Tuesday, 20 October 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 expresses concern that some scientists in Australia are intent on undertaking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-1986 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the Senate and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experiments on human embryos. And your petitioners as in duty bound will ever pray. by Senators Colston (from 267 citizens), Harradine (from 91 citizens), Jones (from 203 citizens) and Sheil (from 26 citizens). To the Honourable the President and members of the Senate in Parliament assembled: We the undersigned, (i) are greatly disturbed by the dangers to health posed by passive smoking, and evidence of which is being documented daily by medical authorities around the world; (ii) note that environmental tobacco smoke has been identified as the major pollutant in aeroplane cabins, and that its direct threat to health is recognised in the special leave provisions for flight attendants specifically on grounds of upper respiratory infections; (iii) appreciate the government's undertaking to legislate for smoke-free travel on aeroplanes, but are dismayed at the apparent reluctance to follow up the Minister for Aviation's December announcement with action; and (iv) call upon the government to make smoke-free aeroplane travel a reality without further delay, and to ensure that smoke-free areas which cannot be contaminated by recycled pollutants, are available at all aerodromes. And your petitioners as in duty bound will ever pray. by Senators Ryan (from 300 citizens) and Walsh (from 1,275 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 we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 Oct. 86 to be a serious breach of trust by the Government. This cut has reduced the base for future adjustments. The Government has promised to restore the base as soon as economic circumstances permit. Having regard to state of the economy as portrayed by members of the Government during the recent election campaign, your Petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to restore the pension base in the 1987 budget. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 63 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: millions of dollars of taxpayers money is spent at each Federal election in Australia in the drafting, production and distribution of How-to-Vote cards which are unnecessary and pollutant and that this waste is not desirable or essential in assisting the electorate to vote informatively for their parliamentarians. Your petitioners most humbly pray that the Senate in Parliament assembled, should: urge the Government to introduce legislation which requires that the registered How-to-Vote cards of all political parties and candidates for political office must be placed under glass in every polling booth within obvious sight of all voters, thus making it unnecessary for How-to-Vote cards to be distributed at future Federal elections. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 80 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card would have a deleterious impact on all Australians, and your petitioners therefore request that the Australia Card Bill not be passed. As in duty bound, your petitioners will ever pray. by Senator Bolkus (from 138 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the proposed national ID Card and numbering system threatens the privacy of law-abiding Australians opening the door to computer matching of personal information, will cause inconvenience to rural people in particular, and will result in massive compliance costs for private business. That the Joint Parliamentary Select Committee Report of 1986 showed that the Australia Card will not be effective in combating taxation and social security fraud and illegal immigration, as its cost savings are based on faulty estimates. That accordingly the Senate and Parliament should reject the Australia Card Bill. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 324 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth that the proposed Australia Card is an intrusion into the rights of the individual in a free and democratic country. Your petitioners most humbly pray that the Government not proceed with this legislation. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 146 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned citizens respectfully requests that the Australia Card Legislation be rejected because the proposed system: (1) has been demonstrated to have no capacity to stop tax evasion, Social Security fraud, illegal immigration or to recoup the revenue lost through abuse of these systems as was claimed. (2) will impose a large financial impact on Australian citizens, and has been demonstrated by the Parliament's own Joint Committee to be not cost effective. (3) has been shown to have the capacity to actually aid and abet both illegal immigration and organised crime. (4) is designed to cause a great intrusion and disruption to the normal day to day activities of all citizens. (5) does not contain the very necessary barriers to invasion of privacy, and loss of personal liberties. (6) will in both the words of the Government and the HIC be enlarged to encompass far greater uses, and the compilation of much more information on the data base. And your petitioners humbly pray that in the light of the obvious and proven inability of the proposed Australia Card to achieve its stated objectives that the Government explain the reason why it is persisting in reintroducing this legislation. And your petitioners as in duty bound will ever pray. by Senator Jones (from 77 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the proposed national ID Card and numbering system threatens the privacy of law-abiding Australians opening the door to computer matching of personal information, will cause inconvenience to rural people in particular, and will result in massive compliance costs for private business. That the Joint Parliamentary Select Committee Report of 1986 showed that the Australia Card will not be effective in combating taxation and social security fraud and illegal immigration, as its cost savings are based on faulty estimates. That accordingly the Senate and Parliament should reject the Australia Card Bill. And your petitioners as in duty bound will ever pray. by Senator Knowles (from 336 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card would have a deleterious impact on all Australians, and your petitioners therefore request that the Australia Card Bill not be passed. As in duty bound your petitioners will ever pray. by Senator Puplick (from 68 citizens). The Honourable President and Senators in Parliament assembled. We, your humble petitioners, pray that, in accordance with the wishes of a substantial number of the people of Australia, the Australia Card Bill be rejected, and we in duty bound will ever pray. by Senator Stone (from 115 citizens). To the Honourable Susan Ryan, the Speaker and Members of Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: that the proposed introduction of compulsory identification cards should be reconsidered and rejected because the proposal: (a) is not a cost effective method of reducing tax evasion and Social Security fraud, and to the contrary, in the form proposed will facilitate such evasion and fraud; (b) will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private matter; (c) will cause a further large and costly growth in the bureaucracy and burden on the tax payer; (d) cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other more effective methods. And your petitioners in duty bound will forever pray. by Senator Ryan (from 13 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned, having great concern because of the threat to personal freedom posed by the introduction of the Australia Card, call on the Government to withdraw the enabling legislation on the following grounds; 1. Expert opinion does not agree ``that a National identification system for all Australians'' would ``combat tax evasion and welfare fraud''. 2. Once established at enormous cost to the taxpayer, the system would be here to stay. 3. The potential for the invasion of individual privacy by persons unknown to the private citizen is so great as to be unacceptable to us. Your petitioners therefore humbly pray that your Honourable House will protect this society by rejecting the Bill outright. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 19 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That In view of the number of expert witnesses and government departments that have cast doubts on the cost, inadequate safeguards and purported benefits of the Health Department's claims for the proposed Australia Card and In view of the radical change in the proprietal relationship between Australian citizens and the bureaucracy implied in the Australia Card Legislation and In view of the demonstrated inability of the bureaucracy in general and the Health Department in particular, to protect the privacy of information entrusted to them and In view of the contrast between the openness daily shown in media by our U.S. cousins in their open and televised inquiry into the ``Contragate'' arms for Iran scandal, and, the almost total absence of debate during the recent election on what was supposed to be the constitutional trigger for that election: Your petitioners therefore humbly pray that the Senate in Parliament assembled will Neither pass nor reject nor fail to pass the Australia Card Bill but rather refer the bill to an open Senate enquiry That that enquiry be held in public And that every assistance be given to the broadcast media, both public and private to record and/or broadcast the proceedings of that enquiry in its entirety. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 1,072 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound, your petitioners will ever pray. by Senator Peter Baume (from 31 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: (1) That we are totally opposed to the introduction of the Australia Card. (2) That this national identity system will be intrusive, will not appreciably combat tax or social security fraud, is authoritarian and alien to the Australian way of life. Your petitioners most humbly pray that the Senate, in Parliament assembled, should: Urge the Government to institute a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. And your petitioners as in duty bound will ever pray. by Senator Calvert (from 27 citizens). To the Honourable the President and members of the Senate in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Chaney (from 98 citizens). To the Honourable the President and members of the Senate in Parliament assembled, your humble petitioners showeth: 1. The proposed Australia Card will have a dramatic impact on the lives of all Australians. 2. Therefore your petitioners request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Crichton-Browne (from 101 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Lewis (from 76 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound, your petitioners, will ever pray. by Senator Puplick (from 45 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound, your petitioners, will ever pray. by Senator Ryan (from 629 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: As the Australia Card will have an immense impact on the way of life of all Australians, the Government should allow a Referendum before it proceeds with the legislation to impose the Card. And your petitioners as in duty bound will ever pray. by Senator Sheil (from 36 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound, your petitioners, will ever pray. by Senator Stone (from 231 citizens). To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth that: (1) We are totally opposed to the introduction of the Australia Card or any other form of national identification numbering system. (2) We consider that compulsory national identification will be intrusive, costly and ineffective in combating tax evasion, illegal immigration and social security fraud. (3) We believe that there can be no adequate safeguards to protect individuals from unscrupulous and illegal use of information collected and stored under the proposed Australia Card legislation. (4) We call on the Parliament assembled to reject the Australia Card legislation and to improve management of existing legislation to crack down on tax evasion and welfare fraud. And your petitioners as in duty bound will ever pray. by Senator Calvert (from 11 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Labor Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life; That we call upon the Labor Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 11 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we call upon the Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. As in duty bound your petitioners will ever pray. by Senator Crichton-Browne (from 60 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we call upon the Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Hill (from 76 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: (1) That we are totally opposed to the introduction of the Labor Government's Identity Card. (2) That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security. (3) That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life. (4) That we call upon the Labor Government to improve management systems within the Australian Taxation Office and other departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Messner (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we call upon the Labor Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Vanstone (from 987 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned, call on the Federal Government to give the required 12 months notice (on or after October 19, 1986) to the United States Government to terminate the lease of the US base at Pine Gap. We believe that in the interests of world peace and the Australian people, this lease should be terminated and the Base closed. Pine Gap is a nuclear target-it is a danger to Australia's security; Pine Gap is a ground control station for US Signals Intelligence; Pine Gap is virtually a US colony in the middle of Australia; Pine Gap spies on Australian and overseas telephone and telex communications-last year Pine Gap was caught spying on Greece; Pine Gap is heavily staffed by the US Central Intelligence Agency because it is the single most important US facility in Australia and one of the most important US satellite ground stations in the world; Pine Gap is situated on Aboriginal land, specifically a sacred dreaming tract; Pine Gap is an obstacle to the achievement of a nuclear-free and independent Pacific; Pine Gap helps the US select nuclear targets in the Soviet Union and other countries and as such involves Australia in US nuclear war plans. by Senator Wood (from 800 citizens). Senator JONES(Queensland) —by leave-I present the following petition, from 48 citizens, requesting that the Australia Card Bill be not introduced: To the Hon. the President and members of the Senate in Parliament assembled: I implore you to reject the Australia Card. The serious doubts cast on the Australia Card by expert witnesses and government departments regarding cost and supposed benefits and safeguards are surely proof enough that the Australia Card is not necessary and not beneficial. I would also like to express my concerns for privacy if the Australia Card is introduced. Future governments could easily modify laws controlling the card-to the grave disadvantage of the Australian people. If the Australia Card is passed I will not support it nor use it. Senator MACKLIN(Queensland) —by leave-I present the following petition, from 156 citizens, which is not in conformity with the Standing Orders: We, the undersigned hereby humbly petition the federal government to cease and desist with all activity aimed at introducing the ``Australia Card''. Senator RYAN(Australian Capital Territory-Special Minister of State) —by leave-I present the following petition, from 23 citizens, requesting that the Australia Card Bill be rejected: To the Hon. the President and members of the Senate in Parliament assembled: I deplore you to reject the Australia Card. The serious doubts cast on the Australia Card by expert witnesses and government departments regarding cost and supposed benefits and safeguards are surely proof enough that the Australia card is not necessary and not beneficial. I would also like to express my concerns for privacy if the Australia Card is introduced. Future governments could easily modify laws controlling the card-to the grave disadvantage of the Australian people. If the Australia Card is passed I will not support it nor use it. Senator GARETH EVANS(Victoria-Minister for Transport and Communications) —by leave-I present the following petition, from 422 citizens, which is not in conformity with the Standing Orders: We the undersigned residents of the eastern shore of Hobart, Tasmania protest the closure of the Eastlands Telecom business office located in the Eastlands Shopping Centre, Rosny and request Telecom to reverse its decision to close the office. Senator JONES(Queensland) —by leave-I present the following petition, which is not in confirmity with the Standing Orders, from 17 citizens requesting that there be a referendum on the Australia Card Bill 1986: The undersigned are opposed to the introduction of the ``Australia Card'' and request a referendum. As in duty bound, will ever pray. Senator JONES(Queensland) —by leave-I present the following petition, which is not in accordance with the Standing Orders, from three citizens requesting that the Australia Card Bill be not introduced: We the undersigned would not like you to re-introduce the Australia Card Bill to stamp out tax cheats and welfare fraud, but to use other less draconian means: Petitions received. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: (1) That the sessional order relating to the routine of business for Fridays in week 1 be varied to read as follows: ``(1) Petitions (2) Notices of Motion (3) Formal Motions-Discovery of Formal Business (4) Postponement and re-arrangement of Business (5) Government Business (6) At 10 a.m., Questions (7) Further consideration of Government Business (8) At 2 p.m., any proposal pursuant to Standing Order 64 (9) Consideration of Government Papers pursuant to Sessional Order (10) Further consideration of Government Business''. (2) That the sessional order relating to proposals pursuant to standing order 64 be varied by leaving out paragraph (1) and inserting the following paragraphs: ``(1) On Fridays in week 1 the discussion of any proposal submitted to the Senate pursuant to Standing Order 64 shall not exceed one and three-quarter hours. (1a) On Thursdays in week 2 the discussion of any proposal submitted to the Senate pursuant to Standing Order 64 shall not exceed one hour.''. 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, notwithstanding anything contained in the Sessional Orders, the order of business on Thursday, 22 October 1987, be as follows: (1) Petitions (2) Notices of Motion (3) Ministerial Statements, by leave (4) Discovery of Formal Business (5) Placing of Business (6) Questions (7) Adjournment. Senator MACKLIN(Queensland) —I give notice that, on the next day of sitting, I shall move: (1) That, unless otherwise ordered, where a Bill is introduced by a Minister, or is received from the House of Representatives, after 26 November 1987, and a motion is moved for the second reading of the Bill, debate on that motion shall be taken to be adjourned upon the conclusion of the speech of the Senator moving the motion, and the resumption of the debate shall be made an Order of the Day for the first day of sitting in 1988, without any Question being put. (2) That immediately after debate on a motion for the second reading of a Bill is adjourned in accordance with paragraph (1), or following the giving of notices on a subsequent day, a motion may be moved without notice to refer that Bill to a standing committee for inquiry and report by a day not later than the first day of sitting in 1988. (3) That this Order cease to have effect at the commencement of the first day of sitting in 1988. Senator MESSNER(South Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with alarm the very critical personnel problem within the Australian Defence Force which has involved the resignation of approximately 32,000 Defence Force personnel or 46 per cent of the current staffing level of the entire Australian Defence Force over the past four years; (b) condemns the Government for its failure to appreciate and address the personnel wastage problem within the Australian Defence Force; (c) views with concern the deleterious effects of the high wastage rate, including a general decline in morale, a general dilution of experience levels, unnecessary diversion of resources into training, an accelerated increase in the cost of training, an over-rapid promotion of inexperienced personnel and an increased posting turbulence; and (d) refers the following matters to the Joint Committee on Foreign Affairs, Defence and Trade for inquiry and report: (i) the extent and magnitude of the Australian Defence Force wastage problem; (ii) the effects of the present level of wastage on the capability of the Australian Defence Force to fulfil its role in an effective manner; and (iii) measures to reduce wastage, and an assessment of the relative effectiveness of these proposed measures. 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. Waterfront strategy-Inter-State Commission initial report-pursuant to section 10 of the Inter-State Commission Act 1975. 2. Inter-State Commission-annual report 1986-87-pursuant to section 32 of the Inter-State Commission Act 1975. Senator GARETH EVANS(Victoria-Acting Leader of the Government in the Senate) —by leave-I inform the Senate that the Prime Minister (Mr Hawke) left Australia on 9 October for official duties in Canada, Ireland, Switzerland and Yugoslavia. He will return on 26 October. During his absence the Attorney-General, Mr Lionel Bowen, will be Acting Prime Minister. I also inform the Senate that Senator Button left Australia on 11 October for official duties in the United States and Europe. He will return on 3 November in time for Question Time. In his absence I will act as Leader of the Government in the Senate. Questions in this regard should be directed to me. Senator Walsh will be Acting Minister for Industry, Technology and Commerce and any questions which would normally be directed to Senator Button in relation to his portfolio or those he represents should be directed to Senator Walsh. I also inform the Senate that the Minister for Science and Small Business, Mr Barry Jones, is also overseas on Government business from today until 11 November. Senator Walsh, in his capacity as Acting Minister for Industry, Technology and Commerce, will also answer questions for Mr Jones's portfolio. Senator CHANEY —My question is addressed to the Minister for Finance in his own capacity and as Minister representing the Treasurer. I ask: Does the Minister agree that current developments on world stock markets combined with last week's poor balance of payments result highlight the riskiness of the Government's Budget and economic strategy of gradual adjustment? Does he agree there is now a clear need for remedial action to increase the pace of economic adjustment, including reconsideration of the Government's submission to tomorrow's wage case hearing and a mini-Budget before the Parliament rises in December? Senator WALSH —I was asked whether I agree with a list of propositions. So far as I can remember them, I certainly do not agree with any of them because, of course, they are patently stupid. In regard to the fall this morning in the all ordinaries index in Australia, which was of the same order as yesterday's fall on Wall Street, it should be noted, firstly, that the all ordinaries index is following that fall at the level it was late last year. In other words, there has been a stock market boom in the United States, in Australia and in the industrialised world in general. These things happen from time to time. I have in front of me an extract from Lester Thurow's Zero Sum Solution. With reference to the South Sea bubble which burst in 1720, he wrote: A few months before the peak, what may have been the world's smartest man, Sir Isaac Newton, sold his shares for a 7,000 pound profit, with the statement that he could- this is a quotation from Newton- `calculate the motions of heavenly bodies, but not the madness of people.' Even the world's smartest man, however, could not resist the temptation of rapidly rising prices. He later re-entered the market for shares and eventually lost 20,000 pounds when the stock eventually crashed, wiping everyone out. Earlier on the same page he referred to the tulip bulb boom of the seventeenth century. These things happen from time to time. I think it has been fairly predictable for several months, if not longer, that a significant decline in share market prices was going to happen sooner or later. And it has now happened. Although the Australian share market would not be tied in a one to one ratio with any other share market, it is not going to remain unaffected by a fall of the magnitude that has been experienced in Wall Street in the last week or so and yesterday in particular. The only ways in which a decline in share prices could have a significant adverse affect on the Australian economy would be if it were to induce a fall in export prices or a significant withdrawal of overseas capital from Australia. If either of those things were to happen-and there is no evidence or even reason to believe at this stage that they will-my last comment to Senator Chaney is that it is just as well John Howard is not still the Treasurer and it is just as well the country is not in the mess it was when John Howard was the Treasurer, when we were facing a prospective Budget deficit of nearly $10 billion. It is just as well that that sort of fiscal irresponsibility which was displayed by John Howard during his period as Treasurer, and in particular in his last Budget, has been purged from the Australian Government. Senator CHANEY —Mr President, I ask a supplementary question. I notice that the Minister ignored the reference to last week's balance of payments figures. Perhaps he suggests that they also are irrelevant to Australia's economic and Budget strategy. I ask him to address that part of the question. I ask him to tell the Senate whether he is currently of the view that we are moving in the adjustment processes as quickly as the externally imposed circumstances demand, to use his words. Senator WALSH —The last part of that supplementary question is a matter for judgment. At the margin, there are legitimate reasons for people to come to slightly different judgments. Of course, what is not a question of judgment or opinion is that this Government's policy is moving Australia in the right direction, unlike the policy of the former Government and, in particular, the last Budget brought down by the discredited former Treasurer, which had no economic strategy at all but just a string of irresponsible political bribes, the cost of which was substantially deferred into the next Budget and, therefore, inherited by this Government and the macroeconomic effect of which, of course, was to leave a prospective Budget deficit of nearly $10 billion, a factor which Senator Stone, to his credit, very promptly drew to the notice of the new Government on 6 March 1983. It is a pity that Senator Stone, as a politician, does not continue to display the sort of fiscal responsiblity which he displayed as a Secretary to the Treasury. Senator McKiernan —The leopard has changed his spots. Senator WALSH —Yes, the leopard has changed his spots. He now gets around as the mouthpiece for supply side voodoo economics. Even Mr Peacock walked away from that, but not Senator Stone. This former astringent Treasury Secretary is now the mouthpiece for voodoo economics in Australia. Senator Chaney —Mr President, I rise on a point of order. Clearly, the Minister, in his usual manner, is now debating the question. He still has not addressed the question in regard to our balance of payments. I ask you to call him to order. The PRESIDENT —The Minister is debating the question. Senator WALSH —Mr President, I have finished now. Senator COLLINS — My question is addressed to the Minister Assisting the Minister for Community Services and Health. Last week the Housing Industry Association issued a public statement stating that home ownership for the average wage earner was more affordable now than it had been 12 months ago. Can the Minister confirm the accuracy of this report? Senator RYAN — I am very pleased to be able to confirm the accuracy of that report from the Housing Industry Association. I presume that all honourable senators will be equally pleased. This Government has introduced a number of initiatives which have improved the affordability of home ownership, particularly for low and moderate income earners. The decision on 2 April 1986 to remove the interest rate ceiling on new savings bank home loans led to a significant improvement in both the availability and the affordability of housing finance. Savings bank home lending increased from $4 billion, in annual terms, in the March quarter 1986 to in excess of $9 billion in March 1987. The total value of home lending in August 1987 was the highest on record, at almost $1.3 billion. Prior to April 1986 lending was strictly rationed and some borrowers were required to top up their first mortgage loan with more expensive loans such as personal loans. Following the partial deregulation, borrowers could obtain a single loan, often at a lower cost than the former cocktail loans. The average value of home loans in August 1987 reached a record of $50,000, reflecting improved affordability of housing finance. The changes to the first home owners scheme announced on 30 March this year were designed particularly to help low and moderate income families experiencing difficulty affording a home of their own. The changes will mean that 13,000 households which previously could not have been eligible for assistance will now receive assistance. A further 13,000 households will now receive increased assistance. Following the Budget, the nationally-operated savings banks announced a cut in housing loan interest rates to 14.5 per cent. The rates on housing loans charged by many permanent building societies have also fallen. Affordability has also been aided by subdued house prices in recent years. In the 12 months ending in June 1987, only Sydney house prices increased in real terms. The combination of lower interest rates, more freely available housing finance, increased eligibility for the first home owners scheme and stable house prices has led to a significant improvement in affordability in the last 12 months. Senator LEWIS —I ask the Minister for Finance whether he recalls telling Labor lawyers in Perth last month, in answer to a question about why the Government had not had an inquiry into wealth: Some interesting things might come out of it but you don't have to run a $6 million inquiry to know that having an inheritance tax would be a much more equitable distribution of wealth, albeit over time. Is he aware that his Centre Left colleagues, Messrs Hayden and Dawkins, have supported the idea of such an inquiry and that the Prime Minister says he will keep an open mind? Does the Minister hold to his view that an inquiry would be an expensive waste of time? Does he agree with Mr Kelty of the Australian Council of Trade Unions, who said yesterday, `I'd rather have the tax than an inquiry'? Senator WALSH —I was asked whether I recall saying something a month or so ago, I think it was. I recall saying something like that. I do not think that is completely accurate, but I do not dispute the substance of it. There was no written text of what I said, so I cannot be certain of that. I was also asked a few other silly add-ons to that primary question. Of course, the Government has already decided. Some time ago it asked the Australian Bureau of Statistics to examine existing data on income and wealth to see what scope there is for any improvement or changes. That report has recently been completed and will be looked at by the Government shortly, I expect. But as to whether any further inquiry should be made, that entails a judgment about the likely cost of such an inquiry and the likely value of what it might produce. Leaving aside the people who seem to object to an inquiry per se, it has long been the case that the National Party of Australia, or the Australian Country Party as it used to be, has made a virtue of ignorance. I do not think any serious student of the Country Party over the last several decades would dispute that the National Party used to be the only party that made a virtue of ignorance. It now appears that the Liberal Party of Australia is joining it. Senator COLSTON —I direct a question to the Minister Assisting the Minister for Community Services and Health. Has the Federal Government previously offered the Queensland Government funds to assist in the cost of educating nurses at colleges of advanced education? If so, for what use have these funds been available and has the Queensland Government availed itself of any of these funds? Is it a fact that, as stated in the Courier-Mail of 19 October, if the Queensland Government does not accept those Federal funds and allow nurses to have a college education, Queensland nurses will be regarded as underqualified in a second-rate health service? Senator RYAN —It is the case that for three years now Commonwealth funds have been available to assist in the cost of the transfer of nurse training from hospital-based nursing, where it has been traditionally, to college-based nursing, where it is the policy of our Government, the nursing movement and the Royal Australian Nursing Federation to develop it. Nearly three years ago we negotiated an agreement with the States whereby we would make a contribution over and above the grants to States for health training that they have always had to assist in this process and the process was to be complete by 1991. All of the States and Territories except Queensland now have college-based nurse training at some stage of development-some States are going faster than others-and are receiving Commonwealth funds. But the Queensland Government decided not to accept the Commonwealth assistance for this new education development. I think it is an affront to Queensland nurses that the Queensland Government has made this decision. I think it is a setback for the profession in Queensland and, to some extent, nationally, because nurses like to move around between the States, that college-based training is now possible in every State and Territory in Australia apart from Queensland. The Queensland Government has tried to claim during the period that we have attempted to negotiate this matter with it, that the Commonwealth should meet the full cost of the college-based training and that there are no savings to be made in the health sector. Of course, this claim by Queensland simply indicates the historically low level of money spent by that State on nurse education. Indeed, every other State currently provides far more hours of curriculum education for nurses in hospital-based courses than does Queensland. In Queensland the general nursing hospital-based course currently involves only 1,200 hours of curriculum education over three years, which compares badly with the 1,600 and 1,800 hours of curriculum in the other States. So it is clear that, even in the case of hospital-trained nurses, Queensland nurses are already at a disadvantage compared with nurses being trained in hospitals in other States and Territories. Added to that disadvantage is the fact that the Queensland Government will not move to take Commonwealth assistance and make college-based training available to Queensland nurses. That amounts to a very sorry picture for the nursing profession in Queensland. Senator HAINES —My question is directed to the Minister representing the Minister for Employment, Education and Training. Can the Minister say whether cuts are being planned in the staffing levels and functions of the Women's Bureau in the Department of Employment, Education and Training? If such cuts are being planned, will the Minister give details and explain the reasons for them in the context of the Government's repeatedly stated commitment to equal employment opportunities for women? Senator RYAN —It is certainly the case that there is no reduction in the Government's intention to do everything possible to provide equal employment opportunities for women. The role played by the Women's Bureau in recent years has been very important in assisting with labour market analysis, skills needs analysis, and so on. The Women's Bureau will continue to perform that very valuable function and will continue to be part of the network of policies, structures and legislation which are all designed to achieve equal employment opportunity for women. I think it is the case that the Women's Bureau, like all parts of the public sector, will be streamlined to some extent. As to the details of any reductions that are planned for the Women's Bureau, I will take that matter to Mr Dawkins and get a detailed reply for Senator Haines. Senator DEVLIN —My question is directed to the Minister assisting the Minister for Community Services and Health. Is the Minister aware of the call by the Real Estate Institute of Australia for a rental crisis conference? Does the Minister agree with comments made by the shadow Minister for Community Services that housing costs are too high? Can the Minister inform the Senate of the ways in which the Government has acted to assist low income private renters? Can the Minister advise us of the prospects now faced by first home buyers? Senator RYAN —I certainly do not agree with the Opposition spokesperson's comments. Any reference to the record would indicate that our Government has done more to wipe out housing-related poverty than any previous Liberal- National Party government. We have acted on two fronts to assist low income private renters. On the supply side, we have restored negative gearing, which will provide a much needed boost to the private rental sector, particularly in Sydney. Senator Vanstone —Why did you take it away? Senator Puplick —The bottom of the barrel. Senator RYAN —I can only report to those opposite who are making sceptical sounds that at the meeting of the Australian Housing Council, which I chaired last week, industry representatives were unanimous in their welcoming of the restoration of negative gearing and in their prediction-- Opposition senators interjecting- Senator RYAN —Mr President, I know it is very difficult for the Opposition to face up to the success of our Government's housing policies-be it in the statistics of home ownership, which I was able to give the Senate earlier today, or in the great improvements we have seen in assistance to low income renters. It is not only the view of the industry but also my view, and that of all housing Ministers who have paid careful attention to this, that the reintroduction of negative gearing will bring private investors back into the rental market, and that will have an effect on the lower end of the market. At the same time assistance to low income family renters of $15 a week was announced in the Budget this year as a part of the family package; that is $15 a week additional to the $22 or $28 per child. I think everyone concerned about housing-related poverty and family poverty has welcomed that package as the greatest step forward in defeating poverty, including housing-related poverty, that we have seen. As well as that, under the Commonwealth-State Housing Agreement, our Government is committed to providing $700m this year and for the two subsequent years. Legislation to that effect will be coming into the Senate shortly. So it is quite clear that, for the people at the lower end of the market, the private renters, although they still face economic and supply difficulties, the Government has taken a number of significant steps which have never previously been taken by a government. This has certainly ameliorated the circumstances for many low income private renters. Senator Messner —I ask the Minister to table the document from which she quoted. The PRESIDENT —Will the Minister table the document? Senator RYAN —No, it is confidential. Senator CHANEY —My question is also to Senator Ryan and follows the answer she has just given. I thank her for her very good explanation of why negative gearing is of value. I ask: Why did her Government abolish negative gearing and cause the problems in the housing area and the rest of the construction industry? Senator RYAN —I do not want to have a demarcation dispute with my colleague Senator Walsh, but I will point out to Senator Chaney that at the time the negative gearing provision was withdrawn there was no capital gains tax. So the investor in the private rental market was getting a double whammy. Opposition senators interjecting- Senator RYAN —I know the facts are very distressing to senators opposite because they are so favourable to the Government. It was quite clear that at the time of the first major package of tax reforms, investors in the private rental market not only could get the significant benefits of negative gearing but also could then sell their property and not pay any tax on the profits made. That is no longer the case. Opposition senators interjecting- Senator RYAN —Those opposite are very tedious, Mr President. It is now the case that negative gearing has been restored and investors who invest in the private rental market, sell their properties and make a capital gain, will pay tax on that, so equity has been restored. Senator BOLKUS —My question is addressed to the Minister for the Environment and the Arts. I ask the Minister whether he has seen reports that much of Australia's film heritage, including films such as Raymond Langford's silent masterpiece On Our Selection, and The Cheater made by our first female production team, is in danger of disintegrating? Is it a fact that the National Film and Sound Archive has 10 million feet of uncopied nitrate film which is in danger of disintegrating? Further, is it a fact that the Archive needs another $1.5m a year for the next 12 years to preserve all its nitrate films? Can the Minister indicate what the Government has done and what options are open to it in the future to preserve these films? Senator RICHARDSON —Yes, I have seen the Press reports, in particular, the one in the October issue of Australian Society. I am happy to assure honourable senators that acetate preservation copies of Raymond Langford's On Our Selection, and The Cheater made by the McDonaghs, our first female production team, were made some time ago. So while the article may have got that wrong, I would also have to concede that the National Film and Sound Archive does indeed have some 10 million feet of uncopied nitrate film which is in danger of disintegrating. It is also true that preservation of these films would cost something like $1 1/2m a year for 12 years. In times of economic restraint, the National Film and Sound Archive fared comparatively well with other collecting institutions in this Budget. But, with finite resources, the National Film and Sound Archive is giving urgent priority to the preservation of Australian film. It is assigning a heritage rating to endangered footage to ensure that the most significant films are preserved. I am conscious of the problem of the disintegration of the film footage held by the National Film and Sound Archive and because of that I have had some discussions with its officials. The Archive is seeking additional funds from private sponsors. It should be noted that its sister body in the United Kingdom recently got a $60m grant from the Getty Foundation. While I cannot promise to be of assistance in getting a $60m grant, I shall do what I can with private sponsorship to see whether I can be of some assistance in its endeavours. Senator STONE —My question is addressed to the Minister representing the Treasurer. In response to an earlier question from Senator Chaney, the Minister said, when describing the stock market crash overnight, that `these things happen from time to time'. Would the Minister care to expand his historical lecture to the Senate by telling us what happened to the British economy after the bursting of the South Sea bubble, and what happened to the Dutch economy after the bursting of the tulip boom? More seriously, because these are serious matters, in the light of developments overnight in major stock markets overseas and further such developments in the Japanese stock market this morning, does the Minister accept that these developments are likely to affect adversely the previously forecast outlook for the economies concerned? If so, what consequences does the Minister foresee for the forecasts about the international economic environment, on the basis of which our own recent Budget for 1987-88 was framed? Senator WALSH —Senator Stone could not have been paying attention to my answer to the first question. I think that he would agree that the two ways in which a major decline in share prices throughout the world could adversely affect the Australian economy would be if they induced either a fall in the price of our exports or a significant withdrawal of capital from Australia. There is no evidence, to my knowledge anyway, that either of those things is likely to happen. Whether they happen is something that only time will tell. In regard to what happened to the British economy after the South Sea bubble burst, there was, I think, a fairly prolonged recession. However, if Senator Stone is suggesting-he may not have been-that precisely the same thing would happen in Australia following the decline in share prices this morning and the smaller decline over the last week or so, he should bear in mind the order of magnitude of the South Sea bubble collapse, plus the fact that governments are more interventionist today than they were in the eighteenth century. Senator Stone would probably like to take us back to the eighteenth century, but I do not think that is likely to happen. As to what happened to the Dutch economy after the tulip bulb boom burst, I am afraid I do not know; but if anybody would like to know what would have happened to the Australian economy had Mr Howard remained the Treasurer in 1983, I cannot think of any better description of what was likely to have happened than that penned by Senator Stone in his former incarnation as Secretary to the Treasury, and which he would have delivered to Mr Howard on 6 March 1983 had Mr Howard still been Treasurer. Senator CROWLEY —My question is to the Minister representing the Attorney-General. I draw the Minister's attention to a recent judgment by Justice K. Murray in the Family Court in South Australia on 6 August 1987. It reads in part: It will be clear from these reasons that if the wife has become pregnant and given up work by then, and . . . her new husband is secure in his employment at the Royal Adelaide Hospital the wife should have custody of the two children so long as she remains in the State of South Australia. If any of these conditions are not satisfied, then the husband will have custody of the children. The case was adjourned on 7 October. The wife was not pregnant by then, so custody went to the husband. Can the Minister say whether this judgment is sufficient to have the judge removed? What assistance or further investigation can or will the Attorney-General undertake in this case? Can the Minister guarantee that no further judgments of this sort will emerge from the Family Court? What steps can be taken to overturn this bizarre custody ruling immediately, pending legal appeal? Senator TATE —I had some parts of this judgment drawn to my attention in the few minutes before Question Time. I have not had an opportunity to read the full judgment and therefore it would be remiss of me to comment as though I had access to the whole judgment of Justice K. Murray, a female member of the Family Court in South Australia. But it appears from the little of the judgment I have had an opportunity to read that, indeed, the granting of custody to the woman concerned was subject to conditions which were quite extraordinary and even bizarre. As for the idea that the custody of children might be subject to the custodial parent becoming pregnant, I know of no similar case in the common law and I doubt whether any other legal system would countenance such a matter being subject to what is obviously conjugal union beforehand and a successful result of that union. I am unable to say whether this judgment is being considered by authorities other than me or the Attorney-General with a view to having the judge removed. It does not fall within my power either to suggest or to make such a removal. I am further asked: What assistance or further investigation can or will the Attorney-General undertake in this case? Given the gravity of the matters raised by Senator Crowley and given their complex nature and their ramifications, I will certainly refer them to my colleague the Attorney-General for a more detailed answer. I cannot give the guarantee that no further judgments of this sort will emerge from the Family Court. However, perhaps the sort of publicity that Senator Crowley's question is now giving to this judgment will give similarly minded justices, if there are any, some pause. I am finally asked: What steps can be taken to overturn this bizarre custody ruling immediately pending appeal? I have not had time to check, but I believe that it is quite normal practice, and it may have been attempted by the woman concerned in this case, to ask the judge for a stay of the implementation of the judgment pending appeal. That ought to have been undertaken, but I am unable to say whether it was and I am not in the business of giving legal opinions as to whether it ought to be attempted now. Senator MICHAEL BAUME —My question is addressed to the Minister for Transport and Communications. Has Qantas Airways Ltd engaged consultants on, or is it in any other way looking at options for, the sale of all or part of the airline, as has recently been reported? Does this action have the support of the Minister and the Government? Does the Minister agree that this is prudent forward planning by Qantas in light of the apparently inevitable move by the Government towards at least partial privatisation of the Government's wholly owned domestic and international airlines? Senator GARETH EVANS —Qantas will have a major funding requirement in the near future to enable it to re-equip with new aircraft and to retain competitiveness with other international airlines. The extent of that financial commitment is presently estimated at some $4 billion over the next five years, measured in dollars of the day. The residual capital injection that is presently estimated to be necessary to secure that, bearing in mind the sorts of sums that Qantas may be able to raise by way of internally generated funding and further on the loan market, in very rough figures is $400m, with most of the requirement tending to be concentrated around the year 1989. So it is evident that there is a quite formidable capitalisation problem confronting the corporation. As one would expect of any competently managed airline, Qantas is, quite properly and understandably, undertaking its own full study of its requirements for future funds, including an analysis of the appropriate mix of capital, borrowings and internally generated funds. I understand that Qantas has an ongoing consultancy arrangement with merchant bankers to assist it in this issue and that no special consultancy arrangements have been entered into in recent times. Notwithstanding a suggestion in a newspaper report to this effect, the Government has appointed no merchant bank or any other advisers in relation to Qantas's capital problems and has not embarked upon any analysis at this stage of what might be required so far as meeting Qantas's capital needs is concerned. Clearly, however, it is a major issue, one that we will need to look at very closely. As the Prime Minister has foreshadowed, in the context of not only Qantas, but Australian Airlines and a number of other government business enterprises as well, it does demand a careful analysis of the data and the policy issues associated with problems of this kind. I am presently considering how the Government might embark upon such an analysis of its own in the context of Qantas. Senator BURNS —My question is directed to the Minister representing the Treasurer. Has the Minister's attention been drawn to an article appearing on page 44 of the 9 October 1987 issue of the Business Review Weekly magazine? Does that article expose the myth of Sir Joh Bjelke-Petersen's claim that Queensland is a low tax State? How do Queensland's hidden taxes affect Australia's national economic performance? Senator WALSH —In regard to the last part of the question, there are always some difficulties or hazards in ascribing a particular outcome to a particular cause. But it is a matter of record that the performance of the Queensland economy, relative to the rest of Australia, particularly over the last four years, has been abysmal. On almost every index of economic activity or economic health one finds that Queensland is either the most unhealthy or the second most unhealthy of all the States. The article published in the 9 October issue of the Business Review Weekly explains the range of hidden taxes that are imposed on Queensland by the Bjelke-Petersen Government, the most important of which, of course, is the hidden tax of high railway freight charges for the transport of coal in particular from mines to ports. There is one particular paragraph in the article that I believe is worth quoting: Coal rail freight profit shave enabled the Premier . . . to hold back on tobacco and fuel tax, financial institution taxes and death duties. If these taxes and duties had been applied on the same basis as in other states, they would have raised up to $400 million a year. Coal rail freight profits are tied to tonnage, not to price. This means the Government has received profits from the industry while mining companies have faced low prices and losses. The coal mining companies which pay these hidden taxes have, quite legitimately in my view, been complaining for some time about the severity of them and have cause to complain more loudly now since the price of coal is being squeezed by a world oversupply. An attempt was made by the Utah Development Co. Ltd some 18 months ago, or thereabouts, to quantify the effects of these hidden taxes, excessive rail freights, on the mining industry in Queensland. If I remember correctly, the figure that Utah came up with as the hidden tax component of the railway freight charge was of the order of $350m. Obviously, a hidden tax of that magnitude, which is not related in any way to the price of coal but simply to the tonnage which is being carried, must do a good deal of damage to the mining industry and, in particular, it is likely to do a good deal of damage at a time when coal prices are depressed because of world oversupply. Senator PARER —My question is directed to the Minister representing the Minister for Foreign Affairs and Trade. Does the Government believe that there should be trade or other economic sanctions directed against the regime in Fiji? If not, what is the Government doing to have existing union shipping bans lifted and to prevent the threatened imposition today on air travel to Fiji? Does the Minister expect that the Government will prove as impotent in this instance as it was after the first coup when similar bans seriously jeopardised important markets for Australia's primary products? Senator GARETH EVANS —The Government has made it clear all along that we do not support the imposition of trade or economic sanctions against the military regime in Fiji, notwithstanding our obvious position in relation to that regime-our non-recognition of it and our appreciation of the concerns and indeed our sharing of the concerns of the trade union movement about the treatment of unionists in Fiji. It needs to be appreciated that the particular bans that are being imposed at a maritime level and being talked about in an aviation context are not an attempt to bring down the regime as such or even to impose political pressure on it; rather, they are a response to the situation which is a very unhappy one so far as the treatment of fraternal trade union organisations and individual trade unionists is concerned. Notwithstanding all of that, the Government's position is one of a belief that such sanctions are likely to be counterproductive and, certainly in the Fijian context, are not likely to be effective given the ready availability of other sources of supply for the commodities that are involved and the lack of any evident regional or, for that matter, larger international will to join in any sanctions exercise. So against that background we are continuing to talk with the trade union movement to make it see the force of the argument that we are putting about the likely lack of utility of any such sanctions exercise. We hope that in due course, and sooner rather than later, that approach by the Government, which is, realistically, the only approach we can adopt at this stage, will bear fruit. Senator ZAKHAROV —Is the Minister representing the Minister for Employment, Education and Training aware of widespread concern in the community about the possible effects of the proposed restructuring of the advisory bodies and administration of the Department of Employment, Education and Training? What consultations took place with teachers, parents and students in the development of this proposal? What opportunities will be available for these and other groups to influence the final shape of the restructure? Senator RYAN —The proposed restructuring of advisory bodies within the new portfolio of Employment, Education and Training was announced by Mr Dawkins on 15 October. Mr Dawkins advises that the proposed structure was developed from the work of a task force headed by Mr Charles Halton, which included some initial contact by him with key organisations, unions and education providers. The proposals have attracted a wide measure of public support since their announcement. However, Mr Dawkins is aware that some concern has been expressed, chiefly by interest groups uncertain of the retention of their position and access in the proposed structure. It is to resolve such concerns and to clarify relationships that the structure is at this stage only a proposal, subject to consultations. Mr Dawkins advises that these consultations will take place over the next two or three weeks and those organisations which wish to do so will be able to put their views on the proposal to the Halton task force. Senator WALTERS —I refer to an article in yesterday's Sydney Daily Mirror and direct my question to the Minister representing the Minister for Employment, Education and Training. Will the Minister confirm that the article quoting Mr John Bowdler, Deputy Secretary of the Department, which said that the Priority One: Young Australia scheme, launched by the Prime Minister in 1985, has been dumped, is correct? If it is correct, in light of the earlier defence of Priority One when this matter has been raised in the Senate, will the Minister explain why Priority One has been abandoned? Senator RYAN —I did not read the Daily Mirror yesterday afternoon so I do not know whether the quote as stated by Senator Walters is as she described it. I remind the Senate that there were a number of elements in Priority One. It was a strategy to improve opportunities for youth, particularly those young people who were dropping out of school before year 12 and who had no access to education and training. Statistics clearly show that great advances have been made with regard to the various parts of the Priority One strategy. Even Senator Walters must be aware of the dramatic success in improving retention rates of students towards the end of year 12, which have increased from one- third to a half during the period of the Hawke Administration, and they are up again this year. So that part of Priority One has certainly not been dumped and it will be accelerated and improved under the newly strengthened education and training policies. The other major aspect of Priority One was the youth traineeships. Perhaps even Senator Walters will recall that the traineeships were aimed at providing a formal training opportunity for young people for whom there was no other appropriate education or training possibility. As I am sure everyone in the Senate knows, the development of the traineeships was slower than the Government anticipated when this scheme was announced; however, I am pleased to report that there have been some dramatic improvements in the development of traineeships just recently. Mr Dawkins will announce, or will have announced, our expectation that the numbers of traineeships available for young people this year and next year will increase very rapidly now that more co-operation with the trade union movement and with employers who will provide the training has been achieved. Both the policies of achieving increased participation in year 12 and achieving new and better opportunities for training for teenagers are still very much in place and are being pursued very successfully. Senator WALTERS —Mr President, I have a supplementary question. I again ask the Minister: Has Priority One been dumped and have the figures of those employed that the Prime Minister assured us would be reached any chance of being reached? Senator RYAN —I thought I had just explained to Senator Walters the two major elements that constituted the Priority One campaign. The first was increased participation of students, particularly disadvantaged students, towards year 12. That strategy is succeeding and we expect the numbers to improve even further this year and in subsequent years. Although the traineeship program developed more slowly than was anticipated when it was announced, we certainly expect a rapid increase in the number of traineeships available. So both major elements of Priority One are in place and on target. Senator BLACK —Has the attention of the Minister for Finance and Minister representing the Treasurer been drawn to a report in last Saturday's Brisbane Courier-Mail that, according to Queensland National Party President, Sir Robert Sparkes, a 25 per cent flat rate tax remains a `vitally important blue-print for taxation and related reform'? Will the Government accept Sir Robert's advice and examine the 25 per cent flat tax proposal in the course of its review of corporate taxation? Senator WALSH —I think I can confidently assert that the Government will not be accepting advice from Sir Robert Sparkes. It does not surprise me and I do not think it would surprise many other people that Sir Robert Sparkes is still committed to voodoo supply side economics with incentivation and all those other things tacked on to it. What is alarming is that somebody who is not by background a Queensland National Party redneck, somebody who used to pride himself on being an intellectual and who was once Secretary to the Treasury, also, according to the weekend news reports, remains committed to the supply side voodoo that is attached to a 25 per cent flat tax. I do not know whether Senator Stone is still committed to the bonus for working proposition which he put up during the election campaign-or rather that the Queensland Premier put up on his behalf, I suppose one could say-which would, of course, provide immense benefits for superannuated departmental secretaries who became politicians and for Australian Capital Territory doctors if they were successful in getting the 69 per cent pay increase that they are attempting to screw out of the taxpayers. However, if ACT doctors were successful in screwing out of the taxpayers the 69 per cent pay increase that they are attempting to get, it would not do much for the rest of the people of Australia. Of course, on the debit side of Senator Stone's cum Bjelke-Petersen's pre-election document, or whatever it was, with the 25 per cent flat tax, the bonus for working and all the rest of that supply side nonsense, we were still left ultimately, after we allowed for the $4.7 billion of specified expenditure cuts, with some $18 billion of unspecified expenditure cuts. Fiscal irresponsibility of that magnitude is not really surprising when it comes from the National Party in Queensland, but I must say that it is very surprising and disappointing when it comes from somebody who was once Secretary to the Treasury. Senator WATSON —My question is directed to the Special Minister of State. I refer to her somewhat surprising response to the Senate earlier this afternoon when she justified the Government's decision on 17 July 1985 to reduce the income tax advantage associated with the negative gearing of rental property investments because there was at the time no capital gains tax. I ask: Is the Minister aware that the capital gains tax was introduced on 19 September 1985? Was not the Government at that time, in July 1985, advocating its intention to introduce in the immediate future a capital gains tax? If negative gearing was not necessary if a capital gains tax was in place, why has the Government taken so long to reverse its decision of 17 July 1985? Senator RYAN —I do not have the dates in front of me to check what Senator Watson said, but perhaps I could again explain to him clearly the circumstances facing investors in the private rental market and how they have changed in three stages. Prior to the Government's package of tax reform, the investor in the private rental market had available to him or her a negative gearing opportunity plus no capital gains tax. It is true that the Government announced its withdrawal of negative gearing, which changed the situation, and not long after that announced the intention to legislate for a capital gains tax. As my colleague Senator Walsh has pointed out, that process took some time. Senator Watson —You were aware of it? Senator RYAN —Of course we were aware of it. Having then observed and monitored the effects on the attractions of private rental investment to investors, the Government has decided that, since the capital gains tax is in place and is now gaining revenue because some of those properties have been turned over and capital gains taken from them, it is now time to make investment in the private rental market attract a similar kind of negative gearing advantage to that which investment in other areas attracts. There have been three separate situations. There was the situation prior to 1985 when there was negative gearing and no capital gains tax. There was then a period when there was no negative gearing, plus no capital gains tax. Now there is a capital gains tax plus negative gearing. I hope that Senator Watson can understand that. I hope that he will also understand that the decision of the Government now, in a changed capital gains tax environment, to reintroduce the negative gearing provisions will attract, as an investor into the private rental market, the smaller type of investor who can afford perhaps to rent out one flat or one house and who will provide more private rental accommodation at the lower end of the market. It may also affect other parts of the market, but we are particularly interested in the fact that it ought to create more opportunities for the private renter at the lower end of the market. Senator WATSON —Mr President, I wish to ask a supplementary question. I ask the Minister: Could the Government not have foreseen the consequences of its action? Senator RYAN —Senator Watson will remember that the time those decisions were made or foreshadowed was the time of the most dramatic and radical series of tax reforms that any Australian government has engaged in. Opposition senators interjecting- Senator RYAN —Remember the fringe benefits tax, which, of course, was opposed. If Senator Watson is saying that every aspect of the post-reform investment environment could have been foreseen with great precision at that time, I think he is saying something that no sensible person really ought to say. We have monitored closely the effects of the various tax reform measures that we have put in place. Also, many changes have taken place in the housing market. Today I have already given the Senate two lots of statistics-- Senator Tate —Very favourable ones. Senator RYAN —As my colleague Senator Tate is aware, I have given very favourable statistics on the increased affordability of home ownership; on the great increases in the number of people of low income who are now able to buy a home; on the increase in public housing provision, assisted by the Commonwealth's efforts under the Commonwealth-State housing agreements; and on the lower interest rates which, of course, are bringing many more people into the situation of being able to afford their own home. None of these things could have been predicted precisely when we embarked on this course of reform. So we have monitored all of these things. We now believe that the time is right to reintroduce the negative gearing opportunity for those investing in the private rental market, thus putting private rental accommodation on an equal basis with other available investments. But, of course, we know that we will be able to reap the capital gains tax payable when those properties are turned over. Senator FOREMAN —My question is to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. What action does the Department of Immigration, Local Government and Ethnic Affairs take to limit the potential for domestic violence in Filipino-Australian marriages? Senator REYNOLDS —I thank the honourable senator for his question. While it is true that domestic violence does occur in some Filipino-Australian marriages, we must also remember that domestic violence is a major social problem amongst marriages across all cultural, social and economic groupings. So it is very important that we do not distort the concerns that have been expressed publicly. Many marriages between Australian men and Filipino women are in fact happy and successful. We recognise, however, that the migration process can cause added strains in a marriage. The Australian Government does all it can to ensure that appropriate counselling is available, both in Manila and in Australia. The Department commissioned a special video, Filipino Marriages in Australia, for the purpose of counselling Australians and their Filipino fiancees. Migration officers provide as much information as possible about life in Australia at the time of interview and copies of the guide book Living in Australia are given out with every visa. The Department recently negotiated a visit to Australia by two counsellors employed in Manila by the Commission for Filipinos Overseas. This counselling service is very important and we hope that it will overcome some of the concerns that have been publicly expressed. Senator Short —Mr President, I ask the Minister to table the paper from which she was reading. The PRESIDENT —Will the Minister table the document? Senator REYNOLDS —Yes, I am quite happy to. Senator JENKINS —My question is directed to the Acting Leader of the Government in the Senate. In view of the fact that United States bases on Australian soil, such as Pine Gap, Nurrungar and North West Cape, are nuclear targets and add to the potential of war, will his Government now act to remove the bases, especially as the Pine Gap lease expired yesterday and in view of the many demonstrations over the past weekend by Australians against the presence of the bases? Senator GARETH EVANS —The Government's position in relation to Pine Gap and the other joint facilities was well spelt out by the Prime Minister in his statement of 6 June 1984, which I urge Senator Jenkins to look at. Our position has not changed in any respect since then. The Australia-United States joint defence research facility at Pine Gap contributes, in our clear view, to the maintenance of an effective deterrent relationship between the super-powers and plays an important role in verifying arms control agreements. The avoidance of nuclear war, therefore, underlies the purposes of the joint facilities. All the functions and activities of those facilities, and Pine Gap in particular, require, and have, the full knowledge and concurrence of the Australian Government. It is not a military base. There are no combat personnel, no combat equipment, no military stores or workshops, no plant, machinery or laboratories for research, development, production or maintenance of any weapons or combat systems of any type. The language used by Senator Jenkins is also a misrepresentation of the situation to the extent that she referred, as many do, to a lease which requires renewal or renegotiation. The idea that facilities operate on leases for which some kind of rent could be charged-another common theme of the opponents here-is clearly quite incompatible with the concept of jointness which is enshrined in the relevant agreements and which governs the operations of these facilities. The Pine Gap facility operates under an unclassified government-to-government agreement, the non-terminable period for which expired yesterday, 19 October. Henceforth, that agreement continues in force unless either side gives 12 months notice of termination. I repeat that the Government, for the reasons I have outlined, does not intend to give notice of such termination. Senator HARRADINE —My question, which is directed to the Minister representing the Minister for Employment, Education and Training, follows the answer she gave to Senator Walters in which she said that the objectives of the Priority One: Young Australia scheme were to develop traineeships in both the public and private sectors and to increase the participation rate of young people in secondary schools. Is it not a fact that those objectives are designed to better equip youth for employment and that the overall objective of the Priority One scheme is to increase the participation rate of youth in the work force? Is it not a fact that, by reference to that test, namely, the increased participation of youth in the work force, Priority One has failed, and has failed decidedly? Is it not therefore a fact that the whole concept of Priority One should again be reconsidered and that the Government should attend to the type of structural discrimination that is being experienced by youth in employment because of the employment and family policies of successive governments? Senator RYAN —It is certainly the case that the longer term objective of giving young people better education and training opportunities is so that they will have better opportunities in the work force. It is also the case that those young people who have increased the length of time they spend in the education system, or who have been fortunate enough to get a traineeship, generally have shown a higher level of success at moving into the labour market than those without those skills. Of course, I acknowledge that there is still a lot to be done in this area and that there are still too many young people leaving school and attempting to join the work force and failing to do so. It is for this reason that we are streamlining and upgrading the way in which we are preparing young people for the work force. I am not aware of any structural discrimination against young people entering the work force, but I am aware of their lack of appropriate skills. I point out that we are quite a long way down the track from the time when we first announced Priority One. Certainly, there has been some refining and renegotiation of some aspects of that package. Perhaps the most important thing-I know Senator Harradine has had a long-standing interest in this-is that more traineeships will be coming on-stream both in the public sector, in which I know that Senator Harradine has had an interest, and in the private sector. We expect to make a big dent in the youth unemployment figures by the continued success of increased participation through to year 12 and also by the opening up of more traineeships in both the public and the private sectors. Senator GARETH EVANS —On 7 October Senator Alston asked me a question drawn from a report in the Business Review Weekly about Telecom Australia purchasing exclusive easement rights to the Victorian Railways network. I have a detailed answer for him which I seek leave to incorporate in Hansard. Leave granted. The answer read as follows- The newspaper report referred to by the honourable senator is untrue in that, although Telecom has entered into a long term agreement with Vistel Pty Ltd, a telecommunications network management company formed by the Victorian Government, it has not purchased or been given exclusive rights of access to Victorian Railway network easements. Telecom has a statutory right to enter all land, including land belonging to the Victorian Railway Authorities, under section 16 of the Telecommunications Act 1975 for the purposes of establishing, operating or maintaining telecommunications facilities. However, the Telecommunications Act says nothing about the attitude which any landowner should adopt towards such entry by Telecom. The agreement between Telecom and Vistel Pty Ltd requires the Victorian authorities to facilitate such access, where it is considered desirable, to provide the Victorian Government with the telecommunications services covered in the agreement. It is quite open, so far as both the Telecommunications Act and the agreement are concerned, for the Victorian Government to grant access rights to railway easements to other parties for telecommunications or any other purpose it may please. In answer to the honourable senator's further questions on the matter: no, the agreement reflects no intention on Telecom's part to secure exclusive access rights nor am I aware of any such intention by Telecom; no, I do not agree that the agreement in any way pre-empts the current review of telecommunications policy which I announced in September; no, the agreement will not exclude potential new entrants in telecommunications network service markets, should those markets be opened to competition, for the reasons already referred to. On the matter of the reported cost savings of $20m per annum, reported in the newspaper article, this figure was attributed by the journalist to the Victorian Government's Task Force. It is not a Telecom estimate nor a matter that I would wish to comment on. The Victorian Government may make savings in many ways, including rationalisation of its own staff numbers and work processes, not necessarily associated with reductions in its telecommunications costs. It also may reasonably compare the method it is pursuing with Telecom with other alternatives for carrying projected traffic volumes. These are matters for the Victorian Government to assess and, if it wishes, to make public. The important point is that Telecom has not offered a discount that would flow on to other customers. Senator GARETH EVANS —Senator Boswell, on 9 October, asked me a question about remote telephone connections to which I also now have a reasonably detailed answer. I seek leave to incorporate that answer in Hansard. Leave granted. The answer read as follows- SENATOR BOSWELL asked the Minister for Transport and Communications a Question Without Notice on 9 October 1987 regarding `Remote Telephone Connections'. SENATOR EVANS —The answer to the honourable Senator's question, based on advice from the Australian Telecommunications Commission is as follows: I am aware of the importance of modern communications to people living and conducting businesses in rural and remote areas. The progress Telecom has made to date in its Rural and Remote Areas Programme (RRAP) is evidence of the importance placed on the provision of these services. Since the commencement of the programme in 1984-85 some 28,000 modernised and new services have been provided throughout rural and remote areas of Australia requiring a capital investment in the order of $235 million. This achievement represents over 60% of the estimated 43,500 services scheduled to be provided under the programme at a total capital cost of approximately $526 million (at 1987-88 prices), as well as additional costs for sales tax and customs duties and substantial ongoing maintenance and operation costs. The number of people now awaiting connection or conversion is approximately 15,500, not 18,000 as mentioned in your question. Given the enormous scale and cost of the programme and the need for financial responsibility in the present economic climate, the future progress of the programme needs to be considered in terms of the availability of capital funds and Telecom's overall service obligations. Telecom has been required to undertake internal economies and postpone planned projects across many areas of its activities, affecting both country and metropolitan subscribers. Reductions to the RRAP are a small proportion of the overall figure. Telecom is pressing ahead with the programme (some $100m will be spent in 1987-88) giving preference to larger communities. The programme should be substantially completed by 1990 although on present indications delays of up to two years could occur for some of the more isolated customers. Senator TATE —Senator Hill asked me a question without notice on 24 September 1987 concerning the Queensland Police Force. Amongst other things he asked whether Mr Parker would have learned from the National Crime Authority the names of Queenslanders who might be Authority informers or prospective witnesses and, if so, whether appropriate witness protection measures would be taken. In my reply on that point I said that I would ask Mr Justice Stewart whether he felt able to inform me whether any particular witnesses may have been put in jeopardy and, if so, what action had been taken. I am advised by Mr Justice Stewart that there is no evidence or other information at this stage to suggest that any witness-prospective witness or informant-has been put in jeopardy by Mr Parker and that, should any such persons be identified, the Authority will take appropriate steps to protect them. The PRESIDENT —Order! Pursuant to standing order 28a, I lay on the table a warrant nominating Senator Zakharov to act as Temporary Chairman of Committees when requested to do so by the Deputy President and Chairman of Committees or when the Deputy President and Chairman of Committees is absent. Senator WATSON(Tasmania)(3.17) —I move: That the Senate take note of the paper. Given the importance of the export trade to Australia, the efficiency of our waterfronts is of primary significance to all Australians. Given the island nature of my State of Tasmania, especially its high export trade, it is particularly important to Tasmania. The number of committees that have recently reported and are currently investigating the efficiency of our waterfront I think illustrates the importance that is attributed to this area of activity. I will quote from a statement by the then Minister for Transport in May this year when he said: The challenge on the waterfront is difficult not the least because of existing entrenched attitudes and practices which may have been appropriate to earlier times but are quite inappropriate for today's economic circumstances. I submit that this Labor Government has taken far too long to act. We have had inquiries and rhetoric, but very little action. Unfortunately, the problem of industrial action on the waterfront is fairly widespread. The Australian Chamber of Shipping announced recently that the number of man hours lost on the waterfront in 1985-86 was 310,000. This compares with a figure of some 122,786 man hours lost in 1982-83. Clearly, we have a very significant problem in this area. In fact, the London Shipowners Association has reported that 54 per cent of claims relating to losses of earnings through strikes were incurred on Australia's waterfront. The next in line was Canada, with only 14 per cent of claims. This is a record that Australia should not be proud of. Australia just cannot afford to lose its credibility in the international marketplace. It must cultivate an image of being a regular supplier. Of course, the waterfront must co-operate in this area and play its part. We simply cannot afford to have our export markets endangered by the threat of trade union action to freeze activity on the waterfront. I think the question has to be asked: Do waterfront workers today have too much power? I think we could be forgiven for believing that they do when we hear today that they are making a decision on whether to ban exports to Fiji. They appear at least to have the power to make decisions on matters of foreign policy. I also make the point that the level of industrial disputation that occurs at any one port will, unfortunately, have an impact on the future of that port. For example, a Tasmanian group which has been considering the establishment of a new Bass Strait ferry is currently looking at a number of ports to decide where the proposed service could best operate from. A high level of industrial disputation could well discount certain ports from consideration due to their waterside workers and the local community. However, all is not bleak. There are encouraging signs to suggest that negotiations between all the parties concerned can result in co-operation on the waterfront to the benefit of all Australians. I would like to quote an example from my home State of Tasmania, where the Port of Launceston Authority has this year made an agreement with commercial stevedores to form the Bell Bay Cargo Services. This association, which is the first of its kind in Australia, shows that it is possible for government, industry and waterside employees to work together. Senator COONEY(Victoria)(3.21) —The last part of Senator Watson's speech was better than the first. There is a tendency unjustly to criticise unions and the Waterside Workers Federation. An example of how it is unjust is the case of the Melbourne section of the Waterside Workers Federation, of which the President is Mr Jim Beggs. Much of the criticism made of the waterside workers' actions was found, on examination, to be wrongly placed. For example, there were allegations that they had ruined a cargo of fruit and it was found that that was wrong in the sense that it was damaged-- Senator Watson —I did not say that. Senator COONEY —I am talking about the general criticism made by Senator Watson of the Waterside Workers Federation at the beginning and middle of his speech, although by the end he had come round the other way and acknowledged that it had contributed mightily in certain areas. I am rebutting the suggestion that Senator Watson made at the start of his speech that the Waterside Workers Federation needed, in some way, to be condemned roundly. I am simply saying that there is another side to that story and an example of that is the Melbourne section of the Waterside Workers Federation, which has gone to farmers and explained the situation. During those discussions, it has found that much of the criticism directed at it should have been directed elsewhere. For example, a cargo of fruit coming from the country was ruined in transit by a transport truck, which had nothing to do with the Waterside Workers Federation, although the damage was blamed on it. In response to the criticism, the Federation has been to country Victoria and discussed the matters with farmers, and as a result a greater understanding has developed. The relationship between the farmers of Victoria and the waterside workers has improved to the extent where they consult. Much of the criticism is a result of misunderstandings and, at a time when there is a great need for consensus between employers and employees, better relationships can be developed by different bodies-in this case the farmers and the unions-talking about matters together. The initiative was taken by the waterside workers. They visited the farming bodies and, although they met with hostility to start with, when the situation was explained that hostility disappeared. The farmers then came down to the wharves and were warmly received, so the development of a proper relationship has occurred. There is a tendency to look at situations as they were in the old times. Fortunately, these times have passed and we should look positively at these situations, as Senator Watson did at the end of his speech, although that optimism was not there at the start. There are grounds for optimism, and this example of the Melbourne waterside workers shows how co-operation between different bodies in the community and between employers and employees can develop and go on to produce greater and greater productivity. Senator CHANEY(Western Australia-Leader of the Opposition)(3.24) —This report is of considerable significance because it represents part of an attempt to come to grips with the situation on the waterfront, which is of great importance to our trade. I do not wish to speak at length on the report-indeed, the sessional order does not permit me to do so. However, I want to refer the Senate to the progress report to the Inter-State Commission by the Chairman of the Stevedoring Industry Review Committee, Sir John Moore. Sir John Moore's report highlights some of the very significant problems in the Australian labour market, quite apart from but also including the waterfront. Senator Stone —The waterfront was a problem for Sir John Moore. Senator CHANEY —I will not take up that point at this stage. Madam Acting Deputy President, I direct your attention to the fact that a series of discussions promoted by Sir John Moore has involved the work force in discussing practices on the waterfront. We find Sir John Moore reporting that the examination has been approached by all parties in a constructive and positive way, although the attitude of unions varied from port to port. Sir John Moore goes on to say that changes are to be recommended. He says: The recommended changes will result in manning reductions for particular jobs and afford overall a greater degree of efficiency in stevedoring operations, once the national agreement has been reached. Those words really struck me, because they typify the difficulty we have in coming to grips with the problem of becoming a competitive country. We seem to have a succession of areas where work practices are discussed but where it is simply not accepted that the greatest efficiency needs to be achieved at the work place without further ado. In this case we have inefficient work practices being disclosed, excessive manning levels and a postponement of any action on those things until we have had some national agreement on the matter. This is rather akin to the approach which was adopted by the Government in doing something about work practices in the heavy engineering field and in the shipbuilding industry, where an extraordinarily bureaucratic approach seems to be taken to doing anything about work practices which are, in fact, strangling this country economically. Our competitor countries simply do not allow themselves the luxury of this sort of delay. I have been talking to an Australian industry leader who is one of the people appointed by the Government to perform functions within these arrangements-Mr Deveson from the Nissan company. I recall in my last conversation with him his comments about the flexibility of the Japanese work force and the capacity of the Japanese to move very quickly to use their labour and their equipment more effectively. He stressed the difficulty for Australia of competing with that sort of flexibility. In this report we see again evidence of the ossification of the whole way we work in this country, a way which I believe is thoroughly destructive. Whilst I think the intentions in devising a waterfront strategy are correct, I say to the Government that the really correct strategy for Australia is to accept that these practices should be dealt with at the work place and that, when an inefficient work practice is disclosed, it should be done away with. I think, from my limited knowledge on the waterfront, that one cannot blame the work force entirely for the difficulties there, any more than one could blame the work force for the difficulties that existed at Robe River, because historically there had been management acquiescence in practices which seemed sensible at the time but which have proved to be quite absurd and uneconomic and which certainly cut down Australia's competitiveness. Senator Stone —They did not seem sensible at the time. Senator CHANEY —I guess they seemed affordable at the time, and management, for one reason or another, went along with them. So my plea is directed as much to management as it is to the work force. There needs to be an absolute concentration by everybody in the enterprise on producing a more productive result not only for the enterprise but also for Australia. I see this report as a sad commentary upon our way of doing things in Australia. If we continue to take the approach that we have to superimpose an additional bureaucracy every time we want to get a work practice changed, or that we have to grant a wage rise every time we get a work practice changed, this country will never succeed in meeting the challenge it faces. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator CHANEY(Western Australia-Leader of the Opposition)(3.29) —In light of the novelty of the work which is being done by the Inter-State Commission, I believe it would be useful to have this report preserved on the Notice Paper. Therefore, without wishing to speak to the report, I move: That the Senate take note of the paper. I seek leave to continue my remarks later. The ACTING DEPUTY PRESIDENT(Senator Giles) —Senator Chaney, do you want debate on these papers to be resumed on Thursday? Senator Chaney —No, I want the opportunity for the Opposition, Senator Harradine, the Australian Democrats or any senator to bring them forward at General Business time for a substantial debate on the issues, rather than simply listing them in papers. Provided leave is granted, my seeking leave to continue my remarks will have achieved my objective. Leave granted; debate adjourned. The ACTING DEPUTY PRESIDENT —The President has received a message from the House of Representatives notifying the appointment of members to the Parliamentary Joint Committee on the National Crime Authority. The ACTING DEPUTY PRESIDENT —I inform the Senate that the President has received a letter nominating Senator Collins to serve as a member on the Council of the Australian Institute of Aboriginal Studies. Motion (by Senator Ryan)-by leave-agreed to: That, in accordance with the provisions of the Australian Institute of Aboriginal Studies Act 1964, the Senate appoint Senator Collins to be a member of the Council of the Australian Institute of Aboriginal Studies on and from 20 October 1987, and that he continue as a member for a period of three years from that date. Debate resumed from 9 October, on motion by Senator Gareth Evans: That this House consents to termination by the Commonwealth of the Airlines Agreement 1981. upon which Senator Messner had moved by way of amendment: At end of motion, add: ``, and notes the long overdue adoption by the Government of a substantial part of the Coalition's aviation policy; further notes the Government's de facto decision to privatize Australian Airlines, which is the inevitable and proper consequence of the deregulation of the airline industry; and condemns the Government for: (a) the time lost since the first day that notice of termination of the Two Airlines Agreement could have been given (January 1987) and the effect this has had on the postponement of the commencement of deregulation of the Australian airline industry; (b) its inaction during this period in not preventing the removal of competitors in the airline industry, which will substantially reduce competition; (c) the repeal of legislation which the previous Coalition Government had in place to convert the then Trans Australia Airlines (TAA) into a company, thereby reducing the ability of TAA to readily adjust to the new deregulated environment; (d) the absence of pre-1990 informal measures to facilitate deregulation; (e) its failure to provide the necessary infrastructure at Australia's airports, especially Kingsford-Smith Airport in Sydney, so as to cope with present and, more importantly, future congestion; (f) not completely deregulating domestic and international airfreight carried by Australian airlines; and (g) creating unnecessary uncertainty amongst Australian Airline employees as to their future'' Senator MacGIBBON(Queensland)(3.32) —When this debate was adjourned I had said that the Opposition supported the need to abolish the two-airline agreement. I personally welcome that, having been opposed to the Airlines Agreement Act when it previously went through the Senate. The consequences of the decision to abolish the two-airline agreement inevitably are that Australian Airlines must be sold, whatever the left wing of the Australian Labor Party might think about it and however much the Minister for Transport and Communications (Senator Gareth Evans) might dissemble on the subject-which is only a polite way of saying that he is not telling the truth when he says that Australian Airlines will not be sold. The reason why Australian Airlines must be sold is that a government airline, which theoretically can make a loss, cannot compete with a private airline, which cannot afford to stay in business if it makes a loss. So they both have to be put on the same ground, which inevitably means that if we get rid of the two-airline agreement Australian Airlines has to be sold. The two-airline agreement has resulted in air fares in Australia being far too high and a very great inflexibility in air services, circumstances which penalise the public enormously. So we welcome this decision. I went on to say that the Minister simply did not understand the subject that he had blundered into. I made two points. The first referred to the Minister's claim that legislation would be applied only in relation to safety. Secondly, I said he had tunnel vision insofar as he saw all the ills of the Australian airline industry as stemming from the two-airline agreement. I made the point that we cannot legislate for safety alone. We can put all the regulations on the book about how aircraft are maintained and operated, about how crew training is done and about all the support facilities, but that does not guarantee a safe airline. We get safe airlines only when airlines are earning a profit. If airlines are to earn a profit, to some degree the Government must have an oversight over airline operations beyond that involved in safety procedures. There has to be oversight with respect to fares and schedules. I do not know the answer to that problem, but clearly I know a little more about it than the Minister does. We on this side of the chamber support the abandonment of the Independent Air Fares Committee, which just guaranteed that neither of the airlines could go broke, no matter what happened-with the public picking up the tab. But it is very naive and simplistic for the Minister to say that the only regulation of the airline industry will be in relation to safety matters. Safety involves more than simple regulations as to the maintenance and support of aircraft. The second point I made was that a range of other issues in relation to airline operations are quite divorced from the two-airline agreement. Very quickly I will list them: curfews at Australian airports, the lack of a parallel runway at Sydney (Kingsford-Smith) Airport, the poor standard of radar and instrument landing systems, a poor meteorological service, and at the same time featherbedding by unions representing the pilots, the cabin attendants and the ground crews. The curfew, which applies at a number of Australian airports, and most critically at Sydney-because nearly all traffic in Australia hubs through Sydney-means that for nearly a third of the day airlines cannot use their equipment. Between the hours of 11 p.m. and 6 a.m. no aircraft, other than turbo-prop aircraft and light aircraft, can operate into Sydney Airport. It is not just that aircraft cannot get into Sydney, Brisbane and, I think, Adelaide, but aircraft cannot be positioned in another capital city to start the next day's run. An airline might want to fly a service into Brisbane or somewhere else at the end of the day and get in at midnight. It cannot do so because of the curfew. The airline might beat the curfew by coming into Brisbane at 11 p.m. but it might want to start that aircraft at 6 a.m. the following day out of Sydney-and the aircraft cannot be positioned there. Aircraft have a short life. They have to be amortised over a 10- or 15-year period because technology is progressing the whole time. So Australian operators are faced with the huge economic penalty of losing one-third of the effective life of their aircraft. In an industry as cost intensive as the airline industry, that is a burden we cannot carry. A very significant problem for Australian air travellers is the lack of a parallel runway at Sydney. This slows down air movements enormously. I came through Sydney today from Brisbane. We were 20 minutes late out of Brisbane because of traffic congestion at Sydney, a consequence of both the runway situation and the lack of instrumentation and adequate radar. Sydney must have a parallel runway to take turbo-prop aircraft-F27s and below. The Labor Party, which controls most of the seats around the airport, will not see to that because it is frightened of the electorate reaction. That is absolute nonsense because by putting in a parallel runway we will not increase the number of aircraft operating into Sydney; we will just put more aircraft in at the same time. The aircraft that will come in at the same time are turbo-prop aircraft and commuter aircraft, which are allowed to operate outside the curfew. So there is not a noise penalty in doing this. Six or eight years ago the Senate was told the cost of congestion at Sydney Airport. The figure then for fuel wasted was around $23m a year. I guess that the figure has more than doubled since it was given to this chamber. Not only is fuel burn involved but also air frame times are used up while the aircraft are flying, plus extra crew times while the aircraft are in a holding pattern, trying to get into Sydney. That puts a very significant impost on fares. Another problem is the lack of adequate and modern radar facilities around the country. There is no excuse for the Government not picking this point up. The failure to have modern instrument landing systems means that landings can be attempted only in category 1 conditions. In category 2, category 3 and category 3A conditions, landings cannot be attempted, as they can overseas, which means that airliners using Australian airports have to carry fuel for alternates when, in another country, they would be able to land safely in adverse weather conditions. That problem is linked with very poor meteorological forecasting. Because the Government has cut back on meteorological forecasting and there is lack of resources to give a more precise definition, the people involved prophesy the worst case. If an aircraft is going from Sydney to Perth or from Tokyo to Perth and the meteorological people think there is a possibility of fog, they will forecast a 10 per cent possibility of fog. There may be nine chances out of ten that it will not occur, but the airline must cope with that situation. So it has to carry fuel for the alternate. The alternate for an aircraft going from Tokyo to Perth is Learmonth. Aircraft make money from the payloads they carry. But the first thing one has to put in is fuel. With modern aircraft such as a Boeing 767, which is very fuel efficient, the rule of thumb is that for every three pounds of fuel an aircraft carries for an alternate, it will burn one pound, or one-third, of it just carrying that excess fuel load. So the lack of adequate radar and instrument landing facilities and the inability accurately to forecast meteorological conditions are, again, very high imposts on the Australian traveller. I now turn to the poor productivity of Australian air crews. This is not a reflection on their professional competence in any way, but we have a high degree of overmanning. May showed in his report on an Independent Inquiry into Aviation Cost Recovery that the productivity of crews in America in some cases was up to twice the level of that in Australia. Ansett Airlines of Australia is the only airline in the world that carries three on the flight deck of its 767 aircraft. It had to get the aircraft specially made for that purpose. That was because the pilots and engineers ganged up on the operator and said, `We are going to keep our jobs'. Qantas Airways Ltd operates exactly the same aircraft, and at a higher gross weight over longer stages, with only two on the flight deck. Pilots in Australia also have very high rates of pay. I do not begrudge the salaries they get. However, whereas airline pilots around the world have taken significant cuts in their salaries in the last five to eight years, and with increased hours on duty, Australian pilots have not done that. Although there is a limited number of hours which aircrew can fly in Australia, the regulatory procedure is such that only 50 to 60 per cent of the nominal hours they can fly can be got from them because of overregulation by the Department of Transport and Communications. The whole matter of efficient and safe operation in Australia involves far wider considerations than the Minister has shown. I am sorry that he is not here. He would have learnt a little had he been in the chamber. But, characteristically, we will have to do that at a later date. Senator SANDERS(Tasmania)(3.43) —The Australian Democrats support the deregulation of the airline industry in Australia. I have always been amazed at the amount of regulation which exists in Australia, especially since aviation was pioneered in Australia. Kingsford-Smith and others made aviation a household word not only in Australia but around the world. Since that time, bureaucrats and various politicians have got together to hamstring aviation to the point where we have some of the most regulated airspace and aviation procedures in the world. I speak with some experience. I have been flying for 37 years as a commercial pilot and a flight instructor. I have owned my own flying business. I have been a control tower operator in the Air Force. It always annoys me that people who have no knowledge of the industry make statements. One of the statements that is being made now about deregulation is that, automatically, flying will be less safe, as has been the case in the United States of America since deregulation. However, no figures are quoted on that. I often find in Australia that when people are opposed to some facet of Australian life or some regulation they will drum up spurious figures overseas to support their cases. It is very difficult to track these down. They make sweeping statements with no justification. If we look at the figures in the United States of America, we find that there has not been all that much of a change in terms of safety. What we find is that there has been much media attention on air crashes that take place in the United States, as is the case here and elsewhere. There is a double standard. An automobile accident, even if it kills seven people, may be buried on page three or four of a newspaper, but we often see headlines such as `Plane lands safely after engine failure', which implies somehow that the safe landing is an exceptional event when, in fact, safe landings are quite common. We never see a headline saying, `Car runs out of petrol on freeway', but we often see a headline saying, `Light plane runs out of petrol: pilot lands safely'. What has been the safety achievement in the United States since deregulation? It turns out that taking a bath in a bathtub is more hazardous to one's health in the United States than is flying. Every year some 1,000 people in the United States die as a result of accidents in bathtubs. On average, some 500 people in the United States die because of air disasters. In the United States, there have been other happenings besides deregulation. President Ronald Reagan sacked all the controllers. That led to an influx of controllers, many of whom were unskilled and untrained, and they were forced into positions far above their degree of skill. That caused a spate of near misses and several accidents. Whatever is happening in the United States, it cannot be said that flying is now unsafe because of deregulation. Flying is very safe in Australia, and well it should be. Australia has very low aircraft density compared with that which exists in parts of Europe, Japan and the United States. Australia has very good weather. As Senator MacGibbon pointed out, meteorological services have been cut back, but still we are blessed with very good weather compared with that in North America and Europe when, in the winter, there is freezing rain, ice on runways and snow drifts alongside runways. We certainly have far better weather than that and our safety record shows it. The Department of Transport and Communications has often used safety as a means of extracting more money and better bureaucratic situations for its operation. I think that we have to face safety squarely. People do not like to talk about aircraft safety or any kind of safety, but we have to face the fact that people who fly can be fatally injured. There is a risk. The only way to avoid the risk is to stop flying. For years, the Department seems to have had this attitude. It was a standing joke in the industry that the only time the Department would be absolutely satisfied would be when all aeroplanes were stored permanently in hangars and the doors spot-welded shut. Now we have seen a slight cleaning out of the attitudes of the Department. It has been subjected to the scrutiny of the Dick Smith inquiry. Some 700 to 800 people made submissions to that inquiry about inadequacies in the Department which were causing unsafe practices in themselves. One of the things that have always concerned me in Australia is the size of the control zones-the amount of area that the Department actually sets aside in primary control areas for operation in times of instrument conditions. In Hobart, the control zone is 50 miles across, which means that any aircraft transiting that zone has to be in radio contact with the tower. It has to have previous approval to cross that zone and has to be under direct control at all times. The control zone is so large that it actually extends to the opposite sides of mountain ranges so an aircraft can be flying legally in the control zone but it cannot actually contact the tower. That is absurd. In the United States, control zones are 10 miles across; they are a radius of five miles around an airport-that is, five miles radius and 10 miles diameter. In the United States, they will take a massive amount of air space-anything above 700 feet in times of instrument flying conditions. But in times of visual flight conditions, the control zones are only 10 miles across, in addition to which there are many visual flight rules (VFR) corridors across the tops of airports which require no control at all. There is a VFR corridor which goes right over the top of Los Angeles International Airport. One needs no clearance at all to transit this zone. Senator MacGibbon —I think it was closed last month. Senator SANDERS —It certainly existed for a number of years and I used it quite safely for a number of years. If it has been closed it might be because the whole of Los Angeles basin has a density of traffic which is probably many times greater than anything in Australia. Our Department of Aviation bureaucrats have always felt that the only way to maintain safety is closely to regulate air traffic. But in many instances this actually has an unsafe result. Many pilots in Australia are afraid to enter a control zone. Often they are taught that unless they use the correct language and follow the correct procedures they will in fact be penalised for entering a control zone. Since the control zones for our city airports are in basins surrounded by mountains, frequently when pilots get into trouble in bad weather, instead of going into the basin, the control zone area, they will attempt to fly around the outside and they will strike a mountain top and kill all the occupants of the aircraft. There are a number of ways in which we can increase safety without merely locking all the aircraft in hangars. Another difficulty with the safe operation of aircraft and the Department of Aviation is the very strict adherence to regulations by Department of Aviation personnel. In my home State of Tasmania a pilot took off from Strahan airport. He got lost and he asked for assistance. It is a well-known mistake in Australia to ask for assistance, because if a pilot does, immediately forms are filed against him and he is asked to explain. The pilot found his way back to Strahan and landed safely. After waiting several days for the weather to clear he flew to Hobart. He was instructed by the tower that the people there wished to talk to him on the telephone when he landed. He did and they pulled his licence. Why did they pull his licence? Because he admitted that he was lost. They kept his licence until he was subject to more training. That is not the way to encourage people to adopt safe procedures. One does not penalise them for admitting that they need help or declaring emergencies. I think Senator MacGibbon will agree that one has to think twice before one declares an emergency in Australia. Senator MacGibbon —You don't. Senator SANDERS —Paperwork ensues from a declared emergency. One has to file a report. The tower files a report. The fire brigade files a report and there is a full investigation. Senator MacGibbon —There is an intimidatory atmosphere from the Department. Senator SANDERS —Yes. The Department must look at this. As Senator MacGibbon has pointed out, safety cannot be legislated; it must be part of a working partnership with all in the aviation industry. I turn to the two-airline system. The two-airline system is based on a gross misconception about the aviation industry. The misconception is that one has to force airlines to fly. The reality is that if there are two groups of people anywhere on earth and two airstrips near these two groups of people somebody, somewhere will start an airline to serve these people, to fly them from one place to another. It is simply not true that the two-airline system is necessary for the movement of people and freight around Australia. If the two-airline system did not exist we would still have just as many airline seats between all population centres in the country. The two-airline system ensures high profits for the existing two airlines. It maintains a monopoly in what should be a free market, free enterprise industry. The two-airline system carries great penalties for the aviation industry and consumers in Australia. For the aviation industry, the two-airline system causes considerable expense in the following manner. Since Australia has such a high level of cost recovery directly attributable to the aviation industry, the users of the facilities offered by the Government are penalised financially. The two-airline system costs the industry money because the airlines operate on very close parallel scheduling. This means that the air traffic control system has to have all the sophistication of a system handling high-density traffic. Given the parallel scheduling, there are always two jet aircraft within a few minutes of each other in the airspace. In order to maintain separation and keep the safety standards, we are forced to have a system which is capable of separating great numbers of aircraft at five-minute intervals continuously. Since there are only two aircraft at five-minute intervals and the airspace is vacant at other times, the system is very uneconomic. The other factor is the high cost of terminal buildings. With both airlines landing and taking off at similar times, the terminal facilities in places such as Hobart and Launceston have to be twice as big as they would otherwise be. For the consumer there is a dual disadvantage. One is the fact that the airlines do not swallow the cost of the cost recovery program but pass it along to the passengers. This means that they have to pay more in air fares than they otherwise would. The other disadvantage is that the passengers are forced to fly when the airlines want to fly. The airlines do not fly when the passengers necessarily want to fly. The two airlines find it most economical to load up a large jet once or twice a day, which means that the consumers-the airline passengers-have to wait hours between flights. It would be far more sensible to eliminate parallel scheduling and the two-airline system which fosters it. Deregulation, as has occurred in the United States, is treated with loathing by aviation authorities and the two airlines in Australia. The two airlines loathe it because they have a wonderful monopoly going. They simply do not have to worry about competition. No business likes to worry about competition. Aviation officials, being bureaucrats, basically do not like change. They have learned to operate the system and they feel that anything else would be just too difficult for them to understand. In the United States, when deregulation came in a lot of people predicted doom and gloom for the industry and said that it would be the end of aviation as we know it in America. In fact the dire predictions did not come true. Certainly there was a shake-out in the industry. A number of firms did go to the wall. Hundreds of firms started: the efficient survived, the inefficient did not. Aviation is still alive and well. New airlines have sprung up to take the place of inefficient airlines which went out of business. There has been a large turnover, a shake-out in the industry, but the consumer has benefited. To my knowledge there is no community of any size in America which is not served by aircraft. The aircraft may not be as big as previously but I do not believe that a big aircraft is necessarily better than a smaller one. In fact, I would much rather fly on a service which would supply me with a 10-passenger plane every hour at my convenience than an airliner which flies only once a day with 120 passengers on board. The doom and gloom merchants who predicted higher air fares were proven incorrect in the United States. Fares in the United States have dropped tremendously since deregulation. At other times fares in the United States have been cited here. I will list just a few. Admittedly these are special fares but some of them are as follows: $29 from Newark, New Jersey, to Montreal; $99 from Newark to Brussels; $49 from Newark to Atlanta; and $69 from Newark to Dallas. It is interesting that the fare on a bus on the same routes actually costs more than the air fare. New markets are being developed. Consumers and the industry will both benefit from deregulation in Australia. There is no evidence to suggest that safety would suffer. There is no rational reason that flying would be any less safe than it is now. The same high standards for aircraft and air crew would apply whether deregulation took place or not. The two airlines, once they got over the original shock of change, could find it quite stimulating to be in a competitive situation. There would be a lot of moaning and groaning on the part of Ansett Airlines of Australia and Australian Airlines but others such as Bob Ansett and the smaller charter firms would be quite overjoyed with deregulation. Cheaper fares would prompt a number of people to fly who are now unable to afford air fares, thus opening up a new market. Roughly 92 per cent of Australians do not fly, 8 per cent do and only 2 or 3 per cent fly with any frequency. There is a tremendous market to be tapped and it will be tapped if fares are reduced to the point where people can afford them. We must have regulations protecting the industry from the rip-off artists: we do not want the entire industry to be a monopoly controlled by Rupert Murdoch or Sir Peter Abeles. We must have firm anti-trust legislation or some mechanism to keep the entire airline industry from falling into the hands of a small group of people. On the issue of privatisation, frankly as an American coming to Australia I was at first puzzled by the nationalised system of airlines and trains, but I have since grown accustomed to this concept and I find it really quite worth while. I do not think that Australian Airlines should be sold off and privatised. I think that the airline can compete and should be allowed to compete. It should be given the capital to expand to allow it to compete successfully in a deregulated market. There is another aspect to deregulation, that is, the use of the many empty airline seats in Qantas aircraft which regularly cross Australia. Qantas flies between Australian cities each week with some 1,000 vacant seats which could be used for flying passengers at reduced rates. De- regulation should also allow companies such as Air New Zealand Ltd into the market. It is an irony that Ansett Airlines is allowed to operate in New Zealand, yet Air New Zealand is not allowed to operate in Australia. The Minister for Transport and Communications, Senator Gareth Evans, stated recently that Air New Zealand would not be able to operate domestic services in Australia. If we are to have true competition, we must change this policy and allow Air New Zealand, as well as any other airline that can furnish a service to the consumers, into the market. In closing, I would like to observe that deregulation will at last allow the aviation industry to attain its proper place in Australia's transportation system. It is about time. The Australian Democrats support this move. Senator SCHACHT(South Australia)(4.03) —I rise to support the Government's motion to terminate the two-airline agreement. I believe that this is a long overdue development. I think that the Government is to be congratulated for taking this decision. However, I must say that I am a little bemused by Senator Messner's amendment to the motion moved by the Minister for Transport and Communications (Senator Gareth Evans). I point out that, of the last 38 years of government in Australia, the Liberal-National Party coalition was in government for 30 years. It had many opportunities to end the two-airline agreement but never chose that option. In the 1950s and 1960s it was quite clear to many people in Australia that the two-airline agreement was being used to stifle the then Trans Australia Airlines (TAA) operation to the advantage of Australian National Airways (ANA) and later Ansett Airlines of Australia. For example, in the late 1950s TAA wanted to go straight into the use of jets. At that stage ANA could not afford that leap forward, so it convinced the Government that there ought to be a purchase of turbo-jets. From the late 1950s until about 1963 we had both airlines operating the same sort of aircraft. That was a delay that disadvantaged TAA. If TAA had been allowed to purchase jets in the late 1950s, as it wanted to, it would have been much more competitive than Ansett and been able to provide a quicker and better service. Because of the arrangement of the two-airline system in the 1950s and the desire of the Menzies coalition Government to protect Ansett, a commercially difficult decision was forced on TAA. I refer now to paragraph (b) of Senator Messner's amendment, which relates to competition and the situation in regard to the two-airline agreement during the late 1950s and 1960s. At that time Ansett ANA was able to buy up many of the regional airline operators in Australia. In my State of South Australia it bought up Airlines of South Australia, which became a fully fledged subsidiary of that company. The same thing occurred in Western Australia when, I think, MacRobertson Miller Airlines was bought up. Ansett ANA also bought up one of the regional airlines in New South Wales. Therefore, when the issue of competition was raised during the 1960s the coalition government of the day did nothing to stop Ansett buying up regional airlines under the auspices of the two-airline agreement. Therefore, I must say that paragraph (b) of Senator Messner's amendment is a little late and is a little bemusing to us, knowing the track record of the coalition. As I said, the issue of the two-airline agreement comes back to the fact that the coalition, in government for 30 out of 38 years, did not take the opportunity offered. Now that the Federal Labor Government has taken the decision, there is in the Opposition almost an attitude of crying over spilt milk. There is a sense of regret and chagrin that this action has been taken by the Labor Government and that the coalition parties have again been forced to admit that this is an appropriate way in which to go in the development of the aviation industry in Australia. I think that the Senate should reject out of hand Senator Messner's amendment and pass Senator Evans's motion concerning notice of termination of the two-airline agreement. Senator Messner's amendment is at the very least gratuitous. Debate in the community about the two-airline agreement and the future of the civil aviation industry revolves around two items: deregulation and privatisation. I do not hold with the view that deregulation in any way is necessarily connected to privatisation, or vice versa. I believe that deregulation is a separate issue, and it is one that I fully support in the way that it has been put forward by the Government. Deregulation is the process of removing regulations which unnecessarily restrict the operations of an organisation. Privatisation is the transfer of public assets to the private sector. The motion deals purely with deregulation. The Minister's statement outlines the form of an inquiry to be undertaken on the future of Australian Airlines. I will come back to that in a moment. However, in no circumstances is that a forerunner to a privatisation program. It is to deal with the most effective way for Australian Airlines to operate in this community. Like Senator Sanders, formerly an American citizen but now an Australian citizen, I recently had an opportunity to experience the American aviation system. With Senator Puplick and Senator Bishop I visited America in January this year as part of a delegation invited by the American Government. In 2 1/2 weeks of flying around America we had the opportunity to see, one could say, the best and the worst of the deregulated American civil aviation industry. I would have to say that a number of aspects of the deregulated American civil aviation industry can be supported. There is no doubt that, as far as the cost of air fares is concerned, many more people on lower incomes in America can afford to fly compared to the number in Australia who can afford to do so. The air fares that Senator Sanders read out are typical of some of those available to people. When Kenneth Galbraith was visiting Australia recently he was asked specifically whether he was in favour of deregulation. He said that on a case to case basis he supported some deregulations and opposed others but that on balance he supported deregulation of the aviation industry in America because it meant that a greater number of ordinary people had access to flying than had the opportunity before deregulation took place. He said that that was to be supported. That was a comment from one of the most liberal and Keynesian economists in the world. It is interesting to note that Galbraith supported deregulation because it gave people in the community a more equitable chance to fly. I do not know whether the figures that Senator Sanders quoted are correct, but I think they are pretty close to it. In Australia only about 8 per cent of people regularly fly and maybe only 2 or 3 per cent fly consistently. Probably senators and members in the other place are the most regular users of air transport in Australia. Therefore, we all have a vested interest in air transport. We are part of the lucky 2 or 3 per cent who use air transport as part of our parliamentary duties. The aspect of deregulation in America which I think has to be queried and looked at very carefully in the Australian context relates to the level of service that is provided. I do not want to give a Cook's tour about what happened to me in the 2 1/2 weeks I was in America but I must say that, on a couple of occasions, trying to catch an American domestic jet was almost equivalent to catching the subway in New York in terms of services. The only things that were missing were graffiti on the inside walls of the plane and the chance of being mugged. I understand that no one travelling on a jet aircraft has been mugged, although I suspect that that sort of thing may not be too far away having regard to the level of servicing and staffing of the civil aviation industry in America. Passengers on Australian aircraft have reasonable expectations in good weather of being able to make a connecting flight within 10 or 15 minutes of arrival at an airport. In good weather in America one runs a great risk, almost a certain risk, of missing one's connection. The timetables that apply when one books one's flight really might as well have been drawn out of a hat. When I booked my ticket in Washington I was told that to catch a plane at 8.45 a.m. I should be at the airport just after 7 a.m. I thought that that was a pretty extraordinary allowance to make. However, when I got to the airport just after 7 a.m., I soon found out why. There was a queue about 100 yards long of passengers waiting to check in baggage and be given seat allocation. I waited in the queue for 45 minutes to get my ticket, to be allocated a seat and to hand in my luggage. Ten minutes after I had done that, it was announced: `Will all those who are flying Eastern Air Lines please go to desk number so and so. Your flight now has been cancelled. You have been transferred to United Air Lines to go via another destination'. That plane, of course, was an hour and a half late taking off. I was supposed to go to Denver, Colorado, but my luggage ended up in Boise, Idaho. As I say, I do not want to give a Cook's tour of what happened to me, but that is an example of what those of us in the delegation discovered about the level of service provided in America under that country's deregulated system. I notice that recently in America the airlines have been asking the American Congress to amend the civil aviation legislation so as to stop people suing airlines for loss of luggage, for loss of time and for timetables not being adhered to. By way of civil actions, which are quite popular in America, the public was starting to sue airlines for not getting them to business appointments on time, for losing luggage and so on. Many members of juries, who had also experienced similar problems, were more than willing to award substantial payments to the people who were suing. These airlines, which are great supporters of deregulation, have tried to get out of this by asking the Government to intervene to stop the public from suing them. I find that an ironical commentary on people who so strongly support deregulation. The one thing they do not want to be responsible for is a commitment to their passengers to deliver them on time. One area of the American system that has been commented on, and in respect of which I think there is less concern, is air safety. Certainly many of us in Australia and elsewhere had some apprehensions about flying to America after Ronald Reagan sacked 11,000 air traffic controllers in 1981-82. Senator MacGibbon —And in the union movement. Senator SCHACHT —Yes. It is interesting that in 1979-80 the air traffic controllers' union was one of only two unions that endorsed Ronald Reagan for election as the President of America. The other union was, of course, the Teamsters Union. Most of us who are involved in the broad labour movement in this country do not consider the Teamsters Union to be a trade union; it is more like a vehicle for organised crime. But, as I said, the air traffic controllers supported Ronald Reagan's election. They openly endorsed him and made contributions to his campaign. They thought that they were going to get from him a commitment in regard to an increase in salaries. But 12 months later they paid the penalty by all being sacked. We had many concerns about safety in the American airline industry but the figures show that, since deregulation, safety in terms of the number of passengers flown has improved. I will cite the figures. Measured in terms of passenger fatalities per billion revenue passenger miles, passenger accidents in the United States actually fell from an average of 0.86 per billion during 1969-78, pre-deregulation, to an average of 0.32 per billion during 1979-85, post-deregulation. Although I do not suggest in any way that the American system of air safety and air traffic control is one that we ought to emulate in this country, it has to be admitted that there is evidence that safety is not the problem some people in Australia say that it is. I now turn to the question of industrial relations in America. When the airlines were deregulated, many employees were sacked as a result of mergers. Many took or were forced to take reductions in pay. However, over the last couple of years evidence has emerged that by and large employees in the industry are earning and enjoying pro rata salaries and conditions to employees working in other industries in America. So I think the American experience in respect of deregulation ought to be looked at very closely. But when we read the statement made by the Minister for Transport and Communications in support of the termination of the two-airline agreement, we find that we are not going down the same road as the Americans and, in my view, we ought to be grateful that we are not. We should look at the American experience and take the best of what happened there. One matter I should raise is the cost of air fares. I come from South Australia, which is very dependent upon access to air transport from Adelaide to the eastern States and to Western Australia. We do not have access to the range of international flights that the eastern States or even Western Australia have. We have a limited number of international flights but many people in South Australia still have to fly to Melbourne or Sydney to connect with international flights. Therefore, we in South Australia are very sensitive about the cost of air fares. It is proposed that the Independent Air Fares Committee be ended and that power be exercised under the Trade Practices Act and by the Prices Surveillance Authority. I would be concerned to ensure that after deregulation the Prices Surveillance Authority would act with considerable determination to ensure that air fares in this country are kept at a reasonable level. Many years ago railway fares were the main concern to the public of Australia and in other Western countries because rail was the major form of passenger transport. Now, the cost of air fares in both our country and the rest of the world is critical because aviation is the means by which most people choose to move around their own country or the international sphere. Therefore, the Prices Surveillance Authority in particular has to be firm and direct in discussing and negotiating the cost of air fares with the airlines. It will be what are called the BAPH States, the outlying States, which will suffer greatly in the deregulated atmosphere if the air fare prices are allowed to rise substantially. The smaller States will be greatly disadvantaged. Deregulation and competition may substantially reduce prices on the Sydney, Melbourne, Brisbane, Canberra air routes, but the outlying States will have a problem. I must expand that statement to say that our continent is nearly the same size as the USA but we have only 17 million people. The United States, which is only slightly larger, has about 250 million people. The density of population to provide customers for the air transport system is quite different. Therefore, the deregulation of our industry has to take into account that we have a vast continent with a sparse population. For the regional areas of Australia, even outside the major capital cities of the smaller States, how we provide air services in the deregulated economy and the deregulated system will be critical. I am sure that from time to time members of parliament of all political persuasions will raise questions about the provision of efficient, cheap air services to regional areas of Australia. However successful deregulation is in the major areas, I suspect that there will be a number of queries that we will have to deal with. These may well lead one day to the Parliament and the Government having to make a decision to support a subsidy to the regional areas of Australia so that reasonable air services can be provided to those communities. The final matter to which I wish to refer is the question of so-called privatisation. When Australian Airlines was established by the Chifley Government, it was for a very specific reason. At that stage it looked as though there could be a monopoly of the Australian airline services by the then Australian National Airways-ANA. One of the major reasons that the Chifley Government established Australian Airlines, as it is now known, was to provide competition by ensuring that two airlines would be operating in Australia. I have already mentioned that I believe that, during the 23 years of the coalition Government, the two-airline system was often perverted to support Ansett Airlines of Australia unnecessarily. Although the situation of civil aviation in Australia now is quite different from 1949, I still believe that Australian Airlines has every justification to continue to be an airline service in which the Australian people, through the Government, maintain a majority role. Because of the importance of civil aviation and air transport to the development of our country, a very important social priority can be justified and put forward for this airline to stay substantially in public ownership. I agree that there will obviously be some problems for Australian Airlines in raising the finance which it needs to equip itself, whether deregulated or not, to meet the challenge of the 1990s. The Federal Government, in announcing general deregulation, has already outlined some measures to improve the commercial operation of Australian Airlines. These include the incorporation and removal of day to day controls, which I think will obviously be important to give the airline an immediate sense that it is in charge of its own affairs. In regard to the removal of the need for the Minister to sign all but the major and significant expenditure decisions, Senator Evans referred, at a meeting this week which I attended, to some of the items for which he has to sign and approve-matters which are really day to day management decisions of the airline. Irrespective of the argument about whether privatisation should occur, these things are unnecessarily bureaucratic and affect the efficiency of the airline. Those sorts of changes in Australian Airlines will improve its efficiency and its competitiveness. The most important matter that Senator Evans has announced is the establishment of an advisory group to examine the remaining questions about how Australian Airlines can optimise its managerial effectiveness in the post-deregulated environment. I think it would be very difficult for people to complain about the expertise and background of members of the advisory group. Senator Alston —What has Peter Redlich got going for him? Senator SCHACHT —Senator Alston may not be aware that Peter Redlich is a senior legal person from Victoria who-whether Senator Alston likes it or not; I openly admit it-is a former President of the Victorian Branch of the Australian Labor Party. Senator Alston —That is all he has got going for him. Senator SCHACHT —For 23 years, and a subsequent seven years, Senator Alston's Party was in government. Some of the appointments that were made in that time-- Senator Alston —You started out saying that they were well qualified. I am asking for the qualifications. Senator SCHACHT —I openly say that Peter Redlich, with his legal experience as well as his political experience, is well qualified to serve on the committee. I make no bones about it. I do not presume that Senator Alston would say that Ted Harris, as Chairman of Ampol Ltd and also of the Australian Airlines Board, does not have some experience and knowledge of transport in Australia. I do not suppose that he would object to Peter Wilenski, the head of the Department, who has a long experience of public-- Senator Alston —Harris is hardly objective as the incoming Chairman of the Board. Senator SCHACHT —We are not looking at destroying Australian Airlines by setting up this committee, which is maybe what Senator Alston wants to do. We are trying to put together a committee with expertise and background both in public administration and in private enterprise administration. Senator Alston would obviously strongly object to Bill Kelty being a member of the inquiry. Senator Alston —He is on for a different reason. Senator SCHACHT —He is there for the very good reason that several thousand people employed by Australian Airlines all happen to be members of appropriate trade unions. Bill Kelty is a representative of trade unions in Australia. Senator Alston —He flies around with lots of government boards and authorities. Senator SCHACHT —It must irk Senator Alston that this Government will take the opportunity to appoint people such as Bill Kelty. We accept the fact that trade unions have a legitimate and effective part to play in the Australian community. When Opposition senators were in government they tried to ignore trade unions and cut them out of playing any role at all. That is the way in which they want to operate. They just want to appoint business people to boards, inquiries and so on, and not give the trade union movement any representation. We give both sides representation, as well as the public administration. The terms of reference for the advisory group are as follows: . . . to advise the Government, against the possibility of either the removal or retention of the board-ranging controls I have already referred to, on: (a) the extent of Australian Airline's capital requirements, and options for meeting these requirements; and (b) means of enhancing the airline's management flexibility and effectiveness, and the efficiency of its operating structures. The advisory group will generate options and hard data across a range of possibilities for the future. I believe that the way in which the Government has gone about handling the difficulties which Australian Airlines faces with its future financial requirements is the correct procedure. It is a balanced way. It will enable the Government and the community to assess, in the end, the information as to the best way in which Australian Airlines should proceed in the future. I would be extremely surprised if the recommendations of that committee are not acceptable to the Australian community. I would also be very surprised if there is not a retention for Australian Airlines to maintain a major shareholding in the public interest. I know some honourable senators opposite are not overly interested in preserving the public interest. When the coalition was in government in the 1950s and 1960s it used the two-airline agreement to act not in the public interest, but in the interests of Ansett in Australia. Senator Boswell —That is wrong. Senator SCHACHT —I gave examples earlier in my remarks about how the two-airline agreement was used in the 1950s and 1960s to advantage Reg Ansett. The ultimate advantage Reg Ansett got was a Bill put into the Parliament of Victoria in 1971 by Sir Henry Bolte to stop another group of capitalists taking him over; namely, Sir Peter Abeles through Thomas Nationwide Transport Ltd. Sir Rupert Murdoch came in later. This Government will protect the community and the public interest. Our record is immeasurably better than the record of the previous coalition government over 30-odd years of the last 38. I commend Senator Evans's motion. I certainly ask the Senate to reject the amendment moved by Senator Messner. Senator ALSTON(Victoria)(4.31) —I welcome the opportunity to speak on the airlines agreement termination statement and the motion moved by the Minister for Transport and Communications (Senator Gareth Evans) recently. I think it is worth saying that the Government has finally grasped one part of the nettle very gingerly. It has had 4 1/2 years in which to ruminate on the desirability of freeing up the airline industry. What has ultimately emerged is little more than a damp squib. Perhaps whilst Senator Schacht is still in the chamber it might be worth my while repeating some of the remarks I made on the last occasion in relation to the composition of the committee of review. It is quite clear to all those who take an intelligent interest in the matter that this is no ordinary committee; this is a committee of political operators and it is a deliberate part of the Government's strategy to soften up the trade union movement. One can perfectly well understand why it has been necessary for the Government to engage in verbal subterfuge to date and undoubtedly, if it were serious about inquiring into the capital base of the organisation and determining means of efficiency, then it would have taken notice of a number of well qualified experts who have already spoken on the matter. The people who would be best placed to know would be Mr Ted Harris and Mr Neil Smith, who is standing down as Chairman of Australian Airlines. Both people are already on record as saying that what is urgently needed is a significant capital injection to lift Australian Airlines not only off the ropes, but off the canvas in order to enable it to compete. It is perfectly clear to anyone who has had even a passing interest in the industry that Australian Airlines is being taken to the cleaners and is simply not able to compete against Ansett Airlines of Australia. But what we have had here is, in effect, a holding mechanism put into place which will further disadvantage Australian Airlines by the mere passage of time. The Government hopes that this will give it sufficient breathing space prior to the next Australian Labor Party national conference to enable this committee of so-called political wise men to somehow persuade their broader union colleagues that there are some real necessities, if not political advantages, in opening up the structure of Australian Airlines. There is simply no logical reason why it is necessary to corporatise unless one proposes at a later point to transfer at least part of that corporate structure to the private sector. If one looks at the demands that will be placed on the Government for capital injection of orders of magnitude that simply are not available, it is clear that the Government will desperately need to find a substantial sum of money in accordance with the already received recommendations of both Mr Harris and Mr Smith. I just want to deal with a couple of other competing statutory authorities to demonstrate the level of funding that will be required if they are all to be kept in the public sector. It is very opportune that in answer to a question today Senator Evans spoke in relation to Qantas Airways Ltd I do not purport to quote him directly, but I did take some notes. He said that Qantas will have a major funding requirement of the order of $4 billion over five years. There will be a necessary capital injection, apart from internally generated funding, of some $400m which will be needed probably around 1989. He said it has a formidable capitalisation problem and, therefore, Qantas has, quite properly, engaged in forward planning in order to determine the appropriate mix-presumably he means debt and equity. It is also desirable that the Government should consider the appropriate structure of Qantas for the future. The Government in this statement that we are debating at present has ruled out a merger between Qantas and Australian Airlines. Again, it is regrettable, I suppose, that that sort of decision should have been made prior to this so-called committee of experts. If we are serious about its charter being to investigate means of broadening the capital base, then that is one possible alternative that deserves to be explored in some detail instead of being dismissed at the outset. Again, it simply lends force to the argument that this committee is not there to make any sensible assessment of the needs of Australian Airlines, it is simply there to soften up the union movement to persuade Mr Kelty that there are some real virtues. I noticed, incidentally, I think in today's Press, that Mr Kelty came out and defended the private sector and said that that was where real growth for the future would lie. It is clear that Mr Kelty is a highly intelligent union official who does have a very acute understanding of the needs of additional funding for public sector organisations. He also realises the very real and expanding role that needs to be played by the private sector. But because of those in the trade union movement who are not quite as enlightened, it is obviously going to take time for him to get the message across. We will find that there will be resistance from various sections of the Labor Party and the union movement to concepts of privatisation. That is not a simple proposition of selling off a public sector enterprise. In various ways capital shares can be made available. The Bank of New Zealand recently had 13 per cent of its capital structure made available to the private sector. I note that New Zealand steel is up for grabs at present. In many ways the Prime Minister (Mr Hawke) is attracted to the New Zealand path and was led towards prosperity by Roger Douglas. No doubt, he has absorbed a number of the lessons. One lesson is political deceit because time and again the New Zealand Government led the public to believe that it was only a limited exercise or that it did not contemplate any form of privatisation, but continued to move down that path. That is what we are seeing with the present Government. It is terrified to use the word privatisation. It is prepared to contemplate sales of assets, but Senator Evans has gone out of his way to make it very clear that privatisation is not on the agenda. No doubt Senator Schacht was greatly relieved to be able to draw a very firm distinction between deregulation and privatisation and to somehow be satisfied, at least to date, that the Government is only in the business of deregulation. I can assure him that in due course we will see much more than deregulation not just in the area of the airlines in order to accommodate the acute capital funding problem that I have referred to in relation to Qantas, but the Commonwealth Bank of Australia, for instance, has recently received a report prepared by a consultant on behalf of its own in-house trade union which indicates that the Commonwealth Bank will need a capital injection of the order $300m or $500m if it is to remain viable and to compete with all the other sharks in the field. For example, Aussat is in desperate need of additional capitalisation. The sums of money there are very substantial. Aussat, which currently is operating at a loss, is highly geared and will need to raise an additional $600m in the very near future to pay for the second generation of satellites, for which tenders will shortly be called. Although Telecom Australia is 71 per cent internally funded, it will clearly need more and more capital in order not only to maintain high standards of equipment within Australia but also, if it is to get into the business of exports, to reach the levels of research, development and innovation that are taken for granted in telecommunications organisations in Europe. It will need massive injections of capital. If we add up all those sorts of figures, we are talking in excess of $2 billion capital. It is clear that, although against that aggregate sum the $200m-odd that Australian Airlines needs is not as large as that required by other statutory authorities, it is money that the Government would claim that it does not have and money that the Government does not need to raise. Apart from the political odium attached to, and the consequences that flow to, the public sector borrowing requirement from the additional capital raised, the fact is that any of the statutory authorities will be severely constrained by the limitations which remain in place, not just for those enterprises that have not yet been dealt with. We are still awaiting a comprehensive statement on government business trading enterprises. It is deeply disappointing that the Minister did not take the opportunity to set Australian Airlines free. It has been said that there has been removal of day to day controls and that there will be removal of broader controls, but this is not so. It is not accurate to talk in terms of deregulation of Australian Airlines and putting it on a basis comparable to that of Ansett and treating it as though it is in the private sector although it is protected because of its official status. The reality is that it will still need to have ministerial approval for loan raising and decisions of significant economic magnitude. In the last financial year Telecom needed to get the approval of the Minister 82 times. I do not know how many times Australian Airlines has asked for, let alone had to receive, Government approval. It certainly got a capital injection in 1983. However, when such constraints are in place, it is often futile to make an official approach because one is made well aware in advance that the Minister will not entertain the request. It is not even valid to look at the number of occasions on which a request has been made. As the Minister made a point of saying in his statement, there has been no removal of requirement for Loan Council consideration. That is a significant detriment to Australian Airlines. The Minister also said that the Government proposes to take further steps in relation to broader controls and that these controls involve borrowings by enterprises being subject to Loan Council consideration, remuneration of board members and senior executives being determined by the Remuneration Tribunal, industrial relations arrangements being subject to Government oversight and co-ordination and certain restrictions being placed on the ability of business enterprise to adopt commercial superannuation arrangements. What all that means is that Australian Airlines is still hamstrung. It has one and a half hands tied behind its back because it still has to comply with all the award requirements and all the generous workers' compensation arrangements that apply in the public sector, the extraordinarily generous superannuation provisions that operate and all those industrial relations responses that can be second guessed by the relevant Minister. It is simply inaccurate to say that somehow, as a result of this decision, Australia Airlines will be freed up and enabled to compete in the way that Ansett Airlines does. Without dwelling on the point, I make it clear that there are those in the community, including senatorial aspirants such as Mr Halfpenny, who say that this is all part of Abelising the industry and is all designed simply to advantage Ansett. Whether or not that is the purpose of the motivation, one is justified in saying that may well be the end result. Recently, we have seen Australian Airlines going backwards. It has had effectively to renege on a $600m airbus purchase which it had been contractually bound to buy. It was only as a result of Mr James Strong traipsing around Europe for some weeks that eventually it was given the ability to defer the purchase as long as it maintained its deposit and accepted a continuing obligation to purchase those airbuses within the next 10 years. The bottom line is that Australian Airlines is broke, unable to go ahead with that purchase and therefore unable to upgrade its fleet. At the same time, Ansett is in the process of announcing that it is spending $1 billion on purchases of new air fleet equipment. That creates a massive imbalance. If we look at what has happened in recent times to the structures of these two enterprises, we find that Australian Airlines is going nowhere while Ansett is going everywhere. Ansett has bought out not only East-West Airlines. That purchase is subject to the Trade Practices Commission, but I am not holding my breath for a favourable outcome in terms of competition or consumer benefits. It has taken over Lloyd aviation, which was hitherto a rapidly expanding airline. It controls Kendall Airlines, which was quite an aggressive small charter operator. It has taken over Aeropelican Air Services, which was another charter operator, between Newcastle and Sydney. As was pointed out earlier, it was only in the last few years that we saw the demise of South Australian Airlines and MacRobertson Miller Airlines-all gobbled up by the major predator. Senator Maguire —South Australian Airlines was an Ansett subsidiary which collapsed. Get your facts right. Senator ALSTON —The end result is that there is no small charter operator in South Australia, and Ansett once again dominates the regional airlines and is in the business of gobbling up all those who might have posed a potential threat to it. Against that background, what one would think would be needed, if it were desirable to inject new competition, would be quickly to transfer Australian Airlines to the private sector to enable it to compete on equal terms, to rid it of all this red tape and industrial relations nonsense that hamstrings it, and to allow it to have a decent capital injection and to go to the capital markets, not having to worry about the Loan Council or the public sector borrowing requirement to enable it to get on with the game. Of course, the trade practices monopoly provisions would operate and we would hope-Senator Evans has certainly expressed this view-that there would be no prospect of Ansett being able to take it over. We may find that it is taken over by others. Although it might start off in the hands of its employees and others, it might quickly find that it has become part of a larger organisation. I do not think that that is anything that we should deplore. It is no reason why we should not closely monitor and, if necessary, regulate the outcome. To say that it is not desirable to ensure that Australian Airlines is able to compete on an equal footing is playing into the hands of Ansett Airlines. A good editorial appeared in the Australian Financial Review on Thursday, 8 October last. What that editorial had to say about Senator Evans's wimp of a statement was this: . . . its timid approach to the idea of more immediate and draconian deregulation is almost certainly influenced by the very real tide of traditional Labor Party opinion opposing anything that would weaken Government intervention in the industry. It was a brave new world when Mr Keating was prepared to deregulate the banking sector to float the dollar and allow for real and genuine competition, but now, four and a half years on, that burst of deregulatory fever has disappeared and we are seeing an ossified government. Perhaps that is inevitable after 4 1/2 years, but it is nonetheless regrettable. New Zealand was prepared to allow Ansett to shake up its domestic airline industry, but we are not prepared to allow little New Zealand Airlines to come here and return the favour. There is nothing wrong with allowing the entrance of foreign airlines. Indeed, Scandinavian Airlines Systems, SAS, exercises domestic and international rights for Sweden, Denmark and Norway. That has been a very healthy development. It benefits not only the owners of the airline-in that instance, the Swedish Government-but also consumers because, when there is very real competition in a series of countries, consumers are the beneficiaries. That is why I think it is deeply disappointing that the Australian Government was not prepared to allow New Zealand Airlines to enter Australia's airline industry. It could have allowed in a number of other carriers, but again there are very severe restrictions-I think the limit is 15 per cent-on the involvement of foreign carriers in Australia's airline industry, and the Foreign Investment Review Board would no doubt keep a very watchful eye on the activities of any foreign entrants to the market. So there will be very little competition. Senator Evans does not pretend for a moment that there will be anything more than an incremental change. The most that he could talk about was niche carriers entering the industry. That is all very well on some trunk lines and intercapital routes, but there is absolutely no reason why we should not have competition right across the board. There are a number of other ways in which the statement is disappointing. A major disappointment is the failure to envisage a bigger and more competitive role for Qantas in both overseas and domestic airline services. We may well, as Senator Evans intimated today, be going to have a comprehensive Government review of the operations of Qantas. Given its capital requirements, perhaps that is long overdue. That is another issue that could have been addressed in the context of Australian Airlines, but all we had was the statement that any merger would be ruled out. This policy will not do much more than enable Australian Airlines to retain a very real and significant competitive advantage. I think that is regrettable. In large measure it is because the Government is still hide-bound by its opposition to privatisation and by its fear of hastening too fast for the trade union movement. The rationale for public ownership of a domestic airline has long since disappeared. We have to go back to 1945 and the unsuccessful attempt by the then Labor Government to nationalise the provision of air services to detect the origins of what was then Trans Australia Airlines. It was a result of a political compromise when the Menzies Government came to power that the two airlines agreement came into existence. If what we are talking about in current economic circumstances is generating a more effective and efficient national economy, both public and private sectors have to play their part. There is no reason at all why a domestic carrier need be owned by government. I am sure that Senator Evans acknowledges that point but, for base political reasons, he is not prepared to move down the necessary path of allowing the govern- ment airline to compete in the way it ought to be allowed, and will ultimately need, to compete if it is not to shrivel and wither on the vine. The justification for public ownership of domestic airlines was thought to lie in increased air safety providing genuine competition because somehow the public sector would be more honourable and honest and keep the private sector up to the mark. I do not think anyone pretends these days that the existence of a public firm in an industry in any way acts as an aid to economic regulation or to inspire competition. For many years we have had the soft life and non-price competition, and that to a very limited extent. In the United States of America there have been significant benefits, not just, as Galbraith would concede, directly in enabling more people to fly. That is probably a function of the reduced costs of flying, passed on as benefits to the consumer in terms of air fares. What has tended to happen in a regulated environment is that any benefits that might be extracted by monopoly players such as Australian Airlines have resulted in cost padding, probably feather bedding in terms of employees and all sorts of non-price benefits that have flowed on to all but consumers. It is certainly the view of Michael Kirby, not the one that Senator Puplick would have in mind but an economist who has specialised in the airline industry for many years-- Senator Puplick —My Michael Kirby would have had a view too! Senator ALSTON —He has certainly done enough international travelling to qualify as an expert, but perhaps in his current role he is not truly regarded as an economist. The Michael Kirby I refer to, in a publication released several weeks ago, said: . . . the cost efficiency of . . . US local service and trunk airlines increased significantly following deregulation . . . Cost differences of the order of 25-30 per cent have been observed between new entrants and established carriers. These differences have been attributed to a less unionised workforce with lower wages and conditions . . . Bear in mind that employees in the United States have been prepared to take real cuts in wages-nominal wages. That is because of an entirely different corporate culture, no doubt, but it is also because they have had a vested interest in seeing the industry survive. In some instances perhaps it has not survived, but their action shows a breadth of vision and a willingness to accept the risks that simply have not prevailed in Australia. Kirby went on to say: These differences have been attributed to . . . fewer senior staff, and increased aircraft utilisation achieved through higher seating densities, the use of less congested airports, specialised `no frills' services and simpler network patterns. So a number of significant benefits will flow from genuine competition and deregulation. The tragedy in this statement is that we do not really have anything like genuine deregulation, let alone the anathema of privatisation. To that extent, this statement is a very disappointing document. So much could have been done to enable Australian Airlines to get back on to a sound footing, whether or not it went into the private sector. I would argue that it should and that that is where it should already be. But even if the justification for corporatisation was that it would somehow then be on an equal footing, the reality is that in all sorts of ways it remains hamstrung and does not have the capital that it requires. Senator Evans, in the context of a review of Qantas, will no doubt be prepared to review some of the capital requirements of Australian Airlines, but government has a massive task ahead of it if it has to find something like $2 billion which it does not have. The reality is obvious that it will have to privatise, in whole or in part, a significant number of public statutory authorities and trading enterprises. Australian Airlines is probably the easiest one of all. There are probably fewer ideological reasons, let alone commercial reasons, why we need in this day and age a publicly-owned domestic airline, yet, when the opportunity was provided, all that Senator Evans could do was to conform to what has been conventional wisdom for the last 4 1/2 years and give notice of the termination of the two airlines agreement. Beyond that we have seen very little indeed. We have had a cautious and timid response to some very real opportunities. The end result of all that is that there will continue to be one major player which will go from strength to strength and one lesser player which will remain hamstrung by remaining in the government sector, and in the meantime consumers will get much the worst of the deal. The statement is, therefore, very disappointing. I can only hope that, in the fullness of time and with the political wisdom that undoubtedly resides in those on the committee of review, strength of purpose and political will will be found to enable the Government to take what it knows to be the right commercial and political decision for the benefit of all Australians, which it has not yet had the courage to take. Senator BOSWELL(Queensland)(5.00) —I briefly join the debate on the motion by Senator Gareth Evans. As a National Party senator, I have to support anything that offers deregulation, privatisation or something in that direction. But I have some misgivings about this motion. I am concerned about a number of areas. As a senator and member of parliament who uses the airlines extensively, I certainly acknowledge and am very grateful for the service given by Ansett Airlines of Australia and Australian Airlines. It is nice to know when one gets on an aircraft that one can make a connection within 15 or 20 minutes of arrival. There are delays from time to time but I believe that the services these two airlines offer to Australia are second to none in the world. I am very happy to say that publicly. I am concerned that we may move to a monopoly situation. We have heard from previous speakers that Australian Airlines has been hamstrung and does not have the money or financial support to provide services equal to those of Ansett. As a National Party senator, and as a senator who gets a lot of electoral support from remote Australia, I must say that I am concerned about how the policy of the Department of Transport and Communications on the abolition of the two-airline agreement, an open skies policy, will affect remote Australians-not the people on the main routes between Brisbane and Sydney and between Sydney and Melbourne. I believe that the two-airline agreement was set up early in the 1950s to subsidise air travel in the rural areas of Australia. In other words, the profits picked up on the main routes between the major cities could be offset against the losses sustained in servicing the more remote areas. Information given by Senator Evans indicates that since 1968 the towns and cities serviced by the two major airlines have been reduced in number from 150 to 80. Therefore, the two-airline agreement has fallen down in its objective to service the more remote areas. Therefore, the airlines no longer really deserve the protection of the community. I listened very carefully to Senator Schacht's contribution. He pointed out that the airline services to remote areas will be run on a completely free enterprise system. That concerns me because I believe-and I have always said this-that for free enterprise to exist we must have competition. If competition is lacking in airline services to places such as Longreach, Barcaldine and Winton, there will be a monopoly if the Government leaves the airlines to set their own prices. What will eventually happen in those areas is that cities and towns will not be able to sustain two airlines. They will be able to sustain only one service and that service will then have a monopoly in that area. A monopoly will generate very high air fares. Many people in remote areas of Queensland and western New South Wales do not even enjoy a telephone service. They depend very heavily on a reliable airline service for communication with cities and other areas. I believe that these people will lose under this deregulated airline system. I would like to ask Senator Evans, who has joined us in the chamber, whether he has made any provision for people living in remote areas. Only this year, the Federal Government reduced a $7m subsidy to the people of outback western Queensland. That caused a prominent airline to remove its service from the western areas of Queensland, leaving a large number of western Queensland graziers and farmers without any form of air transport. It was only through luck that another airline was prepared to fill the gap left by Australian Airlines. Whilst Flightwest provides a very good service-I have no complaints about it, and I have travelled with Flightwest-it uses a smaller plane and the service and the number of flights have been reduced. People are travelling in far less comfort than they were when the area was serviced by the previous airline. These are the types of concerns that I have. What will be the consequences for these rural people of a deregulated airline industry? Mr Halfpenny has said that we will see the monopolisation of the airline system. That is already happening. A great number of the smaller airlines have been taken over by Ansett. Senator Alston mentioned six or seven of them. Every airline that has serviced smaller areas has been bought out by a major operator to provide on-traffic. So we are facing a crisis now in that we are seeing less competition in the airline market than we have seen before in the history of air services in Australia. This must concern everyone in the Senate. Rather than the opening up of airline services to many other competitors, we will see a reduction in the number of players providing services for air commuters. If there were a search of the number of airline companies in Australia, we would find that the number has fallen fairly drastically over the last three or four years. All we are left with is the major airlines-Australian Airlines and Ansett Airlines. When there was a chance of some competition from East-West Airlines Ltd-East-West was the only player in the field that could have provided any competition for the two major airlines-it was snaffled by Sir Peter Abels. He reduced the chance of any competition coming in that would have provided an alternative to Ansett and Australian Airlines. I am mindful of the fact that the cost of air fares in Australia is high. I am surprised that Senator Evans's document says that deregulation of the airlines will reduce the cost of air transport in Australia by only 7 to 10 per cent. I would have thought that overseas experience would have shown that the reduction in air fares would have been considerably more than that. Nevertheless, I support the main thrust of the document which has been put down by the Government. I am concerned about some of the results that could lead from the document and I ask the Government to take on board the experiences of the United States of America. From my reading of the situation over there, rather than the airline business being expanded when the airlines were deregulated, there was a great falling out and it went down to four or five major players in the airline business. I express my concern for the people of remote Australia. We have a large continent with a very small population in the hinterland which, it would seem to me, is unable to support a number of air services going into those smaller areas. Obviously, that could lead to a monopoly situation in areas such as Longreach, Winton, Mareeba and the many airports in New South Wales, western Victoria, northern South Australia and eastern Western Australia. If there is a complete deregulation of air fares, I am concerned that the cost will rise and some people in those remote areas will not have the capacity to pay fares. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(5.14) —I do not propose to track over every one of the issues that have been raised in the course of this rather discursive debate. I note simply that strong general support has been expressed for the Government's deregulation policy and, accordingly, for the specific terms of the motion to terminate the two airlines agreement. I will confine my remarks to saying something about the comparative position in the United States (US) which has been the subject of so much speculation, particularly in the media. Many spectres have been raised by a number of people that this might be the downside of the Australian deregulatory environment. Having made some remarks about the United States, I will turn specifically to the terms of the Opposition's amendment to the motion and explain why it is that it really is a rather misconceived set of whinges that are there set out. Let me say just a word or two about the US situation, because there has been, not to any great extent in this chamber but certainly in a lot of other places, a disposition to suggest that there are some real risks in following a deregulatory course, given some of the less happy features of the United States experience. The Australian Government has been acutely conscious of a number of the difficulties that have occurred in the US following deregulation there in 1978, and our policy is designed to avoid the undesirable effects of the kind of economic de- regulation that occurred in that country. Critics of deregulation in the United States have focused on a number of matters. For example, they point to the fact that the benefits, such as higher frequency of service and lower fares, have not been uniformly available. They also argue that consumer benefits have been achieved largely at the expense of reduced wages and conditions of employment in the aviation industry. Concerns are also expressed about the lower levels of in-flight service which have accompanied lower fares, the congestion of airports and airways facilities, with delays and costs to industry and consumers that have resulted from large traffic growth, and possible threats to safety standards. More recently, criticism has been directed to the dominance of the market by relatively few airlines through a process of mergers and acquisitions. These criticisms need to be put into proper perspective, I believe, by looking at the economic and industrial environment in the United States during the period of deregulation. In the early stages of deregulation in the US, the economy in that country was at a very low point with double digit inflation, used aircraft freely available, a large pool of skilled unemployed aviation industry workers and fluctuating interest rates. Existing operators, financially weakened by the economic recession, were thus in a very poor position to prevent the entrance of large numbers of new operators and they did come in droves-some 100 new entrants to the interstate market alone. They did not always come for very long, but long enough, certainly, to cause havoc among a good many existing operators. If that was not enough to cause a bumpy ride for deregulation, the industry was further affected by major oil shocks, the impact of the 1981 air traffic controllers strike and the subsequent sacking of more than 11,000 operators, which effectively reduced the capacity of the air traffic system by about 50 per cent, and the grounding of some DC10 aircraft in the US airline fleet. Clearly, even the strongest critics of deregulation would have to concede that much of the instability in the US aviation industry has been due in part, perhaps in very large part, to factors other than deregulation. I think that the more relevant standard of comparison, or locus of comparison, with Australia is not so much the United States but Canada. Economic deregulation of the aviation industry in that country occurred at a time when, like in Australia, existing operators were in a strong position, interest rates were high, there was no reservoir of unemployed skilled aviation workers and few used aircraft were available at low prices because so many had been absorbed by the US market. There are many other points that I could make about the United States experience, including, in particular, the safety experience in the two countries. I make no apology for the emphasis which we are continuing to place on safety regulation. Whether it needs to be exactly the present safety regime as it affects general aviation, the kind of thing which Senator MacGibbon and others have talked about, is something that we can argue out in the specific context of the various legislative and regulatory reviews that I foreshadowed in the statement. I think that it is fair enough to point to the fact that, when one looks at the statistics, the safety experience in the United States has, as I think Senator Sanders pointed out, not been, in fact, anything like as bad as has been alleged. Certainly, there was an acknowledged shortage of experienced surveillance regulators at a time when massive demands were placed upon those limited resources by the influx of new operators. That is something on which we have taken note of the United States experience. I have made a specific commitment on behalf of the Government to ensure that there are ample resources available to meet any changes that might arise in that respect in the Australian environment. Let me turn to the specifics of the Opposition's amendment to the motion because I think it is important to point out that a number of the criticisms that are contained in the amendment are misconceived. (Quorum formed) Turning to the terms of this rather churlish Opposition amendment to the motion with which the Opposition agrees, let me deal successively and quickly with the points that are made in it. The preamble of the amendment reads: . . . notes the Government's de facto recognition to privatize Australian Airlines, which is the inevitable and proper consequence of the deregulation of the airline industry; Let me say, as I said at some length in response to Senator Alston on 9 October in this place, that privatisation of Australian Airlines is neither the inevitable nor necessarily the proper consequence of the deregulation decision. It is important that measures be taken to increase the efficiency of Australian Airlines so that it will be strong and viable in a deregulated environment, and we have taken and announced a series of such measures. It is also, of course, necessarily the case that there must be some strengthening of the capital base of Australian Airlines so that it will be able to acquire the fleets necessary to compete effectively in the future. But it is absolutely begging the question to make the assumption, as the terms of this motion do, that that capital base can be provided only through the mechanism of privatisation and equity raising in the private market. That does not necessarily follow at all: it is a matter for judgment, debate, argument and careful analysis of the available data. That is what we will be doing before we make any conclusion on this matter. It is quite misconceived to take the position that this text does. The amendment goes on to talk about the time lost since the first day that could have seen the ticking of the clock on the three years notice for the end of the agreement; that is, January this year. I simply make the point in this respect that the May report of the Independent Review of Economic Regulation of Domestic Aviation on which we have premised all our actions on this matter was delivered to the Government only in January this year. We immediately released it for public comment and response. We have proceeded with all deliberate speed throughout this year to formulate a policy which does not pick up only one of the May report options but at the same time deals comprehensively with a whole range of related issues-all the issues: safety, competition policy, foreign investment rules and the future of Australian Airlines. This is obviously a complex policy-making task which this Government has sought to put in place with a great deal of dispatch. The time that has been lost by this Government in responding to the manifest inadequacies of the two-airline agreement is to be compared with the 27 years of wasted opportunity of our Tory predecessors. From 1952 to 1972 the Tories had 20 years to allow the two-airline agreement to achieve its basic objectives and then to be recognised as the outdated and unnecessary set of constrictions that it was. From 1976 to 1983 there was another seven years of wasted opportunity. For anyone on the other side to come out with this extraordinary cheek of saying that there has been a loss of time or an inadequacy of quick response by this Government is really the usual kind of breathtaking chutzpah that we associate with some of the more outrageous performers on the Opposition front benches. The amendment also refers to inaction in not preventing the removal of competitors in the airline industry. That simply begs the question of what the response of the Trade Practices Commission will prove to be in relation to the East-West Airlines Ltd acquisition by Ansett Airlines of Australia. It also totally ignores the extent to which a great number of small and regional airlines were gobbled up during the period of operation of the two-airline agreement before this Government chose to act to get rid of it. In sub-paragraph (c) the Opposition amendment talks about the way in which we are acting now to incorporate the previous Trans Australia Airlines and in doing so are acting contrary to a course which we adopted when we first came into government. I say simply in this respect, as I have said before, that unlike the Bourbons opposite who learn nothing and forget nothing we are able and willing to change our minds if persuaded by force of argument. We have looked at the argument, we have responded to the issues as they have evolved, we have responded to new data, new information and compelling argument, and we have changed our minds. I make no apology for that. It is something I commend to the Opposition to do from time to time in relation to some of the more lunatic policies that it constantly espouses. There is a reference in sub-paragraph (d) to the absence of informal measures being taken to facilitate deregulation between now and 1990. That simply reflects the ignorance of whoever it was that penned this amendment because, under the terms of the two-airline agreement-which cannot be terminated, amended or altered before 1990 without agreement of all three parties-so long as that agreement prevails, as it will until 1990, there is no way that there can be any informal lesser measures chosen to facilitate, as is suggested in the amendment, the deregulatory processes. One cannot go half way. One cannot be half pregnant when it comes to terminating the two-airline agreement as this sub-paragraph suggests. It is all or nothing. We have taken the decision to make it all. There is reference in sub-paragraph (e) to the failure to provide the necessary infrastructure at Kingsford-Smith Airport in particular and airports in general. We have recognised the problems with potential and actual congestion that arise at Kingsford-Smith Airport at the moment. To ease the congestion my Department has already introduced air traffic arrangements which involve a flow control system, changes to the use of runways and operational procedures to increase the hourly movement rate, and we have moved to construct additional taxiways. We have, moreover, taken the basic remedial step that our predecessors could never get around to: we have chosen the site for a second Sydney airport and we have begun the process of land acquisition that is necessary for that to go ahead. There is a reference in sub-paragraph (f) to not completely deregulating domestic and international air freight carried by Australian airlines. Again, that shows a grotesque failure to understand what has been going on. In 1981 domestic freight was deregulated. In fact, the 1981 airlines agreement does not refer to freight because it was in 1981 that domestic freight carriage was deregulated in this country. So much for that part of the paragraph. So far as international freight carriage is concerned, I have announced-I am not sure that anyone has even noticed this part of that very detailed statement on 7 October-a major liberalisation of the rules governing international air freight charters which should mean that there is no longer any effective restriction at all on the capacity of Australian exporters to get their products out of the country, and importers to get them in for that matter, by air freight charters. It is an extensive liberalisation. It is significant. It has been long fought for and long argued by business. There it is. The Opposition cannot even read the text of the statement and the accompanying documentation sufficiently to appreciate that. The final point made in the amendment refers to the creating of unnecessary uncertainty among Australian Airlines employees as to their future. All I can say is that I have been discussing these issues with Australian Airlines employees and with the unions generally in the aviation industry and that is not a concern that they have expressed to me. They are only too happy about this Government's commitment-the very firm commitment which I articulated in the 7 October statement-to the future of a strong and viable Australian Airlines which we are sure will not only survive in a deregulated environment but be a very powerful and effective competitor in the public interest as well. I thank the Senate for its support, albeit a little half-hearted in some places, for the basic text of the motion. I do not congratulate the authors of the amendment for this shoddy, patchwork job of half truths, untruths and rhetorical excesses that they have put together. Accordingly, I urge the Senate to reject the amendment and to vote for the basic motion, which has apparently received the unanimous support of this chamber, for which I am duly grateful. Senator HAINES(South Australia-Leader of the Australian Democrats)(5.31) —I rise simply to direct some comments to the amendment moved by the Opposition and to indicate that we will be supporting the amendment because we support the items in the amendment labelled (a) through to (f). Had we had time to do so, we would have moved an amendment to the Opposition's amendment, deleting all words after `aviation policy' and prior to the words `and condemns the Government for'; that is, we would have deleted the reference to privatisation which reads that the Senate: . . . further notes the Government's de facto decision to privatize Australian Airlines, which is the inevitable and proper consequence of the deregulation of the airline industry . . . As my colleague Senator Sanders would have indicated in his speech to the Senate on this matter, we do not believe that deregulation of the airline industry should lead, must lead, or even might lead to privatisation of Australian Airlines and would certainly oppose that element of the amendment. What I would like to make quite clear is that, while we will support the amendment, we do so on the proviso that we do not agree to that particular section of it but simply do not have the time at the moment to delete it. Even if we did have the time, I have a suspicious feeling that we would not be able to get it deleted. Obviously, the Opposition would not support us and the Government seems to be so hell bent on privatising everything that stands still long enough to be caught that it probably is not going to support the amendment anyway. With that clarification of the issue, I indicate that in fact the Australian Democrats will support the amendment. Question put: That the amendment (Senator Messner's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 28 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. Messner, A. J.Baume, Michael Newman, J. M.Baume, Peter Panizza, J. H.Bjelke-Petersen, F. I. Parer, W. R.Boswell, R. L. D. Patterson, K. C. L.Brownhill, D. G. C. Powell, J. F.Chaney, F. M. Puplick, C. J. G.Chapman, H. G. P. Reid, M. E.Durack, P. D. Sanders, N. K.Haines, J. Sheil, G.Hamer, D. J. Short, J. R.Jenkins, J. A. Stone, J. O.Knowles, S. C. (Teller) Tambling, G. E. J.Lewis, A. W. R. Teague, B. C.McGauran, J. J. Vanstone, A. E.MacGibbon, D. J. Walters, M. S.McLean, P. A. Watson, J. O. W.Macklin, M. J. Aulich, T. Foreman, D. J.Beahan, M. E. Gietzelt, A. T.Black, J. R. Giles, P. J.Burns, B. R. Harradine, B.Childs, B. K. McKiernan, J. P. (Teller)Coates, J. Maguire, G. R.Collins, R. L. Reynolds, M. E.Colston, M. A. Richardson, G. F.Cook, P. F. S. Ryan, S. M.Cooney, B. Schacht, C. C.Crowley, R. A. Sibraa, K. W.Devereux, J. R. Tate, M. C.Devlin, R. Walsh, P. A.Evans, Gareth Zakharov, A. O. Hill, R. Button, J. N.Crichton-Browne, N. A. Jones, G. N.Calvert, P. H. Bolkus, N.Archer, B. R. Morris, J. J.Bishop, B. K. Ray, Robert Question so resolved in the affirmative. Motion, as amended, agreed to. Debate resumed from 15 September, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator LEWIS(Victoria)(5.40) —The Opposition does not oppose the Bankruptcy Amendment Bill 1987. This legislation is an attempt to address what might be called insolvency fraud by extending the investigatory powers of bankruptcy trustees. It introduces measures to give debtors advice, counselling and alternatives to bankruptcy. The most important aspect of the Bill is the recognition of insolvency fraud of the sort commented upon by Mr Costigan in his Royal Commission on the Activities of the Federated Ship Painters and Dockers Union-cases which involved sophisticated and complex commercial structures of companies and trusts being used by bankrupts to defeat the claims of their creditors, the bankrupts being protected from the claims of the creditors but secreted property being beyond the reach of the trustees in bankruptcy. The Bill also deals with a number of matters raised by the Australian Law Reform Commission's recently released discussion paper `General Insolvency Inquiry', and in general terms the Bill is in keeping with that paper. The amendments in the Bill fall into five main categories: firstly, the introduction of a pre-bankruptcy moratorium to enable debtors to consider possible alternative arrangements with creditors; secondly, changes designed to enhance the investigatory powers of the trustee and to enable the trustee to recoup from companies, partnership and trusts, assets which a bankrupt has acquired by personal effort. The Bill introduces concepts of `associated entities' and `examinable affairs' and enables a court to make orders about property of entities controlled by a bankrupt. Thirdly, the Bill seeks to reform part X of the Act to ensure that creditors are provided with full and timely information about a debtor's affairs; fourthly, it seeks to improve the administrative controls over private sector registered trustees, and controls by creditors over those trustees; and, finally, it contains other amendments which are designed to improve the effectiveness of the Act. It is recognised that the majority of people becoming bankrupt each year are consumer bankrupts who, in most cases, become bankrupt through poor judgment or sometimes misfortune. But there are, of course, other bankruptcies in this country as a result of the mismanagement by this Government of the nation's economy. It is clear that this Government's economic policies are a major contributory factor, with consumer debt running at a record $23,000m and individual savings at their lowest level since the 1982 recession-a situation described by Senator Walsh as a `national malaise' that could seriously affect the economy. According to the Law Reform Commission in its discussion paper on insolvency, insolvency is a valuable indicator of trends in the economic system and one of the reasons is that people seek credit to maintain their standard of living. The Hawke-Keating economic policies have lowered the living standards of all Australians and it is hardly surprising that bankruptcies have increased so dramatically as people have attempted to maintain their living standards. Bankruptcies for the year ended 30 June 1987 have risen to 7,495, compared with 5,539 for the year ended 30 June 1986-a massive 35.3 per cent increase. The Government should be endeavouring to address the root causes of this problem. If this Government continues to ignore the warning signs, the rate of increase in bankruptcies will accelerate like the national debt, despite the alternatives to bankruptcy outlined in this Bill. Provision is now made for the introduction of a limited pre-bankruptcy moratorium to enable debtors to consider possible alternatives to bankruptcy. Turning to specific issues in the Bill, I would like to deal firstly with insolvency fraud. The Costigan Royal Commission referred to the activities of a person called Lockyer who spent 23 years as a bankrupt. He used his bankruptcy as a shield against his creditors and was estimated by his wife to be worth some $5m, notwithstanding that he was a bankrupt. Senator Alston —Together with his wife. Senator LEWIS —I am sorry, he and his wife were worth $5m. The Australian Law Reform Commission states that there is clear evidence that in a number of cases the spirit of part X has been deliberately abused by a variety of devices, including misleading information, insufficient notice of meetings, convening meetings in obscure places, stacking meetings or conducting meetings without an impartial chairman. A range of measures has been introduced to lift the corporate veil and the Opposition supported similar procedures in the Crimes Act. The pre-bankruptcy moratorium gives debtors seven days to consider the alternatives to bankruptcy. The Registrar is to direct the debtor to sources of guidance and advice, although no additional resources have been made available by the Government for this purpose. I must say that on the rare occasions I was involved in bankruptcy proceedings when I was practising in my profession I had some difficulties because of the lack of information available to debtors as to their bankruptcy alternatives. I think making available this sort of guidance and advice in simple, understandable language is an excellent reform. The simple alternatives could be explained in understandable language to people who are in what might be expected to be the `normal' form of bankruptcy. For example, a business person who is unable to pay his debts but who may, in due course, be able to trade his way out of bankruptcy ought to take a particular course. By comparison, someone who has lost everything may be able to get back on his feet only by taking an alternative course. The Australian Law Reform Commission says that some debtors have become bankrupt unnecessarily-that is, that part X may have been more appropriate. It says that there is no public counselling or advisory service and proposes that such a service be funded by Commonwealth legal aid agencies. The reforms of part X include, firstly, a requirement that a statement of affairs be prepared prior to the debtor authorising the calling of a meeting; secondly, a requirement that the statement be provided to creditors when they are notified of the meeting; thirdly, a requirement that the trustee prepare a report for creditors to assist the meetings of creditors; fourthly, a provision whereby the meetings that do not fulfil certain criteria are invalidated; fifthly, a provision for the Inspector-General in Bankruptcy to have the right to apply to set aside part X deeds, et cetera; sixthly, a requirement that the examination of trustees be by a registrar, not a court; seventhly, a provision that a creditor or his spouse is not entitled to vote at a creditor's meeting; and, eighthly, a provision for the giving of proxies, which is referred to in the Australian Law Reform Commission paper. There are some difficulties with the requirement that a statement of affairs be prepared and provided to creditors prior to the meeting. I can well understand that, because the statement of affairs is frequently very difficult to prepare. Frankly, by that stage many of the bankrupts do not know to whom they owe money as they owe money in so many areas. They do not know the amount they might owe. They have been going from pillar to post trying to run a cash economy or a cash system of payments. At the same time, they have been trying to get funds into their bank. They believe that some cheques they have made out have been met, whereas subsequently they turn out to have bounced. There are all sorts of problems in practice in trying to prepare a statement of affairs. The Insolvency Practitioners Association of Australia is of the view that the delay caused by the preparation of a statement of affairs is such that it will disadvantage the creditors. As I said, I have had some small experience in this area, and that was what I found. On the other hand, the Australian Law Reform Commission paper supports the requirement of the Bill. All I can say is that we do not oppose the provision in the Bill, but we shall be taking advice from practitioners in the area as to how it works in practice. We will keep a general watch on this aspect of the proposed change, with a view to dealing with it when we are in government, in accordance with what the result should be. There are a number of other minor matters, including maintenance agreements, a spouse's claim to rank with other unsecured creditors, and the allowing of a bankrupt to keep a vehicle to the value of $2,500. We will be fascinated to know what the Government will do in the case of someone who owns a Mercedes and who says that its value is $2,500. No doubt some people will try to do that. Another minor matter is the fact that statements of affairs are to be changed administratively. The amendments in clause 98 require an owner of premises to allow reasonable use of the facilities to persons holding a warrant. Again, the Opposition has difficulty with this matter. The provisions are similar to those in the fringe benefits tax proposal and other recent tax legislation. The Opposition has previously emphasised its objection to such wide powers. We believe that when these facilities are required to be provided there ought to be some form of compensation to the person who has to provide the facilities. Nevertheless, it is not a matter that we will take to the barricades. Finally, I mention that the Senate Standing Committee for the Scrutiny of Bills has raised reservations with respect to clauses 35 and 36, which amend the powers of the Official Receiver. But the Scrutiny of Bills Committee recognised that the new provisions do not differ from those contained in section 77 of the Bankruptcy Act. As I said, the Opposition welcomes the Bill. We will not oppose it. We shall be interested to see how it works in practice. Senator MACKLIN(Queensland)(5.52) —We are debating the Bankruptcy Amendment Bill 1987. As the Minister for Industry, Technology and Commerce (Senator Button) noted in his second reading speech, the Bill marks a major turning point in the administration of bankruptcy law in this country. It is a process which is very slow-in fact, much slower than we would have hoped at this stage. Essentially, the Bill arises from royal commissioner Costigan's findings that the bankruptcy laws were being abused by fraudulently motivated insolvency claims. There is no doubt that modern bankruptcy law, in itself, is quite inadequate in attacking insolvency fraud, while also providing protection for innocent people whose bankruptcies have arisen from misfortune. In particular, we have seen in recent times an increasing number of abuses of insolvency law. There are some quite infamous cases of bankruptcy's being used as a deliberate device to defeat the claims of creditors by concealing property in complex trust or corporate structure arrangements, thereby putting it beyond the reach of the trustee in bankruptcy. To help overcome these problems, some of which have been addressed by the Statute Law (Miscellaneous Provisions) Act (No. 2) 1986, the amendments in this Bill cover five main areas. The first is the introduction of a pre-bankruptcy moratorium to enable debtors to consider possible alternative arrangements with their creditors. This is obviously a desirable move. At the end of the day, those who are owed money would obviously prefer to be able to get as much back as possible. This can often be done by keeping the bankrupt in a trading situation. Hence, an earlier movement would be of much more interest to people if it were possible for the company, or the individual, to trade its way out of difficulties. Under the new division 2a of part IV, a debtor will be able to present to the Registrar in Bankruptcy a declaration of intent to present a debtor's petition. Once this is accepted by the Registrar, the debtor will be able to invoke a limited stay upon certain debt recovery processes for a maximum period of seven days. The Registrar will be obliged to direct the debtor's attention to the sources of advice and guidance about his financial affairs and to the proceedings under the Bankruptcy Act dealing with insolvency. This process will almost certainly prove to be more constructive and co-operative than past practice has been. The second major change is designed to improve the investigatory powers of bankruptcy trustees and to enable asset recoupment from corporations, partnerships and trusts, which a bankrupt has used to conceal property, the use and enjoyment of which is reserved to the bankrupt, but which has the appearance of being owned by a company or a trust. One can recall many outrageous examples, as Senator Lewis has already done with regard to one case. I can think of another case in my State whereby a technical bankrupt not only continued to enjoy the use of substantial assets but also ended up qualifying for legal aid. In this context, the powers of the trustee in bankruptcy to realise a debtor's property for distribution among creditors and to protect the public interest by investigating the bankrupt's conduct with a view to upholding standards of commercial morality have not kept pace with modern corporate reality. Increasingly, some debtors have developed a maze of family trusts and companies which gives the impression that they are totally without assets. As I said before, they continue to enjoy the use of these secreted assets and properties which have the guise of being owned elsewhere. Practices, such as remuneration skimming, which put assets of companies and trusts associated with a debtor beyond the trustee or creditors fall within this category. Constraints on the property which can be realised by the trustee compound this problem. The Bill has extended the trustee's powers to investigate the bankrupt's financial affairs and enable the trustee to recoup from companies, trusts, partnerships and other devices assets which have been acquired by the personal efforts of the bankrupt. The introduction of related concepts of associated entities and examinable affairs and the new division 4a of part VI will enable the court to make orders in relation to the property of entities controlled by a bankrupt. Associated entities will now include those which the bankrupt is able to influence by virtue of close business or family relationships. Examinable affairs which the trustee will be able to investigate will include the financial affairs of an entity associated with a bankrupt to the extent that those financial affairs are relevant to the bankrupt's financial affairs. This extension of powers will no doubt do much to remedy the deficiencies in the existing laws. The third major change is to part X of the Act to ensure that creditors are provided with full and timely information about debtors' affairs. Again, some flaws in the existing legislation have been exploited by unscrupulous trustees and solicitors in order to defraud creditors. The three major problems concern insufficient information; the omission of provisions which ensure that previous dealings between a debtor, creditors and the trustee are disclosed; and inadequate supervision of part X arrangements. All three of these problems are addressed in the Bill. It seems probable-we certainly hope it is true-that the abuse of proceedings under part X will be minimised as a result of this movement. The final two areas affected by the Bill are improvements in the administrative controls over private sector registered trustees and controls by creditors over trustees and other amendments. Generally speaking, this Bill represents some much needed and long overdue improvements in bankruptcy law. However, the Government hopefully will not be resting on its laurels upon the passage of this particular piece of legislation by the Senate today or early tomorrow at the latest. Discussion paper No. 32 of the Australian Law Reform Commission was put down in August this year. It outlines a whole range of suggested reforms. If one took to heart the Commission's discussion paper relating to the general insolvency inquiry reference, then one would see some massive pieces of legislation coming into this chamber in the not too distant future. However, if the introduction of those pieces of legislation is as tardy as this legislation was, I suppose they will be introduced some time in the next Parliament. I draw attention to an item which Senator Haines has raised on innumerable occasions; that is, the problems confronting primary industry and people who are classified as unsecured creditors. For example, when a winery or a cannery goes into liquidation, the difficulties of small creditors are in conflict with large corporate debtors. The discussion paper covers a whole range of areas and the proposals seem to be not only workable but also will probably shift the balance towards unsecured creditors. It seems very odd that the people who have provided the grapes or the produce are at the very end of the line when it comes to an exercise in bankruptcy, whereas trading their way out of operations often means that they will be using the very products which have been provided by the unsecured creditors. The Senate Standing Committee for the Scrutiny of Bills, which is due to report tomorrow, raised a number of queries to clause 35, which deals with the powers of officials and commissions, clause 36, which deals with the powers of officials, and clauses 51(2) and 91(2), which deal with the retrospectivity of operating clauses. As is usual with the Scrutiny of Bills Committee, the initial report would then give the Minister for Justice (Senator Tate) the opportunity to respond. Since the Scrutiny of Bills Committee has not had a chance to bring down its report-I understand it will be coming out tomorrow-the response by the Minister will not be available to senators and that is rather unfortunate. I had assumed that this Bill would have come on tomorrow, but for other reasons it has been reshuffled into this time slot, hence I am somewhat at a disadvantage. I do not want to take up the time of the Senate by going through the whole report from the Scrutiny of Bills Committee. I think it has made its point very firmly in its preliminary report. The Australian Democrats are inclined to support some of the items that are included in this report. However, I am at a disadvantage because I have not heard the Minister's response and the Minister will not be making his response until the end of the second reading debate which is very close to the committee stage. I do not know whether it is possible, but I think it would be useful to postpone the committee stage until tomorrow. If the Minister is indicating that he does not want to do that, it may very well be that we will have a committee debate that goes after 6.30 p.m., which means that the Bill will be debated tomorrow. I hope that the Minister will not incorporate his response. If the Minister can briefly explain his response in the second reading debate it may very well be that we can move rapidly through the committee stage today, but at the moment I am inclined not to think so. Senator ALSTON(Victoria)(6.06) —I also rise to speak on the Bankruptcy Amendment Bill. I am grateful to my colleague Senator Lewis for the outline that he has given to the major amendments proposed and the matters that I think do need serious addressing. Essentially this needs to be looked at in two ways. Bankruptcy legislation has been notorious for its complexity. Those of us who have had anything to do with it would agree that the legislation and the practice were both replete with arcane legalisms and it was very difficult to ever get a result that was satisfactory. But that was prior to the days when it became relatively easy for someone to go in and out of bankruptcy. As a result of that gradual wearing down of the real burden, despite the pettifogging that still went on, incentives were created for people to abuse the system. As a result this amendment is designed to cope with what have been a number of serious instances of fraud. I think it quite properly does deal with some of the ways in which people have used and abused this legislation for the benefit of themselves and their families. Certainly I think it is desirable that there be facilities for people to file for voluntary bankruptcy. I think debtor petitions are a very desirable option that should be available, but it is equally desirable that there should be a cooling off period, that people should be able to get advice and counselling and should be able to appreciate what is involved not only in becoming bankrupt but in subsequently trying to be released from bankruptcy. There is certainly a lesser social stigma attached to it than there was, but it does create impediments for those who want to resume life as company directors and play an active part in the business community. One can only applaud the way in which the Bill makes it a lot easier for people who are genuinely wanting to file for bankruptcy to address the implications but, at the same time, it deals with those who have deliberately abused the system. The example of Mr Lockyer is dealt with in the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. I think it is probably a classic example. But there are a number of others, including some people in very high places, who have taken the opportunity of an impending judgment against them to transfer their assets to their spouses, and also to relatives and friends. That sort of thing can be done with relative impunity as long as one has sufficient foresight. I think it is one aspect of the law that does infuriate not only creditors but also the community at large if they see that it is relatively easy for someone with good legal advice to ensure that prior to the entry of judgment that one can simply transfer one's assets to others. Insolvency fraud is a function not just of the occasional criminal but, I think in some instances, has almost become an additional mechanism for laundering funds and for organised criminals to rearrange their affairs in a way that obviously defeats their creditors. The reform of part X is designed to ensure that creditors will have the opportunity to be fully aware of the size and extent of the potential bankrupt's estate and to have those necessary details before them before they can make an informed decision. Whilst I note that the insolvency practitioners have some real reservations about the effectiveness of the requirement for notice, I must say I find it difficult to comprehend the logic of their argument. It would seem to me that although, no doubt, there have been a minority who will abuse the process, at the end of the day it is much more desirable to go into such a conference for a composition of creditors armed with at least some information, rather than simply having to attend and take the word of the bankrupt for his state of insolvency. The reforms of part X which require notices and advanced statements and generally facilitate the ability of the registrar to examine the trustee are desirable changes. Limitations on the role that can be played by spouses and those steps that will ensure that debtors and their creditors are at arm's length are very desirable. Certainly, there have been abuses in the area of maintenance agreements. Transfers to spouses have been one obvious area of abuse and the provision that, henceforth, spouses' claims will not rank above those of ordinary creditors, is justified in the circumstances, although there may be situations in which a spouse has genuinely lent funds to enable a person in financial difficulties to trade out. By and large, that has not been an arm's length relationship and spouses will have to take their chances. While I welcome the thrust of this Bill and acknowledge the desirability of cleaning up its provisions, it is worth noting, when talking about bankruptcies, that we are operating at record levels. In the nine months to 31 March this year, the total number of bankruptcies was 5,478-up by 1,579 over the corresponding nine-month period. The figure for the year ending 30 June would normally have been available by now, and the uncharitable interpretation would be that they have been deliberately withheld so as not to compromise the inquiry into consumer debt which seems to have caught the fancy of several Ministers, including Mr Staples, who wants to make a bit of a name for himself. It is not hard to understand why there has been an increase in consumer debt and a record number of bankruptcies. If we were to project those figures through on a 12-month basis, we would be looking at about 8,000 bankruptcies in the last financial year. That is a sad reflection on the state of the economy. It could be the case-I suspect that there are a number in this situation-that there are people who would normally have been able to survive in the economic climate but, because of reductions in real wages, tightening in the economy and creditors who have taken a harder line, have not been able to trade out of their predicament. That is a reflection on the way in which the Government has handled the economy. In the 4 1/2 years that it has had to create a more propitious commercial climate, the end result is a record number of bankruptcies. That is open to the interpretation that we would not have such record numbers were it not for the fact that people have been forced to get into debt and go beyond their means and have then found that bankruptcy is the most attractive way out. I do not suppose that Senator Tate will suggest, and I am not suggesting, that the majority of the total number, or even the majority of the increase, of bankrupts are those who are abusing the system or who are part of the abuse process that the Bill attempts to remedy. The vast majority of those who go bankrupt do so because they bite off more than they can chew. Usually, they are small business people who do not know the way in which the system operates, and at the end of the day they are the people who are faced with record high interest rates, and who find life difficult, with high inflation, award wage increases that they have to bear and all sorts of economic constraints which operate on them in an economic environment that is not growing. They find that they simply do not have the opportunity to trade out of their problems. That is an indictment, and it is something that we should not forget when we are discussing bankruptcies. It would be presenting an unbalanced picture if we were simply to look at the Bankruptcy Amendment Bill in the context of a few tidying up amendments without also looking at the gross number of persons who have found it necessary to go into voluntary or involuntary bankruptcy. With those remarks, I join in the support for the Bill. Senator TATE(Tasmania-Minister for Justice)(6.14) —I thank those honourable senators who have contributed to the second reading debate. We regard this legislation as being vital. It is somewhat delayed, given the intervention of the election, and I am appreciative of those honourable senators who have shown an awareness of the need to get this legislation on the statute books and operational as soon as possible. In particular, I think that the general public is concerned about the matters that were revealed by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, such as bankrupts using a plethora of family trusts and companies, and so organising their affairs that they are apparently without any assets but are still enjoying the use of those properties and assets because they are under the guise of being owned by some company or trust. People want to see that attacked, and this legislation does that. The Bill does some other equally important things. Before I remark on those, I simply put on the record that, while the number of bankruptcies has increased in the way that has been indicated, the statistics show that the rate of business bankruptcies has been relatively stable in the years since the Hawke Government came into power. The Government believes that the relative stability in relation to business bankruptcies shows that its economic policies are working. The overall increase in bankruptcies is attributable to the substantial increase in non-business bankruptcies, and that is a matter of great concern to us. The Government has agreed, and Mr Staples is making the running on this, to convene a meeting under the auspices of the National Consumer Affairs Advisory Council to examine certain aspects of consumer credit marketing and credit assessment techniques used by financiers. That will be an important meeting. In addition, some $190,000 was provided in the Budget to enable additional consumer education on financial matters to be undertaken. I could elaborate on that, but I do not have enough time to do so at this stage. I turn now to what Mr Tuckey said, interestingly enough, in his remarks in the House of Representatives on 16 April 1985. He asked the Attorney-General: . . . in framing future legislation, to think to some extent on what the Ombudsman has suggested; that is, that there is room for a cooling-off period, in the same way that, in buying encyclopaedias, a person can change his mind in a day or so. Part of this legislation provides for that cooling off period, which we believe will, on occasion, enable those who could perhaps continue to trade to do so, and will certainly allow some time for advice to be sought from financial consultants, debt counsellors and so on. This may have an impact on the number of persons who would otherwise go in automatically and become bankrupt. The resources for providing information for debtors in bankruptcy and the alternatives is something which needs to be addressed, and I know that Senator Lewis made some point of this. During 1986-87, the Government provided funds for preparation of a script for an information video on bankruptcy and its alternatives. The first draft of the script has been prepared by Film Australia and is now being revised. We hope that the video will be produced this financial year and made available not only in bankruptcy offices but in centres such as legal aid offices and places where debt counselling occurs, in order to provide those who might otherwise rush into the bankruptcy situation with some knowledge of the various alternatives in a convenient and attractive video. My main task is to reply to Senator Macklin who raised the question of the Scrutiny of Bills Committee report-an alert digest as it is called. I wrote to the Chairman of that Committee some days ago and admittedly my reply is not available generally to honourable senators at this stage. However, the four clauses to which the Committee drew the Senate's attention fell into two categories. Clauses 35 and 36 were cited by the Scrutiny of Bills Committee: on the ground that they confer on officials powers of uncertain breadth and without adequate safeguards. In my reply I pointed out: Both trustees and Official Receivers are subject to very rigorous scrutiny, both judicial and official, and that degree of scrutiny will be enhanced by the Bill. After a page or two of argument verifying that point, I concluded: Accordingly it is my view that there is a more than adequate level of scrutiny over the actions of trustees and Official Receivers when exercising their existing powers and the new powers to be conferred upon them by the Bill. It is in relation to clauses 51 and 91 that the most concern and genuine misgivings may be felt. Clause 51, in my opinion, confers upon the court a new power to deal with existing matters. This should be contrasted with retrospectivity where the law is expressed to operate from a past date. Professor Pearce states in Statutory Interpretation in Australia: (few) Acts do not interfere with some existing right. The usual intention of a legislature is to make some change in an existing course of conduct. It is, therefore, appropriate to talk in terms of retrospectivity only where an Act affects rights by changing them with effect prior to the commencement of the amending Act. In those terms clause 51 is not retrospective. As far as clause 91 is concerned, I believe that the Scrutiny of Bills Committee has based its remarks on an incorrect interpretation of that provision. Sub-clause 91 (2) is a clarifying provision. The correct interpretation of it is that the conduct which will constitute the offence must occur after the commencement of the provision. However, the new offence will apply even if the meeting was called pursuant to a section 188 authority signed before commencement. This is the effect of the application provision in sub-clause 91 (2). I believe that we are not confronted by true retrospectivity. I believe that the breadth of the powers given to official receivers and trustees is subject to sufficiently rigorous scrutiny, both judicially and officially, to enable the legitimate misgivings and fears raised by the Scrutiny of Bills Committee to be set at rest. I anticipate that that will be confirmed at the meeting of the Committee to be held tomorrow. I believe that I have answered those matters which have been raised. In view of the need to process this legislation as rapidly as possible, I conclude the second reading debate. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MACKLIN(Queensland)(6.22) —I thank the Minister for Justice (Senator Tate) for his response at the end of the second reading debate to the items raised by the Standing Committee for the Scrutiny of Bills. I wish to refer to one such item; that is, clause 91 (2). Clause 91 (1) states: A person shall not, in connection with giving to the chairman of a meeting of creditors held under an authority under section 188 particulars of a debt, knowingly make a statement that is false or misleading in a material particular. There is provision for a penalty of $1,000 or six months imprisonment. Clause 91 (2) states: The section inserted in the Principal Act by subsection (1) applies in relation to an authority under section 188 of the Bankruptcy Act 1966, whenever signed. Quite frankly, I am not interested in Lord Denham's comments about a statute. I am not saying that the Act will be retrospective; what I am interested in is whether this clause is retrospective. I thought that is what the Scrutiny of Bills Committee was interested in too. Is it not the case that if, at a meeting held before the Act is signed and where a bankruptcy matter is in process, a false and misleading statement is made in regard to that action, a penalty will now apply as a result of clause 91 (2)? If that is not the case, obviously the provision is not retrospective. But, if that is the case, the provision obviously is retrospective. Senator TATE(Tasmania-Minister for Justice)(6.23) —All I can say is that the very best advice that I have obtained from the Attorney-General's Department and from the Inspector-General in Bankruptcy, who is with me in the chamber, is that clause 91 (2) is a clarifying provision. The correct interpretation of it is that the conduct which will constitute the offence-Senator Macklin has mentioned the penalty-must occur after the commencement of the provision. However, the new offence will apply even if the meeting was called pursuant to a section 188 authority signed before commencement. That is the only point to be made. The actual conduct which can attract a penalty must occur after the commencement of this provision. Senator HAINES(South Australia-Leader of the Australian Democrats)(6.24) —As we are talking of clarifying things, I would like to get this matter quite clear. If a meeting, an action or whatever has started and is in process now and continues past the proclamation date of this piece of legislation, and a false and misleading statement is knowingly made today, will no action be taken? If such a statement is knowingly made after the proclamation, will action be taken under the proposed new section 263c? Senator TATE(Tasmania-Minister for Justice)(6.25) —The situation is precisely that. If such a statement were made today it would not attract a penalty, even if it was knowingly false. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Tate) read a third time. Motion (by Senator Tate) agreed to: That the Senate do now adjourn. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Before the Senate adjourns, I advise honourable senators that Estimates Committee C will meet in the Senate chamber at 8 p.m. Prior to the sitting of the Committee, the bells will be rung for three minutes. Senate adjourned at 6.27 p.m. The following papers were tabled: Acts Interpretation Act-Correspondence relating to extension of specified period for presentation of the Australian National University Annual Report 1986 (Part II). Archives Act-Regulations-Statutory Rules 1987 No. 235. Audit Act-Regulations-Statutory Rules 1987 Nos 227, 228. Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposal 1987 No. 6-Survey of Textiles, Clothing and Footwear Manufacturers. Australian Meat and Live-stock Corporation Act-Orders 1987- No. MQ21-Buffalo Meat to EEC-1988 Quota Administration Scheme, dated 22 September 1987. No. M36-1988 Performance, dated 22 September 1987. No. M37-Cessation of 1987 Quota Meat Shipments to the USA, dated 29 September 1987. Bankruptcy Act-Rules-Statutory Rules 1987 No. 223. Defence Act- Defence Force Remuneration Tribunal-Determination 1987 No. 6 and reasons, dated 7 September 1987. Determinations 1987- No. 64-Overseas Living Allowance and others. No. 65-Pay of Reserve Force Members and others. No. 66-Overseas Living Allowance. No. 67-Temporary Accommodation Allowance. No. 68-Field Allowance. No. 69-Rental and Utilities Contribution. No. 70-Complementary Allowances Payable to Member Serving on Duty Overseas. Family Law Act-Rules of Court-Statutory Rules 1987 No. 222. Fisheries Act- Fisheries Notices 1987- No. 193-Prohibition on taking prawns in the vicinity of the Vanderlin group of islands, dated 8 September 1987. No. 194-Prohibition of taking prawns west of Groote Eylandt, dated 8 September 1987. No. 195-Revocation of Fisheries Notice No. 184-Prohibition on the taking of prawns off Northern Australia, dated 16 June 1987. Health Insurance Act- Approvals (2) pursuant to subsection 23db (1), dated 28 May 1987. Determinations pursuant to subsections- 4ba, dated 21 July 1987. 4bb, dated 21 July 1987. 23dn (2), dated 28 May 1987. 78c (2), dated 21 July 1987. Statements of particulars of a Ministerial determination pursuant to section 106aa, dated 26 August 1987 (2) and 7 September 1987. Liquefied Petroleum Gas (Grants) Act-Price Determination, dated 28 September 1987. National Health Act- Declaration made by the delegate of the Minister under section 85, dated 11 September 1987. Determinations (3) made by the Minister under subsection 4 (1), for purposes of paragraphs (db), (dc), (dd), dated 23 September 1987 and 25 September 1987. Principles formulated under subsection 40aa (7), dated 28 June 1987. Navigation Act- Navigation (Orders) Regulations-Marine Orders 1987-No. 7-Part 10 (Health-Medicines and Medical Stores). Regulations-Statutory Rules Nos 229-233. Proceeds of Crime Act-Regulation-Statutory Rules 1987 No. 224. Public Service Act-Determination 1987 No. 78. Radiocommunications Act-Standard-Statutory Rules 1987 Nos 236, 237. Seat of Government (Administration) Act- Determinations made under the following Ordinances- Payroll Tax, dated 29 July 1987. Real Property, dated 9 September 1987. Taxation (Administration) (7), dated 29 July 1987 (3), 24 August 1987 (2), 28 August 1987 and 21 September 1987. Ordinances 1987- No. 54-Air Pollution (Amendment) No. 55-Coroners (Amendment) No. 56-Magistrates Court (Amendment) Regulations 1987- No. 12-Co-operative Societies (Amendment) No. 13-Gaming Machine (Amendment) Shipping Registration Act-Regulations-Statutory Rules 1987 No. 234. States Grants (Tertiary Education Assistance) Act 1984- Directions- No. 27, dated 23 September 1987. No. 28, dated 24 September 1987. Superannuation Act-Regulations-Statutory Rules 1987 Nos 225, 226. The following answers to questions were circulated: (Question No. 6) Senator Bolkus asked the Minister representing the Minister for Foreign Affairs and Trade, upon notice, on 15 September: (1) Did the Australian Government provide the funds for Phase I of the Inhambane Province project, in Mozambique, as agreed in 1984. (2) Has the Australian Government received a submission for Phase II of the project; if so, was the request granted. (3) If the request was denied, is it likely that the decision will be reviewed. Senator Gareth Evans —The Minister for Foreign Affairs and Trade has provided the following answer to the honourable senator's question: (1) Yes. (2) A proposal was put to the Government to fund Phase II of the project over 3 years at a cost of $1.5 million, of which $400,000 was required in the first year. Following a thorough appraisal of the Phase II proposal, the total request for Phase II funding was not granted but the $400,000 sought for the first year was provided to give project management time to find alternative funding sources, or to wind up the project, as the case may be. (3) No. (Question No. 25) Senator Jones asked the Minister for Industry, Technology and Commerce, upon notice, on 15 September 1987: (1) Will the Minister supply a complete breakdown of the company structure of ICI Australia, in view of the decision of the Queensland Government to allow ICI Australia to go ahead with its controversial $24 million caustic chlorine plant at Lytton in Brisbane, listings its Company Officers, Directors and major shareholders. (2) What overseas interests are involved in the operation of ICI Australia. (3) What are their listed operations within Australia, and of their produce, how much is for (a) International; and (b) Domestic, consumption. (4) What are the overseas markets of ICI Australia, Senator Button —The answer to the honourable senator's question is as follows: (1) The activities of ICI in Australia are undertaken by ICI Australia Limited. ICI Australia operates through a large number of subsidiary and associated companies, which are listed in the company's annual report. The current directors of ICI Australia Ltd are: Executive: Milton D. Bridgland: Chairman, Dr Michael Deeley: Managing Director, John V. Eddey, Warren W. Haynes, Terry Silverson, David W. Gaffney. Non-Executive: John B. Gough, Tom O. Hutchison, Jim Scully, A.O., Robert J. White, R. Bruce Vaughan. The current general managers of ICI Australia Ltd are: B. G. Smith, Plastics and Olefines; A. W. S. Rogers, Industrial Chemicals; P. J. Clinch, Explosives; J. Marshall, Specialty Chemicals Group; J. V. Plunkett, Biologicals; P. L. Weickhardt, New Businesses Group; G. D. W. Curlewis, Dulux. The major shareholder in ICI Australia is Imperial Chemical Industries, PLC, of the United Kingdom, which owns 62.4 per cent of the issued shares. The balance of the company's shares is held predominantly by the Australian public (comprising approximately 20,000 separate shareholders). The shares in ICI Australia Ltd are listed on the Australian Stock Exchange. (2) The control of the activities of the company in Australia is vested almost entirely in the Board and management of ICI Australia. (3) The company operates in three broad areas. Industrial, specialty and agricultural chemicals and fertilisers: the major industries served include agriculture; food; alumina; automotive; building; glass; minerals; paint; ink; paper; plastics and rubber; soaps; detergents; steel; textiles; water treatment; wool. Effect products which include human and animal health care products; explosives; paints; scientific instruments; specialised building products; polyurethanes; adhesives: the major industries served include agriculture; automotive; building; footwear; health care; household appliances; packaging; mining; textiles. Olefines, plastics and films: the major industries served include agriculture; automotive; building; cable insulation and sheathing; footwear; packaging. ICI Australia Ltd produces predominantly for the domestic market. In recent years, however, there have been increasing efforts to expand into export markets. (4) The overseas markets for ICI Australia are primarily in South East Asia and the Pacific region, with the major countries being New Zealand, Papua New Guinea, Fiji, Indonesia, Malaysia and the Philippines. ICI Australia announced on 16 September 1987 that it will not proceed with the proposed caustic soda and chlorine plant at Lytton in Brisbane. The Company will ensure that supplies of chlorine and caustic soda to Queensland are maintained. (Question No. 40) Senator Jones asked the Minister representing the Minister for Foreign Affairs and Trade, upon notice, on 15 September 1987: (1) How many Australian nationals have been executed overseas after being found guilty by foreign courts of drug offences during the years 1985-86. (2) In which countries did these executions take place. (3) How many Australian nationals have been convicted of drug offences overseas, and have received alternative penalties. (4) In which countries did these convictions occur. (5) How many Australian nationals are awaiting trial for drug offences overseas and in which countries. Senator Gareth Evans —The Minister for Foreign Affairs and Trade has provided the following answer to the honourable senator's question: (1) Two. (2) Malaysia. (3) According to the information available to the Department of Foreign Affairs and Trade, 103 in 1985-86. (4) Asia: India, Indonesia, Pakistan, Singapore, Thailand. America: U.S.A., Mexico. Middle East: Lebanon, Iraq, Syria. Europe: France, Germany (FRG), Greece, Italy, Spain, Switzerland, United Kingdom. (5) According to the information available to the Department of Foreign Affairs and Trade, there are 28; countries concerned are: Czechoslovakia 1, France 1, Federal Republic of Germany 2, Greece 1, India 1, Italy 1, Lebanon 8 (details not known), Malaysia 1, Mexico 1, Netherlands 1, Pakistan 1, Spain 1, Switzerland 1, Thailand 4, United Kingdom 2, United States of America 1.