised accreditation. Recommendation 16 The Committee recommends that existing arrangements for the use of revenue generated by commercial operations at Canberra College of TAFE be reviewed to determine whether greater flexibility could be achieved. (a) I have referred this matter to my colleague the Minister for Education. (b) The Office of ACT Further Education will undertake the recommended review in mid-1987 in consultation with the Department of Finance. (c) One possibility which the Review should consider is the establishment of a Canberra TAFE College Trust Account. This would provide the flexibility to channel any profits from leisure courses into vocational training, and thereby reduce the burden on the ACT territorial account. Recommendation 17 The Committee recommends that the Industry Training Committee continue to monitor the industry's longer term employment and training needs. (a) The Government rates the continuation of this monitoring service as extremely important. As part of its charter the Industry Training Committee provides relevant labour market information to the Government through the Department of Employment and Industrial Relations. Information is used to develop and implement Department of Employment and Industrial Relations programs and services as appropriate. (b) In addition, the ACT Development Board will monitor vocational training needs in the ACT and will work closely with the Industrial Training Committee on this matter. Recommendation 18 The Committee recommends variation of awards covering apprentice cooks in the ACT to provide an apprentice/tradesperson ratio of 1:3 or part thereof (ie 1:1 or 1:2) and to give the ACT Apprenticeship Board the discretion to vary that ratio in cases where it sees fit, so that awards reflect current industry needs and practices. (a) Although both the Government and the Federated Liquor and Allied Industries Employees' Union support the variation of awards to modify apprentice/tradesperson ratios to more accurately reflect the needs of industry early resolution of this matter is unlikely, due to the alignment of this issue with that of the introduction of a 38-hour week, which has yet to be resolved before the Conciliation and Arbitration Commission. (b) I have asked my colleague the Minister for Employment and Industrial Relations to address this recommendation as a matter of priority. Recommendation 19 The Committee recommends that junior rates of pay be applied only to permanent employees and that the nature of job training be specified in any arrangement for the introduction of a junior rate. (a) The Government shares the Committee's concern that juniors not be exploited as a source of cheap labour for employers. (b) I have asked the Minister for Employment and Industrial Relations to give his early consideration to this issue. Recommendation 20 The Committee also recommends the waiving of payroll tax on juniors, as a further incentive to employers to employ and train juniors. (a) Although the Government supports the development of incentives to employers to train and employ junior staff, the waiving of payroll tax on juniors is not supported. (b) The removal of payroll tax on juniors would presently provide an unfair bonus to the ACT employment sector and encourage other employee groups to seek similar exemptions. This would erode the ACT taxation base. Taxation exemption represents a `hidden subsidy', which is contrary to the Government's view that all forms of assistance to particular groups should be readily identifiable by the wider community. Recommendation 21 The Committee recommends the introduction of provisions for permanent part-time employment into ACT hospitality awards. It is anxious to ensure that such provisions facilitate the employment of permanent part-time employees and advocates that the relevant provisions of Public Service awards be examined as a possible model. (a) The Government supports this reform in the interests of a flexible industry, and I have asked the Minister for Employment and Industrial Relations to give his early consideration to this issue. The proposed reforms are consistent with those in the Australian Public Service which have the support of unions. Recommendation 22 The Committee recommends that the Department of Territories give urgent attention to the need to restructure the workers' compensation system in the ACT. (a) The Department of Territories is currently devoting resources to bring ACT support mechanisms into line with incentives available in other States and Territories by late 1987. (b) The Department has engaged a consultant to advise on policy options for changes to the ACT Workers Compensation Scheme. A report from the consultant is due by mid-1987. (c) In regard to all first-year apprentices and Australian Traineeship Scheme participants, the Department of Employment and Industrial Relations and the Department of Territories have jointly examined the creation of employer rebates (or exemptions) from workers compensation and payroll tax. Changes impacting on these groups will be implemented in the near future. Senator GIETZELT —I move: That the Senate take note of the statement. Senator REID(Australian Capital Territory)(3.09) —I am pleased that the Government has responded so promptly to the report of the Joint Committee on the Australian Capital Territory following its inquiry into the hospitality industry. The report was tabled in November 1986 and contained some 20 recommendations, many of which the Government has agreed to. Some of them, I note, it has already put into effect, and it is planning to act on others. But there are some comments that I wish to make on some of the matters raised in the report. The most significant action that the Government has taken is its undertaking to restructure, and its restructuring of, the Canberra Development Board which will incorporate the Canberra Tourist Bureau and the former Canberra Development Board. As yet, the Board has not had an opportunity to make much impact but I have no doubt that it will. I must say, though, that I was surprised to see a newspaper report recently that the Board will comprise some 65 employees and that it will have a budget of $3.5m. I look forward to hearing from the Government at some stage exactly what is to be included which will require so many employees and a budget of that size. I hope that the Board will not become bogged down as a bureaucratic organisation as one might expect from those figures. I was disappointed that there was no mention, within the restructuring of the Board, of any industry incentives which existed prior to the Labor Government's coming into office. The Government has cut out those incentives. I believe that we are suffering a disadvantage in relation to our neighbouring States that give incentives to industries to establish in their areas. I hope that that matter will be reviewed at some stage. The first recommendation that was made in the Committee report related to the promotion of Canberra as part of the bicentennial celebrations and, in particular, the new Parliament House. I note that the Government has said that a national institutions program will be developed. I hope that that will be developed well before the end of this year so that it can have some effect and be of value in 1988. The response of the Government refers to the opening ceremony of the new Parliament House and indicates that officers of the Department of Prime Minister and Cabinet are planning the opening ceremony. It is my view that the Speaker and the President ought to be involved in that committee. Perhaps they are, but it just has not been spelt out. I also hope that there will be consultation with people in this community. Although the new Parliament House undoubtedly is very much a national project, it is an important part of the Canberra community and I hope that there will be consultation as I know of a number of organisations that wish to make suggestions in relation to it. For example, the Canberra Symphony Orchestra has indicated that it would like to participate in the opening ceremony. I hope that the committee is a wider and more consultative body than is indicated in this report. I welcome the bicentennial travelling exhibition, which will be of benefit in promoting Canberra in other parts of Australia. The Government also referred in its response to the future uses of the provisional Parliament House. It has said that there are deliberations by an interdepartmental committee and that tourism is one of the options that is being canvassed. The report of the Joint Committee on the New Parliament House which was brought before the Parliament in May 1984 related to the future use of the provisional Parliament House. The Government responded to that report in November 1985. It took a great deal longer to respond to it than it ought to have, but at least in November 1985 we were told that an interdepartmental committee was to be established for the purpose of determining the future of this building. This building is also very important to Canberra and to tourism and the role that it will play in the future is something that we are anxious to know about. But the statement tabled today merely refers to the fact that an interdepartmental committee is looking at the future of this building. I must say that I am very disappointed indeed to find that the matter has not progressed further. Time is passing and I hope that the Government will do something about reporting on the matter, or letting us know what that Committee has recommended before too long. As I have said, a report as to what should happen was presented in May 1984 and it is now May 1987. A strategic development plan is to be established for tourist development and I look forward to seeing that. The Minister for Education (Senator Ryan) has been asked by the Government to look at establishing a course for prospective restaurateurs within the technical and further education system and that is something that is appropriate from the recommendations that the Committee has made. There are many others. I welcome the fact that the public health ordinance is to be amended to increase penalties for breaches of that ordinance and I note that they should be in place in the first quarter of 1988. I also welcome the response to recommendation 7, that the gaming and liquor authority ordinance will be amended to enable more streamlined activity on the part of the inspectors of that body and to allow prosecutions to be streamlined where they are necessary. The Government has agreed to the extension of the School of Catering Studies at the Canberra College of Technical and Further Education and that, of course, is long overdue. It was to have been done and was something that was postponed by this Government when it was elected to office. That school should have been operating well before 1988 but at least it now is, we hope, to proceed next year. It will still be very necessary. There are a number of other matters that we raised in our report about the future of the food school and the need for it to be able to operate differently, and the May statement dealt with part of the restructuring of the technical and further education system so that the college can run its system more like the Ryde Cooking School and get money back for some of the things that it does. One of the aspects it has suffered from recently is staff ceilings, which prevented the food school from employing someone who would have been of great benefit to the school if it had been able to place another person on the staff. It is the sort of thing that flows from staff ceilings, which really is quite absurd. It is an area in which there are students who want to study and where there are jobs for students who go there, and that is a matter of particularly high priority. The group apprenticeship scheme has been supported by the Government and, knowing how well the master builders' group apprenticeship scheme operates, I hope the industry will respond to the Government's support of it and come up with a proposal that can be put into operation before too long. The most significant part of the report is that which arises from recommendation 18, where the Committee recommended that there be a change in the ratio of the employment of apprentices to tradespersons in the hospitality industry from 1:3 to a lower number. I shall quote what the Government says in response: Although both the Government and the Federated Liquor and Allied Industries Employees Union support the variation of awards to modify apprentice/tradesperson ratios to more accurately reflect the needs of the industry early resolution of this matter is unlikely, due to the alignment- due to the alignment, Mr Acting Deputy President- of this issue with that of the introduction of a 38-hour week, which has yet to be resolved before the Conciliation and Arbitration Commission. This industry would have places for young people who are needed, who would want to get training and who would want to get on with their careers, but they are being hamstrung because of this absurd relationship between the number of apprentices and tradespersons with which we are saddled at present. The Government indicates that it recognises the absurdity of it but it is not prepared to do anything to try to break the deadlock that has arisen because the union is insisting that it will not give in in any way on the issue, even though it recognises the need for the change because the union is insisting on it being tied with the 38-hour week. It is absolute blackmail, Mr Acting Deputy President, and the Government is condoning it and showing that it is totally unwilling to deal with the union on this important matter that would really be giving opportunities for young people in Canberra to get careers in areas where they want them, in areas where there would be jobs for them. That is the most disappointing part of the Government's response to this report. Much of it, as I have said, is good and worth while. The Government also indicates that the workers compensation system is to be restructured and I hope that will happen quickly but it is particularly disappointing to find that on this issue the Government will not do anything other than acknowledge that it is right that it should be changed. The Government seems very reluctant. I have asked my colleague, the Minister for Employment and Industrial Relations (Mr Willis), to address this issue as a matter of priority. There is no will within the Government to solve this problem and respond to a recommendation in a way that indicates that it will do so or has the will to do so. The Government has also rejected the recommendation to waive payroll tax on juniors as a means of encouraging employers to take on more junior employees. It is expensive to have juniors on the payroll. This was one way of addressing the issue that we believe was appropriate. The reason for rejecting that recommendation was that its implementation would favour the Australian Capital Territory and be an unfair bonus to the Territory's employment sector. We always seem to be getting hit with taxes that everyone else pays. I can see no reason why the Commonwealth Government should not give a lead and set an example in this area. I am disappointed that it is not prepared to do something a little innovative in that regard. We pay payroll tax at the same rate as people in New South Wales. Slavishly we follow New South Wales in this area. Payroll tax in New South Wales is adjusted in January of every year. But this does not happen automatically in the Australian Capital Territory; it is usually about July before the same rates are brought into effect in the Australian Capital Territory. So we are totally disadvantaged for about six or seven months each year in the matter of paying payroll tax. I do not see why we could not be a bit different, setting an example and giving a lead in this area. But my disappointment on this is nowhere near what I feel at the Government rejecting taking a lead in changing the ratio of apprentices to trades people in the hospitality industry. This is an important report, and I look forward to seeing the reports of the various committees that the Government has set up as a consequence of it. Senator VIGOR(South Australia)(3.21) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MICHAEL BAUME(New South Wales)(3.22) —I move: That the Senate take note of the paper. I would like to draw the Senate's attention to the Auditor-General's report on the Australian Broadcasting Corporation's annual report. For the benefit of the Senate, I will read an extract from that report which is signed by Mr J. V. Monaghan, Auditor-General. He states: Audits tests of the assets register indicate that it is not a reliable source from which to generate accurate financial statement figures in respect of plant and equipment and motor vehicles. The records which form the bases for the valuation of television program inventories contain significant errors and discrepancies rendering them inadequate records on which to base financial statements. Accordingly, for fixed assets and inventories, it is my opinion that the financial statements are not based on proper accounts and records. Because of the unreliable nature of the records relating to plant and equipment and motor vehicles and television program inventories, I am unable to determine the extent to which the statements are in agreement with the accounts and records. He then says further: . . . the value of plant and equipment and motor vehicles reflected in the statements may be materially understated, as assets at only two locations, representing about 20 per cent of asset written down values, were the subject of detailed assessment to determine the values reported. The significance of these comments is evident when one looks at the sizes of the assets involved. They are very substantial indeed. I will return to this matter later. The Australian Broadcasting Corporation itself says that it recognises that the fixed asset register does contain discrepancies `which could be attributed to previous accounting procedures which lacked internal financial controls required of an accrual accounting system'. It says: Action is being taken by the Corporation to undertake a comprehensive stocktake of all plant and equipment and motor vehicles with a view to a complete update of the fixed asset register during 1987. Any variations arising from the stocktake will be disclosed at that time. That comment applies to the matter of fixed assets. On the matter of television produced programs and programs in progress, the Corporation says: The Corporation recognises that these costing records contained discrepancies in the methods and source of recording labour and materials incurred in producing programs. These discrepancies indicated that the Television costing system could not be relied upon to produce accurate valuations for Television produced programs and programs in progress. Action is being taken by the Corporation to eliminate the current deficiencies. That is all very well, but I should remind the Senate and also the Australian Broadcasting Corporation that the matter of inadequate financial controls and hopeless financial reporting was taken up in a Senate Estimates committee a couple of years ago, as I recall, and it appears that very little effective work has been done to correct this ludicrous situation. The Senate has a right not only to ask but also to demand what action will be taken at last and when it will be effectively completed. The report indicates there will be a stocktake during 1987. What on earth should be the obligations of bodies such as the Australian Broadcasting Corporation with large amounts of money involved-something of the order of $221m of fixed assets, resulting from a revaluation of $158 million last year. That is a large amount of money and yet the Auditor-General has stated that he cannot make a proper audit because the figures on which he makes his tests are grossly and hopelessly inadequate. However, that is nothing new; we have always known that the Corporation's accounts have been inadequate, but the Auditor's report is damning and it requires immediate and prompt effective action from the Corporation to make certain that it can, in future, not be subjected to the quite proper criticism that the Auditor-General has now brought to the attention of honourable senators. Senator COLSTON(Queensland)(3.27) —I refer to the Australian Broadcasting Corporation annual report for 1985-86. I hold that it is unacceptable for a report for the period ended 30 June 1986 to be tabled in Parliament in May-more than 10 months later than the closing date for the report. If the ABC is to take its accountability to Parliament seriously, it must ensure that Parliament is able to examine its report much earlier than this. The Corporation's request for an extension of time to report and the approval of that request by the Minister for Communications (Mr Duffy) were tabled in the Senate on 19 February this year. The ABC's reasons for the delay centred on problems concerned with its accounts. Nevertheless, it is of little use presenting a glossy report if it is first before Parliament when the end of the next reporting period is clearly in view. Thus, it is imperative that the Corporation puts its financial house in order so that it can report promptly. Possibly because the report was submitted so late, there are some rather odd features in it. One is an organisation chart dated 31 December 1986. This is in a report referring to the year ended 30 June 1986. Another odd feature is at page 87 of the report where reference is made to Mr Hill as Managing Director. Mr Whitehead was the Corporation's Managing Director during 1985-86. A third feature is that, while the Board of Directors' report is dated 30 June 1986, there is no indication of when the report was forwarded to the Minister for Communications. It is obvious from the fact that the ABC was granted an extension of three months to make its report that the report was forwarded on or about 31 March 1987. Annual reports should include a dated letter of submittal. This report does not. Those inconsistencies, although minor in themselves, suggest that the report may deserve closer study by the Senate Standing Committee on Education and the Arts. I wish at this time to make specific reference to one section of the Board's report to the Minister, a copy of which is reproduced at the beginning of the annual report. The Board commented on its accountability and referred to the Senate Standing Committee on Education and the Arts. It implied that the Committee should not have pursued a particular inquiry because it was interfering with the independence of the ABC. The inquiry was into the adequacy of the ABC's radio racing service in Queensland. It is a matter of regret that the Board chose to report in the way that it did. This chamber has since resolved that the Corporation acted wrongly in frustrating the efforts of a committee established by a House of the Federal Parliament. I expect that in its next annual report, the ABC will report factually on what occurred after it refused to co-operate with the Senate Committee. I need not remind the Senate that in a report to the Senate the Committee raised the question of whether the ABC was in contempt of the Committee and, therefore, the Senate. Neither do I need to remind the Senate that in relation to the Committee's report it passed a resolution, a copy of which I seek leave to incorporate in Hansard. Leave granted. The resolution read as follows- (a) agrees with the Committee's conclusion that the Australian Broadcasting Corporation's approach to the Committee's inquiry was incorrect and that the ABC and any summoned officers of the ABC should have answered the Committee's questions; (b) asserts that the ABC and any other witnesses before the Senate Committees have an obligation to co-operate and to answer questions within the terms of reference of Senate Standing Committees and Senate Estimates Committees alike; and (c) requests the Senate Standing Committee on Education and the Arts to consider, in the light of its own evidence and the answers subsequently given by the ABC to Senate Estimates Committees, whether further investigation is required. Senator COLSTON —I thank the Senate. Since then, there has been a further public hearing at which the ABC gave the co-operation which was so conspicuously lacking at a hearing in February 1986. It is my opinion that at that earlier hearing the ABC displayed contempt towards the Senate and it was thus refreshing to see a change of attitude earlier this year. The altered stance was undoubtedly in part due to the Senate Committee's report and the subsequent support given to the Committee by the Senate. Because the Senate referred the ABC/SBS Amalgamation Bill to the Standing Committee on Education and the Arts, it has not yet been possible for the Committee to present a final report on the ABC radio racing inquiry. It is the Committee's intention to report in the near future, however, and certainly in time for the ABC to consider that report before the Corporation completes its report for the 1986-87 financial year. Finally, I remark that the scant mention which the Corporation made on page 42 of its report about race descriptions on radio is almost as cavalier as the ABC's attitude in early 1986. Surely the Corporation could have given its reasons for ceasing so suddenly a long-established service with no thought of seeking community reaction before it did so. Senator BROWNHILL(New South Wales)(3.32) —The Senate is discussing the third annual report produced by the Australian Broadcasting Corporation since its establishment. As the Chairman himself said just recently, the Corporation has experienced a period of profound and sometimes controversial change. Certainly the recent history of the Corporation has been more stormy than that of its predecessor, the Australian Broadcasting Commission. I think it is still a little early to say how effective David Hill will be in his new role, although he made an impressive start at Estimates Committee hearings. I feel that he answered all the questions put to him in a very deft way. However, I am greatly concerned that there has been a big delay in obtaining answers to some of the questions asked of the Australian Broadcasting Corporation. I hope that the ABC and Mr Hill take the Estimates Committee seriously, as the Corporation is funded by public money and Australian taxpayers have a right to know whether or not the money is well spent. I remain concerned at the apparent wastage of money by the ABC in many areas. Every time I have sat on the Estimates Committee evidence of rather unusual business practices and rather wasteful ways of doing various things has been brought forward. Here again I hope that Mr Hill pulls the ABC into shape, in a manner similar to the way he did with the New South Wales State Rail Authority. I note the various statement of purpose objectives listed in the front of the report. However, it is no good having all those items and aspirations if, as Senator Colston said, it takes nearly 10 months after the end of a financial year to come down with some findings. The Corporation is a large recipient of public money-some $430m. Senator Michael Baume has referred to the Auditor-General's report, and I think that matters raised there should be taken on board by the ABC and acted on accordingly. Ever since I have been in this Parliament we have been worried about some of the accounting measures of the ABC. It costs some $200m to operate and has total expenses of nearly $400m. I am concerned at the increase in the appropriations made over the past 10 years, as indicated on a very nice looking graph on page F4 of the report. The graph looks good but the increase in appropriations is causing all Australian taxpayers some concern. I hope that the ABC's performance in the next 12 months matches its potential and I hope that it improves along the lines suggested by Senator Baume and Senator Colston. Senator VIGOR(South Australia)(3.35) —The third annual report of the Australian Broadcasting Corporation was late, according to information received, because of the changeover to accrual accounting procedures. Each year we have had various changes announced at the Estimates Committee which, it has been claimed, will solve all the problems of the ABC within the next 12 months. We have been waiting for this for at least three years, ever since the Corporation was formed. However, the advent of Mr Hill has meant that at Estimates Committee C, as Senator Brownhill said, we have had some tangible answers and the Committee has also had reasonable answers from the ABC to the questions on notice this year. It is important that as well as bucketing the ABC for the things it does wrong we should praise it for things it does well. Certainly it has been very inefficient in its accounting procedures, as has been shown by the Auditor-General's report on its handling of fixed assets. It has been very inefficient in handling staff, as has been shown by various inquiries into the ABC's activities, and it has been very lax in getting its report out and fulfilling its duties of reporting to the Parliament. However, I would like to look at some of the things that the ABC has done quite well. It has actually produced an excellent science program on radio and it has been suggested by the advisory council that the type of program that Robin Williams produces on radio should be produced for television. I support that very strongly. This would attract a large audience and it is unlikely to be taken up by the commercial stations. I believe that people would come to the ABC to watch such a program, as they have come to watch the nature programs that have been presented by the ABC. I also wish to congratulate the ABC for trying hard to achieve a reasonable amount of Australian-produced television drama. Mr Hill told us that the ABC would meet the annual target of 100 hours of Australian-produced TV drama by August 1988. I believe that such a program must have input from all over Australia and not just end up in a Sydney-based, centralised programming arrangement. Also, the ABC seems to be taking part in effective joint ventures this year-such as the program Great Expectations-the untold story-and selling such programs and getting rights from other countries such as France for them. This is the way to go for a national broadcaster. I also wish to raise the aspect of the influence of political pressure on the ABC. I believe that the ABC should, at no stage, be seen to bow to political pressure, particularly over interviews which may annoy important political figures. I refer particularly to the complaints made by the Prime Minister (Mr Hawke) about John Pilger. That program about which he complained might not have been a good piece of current affairs, but the type and method of complaint used by the Prime Minister is not acceptable. If we are in public positions we must cop whatever is given to us by the media and accept that type of thing gracefully. I finish by giving an accolade to Radio Australia for its crucial role in transmitting the facts in the Fijian situation. I deplore the fact that in the mini-Budget, although the Government has not announced it directly, it seems to have cut funds for the second regional radio network which would have been important for those people living in regional Australia. It is very important that regional Australia be considered. The ABC was doing the right thing, but the Government has cut the funds from beneath it. I believe that such last minute Budget cuts are really a problem. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator REYNOLDS(Queensland)(3.40) —At the risk of sounding like a broken record in relation to the Australian Broadcasting Corporation, I would like to concentrate on its allocation of staff resources. I could talk about many things in this report, but year after year I look for a change in the priorities of the ABC as to where staff members are located, and year after year I see that there is no change. I particularly note the discrepancy in staff allocation between a large, decentralised State such as mine-Queensland-and a small State such as Tasmania. I would like to quote from figures that have been used before. By branch the percentage of staff working in Tasmania is 6.9 whereas in Queensland it is only 8.7. When one looks at the simple geographical differences between those States-Queensland and Tasmania-and at the fact that the ABC somehow manages to stretch the smaller number of staff between nine offices in Queensland while there are only three offices in Tasmania, it is quite beyond me why Tasmania is so favourably regarded by the ABC when it comes to staffing. When I look particularly at page 25 of the report showing the range of State-based television in Tasmania, I am afraid I get very angry. I would congratulate Tasmania on the type of local material that it is able to produce, but the reality is that there is unequal treatment between the States in regard to ABC staffing. I have taken up this matter with the Minister for Communications (Mr Duffy) and with the new Managing Director. Over four years I have failed to make any real headway in getting a fairer distribution of staff around the States. I have commented before on the fact that 43 per cent of ABC staff is located in New South Wales while something like 21 per cent is located in Victoria. I have yet to be really satisfied that that is an appropriate balance for the respective work loads. However, in the smaller States there is a very serious discrepancy between the staffing levels for a highly decentralised State such as Queensland and a much smaller State such as Tasmania. I hope that next time I have the opportunity to speak on this annual report-which I hope will be on time on the next occasion-I will see the ABC is starting to spread its staff more equitably around the areas where they are needed. Question resolved in the affirmative. Senator COOK(Western Australia)(3.44) —I move: That the Senate take note of the paper. I rise to speak on the Building and Construction Industry Long Service Leave Board annual report 1985-86 because I believe that the formation of the Long Service Leave Board has had a major and stabilising effect on one of Australia's most disputatious industries, the building industry. Before the formation of this Board it was the case that building workers, who work by necessity in a jobbing situation, would never have achieved sufficient years of service with any one employer to qualify for three months long service leave after 15 years of service. Building projects would come into being and exist for maybe three or four years and then go out of existence. Workers on those projects would lose their jobs, apply for work on the next building project and move on, and thus never accumulate consistent employment with the one employer. As Australia's industrial standards began to firm around long service leave straight after the war, it became increasingly the case that building workers were denied this privilege that was a community standard that other workers enjoyed. Thus the concept of long service to the industry rather than to an employer in the industry arose, and in 1981 an ordinance was passed to provide for a levy calculated by the Commonwealth Actuary to be paid into a central fund on behalf of each employee of a construction employer. At the end of an employee's entitlement, given the necessary 15-year service, a payment is made for that building worker to take long service leave. Indeed, there is a provision for that worker to take pro rata long service leave after 10 years. The inauguration of this industrial relations reform has had a major stabilising effect on the building industry. It has been followed by a superannuation provision which again has stabilised an industry with fluctuating industrial relations fortunes, an industry which is primarily based on the lowest tenderer winning the project and thus being able to commence the construction. By the very nature of the lowest tenderer always being successful there is always competition between tenderers to shave their margins, and often and unfortunately they do that in areas which affect the income or well-being of the people whom they employ to do the work for which they have won the contract. Before this scheme came in and before the superannuation provisions were agreed to, this led to a very high rate of loss of skilled building industry workers out of the industry into more stable employment, and thus there has been a higher cost to the industry in training replacement labour to fill the places of those who have left because they have become disenchanted with the lifestyle of the building industry. This provision and the superannuation provision have brought some degree of permanency of employment to the industry. It is an example of co-operation between the unions and the employers, with the Government performing a necessary role of organising that co-operation for the benefit of the workers in the industry and the industry as a whole. It has brought some predictability to tendering rates as contractors are certain of their long service obligations and have a statutory requirement to pay them. It stands, I believe, as an example of how this industry ought to approach some of the other areas that are vexed by continuous disputation which has been brought about by the inherent instability and lack of certainty. It stands as some sort of indication of what could be considered in relation to labour-only subcontractors who work essentially in an employee relationship with their contractors and their employment future. This model provides an approach for employers and unions to come together and reach some agreement about that class of employee or quasi-employee or independent contractor, according to one's point of view. If that were done, we would find that the inherent lack of certainty, the instability and the lack of confidence that employees have would be taken from the industry, to the benefit of the industry. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator REID(Australian Capital Territory) —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)(3.50) —I move: That the Senate take note of the paper. The Australian Marine Sciences and Technologies Advisory Committee report for the year 1985-86 covers a period in which the Committee has done excellent work. Professor Swan, who was the Chairman, retired from the Committee in December 1985. Under him, the Committee became involved with building the R V Franklin, chartering the rig Seismic and strengthening marine research institutions throughout Australia. I commend him and his Committee for their foresight and determination to see Australia take its rightful place in the world of marine science. Marine science is very important to Australia. Australia is an island continent with a 200-mile territorial zone which we are not treating properly as a resource. It is extremely important that we consider the processes. Marine science serves industries in Australia with annual turnovers of approximately $11 billion a year which employ some 320,000 people-not including those in the tourist industry, which uses our seas. Examples are shipping, navigation, operation of off-shore rigs, designs of ports and harbours, fisheries and other areas. Organisation for Economic Co- operation and Development examiners have stressed the importance of research and development in this area and this Committee has been very important in pushing that. I am pleased to note that co-operation is being established between our freshwater research and marine science endeavours and this is being sponsored by AMSTAC. Australia is also desperately dependent for its future development on the availability and quality of our freshwater resources. The Committee points to the need to carry forward our successes into commercialised technologies if Australia is to gain full advantage from its research and development investment in these areas. I seek leave to continue my remarks later. Leave granted; debate adjourned. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The time allowed for the consideration of Government Papers has expired. Senator JONES(Queensland) —by leave-On behalf of Senator Cooney, I table volumes 1, 2 and 3 of the additional information received by Estimates Committee D. Senator COONEY(Victoria) —I present the 274th report of the Joint Committee of Public Accounts. I seek leave to make a short statement. Leave granted. Senator COONEY —The Committee presented its 233rd report on the reports of the Auditor-General for 1982-83 and September 1983 on 29 May 1985. This report, the 274th from the Committee, sets out the response to its findings in report 233. The items raised in the Committee's earlier report have largely elicited a satisfactory response. Of the outstanding matters, the most significant were the administration of aspects of the Bankruptcy Act by the Attorney-General's Department and the collection of dividends and interest withholding tax by the Australian Taxation Office. The Committee, in its earlier report, was concerned that there had been delays in the Attorney-General's Department implementing the bankruptcy official receivers information system, a computer based accounting and statistical system. The delays have been raised in successive reports of the Auditor-General. However, the Department has indicated that the system is now operational. Despite this there still appear to be problems in securing the filing of accounts of registered trustees and delays in the distribution of dividends. The Committee will continue to keep this matter under review. The Committee was also concerned at the reported inefficiencies in the administration of dividends and interest withholding taxes. The Committee remains concerned at the response by the Taxation Office to several of the matters raised. In respect of the reliance on voluntary compliance, the Committee considers that the Taxation Office should institute procedures to provide an independent check and make greater efforts to determine statistically what level of compliance with the legislation can be expected. The Committee is currently examining the proposed computer acquisition by the Taxation Office. The Committee expects that the dividend and interest withholding tax system will be greatly improved as a result. This matter will be kept under review by the Committee. I commend this report to honourable senators. Assent to the following Bills reported: Television Licence Fees Amendment Bill 1987 National Parks and Wildlife Conservation Amendment Bill 1987 National Parks and Wildlife Conservation Amendment Bill (No. 2) 1987 Environment Protection (Alligator Rivers Region) Amendment Bill 1987 Aboriginal Land Rights (Northern Territory) Amendment Bill (No. 2) 1987 Lands Acquisition Amendment Bill 1987 Equal Employment Opportunity (Commonwealth Authorities) Bill 1987 Parliamentary Privileges Bill 1987 Bills received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bills may proceed without formalities, may be considered together and be now read a first time. Bills read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.58) —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- BROADCASTING (OWNERSHIP AND CONTROL) BILL 1987 The purpose of this Bill is to amend the Broadcasting Act 1942 in order to repeal the 30-year-old `two-station rule' governing the ownership of commercial television and replace it with: (a) A `75 per cent reach rule' which will allow persons to hold prescribed interests in any number of commercial television licences so long as the combined population of their service areas does not exceed 75 per cent of the Australian population; (b) Limits on cross-ownership between television and newspapers; and television and radio within the service area of the related commercial television licence. The Bill includes other provisions which maintain the two-station rule for persons who hold prescribed interests in commercial television licences utilising multi-channel service-MCS-permits in regional areas specified as approved markets pursuant to the Broadcasting Amendment Bill 1987, the Equalisation Bill. That Bill has, I regret to say, been rejected in this chamber. That does not mean, however, that the Bill needs amendment. It just means that those clauses which are dependent upon clauses of the Equalisation Bill will remain passive until such time as the Equalisation Bill is passed. It is the Government's firm intention to again bring forward the Bill to give effect to its equalisation policy. Equalisation is complementary to the ownership and control changes included in the Bill currently before this House. The Government does not intend to sit back and let the viewing public of Australia, and the viewing public of regional areas in particular, suffer a poorer level of service-a poorer level of service maintained by legislation which will keep smaller monopolistic markets. Such a regional market structure can only inhibit the growth of Australia's commercial television industry to maturity. It is surprising-might I say curious-that those opposite, those who purport to advocate free enterprise, can, in relation to the television broadcasting industry, adopt such a protectionist and monopolistic attitude. Broadcasting (Ownership and Control) Bill 1987 There is to be no provision in the Broadcasting (Ownership and Control) Bill 1987 which will require forced divestiture of interests legally acquired under different rules on or before 27 November 1986, the date of the Minister for Communications' announcement of the Government's intention to introduce the new ownership and control limits provided for in this Bill. The Bill therefore includes provisions to `grandfather' interests acquired on or before 27 November 1986 which would otherwise have contravened the new cross-media rules. The Bill also provides for other consequential amendments to the licensing, share transaction and directorship limit provisions. The provisions of this Bill together with a further Bill to put in place the Government's equalisation policy are part of a package designed to put in place the Government's policy objectives of a restructured, mature television broadcasting industry. There is, at present, a fundamental structural imbalance in Australian television. The imbalance is between metropolitan and regional television. It arises from a regulatory regime which has outlived its usefulness and is now counterproductive. This inequitable situation is quite unnecessary. The imbalance has been brought about by the two-station rule. This effect has been exacerbated by the current regional television market structure of comparatively small monopolistic markets which are unlikely to be able to facilitate, let alone encourage, new ownership groups able to take a significant role in program decision-making. Are we to condemn Australian viewers to the strait-jacket of the current imbalance-a system with little room for growth-or are we going to give broadcasters sufficient elbow room to prosper and mature? The proposed 75 per cent reach rule will allow structural changes to take place and so encourage ownership by new groups able to take a role in program decision-making, and thereby enhance competition in program commissioning and distribution; encourage greater investment in the television industry. Networking-that is, the central production and/or acquisition of programs for distribution to affiliated stations-has its role to play. Networking has been part of metropolitan television from the early days. There has also been a considerable amount of de facto networking in the regional areas. It is the Government's belief that this Bill and the complementary Equalisation Bill, when reintroduced, will promote a trend to more balanced and competitive networking arrangements in this country. This will facilitate an evolution towards a greater number of competitive television organisations to the benefit of all Australia. Honourable senators will recall that the policy issues associated with this Bill have been the subject of considerable public debate. In 1984, the Australian Broadcasting Tribunal in its `Satellite Program Services' report, drew attention to the lack of opportunities for new television enterprises, and for expansion of television licensee companies based outside Sydney and Melbourne. The ABT, as is well known by now, identified `structural imbalance' in the system caused by the television licensees based in these two largest metropolitan areas dominating the program purchasing and distribution arrangements. This in turn was seen as a function of their greater financial resources arising from the size of the market served by the licence. In its 1982 cable report, the ABT had previously identified the inequity in the operation of the `two-station rule' which treated all licences alike-regardless of the population served. Because the rule ignored variations in market size, a licence in Mount Isa or Broken Hill had the same weight as one in Sydney or Melbourne. The rule consequently took no account of the real financial strength of licensees or their power within the system. The Department of Communications' 1985 report, `Future Directions for Commercial Television', analysed these structural problems arising from the present ownership or control rules for commercial television and concluded that what was needed was rules which allowed for the expansion and growth of commercial television interests outside Sydney and Melbourne. The findings of the report pointed to the need for a review of the heart of the system-the `two-station rule'-with the object of achieving a more `open-textured' framework for regulation of ownership or control-one which: Takes full account of the economic realities of commercial television in the 1980s; includes a clear statement of policy intent; takes account of the size of commercial television markets; provides opportunities for growth for commercial television interests outside Sydney and Melbourne; avoids the detailed, costly and complex regulatory processes of the current scheme and takes account of the Government's general deregulatory stance; is sufficiently flexible to accommodate the introduction of new technologies. Subsequently, on 28 August 1985, the Minister for Communications announced that his Department would undertake a full scale study of the ownership and control rules for commercial television. That report, `Ownership and Control of Commercial Television: Future Policy Directions', was tabled in Parliament on 22 Aug- ust 1986. Its findings suggest that the current rules are no longer adequate and badly need updating; that despite the complex net of interrelated provisions there are fundamental flaws in the current system of ownership and control regulation. In particular, the report suggested that one approach to correcting the inequity of the `two-station rule' could be to allow persons to hold interests in any number of licences so long as the population served did not exceed a specified maximum limit, expressed as a percentage of the total Australian population. Another major defect in the current regulation, as the report identified, is that the Broadcasting Act 1942-the Act-contains no cross-media ownership rules. The Government addressed these two major defects last November. Announcing the new television ownership policy on 27 November 1986, the Minister for Communications stated that under the new rules, the effect will be to limit the reach of any one television licensee-or substantial investment-to 75 per cent of the Australian population. Also it is the Government's intention that licensees will face competition in their markets. They do so at present in metropolitan markets and under the Government's equalisation program-which remains this Government's policy-they will in regional markets also. The extension of the one-to-a-market rule to regional areas will occur. While that restriction formed part of the equalisation Bill, it is seen as an essential complementary provision to the new rules to be put in place by this Bill. The delay to the one-to-a-market rule caused by the rejection of the equalisation Bill will not be allowed to affect the eventual outcome of the application of these rules as a package. The Government is particularly concerned to inhibit the perpetuation of existing monopolies. The existing regulatory regime for television is protectionist. It limits the provision of additional services, and it limits investment opportunities. The Government wishes to remove these protectionist, monopolistic bulwarks of a bygone era. If competition is to be enhanced, an essential part of the reform program is to limit cross-media ownership, that is, the common ownership of television-newspaper and television-radio interests within television service areas. Cross-media ownership has a long history in this country going back to the 1920s when newspaper interests decided to become involved in the new broadcasting industry. It is of concern because it can limit public access to diversity of opinion, information, news and commentary. It can inhibit competition, produce monopolies, and affect employment opportunities. For these reasons, the Government has decided to regulate cross-ownership of the media within television markets in order to facilitate better access by the public to diverse sources of news and information. The present Bill accordingly prohibits the cross-ownership of commercial television and relevant newspapers or commercial television and commercial radio which has a monopoly anywhere in the related commercial television service area. Persons who hold prescribed interests in a relevant newspaper and/or a `monopoly' commercial radio licence will not be able to continue to hold a prescribed interest in the associated commercial television licence-subject to the grandfathering provisions already mentioned. On 22 January 1987 the Minister for Communications confirmed the Government's intention to introduce this Bill in these sittings and foreshadowed a later Bill to address the supporting provisions and administrative arrangements. The present Bill interweaves the new 75 per cent reach rule and the cross-media ownership rules into the existing structure of the Broadcasting Act 1942. There is a need to review the procedural and administrative provisions supporting the ownership and control rules in the Act with the objective of making them more efficient, effective and understandable. The Minister has accordingly asked his Department to review these provisions of the Act with a view to having a further Bill introduced in the next sittings. The 75 per cent reach rule The Bill provides for an amendment to paragraph 92 (1) (a) of the Act to repeal the current limitation which prevents a person from holding a prescribed interest in more than two commercial television licences throughout Australia. This is known as the `two-station rule'. Clause 22 of the Bill replaces this rule with a provision which will allow persons to hold prescribed interests in any number of commercial television licences so long as the combined population of their service areas does not exceed 75 per cent of the Australian population. The Bill will however provide for one exception to the new 75 per cent reach rule. The `two-station rule' will be retained for persons holding prescribed interests in commercial television licences using multi-channel service-MCS-permits in approved markets which will be provided for in the reintroduced equalisation Bill. Such persons will be prevented from benefiting from the relaxed ownership rule. In essence this is an incentive to encourage the move to aggregation on a competitive basis. Honourable senators should note, however, that interests acquired by persons in MCS permit holders outside of approved market will be grandfathered-that is, exempted-from application of the two-station rule. This is to cover the situation where the area served by an MCS permit is outside an approved market and where a new approved market is subsequently specified which encompasses the service area of that MCS permit. The proposed amendments will permit major adjustments in the structure of the commercial television industry. Although some television groups have the financial capacity to expand into program production activities, the existing structure has limited their ability to obtain outlets for their product. The 75 per cent reach rule will encourage the growth of new ownership groups able to make a substantial contribution to program making, acquisition and distribution. The consumer will benefit from the provision of more services, more sources and news and commentary. A key reason for consolidating television licences into ownership groups with wide population reach is the economies of scale associated with buying programs for distribution to multiple outlets. Another is the ability to offer advertisers a mass market in a number of cities. In the longer term the proposed amendments should produce a more balanced commercial television industry less reliant on Sydney-Melbourne based interests for their programming. Television is a capital-intensive industry. A proliferation of small owners, cut off from expansion capital, inhibits the development of services. There are presently 15 capital city commercial television licences. There are 36 regional licences, each in a monopoly market. Entry into the commercial television industry is limited by the licensing process. Under the 75 per cent reach rule it is likely that some existing small owners will be bought out. The industry may eventually shake out into a smaller number-possibly 5 or 6-stronger ownership groups able to operate competitive services. Administration Administration of the new national limit on television ownership requires provisions to take account of measurement of the population in: (i) Australia as a whole; (ii) the service area of each commercial television licence; and (iii) the area of overlap between service areas. Accordingly, the Bill includes provisions to the effect that measurement of the Australian population will be determined on the basis of the most recently available census count as published by the Australian Statistician. The Minister for Communications is required to publish the figures in the Commonwealth of Australia Gazette. Similarly the population figures and the relevant percentage population figures for the service areas of each commercial television licence will be gazetted as soon as practicable after publication by the Australian Statistician of the results of a census count. When a service area is varied or a new licence granted the population figures for the new area will be gazetted. The gazettals will include the percentage of population in any area of overlap for the purpose of administering the 75 per cent reach rule. Service areas can, and do, overlap. The area of overlap can be readily identified by reference to the statistical collection districts contained within it. For the purpose of determining whether a person has breached the 75 per cent reach rule, the area of overlap will only be counted once. On the other hand the whole of the population within the relevant service area will be taken into account in assessing the population reached by a person who has a prescribed interest in only one of those television licences. Cross-media ownership Cross-media ownership rules an integral part of this legislative package. The Government considers it critical that such rules be introduced in tandem with the 75 per cent reach rule in order to curb a major expansion in television by existing newspaper or radio interests which already have considerable influence over the formation of public opinion. Raising the national ownership limit without placing limits on cross-media ownership would produce an unacceptable level of media concentration in local television service areas. Cross-media ownership rules have therefore been introduced in order to: (a) support competition policy; (b) discourage concentration of media ownership in local markets; (c) enhance public access to a diversity of viewpoints, sources of news, information and commentary. The cross-media ownership rules will provide safeguards for the future-the sources of news and information in each local market will not be able to become concentrated in the hands of one owner. As the Minister for Communications foreshadowed on 27 November 1986, the Bill therefore includes provisions to amend the Broadcasting Act 1942 in order to prohibit a person holding a prescribed interest in a commercial television licence from also: (a) holding a prescribed interest in a relevant newspaper, 50 per cent of whose circulation is in the service area of the associated commercial television licence; or (b) holding a prescribed interest in a commercial radio licence which has a monopoly anywhere in the service area of the television licence concerned. Cross-ownership interests held on 27 November 1986 which would be in conflict with the new rules will be `grandfathered'. However, pre-existing interests will only be exempted as long as they are not increased. An increase in an existing interest after 27 November 1986 would cause the grandfathering to cease to apply. Consistent with previous amendments of the Act an increase by way of a bonus share issue and the like would not invalidate the grandfathering as long as the issue was common to all other persons holding shares of that class. `Monopoly' commercial radio The Bill provides that the prohibition on the holding of cross-television/radio interests will be triggered when there is an area of overlap between the service areas of the radio and television licences concerned and the service areas of other commercial radio licences do not, either alone or in combination, completely cover the area of overlap in question. Where a person has a prescribed interest in each of two or more commercial radio licences the service areas of which have a common overlap within the service area of the related television licence, this will be treated as a monopoly within the ambit of the cross-media rules. Associated newspaper For the purpose of the limits on holding cross-media interests, the Australian Broadcasting Tribunal will be required to maintain an associated newspaper register of newspapers that are published in English; sold as newspapers; published four or more days per week; and have 50 per cent or more of their circulation in the service area of the associated commercial television licence. The register is to be updated quarterly and will be available for public inspection. The Bill also provides for the publication by the Tribunal in the Commonwealth Gazette of those newspapers which are to be taken as associated with the service areas of commercial television licences as at 27 November 1986. This will provide a certain basis for determining whether a person is grandfathered under the new cross-media rules. Honourable senators will note that clause 18 (j) of the Bill provides that ostensibly `separate' newspapers will be treated as part of the same publication if it is reasonable to conclude that this is the case having regard to the ownership, editorial control and style of those newspapers. Prescribed interests in newspapers The Bill includes detailed provisions to take account of prescribed interests in newspapers. A person has a prescribed interest in a newspaper if he or she: (a) is the publisher of the newspaper; (b) is in a position to exercise control either directly or indirectly, of the newspaper; or (c) where the newspaper is published by a company: (i) is in a position to exercise control of more than 15 per cent of votes that could be cast on a poll; or (ii) is the holder of more than 15 per cent of the paid up capital of the company. Other provisions define when a person is deemed to be in a position to control a newspaper. They follow the existing provisions in the Act in relation to commercial radio, adapted to cover the situation where a newspaper publisher may be a natural person, a member of a partnership, or a joint venturer. Enforcement For the purpose of enforcement of the new 75 per cent reach rule and the cross-media rules, contraventions of these new provisions will be treated in the same way as the Act treats contraventions of the existing two-station rule. Persons contravening the new ownership and control limits will have a minimum six months period of grace, or longer with Tribunal approval, to dispose of excess interests. I am confident that the Tribunal will take all reasonable measures to expedite its inquiries into the important media transactions which have already occurred since the date of my announcement on 27 November 1986. A person holding a prescribed interest in a commercial television licence will be required to notify the Tribunal within 28 days of the acquisition of a prescribed interest in an associated newspaper. Persons who have acquired cross-media interests between 27 November 1986 and commencement of this legislation will be deemed to have contravened the Act from the date of commencement. Consequential amendments to licensing and directorship limits The Bill also provides for consequential amendments to licence grant, renewal and transfer provisions in order to take account of the cross-media limits. Consequential amendments have been made to the directorship limits in section 92C to bring them into line with the 75 per cent reach rule. However, the present limit on directorships under section 92C is retained for persons who are directors of companies in a position to control a licence utilising an MCS permit in an approved market. This is consistent with retention of the two-station rule for persons who hold interests in licences utilising MCS permits. New section 92FAD incorporates directorship limits for cross-media ownership. The Bill provides that a person who is a director of a company in a position to control a commercial television licence may also not be a director of a company in a position to control: (1) an associated newspaper; or (2) a `monopoly' commercial radio licence in the same television service area. Since some persons may have contravened the cross-media directorship limits since 27 November 1986, the Bill provides for a six months period of grace, starting from the commencement date of this legislation for persons to take the necessary action to cause these contraventions to cease. I want to include, at this point, a clear warning to licensee companies or associated interests about the strength of the Government's resolve to enforce these new arrangements. I believe I have made it abundantly clear as to the arrangements which the Government seeks to apply with effect from 27 November 1986 when the proposals were first announced. Over the last few months there have been some clever corporate schemes devised which, it is suggested, could be used in an attempt to frustrate the intent of the ownership and control provisions in the Act. If there is any attempt to try to circumvent the clear intent of these new provisions, through an artificial avoidance scheme, the Government will consider the introduction of retrospective legislation. Financial impact Administration of the new rules will entail some extra work load for both the Department of Communications and the Australian Broadcasting Tribunal. It will be necessary for the Department to arrange for gazettal notices of service area populations and percentage of population figures for all commercial television licences and variations to these notices from time to time as appropriate. The ABT will also need to maintain up to date data on associated newspapers for the purpose of administering the cross-media rules. It is also expected that the ABT will be involved in additional share transaction inquiries arising from the new rules. COMMUNICATIONS LEGISLATION AMENDMENT BILL 1987 The Communications Legislation Amendment Bill 1987 will amend the Overseas Telecommunications Act 1946, the Postal Services Act 1975, the Radiocommunications Act 1983 and the Telecommunications Act 1975. Provisions of the Bill will empower the Overseas Telecommunications Commission, with ministerial approval, to engage in activities relating to telecommunications in Australia. It will also enable the Commission to engage in activities relating to domestic and international telecommunications services in or for a foreign country. The Bill will remove present requirements for OTC to obtain ministerial approval for the exercise of its powers in a number of areas. The Commission will no longer need ministerial approval for the exercise of its incidental powers or for the provision of consultancy services overseas. When making alterations to categories of services or rates applicable to them, OTC will require the Minister's approval only in relation to changes to the basic overseas telegram and telephone services. Other provisions of the Bill will enable Australia Post to enter currency hedging and financial futures contracts. It also makes technical amendments to the hedging contracts provisions of Telecom Australia and OTC. The Bill will impose a moratorium on the provision of domestic pay-television for at least four years. It will make a number of changes to provisions of the Radiocommunications Act relating to the making of standards, spectrum plans and frequency band plans. In particular, it will define the `Australian table of frequency allocations' as the spectrum plan. The spectrum plan is the basis for frequency planning under the Act. I will deal first with the provisions of the Bill to expand the powers of OTC. Within Australia OTC will be able, with ministerial approval, to participate in a number of recent developments in the telecommunications industry. These include membership of the telecommunications trading and development company proposed by the Australian Industry Development Corporation, commercial development of OTC research and development in areas such as antenna design, and marketing of specialised computer software consultancy services in Australia. OTC will not be empowered to establish, operate, provide or maintain telecommunications services in Australia. The amendments will also enable OTC to exploit off-shore opportunities as they arise. In particular, OTC will be able to develop an Australian telecommuni- cations hub-network for the South Pacific Region. It will also be able to provide domestic and international telecommunications in or for foreign countries. Ministerial approval will be required before these new powers are exercised. In granting approval to specific proposals, arrangements will be put in place to ensure that there is no cross-subsidisation and that relevant government interests are taken into account. The amendments will give effect to a recommendation of the Report of the House of Representatives Standing Committee on Expenditure entitled `Call Us Again'-a review of the Auditor-General's efficiency audit on the control over manpower and property by OTC. The Bill contains provisions to remove unnecessary requirements for ministerial approval with respect to certain OTC activities. The amendments, which I have outlined earlier in relation to the exercise of incidental powers and the provision of consultancies overseas, will put OTC in the same position as Telecom Australia in relation to the exercise of powers. The current restrictions are seen as unnecessary impediments to the Commission in the exercise of its statutory responsibilities. Similarly, the current need for the Commission to obtain ministerial approval to alter services other than its basic overseas telephone and telegram services is inconsistent with the Commission's status as a competitive government business enterprise. I now turn to the other provisions in the Bill. The provisions which will enable Australia Post to enter hedging contracts are modelled on similar provisions contained in the Communications Legislation Amendment Act 1985 for Telecom Australia and OTC. Part IV of the Bill contains amendments to the Radiocommunications Act. The most significant of these is the moratorium on domestic pay-television which is contained in clause 19 of the Bill. On 2 September last year the Minister for Communications announced that the way was clear for the introduction of new video and audio entertainment and information services to non-domestic premises such as hotels, motels, clubs and TABs. I am sure that most honourable senators are by now familiar with the services such as Sky Channel and Club Superstation which are currently operating. At the same time, however, the Minister announced that the Government had decided that the introduction of pay-television services to the general public would not be permitted for at least another four years. The proposed new section 24a of the Radiocommunications Act gives a statutory basis to that moratorium. Another noteworthy change to the Radiocommunications Act is contained in clause 15. This amendment has the effect of defining the Australian table of frequency allocations as the spectrum plan for the purposes of the Radiocommunications Act until it is replaced by a plan prepared by the Minister. The Australian table of frequency allocations was published by the Department of Communications in 1982 after extensive consultation with industry and users of the radiofrequency spectrum. Since then it has been the accepted basis for frequency planning in Australia. It is a well known document in radiocommunications circles and is publicly available for sale through the Australian Government Publishing Service. Its adoption therefore represents the most efficient means of putting an initial spectrum plan in place. Any subsequent plans will be prepared by the Minister in accordance with the procedures, including public consultation, laid down in the Act. Clauses 14 and 17 of the Bill are designed to remove unnecessary repetitions which occur in the process of making standards, spectrum plans and frequency band plans. Under the current provisions, once even a minor change is made to a plan or standard as a result of public consultation the Minister is obliged to resubmit the whole document for a further round of public consultation. This requirement, with its obvious scope for needless delay in the making of plans and standards, is to be removed. Of course, the Minister will still be free to resubmit an amended plan or standard for further public comment where amendments are more significant. Finally, I turn to the financial impact of the Bill. The provisions to augment the powers of OTC have the potential to lead to an increase in the Commission's profit and consequent dividend payment to the Commonwealth. The provisions to limit the range of activities for which OTC requires ministerial approval will not affect the Commission's revenues and will result in some small administrative cost savings. The provisions to enable Australia Post to enter hedging contracts will enable the Commission to manage its foreign currency exposure in a prudent and effective manner with corresponding savings to the Commission. I commend the Bill to the Senate. Senator GARETH EVANS —I table the revised explanatory memorandum for the Communications Legislation Amendment Bill 1987 and in doing so draw the attention of honourable senators, if they have not already noticed this, to this being I think the first, if not one of the first, uses of our new expedited procedures which are designed to get rid of mumbo-jumbo. I commend the process we have just gone through to the Senate and hope that it is continued in the next session and subsequent sessions. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.00) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill seeks interim appropriations to meet expenditures by the Parliamentary Departments during the period 1 July 1987 to 30 November 1987. They total some $23.7m which is $2.4m or about 11.2 per cent greater than the amount provided for in the Supply period 1986-87. An increase is necessary to maintain the ongoing operations of the Parliament, to cover unavoidable price increases and to meet expected costs for the provision of information systems for the new Parliament House, namely systems for catering services and building operations and maintenance management. I commend this Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.01) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill, together with its companion Bills, Supply Bill (No. 2) 1987-88 and Supply (Parliamentary Departments) Bill 1987-88, seeks interim appropriations for the services of the Government for the period 1 July 1987 to 30 November 1987, by which date it is expected that the equivalent Appropriation Bills, which will form part of the Budget for 1987-88, will have been enacted. Supply Bill (No. 1) seeks appropriations totalling some $8,652.1m for the ordinary annual services of the Government. This is $655.4m, or about 8.2 per cent, greater than the equivalent amounts provided in the Supply Act (No. 1) 1986-87. A significant part of the increase reflects the full year effects of new policies introduced in this year's Budget, price and cost increases and exchange rate variations. Major increases are: $221.3m reflecting major contractual defence payments which fall due before end-November 1987 in respect of the purchase of new, and the replacement, repair and overhaul of, defence equipment and stores; $63.2m to meet increased demand from veterans and their dependents for treatment by local medical officers and ancillary health care providers, and increases in nursing home benefit and public and private hospital bed day charges. We have also provided for six-monthly payments to the Health Insurance Commission which are made on the first working day of each month. Last year only five were provided for and this proved inadequate: $28.8m for property services, to cover the full year impact of new leases entered into in 1986-87, the renewal of existing leases at higher rates and increased property management costs. $26.5m primarily reflecting 1986-87 Budget decisions in taxation reform administration and the inclusion of client driven demand in the Supply period. $26.0m for the Australian Bicentennial Authority as it is anticipated that 70 per cent of the national program provision for 1987-88, will be expended during Supply. $25.4m for the Australian Trade Commission reflecting a higher provision for export market development grants to pay out, in Supply, the backlog of claims carried over into 1987-88, a change to quarterly payments for property rent, and price increases. I wish to emphasise that this Bill seeks interim provision only in respect of approved ongoing policies of the Government. It does not anticipate decisions to be taken in the 1987-88 Budget context for which provision will be sought in the Appropriation Bills. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.02) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill seeks interim appropriations, totalling $2,404.3m, for expenditure on capital works and services, payments to or for the States and the Northern Territory and certain other services for the period 1 July 1987 to 30 November 1987. The amount sought is $287.8m, or about 13.6 per cent, greater than that provided in the Supply Act (No. 2) 1986-87. The main increases relate to: $290m for payments to the States and the Northern Territory under the Commonwealth-State Housing Agreement. The Government announced on 30 March 1987 that $700m is to be provided under this program in 1987-88, and the legislation to enable this is to be introduced in the Budget sittings. $35m for general revenue assistance to the States and the Northern Territory; the increase primarily reflecting the change in the level of assistance to be paid to the Northern Territory in the form of its financial assistance grant. This grant is adjusted each year for price increases and the Northern Territory's population growth relative to the rest of Australia. $27.1m to meet additional quarterly payments to the States resulting from real injections of funding agreed to under the home and community care program. Certain new provisions in respect of which government decisions have been taken have been separately itemised in the Bill in accordance with convention. The most significant of these are those items establishing the proposed revised funding arrangements for public housing activities in the Australian Capital Territory. In the 1986-87 Budget context, the Government announced that action would be taken to progressively place Australian Capital Territory finances on a basis consistent with Commonwealth arrangements with the States. The items are necessary to assist in implementing alignment of the Australian Capital Territory public housing function with the Commonwealth-State Housing Agreement which is but one aspect of that decision. As indicated with respect to the Supply Bill (No. 1), the provisions in this Bill do not anticipate decisions to be taken in the 1987-88 Budget context. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(4.03) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill continues the practice of introducing an omnibus Bill into each sittings of the Parliament as an expeditious way of making a large number of non-contentious amendments to legislation not otherwise being amended. Some of the amendments made by this Bill tidy up, correct and update existing legislation. Other amendments are of minor policy significance or are matters of routine administration. None of the amendments made by the Bill has any significant financial impact. Many of the proposed amendments will be self-evident or sufficiently explained by the explanatory memorandum circulated with the Bill. I propose to confine my comments to addressing the more noteworthy changes included in this Bill. Anglo-Australian Telescope Agreement Act 1970 The Act currently restricts the functions of the Anglo-Australian Telescope Board to those specified in the agreement annexed to the Act. The United Kingdom and Australian governments have now agreed that it is desirable for the Board to assume from the United Kingdom authorities responsibility for the future management of some additional facilities already in place at Siding Spring. The amendments will enable the Board to undertake other functions as prescribed by regulations. Audit Act 1901 The amendments proposed in this Bill are aimed at improving the efficiency of the Commonwealth's financial administration and allowing the Auditor-General discretion in reporting minor breaches of legislation. From the point of view of financial administration, one amendment will simplify the processes by which funds that have already been appropriated by law are subsequently distributed to departments and will save administrative effort. Financial administration will also be improved by another amendment to enable the Minister for Finance to approve methods of performing accounting functions which do not involve written signatures. The amendments will ensure that departments report to Parliament on their special operations-a requirement which has not existed previously. The Auditor-General will also be given some discretion on which matters are included in his reports. The Auditor-General, when so requested by the Minister, will be able to audit the financial statements of bodies such as incorporated companies controlled by the Commonwealth. Currently there is doubt whether the Act permits such an audit, as the existing provision refers to the audit of accounts and records only. Other amendments will enable regulations to be made to re-establish a policy, adopted by previous governments and arising directly from the policy of self-insurance, that the liability of Commonwealth drivers for the cost of replacing or repairing damaged vehicles should be the same as for a driver in the private sector who is covered by motor vehicle insurance. Australian Capital Territory Electricity Supply Act 1962 The Act establishes the Australian Capital Territory Authority consisting of 3 members, including one elected by the Australian Capital Territory House of Assembly which has been abolished. In order to provide the Authority with a full membership, the amendments empower the Governor-General to appoint a member to the Authority for a maximum term of 3 years in lieu of the former House of Assembly nominee. Australian Citizenship Act 1948: Migration Act 1958 The amendments remove from the Migration Act all references to `return endorsements'. A return endorsement gives authority to a non-Australian citizen who is a resident of Australia to return to Australia after a trip overseas. However, since 1 January 1987, return endorsements have been replaced by `resident return visas', and the provisions in the Migration Act relating to return endorsements are no longer required. The amendments to the Australian Citizenship Act are consequential upon this change. Automotive Industry Authority Act 1984 The amendments will enable automotive companies not incorporated in Australia to be eligible to participate in the motor vehicles and components development grants scheme. The amendments would ensure that the original intent of the scheme was maintained by providing continued access to grant funding to all 5 local motor vehicle manufacturers including Holden's Motor Company which, as a result of the restructuring last year of General Motors-Holden's Ltd, is a United States subsidiary. Bass Strait Freight Adjustment Trust Fund Act 1984 The amendments will modify 2 aspects of the Bass Strait freight adjustment scheme. They will specify that funds are to be disbursed on the basis of crude oil ownership at the refinery gate. This will promote maximum flexibility for refiners by allowing them to arrange between themselves exchanges of crude oil in order to minimise costs. The amendments also provide for a refund of the refiners' contributions to the trust fund in respect of Bass Strait crude oil purchased at import parity prices and subsequently exported by them. Refiners will thus be treated in the same way as Bass Strait producers under the Act. Commonwealth Prisoners Act 1967 Since 1983, courts in New South Wales are required to set non-probation periods, not non-parole periods, when imposing sentences of 3 years or less. The amendments will ensure that courts in that State may fix non-probation periods for Federal offenders and that these offenders may continue to be released on parole under the Act. Where a parolee is sentenced to a further term of imprisonment in a State or Territory other than the one in which he was released on parole, the parole order is automatically revoked. The amendments will enable the Attorney-General to request the issue of a warrant to enable such a person also to serve the balance of his first sentence in the place of this second sentence, instead of his having to go back to the State or Territory in which he received that first sentence. Complaints (Australian Federal Police) Act 1981 The amendments will provide for a new conciliation and caution procedure for resolution of minor complaints against AFP members. They will also introduce greater flexibility in the Commonwealth Ombudsman's options after he receives a report on the investigation of a complaint. The amendments have been developed, in the light of operational experience, jointly by the AFP and the Ombudsman, in consultation with the AFP Association. Crimes Act 1914: Removal of Prisoners (Australian Capital Territory) Act 1968: Removal of Prisoners (Territories) Act 1923 One amendment of the Crimes Act will ensure that the offences of disclosure of information, falsification of books or records, false returns or certificates by Commonwealth officers and impersonation of a Commonwealth officer extend to cover persons who perform services for or on behalf of the Commonwealth, a Territory or public authority. At common law, it has been held that where a prisoner escapes while serving a term of imprisonment he cannot be detained under the sentence once the term has expired. Amendments to the Crimes Act and the Removal of Prisoners (Territories) Act will make it clear that sentences of Federal offenders and Territory offenders respectively will cease to run for the period they are at large. Where a prisoner is accidentally released, for example, by the prison authorities before he is due to be released, he cannot be required to return to prison and serve the balance of his term because, at common law, the warrant under which he was committed to prison is spent. The amendments to the 3 Acts will enable a constable to arrest a prisoner unlawfully at large and bring him before a magistrate, who will be able to issue a new warrant for his detention. A prisoner will be unlawfully at large for the purposes of the amendments if he is required by law to be in custody. Customs Act 1901 The Act currently makes provision for the Official Trustee in Bankruptcy to take control of the property of persons penalised for complicity in certain narcotics dealings, in order to recover pecuniary penalties imposed on them. The amendments are designed to provide for indemnifications by the Commonwealth of the Official Trustee and officers of that statutory corporation in discharging this responsibility. Dairy Produce Act 1986 The amendments will prevent persons who are members of the Executive Council of the Australian Dairy Conference, which is the peak policy council of the dairy industry, from being appointed as members of the Australian Dairy Corporation. This change is in accordance with the Government's policy that, where a statutory marketing authority is required to account to the peak industry body, the members of the executive council of that body are not to be eligible for appointment as members of the authority because of the possibility of a conflict of interests. Director of Public Prosecutions Act 1983 The amendments will enable the Director of Public Prosecutions to file a Commonwealth indictment against a person who has been committed for trial otherwise than in respect of a Commonwealth offence in certain circumstances. These are that the Director is satisfied that the facts or evidence on which the person was committed disclose the commission of an indictable Commonwealth offence, and that if the person's committal for trial for that Commonwealth offence had been sought on the basis of those facts or that evidence it could have succeeded. The amendments will also enable the Director to give an undertaking to persons who give evidence in Australia in proceedings brought under the Extradition (Commonwealth Countries) Act 1966 and Extradition (Foreign States) Act 1966 and in relation to coronial inquests and inquiries conducted under the laws of the Commonwealth. The undertaking which can be given to such persons is that the evidence to be given by them will not be used against them in civil or criminal proceedings-except for perjury in respect of the evidence. Export Market Development Grants Act 1974 The Act was introduced to ensure that Government assistance to exporters was provided in a more cost effective manner. The amendments are needed to correct an anomaly in the provisions of the Act covering the export of educational services. Currently it specifically excludes Commonwealth, State and Northern Territory governments from claiming grants under the export market development grants scheme. Some colleges promoting educational services are not established as separate legal entities but are part of Commonwealth, State or Territory education departments. As it was clearly intended that such colleges should be encouraged to promote the export of their educational services, it is proposed to amend the Act to allow education departments to claim in respect of those colleges' export activities. First Home Owners Act 1983 The Act confers on the Secretary of the administering department the discretion to determine for the purposes of an application under the first home owners scheme that the date of the applicant's contract was later than that stated in the contract. The amendments are intended to clarify the extent of that discretion and the circumstances under which a later date can be so determined. Another amendment will enable an intending spouse of an applicant to join in the application. This will overcome a difficulty with the existing legislative provisions which put intending spouses at a cost disadvantage compared with joint applicants who are married couples or are living together in a de facto relationship. Honey Industry Act 1962 The proposed amendments will enable the Minister to extend the terms of current members of the Australian Honey Board to the end of 1988, by which time it is planned that legislation for reform of the Board will have been passed. The amendments are necessary because that legislation will not be introduced or passed before the expiration of some current members' terms in June 1987. An extension of the terms of existing members will overcome problems caused by the lack of time available to hold a poll of producers to elect new producers' members to serve for the brief period until the projected reforms are fully implemented. Human Rights and Equal Opportunity Commission Act 1986: Inspector-General of Intelligence and Security Act 1986: Intelligence and Security (Consequential Amendments) Act 1986 The amendments will replace references in the Inspector-General Act to the former Human Rights Commission and the Human Rights Commission Act 1981 with references to the Human Rights and Equal Opportunity Commission and the Human Rights and Equal Opportunity Commission Act 1986. The amendments will also make it clear that the Inspector-General may inquire into an act or practice of an intelligence agency that is or may be contrary to any human right, may constitute discrimination or may be unlawful under the Racial Discrimination Act 1975 or the Sex Discrimination Act 1984 where it has been referred to the Inspector-General by the Human Rights and Equal Opportunity Commission. The term `discrimination' is given the same meaning as in the Human Rights and Equal Opportunity Commission Act. National Companies and Securities Commission Act 1979 The amendments will enable the Ministerial Council for Companies and Securities to make determinations about superannuation benefits for full time members of the Commission. They will also empower the Commission to make disbursements pursuant to any superannuation arrangements so determined by the Council for full time Commission members. National Crime Authority Act 1984 The amendments will extend the scope of the secrecy provisions of the Act to include certain persons who at any given time might be engaged in the operational work of the National Crime Authority without being employed by the Authority. A new provision is inserted to enable the issue of warrants for the arrest of absconding witnesses, and to enable execution of such warrants even if not in the possession of the relevant officer when making the arrest. National Measurement Act 1960 As part of the ongoing process of metrication, imperial units used in the real estate industry will be withdrawn as legal units of measurement on 1 July 1987. Since it is unclear whether the Act currently applies to real estate contracts, a new provision will be inserted specifically relating to real estate contracts. The new provision will provide that real estate contracts will be void unless entered into by reference to Australian legal units of measurement or additional legal units of measurement. The voiding provision will not apply however where the units of measurement which are referred to in the contract are the units of measurement which are referred to in the documents of title for that land, or in a plan referred to in the documents of title. The amendments will specifically except futures contracts from the requirement that only Australian legal units of measurement of any physical quantity be used. It is recognised that futures contracts can cover matters in countries which have non-metric units of physical measurement. The amendments will also create the office of Executive Director of the National Standards Commission, who will also be an ex-officio member of the Commission. He or she will be appointable by the Commission, not the Governor-General. The appointment of the Executive Director will add to the Commission's expertise and enhance its effectiveness. It will also be consistent with the findings of the Committee of Inquiry into Commonwealth Laboratories-the Ross Committee-and with the `Policy Discussion Paper concerning the Efficiency and Accountability of Commonwealth Statutory Authorities and Government Business Enterprises'. Another amendment, which will also implement that policy discussion paper, will raise from $50,000 to $100,000 the limit on contracts which the Commission may enter into without ministerial approval. National Museum of Australia Act 1980 The amendment is being made to rectify an anomaly. The Act at present does not give the Council of the Museum the power to dispose of historical material owned by, or in the possession of, the Museum which does not, however, form part of the `national historical collection' as defined in the Act. The amendment will confer on the Museum largely the same power to dispose of such material as it now has over material that is in the `national historical collection'. Navigation Act 1912; Shipping Registration Act 1981 The most noteworthy amendments of the Navigation Act will benefit the maritime industry by eliminating unnecessary duplication of certificating of ships. The amendments of the Shipping Registration Act are intended to promote the prompt provision to the Registrar of Shipping of accurate information on ships entitled to be registered in Australia. Pig Industry Act 1986 This amendment removes the restriction on the Australian Pork Corporation Selection Committee which prevents it from nominating for appointment to the Corporation anyone who is a member of the executive of an eligible industry body, that is, the Australian Pork Producers Federation or the National Meat Processors Association. A person will still be ineligible for actual appointment to the Corporation if he or she is such a member. Removal of this restriction will mean that such a person will not need to resign his or her position in the Federation or Association when nominated for appointment; he or she will have to do so only if and when offered appointment to the Corporation by the Minister. This amendment will bring the selection procedures for the Corporation into line with those for other statutory marketing authorities. Quarantine Act 1908 The Act does not at present authorise the search of luggage and cargo entering mainland Australia from the Torres Strait area on Australian ships and aircraft. The amendment will close this loophole in the law. Trade Practices Act 1974 The object of this amendment is to eliminate overlap and possible conflict between the provisions of the Act that import certain terms into contracts for the sale of goods and those of the 1980 Vienna Convention on Contracts for the International Sale of Goods. Legislation implementing the provisions of the Convention is being enacted in each State and Territory. Once that legislation is in place and the amendment now proposed has been made, Australia will be in position to accede to the Convention. I commend the Bill to the House. Senator GARETH EVANS —I table the revised explanatory memorandum to this Bill. Debate (on motion by Senator Reid) adjourned. Motion (by Senator Gareth Evans) agreed to: That Government Business, Notice of Motion No. 1, be postponed till the next day of sitting. Motion (by Senator Coates)-by leave-agreed to: That Business of the Senate, Order of the Day No. 1, be postponed till Friday, 29 May 1987. Debate resumed from 13 May, on motion by Senator Walsh: That the Senate take note of the statement. Senator SHORT(Victoria)(4.04) —The 13 May statement by the Treasurer (Mr Keating) on initial Budget measures for 1987-88, which we are debating today, should never have been necessary. But, given that it did become necessary, it should have been a serious attempt to identify and tackle the fundamental problems facing this nation. Instead, the Government once again dissipated its opportunities and totally misjudged the priority needs of Australians. The mini-Budget not only failed to tackle the fundamentals of our problems but it targeted those in our society who could least afford to be targeted. It targeted the already disadvantaged, the weak, the poor, the powerless. It added to the problems of these people in our society. It furthered the process that the Government embarked on when it took office more than four years ago, the process of butchering the living standards of virtually every Australian. The Government has caused the greatest fall in living standards-- Senator Gareth Evans —An overdose of your rhetoric. Senator SHORT —I repeat, for Senator Evans's benefit, that the Hawke Government has caused the greatest fall in living standards in well over 30 years. It has done so in a variety of ways and for a variety of reasons. It has done so deliberately, coldly and callously. It has done so because it has not had the guts to stand up to its powerful friends, the trade union movement, of which the present Prime Minister (Mr Hawke) was the leader for 10 long and miserable years-10 years which saw the trade union movement and its leader become far and away the most divisive and destructive element in Australia's history. The Government has not had the guts to take the axe to its own bloated spending programs, to its vast bureaucracies, to its inefficient, senseless and wasteful spending of the taxpayer's money. These are the reasons which have necessitated this mini-Budget. These are the reasons why the Opposition called over and over again for the Government to introduce a mini-Budget. It was totally clear last August when the 1986 Budget was brought down that a mini-Budget would be necessary before the end of this financial year-totally clear to everyone except this incompetent Government and economically illiterate Treasurer. The need for a mini-Budget was clear, as were the reasons. The reasons were these: Government spending had got out of control. The four Keating Budgets have been the four biggest spending Budgets in our history, not just in terms of dollars but as a proportion of our total gross domestic product or, if you like, our total economy. For this reason the Government has also been the biggest taxing government in our history. Because of both these factors the Hawke Government has presided over the lowest value of the Australian dollar ever. It has imposed and is still imposing the highest real interest rates in our history. It has contributed to the largest foreign debt ever, a debt which is now, in net terms, one-third of our total gross domestic product compared with only 13 per cent of GDP which it was when the Hawke Government came to office, a debt which last year increased by $3m every hour of every day of every week in the year, a foreign debt which to pay off would require $26,000 to be taken from every Australian family. The Government has contributed to the largest deficit in our balance of payments on current account in our history, a deficit which continues to increase by an average of $1 billion every month, a deficit which is the second largest of any country in the Western world, a deficit which is placing the future economic viability of our nation in very considerable jeopardy. This Government's economic policies have led to its being the only Australian government ever to lose Australia's AAA international credit rating. It is these policies which have led to a major reduction in our rate of economic growth. In 1986-87 alone, gross domestic product growth will be at best 1 1/2 per cent compared with last year's Budget estimate of 2 1/4 per cent. The Government is forecasting growth of 2 1/2 per cent again for 1987-88, but one can bet London to a brick that that will not be achieved. The Government has substantially revised downwards the forecasts for growth in 1987-88 which it made only five months ago. Inflation has remained very high, indeed at record levels relative to the inflation rates of our major trading partners. There is very little substantive evidence to suggest that inflation will decline next year. Private business investment, the engine of future growth and development, has fallen in three of the past four years and will show little or no growth once again in the current 1986-87 year. More disturbing still, surveys indicate that business fixed investment will fall even further next year, 1987-88, possibly by as much as 5 to 10 per cent. These disastrous trends have had a devastating effect on the standard of living of every Australian, and particularly young families with young children. Let me outline some of the stark, cruel, objective facts. A one income family with two young children is now at least $31 a week worse off than it was when the Hawke Labor Government was first elected. Even after the Hawke Government's so-called tax cut on 1 July next, all single income families with a dependent spouse will be paying a higher proportion of their income in income tax than in March 1983. For a single income family on average weekly earnings, the average tax rate will have increased from 17.5 per cent in March 1983 to 20.5 per cent in July 1987, while the marginal tax rate will have increased from 30 per cent to 40 per cent. After July this year such a family will still require an additional income tax cut of $15 a week just to restore it to the same average tax rate position it faced when the Hawke Government came to office. In other words, the Hawke Government's December 1986 and July 1987 tax cuts merely give back to taxpayers some of the additional tax that four years of fiscal drag have taken away from them. So much for taxation. Let us look at other areas where this miserable, incompetent Government has savaged Australians. There are now almost three-quarters of a million more people below the poverty line than there were when the Hawke Government came to office. There are now 2.6 million people officially classified as below the poverty line, compared with 1.9 million people in 1983. Some 400,000 Australians live permanently in caravans and another 100,000 are homeless or live in refuges. Public housing waiting lists continue to grow inexorably. There is a waiting list now of 154,000 for public housing-a record, and what a sad record. That figure of 154,000 includes families, of course, so the actual number of people affected is much greater. Private housing has become unaffordable for many Australian families as a result of the deliberate high interest rate policy of this Government. Four years ago, when the Labor Government was first elected, the average Australian family needed to spend 19c in every dollar of its pre-tax income to repay its housing loan. Today, that figure is almost 27c in every dollar. The real position, of course, is much worse than that because that sum is a percentage of pre-tax income dollars and the average amount of tax that all of us are paying is now that much higher. This amounts to a staggering increase of $281 each month in additional repayments, to a total average monthly repayment figure on an average loan for an average house by an average Australian income earner of $650. No wonder Australian families are bleeding from the wounds inflicted by this Government. So what does the Government do? In its mini-Budget it increased taxes still further, by between $400m and $500m per year. The Government boasted that this was a much vaunted part of its so-called $4 billion spending cuts-but $500m of that was in increased taxes, not in reduced spending. On top of that, the Government increased the cost of private health insurance. It discriminated against private hospitals and disadvantaged many ill people, particularly the elderly with chronic illnesses. It announced a $1 billion sale of assets but it refused to give sufficient details for us to judge whether these sales are achievable. On the Government's past record, they are not achievable. It tried to have us believe that this selling off of the family silver was a spending reduction. What absolute nonsense. The Government announced a $1 billion reduction in payments to the States but it refused yesterday at the Premiers Conference-and it stands indicted for this-to obtain any assurance from the States that they will cut their spending accordingly, rather than simply fuel inflation by increasing State taxes and charges. It is clear from the Premiers' reactions after yesterday's Premiers Conference, and from the comments in today's Press about those reactions, that State taxes and charges will be increased. So Australians will be slugged still further, their living standards will be further reduced and additional imposts will be placed on business at a time when business is struggling to survive and, as I said before, when business investment is falling. I will leave it to other speakers on this side of the chamber to go into more detail on these and other issues. Let me make a few concluding additional points. The Opposition of course does not object to everything in this mini-Budget. Several of the decisions, including for example those relating to the unemployment benefit for 16- and 17-year-olds and the privatisation proposals, were taken from my Liberal Party's policies. What we do object to is the Government's economic incompetence which led to the need for a mini-Budget in the first place and then, having decided on a mini-Budget, the Government's failing abjectly to deliver the goods on its own side and instead trying to force all the pain of adjustment on to the States without obtaining any guarantees that they will not merely increase their own revenues rather than reduce expenditures. Not one government body, board, commission or department was abolished in this mini-Budget. Not one attempt was made to reduce duplication and waste by Federal and State governments. Instead, all we got was the tired old rhetoric and a further attack on the living standards of Australians. The Government must realise that the time for alibis has long passed-if it ever existed. This Government inherited a situation in March 1983 where the world economy was recovering, the worst Australian drought in living memory was breaking and the Fraser Government's wage pause was bringing stability to costs, prices and interest rates. The Hawke Government inherited a wonderful opportunity but through gross mismanagement, capitulation to militant trade unions and the Australian Council of Trade Unions, and an overwhelming need to be populist, this Government has completely dissipated the wonderful opportunities with which it was presented. As a result, Australia and all Australians are the poorer. This is tragic. The other tragedy is that the Government appears to have learnt nothing from the past four years. It is not good enough for the Government to blame Australia's economic problems simply on the terms of trade, on the fact that the rest of the world is paying less for our goods. On three occasions during the 1970s, the terms of trade declined by as much as or more than they have in the last couple of years. But the difference between then and now is that in the 1970s the Fraser Government which faced these problems adopted policies which had regard for these declines and for the external situation. As a result it produced policies which caused and enabled living standards to rise. By contrast, this Hawke Labor Government has failed to tailor its policies to take account of its external environment and, as a result, we have all suffered. But, for heaven's sake, let us hear no more alibis. Quite simply, they will not wash any longer. If Australia is to break out of its present disastrous combination of highest real inflation in our history relative to the rest of the world, its declining economic growth, its rising unemployment, its record interest rates and its record and rising debt, several fundamental steps have to be taken. The Government obviously cannot take them all. Decisions that governments take will affect the future of this country and determine the growth, the activity and the living standards of this country in a fundamental way. What the Government must do-what it has not done since it came to office-is encourage incentive and initiative so as to increase investment and productivity to make us internationally competitive once again. In the last four years we have become increasingly internationally uncompetitive. Depending on how one plays with the figures, they will show that the exchange rate depreciation has made us more competitive than would have otherwise been the case and, of course, that is so. But exchange rate depreciation is the soft, unsustainable option to make a country increasingly competitive and we are not taking the steps to produce international competitiveness on a sustainable basis. Over the last four years our unit labour costs have risen relative to those of our major trading partners and we have become increasingly uncompetitive in that and other ways. So the Government must adopt policies and take actions to reverse that trend to make Australia a much more productive and competitive country again. As part of that, the Government must restructure the tax system to encourage this productivity and growth. We must have a less overall burden of taxation; we must have a flatter rate of income tax; we must remove the enormous raft of anti-business taxes that have been foisted on the productive sector of this nation over the last four years; and we must remove the bias and positively rebase our taxation system to assist young Australian families with young children because that is the group in our community that has been most savaged by the policies of the Hawke Government over the last four years and that is the group in our community that can least afford to be so savaged. Quite simply and quite obviously, we cannot afford the continuing decline in our relative position in the world that has occurred over the last four years. Over the last couple of days we have heard sounds, noises and words that we are about to have an early election. All I can say to the Government is that on its record over the last four years, particularly its record on this latest mini-Budget and its continuing failure to take the hard and necessary decisions to put this country right, I, for one, cannot wait to go to an election to help restore a Liberal-National Party coalition to government because that is the only way that this country will get out of its present problems and go on to a vital and prosperous future. Senator MAGUIRE(South Australia)(4.24) —This afternoon we are debating the Budget 1987-88-Initial Measures, May 1987, otherwise known as the May economic statement. I begin my remarks by saying that after three years of strong economic growth in Australia, the Government made a readjustment to Australia's economic policy in the August 1986 Budget. Up to 1986 Australia had experienced the most rapid real economic growth in the Western world. Despite the carping, whingeing and knocking comments by the Opposition and despite the knocking comments by Senator Short this afternoon, this Government had the fastest real economic growth in the Western world in the period up to June 1986. Senator Short claimed that, because of world economic recovery or some other factor, economic growth in Australia took off under this Government. But it certainly does not explain the fact that, over that three-year period, the Labor Government in Australia presided over the most rapid growth of any industrialised country in the world. We had to readjust our economic policy because of the external factors facing the country, most notably the relative decline in the average prices paid for our export items compared with the average prices paid for our import items. As a result of that decline in our terms of trade, we have physically had to export more items to cover the cost of a previously given amount of imports and there has been a blow-out in the recurrent part of our balance of payments, known as the current account. The deficit on the current account increased enormously and that is the reason why the Government has had to readjust economic policies. This May statement is part of that readjustment of policy. It is very illustrative to compare our export prices on average with our import prices in the financial year 1985-86. We find that they declined by some 10.1 per cent in that year compared with a previous annual decline of around one per cent per annum. So that devastating fall in our export prices wiped off about $4,500m of Australia's national income in one fell swoop. Of course, despite the comments made by the Opposition, most notably by Senator Short this afternoon, the decline in the terms of trade is completely outside the control of the Government of Australia. In fact, it reflects items such as depressed international commodity prices and it has been compounded by the actions of the United States of America and the European Economic Community in subsidising farm prices which have been forcing down the prices of our traditional exports. So those are the sorts of factors that have been causing these problems. The bottom line is that, as a result of those factors, Australia has had to export more to pay for the same amount of imports. That is a very simple way of illustrating the problems facing this country and it is a very simple way of showing the need for measures such as the May economic statement. The Government has readjusted economic policy to moderate domestic economic demand but, at the same time, permit increasing growth from external sources. In fact, the 1986 Budget calculates that net exports-that is, the excess of exports over imports-will constitute some one and three-quarter percentage points of the projected growth in domestic product in 1986-87, with the domestic sector growing by comparison by only one-half of a percentage point. So the overwhelming contribution to that growth is coming from the external sector. The low growth in domestic demand will help to turn around the current account deficit on our balance of payments, most importantly, by reducing demand of the economy for imports because there is quite a definite relationship between levels of economic activity and demand for imports into an open economy, such as that of Australia. To achieve this objective of reducing imports the Government has made substantial reductions to its own expenditures. Let me give as an example the 1986 Budget deficit, as distinct from the current account deficit on the balance of payments. I must say that I am surprised at the amount of confusion that exists, even among members of parliament, that the current account deficit is the same as the Budget deficit. It is a rather astounding situation. The deficit of the Federal Budget has been cut to 1.4 per cent of gross domestic product for the current financial year. Of course, that compares with a 5 per cent prospective deficit inherited from Mr Howard when he was the Liberal Treasurer for the 1983-84 financial year. During the current year total public sector borrowings will fall by more than $2,000m and this will help cut, importantly, the growth in public debt interest and hold it at about 10 per cent of Commonwealth government spending through the Budget. The statement that was brought down by the Treasurer (Mr Keating) last Wednesday week includes a number of measures that will have the effect of reducing the Commonwealth Budget deficit in the 1987-88 financial year by some $4,000m. The measures in that May statement will have the effect of reducing the rate of growth of government spending to its lowest level in 30 years and the statement builds on the process of readjustments that the Government initiated last August in the 1986 Budget. Mr Deputy President, the measures that are contained in the May economic statement fall into three categories: Recurrent expenditure reductions; receipts measures; and the sale of assets. Recurrent expenditure reductions total more than $2,600m for next financial year, of which $1,600m are recurrent expenditure reductions by the Commonwealth Government in respect of its own expenditure with the remaining $1,000m being made up of recurrent expenditure reductions by the six States and the Territories. The receipts measures in the May economic statement will gather some $400m, resulting from the removal of sales tax and customs exemptions for some Commonwealth enterprises. So, the recurrent reductions in prospective government spending next financial year will total $3,000m. This will be capped off by the sale of assets worth $1,000m, which will be used to reduce Commonwealth debt and to provide some savings on interest payments made by the Commonwealth Government. Had the Government not acted to introduce this May economic statement to restructure Commonwealth and State government expenditures, the forward estimates of expenditure show that spending would have risen by some $7,000m or 2 1/2 per cent in real terms next financial year. A very large amount of extra expenditure would have resulted had there not been measures to trim back growth in Commonwealth Government and State government spending. As a result of the May statement, instead of there being a real increase of 2 1/2 per cent in real terms in government spending next financial year there will be a negative 2 per cent change. The May economic statement introduced by the Treasurer will allow the Commonwealth Government significantly to reduce the Budget deficit in both money terms and as a proportion of Australia's gross domestic product. Next year's Budget deficit will fall below one per cent of Australia's gross domestic product and I would compare that with the figure that was inherited from Mr Howard when he was the Liberal Treasurer. The figure in prospect for 1983-84 was some 5 per cent of gross domestic product. In 1987-88 the Budget deficit will be less than one per cent of Australia's gross domestic product and a figure of around $2,000m is likely to be the Budget deficit next financial year, compared with the figure bequeathed by Mr Howard to the Australian people of $9,600m. The Government's spending restraint will contribute towards correcting the imbalance in the external economy, reduce public sector borrowings and help to reduce interest rate pressures in the economy. The fiscal restraint practised by the Commonwealth will help to moderate domestic demand and, as I explained earlier, therefore help to moderate and stem the flow of imports. The reduced government borrowing will help stem the growth of Australia's foreign debt. I should here, Mr Acting Deputy President, pick up some of the comments made by Senator Short in this debate this afternoon, because although he waxed eloquent about the level of Australia's foreign debt, I did not hear him refer at all to the fact that the overwhelming majority of that debt is in fact private sector debt owed by many of the largest corporations in Australia. Senator Brownhill —They have been forced off-shore by your high interest rates. Senator MAGUIRE —As a result of very large scale borrowings by large Australian corporations we have a situation where the overwhelming majority of Australia's overseas debt is owed by companies. It is rather illuminating to hear a National Party senator such as Senator Brownhill, who purports to represent farmers and rural interests, now protecting the largest industrial corporations in Australia and now defending them and their activities to take over Australian assets by large scale off-shore borrowings. It is an indication of the road down which the National Party of Australia has moved since the days when it defended the ordinary farming community of Australia; now it protects the large industrial corporations that borrow billions and billions of dollars overseas to take over Australia's assets. The May economic statement brings restraint with equity to the Australian community. The Government has spread the burden of adjustment to the more difficult economic times we face in Australia across all sections of the community. It has not left it to the laws of the market or the laws of the economic jungle. It is, by its own action, spreading the burden of the adjustment to our difficult circumstances across the community. I am very pleased that one of the items that have been cut in the May economic statement is the allocation on the forward estimates for defence, because it is a fact that in the previous two rounds of reductions in expenditure the defence area has been largely untouched. Although it is important that we have a viable defence structure in Australia, it is also important that the defence area shares the burden of reductions at a time of economic restraint such as the present. The one per cent reduction in defence spending next financial year will save some $350m of the $1,600m of Commonwealth outlays reduced by the May statement. The provision in the May statement to income test family allowances is a very fair measure, again spreading the burden of adjustment more equally-making sure that lower income families are protected but also ensuring that those who have the capacity to pay make their contribution by having family allowances subject to an income test if the income is above $50,000. It is very interesting to note that in the case of, say, a three-child family, family allowances do not cut out until an income of $59,400 is achieved. That is by no means a low income in Australia. It is a relatively high income and I believe it is fair and just that families in those circumstances do contribute to the sacrifices that have to be made by the community as a whole. The savings made with regard to family allowances will save the expenditure of $95m next financial year. I am also very pleased as a member of the Joint Committee of Public Accounts that reductions have been made in the schedule fees paid to members of the medical profession in regard to some diagnostic services. The fact is that in recent years enormous productivity gains have been made as a result of high technology being introduced into diagnostic services. Multiple tests are now available with particular equipment, but the schedule of fees that was available to remunerate doctors for performing those services was still very much of a cumulative nature. So doctors could be remunerated by adding a number of services together and getting a very large remuneration from the taxpayer when, in fact, the technology that is available enables a whole range of tests to be performed simultaneously. It is appropriate that these measures have been introduced in the May economic statement to bring the fees that are paid to those members of the medical profession more into line with the technology that is available. I just instance that, in regard to the diagnostic services, that will save the taxpayer some $40m next financial year. That, combined with other adjustments in medical fees, will save a total of $128m, and that is one of the large elements of government expenditure reduction in the May economic statement. I am very pleased to say, as are all members of the Australian Labor Party, that in constructing the May economic statement-in looking at the sums and in getting the numbers right-we have been able to exempt pensioners from any further sacrifice through cuts in expenditures. We are very pleased indeed that, following the May economic statement, we have been able to retain indexation of pensions for cost of living rises. I am also pleased to announce that on 25 June there will be a 5.5 per cent increase in pensions, reflecting the rise in the consumer price index from July to December last year. The standard or single weekly rate of pension will increase by $5.95 to $112.15. The weekly rate of pension for couples will rise by $9.90 to $187. Of course, as well as going to age pensioners, that 5.5 per cent increase will go to invalid pensioners, widows and supporting parents. It will be available to married couples receiving unemployment benefits and it will also apply to persons over the age of 21 years receiving unemployment benefits but without dependants. It will also be available for persons receiving service, disability and war widows' pensions paid through the Department of Veterans' Affairs. Even though we have brought down this very stringent reduction in government expenditure, the Government has committed itself to the introduction on 1 July of the so-called poverty trap measures, which will be of enormous benefit to pensioners throughout the Australian community. On 1 July the amount of extra income allowable before a person goes on to a part pension will increase from $30 a week to $40 a week for a single person and from $50 a week to $70 a week for couples. Also, on 1 July the income which is disregarded in the case of pensioners who have dependent children will be doubled from $6 per child to $12 per child. That means that a pensioner couple with one dependent child, instead of having the present income limit of $56 before going on to a part pension, will have an income limit of $82. That is a tremendous increase. The most important thing to bear in mind is that, as a result of the indexation of pensions by 5.5 per cent on 25 June, Australian pensions, as a proportion of the average weekly earnings of the work force, will be heading towards 25 per cent. That is worthy of note. In late 1986 the pension in Australia equalled 24.1 per cent of total average weekly earnings, which compares very favourably with the 22 per cent proportion which applied when Mr Howard was Treasurer. The May economic statement also introduces an assets test in respect of unemployment and other beneficiaries. That measure will save some $12 1/2m next financial year. The test will apply to persons aged 25 years and over receiving unemployment, sickness or special benefits. That measure closes a loophole which has existed with respect to the pensions assets test. This loophole has been taken advantage of by people who have retired voluntarily before reaching age pension age and who have been able to obtain unemployment benefits without being subject to the assets test which applies in regard to pensions. I am very pleased to note that in the May economic statement there is provision for very significant rises in Austudy allowances; that is, the allowances for persons undergoing secondary or tertiary education in Australia. The allowances paid to those students will be increased significantly from June 1988. I instance the case of a secondary student aged from 18 to 20 years living at home. In January that person's allowance will rise from $45 a week to $60 a week. In other words, that very important allowance will increase by a third. The allowance for a secondary student aged 16 or 17 years who is living at home will increase from $40 to $50 a week, or by one quarter. These are some of the specific measures in the May economic statement. In bringing down that document the Government clearly has rejected the two alternative strategies for dealing with the decline in Australia's terms of trade and its external imbalance. It has rejected the option of doing nothing and it has rejected the option which would have been favoured by a person such as Mr Howard, based on his previous track record, of engineering a recession to deflate the economy and thereby reduce the demand for imports. The Government has taken action to stem the flow of imports and to hold down growth in Australia's foreign debt. Had we not done that, the economy would have become trapped in a vicious circle of exchange rate depreciation, mounting inflation and a worsening external imbalance. A deliberately engineered recession would have forced a reduction in the current account deficit, but it would have done so by drastically reducing domestic demand and by just flinging more and more Australians on to the industrial scrapheap. Of course, such a measure would have resulted in substantial falls in family incomes with steep rises in unemployment. There are very encouraging indications that the Government's economic policies are having their effect. I refer to the situation in regard to the current account deficit. The rate of deficit is coming down compared with the Budget forecast. There are encouraging signs in financial markets in regard to interest rates. All honourable senators will be aware that recently most Australian banks have cut their prime interest rates on major overdrafts from around 18 per cent in April to 16.75 per cent in May. These are some of the major reductions in overdraft rates that have been occurring for large borrowers, but I think the most interesting change in interest rates is that paid on bank bills, particularly the three-month bank bills. Three-month bank bills are a major form of borrowing by the banks, as distinct from lending. They are a device by which banks are able to obtain funds for further on-lending to the rest of the community. It is very illuminating to look at the rate that applied back in January, when it touched 17.7 per cent. But, looking at the figures for yesterday, we see that that rate was not 17.7 per cent but 13.7 per cent, so there has been a four percentage points reduction in that very important borrowing rate paid by the banks and that, of course, has a very big influence on their on-lending rates. I noticed that a commentator said last week that once that rate on bank bills touched the 13 per cent level there would be quite significant scope for reductions in other interest rates such as those for home mortgages. We have made great strides in keeping down the rate of inflation or cost of living rises in Australia. As at March 1987 Australia had a 9.3 per cent annual inflation rate compared with a rate of 9.8 per cent up to December last year. So the cost of living rises are moderating. While a 9.3 per cent cost of living rise for the community is too high, it certainly compares well indeed with the 11 1/2 per cent rise-the double digit rise-in inflation that was occurring when Mr Howard was Treasurer. We have had very strong employment growth in Australia in the 12 months to April this year. In fact, despite the adverse economic circumstances facing Australia, employment has grown at a rate well in excess of the Budget forecast of 1.75 per cent. That growth far outstrips the employment performance of many comparable countries. Since the Government's economic summit in April 1983, more than three-quarters of a million new jobs have been created. The Fraser-Howard Government was in office for more than seven years, and its total record for that period was 337,000 new jobs. The Hawke Government has more than doubled that effort, with three-quarters of a million new jobs created in a four-year period. That has had the effect of helping to reduce the unemployment rate, which peaked at 10.4 per cent during the Howard recession of 1982-83. That unemployment rate has now been reduced to 8.3 per cent, which is a significant reduction. The May economic statement enables honourable senators to look forward to the next financial year, 1987-88, somewhat more optimistically with regard to economic matters. As I pointed out earlier, a Budget deficit of around $2,000m can be expected in the next financial year. I compare that with the $9,600m deficit inherited by this Government from the former Treasurer, Mr Howard. The Government can point to a forecast of gross domestic product growth of 2 1/2 per cent in the next financial year, and it can also point to a fall in the inflation rate. Honourable senators heard Senator Short talking a load of nonsense about inflation rates and how inflation would not fall as a result of the May economic statement. This Government started off with an inflation rate of 11 1/2 per cent inherited from Mr Howard when he was the Treasurer. It has already got it down to 9.3 per cent. However, the forecast as a result of the May economic statement is that by June 1988, the annual inflation rate will be cut not to 8.3 per cent or 7.3 per cent but to the vicinity of 6 per cent. That is a virtual halving of the inflation rate that pervaded Australia when Mr Howard had his go at running the economy of this country. We can look forward to improvements on the economic front next financial year as a result of the May economic statement. This Government, through its policies, has ended double digit inflation and double digit unemployment, and has ended economic mismanagement. It has created three-quarters of a million new jobs; it has not destroyed 186,000 jobs as Mr Howard did when he was the Treasurer. The May economic statement helps the Government to take better advantage of the competitive edge provided for the Australian economy by the devaluation of the dollar. Australia is now poised to reap the benefits of the redirected and restructured economy, and a key benefit of that will be improved future living standards for the Australian people. Senator BROWNHILL(New South Wales)(4.53) —Having listened to Senator Maguire, for whom I have always had an amount of respect, I thought he was talking about fairy tales and as though we are living in a land called Camelot. He is not in the land in which I am living because he is looking at the situation in a quite different way. He is either living in Camelot or away with the pixies. The mini-Budget was forced upon the Government because of its continued mishandling and misinterpretation of the economy. The Government has been repeatedly unable to keep its Budget deficit to acceptable levels. The best that can be said is that it has started to do some of the necessary pruning that it should have done a couple of years ago. Having said that I have always had some respect for Senator Maguire, I have to say that I cannot understand what he was talking about, because his thinking is in a different category to that of any other person in Australia. The Government has failed to make any substantial cuts in spending of any real nature in any government department. I remind Senator Maguire that the Treasurer (Mr Keating) indicated in his statement that spending cuts would reduce the growth rate of government spending to its lowest level in 30 years. I shall refer to the level of government spending since the Labor Party has been in power in a moment or two. This is not a real cut. It is not what the community expected the Government would be doing at this stage to get the economy back on the rails. The Government has decided to take the soft options. It has decided to sell assets-and in some cases, it is unlikely that it will find buyers for them. Last year, this same Government was talking of selling rifle ranges in Sydney and Melbourne. Those rifle ranges are still on the market. Other assets the Government has included in its assets sell-off are Commonwealth offices. They are included at a time when the Government is still paying exorbitant rents for space elsewhere. The Government is talking about selling off the Embassy in Paris and parts of the Tokyo Embassy land. Even if those sales go through, they will only slightly reduce the Commonwealth debt, which is now some $46 billion, aided and abetted by the Government's mismanagement of the past few years. The sale of those assets would raise revenue in the short term, but it would do little for the long term economic needs. It has only a small immediate impact and has no continuing benefit for this country. The sale of those assets will not be of any substantial benefit given the size of Australia's present trade deficit. The sale of part of the Tokyo Embassy seems particularly futile when the Government will be liable for capital gains tax to the Japanese Government. It is a short-sighted move. There is little to be gained from selling an asset at any time, but it is likely that, in the future, Australia will need to expand its embassy area and it could use that land it has now to earn income rather than to have a one-off benefit. No accountant would suggest selling assets to clear debts if there were a possibility of the asset being a potential income earner. It is all right to sell an asset that has no hope of earning income, but it is futile to sell an asset that has a chance of being an income earner, such as the Embassy in Tokyo. I shall quote from a letter that appeared in the Australian Financial Review of Friday, 22 May from a Mr Harrowell, who visited Tokyo. He stated: As the result of a most innovative approach by the Department of Local Government and Administrative Services last year I was involved in forming a consortium to provide advice on all aspects of redevelopment of the Australian Embassy site and attended in Tokyo for the purpose of ascertaining the facts and preparing a tender submission. The letter went on to state: This low vacancy rate is being maintained in the face of very high rents. The letter indicates that one can get between $6,000 and $10,000 a month for suitable accommodation in Tokyo, and that is because there is a low vacancy rate. The letter ends by stating: Australia has already incurred the cost of acquiring lands sufficient to satisfy Australian requirements for many years to come; the commercial decision is how best to capitalise on this valuable asset. The British and Canadian Governments have already considered the issue and incorporated in developments of their sites the ability to let office and domestic accommodation on the local rental market both to fund redevelopment and to maximise site usage. The scope and possibilities for maximising site usage in Tokyo are enormous and any decision to sell without a thorough evaluation would be extremely short-sighted and not, I believe, in the long-term interests of Australia. Those comments were made by a person who has been there to look at the situation. The sort of capital gain that can be made from an asset like that is something that the Government has not properly considered. One of the measures that have been suggested concerns gaining revenue from Telecom Australia and Australia Post by taking away the excise exemptions that presently exist. Telecom has already announced that it will increase the cost of local and subscriber trunk dialling calls. It has already indicated that it will almost completely stop its upgrading of telephone services in regional and remote areas. The cost of rural installations will increase from some $1,380 to $6,250. Australia Post is also going to increase its charges. This involves no savings, cuts or reduced expectations; there is no real belt-tightening or greater efficiency in this proposal. This is simply passing on the costs to people in the community. It involves no real increase in productivity and there is no real cutting back of government spending. Yesterday the States' allocation was cut back, supposedly by some $2.4 billion. Predictably, with one exception, the States have said that the cuts will be difficult to absorb without increases in taxes and charges. This morning's Sydney Morning Herald reports comments by Mr Unsworth, the Premier of New South Wales, as follows: Mr Unsworth said transport, hospital and electricity charges were likely to rise as a result of the $750m cut in NSW funds. While he hoped cost increases could be kept within the Consumer Price Index, as he had promised earlier, the Government would have to examine the Budget figures more closely . . . Mr Unsworth said the effects of the cuts would begin to flow through after the September State Budget. `The severity of the cuts places an enormous burden on the State which will result in a pruning of our expenditure and an increase in some government charges,' he said. This will cause an increase in the cost of living for the people living in New South Wales. In CPI terms it will cost all the people of Australia, and obviously will start a further advance in the inflationary spiral in this country. I want to refer to a few facts about this Government, some of which Senator Short has already mentioned. This is the biggest taxing Government in peacetime history, with receipts from tax accounting for some 25.5 per cent of the gross domestic product in 1986-87. This is the biggest spending government in peacetime history. In 1984-85 spending reached 30.4 per cent of GDP. It is very easy for honourable senators opposite to criticise the Fraser Government, but I point out that under Fraser spending totalled 27.7 per cent of GDP, while under Hawke the average is 29.9 per cent. I think that Senator Maguire, who has now left the chamber, would most probably be very interested in those figures, in that they could help him when he next plays his Camelot role in this chamber. Under this Government the dollar has slumped to its lowest level ever; on 31 July last year it fell to US57c. Under this Government Australians have suffered the highest interest rates ever. It is all very well to say that interest rates have come back now, but they have come back from an extremely high level to what is still an extremely high level. The interest rate for home loans has been as high as 15.5 per cent minimum; Bankcard has been as high as 22.5 per cent; the prime lending rate has been as high as 21 per cent; and the small overdraft rate has been as high as 20.5 per cent. Further, under this Government the largest stock of foreign debt ever has been accumulated-$101 billion plus at the end of September 1986. In Organisation for Economic Co-operation and Development terms, we have the worst relative inflation rate in the world-some four or five times higher than the OECD average. We have the highest current account deficit ever. In 1986 it was 5.9 per cent of GDP. Whenever the current account deficit for the month is under $1 billion the Government is ecstatic, but what a thing to be ecstatic about. Would it not be nice if it could be turned around? What incentive will be given to this country by this Government? We must remember that this is the first Australian Government to lose Australia's AAA credit rating by two international credit rating agencies. Since 1984 Australia's inflation rate has risen while in the OECD countries inflation has been falling. An inflation rate of around 9.3 to 9.5 per cent is definitely unacceptably high for any country. The mini-Budget has not addressed this problem. I have already said that Telecom and Australia Post will raise their charges, and I believe that the possibility of inflation rising even above the 10 per cent level is just around the corner. It is interesting to note that the standard six-cylinder Holden Commodore-the average Australian car-has increased in price by 25 per cent in 18 months. In the past year the cost of clothing has risen by some 10.2 per cent; house rents by 10.2 per cent; bus and tram fares by 10.7 per cent; cigarettes by 12.6 per cent; and books and magazines by 15 per cent. The situation is even worse in the country areas. In the Tamworth area, just some months ago the cost of fruit and vegetables rose by 18.5 per cent, and while the cost of wine and spirits rose by 6.4 per cent in the cities, in country areas like Tamworth it rose by 20 per cent. The cost of housing is rapidly becoming out of reach of most Australians. In March 1983, families needed to spend 19c of every dollar of weekly income to pay off the average house loan. By December last year that had risen to 27c in every dollar. That works out to be an extra $281 a month for the average home buyer. That is the real story, the real truth. This is not living in Camelot or going away with the pixies. This is how the Government has affected the real people of Australia, the people living in areas other than those which seem to be frequented by Government members. Some 2.6 million Australians are now below the poverty line, compared with 700,000 in March 1983. What should the Government do? Should it have addressed the Medicare situation? Should it have done some pruning there? One must remember that not that long ago the Medicare levy was one per cent, increasing to 1.25 per cent and then to 1.5 per cent? Where will it end? Should not this Government have looked at having a wage freeze? We are already pricing ourselves out of our world markets. If we continue with wage rises we will never get our costs in line with those of other countries. Because the May economic statement was just a fiddle we will still not have a balanced Budget in this financial year. As a country we are still living well beyond our means. Because of the progressive tax scale there is still no incentive for people to work harder and be more productive. We must increase productivity; we have to produce more and if we are going to survive it has to be produced at a lower cost. The Government must prune its inefficiency. Perhaps we need a Peter Grace type inquiry, such as the one that President Reagan commissioned in the United States of America. We need more than this May mini-statement produced by the Labor Government. This statement has been a sleight-of-hand in which the Commonwealth has not really cut back on its own spending. It has left it to the rest of the community to carry the bag for the Government. It has not done the right thing by the people in our community. Senator COOK(Western Australia)(5.11) —This afternoon we are debating the 1987-88 Budget-Initial Measures, May 1987 ministerial statement which was brought down by the Treasurer (Mr Keating) in the House of Representatives last Wednesday and was replied to by the Leader of the Opposition (Mr Howard), the former Treasurer in the Fraser Government, on Thursday evening. I wish to refer shortly to some of the public responses to both the statement by Mr Keating and the reply by Mr Howard. However, while Senator Brownhill is still in the chamber I cannot allow this opportunity to pass without commenting on a couple of the central propositions he put forward in his remarks. One of the comments that he made was that the Government had taken soft options, that the cuts were not real, but illusory, and the somehow we had shirked the responsibility imposed on those who have the treasury bench-the responsibility which obliges us to conduct the economic affairs of this nation as good economic managers. The belief that the Government has taken the soft options, as Senator Brownhill argues, is not shared by key spokesmen for the Opposition. For example, in a media release on 26 April, the Leader of the National Party of Australia (Mr Sinclair), in anticipation of the May statement, said: Not only must there be at least a $4 billion cut in government spending in May, but there also need to be further cuts in the August Budget. On 30 March Jim Carlton, the honourable member for Mackellar, was quoted in the Sydney Morning Herald as saying: The Government needs to make real cuts in government spending to the tune of about $4 billion if it is to convince international markets of its capacity to regain control of economic policy. Senator Short, who spoke earlier today in this debate, made a statement on 10 May. I assume this statement was made to celebrate his elevation to the Opposition front bench as finance spokesman. He said: However, it is certain that genuine expenditure reductions well in excess of $4 billion will be required if a necessary major attack on the Budget deficit is to be mounted. All those leading spokesmen for the Opposition-Sinclair, Carlton and Short-nominated the figure of $4 billion. What do we find when we read the Treasurer's statement to Parliament? In his first sentence he said: Madam Speaker, I shall outline to the Parliament and to the people of Australia measures which will reduce next year's prospective Budget deficit by more than $4,000m. So the target nominated in advance by the Opposition for the Expenditure Review Committee of Cabinet to come up with was met in the statement. It behoves Opposition members at least to recognise that point. One of the necessary ingredients for any government, be it ours or theirs, to succeed in achieving a resurgence of growth and prosperity in the Australian economy is that there should at least be a recognition-as Mr Howard said when he became the Leader of the Opposition-of what the Government is doing right. The Government has done this right. The media commentary has recognised that and it is only the Opposition that does not do so. That partly explains why the Opposition is the most discredited Opposition that one could imagine appearing opposite a government such as ours. The cuts are real. From time to time I wish that they were not as real as they are because the commentary given by the Liberal Party spokesman out in the electorate and reported in the local media is not the sort of commentary that is given in this chamber. Out there among the constituents, confronting the electors, the Liberal Party spokesmen claim that there is pain and suffering because of the cuts that have been made. They try to win votes in their favour because we have been too harsh. This double standard is something for which the Opposition should be held accountable. Senator Button —It happens in here too, depending on who is speaking. Senator COOK —That is absolutely right. Perhaps double standards are endemic in the Liberal Party. If one turns to the reply to the Treasurer's statement given by Mr Howard on Thursday, 14 May, one sees that in his opening sentence he complains about falling living standards in Australia, which we acknowledge have occurred. Later in his speech he also complains that we have supported wage increases. In the absence of a Liberal Party taxation policy-the one thing that the Leader of the Opposition argues will rescue living standards without there being wage increases-it is pretty hard to see how in present circumstances he can be credible. He puts the proposition that living standards should not have fallen in the way that they have and that the Government should not ease that fall through the social wage-the taxation policy and wages. As I understand it, the reduction in living standards has been to the tune of about 6 per cent. That reduction has been forced upon this Government by a turnaround in the terms of trade-a turnaround that the Treasurer estimates has taken some $6 billion off our national income. That is a significant turnaround in Australia's ability to earn. In those circumstances there needed to be some general reduction in living standards in this country. That is not something that we, as a government, like but it is something that we have sought to achieve with equity and fairness across the board and in concert with the major players in the Australian economy. Our mode of operation is not one of confronting the community and forcing standards on it. In a leaked Liberal Party document, a secret document which deals with the Liberal Party's proposed cuts, it predicts that there will be a general strike because of them. Our approach is to get a degree of easing down and that is something that we have done. Having disposed of the points made by Senator Brownhill, I return to my comments about the May economic statement. The reception accorded to the statement has scotched once and for all any suggestion that this Government is not the best economic manager for Australia. The reception by the Press, the commentators, the market and the major community organisations is one in which the mantle of responsibility and capable economic management has clearly descended on the shoulders of this Government, so much so that if one consults yesterday's Australian Financial Review editorial one will see that it enjoins this Government-or the Prime Minister-to hold an early election and it says some revealing things which should be quoted. These comments indicate the degree of support for this Government across the board, across the political spectrum and from quarters that are not traditional Labor supporters. The editorial said: As far as business is concerned, it is difficult to believe that a Labor Government will ever see a better polling result than the BRW-Hyatt Business Poll published in last week's Business Review Weekly. It showed that out of 180 chief executives from the nation's biggest companies, almost 56 per cent regarded the Government's performance as `quite good' or `very good' while 94 per cent said the Opposition was `bad' or `indifferent'. Almost 40 per cent said Mr Hawke would make the best Prime Minister and only John Elliott came anywhere near this score with a favourable rating of 29 per cent. As long as Mr Elliott remains outside Parliament, opinion polls such as this can only benefit the Government. They tell the public that even business lacks faith in the conservative leadership. Senator Button —As long as Mr Elliott remains out of politics his ratings will be fairly good too. Senator COOK —That is an appropriate interjection because the editors of the Australian Financial Review go on in that editorial to repine that Mr Elliott's ratings remain good while he does not have to face the task of proving his mettle in one or other of the chambers of this Parliament. As soon as he does, the image of competence will evaporate. To return to the argument, the point is that no longer does business approve of the economic policies or the competence-one would say properly incompetence-with which the Opposition conducts its affairs. Business has deserted it; business approves of the Government. In comments on the day after the delivery of the May economic statement one could read in, for example, the Australian newspaper these words: The Federal Treasurer's economic statement is a serious and impressive attempt to cut public spending and to reduce Australia's Budget deficit. That editorial concludes: But none of this can obscure the fact that Mr Keating's statement is an admirable contribution to the struggle for Australia's economic recovery. That is hardly a damning indictment of the Government; certainly, from a conservative journal, it is an approving one. Other newspapers share that view. In an editorial on 14 May, headed `The Right Direction', the Canberra Times says: Last night's economic statement by the Treasurer, Mr Keating, is a step in the right direction. It goes on to say: The savings are significant- and there is an answer to Senator Brownhill's point- and should help to restore the deficit to more manageable proportions. It concludes by saying: Last night's statement is a step toward getting the Australian economy back on the rails and the Government deserves some credit. If the Opposition has the interest of the country at heart it will not try to score political points by arguing the case of people affected by the cuts. After all, it has been the Opposition that has urged the Government to be tough on spending. The Sydney Daily Telegraph of the same date, commenting on the statement under the heading `First steps out of the doldrums', said: Federal Treasurer Paul Keating last night pushed the nation in the right direction. It concluded its editorial with this paragraph: The Government has to keep reducing its demands on Australia's finances so that the economy can move out of the doldrums and into activity and prosperity. Mr Keating's mini-Budget is a very valuable step in that direction. Senator Brownhill —They are six editorials. What about six million people out in the community? What do they think of their extra telephone charges? Senator COOK —I will come shortly to the market's response to the economic statement, but there is the approval given by some main journals in Australia and the business community and, as I have said, other major community organisations have greeted it with approval. The aim, of course, of this mini-Budget, as it has been called, is to shift community resources away from consumption to investment and import replacement. That aim is obviously designed to reduce our foreign debt, to make Australia's internal industrial capacity more competitive and to succeed in reducing the imports into this country. It has succeeded in doing that, according to the commentators. As I have said, the $4 billion cut is real, and in the current macroeconomic circumstances it is the most appropriate figure to have chosen. We have not cut for the sake of cutting. The cuts have been intelligently aimed to produce the best result. For example, the aligning of income support to teenagers who are out of work or who are seeking work with teenagers in education has removed what I think most honourable senators would regard as a long-standing anomaly. The increase in training places is good for the individuals who will be able to take advantage of it and is naturally good for the economy in that it increases the stock of skills and the technical expertise available which an expanding economy will need. One of the little referred to changes that appears in the mini-Budget is one where the Government has managed to save $10m-one wonders why this has not been done by previous governments-simply by booking government travel through travel agencies and getting commercial discounts. That, for example, is a useful change. As other senators on the Government side have said, the cut in out of hours doctors' consultation fees is sensible and responsible in determining the efficient use of funds for Medicare and in cutting waste. If people want to take advantage of the 24-hour doctors' such as Dr Edelsten and others who have become millionaires at, I believe, public expense, they will have to bear the cost. We have managed a number of cuts-cuts in the defence area, the sale of some public assets and a number of other changes-while not touching pensions. As honourable senators will know, in the last Budget the dates of pension increases were put back. It has not been done in this mini-Budget. Pensions will go up by 5.5 per cent on 25 June, and we will be close to achieving a pension that is equal to 25 per cent of average weekly earnings in Australia. As a result of these changes, bank interest rates have begun to fall steadily. The prime rate has come down from 18 per cent in April to about 16.25 per cent now. The 90-day bank bill rate in January this year was 17.7 per cent. It has dropped 4 per cent; yesterday it was 13.7 per cent. Home loan interest rates are teetering on the brink of a fall. I conducted an informal survey in Perth last week and found that if one wishes to borrow $50,000 to finance the purchase of a home banks are undercutting the Commonwealth Bank of Australia in order to compete for custom. One is able to get lower rates from banks such as Citibank Ltd and Challenge Bank Ltd. With that type of competition for customers it is likely that very soon interest rates for home loans generally will fall. As I have said, all of these remarks must be seen in contrast with what the Opposition has been proposing. Mr Howard has, according to the same commentators, delivered a thin, vacuous document, one that has not enhanced any claims that he may wish to make to economic expertise. Coming as it does in the yawning absence of any Liberal Party of Australia policy on taxation, it has no credibility whatever. In this chamber we are able to look across and see the shadow spokesman on tax matters, Senator Messner. Obviously it is discomforting for him- Senator Messner —No, not any more. Senator Childs —No, he has been dropped. He is out. Senator COOK —I can understand why. Obviously it is discomforting for the whole of the Opposition to know that the central plank that is necessary to an economic platform having credibility in this country-what is proposed to be done about tax changes-is still absent and the people are unable to make any decision. Indeed, on 22 March this year, a secret document was leaked. It had been drawn up by the Liberal Party secretariat as a draft policy document listing controversial spending cuts. It proposed savage cuts in the welfare area, including the scrapping of the indexation of pensions and a number of other programs. It would change the eligible age for women getting the age pension to 65 years. The authors of that document claim that their cuts would save some $5 billion, but they warned the Howard Opposition that, if they were implemented, within six months it would face a general strike in the community. That is the first point of contrast between us and them. We have managed to make the adjustments that are so necessary to the economy without that type of disruptive, dislocative and antipathetic activity. Since the secret draft was leaked the Liberal Party has backed away from several of the main spending cuts it proposed. Detailed Government costings produced in the Parliament show the net savings of the complete list would come to just $2.3 billion, still $14 billion short of the cost of the Liberal Party's taxation promises. Indeed, the credibility gap is yawning more widely. In the face of what the Liberal Party proposes, interest rates and inflation rates in this country would go through the roof. The proposals advanced in the secret document suggest the freezing of pensions, which would save $1.3 billion. Therefore, pensioners would be slammed while they watch the rich friends of the Opposition being rewarded by the scrapping of the tax on capital gains, fringe benefits and entertainment allowances and enjoying their free lunches, free cars and other fringe benefits paid for by taxpayers. Other highlights of this so-called plan involve cutting the Medicare rebate from 85 per cent to 75 per cent, thus imposing an inequitable cost across the community; tightening up pensions and benefits for widows and supporting parents and abolishing the Schools Commission, the Department of Education and the participation and equity program. Compulsory work for the dole would be introduced, thus imposing an extra cost-it would not save anything-of $700m while freezing Public Service numbers would cost $35m because of existing plans to cut the number of staff. As I have said, all of these programs have not been fully supported since their public exposure. There have been considerable backdowns which have left a program proposing only $2.046 billion in cuts. On 23 March Mr Blunt, the Opposition spokesman on social security, told Parliament that the Opposition would not abolish indexation of pensions. If that statement were correct, the Liberals would save less than $750m of the remaining expenditure cuts. The Liberal Party's record is one of mismanagement in government and incompetence in opposition. It stands in stark contrast to the confidence this Government enjoys, as I have said, from the market, the business community, editorial writers, commentators, and major community organisations. Therefore, it is clear that this economic statement has the support of Australians and is seen as a responsible measure. I commend it to the Senate. Senator MESSNER(South Australia)(5.33) —I rise to debate the 1987-88 Budget initial measures introduced by the Government only a couple of weeks ago and to point out how catastrophic these measures are in terms of the real decisions that need to be made by this Government if it is to remain with any sense of economic credibility whatsoever. The statement headed `Budget 1987-88-Initial Measures' was brought down by discredited Treasurer Keating, who introduced us to the banana republic only 12 months ago. He told us that somehow he will save $4 billion on the Budget deficit. Let us look at how he will achieve that. First and foremost the Treasurer says that he will get $1,000m from the sale of assets. Some of those assets include the Australian Embassy in Japan. Senator Brownhill from the National Party of Australia pointed out very clearly in his speech how that will be impossible to achieve in the situation that exists in that country. Questions overhanging the sale of that property in Tokyo concern whether capital gains tax on the sale of that property will have to be paid to the Japanese Government by this Government. Such a tax is likely to reduce substantially the amount the Australian Government would finally obtain for the sale of the property. Senator Button —Do you mean the Japanese have a capital gains tax too? Senator MESSNER —Over the years the Japanese Government has found that such a tax is appropriate to its particular circumstances. That is not the case in this country, which is a capital starved country. As the honourable senator well knows, Japan is a capital surplus country and has very considerable resources. Were it not for the fact that we are able to borrow on Japanese markets at the moment and bring in equity capital from Japan our currency would be in a most parlous state. Senator Button would know that only too well. Consequently, circumstances are entirely different in Australia. Australia does not need a capital gains tax and its introduction is entirely the wrong move for this country to make as it will destroy investment potential. While I am on the subject of tax, I should also mention that this Government is the highest taxing government since Federation. In 1984 it promised that it would reduce taxes; in fact it has increased them. Each year in which it has been in office we have seen a breach of its so-called trilogy. That is how much this Government thinks about taxation and the ordinary welfare of Australians. We have seen the introduction of the fringe benefits tax which has added substantially to the cost of manufacturing goods and carrying on business in this country. I draw to the Senate's attention the very simple point that in every year in which the Fraser Government was in power the marginal rate of taxation applied to people on average weekly earnings went down; every year under the Fraser Government the tax rate on average weekly earnings went down. In March 1983, when this Government came to power, the rate of tax applicable to average weekly earnings was 30 per cent. Today the rate under this Government is 43 per cent; it has gone up by nearly 50 per cent. Is it any wonder that the average family is screaming under the pressure of tremendous taxation imposed on it by this Government? Not only that; interest rates are at astronomical levels in real terms and they are causing people to rent rather than to buy their own home. That is a most important point to realise. I will repeat it so that every honourable senator on the Government side can understand it: The marginal rate of tax for average weekly earners went down every year under the Fraser Government; it has gone up every year under the Hawke-Keating Government. That point deserves to be made over and over again. While I am on the subject of dealing with some of the myths that the Australian Labor Party puts around, let us consider the latest one it has got on to; that is, that the foreigners overseas and our terms of trade are reducing our standard of living and that is why the Government has to take measures that appear to be harsh. The Government says that it lost $6 billion from our gross national income as a result of the change in our terms of trade. It then says: `The Fraser Government made such a mess of things back in 1982 it could not possibly have coped with the situation that has arisen during the period of this Government'. The truth of the matter is that in the 1982-83 financial year-the last year of the Fraser Government-we lost double that figure, $12 billion, from our terms of trade. Did we hear a squeak from the Labor Party about how the terms of trade had so disastrously turned against this country at that time? We witnessed a huge drought when we did not even have the volume of wheat, wool and other farm produce to sell on world markets to make up for the loss in prices, causing a fall in our terms of trade. At the time we heard nothing from the Labor Party. It just rubbished the suggestion that somehow the crisis in our economy in 1982 was due to a change in the international trading situation. Of course it was. The extent of the change in 1982 was double what this country has suffered in the last year. The myth, the absolute shibboleth, the nonsense that is perpetrated by the Government side to try to justify its weakness in economic policy and management deserves utter condemnation. It is wrong. It is an utter lie. It has been put around by the Government to try to justify its weak decision-making capacity. It deserves to be exposed. The people of Australia should understand that nothing of an unusual character has occurred in the last year. The history of Australian trade over the last 100 years or so demonstrates that the terms of trade have always been inclined to move against this country because of its dependence on primary production and mineral products which are subject to violent change in the world market. Those are some of the lies which ought to be put down before we start to discuss the Government's initial Budget measures as announced earlier this month. I would like to discuss one or two decisions in respect of the Industry, Technology and Commerce portfolio which were announced in the May statement. The first would have to be one of the most stupid decisions of any government I have ever seen, having been in this Parliament now for 12 years. Having observed government for many years, and going back as far as I can remember, this decision is the classic stupidity. I refer to the imposition of the new $400 concessional charges for overseas travellers returning to Australia with goods they have purchased overseas or, alternatively, within Australia from duty free shops. The decision is absolutely amazing. The charges will apply from 1 July this year, a time when a great many people travel overseas as the northern summer is viewed as the most propitious time to travel. Probably about 65,000 or more Australian tourists have now left Australia to travel overseas without any warning that when they return after 1 July they will be subject to very stringent requirements, far more stringent than those prevailing when they left the country. No arrangements appear to have been made with the Australian Customs Service as to how it will cope with such an influx of people whose goods will be subject to stringent checks, not only in respect of the value of each good they have purchased but also of their volume, quality and so on. One can imagine the streams of people at the Customs barriers after having disembarked from their aeroplanes at six o'clock in the morning, waiting to be processed by the immigration and Customs authorities-- Senator Button —You can imagine all sorts of things. It is your greatest strength. Senator MESSNER —I will be pleased to hear the Minister's views on how the Government is to handle this matter. There will be considerable difficulty in handling such a large volume of people with such a large number of demands, especially given the confusion there will be as to what the law is when the new arrangements come into force on 1 July 1987. The spokesman of the union which represents Customs Service personnel, Mr Spanswick, has commented on how incredibly difficult it will be for Customs Service workers to patrol, look after and check the thousands of people who will enter Australia without the proper declarations and without an understanding that the law has changed. Quite apart from that, the new arrangements will have a devastating effect on the duty free shops that operate within Australia. It will be very easy for people who want to circumvent the new regulations to do so, evading the new regulations at the barrier by making declarations to Customs officers that cannot be possibly checked. If the Government is to institute a system of the proper checking of all goods that are taken out of Australia by travellers and the subsequent checking of those goods when the travellers return to ensure that the full and proper amount of duty is paid, it will mean that every item of personal jewellery, every watch, camera, pair of binoculars or any of the things which, normally, travellers take overseas with them will need to be recorded in a register so that they can be subsequently checked when the travellers return. The item will have to be codified, and consequently the full dutiable amount will be payable. Otherwise, it will be very easy for people to wear a cheap watch, for instance, cast it aside when they get overseas, buy a more expensive watch, wear it back into Australia, and in that way circumvent the Government's regulations, avoiding duty. Senator Button —You are a creative shadow Minister! Senator MESSNER —Creative it may be, but I would like to hear how the Government will handle the problem. The new arrangements will clearly have an impact on the duty free market in this country. As the Minister can clearly see from my example, people, instead of buying duty free watches in this country, will buy them overseas. So the original purpose of establishing a duty free goods industry in Australia, which was to keep the purchase of such goods within the country rather than overseas, will be entirely circumvented and undone. It is clear that the Government has not thought through this proposal very well. The other proposition in this portfolio area that is causing concern is the new processing fee of $200 to apply to customs agents seeking a refund of duty for overpayments. Overpayments can occur for a variety of reasons. Some overpayments are not just the fault of the individual customs agent but are the result of mere human errors that occur within the Customs Service or in respect of the valuation or quantum of goods that are incorporated in documentation, documentation errors and so on. Each customs agent will be required to pay a $200 fee up front in order to be able to obtain any refund. That will apply to an individual refund rather than to a batch of refunds which is commonly the practice at present. A customs agent at present lodges many refund applications in a batch for processing through the Department. That is the normal process, which I understand is well accepted and is considered efficient on the part of both the customs Service and the customs agent. The Government has now introduced this $200 fee which people will have to pay up front. It is akin to the payment that has to be made by taxpayers who seek to have a reference of their disputed assessment sent to the Administrative Appeals Tribunal, introduced in the Budget last year. The Government is merely imposing a tax on people who want their just deserts, who want to obtain, in the case of the Customs Service, a refund of an overpayment of customs duty and, in the case of taxes, an amount which is legally due to them. They can appeal against their tax assessment, and in previous circumstances this would have cost a mere $2. This is causing a great deal of concern in the industry, naturally enough, but it is especially horrifying to know that the estimate I have seen for the average cost of processing a refund application from any customs agent is a mere $30 or $40, whereas this Government is charging a fee of $200. How can the Government possibly justify that? When the legislation passes through the Senate we will certainly ask questions in that respect. Finally, we hear speakers from the Government side making a great deal of the way jobs have been created since this Government came to power. The fact remains that unemployment in this country is a long intractable problem that this Government has done very little to alleviate. The average time for which a person is now unemployed has just about doubled since 1983. It has gone up from an average of 26 weeks to around 46 or 47 weeks. That is a very disappointing and disturbing fact of the unemployment situation. People unable to get jobs are remaining unemployed for longer periods. Their opportunity to rejoin the work force is declining. Those people virtually have been thrown on the industrial scrap-heap. These measures are incomplete, inadequate, and totally without foundation in terms of the reality that the people of Australia were seeking when this statement was first announced. The fact is that the Government ought to be spending a great deal more time tackling the real issues rather than presenting what is merely a cosmetic document in the way it did last Wednesday week. Senator CHILDS(New South Wales)(5.52) —We are discussing the Government's May economic statement. We have just heard from Senator Messner, who discussed industry policy. I cannot help feeling that he indulged in a rather nit-picking exercise when he resisted commending the Government's efforts in trying to make sure that Australian products are not disadvantaged by people who travel overseas buying duty free goods. As far as I am concerned we need to look at industry in a much broader way. As we have in this May statement, we need to increase the pool of savings available for investment in Australian industry. It is this broad view of industry that we have to take. The $4 billion reduction in the 1987-88 deficit, announced in the May statement, will provide a pool of savings able to be used in import replacing and export creating Australian industry. That is what the May statement is all about. The May statement therefore reflects the continuing challenge for this Government to create an industry base which can compete with the rest of the world. It is this lack of industrial base which has been the problem for so long. It is the reason behind our growing international debt and the explanation for our not having responded as quickly as possible to the J-curve effect that has been so often talked about. In other words, we have not had the export boost which was expected after the devaluation of our currency. Unfortunately, we had a number of decades of conservative government. We did not have conservative governments alone, but they were responsible, particularly in the Fraser years, for the overvalued currency and our reliance on primary products. At the same time, our industry crumbled. During the Fraser years we relied on digging up the country and not building it. I am pleased to see that Senator Button is at the table. As Minister for Industry, Technology and Commerce he has probably gained a few grey hairs as he has put package after industrial package together to make sure that Australian industry is leaner, hungrier and more export oriented. The well-known steel plan, the shipbuilding plan, the car plan, the textile, clothing and footwear plan and the heavy engineering plan are just a few of the plans with which this government has approached industry. So in the context of the May statement we can see great possibilities for our industry development. That is very important because the decline in world prices has been a serious problem for us. This process could not have occurred without complete co-operation between this Government and the trade union movement. That is one of the contrasts with the previous Government that every Australian has to face up to. Everything that the coalition parties-they are now divided parties-stand for involves confrontation and scapegoating ordinary wage and salary earners. It is part of the policy of divide and conquer that both conservative political parties stand for. When we look at the advances made by this Government in manufacturing industry, which are reflected in increases in manufacturing, we see a contrast with the previous Government. In 1983-84 there was a 1.5 per cent increase, in 1984-85 a 2.1 per cent increase, and in 1985-86 a 4.5 per cent increase. In the last nine months we have seen manufacturing exports increase 25 per cent whereas imports rose by only 4 per cent. Industry at this moment can see that although we had a problem in the early stages with interest rates after deregulation, when billions of dollars went off-shore and we had to keep interest rates high to attract capital, now with the greater exchange rate stability that has been clearly evident in the last few months there is a pleasing drop in interest rates. That trend will continue and will soon be reflected in lower housing interest rates. Senator Cook has referred to the fact that already that movement down is starting. The expected 5 per cent of gross domestic product deficit is going down to one per cent. So next year we will face a gross domestic product deficit of less than one per cent. This Budget statement will probably lead to great improvement in industry. Of course there are real problems that the Opposition continually skates over, such as the fact that we have had $9 billion knocked off our national income and there is a depressed world economic climate with predicted low growth in demand. For example, a recent Organisation for Economic Co-operation and Development assessment has suggested the possibility of `a catastrophic scenario in which low growth of major economies, falling world trade and trade conflicts could produce world recession and international financial crisis'. That is a problem but nevertheless the decisions made by the Government put us in good stead even if that low growth becomes worse. We have another problem. The private sector has failed to show enough faith in Australian industry to re- invest rapidly enough in the many opportunities that exist. But the $4 billion reduction in government expenditure in the coming year represents this Government's commitment to helping overcome those problems. I would like to focus on a particularly significant aspect of the May statement-the theme that successful restructuring of industry requires a more highly skilled and involved work force and the promotion of what might be called industry culture; that is, an environment where importance and support is given to training and retraining. In this May statement, therefore, along with the deficit reduction which will provide increased encouragement for industry, as I have said, there is also a major restructuring of education allowances and unemployment benefits which will have a particular effect on young people. This restructuring will not involve the abolition of the dole, which some people have mistakenly proposed and which unfortunately is the policy of the Opposition. In fact, 16- and 17-year-olds will continue to receive $50 per week-$25 per week as a job search component and $25 which will be subject to a fairly generous means test. There are other important changes to social security and welfare programs all of which reflect this Government's desire to promote an industry culture. For example, in social security there is to be a reduction in the children's qualifying age for benefits for supporting parents and for widows' pensions, and the phasing out of class B widows' pensions with protection for women over 45 years of age. These women will receive greater support from the Government through the establishment of a child support agency to collect child maintenance. The most important additional training places for affected women are in the adult training scheme which will help them re-enter the work force. There is no way of pretending that these changes will not be difficult and that many women and young people could be affected adversely. I, and I believe many other senators, will make sure that the bureaucracy handles these people both sensitively and humanely. But the other side of the coin is that the only way out of poverty and the way towards economic independence is through employment. That is what this Government is doing through its training and retraining programs. The Government's task is to ensure that, in changing eligibility for social security, there is sufficient financial and other support to ensure that the people concerned are not short changed. In the same vein, the Government announced that the community employment program is to be phased out. One of the problems of the CEP, which is reflected in its poor rate of success in helping people find work after a program is over, is that it is simply not enough to have a short period of work experience. The Government has given emphasis in its May statement towards training in the future. Work experience in itself is not sufficient to supply the needs of an increasingly skills-based industrial work place. At present nothing could be clearer than our need to make sure that people have an adequate skills base to go into industry. The phasing out of the CEP must be seen in the light of the need for training programs and the fact that simple, short term job-creation schemes are inadequate. It is very significant, and it cannot be denied, that Commonwealth spending on training programs in 1987-88 is to be 50 per cent higher than spending this financial year. That is proof of this Government's commitment to training and it reflects the Government's commitment. I believe that, where there is an increasing problem with youth unemployment throughout the world, this is the way for us to go. In the last decade there has been a steady increase in the number of people seeking work-this is reflected in women seeking work-and the figures are still increasing. In 1982, 44 per cent of all women were in the work force. Now 49.5 per cent of all women are in the work force. So we have special problems in the areas of youth employment and women re-entering the work force. But I believe that it is a very positive thing for women to be able to take their place in the work force. The Government's creation of 750,000 jobs has been very beneficial to women wishing to come into the work force. I am concerned that the Government is trying to change the way in which training programs will be dealt with. It has arranged for $30m to go to the Department of Employment and Industrial Relations. I have some concern about some worrying aspects of this because over the years I have had quite a lot of experience with technical and further education colleges, in particular the Sydney Technical College, which has 44,000 students. Although it is to be hoped that some gains will be made by TAFE as a result of changes in the Budget to the charges for hobby courses, I know that fewer than 2 per cent of the courses at the Sydney Technical College could be described as hobby courses. As the Department of Employment and Industrial Relations is naturally concerned that people have short, narrow skill courses so that they can quickly enter the work force, I am concerned that there could be a problem of increasing the load of TAFE and not making sure that the skills-based courses, which are so necessary, are properly planned and advanced within the TAFE system. In some cases money is taken away from TAFE and handed to the Department of Employment and Industrial Relations. We have to consider here the case of, say, a 40-year-old woman who left school at the age of 17 and now wants to return to the work force. In my view, TAFE institutions are best equipped to help these women. For example, courses such as the new opportunities for women-the NOW courses-introduce women to a range of possible work areas, such as computing, electronics, mathematics, accounting, as well as social skills such as self-confidence, an essential ingredient for any young person or any woman entering the work force, so often forgotten when people talk about re-training. I am also aware of the participation and equity program courses. There is a difference in what is seen in some ways as a failure of PEP courses in the school area but, of course, they are a great success in the technical education field. For example, one survey of TAFE PEP courses showed that between 1984 and 1986, 76 per cent of young people doing the course found work and were in work one year later, and 44 per cent of students had enrolled in further education courses showing their success rate. A great deal of effort went into making sure that people were matched adequately with the courses and in emphasising the need for pre-training courses. So it is in this area that I hope the Government will be very careful when it considers-and I know that it will consider very carefully through various committees and through discussion-how we will advance the Government's plans to make sure that people are trained and not left to their own devices at the delicate ages of 16 and 17. I have explained that the financial incentives are virtually the same and we must make sure that we have people competing in the TAFE courses that exist at present. At the moment TAFE colleges run individual learning centres where students receive individual attention tailored to their needs. This is very important because some people who feel that they have failed at school need extra help and they need the confidence to be able to get work in industry. We must make sure that the TAFE system is able to cope with those people and we must tailor the learning programs so that people are able to take a place in industry. I commend the Government for these developments. I believe that, in the next six months of planning time that we have, we must watch carefully to make sure that the courses are not quick courses designed to get young people off the street but that they cater for the needs of young people, and ensure that they will be in courses that will allow them to go on to further courses and take their place in industry. Senator MICHAEL BAUME(New South Wales)(6.09) —The element of the mini-Budget affecting health is discriminatory and unfair and it impinges most on those people who are least able to protect themselves. This Government has set out to save $100m a year in one area alone. In effect, that relates to a discriminatory additional charge on privately insured hospital patients. The Government then has to raise a bit more than $100m-odd from changing the rebate system, the support system for those people who are obliged to undergo a whole range of medical treatments. There is no doubt that there is scope for saving very large amounts of money in Medicare. Of course, this has emerged from the remarkable waste and misallocation of resources that have taken place under such elements of Medicare as bulk billing and the Government's most curious socialist approach to medicine. However, it is vital to recognise the extent to which the particular measures this Government has chosen to take-while, at the same time, rejecting clear opportunities to save money that emerge through administration and in other waste-are discriminatory and unfair and the Opposition strongly objects to them. There are far better ways of saving money in the area of health if only the Government were not so committed to its Medicare madness. I think the Senate is well aware of the $117m that is being added to the health bills of those Australians who take out private health insurance to protect themselves from the Medicare mess. The discriminatory way in which the Government has done this has, frankly, not been defended. The Government has not even tried to defend its discriminatory approach where it is providing a massive disincentive for people to take out private health insurance, despite the fact that the people affected in this way are largely those people earning less than average weekly earnings. Something like three million people in this category have taken out private medical insurance and they, of course, in income terms will be relatively the worst hit by these uncaring and discriminatory health measures. The people most affected by the reduction from 85 per cent to 75 per cent in the amount of benefit available for privately insured patients receiving medical treatment in hospitals are those ordinary Australians who have taken this safety first option to protect themselves and their families through private medical insurance, mainly to ensure that they are not forced to join the 100,000 Australians already waiting in public hospitals queues-some of them have been waiting as long as two years and some of them have been waiting in pain in hospital queues for treatment that, frankly, is not available to them, simply through having their Medicare cover and no more because of the pressure of demand that Medicare has generated on the public hospital system while leaving something like 9,000 empty beds throughout Australia in the private hospital system. There is no prospect of the nonsense uttered by the Minister for Health, Dr Blewett, of the bulk of the added cost involved in this area being absorbed by the private health insurance funds. That is a nonsense and the Minister knows it is a nonsense. There has been, in effect, an admission here by the Minister representing the Minister for Health that, no doubt, some of that increased cost will be conveyed to the users and, as I say, those users include three million people who are earning less than average weekly earnings. The amount of this increased cost-which is probably around $1 a week-that will be passed on entirely to users of the private health insurance system will depend, of course, on the financial level of the funds, and some funds are in serious difficulties as a result of this Government's policies. They are the funds that have a big proportion of aged members as against those funds that have a much higher proportion of younger and healthier members. Senator Tate —Would you agree that some of the reserves of half a billion dollars should be used in this way? Senator MICHAEL BAUME —The reserves should be used in the best interests of the members of those funds and if those reserves are required to protect the funds from the incidence and expected incidence of massive usage because of the age pattern of members of those funds, I think it would be improper of those funds to run down those reserves in order to accommodate an unreasonable, unfair and discriminatory charge imposed by this Government to get itself off a specific hook, a hook it has created for itself by its incompetent administration of health care in this nation. I thank the Minister for encouraging me to pursue that course. The reality of this discriminatory behaviour, of course, extends beyond the area of hospital care, and the Government's activities in this area are totally indefensible. There has been no attempt by any Government speaker so far-and certainly not by the Minister on that night-to establish any honourable reason, apart from saving a quid, why the Government should be discriminating against a specific group of Australians in this way. Let us now look at what some of the other elements of this mini-Budget package in health will do because it has some serious consequences for the users of many different medical treatments. The intriguing thing is that the Minister tried falsely to create an impression that these changes had taken place after discussions with- Senator Tate —I would ask for a withdrawal of the expression that the Minister falsely created an impression. I think that that is a reflection on the integrity of the Minister and I ask that it be withdrawn. Senator MICHAEL BAUME —I am happy to withdraw the word `falsely'. All I shall do is demonstrate the facts that show how the Minister set out to mislead this chamber, and I will do so in this way: He claimed in his statement that there had been discussion and created an impression that these discussions had taken place with the great bulk of the medical organisations involved. That claim is false. Those discussions did not take place in any detail whatsoever. There were no detailed consultations. I have been assured by every medical body involved that there had been no detailed consultations and to pretend so, as the Minister did, is to mislead this Parliament. Again I am interested to hear the Minister's sensitivity on behalf of his colleague. There were, and I restate it, no real, meaningful consultations with the bodies involved before these major changes bringing major disadvantages to Australians-particularly sick, frail and aged Australians-were imposed on them by this uncaring and incompetent Government, certainly incompetent in the area of health care. If the Ministers in this chamber want to pursue this matter they can do so by asking the medical bodies involved what sort of consultation took place with the Minister for Health before he made his incorrect assertion in the statement that consultation had taken place. As I said, an impression was generated by the Minister that is not in accordance with the truth, but that is nothing unusual in this situation. Now let us see who are the people who will suffer under this mini-Budget. I refer to a statement put out by the Royal Australian College of Physicians. The heading is `Chronically ill to bear most burden'. In other words, the people least able to protect themselves are those who are to suffer the greatest burden caused by one of the changes in this mini-Budget. I quote from this release from Professor Kincaid-Smith from the Royal Melbourne Hospital. She said: The Royal Australasian College of Physicians views with alarm the reduction in health funding announced by the Treasurer. Those with serious chronic illness will bear the major burden of these changes. A major reduction in standards of care for patients with complicated medical conditions will result. Alternatively, this disadvantaged group will carry a considerable increase in health care costs. An example of the sort of patient who will suffer most is someone with diabetes, heart disease and kidney failure who clearly requires more than the three visits allowed by the new arrangements. Provisions for this type of continuing care have been cut by 40 per cent and the patient will either have to bear this cost or will have to resort to care within the already overcrowded public hospital system. The College of Physicians has requested urgent discussions with the Department of Health about the arbitrary decisions which have led to these inequities in health care. There was so much consultation that the College of Physicians has had to ask for it after the event; it simply did not take place before the event. In a letter to the Age, Professor Kincaid-Smith gave another example. She wrote: . . . a patient with cancer requiring highly specialised and potentially dangerous drugs may need to have such treatment monitored over long periods by a physician who has had years of specialised training in that field. Under the new regulations that patient will now need to be supervised by a medical practitioner who has no such specialised training or join the waiting lists at a public hospital. A patient with a chronic painful illness like rheumatoid arthritis needs continuing specialist care . . . The list goes on and on and, as I said, people with chronic illnesses such as cancer are the ones who suffer most. The Australasian College of Dermatologists found out about these changes not by consultation but by reading the newspapers, which shows the level of the Government's consultation in this area. In respect of services 3332 to 3346, the College of Dermatologists says: Patients requiring these services are those referred for management, because they cannot be managed by a GP, either for diagnostic and/or therapeutic reasons. Whilst an initial consultation item may cover a first visit for referred patients, follow-up treatments on a regular basis are required for many. In the case of solar keratoses which are pre-malignant, this ensures the early detection of malignant change, in addition to allowing regular examination and treatment of lesions. The College has been taking part each year in extensive Skin Cancer Prevention Campaigns and has always understood that you- `you' referring to the Minister, to whom this letter is addressed- express a contention that preventative medicine should be practised more extensively. If patients are not fairly rebated for these regular visits for treatment and if the fee gap widens substantially, particularly for pensioners, this will act as an inevitable disincentive for such prophylactic treatment. The relevant items numbers also cover the treatment and removal of warts. These may be on fingers or feet, for example or on genitals. Their removal can be time-consuming and difficult, requiring the injection of local anaesthetic, etc. As you know- again, referring to the Minister- genital warts are a sexually transmitted disease and may be pre-malignant. The procedures involved in their treatment and removal are not just a consultation. So this is another example of a problem relating to cancer which this Government is exacerbating by its ill-considered actions which did not follow consultation with the medical profession in any meaningful way whatsoever. The Australian Medical Association complained about the discriminatory nature of the changes for patients with private health insurance. Its President, Dr Pickering, said: These patients are being victimised by the Government. If they are forced out of private health insurance by rises in premiums of up to $1 a week, the AMA says: They will have to compete for access to the already overloaded public hospital system. Dr Pickering also said: . . . there could be adverse consequences from the wide range of reductions in benefits for individual medical services which are additional to the across-the-board cut in benefits for medical services in hospital. Most of these individual reductions were not discussed with the medical profession. Doctors will not be able to reduce their fees in line with the reduction in benefits. Patients will have to pay these extra costs out of their own pockets. He said: . . . the reductions in benefits included such important and frequently used services as consultations with physicians, C.A.T. scans and after hours consultations by general practitioners. That matter of after hours consultations by general practitioners is a disaster, particularly for those frail aged people who depend on their local, friendly general practitioner to come to visit them at all hours of the day and night. In these days when it costs an enormous amount to get a plumber or any other service man at night this Government is reducing to something like $23 the fee for a home visit by a general practitioner at night. This is a ridiculous situation. The Royal Australian College of Ophthalmologists has also objected violently. It said: The aged and the visually disadvantaged will be the hardest hit by the new Medicare arrangements . . . Cataracts are still the most common cause of blindness in the world today. The most common operation performed by ophthalmologists on the aged and the visually disadvantaged is the removal of the cataract which restores their sight. The rebate to the patient for this operation has nearly been halved meaning that patients will have to find out of their own pockets, on the average, $250 towards the cost of the operation in addition to their present charges. There is no doubt that eye surgeons will continue to charge their present fee and that bulk billing will become a thing of the past. It is inevitable that those eye surgeons who currently bulk bill welfare patients will cease to do so- as a result of economic pressure on them. Really this is a ridiculous situation. As claimed by the ophthalmologists: Cataract surgery on uninsured public patients in public hospitals will almost certainly cease and those people unable to afford the above fees will be forced onto the ever-increasing public hospital waiting lists. The Voluntary Health Insurance Association of Australia complained bitterly. The whole profession-everyone involved in health-has been complaining, quite properly, about the discriminatory and unfair nature of these cuts which were taken, in the main, without consultation. As the Voluntary Health Insurance Association said: If the Government really wanted to save money it should start discussing ways in which the Medicare program can be administered by private health funds. I must say that that fits in very well with the philosophic view of the Opposition. I conclude my remarks simply by saying that overall, over the whole range of health care, this Government has behaved in a disgraceful way in this mini-Budget. It has sought to save money by specific measures which are unfair and which particularly hit the frail aged. Yet it had an opportunity. Had it been prepared to buck its philosophic shackles and reject the proposition that Medicare and bulk billing are the answer to everything-if it had been prepared to bite that bullet-it could have done effective and reasonable things in health care which would have diminished the inefficiencies that exist within the health area. The inefficiencies have been bolstered by this Government's approach and have been multiplied by its determination to stick to Medicare and bulk billing. There is money to be saved in the area of health-there is no doubt about that-without diminishing the quality of health care, particularly for those people who cannot afford to pay large amounts for it and for those people who are in other ways disadvantaged. Instead of that, this Government has chosen in this mini-Budget to direct its attack at those people who have sought private health insurance, those people who are frail, those people who have greater demand for the services that are listed in the Government's discriminatory attack. Of course, aged people are particularly affected by many of these specific measures. This is a most unsatisfactory mini-Budget, particularly for health. Sitting suspended from 6.30 to 8 p.m. Senator POWELL(Victoria)(8.00) —The May economic statement was brought down less than two weeks ago, and during that period it has become clear to me and to many other senators that, in spite of media reports of accolades for the tough decisions that were made, in the wider community a great deal of demoralisation, fear and even despair has been created by many of the measures contained in the statement. It seems to me that the decisions with which the Government was faced less than two weeks ago in looking at our legitimate economic problems were made in macro terms. The problem is that the Government has failed to look at the impact of many of its decisions on the members of the community who will be most affected. It has taken some time for many of the permutations of this statement to come to light and to affect the thinking of people who have been asked to make cuts, particularly youth, women and families, especially low-income families, and even families who exist on that mythical average weekly earnings level, families with a number of children, who are faced with considerable difficulties as a result of many of the measures contained in the mini-Budget. It cannot be denied that the Australian economy is between a rock and a hard place. Australia has suffered a collapse in terms of trade, a loss of overseas markets for our primary produce and resource exports due to increased competition, much of it subsidised, which has wiped out over $10 billion of our export income. Any economy would find such a collapse of income catastrophic. In an economy such as Australia's, which is internationally uncompetitive in manufactured goods and, therefore, badly placed to respond to the collapse in the commodity trade, adjustment will be slow and painful at best. No alternative exists but a fundamental restructuring of our economy and a decline in average living standards. There will have to be, as we were told by the Prime Minister (Mr Hawke) last year, restraint with equity. However, is that what the mini-Budget contains? I do not believe so. Let us look at the situation facing Australia's young people and the families in which they live. There has been a full year reduction in recurrent funding for higher education of $24m. That is supposed to be achieved by increased efficiency, despite the fact that funding for higher education has fallen in all but one year of the past decade and despite the fact that Australia's participation rate is still below that of any comparable Organisation for Economic Co-operation and Development country. The mini-Budget contains a reduction of $47.5m for 1988-89 recurrent funding for technical and further education as well as another change to the functions of TAFE. It outlines a reduction in student assistance provided by Austudy of $59.2m, despite the fact that the Government is committed, or says it is, to increasing participation in education, particularly by students from low income households. Approximately half the reduction in Austudy will come from rate changes and the other half will come from a tightening of the already over-stringent eligibility criteria, including the requirement that independent status will be given only where a person has worked a 35-hour week for three of the last four years. The number of students on full Austudy is dramatically down and the amounts they are receiving is also dramatically down even before these changes are implemented. How they are supposed to increase equity or provide an increased incentive for students to continue in education or return to education is unexplained apart from the Humpty Dumpty logic of-to quote from the statement-`A further rationalisation of the rates and eligibility conditions has been undertaken to reinforce the Government's training and education policies and to simplify the common allowance structure'. A significant group of young people affected by the May economic statement are those who, through inability to find work, are forced on to the social security system. Unemployment benefits for people under the age of 18 have been abolished. That has caused considerable demoralisation among young people. An inconsistency exists in the new structure that has been established, with the job search allowance of $25 a week, which implies that looking for a job costs at least $25 a week, but it provides no assistance for job seekers in the first three months in which they are seeking employment. The statement contains a freeze on junior and intermediate unemployment benefits through which the Government wants to save an additional $32m. It also implements the two-week income test to replace the one-week income test with the rather extraordinary claim that it will provide increased scope for genuine clients to supplement their benefit payments by part time or casual work. Regardless of whether the income test is over one week or two weeks, it is inescapable that people currently on unemployment benefits can earn only $30 per week before they loose entitlement on a 50 per cent basis. The poverty traps legislation that was delayed by the Budget last year will come into play on 1 July, but the Australian Democrats believe that if the Government wants to provide an incentive for people on unemployment benefits, the area of free income limit must be looked at. Young people should be entitled to earn twice what they are currently entitled to earn as a genuine incentive to get out into the community, to get experience, to engage in entrepreneurial activities or to take up significant part-time work and find their way into the work force through their own initiatives. That claim is, at the very least, extravagant and it is some kind of window-dressing that will not make any significant difference to incentive in that area. The same young people are those who are affected by cuts in education funding. It is extraordinary that the May economic statement contains a de facto raising of the school leaving age by the Federal Government, which does not have the responsibility for that as it is in the hands of the States. However, by the withdrawal of the unemployment benefit for people less than 18 years of age, the school leaving age, effectively, rises. At the same time, millions of dollars are being taken out of the education system and redistributed in a somewhat dubious fashion. Even when Maggie Thatcher, the doyenne of the New Right, quite openly raised the school leaving age, she showed the good sense to sink some millions of pounds into the school system, recognising that if young people are not staying at school there must be some problem either with the school system or with the young people. On this occasion no one has gone to representatives of the school systems and asked why young people are leaving school and getting unemployment benefits. No one has asked the young people why they are not in education or training and what their problems are. The cuts have simply been made and the young people are expected to cope with them, as are the education systems-which are a State responsibility. Alongside the direct cuts in education funding, there is a cut to the funding of the States, which have the ultimate responsibility for education, particularly at the secondary level where many of those young people will be forced to stay. That is a very insensitive approach to the problems facing these young people. It is encouraging to see that groups of students who find themselves under siege following the mini-Budget-and after the previous Budget, with the implementation of the $250 fee-are beginning to express some sense of solidarity with those people under 18 years of age who previously were unemployed beneficiaries. Also in the run-up to the mini-Budget the pensioner group began to express some sort of solidarity with the student groups. It appears that the Government is targeting those people in the community who are the least able to defend themselves as being those who must accept a large measure of the restraint-restraint which we all accept must take place but which cannot be imposed to an unjust extent on these people. These groups are taking the view that they will work together in order to resist this kind of approach from the Government. In the area of family support we see in this mini-Budget a further extension of the stress being imposed on all kinds of families at several levels of income. I refer first to the reduction of $17m in the supporting parent's benefit and class A widow's pension, achieved by stopping support once a dependent child reaches 16 years of age. I do not know whether other senators have received the sorts of telephone calls that I have received in the less than two weeks since this statement was brought down. However, I have been extremely distressed by a number of those phone calls, particularly one which I took in my office late last week. This was a call from a supporting mother with three teenage children. She had supported them for several years on her own, one of them having moved on to tertiary education, one to a college of technical and further education and the other still at secondary school. She revealed to me her concern about how she would cope for the next few years, following the shock of learning of the reduction in the age of the children on which eligibility is based from 24 years to 16 years. That is an enormous drop and one that was quite unexpected by these individuals who have been eking out an existence on this benefit. This woman also revealed to me that she had in fact attempted suicide the night before phoning my office. That kind of personal distress is not considered enough when people in government and razor gangs sit down to make decisions about who will bear the brunt of economic restraint in Australia in the 1980s. We have also seen a reduction of $95m in family allowance payments by the application of a means test, affecting those with a gross family income above $50,000. The Australian Democrats believe that a much more preferable course is to leave family allowances as a universal payment, but they should be taxed in the hands of the recipient. I refer to the comments made by the former wife of Mr John Elliott, as published in the Melbourne Age of 22 May. She was asked whether she supported her husband's view that he should not get the family allowance and that families like his should not get it-although it was pointed out that of course he had not received the allowance as it is an allowance that goes to women, and in large measure has gone to women as the carers of children. She responded, referring to an interview between her husband and a newspaper reporter, that she thought that newspapers should be seeking the opinions of women who receive family allowances rather than men who do not. I suggest that she made a very telling point. When governments and Ministers make these decisions they should seek the opinions of those people who are going to be affected. I refer to opinions from people such as Nicole Hassett of Melbourne, who in this morning's Age outlined how enormously difficult it is for her, a student still at school and with intentions of undertaking tertiary education and a professional career, to get work experience. Of course the Commonwealth work experience program was one of the casualties in the May economic statement. Nicole Hassett is a young person who understands the importance of work experience in the whole context of a difficult employment situation. When young people attempt to obtain employment they have to face the question: What experience do you have? Nicole said that she believed that it was ironic that the Federal Government had attempted to keep students at school or in training and employment by cutting the dole for people her age, when potential employers were so unwilling to help `even on the small scale of work experience'. Not only are young people facing the barrier of lack of support from government but also the experience is that those people more fortunate than themselves are not always prepared to help them either. If the Government withdraws its support obviously it will have to do something about encouraging the private sector to pick up some of these responsibilities. I must say that past experience does not give a lot of hope for the future. There are other aspects of the difficulties experienced by families. I refer in particular to single parent families, which of course have been hit by these reductions in the eligibility criteria for the supporting parent benefit. The Government has placed a good deal of moment on its restructuring of funding for training. Money is being taken out of the TAFE system, an existing system with programs already set up, and put into Department of Employment and Industrial Relations training programs. My concern is that these programs are not already established. Some of the supporting parents who have contacted me have asked me where these programs are, how they will get on them and, most importantly perhaps, whether they will get a job once they have been through a program. Of course, there are no such guarantees. The promise of funding for new programs is a worry, and I think it would be far more effective to continue to fund programs that are already in place rather than to shift them around and obviously delay access for those people who have been tossed off the income support that they have received in the past. Allied to this-and for many families this is of enormous concern-is the reduction over the next two years of $23m in government support for children's services, to be achieved by replacing child care centres with family day care facilities and postponing the implementation of the promised 20,000 new places. The provision of housing-always a problem for many families-has been subject to a reduction of government support under the Commonwealth-State Housing Agreement of $40.9m in 1987-88 and $77.9m in 1988-89. This is despite the collapse of the housing industry and the crisis facing young families seeking housing accommodation and the tens of thousands of homeless young people. The community employment program and the job start scheme have been scrapped. The Government has withdrawn support for schemes which certainly were not perfect but which for very many people were the means of moving into an employment opportunity as a result of their having gained some experience. I do not believe that these sorts of measures can be claimed as essential to the restructuring of the Australian economy. Before I talk more specifically on that matter might I just say that the Australian Democrats deplore the reduction in overseas aid which was also outlined in the package and, of course, it is part of the package which hits at people, like those unemployed people under 18 years of age, who cannot hit back by voting at the ballot box. This reduction of $20m a year for the next two years comes on top of a reduction of $67m in the Budget last year. This is compounded by the increase in the overseas student charge to 55 per cent of full average course costs which, in effect, is a cut in foreign aid and is a counter-productive move which will make access to Australian education much more difficult for young people from low income families in neighbouring countries. That whole package demonstrates a lack of commitment in the area of overseas aid on the part of this Government and the willingness of the Government to use that area in its attempts to balance its Budget. The May statement is a package of measures, some of which I have addressed specifically, which will not really have any substantial effect on the recovery of the Australian economy. They certainly do not represent restraint with equity. Most of the measures deal with services to those who are already considerably disadvantaged and who have suffered more than others in the community through the economic decline. The cuts represent the sacrifice that the Government felt it must make in order to appease the money markets, the business community and those members of the financial Press who clamoured for evidence that the Government was prepared to take tough decisions to get the economy back on the tracks. I do not believe that the May economic statement contained tough decisions because I do not believe it is any longer politically a tough decision to cut funding to education or reduce benefits to the unemployed. With the major opposition party attempting to outbid the Government in terms of how much government expenditure and services can be cut and with the media and the business community almost unanimous in their support for so-called `tough measures', it takes a government of some courage to maintain welfare services at a civilised level and to increase government support for education and training, even where this means that the Budget cannot be cut by the magical $3 billion or $4 billion. The strategy behind the May statement of less than two weeks ago of reducing consumption to reduce imports, thus arresting the decline in our current account is one way of managing the economic crisis facing Australia. It is arguable to what extent the measures announced will actually reduce imports. For instance, the sale of assets-another feature of the statement-will decrease government indebtedness without decreasing net expenditure. That is akin to a person who has trouble with the family budget running out and selling some of the family silver, and is about as permanent a redress to the problem. The cut in funding to the States may not lead to decreased expenditure if the States meet the shortfall in Commonwealth funding with the savings that they have supposedly accumulated. The savings in the statement, apart from the assets sales and the reduction in grants to the States, is about $1.6 billion in 1986-87. If one applies to this the most commonly used formula for estimating the effect of reduction in total expenditure on a reduction in imports of 1 : 5, the result will be a fall in imports of only about $300m. If one assumes that the States will reduce their expenditure in line with the cut in funding and borrowing limits, the total cut in imports would be around $700m to $800m. The reduction in overseas borrowings due to decreased Commonwealth and State borrowings will also flow through to the current account. To the extent to which these improvements in the current account take pressure off the dollar and allow interest rates to ease investment activity may pick up, and with it employment. That is one side of the balance sheet. The other side, of course, is increased unemployment due to decreased government expenditure. For example, the South Australian Government figures suggest an increase in unemployment of about 40,000, resulting from the $1 billion decrease in funding to the States. The total reduction of government spending across the board-both Commonwealth and State-is likely to reduce economic growth by about 1 1/2 per cent which will increase unemployment by about the same amount. The Treasurer's optimism that this unemployment will be soaked up by growth in export and import replacement industries is cavalier to say the least if one looks at the performance of those industries over the past two years. In fact, there has been a massive increase in investment within Australia, but little of it has flowed through to investment in the long term restructuring of Australian industry. The lion's share has gone into share trading activities as the value of companies on the Australian stock exchange has increased by more than $80,000m. This has brought a windfall profit to the Government through the capital gains tax, which passed with Democrat support, but it has done very little to improve our ability to produce tradable goods. The need to reduce government expenditure in order to reduce the deficit stems not from excessive levels of government expenditure, but from a fall in revenue which the recent tax reforms have only partly addressed. As I, and other Democrat senators, have pointed out on numerous occasions, the use of debt rather than equity financing, particularly the use of negative gearing, has been a major source of revenue loss. The 10 April edition of Business Review Weekly lists the best 60 tax shelters. The first tax shelter mentioned for companies is `getting a proper gearing'. It states that by and large companies have greater scope for negative gearing than individuals. It points out that under present rules a company can borrow and use the borrowings to subscribe to capital in gold mining companies or to organise a takeover. The article continues: Dividends from a takeover or from a gold mining company are exempt from tax because of the section 46 rebate. By appropriate structuring, the interest expense can be offset against the other taxable income. The imputation system, announced in December, will not change this practice. The negative gearing restrictions on rental real estate apply to companies as well as to individuals: However, by appropriate structuring, the provisions can be avoided by owning real estate investments outright, and unmortgaged, and by borrowing against other non-real-estate assets of the company. On the same page of the same edition of Business Review Weekly there is information on arranging one's borrowing off-shore. Some weeks ago Senator Haines asked a question of the Finance Minister regarding pre-paid S23Q schemes, which involve an arrangement for circumventing the foreign tax credits legislation. At the time the Minister said that he did not know whether such a scheme was possible, but the fact is that these schemes have been operating for some time and are presently under investigation by the Australian Taxation Office. It is not as if there are no alternatives to hitting people who are already living below the poverty line; to striking out at young people who have their whole lives before them and who should be supported whether it is in education, training or income support; to hitting out at families who are managing on low incomes or even on average incomes where support levels are way below what one might expect in a community of this kind, where family allowances, for instance, have gone down markedly, a fact which has been noted again and again in recent times. There are alternatives in looking at how we, as a nation, can cope with the economic circumstances in which we find ourselves. The way that was pursued in the Budget of August 1986 and then again in the May statement this year is not the way to go. There are alternatives. There is not necessarily any magic in balancing the Budget either. The concept that the public sector must move over and make room for the private sector is not accepted on a prima facie basis by the Australian Democrats. Our economy can gear itself up and get back on the road again if we have a government which is prepared to do other than accept the force and pressure coming from world bankers and businessmen. In our view, it is a disgrace that this Government continues-and no doubt the Opposition will support it, as it has in past Budget legislation-to hit those people who are less able to hit back, and in this statement particularly those people who do not even have a vote at the ballot box. Senator SIDDONS(Victoria)(8.29) —We are debating the May mini-Budget. This debate should give us an opportunity to criticise the fundamental direction that the Government is taking. It is a great pity that a party such as the Australian Democrats which holds a very important position in the Senate can do little other than make mild comments, a little bit of criticism here and a little bit of acquiescence there. We just heard from Senator Powell a typical Democrats' speech. There was no fundamental criticism of the Government at all. They have made their position very clear; they are there to support the Government. They will criticise little pieces, but the fundamental thrust of what the Government is doing is being supported by them. If ever an opportunity has been lost it has been lost by the Democrats on the basis that somebody should be criticising the fundamental thrust of what this Government is doing. The Democrats are neglecting that great responsibility that they have and are letting the whole of this country down. It is very important that the Australian people see that there is an alternative approach to economic management. The Democrats are not making that clear. If ever we needed evidence of the Democrats' desire to support this Government we heard it today when their leader, Senator Janine Haines, was lamenting the fact that they could not support the Government's industrial relations legislation. There was no concern about small business and no concern about sections 45d and 45e of the Trade Practices Act and the fact that the Government was about to introduce legislation which would have a disastrous effect on small business. The Democrats were there, ready to support the Government, as they have fundamentally supported it in its economic thrust. In the few minutes that are available to me I want to point out that something different should be happening with our economic management. There is no doubt that the mini-Budget, the May statement, has made it very clear that ordinary Australians will pick up the tab for the Government's mismanagement. Youth will be hit; parents will be hit; State taxes will be increased; and telephone charges will be increased. The financial sector is to be let off scot free. It will be allowed to continue to borrow the massive amounts of money overseas so that it can continue to slush around the money markets. The Government has not attempted to tackle the fundamental problem. It is as simple as this: We are spending each year $14 billion more than we are earning. We are making up that deficit each year by borrowing $10 billion and selling $4 billion of our assets. Anybody who has had any experience in business knows that certain fundamentals have to be followed. The first one is that if one is borrowing money to meet current expenditure rather than to put into assets that can generate more money in the future and one cannot meet the interest repayments on the money that one is borrowing, one stops borrowing. Thirty per cent of our exports goes towards paying for money that we have already borrowed. What is the Government doing? It is continuing to borrow at the rate of $10 billion a year. There is no attempt to address that fundamental problem. We have been selling out our assets for years. I first became involved in politics in 1972 because I was concerned about the rate at which we were selling out our assets. In all the years that I have been involved with politics neither the Australian Labor Party nor the Liberal Party of Australia has done anything about redressing the rate at which we have been selling out our assets. Now we are selling them out at the rate of $4 billion a year. This cannot continue. Sooner or later there will be no farm left to sell. The rate at which we are overspending can be put in very simple terms. It can be put this way; every family in this country is spending $60 per week more than it is earning. As a nation that is what we are doing. That is a fast track to the bankruptcy court. What has this mini-Budget attempted to do? It has attempted to depress the whole economy as the only solution to slow down the rate at which we are importing, to slow down the rate at which we are spending money on consumer goods that are imported. There is no doubt that we must face up to the fact that we have to run this country as we run any business. I point out that international businesses have a higher turnover than the whole of the Australian economy. I think the first thing that we have to face up to is the need to be self-sufficient. That requires a plan-a five-year plan of self-sufficiency, I suggest. If we look at the short term five-year period ahead it becomes very clear that if we are to solve unemployment we have to increase our gross domestic product year by year. In the fifth year we will have to increase it by something like 6 per cent on the previous year. We will have to increase our exports by about 10 per cent a year compound if we are to solve our balance of payments problems. Is there any plan for self-sufficiency? No. The Government says: `We will screw the economy down a little and in that way we will stop some of our imports. In five years' time, God knows, we may not be in government.' Before we look at this mini-Budget in detail, let us get our priorities clear. The Government is congratulating itself that it has saved $2 billion to $4 billion in expenditure, which will come off the deficit. That is a big deal, we are told. This $2 billion to $4 billion fades into insignificance when we consider that Australia increased its debt in the non-bank financial sector by a massive $43 billion last year. If anyone doubts these figures they are, plain as a pikestaff, on page 9 of the February issue of the bulletin of the Reserve Bank of Australia. The fundamental tragedy is that of this $43 billion that was borrowed by the non-bank financial sector only $5 billion went into increasing the country's productive capacity, into creating jobs. The balance, $38 billion, went into financial investment-stock market speculation and other sorts of speculation, such as buying land. We have to look only at what happened last year when $5.5 billion alone went into buying shares in Broken Hill Proprietary Co. Ltd during the proposed takeover and defence of that company. The $5.5 billion which was borrowed mainly overseas went into the stock market, yet this Government is concerned and congratulating itself that it is cutting expenditure by $3 billion or $4 billion. We have to get the whole situation into perspective. One of the fundamental and serious criticisms that can be made is that there has been no attempt to encourage investment in productive areas. A friend of mine has just published a very important book. He is Dr Marzouk of Macquarie University, and his book is titled `The Flow of Funds and Monetary Policy in Australia'. It has just been released. I will quote a couple of passages. The whole book, I might add, is addressed to the fact that there has been a massive increase in financial investment in Australia and a massive decrease in productive investment in Australia. He says: There has been a major expansion of credit for paper investment . . . He goes on: . . . paper investment is largely speculative, and unproductive and represents an undesirable diversion of funds away from the creation of productive capacity . . . He continues: For some eight years before the Labor government came to power in 1983, the Coalition government passed policies of `fight inflation first', through fiscal restraint. The benefit from eight years of restrictive fiscal policy, in the form of decline in the rate of inflation, was very modest . . . He continues: Open market operations are not sufficient to restrain the lending of NBFIs. The additional burden of restraint must fall on the only alternative available, which is direct control of the distribution of credit extended by banks and NBFIs with clear directives for all financial institutions to curtail credit for paper investment under the Reserve Bank of Australia Act 1959 and the Banking Act 1959. I also quote this passage from Dr Marzouk's book: James Tobin, Nobel-Laureate in economics, examined the efficiency of the financial system in the United States. He expressed a suspicion that the immense power of the computer was being harnessed to this `paper economy', not to do the same transactions more economically, but to balloon the quantity and variety of financial exchange. These observations by Tobin apply with equal, if not greater force, to Australia which has deregulated the financial system further than has the United States or any other developed market economy, I do not know what it is about Australians and Australian governments but they seem to think they have to do things better and go to greater extremes than any other country. As Dr Marzouk pointed out, we have now deregulated our economy to a greater degree than has any other Western country. Why do we want to break records-all the time? Why do we have to go extremes, particularly when there is a lot of criticism by people such as Tobin, who is an authority on economics, about the degree of deregulation of the United States market, which is nowhere near as deregulated as the Australian economy? We are going from extreme to extreme. Let me turn to what should be done to get ourselves out of this mess. First of all, obviously, we have to tell the banks and the non-bank financial institutions that they should restrict lending for stock exchange speculation and encourage lending for productive investment. That is fairly obvious. The next obvious thing we must do if we are to run our economy in a businesslike way is to work harder. We have to earn more foreign exchange. It is obvious to anybody with even half an eye that the only avenue for doing that is to expand our manufacturing industries. There is nothing very new about the situation now but I must point out to the Senate that I said that about 12 months ago; everybody is saying it now. What is the Government doing about encouraging our export of manufactured goods? It is doing very little I believe. It is busy reducing the protection that industry has. It is busy talking about new car plans but there has been no dramatic and fundamental approach. We need some dramatic solutions, we need to reduce dramatically the amount of money we are spending on consumer products and we need to increase our exports dramatically. This means that we have to get our manufacturing industries efficient and we have to do it quickly. We have to follow the best of what has been done in Japan. We have to encourage worker participation. I would have thought that we have to get an alternative to centralised wage fixing, such as collective agreements. The industrial legislation that the Australian Democrats were so keen to support made it very clear that there was to be no opting out at all and that all agreements had to be centralised through the Australian Conciliation and Arbitration Commission. That is a fundamental mistake: There should be a clear option, an option that is not forced on industry or the trade union movement, to centralise wage fixing so that industries can negotiate together with the unions and management on a broad range of issues-which includes worker participation, work practices, penalty rates and so forth-as well as a system of wage fixing by agreement which is independent of the centralised system. This should be done on an enterprise by enterprise basis so that the conditions and situations that apply to an enterprise's particular work place can be negotiated. Of course, this is particularly important for small business. It is small business that will be at the cutting edge of Australia's salvation, if we are to be saved. I need hardly remind the Senate that small business represents some 65 per cent of the work force. There are some 800,000 small businesses and small business has to be the engine of the future. But has the Government done anything to solve the problems of small business? Senator Kilgariff —They are going broke by the day and the week. Senator SIDDONS —Enormous numbers of small businesses are going broke but nothing is being done about it. Nothing is being done to encourage the entrepreneur. The much vaunted tax package has virtually been nullified by the fact that the Government has refused to index personal income tax. So any income tax cuts that the Government gives on the one hand on the other hand are well and truly overtaken by inflation by the time we actually get them. We still have to pass the imputation legislation. I hope we will get the opportunity of doing that before the Government calls an early election. Small business has to be encouraged and that means we have to have some innovative and exciting initiatives. We should not screw the economy down and congratulate ourselves because we saved $2 billion of expenditure. I am not saying that there is not any government waste. Certainly some urgent consideration has to be given to government waste but that is not an excuse for not facing the fundamentals which are our balance of payments and the amount of money that is being borrowed overseas. On the positive side, it is no excuse for not facing the problems that are inhibiting small businesses and the Australian entrepreneur from developing new products that have export potential and new markets. I would have loved to see a political party in this country that represented farmers, small businesses and manufacturers. They are the powerhouse of our economy. Instead, we have political parties representing one of those sectors of the economy and not the others. Consequently, there is dissension, political debate and no cohesive approach to getting a forward plan that will get us out of this problem. I worry about the future of my country. For some years I have stood in this place as an industrialist. I wish more people who have had experience in business and industry were prepared to be senators. There are some but they are very few. We have to run the country as a business and we have to come up with innovative solutions to the big, deep problems that are now facing us. When I first became involved in politics I had a vision: I wanted to see an Australia that was the sort of country I enjoyed when I was a kid. That vision is disappearing rapidly. It is a great tragedy that the vision we are putting before our young people today is lengthening dole queues, the danger of an acquired immune deficiency syndrome epidemic, drugs and so on. There is no incentive before our young people. It is symptomatic of the attitude of governments today that one of the areas the Government attacked in this mini-Budget was that of young people. The facts are very clear. Twenty-five per cent of the people aged between 16 and 20 are unemployed. Presumably, those figures are accurate; they speak for themselves. Senator Ryan —That is wrong. Twenty-two per cent of those on the labour market. Nine per cent of the age cohort is unemployed. The rest of them are in school. Senator SIDDONS —I am not able to dissect the Minister's comment at this stage. It is new to me. I have looked only at the overall figures. The last figure I saw was very close to 25 per cent. Whatever excuse one can give for that sort of a figure, the fact is that a large number of young people are not able to get work. I know that from experience. Many people have not been able to make the grade in secondary school and certainly have no hope of making the grade in tertiary education. Many people are not qualified to learn a trade. What are we to do with those people? They have opted out of secondary school. Are we going to leave them on the scrap-heap? It is amazing how many young people who apply for employment cannot read or write. I can guarantee that at the technical school I was attending at the age of 14 not one student could not read and write. Yet that same technical school today, which is located close to a factory in which I have a direct interest, is turning out large numbers of students who cannot read or write. I ask: Why is this happening? It is happening, without a doubt. What are we going to say to the people who have gone through secondary school but who cannot read or write? Are we going to say: `You are unemployable for the rest of your life?' There are ways of getting those people into the work force. They can be encouraged into the work force on the basis of permanent part time work. We can give them one day's work per week on a permanent basis, which is what I have done in a company I am associated with. One is amazed at the change of attitude and the enthusiasm that is very quickly engendered. I have spoken on this matter before in the Senate. I have implored the Government to do something about permanent part time work. The Government has tried every other solution under the sun, but not permanent part time work. Is the Government going to face up to these young people who are illiterate, the products of our secondary schools, or is it going to say to them: `You are unemployed and, what is more, you are not going to get the dole'? Many of these young people have left home because their parents have abandoned them, or for whatever reasons. Presumably, they will scratch out a living by thieving or whatever because they will have no other means of support if the Government refuses to give them at least some basic unemployment benefit. The mini-Budget can also be severely criticised on the basis that many things were done which were not made clear in the speech by the Treasurer (Mr Keating) on the matter. This comment is appropriate, more than anything else, to the May statement's effect on women. There was no mention in the Treasurer's speech that the Government was to reduce its commitment to child care centres. The Government originally pledged to increase the number of child care centres. Apparently, that pledge is now to be discarded and there is to be a scaling down of new facilities. There was no mention of the fact that class B widow's pensions were to be scaled down and eventually to be cut out. I conclude by saying again that it is ordinary Australians who are picking up the tab for this Government's mismanagement. I do not know why there is not more criticism of the Government and more comment about a fundamentally new direction for economic management. I cannot understand why members of the Labor Party are not concerned about this. I am amazed that the best the Liberal Party can do, through Mr Howard, is to say: `The Government's policies are really our policies. The Government is pinching ideas we had. We think it is a great idea to deregulate the economy. We wish we had been able to do it before the Government did it'. That is essentially what the Liberals are saying. There is no fundamental criticism or constructive suggestions about a change of direction. The Liberals are saying: `Deregulate further. We will deregulate the labour market as well, and let the law of the jungle apply there'. Until somebody is prepared to stand up in this place and say that there is another way of managing the economy, that there is a case to be made out, as I have said, supported by academics around this country, for some direction for the banks and the non-bank financial institutions to encourage investment in productive areas-nobody in this Parliament is standing up and saying it-I will continue, as leader of the Unite Australia Party and as its sole parliamentary representative, to say with all the vigour I can that, unless we change direction, this country is headed for disaster. Senator McKIERNAN(Western Australia)(9.56) —Tonight the Senate is discussing the `Budget 1987-88-Initial Measures, May 1987-ministerial statement'. I have the unfortunate pleasure of following Senator Siddons in debate. Senator Siddons went on at some length and in some depth about the happenings in the Australian Democrats and criticisms of their policies and performance in this place. I think we have to give some credibility to the honourable senator's criticism because only very recently Senator Siddons was a leading member of that political party. Senator Siddons, unfortunately, went on to criticise the May economic statement and the performance of the Hawke Labor Government, which has been in office since 1983. When we look for ideas of what we can do to correct the ills of society, all Senator Siddons can offer us is a proposal to put young unemployed youth to work for one day a week. I am afraid that it will take quite a deal more than that. It will need in-depth research. It is probably a pity that Senator Siddons is the only member of his party in this place because, although factions can be dangerous in a political party, as the Liberal Party and the National Party know only too well at present, they provide the opportunity for a divergence of opinions. When one gets a divergence of opinions other ideas come forward. If all that is to come out of the Unite Australia Party are the views espoused by one Senator Siddons, it is unfortunate. The Australian population deserves a little more. However, I want to confine my statements to the May economic statement. I will be critical of some aspects of it. As I said, it is difficult to contain factions within a political party but they can be of positive assistance to the party. I hope I will be making my criticisms tonight in a constructive fashion because they are meant to be made in a constructive fashion. The statement by the Treasurer (Mr Keating) on 13 May has been widely hailed as a work of economic and political wisdom and responsibility. Times are tough, a point I shall expand on shortly. One of the pluses Australians have is that they have a government that is made up of people of talent. It is very talented and has a very talented Cabinet. It is prepared to face the realities of the situation we find ourselves in. How disastrous it would be if our destiny had to be directed by the sad, ragtag assortment of political simpletons who sit opposite, who have been brought to the brink of political extinction by their Leader, John Howard, whilst the mad dogs of the New Right snap at their reluctant heels which drag in the wet grass. The Liberal Party had no tax policy or economic policy-despite today's leaks; we saw its Leader denying them on television tonight. It follows that the Liberal Party has no idea how to tackle the ills that beset the national economy at this time. All its leadership can do, including the shadow spokes- person, is carp at the Government's initiatives and wait and hope that the Government will make some mistakes. I assure those opposite that with all the talent that is available on this side of the Parliament Mr Howard will be waiting a long time, even if his colleagues are prepared to give him the chance to wait. The May statement needs to be put in the context of the national economy, which in turn has to be looked at in the context of world trade. This country owes $105 billion in foreign debt. That could be put forward as an indictment on this Government, but it is not all our doing. Only 20 per cent of that debt is directly attributable to us and a lot of it came about because of what we inherited in 1983. Of the $105 billion in foreign debt 60 per cent is owed by the private sector. We have some difficulties in our terms of trade as well. The prices of many of the commodities which Australia depends on for its export earnings have fallen dramatically on world markets. Australia's national income has been slashed by $9 billion. Commodities such as wheat and barley have had their value almost halved from their high point back at the start of this decade. Beef, coking coal, iron ore, copper, lead, nickel and steaming coal form part of the casualty list of world prices for our staple export items. The list goes on. The extraordinary situation which Australia faced coming up to the Budget required extraordinary action by the Government. The Ministers who make up the Expenditure Review Committee went about their task thoroughly and bravely. No Treasurer wants to volunteer to hand down a Budget which claws back 2 per cent of government expenditure in what is likely to be an election year. The $4 billion that has been pared from the deficit represents the highest cutback- Senator Walters —I take a point of order, Mr Acting Deputy President. I draw your attention to the fact that the honourable senator cannot even read his speech properly when he is reading it, and it is against Standing Orders to read a speech. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! There is no point of order. I am certain that Senator McKiernan has copious notes. Senator McKIERNAN —He has indeed. I am more than prepared to show the copious notes to the honourable senator should she so wish. The honourable senator must remember that I got my education back in Ireland. I have to go through a process of translation in picking up the notes I have. The $4 billion cut from the deficit represents the highest cutback made by an Australian government for something like 30 years. It is not my purpose, particularly as a left wing member of the Australian Labor Party, to eulogise all aspects of the mini-Budget but the fact that cuts of such magnitude could be made and be so widely accepted by the community has to be an indication that the Budget process which the Expenditure Review Committee went through was carried out with skill and aplomb. The Treasurer and his colleagues addressed the political and economic realities and got the balance largely right. The Australian people, after examining the statement delivered two weeks ago, recognise the economic realities and the dangers we face and generally have expressed appreciation of the steps that the Government has taken. On the other hand, the shadow Treasurer, the honourable member for Mackellar, Mr Carlton, believes that it is his duty to carp and criticise-and indeed it is. But he takes it a step further. Not only does he have a go at the Government, which is his rightful duty, but also he has a go at those who seek to analyse what the Government has done and give credit to it, and turns his back on what has been an area of traditional support for his Party-the business sector. There was a reference to that in the West Australian on 20 May this year. It said `Carlton criticises business'. The once great Liberal Party is turning its back on those who used to support it. But is it any wonder that the business community is not looking to the Liberals at the moment? As I said, there is little time available to speak on this subject tonight and I do not intend to run the whole 30 minutes allocated to address all of the specifics contained in the statement. But a number of them are worthy of comment, such as the removal of access to the unemployment benefit for 16- and 17-year-olds. It is a radical measure, one that must be backed up by resources which are devoted to training and job creation for this group. We note in the statement that an additional $32m will be allocated from the Department of Employment and Industrial Relations for this purpose. We will be watching this matter with care to ensure that that money is used up, is well spent and will create real jobs for those young people. Regarding changes in family allowances, perhaps I will take up what Senator Powell said earlier-that rather than implementing this change we could have looked at changes to the dependent spouse rebate. We could have done it for the following reason: Family allowances are generally paid to the woman in the family whereas the dependent spouse rebate is paid to the breadwinner, which in the case of a single income family is usually the male of the species. Perhaps it might have been better to have effected the savings through the dependent spouse rebate rather than through the family allowance. However, people whose incomes exceed $50,000 a year generally are in the best position to be able to look after themselves. In the context of the situation at the moment generally it is an equitable decision. I have a few quarrels with the means testing of various allowances, including assets testing people over 25 years old who receive unemployment or sickness benefits. We are in very difficult times. We note and are concerned that there are to be considerable savings in the health portfolio. When we read and heard the announcement that there would be a saving of $121m in this arena we certainly were somewhat scared. However, we congratulate the Government on the fact that the current level of 85 per cent rebate for Medicare is being retained, together with the maximum patient payment of $20. Doctors have been asked to show constraint. Unfortunately, they are not community leaders by showing constraint when it comes to incomes. But hopefully it is not just wishful thinking on our part that they will contribute as well as the rest of the community that has been asked to contribute. The abolition of the community employment program is another area of concern. I would have preferred this program to be maintained, perhaps in a different form. Certainly the CEP has been one of the most successful job creation schemes that we have witnessed. Not only has it provided employment for individuals but also it has given communities at a local level many benefits and assets that they would not have got through normal processes. For those people who took part in the program-- Senator Jessop —It has not provided any permanent jobs. Senator McKIERNAN —They were only temporary but they were additional benefits of the program. Unemployment not only concerns the hip pocket nerve; it affects the morale of the individual. If an individual is unemployed-particularly a young individual who has never been in a work force-for any length of time that person gets very demoralised. The CEP program assisted in breaking that demoralisation and in giving the individual some confidence to go out and enter the work stream. Another area of concern is road funding. One hundred and eighty million dollars is a lot of money to come off road funding. One would have to admit that this would inevitably lead to a reduction in the number of jobs. At the best of times it is difficult to tackle the question of roads because the other question of road safety is raised. I trust that the Expenditure Review Committee, in making its very difficult decisions, took this question into account. I believe that the thrust of the mini-Budget was directed at business, to give it the incentive to invest and, therefore, to create jobs. Hopefully if this takes place the jobs that will be created will take up the slack that has been lost in the areas of the community employment program and road funding. It is something that we hope for. I believe that the vast bulk of business people will take up the challenge, will get out and invest, and in turn will create those much needed jobs in the community at the moment. I take it as a positive sign, a sign that the restraint shown by working taxpayers in Australia which has been exercised for a period will be rewarded by this reinvestment and expansion in the private sector. I could think of nothing more obscene than if the opportunity which has been given to the business community is frittered away by expanding dividends and short term profits to the shareholders, or speculative profits to those sharks involved in the takeover games. If this happens I do not believe that Australians will either forgive or forget. Although we wish that the terms of trade will continue to decline, certainly our Minister for Trade, Mr Dawkins, is doing the best he can so that this will not happen. But I think the signs are ominous in a number of areas. If further cuts are required in the August Budget there are areas to which I think the Government should direct its attention. In order to get accurate information as to where we can direct our attention I believe that an inquiry into wealth in Australia is an absolute necessity. Senator Tate —An inquiry into what? Senator McKIERNAN —A wealth inquiry. We have been asking for it for some time. We have some commitments in this area but other things have pushed it to the back burner. Now that the country is in a difficult situation an inquiry into wealth, ownership and distribution would be timely. Another area at which we ought to look is the way in which superannuation funds make profits from investments. Perhaps that is an area at which the Government ought to look if it needs more money. I mentioned earlier the dependent spouse rebate. The Government, in its May economic statement, has announced that it will dispose of some assets. Whilst my philosophy urges me to approach this area with caution I do not have any real qualms about the decisions that the Government has made in this area. If the Government had been tackling Australian Airlines, the Commonwealth Bank of Australia, Qantas Airways Ltd or the Australian Telecommunications Commission-I will have something to say about Telecom later-or some other major enterprises owned by the Australian public I might have had a different attitude and perhaps I would have said something stronger about it but I think the Government has reached a balanced decision on the disposal of assets. If we are forced in to a position where we have to sell assets or, as Senator Siddons said in his contribution, to sell off parts of the farm, there are other areas at which we can look. I might be criticised for my philistine approach to things. Fairly recently I had the dubious pleasure of visiting the Australian National Gallery-a gallery that is supposed to hold works of art which are of inestimable value, including Blue Poles. I mention that only because it is the most famous. I am not an arty-crafty person. Blue Poles is supposed to be worth 10 times in excess of what we paid for it. It is worth in excess of $10m now. If we have to sell off assets and there is a demand for some of those priceless works of art let us relieve Australians of the burden they have in holding them in the Gallery-a place which does not even have the money to put out programs for kids. If one goes into the gallery with two kids one gets only one directional map. Let us have a look at things such as paintings and treasures of the nation which are seen only by relatively few people. I am not picking particularly on Blue Poles. There were many other things on display in the art gallery on the day on which I visited which perhaps are priceless-I certainly would not have a number of them in my lounge room-and which we could dispose of. Obviously, if the National Gallery has bought them they must be of use to some people. Let us auction off some of the things like that to boost the Commonwealth's coffers and perhaps we might not have to look at cutting expenditure in other areas. Senator Short —You are a philistine. It is not in your character. Senator McKIERNAN —I still have doubts as to whether I am a philistine, but when times are tough we have to make tough decisions and, if it is a hard decision to flog off Blue Poles, that is a decision that ought to be made. If it will save $10m, $12m or $15m of government expenditure in another area I would think it would be money well saved. Another area in the May economic statement on which I will not dwell and with which I am not particularly happy is the slower implementation of the heavy engineering assistance package-a cut of some $10m. I think it is unfortunate that that has happened as it is an area of industry that badly needs a shot in the arm. It is an area that has shown increased co-operation between all the sectors involved in it-co-operation that in part is built upon by this heavy engineering assistance package. I said that I would return to the matter of Telecom. Usually, when governments bring down statements such as this-as we saw in this morning's newspapers-individuals, organisations or groups go out and bucket it and have a knee-jerk reaction to what is contained in it. A Press statement was put out by Mr Brack, the Chairman of Telecom, and it was released by Keith Hainsworth, National Manager of Media. Telecom's reaction should be condemned by all of us in unison, irrespective of what side of the House we sit on and what political party we follow. As a supporter of Telecom I expected something a little better than an immediate call on the Government to allow it to increase local charges by about 3c-from 18c to 21c-and to increase the subscriber trunk dialling charges for short distances by 16.7 per cent, medium distances by 11 per cent and long distances by 5 per cent. Telecom has said that it will have to reduce staff by some 3 per cent. It will have to reduce spending on equipment in Australia by about $50m which, in turn, causes unemployment in the local manufacturing area. Telecom will also have to curtail the rural and remote program and the 1990 completion date that has been set will not be met. I think it is a deplorable state of affairs that an authority such as Telecom that is held in very high esteem in the community should react in this fashion and put out a three-page Press release which one would have expected from the corporate sector but which the corporate sector did not do. I think the corporate sector will pull its weight in the difficult times we are in but unfortunately we get a government instrumentality, such as Telecom, which goes for the easy fix. It might be an easy fix for Telecom but I assure Telecom and its supporters that it is not an easy fix for the Australian community, particularly those people in remote regions who are heavily dependent upon the services that Telecom offers. I understand that Telecom will have to put a submission to the Prices Surveillance Authority requesting that it be allowed to increase the charges. I hope that our Government will bitterly and vigorously oppose any increase in charges so that Telecom, its management and the various experts that it employs who are well known to everyone in this chamber-I have some doubts about the experts-can be forced into examining the areas in which they can cut back and face the tough times as the rest of us are doing. I find Telecom's argument amazing because it recently made submissions to a couple of Caucus committees in which I am involved on the question of whether it should pay customs duty on its imports. Of course, one of the elements of the May economic statement was that Telecom would have to pay duty. I think it amounts to $75m or $80m a year. A couple of `experts' from Telecom addressed the Committee and they were not able to answer our questions. They then said that they would provide us with written submissions afterwards. I shall quote from part of a letter that was received by the chairman of one of the committees. The letter was from Mr R. P. Liggett, the Director of Finance of Telecom. I shall quote just a small part of the letter: The first is on import substitution and looks at the issue from a macro point of view concluding that the change in the A$ is of more significance than the possible introduction of customs duty. I did not hear anything from Telecom prior to 13 May about a demand for increases in charges, yet we are told by the Director of finance that the devaluation of the Australian dollar is having a tremendous impact on Telecom. In my view, the Australian people and the Australian public are deserving of better treatment than they are receiving from Telecom at present. I commend the measures-although I have been critical of some parts but overall it is a responsible package-taken in the May economic statement to this chamber. Senator JESSOP(South Australia)(9.22) —I listened with interest to the left wing spokesman from the Government side and I thought he contributed quite a few interesting points. Senator McKiernan —Despite being a philistine? Senator JESSOP —He claimed he was being like a philistine but I think some of the points he made contained some sense and he recognised that the Government was running into serious difficulties with the economy because it has certainly recognised that the economy of Australia is fraught with fundamental problems. That is the reason why the Government at last recognised the wisdom of the Opposition's urging that it should bring down a mini-Budget or an economic statement as it did this month. It should have, too, because the reasons for the economic chaos are abundantly clear, or are abundantly clear to senators on this side of the House. They become quite apparent when one has regard to the fact that we have a very low productivity growth, a high cost structure, a massive external imbalance and a large public sector deficit. All of these, of course, have to be corrected if Australia is to reverse the experience of recent years, which has resulted in falling living standards. After four years of the Labor Government it has got a pretty impressive record, and this has been mentioned by honourable members on this side of the House during the debate. Senator Short commented that the Hawke Government is the biggest spending government ever, spending 29.7 per cent of the gross domestic product in 1984-85. The four Keating Budgets are the four biggest Budgets Australia has ever witnessed. The Government has certainly evidenced itself as a big spending government in 1986-87, when 24.8 per cent of the gross domestic product was expended. The Government has presided over the lowest value of the Australian dollar ever, so far as I am concerned, and it has also imposed considerable pressures on home buyers in Australia because home loan interest rates are 15.5 per cent. If one uses a bankcard one experiences interest rates of 23 per cent for that facility. Senator Short —An almost unbelievable figure. Senator JESSOP —It is an unbelievable figure and, regrettably, it is causing a tremendous amount of difficulty not only among small businesses and businesses at large but also for the average householder in Australia. The small overdraft interest rate is another example of what has happened under the Hawke Government. It is 21 per cent. The Hawke Government has presided over the largest foreign debt Australia has ever experienced-$105 billion at the end of December 1986, which is the equivalent of something like $26,000 for every Australian family. One finds that Australia, under the Hawke Labor Government, has the worst inflation rate ever of any member of the Organisation for Economic Co-operation and Development. Australia's rate of 9 per cent is almost four times the OECD average of 2.4 per cent. The Government has also contributed to the largest current deficit ever in our history. It was 6 per cent of GDP in 1985-86, the second worst in the Western World in 1986 and in 1987 it was exceeded only by Norway, so it is no wonder the Government had to submit to the pressures exerted by the Opposition and bring down a mini-Budget as it did recently. I have heard comments concerning the attitude of the Government to the dole. I think the Government has adopted a responsible attitude there. I have always said that Australian parents should not abandon their children when their children leave school. The responsibility of a parent is to ensure that the child is looked after, if possible, until the child obtains employment. In Australia today plenty of jobs are available. According to the statistics some 65,000 jobs are available but I think that is the tip of the iceberg. I believe there are many other jobs available if people are anxious enough to seek employment. Certainly, a person may not find the job he would want to enjoy for the rest of his life-that certainly may not be so-but in the interim jobs are available. I was in Melbourne a few months ago and I was talking to a hotel manager who said that he could not find anybody to clean the windows in Collins Street. It is not a very difficult job. The windows are not up high, they are on street level. The contractor to whom he spoke would have been happy to do the work but he cannot find anybody from the Commonwealth Employment Office to take the job. He would otherwise have been able to do the job. So, fairly simple work is available for people. Illiterate though they may be, they can still clean windows. Senator McKiernan talked about the community employment program and the fact that it is now being discarded. I can understand that because until last year, from memory, $1.4 billion was spent on CEP projects. On many occasions Senator Short has raised the matter of the Footscray swimming pool. Initially the cost of that was estimated to be $2.8m, and now it has escalated to $6.5m. Senator Short —An absolute scandal! Senator JESSOP —It is a scandal because at one time, for many hundreds of thousands of dollars, all that had been obtained was a hole in the ground. That sort of project is not peculiar to Victoria. In South Australia we have had evidence of how these CEP projects have escalated in cost. The King William Road pavement project, which was carried out not far from where I live, was supposed to cost of the order of $3m. It escalated to over $5m. The number of people employed on that project, from memory, was about 54 and of that number only two were able to find permanent employment at the end of that project. It is quite clear that the Government has recognised that the money expended on that program has not been directed properly and that there are other ways in which people can be encouraged to find employment. For a few moments I would like to refer to the effects of the statement on medical services. Senator Michael Baume dwelt on this matter earlier in the debate. The Minister for Health, Dr Blewett, proclaimed that although $208m has been cut from the Medicare budget. The reduction will be made `without any alteration to the fundamental principles of Medicare'. I am sure that $208m could be cut from the Medicare budget without adversely affecting health services for Australians, but I doubt whether the Minister or his Department could administer those cuts efficiently. The Minister proudly claimed: The Hawke Government's universal health insurance system, introduced in February 1984 and based on an equitable levy on income, would continue to protect all Australians against the high cost of medical and hospital treatment. Medicare remains the fairest health insurance system ever established in this country. Many years ago the Whitlam Government introduced Medibank. I remember at the time that the late Allan Fraser-probably one of the most intelligent Frasers to have been in this Parliament-- Senator Puplick —All the Frasers were intelligent. Senator JESSOP —Yes, but some were more intelligent than others. He roundly condemned that initiative of the Whitlam Government as a fraud. He was proven correct over Medibank and I think that Medicare is even worse than its predecessor. Of course, Allan Fraser knew something about medical services because he was chairman of the board which had run the Canberra community hospital for about 20 years before Medibank was introduced. Senator Michael Baume has demonstrated that in the last year the cost of health care to the average family which is privately insured has risen by $175 over and above the $75 rise due to the last Budget and the additional $50 caused by the 25 per cent increase in the Medicare levy. Health costs rose by 18.5 per cent last year. That is double the national inflation rate, even though the Medicare levy is not included in the consumer price index. The May statement will effectively cause health costs to rise further, and the waiting lists for hospitalisation will undoubtedly lengthen. The Minister, however, continues to boast in his typical way about fairness and about what he describes as the best of medical services that are being provided in Australia. The decision to reduce by 43 per cent in-patient remuneration for repeat consultations will have a devastating effect on the standards of practice of internal medicine. I was an optometrist prior to coming to Parliament and I still have some knowledge of my former profession. I note that item 180-which is an initial consultation fee which applies to refractions and which used to be payable once every year-will now be payable every two years. I think that is fair enough for the average patient, but there are a number of cases where this may not be quite equitable. For example, I cite the case of a young child who has myopia during its formative years. That myopic condition can increase. Even in six months that child may need further refractive treatment and the provision of additional correction. Those sorts of cases really need to be catered for. I hope that the Minister and the Government will recognise that that sort of case, where it is clinically necessary to see the patient more frequently and provide spectacles more frequently than every two years, needs special attention. Of course, when the average person in Australia reaches the age of 40 he could conceivably require attention every 12 months or so, particularly if the intraocular tension-the tension within the eyeball-is elevated to a stage where it needs to be looked at every six months to ensure that that patient is not a glaucoma case. There are other cases where seeing the patient more frequently could be described as being clinically necessary. I refer to diabetic conditions and so on. I hope that the Government will recognise that there are a few anomalies in this regard and that those patients need special attention. Also, I heard Senator Peter Baume ask a question earlier today about specialist physician treatments. From reading the statement I understand that the new provisions permit patients a full rebate for only three visits to a consultant physician whereas patients often require management by a consultant physician over days or even weeks for an acute condition, and for months or even years for a chronic condition. I think that this decision that has been made in the context of this May economic statement is unfortunate. Also, a patient with cancer requiring highly specialised and potentially dangerous drugs may need to have such treatment monitored over long periods by a physician who has had years of experience in that special area of medical treatment. Under the new regulations, I understand that the patient will now need to be supervised by a medical practitioner who has no real specialised knowledge or training or, alternatively, queue up on the waiting lists for treatment at a public hospital. A patient with a chronic illness such as rheumatoid arthritis needs continuing specialist care, not only for optimum control of joint inflammation but also to reduce the crippling effects and serious complications of this very serious complaint. I have referred to the diabetic patient in an ocular sense. Complications can affect the heart, the eye, the kidneys and major arteries. Continuous management by a consultant physician is required in order to save sight, prevent kidney failure and reduce the risk of heart attack. The only way in which patients suffering from that sort of complaint can now be dealt with and given the necessary services is apparently to pay for them themselves, because they will receive only a fairly trifling amount from their private health fund or Medicare. The only alternative for them is to resort to the already overcrowded public hospital system. I think that there are aspects in that area that need to be watched very carefully to ensure that the standard of treatment does not deteriorate to the extent that the health of the people of Australia is endangered. Senator Tate —Why can't the consultant physician refer the person back to the general practitioner? I am asking this as a general question. Senator JESSOP —They can do that. I am talking about the more serious cases such as the optometric patients who, for clinically obvious reasons, need more frequent attention. Certainly, there are cases that could be referred back to the general practitioner. Senator Walters —And are. Senator JESSOP —That is right. When I spoke earlier, I was really referring to the chronically affected people. The Minister needs to have some compassion and regard for them. I imagine that either the Minister or the Department has the capacity to be flexible in those cases. Senator Townley —Not the Minister. Senator JESSOP —Senator Townley has joined me in the chamber. I would like to think that even the Minister would have some ability to recognise the cases to which I was referring. Senator Puplick —He used to, but he has become a Minister. Senator JESSOP —It happens sometimes that Ministers lose the personal touch and the humane approach and become borne down by the heavy load of economic responsibility. Senator Puplick —And the necessity to fix up an early election. Senator JESSOP —Yes; it is interesting that the Government has withdrawn its industrial relations package, which gives me some reason to suspect that it does not want to carry on too much longer and wants to go to the people before the disaster of its economic management becomes more abundantly clear. I register my disapproval of the Minister's action in denying financial support to long-established organisations which obtain most of their funds from public donations but which have expected to receive some financial assistance from the Government. I refer to organisations such as the Nursing Mothers Association of Australia, the Association for the Welfare of Children in Hospital and the Australian Brain Foundation, all of which have been denied funds while the friends of the Minister have been rewarded. I refer to groups such as the Australian Consumers Medical Association and the Students Initiative in Community Health. Those groups seem to be able to attract abundant funds, but the other organisations that attract donations from people such as Senator Townley and others who recognise the importance of public contributions to these associations have been denied the support of the Government. These organisations are dedicated to promoting the interests of the people they choose to serve in an honorary capacity. I hope the Government will recognise the points I have made with respect to chronically ill patients and patients of physicians to whom I have referred. I hope it will introduce some humane flexibility in its approach to this matter. Senator COONEY(Victoria)(9.43) —Towards the end of his speech, Senator Jessop made some good points. He referred to the fact that certain institutions and organisations need help from the public purse. In our charge down the path of reducing public expenditure, it is well to remember, as Senator Jessop has done, that some demands can legitimately be made on the public purse. In the end, we are not a collection of individuals but a community that should pull together. Senator Puplick —You are a socialist after all. Senator COONEY —I am a man committed to his fellow man, Senator Puplick, like yourself deep down, a man of decency and love of his fellow man-even the historic figure of Richard III, whom the honourable senator so valiantly defended this morning in the paper. The May economic statement is yet another step in the direction towards economic health that the Government has pursued. It has floated the dollar and instituted tax reforms; it has encouraged research and development; it has imposed taxes where hopefully they can best be borne. In some cases, the May economic statement makes it harder to obtain social security payments, and it is well to consider that at this point. People who rort the system deserve to be caught and dealt with, but in accepting that principle, it is well to remember that the vast majority of social security recipients need the payments they receive under that scheme in order to live. There is a lot of tragedy, poverty and hardship in the community, and when parliamentarians talk about the need to be tough, we should remember that fact. At times people refer to the social security system as a bonanza. One must remember that the payment for a sickness benefit is a little more than $100 a week. How luxurious a life can one live on that amount? The statement abolishes the family allowance for children resident outside Australia, and no one would cavil at that. Senator Puplick —What about the Vietnamese families maintaining their children who are still in Vietnam? Senator COONEY —That is a good point and an exception that should be looked at. Legislation must embrace a broad statement. On the one hand, there are Vietnamese children and, on the other hand, there are children of European families who could very well be here but who are not here and who are being supported by Australia over there. That point must be taken into consideration. Like all things, it is a matter of balance. Taking the children who may be spread across the world, it is a matter that can be raised, but, on the whole, it can be accepted. The income testing of family allowances can also be accepted. The sum of $50,000 is substantial and there is an allowance of $2,500 in respect of each child after the first which can be added to that sum before the benefit is affected. Senator Walters —What about the single bloke on $50,000? He pays the same tax as the family man. Senator COONEY —Certainly, there will be people in the community who are better off than others, and that must be accepted. Senator Walters —You are treating children as luxuries. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! There are too many interjections. Senator COONEY —Of course we are not treating children as luxuries. The Government is simply stating that at a particular level of income, people should be able to support their children. Some of us are blessed with children who we enjoy no end; the little treasures are just that. The assets test is now to apply to unemployment and sickness benefits, invalid pensions and so on. It may cause hardship in some particular cases, but the broad principle is reasonable. More efficient procedures have been adopted for reviewing pensions. If people are ripping off the system, they deserve to be investigated. However, the problem with investigation is that it can sometimes impinge harshly on honest people who, nevertheless, are subject to the scrutiny that has been devised for those who are not honest. That fact must be remembered when people are investigating pensions. Some categories of pensions have been reduced and some people currently receiving widow's pensions will have to go on unemployment benefits. When one considers the ages of the people involved, one can see an argument for those provisions. The provision of unemployment benefits for young people aged 16 and 17 years has been cut out and a job search allowance has been provided. If in fact jobs are available-and Senator Jessop says that they are-and they can be filled by these people, that is all well and good. However, Senator Jessop said that there is many a job around that is not filled. He talked about people cleaning windows, and perhaps he could have gone on to say that there are ditches to fill. I think that in regard to employment we must remember this: Clearly, there are less jobs than there are people to fill them. It is very easy to say that this person can get a job or that person can get a job. I want to say a couple of things about that. First, many of those jobs are subject to employers who are harsh and unreasonable. I think it is important when we are talking-- Senator Walters —Cleaning windows? Senator COONEY —Senator Walters laughs, and I take it from that that she means to say that every employer in Australia is blessed, as it were, with a divine ability to be just, proper and reasonable; that employers are the one class of people who can properly define and state what jobs ought to be, what people ought to get paid and how they ought to be treated. I think that very statement indicates how absurd such a proposition is. All I am saying is this: When we talk about unemployment and about jobs that might be available, we ought to look not simply at the bare statement that a window cleaning job or a job filling ditches is available but at the circumstances under which those jobs might be given. The second thing that I want to say about that proposition is that the statement that one can get a job cleaning cars, cleaning windows or mending roads presumes that the generation of employment is simply a matter of creating jobs at any given level, but the reality is that to get out of its problems Australia needs jobs that can be and will be filled by sophisticated and educated people. Japan and West Germany, for example, whose economies have developed and continue to develop well, have a very high class of citizen-high class in the sense of people being educated and able to cope with the technology that is needed to advance in this world. It is at that level that we ought to look. Senator Puplick —Why have you cut research grants at the CSIRO in this mini-Budget? Senator COONEY —Of course what we have done is allowed a 150 per cent tax deduction on those going into research and development. But Senator Puplick will not get an argument from me about the necessity for research and development, as that is what I advocate. It is at that sort of level that this debate ought to be directed rather than having, as has occurred up until now, speaker after speaker talking in terms of economic policies and fiscals this and fiscals that, as well as monetary policy here and monetary policy there. That is not what we should be on about. We should be concentrating on directing industry and jobs in this country towards a more technological orientation. I do not think that we are doing enough of that. I do not think that we will solve our problems simply by reducing wages and sending off everybody who leaves school to clear ditches or clean out the spoutings at home and polish the brass door knob. Senator Puplick —That is how you get to be a Minister. Senator COONEY —There are a few people in the Gilbert and Sullivan works who have got places by polishing up the-- Senator Puplick —Handle of the big front door! Senator COONEY —That is the one; I thank the honourable senator very much. Senator Peter Baume —Who was it? Senator COONEY —I will have to admit defeat following that penetrating question from the honourable senator opposite. I remember seeing HMS Pinafore at Xavier College one night, but I forgot-- Senator Peter Baume —It was Sir Joseph Porter, KCB. Senator COONEY —But he was an exception; I do not think that many people would get too far by polishing up brass handles. When we debate economic matters, as we do constantly in this place, it seems to me that we confine ourselves too much in terms of simply pulling strings, as it were, and saying that if we allow a certain balance to blow out or if we draw this one in or if we send various people out to work on the roads and simply adjust in some sort of mechanical way the various elements that make up the economy, somehow all will be right. It is just the wrong way of looking at it. If we are looking at the question of the capital that we need, we must realise that what we need is human capital; people who can get out and struggle with the needs of the modern world, produce the sorts of goods that will sell overseas. Hopefully in solving our economic problems perhaps we will bring about a society which is not only economically sound but which is compassionate. That is the sort of word that one does not hear in these debates any more. Senator Short —What absolute nonsense! Senator COONEY —When did Senator Short last use the word `compassionate', as distinct from regaling this Government's economic policies? Senator Short —About four hours ago. Senator COONEY —I apologise if he did, and certainly if that is right I will have that text-if it has sympathy for his fellow man, his fellow worker, his fellow unionist and things like that-blown up and put on my board, held up with golden pins. So, I am looking forward to seeing those remarks. But really, in the context of this debate-and I do not want to continue on-- Senator Tate —I want you to-I don't want Senator Walters! Senator COONEY —Senator Walters was a nurse, Senator Tate. Deep down Senator Walters is a compassionate, loving human being, and I will not hear anybody saying anything against her. Other senators have said harsh things but Senator Walters has defended the State of Tasmania and has defended her Party, and I think there is great capacity for love and devotion in Senator Walters's heart, which I think we all ought to promptly pay heed to. Senator Puplick —Senator Grimes used to say as much. Senator COONEY —Yes, he speaks highly of her. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! I think we should get back to the debate. Senator COONEY —I am sorry, Mr Acting Deputy President. I shall refer to one other matter before I sit down. The matter of industrial relations has been referred to, and in this context I think it is important to remember that industrial relations is aimed at getting a harmonious industrial system going, as without a harmonious system we will not get anywhere. Harmony will not be achieved if people constantly attack one side of the equation, namely, the employees represented by their unions. Quite clearly, the workers of this country have taken a cut in wages over the past few years and profits have gone up-and that is a good thing, particularly if they are invested-but when call after call is made for greater cuts it becomes a matter of just how sincere and how credible those sorts of calls are. Senator PUPLICK(New South Wales)(9.58) —It is perhaps symbolic for those of us who, as Senator Cooney has noted, are historians by training that the statement of the Treasurer (Mr Keating) `1987-88 Budget Initial Measures, May 1987' was delivered on 13 May 1987. In fact that was the 200th anniversary of the date on which the First Fleet set sail from Portsmouth. For the average family there was in this mini-Budget statement about as much hope and as much faith in the future as there was for the average passenger on that First Fleet. It is perhaps equally symbolic that the re-enactment of the journey of that First Fleet was only out of Portsmouth for two days before it had to return to port and start the journey all over again. This Government will be required to return to port and start its economic journey all over again because, fundamentally, it has got the economic equation completely wrong, and completely in reverse. Since Mr Keating has been the Treasurer of the Commonwealth of Australia there have been wage increases for the average family in Australia of approximately $119. However the real increase in wages, allowing for inflation, has been only $9. Offset against that, the average family in Australia has had to pay $37 a week more in tax under this Government, $26 a week more in mortgage repayments, $4.70 more in health insurance costs and some 60 per cent of Australian families have kept their private health insurance intact because of this Government's deliberate and mendacious running down of the health system under its Medicare scheme. On an overall basis, the average tax for the family unit in Australia has risen from 17.5c to 20.5c in the dollar. In other words, under this Government in the course of the past four years, as we have repeatedly said on this side of the chamber, the living standards of ordinary Australian families have fallen. Offset against that has been one of the most massive deceptions perpetuated by any government in its estimates of revenue raising. When Mr Keating introduced the capital gains tax he told us that initially it would raise $5m in its first year of operation. This would rise to $25m in its fifth year of operation. We now know that this tax will raise between $125m and $175m in its first year of operation. Within the Government's economic strategy there has been a deliberate downplaying of the impact that its policies have had on the welfare of the average family and a deliberate downplaying of the effect which its revenue raising new taxes have had across the Australian community in general. This mini-Budget statement is a thimble and pea trick. Of the alleged $1.6 billion of restraint on the Commonwealth's own expenditure, $900m consists simply of deferrals, changes in timing and alleged efficiency savings. Less than half of the real expenditure restraint is actual restraint or reduction of costs. Interestingly, only four cuts out of the 80 in the statement will raise more than $100m and two of these are particularly large deferrals. Only 20 cuts are larger than $50m and few programs have actually been abolished which is the only real way to get massive expenditure restraint. This mini-Budget will not last the distance. I predict that it will not last beyond July, which is why we are now awash in this place and in the media generally with speculation about an early election. The mini-Budget will not hold together as a result of the wages blowout which takes place and which will continue to take place as a result of the two-tier wage fixation system, which this Government has sought to put into place. In the Weekend Australian of 16 and 17 May, David Potts, the economic editor, characterised the mini-Budget in the following terms: Where did the $6 billion come from?- he is talking about the deficit- How did the deficit grow from $3.5 billion this year to $6 billion next year? Why weren't we told? Because this Government is more about taxing than axing. That is a correct summary of the economic policy which this Government has pursued. There is no doubt that in one or two fields the Commonwealth has been correct in attempting to impose some degree of expenditure restraint. One of the areas in which I believe that expenditure restraint is properly applied is in relation to the grants to the States. The States have built up about $9 billion worth of assets in various hollow logs around the place and I believe that they should properly be required to disgorge this money in order to help meet the necessary restraint at Commonwealth, State and local government level. I do not believe that the cuts imposed upon the States have been unfair, nor do I believe that the States are incapable of shouldering those burdens without resorting to increased State taxes and charges which they will seek to impose as a way to avoid facing up to their own fiscal responsibilities. I wish to point to one or two specific matters arising from the mini-Budget. I am particularly pleased that the Minister for Industry, Technology and Commerce (Senator Button) is now in the chamber because a number of matters to which I wish to refer touch upon his responsibilities, either as the Minister responsible or as the representative Minister in this chamber. When we come to the debate on the sales tax legislation, I will have a great deal more to say about the imposition of the $400 limit on travellers' duty free concessions. I raise this matter at this stage only to indicate that the impact of that fairly small decision will be significant. It will have three effects. First, it will divert the resources of the Customs department away from the proper policing of its narcotics responsibilities into revenue raising for small scale items relating to the Australian tourist trade. Secondly, it clearly sets at nought the expert recommendations put to the Government by the Industries Assistance Commission in its analysis of passenger concessions. Thirdly, it is another significant blow against the operation of entrepreneurial small businesses in Australia and indicates the sorts of targets that this Government is prepared to identify. I will return in a moment to the question of the targets, the people who really suffer as a result of this Government's mini-Budget. Another example of this is the decision which is made on Film Australia in the mini-Budget. This is described in a fairly specious way in the Budget statement. Here is an institution, so we are told, which will save the Commonwealth $1.3m by being restructured. We are not actually told how it will be restructured; we know that there has been an inquiry into Film Australia which provided the Government with four options about the restructuring. The Government has not actually responded to that inquiry but has simply said that it will take some steps and that it will save $1.3m in the process. However, on page 44 of its own statement, the Government admits that the restructuring will mean a once only redundancy cost of up to $1.4m to provide redundancy payments to staff within Film Australia. Therefore, it is not a saving of $1.3m, it is in fact a cost of $100,000 and we do not know the Government's projections for the work of Film Australia in future years. There is one point in the statement for which I must give credit where credit is due and that is in the funding provided for the acquired immune deficiency syndrome treatment and education programs. An extra $2m has been earmarked for that. However, I do not think that this Government has yet faced up to the dimension of the public health crisis which it faces in terms of the economic cost for AIDS. Just last month the Age newspaper estimated that Victoria would be spending more than $30m a year treating AIDS patients by 1990. That cost will be well in excess of that figure in NSW which I have the honour to represent. There is no comprehension demonstrated in any of the Government's forward commitments and forward planning on health expenditure to accommodate the sort of price tag estimated as a result of this particular public health crisis. Dr Bruce Whyte, one of the AIDS medical experts, has estimated that AIDS will cost Australia $750m a year in lost earnings and hospital and medical care by 1991. Nobody in this Parliament will cavil at having to provide that money. Nobody in this Parliament will seek to avoid the expenditure which will be necessary for people who are suffering from AIDS. Yet this Government, in the way in which it has addressed the forward planning in the health portfolio, shows no indication that it is seized with the economic significance of this matter. An additional $1m has been provided in the statement for the funding of a pilot study for the AIDS treatment using the drug AZT, but we have recent estimates that individual patient treatments with AZT will cost between $10,000 and $15,000 a year, and we know that we will be looking at several hundred cases. Dr Whyte, whom I previously mentioned, indicated that he expected that about 3,000 people by the end of 1990 would be in category A as far as their AIDS health status is concerned. Again the Government shows no clear indication that it is planning for a blow-out within the Department of Health expenditure of that sort of measure. I turn finally to address the question of the cuts that have been made in an area which may look very small to this Government and which picks up a point that Senator Cooney was making a few minutes ago about investment in this country's future and about the levels of skill within the Australian work force. Senator Peter Baume —Tell us about TAFE. Senator PUPLICK —My colleague Senator Peter Baume says: `Tell us about TAFE'. I was about to mention the enormous reductions in expenditure which are being made for colleges of technical and further education throughout this mini-Budget statement. There is to be a reduction in general recurrent grants for TAFE in 1988-89 amounting to $45m. This is in an area where the improvement and the upgrading of skills, particularly technical skills, in Australia is of critical importance. Yet here is $45m to be taken out of the TAFE system and to be saved, so-called, on the basis of fairly short term gains. Page 51 of the printed statement of the Treasurer (Mr Keating) shows a reduction of $1m in the Australian research grants scheme by reducing the number of new grants which are to be awarded under the ARGS and related grants systems. I look at the fact that the Commonwealth Scientific and Industrial Research Organisation is to have imposed upon it a cut in 1988-89 amounting to $15m. When one looks at cuts in the TAFE sector, cuts in the ARGS arrangements and cuts in the CSIRO one is clearly seized with the prospect of cutting into the development of skills in Australia which are absolutely fundamental and absolutely vital to the revitalisation of our economic well-being whether it happens to be in the manufacturing industry or in any of those industries which are related to increased productivity through increased skill in the work force. Only today an article appeared in the Age headed `PhD decline puts industry at risk: report', which made it quite clear that the failure to train enough skilled engineers and people with higher degrees in the engineering and science faculties of our universities is now getting to the stage that it is very clearly cutting into the capacity of Australian industry to take advantage of those niches and those windows of opportunity which are opening up for areas which need advanced skills. One looks, for instance, at the recent reports about the development of superconductors. I am sure my friend and colleague Senator Vigor has been following this as avidly as I have. Here is an area in which Australia can certainly take some part of what is probably one of the most exciting technological and scientific discoveries of recent years. It will take advantage of that by our development not only of the computing and engineering skills in Australia but also equally in terms of the development of our mineral sands industry, in terms of the production of yttrium and the production of the rare earths which Australia possesses in abundance and which will be absolutely necessary as the fundamental ceramic building blocks of the superconductor system. Superconductors of the future will revolutionise the way in which we do business and the way in which the economy grows and develops. Yet, without engineers, without trained scientists and without PhDs with skills in engineering and science, we will not be in a position to take advantage of either the mineral extractive side of things or indeed the superconductor research side of things because of the sorts of cuts which this Government is imposing. I know that our time is pressed this evening, and I am anxious to provide my colleague Senator Walters with the opportunity to make some contribution to this debate. I will conclude quite simply by drawing attention to the number of lost opportunities which exist within this mini-Budget statement-the opportunity which could have been taken, given the recent near 40 per cent reduction in trade weighted depreciation of the dollar to cut protection levels, something which was not done with this mini-Budget but which we could have done. This mini-Budget has imposed an undue burden upon the poor, the young, those seeking to improve their skills, those who are already disadvantaged, those who are weak and those who are not well organised. In doing so, it has failed a series of fundamental and elemental tests about making an investment in Australia's future. It is why this mini-Budget will fail. It is why this Government is now reinvigorating the debate about an early election in order to have the opportunity to cover up for its failures, its lost opportunities and its betrayal of the proper interests of the people of Australia. Senator WALTERS(Tasmania)(10.18) —There is no better way in which I can open my part of the debate on the May economic statement than to quote Senator Walsh, the Minister for Finance. Last year at one of the Australian Labor Party conferences he said: I know some people believe that budget deficits don't matter. They do matter in the degree to which they lock in future expenditure. If we had a public debt interest payment, the same level of outlays as it was in 1982- I interpose here to say that that was the last Budget of the Fraser Government- we would in this financial year have about $4 billion extra to either cut taxes, increase welfare spending or whatever else you wanted to do with it. But because we have run a sequence of high budget deficits, we are lumbered with a crippling public debt interest payment which restricts the ability of this Government and Governments for the foreseeable future, to deliver the programs they would like to deliver elsewhere. That is what the Finance Minister said last year. He admitted that the $4 billion was a result of his Government's having high Budget deficits which have caused the need for this mini-Budget. When Premier Cain complained at the Premiers Conference this week that the Government was behaving like the builders labourers in not keeping its promises made to the Premiers Conference last year, Mr Keating said that that was a result of the world not keeping its promises to Australia. It was not a result of the world not keeping promises to Australia, as Senator Walsh has said; it was a result of the Government having run a sequence of high Budget deficits since 1982. We have been told by Mr Keating that the Government has cut costs by $4 billion. Let us look at what that means. Like any bankrupt business, the Government is having an auction sale of its assets. Of the $4 billion, $1 billion-a quarter of that $4 billion-will be saved by selling, for instance, the Williamstown dockyard. Senator Georges —But you agree with that. You would like to sell a few more. Senator WALTERS —Is Senator Georges going to buy the Williamstown dockyard? Who would want the Williamstown dockyard? Who will pay for it? The Government will also sell all the international airport terminals. Who will buy them? It will be a very interesting auction. Defence enterprises and major assets, Commonwealth Government centres in Sydney and Melbourne, shareholdings in the Primary Industry Bank of Australia, part of the Australian Embassy site in Tokyo and the former ambassadorial residence in Paris are the sorts of assets which the Government will auction. However, they are one off sales; the assets cannot be sold again next year and this measure will not help the deficit next year. So the proceeds from the auction will amount to a quarter of the so-called Budget cuts. It is not a cut at all; it is an auction sale. Let us go further and look at the taxes that this Government will raise. They are not cuts either. This Government is increasing taxes just as it has done ever since it has come to power. It has increased sales taxes and customs duties and dreamed up a fuel rebate scheme. As a result of these taxes, Telecom Australia and Australia Post have already decided to put up their charges; they have already put in their bid. That accounts for about half a billion dollars. So one and a half billion dollars are not cuts at all. One measure is an auction sale and the other is tax increases. There is no doubt that the proposed increases in charges by Telecom and Australia Post will increase the inflation rate. We are now down to $2 1/2 billion of supposed cuts. The Government has taken $1 billion off the States. Were these hard decisions for the Federal Government to make? Not on your life. It has asked the States to make the hard decisions. However, the States will only increase their charges and that will again increase the inflation rate. So that amounts to an additional $2 1/2 billion worth of so-called cuts that the Federal Government has not made. It will have auction sales, cuts will be forced on the States and taxes will be raised. That leaves just over $1 1/2 billion of actual Federal cuts. Ross Gittins said most appropriately in the Sydney Morning Herald, this has been a rather rubbery axe. Who has the Government made bear the costs of these cuts? The majority of the cuts will fall on the students, the families and the poor of Australia. The Opposition has been told that it has not mentioned compassion. I would be most interested to hear Senator Georges on this matter because surely to heavens the Government should have some compassion for the poor and the families of Australia. It has shown absolutely none in the mini-Budget. Most of the cuts will occur in about December this year or January next year so I do not know why the Government has brought down this mini-Budget. It could have brought in these measures in the August Budget-the measures will not be applicable until after then. The family allowance cuts will not start until October. What has happened to families under this Government? We have only to compare the performance of this Government regarding families with that of the Fraser Government. It is very clear that when Fraser came to government there was a steady, gradual increase in family disposable income from an average of $297.90 a week to $316. That figure has dropped. It went from $316.80 to $302.92 a week in constant dollar figures. Disposable income has decreased and the family allowance has decreased. Family allowance is no longer payable for dependent children 16 years and over; parents are no longer entitled to it. We are now told that the family allowance will be means tested. Family allowance was never a welfare payment; it has always been an acknowledgment of the fact that families with children have greater costs than do those without children. We have been told cynically by the Government that we should not worry, the $50,000 family income group will have tax cuts. What about the families on $50,000 without children? They will be getting the tax cuts too but the families with children will not have the offset of receiving the family allowance. It is an absolute disgrace that the Government has introduced the means testing of the family allowance. It is not a social welfare payment; it is an acknowledgment of the fact that families with children bear greater costs than do those without children. However, the Government does not stop there; it has attacked the class B widows. This measure was hidden by the Treasurer under the heading `Phase Out Class B Widow's Pension'. It was not in his speech; it was hidden in the small print in his statement. Widows, who perhaps have been out of the work force for 20 or 25 years looking after their families, who suddenly lose their husband and at the age of 45 or 50, instead of being given a widow's pension because they do not have any work skills-they lost all of their work skills during the years when they looked after their family-will suddenly be put on the unemployment benefit. They will not get a widow's pension; they will be sent weekly to the Commonwealth Employment Service to see whether they can get a job. What sort of a job will they be fit for? They will be fit for no more than cleaning someone else's home, and that is a disgrace. The Government is supposed to be interested in women. It is no more interested in women than any other Labor government has ever been. This is an appalling injustice to class B widows and it is perhaps the most vicious of all of the Government's cuts. The other area in which families have been affected is in health costs. Again, due to the ideology of the Government and the socialisation of health care-Dr Deeble made this only too clear in his statements-bulk billing will not be cut. We will still have bulk billing. That is where the Government could save lots of money if it wanted to but its ideology will not allow it to do that. Dr Deeble has already told us that there is no way other than the socialisation of medicine. He said it is a first step. There is no doubt that the medical profession as a whole will eventually be socialised under this Government. But rather than face the proper cuts of abolishing bulk billing for everyone, the Government has decided to attack, yet again, those who are privately insured. They will have to pay for their hospitalisation not only twice but also double. Firstly, private patients pay for the public hospital system which they do not use and when they pay for a private hospital system that they do use they will then be made to pay 10 per cent more. They will no longer get 85 per cent of the schedule fee for their medical costs in a private hospital; they will get only 75 per cent. As I have pointed out, only $1 1/2 billion out of the $4 billion of cuts announced in the May statement are real Government cuts. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., pursuant to sessional order, I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 10.30 p.m. The following papers were tabled: Family Law Act-Rules of Court-Statutory Rules 1987 No. 74. Foreign States Immunities Act-Regulations-Statutory Rules 1987 No. 77. Health Insurance Act-Statement of particulars of a Ministerial determination, authorised under section 106AA, dated 20 April 1987. National Health Act-Regulation-Statutory Rules 1987 No. 76. National Parks and Wildlife Conservation Act-Regulations-Statutory Rules 1987 No. 79. Nuclear Non-Proliferation (Safeguards) Act-Regulations-Statutory Rules 1987 No. 75. Patents Act-Regulations-Statutory Rules 1987 No. 78. Public Service Act-Determination 1987 No. 24. Remuneration Tribunals Act-Remuneration Tribunal Determination 1987-No. 8-Remuneration payable to holders of certain public offices-Executive Director, Australian Nuclear Science and Technology Organisation and others, dated 30 April 1987. Seat of Government (Administration) Act-Ordinances 1987-No. 17-Parole Orders (Transfer) (Amendment). No. 18-Dangerous Goods (Amendment) (No. 2). Telecommunications Act-By-laws- Telecommunications (Charging Zones and Charging Districts) Amendment No. 77. Telecommunications (Community Calls) Amendment No. 48. Telecommunications (Digital Data Charging) Amendment No. 4. GOVERNOR-GENERAL'S PROCLAMATION-COMMENCEMENT OF AN ACT: A Proclamation by His Excellency the Governor-General was tabled, notifying that His Excellency had proclaimed the following Act to come into operation on the date specified: Patents Amendment Act 1984-7 July 1987 (Gazette No. S89, 20 May 1987). The following answers to questions were circulated: (Question No. 1376) Senator Jones asked the Minister representing the Treasurer, upon notice, on 17 September 1986: (1) Are figures available for women in the age groups 15-19, 20-30, 31-45 who gave birth to children outside marriage in each of the 6 States in the years 1983, 1984, 1985, given the report from the Australian Bureau of Statistics that shows a greater proportion of babies born out of wedlock in Queensland in 1985 than in any State in Australia's recorded history. (2) Is there a trend to suggest it is largely older women of child bearing age who have contributed to the increase. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) Yes. Relevant figures are shown in Table 1. (2) Yes. Table 2 shows the median ages of mothers concerned for all States and Territories of Australian. Table 3 has been provided to show ex-nuptial births per 1,000 women, classified by State of usual residence and age of mother, in 1985. Table 1 EX-NUPTIAL BIRTHS (a) BY STATE OF USUAL RESIDENCE AND AGE OF MOTHER, 1983 TO 1985 Age group N.S.W. Vic. Qld S.A. W.A. Tas. Australia (b) 1983 15-19... 3,495 1,772 2,410 848 1,017 358 10,374 20-30... 7,448 3,847 4,380 1,685 2,237 642 21,149 31-45... 1,473 781 738 288 372 111 3,981 1984 15-19... 3,052 (c)...1,634 2,146 822 974 375 9,480 (c) 20-30... 7,281 (c)...3,949 4,012 1,740 2,114 604 20,796 (c) 31-45... 1,512 (c)...916 754 331 388 104 4,213 (c) 1985 15-19... 3,268 (c)...1,696 2,189 753 973 390 9,810 (c) 20-30... 8,451 (c)...4,334 4,514 1,770 2,453 692 23,367 (c) 31-45... 1,955 (c)...1,037 802 328 434 90 4,903 (c) (a) Based on registrations. (b) Includes Northern Territory and Australian Capital Territory. (c) Because of delays in the registration process, approximately 4,000 births which occurred in N.S.W. in 1984 were not registered until 1985. Table 2 EX-NUPTIAL BIRTHS (a)-MEDIAN AGE OF MOTHERS BY STATE OF USUAL RESIDENCE 1981 TO 1985 State 1981 1982 1983 1984 1985 N.S.W.... 22.6 22.7 23.0 23.2 (b)...23.5 (b) Vic.... 22.7 22.9 23.2 23.4 23.6 Qld... 22.1 22.2 22.5 22.7 22.8 S.A.... 22.3 22.4 22.7 22.8 23.1 W.A.... 22.5 22.7 22.9 23.0 23.3 Tas.... 21.6 21.7 22.3 22.1 22.3 N.T.... 22.7 22.4 22.7 22.9 22.9 A.C.T.... 23.3 23.5 24.2 23.8 24.0 Australia... 22.5 22.6 22.9 23.1 (b)...23.3 (b) (a) See footnote (a), Table 1. (b) See footnote (c), Table 1. Table 3 EX-NUPTIAL BIRTHS (a) PER 1,000 WOMEN BY STATE OF USUAL RESIDENCE AND AGE OF MOTHER, 1985 (b) Age group (years) N.S.W. Vic. Qld S.A. W.A. Tas. Australia(c) 15-19... 15.45 9.83 20.60 13.66 16.53 21.13 15.33 20-30... 17.10 11.43 19.71 14.28 18.68 16.83 16.23 31-45... 3.39 2.39 3.04 2.31 2.86 2.02 2.96 (a) See footnote (a), Table 1. (b) See footnote (c), Table 1. (c) See footnote (b), Table 1. (Question No. 1578) Senator Vigor asked the Minister representing the Minister for Communications, upon notice, on 9 December 1986: (1) What has been the cost value and the face value of stamps printed for Australia Post by the Reserve Bank and by each private contractor, in each financial year from Vesting day. (2) What has been the cost value and the face value of stamps destroyed by Australia Post, in each financial year since Vesting day. (3) For how long has the practice of destroying stamps after a limited period of sale been in existence. (4) What is the reason for using a pre-specified interval of time rather than quantity of panes printed to determine how long a particular stamp can be purchased from post offices. (5) On what basis are the sizes of the printing runs for any particular stamp established. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's question, based on information provided by Australia Post: (1) Details of the printing costs of stamps prior to 1984-85 are no longer available. The costs of stamps printed from 1984-85 are as follows: Leigh Mardon Cambec $m $m 1984-85 ... 2.52 1.65 1985-86 ... 2.15 1.78 Details of the face value of stamps printed, in each year since 1 July 1975, are not readily available. It would require a considerable diversion of Australia Post resources to determine this information. (2) Australia Post's records of stamps destroyed are maintained solely by face value. Details of the face values of stock destroyed by Australia Post prior to 1984/85 are no longer available but for the years 1984/85 and 1985/86, the amounts were $98.7m and $79.2m respectively. Although Management monitors postage stamp usage continually, wastage of this order is unavoidable because of the importance of guaranteeing supply under all circumstances and the need to give preference to new stamp issues during their initial period of sale. Overall, the printing cost of stamps which are destroyed is considered reasonable in relation to the value of postage and philatelic sales. (3) and (4) Sixteen years. It was decided that philatelic sales of Australian commemorative stamps would not be continued for more than six months after the date of issue to bring the then Australian Post Office into line with overseas postal administrations and to realise much earlier the philatelic value of stamps. (5) The size of print runs is determined on the estimated quantities needed to meet philatelic and postage purposes. Minimum print runs comprise 4 million stamps. (Question No. 1604) Senator Macklin asked the Minister representing the Minister for Trade, upon notice, on 17 February, 1987: (1) Does the Government monitor trade legislation before the US Congress; if so, can the Minister for Trade advise the Senate of the full titles of Bills presently before the US Congress which, if enacted, the Government considers could adversely affect Australian exports either to the United States or to third countries, such as Japan. (2) When were each of the Bills introduced into Congress and at what stage of the legislative process are the Bills presently (e.g. introduced to the House Ways and Means Committee on 1 December, 1986-hearings scheduled for February 21). (3) What are the names of the Congressmen sponsoring these Bills and how and to what extent would each of these Bills adversely affect Australia's trading interests. (4) What efforts has the Government made to ensure that the political sponsors of each of these Bills are aware of the harmful effects their proposed legislation would have on Australia's trading interests. Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question and draws to the honourable senator's attention the information contained in the reply to the honourable senator's Question No. 1634: (1) The Government closely monitors trade legislation before the US Congress. The two key Trade Bills currently before the Congress are the Trade and International Economic Reform Act 1987 (HR3) and the Omnibus Trade Act of 1987 (S490). (2) The Trade and International Economic Reform Act of 1987 (HR3) was introduced into the House of Representatives on 13 January 1987. Examination of the Bill was completed by the House Ways and Means Committee on 25 March and the House Agricultural Committee on 1 April. On 30 April the House of Representatives passed the Trade and International Economic Reform Act of 1987 including the controversial Gephardt amendment. The Omnibus Trade Act of 1987 (S490) was introduced into the Senate on 5 February 1987. The Senate Finance Committee completed its examination of the Bill on 7 May and the Senate is expected to complete its work on the Bill in early June. (3) The House Bill was introduced by Representative Dan Rostenkowski, Chairman of the House Ways and Means Committee and Representative Sam Gibbons, Chairman of the House Ways and Means Sub-Committee on Trade. The Senate Bill was introduced by Senator Lloyd Bensten, Chairman of the Senate Finance Committee and Senator John Danforth. The response to Senate Question 1634 outlines how and to what extent each of these Bills affect Australia's trading interests. (4) I will be visiting Washington later this month and will again be pressing with Congressional leaders and the Administration our concerns at the likely implications for Australia of proposed US trade legislation. In addition a joint party Parliamentary delegation will be in Washington next week to meet with Congressional leaders and to press Australia's agricultural trade concerns. Further details of efforts by the Australian Government to ensure that our views and concerns are known in Washington are covered in answer to Senate Question 1634. (Question No. 1628) Senator Mason asked the Minister representing the Minister for Health, upon notice, on 19 February 1987: (1) Is the Minister for Health aware that scientific research has shown that people-particularly children-who are constantly exposed to high noise levels-about 45 decibels-have a slower learning capacity. (2) Has the Minister's Department or any other organisation conducted a feasibility study into the adoption of a national noise abatement policy such as those that have been adopted by a number of European countries, given these findings; if so, what were the major findings of this feasibility study; if not, will the Minister instruct his Department to undertake such a feasibility study with a view to the government, in consultation with the States, adopting such a policy. Senator Tate —The Minister for Health has provided the following answer to the honourable senator's question: (1) I am advised that accumulated research over the past 15 years has indicated that continued exposure to noise in the home and classroom may impede cognitive and language development in infants and reading performance and other learning deficits in older children. Some of the noise levels encountered in this research are quite high and I am advised that it is difficult to put a figure on the lowest noise level that can produce these deficits. However, noise levels equal to or greater than 45 decibels can interfere with the hearing of speech delivered with normal vocal effort at a distance of 10 metres. For this reason alone I am advised that it is desirable for extraneous noise in classrooms and dwellings to be kept below this level during daylight hours. Evening and night-time, and background noise levels should, ideally, be even lower. (2) No. However, I am advised that much has been done relevant to such a policy. Committees reporting to the Australian Environment Council are aiming to produce a national approach to the control of general traffic noise. Restrictions already apply to aircraft noise. Standards Association of Australia standards are available in relation to construction and industrial noise and attention is being given to methods of uniformly assessing community noise. Acts and Regulations are in force in all States for the control of occupational noise and its effects on hearing. Currently the National Occupational Health and Safety Commission in collaboration with other agencies, including the National Acoustic Laboratories in my Department, is developing a national policy in respect of occupational noise control. I will certainly ask my Department to examine the feasibility of incorporating the diversity of noise types and sources, of abatement strategies and of responsible jurisdictions within a single national policy in noise. (Question No. 1653) Senator Haines asked the Minister representing the Minister for Health, upon notice, on 26 February 1987: (1) What evidence does the Government have of the incidence in Australia, on a state by state basis, of surgery to remove, infibulate or otherwise alter the external genitalia of women in a manner consistent with the documented cultural practices of a number of African and Middle Eastern nations, on the basis of claims made under the Medicare Medical Benefits Schedule since 1980. (2) Is any medical (as distinct from, for example, cultural) justification required to be given by the surgeon; if so what reasons were given in what proportion of cases, where Medicare claims were made for such procedures. (3) What was the breakdown by age of the women upon whom these procedures were performed. (4) Are any other indications (besides the incidence of Medicare claims) available to the government of the prevalence of these practices in Australia. (5) What action has the Federal Government taken or will it take to examine the occurrence of and to prohibit the performance of mutilation of female genitals by surgery, except in carefully identified cases of medical necessity, in the public and private health sectors and in the community. Senator Tate —The Minister for Health has provided the following answer to the honourable senator's question: (1) Two Items of the Medicare Benefits Schedule relate to surgery to the female genitals-Item 6299: amputation of the clitoris; and Item 6302: vulvectomy, vulviplasty or labioplasty. The major medical indication for such surgery is the treatment of cancer or the correction of congenital deformity. Both these Items carry the qualification ``where medically indicated''-that is, there is no entitlement to claim Benefits if the surgery is not medically indicated. The qualification ``where medically indicated'' was included in the Schedule on 1 July 1985, specifically to address the issue of ritual female circumcision. Since that time there has been no variation in the incidence of claims made-for example, for the calendar years 1983, 1984 and 1985 the incidence of claims made for Item 6299 was 11, 12 and 13, respectively. Therefore, claims made under the Medicare Benefits Schedule do not provide any evidence of the incidence of ritual female circumcision in Australia. (2) Notwithstanding that the existence of a Medicare Benefits Schedule Item has not encouraged or promoted the practice of female circumcision, I have arranged for the Health Insurance Commission to ensure that appropriate medical indications apply before Medicare Benefits are paid. While this will not in itself diminish the practice, it will ensure that the cost of ritual female circumcision is not underwritten through the Medicare Benefits Schedule. (3) An examination of the age breakdown of women upon whom these procedures were performed was carried out for the September quarter of 1986, with the following results: Item 6299: Amputation of the clitoris-no claims were made for patients under the age of 35 years. Item 6302: Vulvectomy, vulvoplasty or labioplasty-no claims were made for patients under the age of 10 years. The majority of claims were for patients aged 30 to 50. This age breakdown is consistent with the medical indications for such surgery-that is, treatment of cancer and correction of congenital deformity. (4) From time to time I and my Department have received representations concerning female genital mutilation practices, and attempts have been made to obtain as much information as possible about the situation in Australia. Attempts to elicit documented details from health authorities, general practitioners and interest groups have, however, not been successful. Much of the information concerning circumcision of female children is anecdotal. There is, for example, no record of children or women presenting to health services with any of the common complications of the more severe forms of ritual circumcision. (5) The issues involved are complex and sensitive and, I believe, relate fundamentally to questions of child abuse. It is the view of Australian health authorities that steps should be taken to discourage the practice through a low key educational approach. The most appropriate avenue for such an approach is seen to be through health care providers and relevant community and religious groups. Primarily, of course, the matter is one for consideration by the States. Apart from education and persuasion, any preventive action by way of deterrence through prohibition would need to be taken through child welfare and/or criminal law authorities at State level. Such action should be on the basis of well considered strategies that take account of practicalities involved and any limitations that exist as regards the State's responsibilities for the welfare and protection of its residents. A sensitive approach needs to be taken to this issue in view of the undesirability-in Australia's multicultural society-of blanket condemnation of another culture's traditions and practices, particularly where symbolic forms of circumcision involving no long term physical effects are concerned. The World Health Organisation reiterated in 1986 that change should not come from outside campaigners but from within communities where female circumcision is still entrenched. In Australia, health and welfare authorities in several States are developing policies and programs to assist the process of change within their communities. For its part, my Department will continue to monitor the situation regarding the practice of ritual female circumcision in Australia. (Question No. 1687) Senator Sheil asked the Minister representing the Minister for Aviation, upon notice, on 20 March 1987: (1) Why did the Department of Aviation require Australian Airlines to install a third crew station to enable a flight engineer to be carried on their twin engined wide-bodied aircraft (A300 and B767) contrary to the respective manufacturers' design and contrary to the standards used by all other operators of the types world-wide. (2) Why did the Department of Aviation certify Qantas to operate exactly the same aircraft class (B767) for two crew only and on much longer routes. (3) Was the Department of Aviation's decision making process in this area influenced by a pilot or flight engineer union; if so, why. Senator Gietzelt —The Minister for Aviation has provided the following answer to the honourable senator's question: (1) The A300 aircraft operated by Australian Airlines were acquired in standard factory configuration with three crew stations. No modifications in manufacture were sought or required by either the airline or the Department of Aviation. With the exception of the A300-600 series, which are not operated in Australia, all other A300 aircraft have three crew stations and operators world-wide (with the exception of the Indonesian national airline) utilise flight engineers on those aircraft. Australian Airlines do not and never have operated B767 aircraft. (2) The Department of Aviation certificated the Qantas B767 aircraft for two crew operation because that is the standard operational arrangement accepted by all overseas aviation authorities and operators. (3) No. (Question No. 1700) Senator Morris asked the Minister representing the Minister for Trade, upon notice, on 24 March 1987: Does the Government see reports that BHP subsidiary Mount Newman Mining and CRA subsidiary Hamersley Iron have joined 3 overseas firms in an approach to Japanese steel mills for joint discussions as a new circumstance warranting a review of policy on Government involvement in coal industry export negotiations. Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question: No. The report referred to does not warrant a review of policy in relation to the export of coal. The Government has in place arrangements, particularly through the ACCC, to maintain close consultation with the coal industry and unions in relation to coal exports. (Question No. 1704) Senator Vallentine asked the Minister representing the Minister for Defence, upon notice, on 25 March 1987: (1) What military, space and joint intelligence facilities does the United States continue to maintain in New Zealand. (2) What joint intelligence facilities does Australia still operate with New Zealand on New Zealand soil. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) Questions about any facilities that might be maintained by the United States in New Zealand should be directed to United States or New Zealand authorities. (2) In accordance with the practice of successive Governments, I do not intend to comment on details of the operations of our intelligence agencies. (Question No. 1583) Senator Vigor asked the Minister representing the Minister for Communications, upon notice, on 9 December 1986: (1) How regularly are official post offices and postal agencies required to report losses and deficiencies of moneys and stores. (2) What is the current wording of instructions for the reporting of losses and deficiencies to the Australian Audit Office. (3) When was this wording last revised. (4) What was the previous wording and what was the need for the change in wording. (5) What losses and deficiencies have been reported to the Australian Audit Office under these arrangements in each of the financial years since Vesting day, and how many episodes have been involved on each occasion. (6) How much of these losses and deficiencies, has been attributable in each State to safe-breaking and the theft of stamps. (7) What special record of such consequences of breakings is made in the annual financial statements prepared by Australia Post. (8) Has this practice varied since Vesting day; if so, when and for what reason were changes last made. (9) Has Australia Post always reported the face value of stamps lost as a result of theft or has it in some circumstances used just the cost value. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's question, based on information provided by Australia Post: (1) All losses as a result of robbery, defalcation etc, and counter advance deficiencies in excess of $100, are reported immediately. Discrepancies below $100 in counter advances are reported in an accounting return which is submitted at least weekly. (2) The instruction concerning the reporting of losses to the Australian Audit Office reads, `A report will be prepared as soon as possible and copies submitted to the following: . . . Auditor-General's Office (if loss exceeds $50,000).' (3) March 1980. (4) A copy of the instruction containing the previous wording is not available. Prior to 1977, Australia Post was required to report details of all losses and deficiencies to the Auditor-General. In 1977, it was agreed, for a trial period of two years, to report only losses and deficiencies in excess of $50,000. This arrangement has continued. (5) & (6) No central records are kept of losses reported to the Auditor-General. The effort required to collate the data from individual case files held in Australia Post's State Administrations would constitute an unreasonable diversion of resources. (7) None. (8) No. (9) Australia Post has always reported the face value of stolen stamps. (Question No. 1703) Senator Vallentine asked the Minister representing the Minister for Defence, upon notice, on 25 March 1987: (1) How many aircraft carriers are there in the United States Navy and in the Soviet Navy. (2) How many US Navy aircraft carriers are based on the Pacific and Indian Ocean. (3) How many Soviet aircraft carriers are based with the Soviet Pacific Fleet. (4) What is the tonnage, when fully loaded, of US carriers in the Pacific Fleet and Soviet carriers in the Pacific Fleet, how many planes do they carry and how many men are in the crew. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) The US Navy has 15 aircraft carriers. The USSR has four Kiev class aircraft carriers and two Moskva class, helicopter-carrying anti-submarine cruisers that are considered as aircraft carriers. (2) There are six US Navy aircraft carriers based on the Pacific and Indian Oceans, of which two are Kittyhawk-class carriers. (3) Two Kiev class aircraft carriers are based with the Soviet Pacific Fleet. (4) The tonnage, aircraft component and complement of US and Soviet aircraft carriers (by class) in their Pacific Fleets are as follows: Type Tonnage Aircraft Comple- ment (approx.) US- Nimitz class... 91487 90 5680 Enterprise class... 90970 90 5830 Kittyhawk class... 81773 85 4950 Forrestal class... 81163 90 5490 Midway class... 70000 75 4770 USSR- Kiev class... 37000 29 1450 (Question No. 1747) Senator Brownhill asked the Minister for Veterans' Affairs, upon notice, on 29 April 1987: (1) What advertising agencies and public relations consultants have been engaged by the Department for the 1984-85, 1985-86 and the current financial years. (2) What was/is the value of those contracts. (3) On what projects were/are they engaged. (4) What selection criteria were used for their appointment. (5) Who in the Department was/is responsible for formulating the selection criteria and the final selection of the successful agency/consultant. Senator Gietzelt —The answer to the honourable senator's question is as follows: (1) None. (2) to (5) See answer to (1). (Question No. 1767) Senator Kilgariff asked the Minister for Finance, upon notice, on 6 May 1987: (1) Is the Minister for Finance aware of the long delays being experienced by some Northern Territory public servants, who have transferred from the Commonwealth to the Northern Territory Government superannuation scheme, in obtaining refunds of their contributions to the Commonwealth scheme. (2) Is it true that there is a significant backlog of claims which is causing delays. (3) What steps is the Department of Finance taking to facilitate a more efficient handling of claims for refunds. (4) What period of time between lodgment of a claim for a refund and actual receipt of the refund does the Department regard as reasonable. (5) Is there any provision for the interest to be paid on refunds which are delayed; if so, how is interest calculated. (6) When is it expected that the backlog of claims in the Northern Territory will be cleared. Senator Walsh —The answer to the honourable senator's question is as follows: (1) To date, the Australian Government Retirement Benefits Office has received approximately 3150 applications for refunds and over 2800 have been authorised for payment. The initial flood of applications presented a processing problem but the present processing time is 1-2 weeks from the date the staff member ceased membership of the Commonwealth Scheme to join the Northern Territory Government and Public Authorities Superannuation Scheme, or the date of receipt of the application, whichever is the later. (2) No. The Australian Government Retirement Benefits Office is processing approximately 600 refund applications from Northern Territory employees each month and there are currently less than 350 applications waiting to be processed; most of these are for persons who are yet to leave the Scheme and accordingly cannot be paid before the actual exit date nominated by the Northern Territory authorities. (3) The Australian Government Retirement Benefits Office found that it needed to redeploy temporarily staff from other areas of its operations to deal with the claims from Northern Territory employees, which represented a one-off work load peak. In view of the present processing time no further changes to the processing arrangements are planned. (4) The current processing time is regarded as reasonable. (5) In accordance with the Superannuation legislation interest accrues to the scheduled date of payment of the refund, irrespective of the date of exit from the Scheme. (6) The backlog of N.T. claims has now been cleared. Senator Walsh —On 25 February 1987 (Hansard, page 592), Senator Robert Ray asked me, as the Minister representing the Minister for Communications, the following question: Will the Minister representing the Minister for Communications give an assurance that when the 26 new licences for regional commercial radio stations are issued these licences will be given to applicants who have no other television or newspaper ownership or interests. Honourable senators will recall that when answering this question on 25 February 1987, I replied that I thought that the policy was still to be considered and finalised, but that I would seek advice on this matter. The Minister for Communications has provided the following answer to the honourable senator's question: In his Press Release of 27 November 1986, concerning new ownership rules for television ownership, the Minister for Communications said that the Government had decided, in principle, to regulate cross-ownership of media in Australia. Such regulation would prevent a person from holding a prescribed interest in a television licence to serve an area in which that person owns a licence for a monopoly commercial radio station or where a daily newspaper owned by that person has the bulk of its circulation. In his statement of 24 February 1987, announcing the Government's decisions on additional commercial radio services in regional areas (covering the 26 new services referred to by Senator Ray) the Minister said that possible modifications to the ownership and control rules in radio will be taken up as part of the current study of ownership and control, particularly cross-media matters, being undertaken in his Department. The initial legislation, covering cross media ownership of television in relation to radio and newspapers was introduced in Parliament on 29 April 1987. Another package of legislation, on these matters will follow in the Budget session. It should be noted that Section 83 of the Broadcasting Act currently directs the ABT to have regard to the need to avoid undue concentration of influence within a non-metropolitan service area, when considering whether it is in the public interest to refuse to grant a licence to an applicant. Senator Walsh —On 23 March 1987 (Hansard, page 1118), Senator Brownhill asked me, as the Minister representing the Minister for Communications, the following question: In light of Telecom Australia's annual profit of $465m for 1985-86, and increase of $80m over the figure for the previous year, I ask: What justification has Telecom for making changes to charging times, especially the delaying of the cheap night rate until 10 p.m.? Considering that most people regard 10 p.m. as being far too late to contact anyone, why was this alteration made? How does this charge balance with Telecom's corporate objectives to provide services at an affordable rate and, wherever possible, to pass on savings to customers? Honourable senators will recall that when answering this question on 23 March 1987 I undertook to confirm the reason for Telecom varying the commencement of the STD economy rate from 9 p.m. to 10 p.m. The Minister for Communications has provided the following information, based on advice from the Australian Telecommunications Commission: The provision of cheaper off-peak rates for calls at various times is designed to encourage people to make calls during those hours when trunk lines are not fully utilized, thereby making better use of the network. Virtually from its inception, demand for the economy rate exceeded the capacity of the trunk network on most routes between 9 p.m. and 9.30 p.m. This resulted in severe network congestion on a national basis and a general degradation of service during that period. In order to reduce this level of congestion on the national network, it was decided to delay the introduction of the economy rate by one hour. If Telecom were to re-dimension the network to cater for peak periods occurring outside business hours, such as between 9 p.m. and 9.30 p.m., then a large amount of equipment would remain under-utilised for the majority of the day and night. The cost of this additional equipment would have to be recovered by increased rentals or call charges. To compensate for the one hour delay, Telecom has extended the economy rate to Sundays between the hours of 8 a.m. and 10 p.m. This change gives customers affected by the one hour economy rate delay the opportunity to make calls any time between 10 p.m. Saturday and 8 a.m. Monday at the economy rate. It is also of note that the night rate (between 66-75% of the day rate tariff) still applies to calls between 6 p.m. and 10 p.m. Monday to Saturday and represents a real saving to customers. Senator Button —On 6 May 1987 (Hansard, page 2397), Senator Crichton-Browne asked me, as Minister representing the Minister for Trade, a question without notice relating to Bills introduced to the United States House of Representatives and the United States Senate designed to prohibit the importation into the United States of products from Australia including uranium, beef, lamb and wool. He specifically asked what steps were being taken by the Government to provide the United States Senate and House of Representatives with information on the implications of the Bills not only for the United States but also for Australia. He also asked what steps were being taken by the Australian Government to defeat the proposed legislation. The Acting Minister for Trade has provided the following answer to the honourable senator's question: Senator Symms (Republican, Idaho) has introduced a Bill in the United States Senate (S980) that would prohibit the import of uranium, beef, lamb and wool from Australia and New Zealand. Identical legislation has also been introduced in the United States House of Representatives by Congressman Craig (Republican, Idaho). The sponsors of the Bills have sought to justify the legislation on the grounds that ``the Government of Australia refuses to allow the use of its bases by United States aircraft in monitoring strategic missile tests''. The Australian Embassy in Washington has made strong representations to both Congressmen opposing their Bills. In these representations it was pointed out that the alleged rationale for the Bills was incorrect and that it was a decision by the United States authorities not to use Australian support facilities for monitoring MX missile tests. In addition the defence relationship between Australia and the United States continues on a very sound and co-operative basis. This was evidenced by the 1986 San Francisco communique following the meeting there of the Australia/United States Ministerial Talks. The Congressmen have been reminded that the trade balance between Australia and the United States is running two to one in favour of the United States and their proposal to cut imports from Australia for some of our key products would naturally adversely affect our ability to pay for imports from the United States and elsewhere. More generally it was put to the Congressmen that their proposals would seriously damage trade relations between Australia and the United States. They should recognise that their Bills, when taken together with all the other trade difficulties we are having with the United States, could provoke a strong backlash in Australia against the United States. While we shall continue monitoring the situation very closely, support for the Bills from the House and Senate leadership and from the relevant Congressional Committee does not seem to be growing. The Bills are also opposed by the US Administration. Mr Dawkins intends raising this and other issues with Congressional Leaders and Administration Officials when he visits Washington later this month. Senator Walsh —On 12 May 1987 (Hansard, page 2634), Senator Collard asked me a question in my capacity as Minister representing the Minister for Primary Industry. His question concerned whether the Government had considered urging the Bureau of Agricultural Economics to do a cost analysis on United States agricultural protection similar to the `red book' exercise on the European Community. The Minister for Primary Industry has supplied the following answer to the honourable senator's question: The Bureau of Agricultural Economics is currently well advanced in carrying out major studies on the international implications of US agricultural policies. Those studies will, when completed, be published in a similar manner to the `red book' on the European Community. An assessment of the costs associated with US policies is being incorporated in these studies. To date most of the Bureau's attention has been directed toward grains and sugar.