Monday, 26 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 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 Senators Michael Baume (from 14,153 citizens), Boswell (from 1,657 citizens), Chaney (from 46 citizens), Richardson (from 20 citizens) and Walters (from six 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 Walters (from 18 citizens). To the Honourable the President and senators in Parliament assembled: The humble petition of the undersigned citizens of Dawson electorate respectfully shows that: The Hawke Labor Government has no mandate to introduce its flawed and costly ID card proposal, and that the card will not stop tax and welfare fraud and will invade the private lives of Australians. Your petitioners humbly pray that the Senate will urge the Government to reject Labor's ID card proposal. by Senator Boswell (from 1,954 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we are totally opposed to the introduction of a compulsory national identification system under the control of the Federal Government. 2. That we reject the identity card proposal because it will involve massive expenditure of taxpayers funds while being ineffective in combating the problems of tax evasion, illegal immigration and abuse of the social security system. 3. That we are deeply concerned at the invasion of each Australian's privacy and the loss of their freedom that would occur if the identity card was introduced. Your petitioners therefore humbly pray that the Se-nate should: Reject the identity card or allow for a national refe-rendum so the Australian people can decide themselves whether they want the costly, ineffective and intrusive un-Australian identity system. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 4,360 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 Boswell (from 1,796 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 Boswell (from 481 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 Parer (from 14 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned respectfully showeth: (1) That the Government's proposed Identity Card is the greatest threat to civil liberties in the history of this country; (2) That the I.D. card will be a costly and unnecessary method of attacking tax evasion and social security fraud; and (3) That the proposal will impose yet another bureaucratic burden on the business sector. Your petitioners therefore humbly pray that the Senate reject the Government's legislation to introduce the Australia Card or any other identity card system. And your petitioners as in duty bound will ever pray. by Senator Parer (from 35 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. We consider 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. We therefore ask the Senate to take action to prevent the implementation of this legislation. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 3,309 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 nine 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: (i) the fringe benefits tax will place enormous cost increases on employers throughout Australia; (ii) in so doing, the fringe benefits tax will raise the cost of employing labour particularly in remote locations and it will inevitably worsen the already high level of unemployment in Australia; (iii) much of the cost of the tax will be carried by employees as employers reduce benefits; and (iv) the cost of the tax will harm small business particularly as these businesses will be unable to pass on the cost of the tax and as a result many may be forced to close. Your petitioners therefore call upon the Government to repeal this unfair tax before it damages Australian business and thereby reduces the standard of living of all Australians. And your petitioners as in duty bound will ever pray. by Senator Crichton-Browne (from 20 citizens). 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 under-taking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-86 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 27 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 Senator Parer (from 25 citizens). To the Honourable the President and the members of the Senate assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. The present Australian national flag is not distinctively and uniquely Australian and is confused with other national flags. 2. The people of Australia have never had an opportunity to express their views on an appropriate Australian national flag in a referendum. 3. The present Australian national flag does not properly represent Australia as a sovereign, independent nation. 4. The present Australian national flag incorrectly proclaims Australia as a colony, homeland, protectorate, dominion or government department of Great Britain. 5. The first condition in the flag competition of 1901 required that the design should show Australia's loyalty to the British Empire. The British Empire no longer exists. 6. A public opinion poll held in 1984 using the Gallup Method revealed that 52 per cent of Australians surveyed wanted a competition for a new design for the Australian flag. 7. There is no inherent link between Australia proclaiming a unique and distinctive flag and the political issue of Australia moving to a republican form of government. 8. The adoption of a truly Australian national flag would serve as a focal point for Australia's bicentennial celebrations in 1988. Your petitioners therefore pray that your honourable House will: (a) Appoint a Committee of the Parliament with representatives from both Houses and all parties to invite and consider proposals for the design of a new Australian national flag, and (b) Require that Committee to make recommendations on the form of a minimum cost referendum in which the electors will be given the opportunity to vote for a flag from a selection of at least three designs, one of which will be the present Australian national flag. And your petitioners as in duty bound will ever pray. by Senator Jenkins (from 14 citizens). Senator MICHAEL BAUME(New South Wales) —by leave-In addition to the petition I presented earlier which was read by the Clerk and signed by 14,153 constituents, I present to the Senate the following petition, from 93 citizens, which is not in conformity with the Standing Orders: The Federal Government is proposing that every adult citizen be issued with an identity card. You should by now, have heard all the arguments for and against this proposal. If you are opposed to the ID card please sign the petition below. We are endeavouring to present 500,000 names to the Federal Government in an attempt to stop legislation before it is too late. Your signature could tip the scales. Petitions received. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —Mr President, 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. Director of Public Prosecutions-annual report 1986-87 pursuant to section 33 of the Director of Public Prosecutions Act 1983. 2. Access-some options for reform-Family Law Council report. 3. High Court of Australia-annual report 1986-87-pursuant to section 47 of the High Court of Australia Act 1979. 4. Primary Industry Bank of Australia Limited-annual report 1986-87-pursuant to section 10 of the Primary Industry Bank Act 1977. 5. An investigation into a potential extension of intermodal rail services-Inter-State Commission report-pursuant to section 10 of the Inter-State Commission Act 1975. 6. An investigation into the efficiency of interstate transport arrangements-Inter-State Commission preliminary report-pursuant to section 10 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 Senator Richardson is absent from the chamber for Question Time today, as he is in Hobart attending a conference on Antarctic conservation. Any questions in this chamber which would normally be directed to Senator Richardson in relation to his portfolio or those he represents should be directed to Senator Ray. Senator CHANEY —I have a question for the Minister representing the Treasurer. Have any Commonwealth Ministers, departmental officials or officials of any Commonwealth statutory authorities been involved in discussions concerning the package put together to support Rothwells merchant bank? Can the Minister advise the Senate what part the State Government of Western Australia is playing in the arrangements and what obligations have been entered into by the State Government and its instrumentalities? What role, if any, is being played by the Commonwealth or any of its instrumentalities? Is the Commonwealth in any way directly or indirectly assuming any responsibility or liability? Senator WALSH —I have a note from the Treasurer which says, among other things, that the Government is not a party to recent arrangements involving Rothwells. Therefore, I think the answer to all of the questions asked would have to be no, although I do not remember for certain how they were all framed. Anyway, the Commonwealth is not a party to the recent arrangements. Therefore, it seems likely that the Commonwealth or Commonwealth officials were not involved in discussions either, but I will check that with the Treasurer. Senator CHANEY —Mr President, I ask a supplementary question. I thank the Minister for his response but there was one element of the question which related to the part which the Government of Western Australia is playing. In light of the heavy involvement of the Commonwealth in providing funds for the States, it seemed to me to be a reasonable matter to ask the Minister whether he is aware and could give the Senate details of what role the State Government is playing and what obligations it has entered into either directly or through its instrumentalities. Senator WALSH —All that I know about the State Government's involvement is what I have read in the Press. The sum of that is that the State Government Insurance Office has taken over property allegedly worth $52m for $30m and that there is a buy-back clause, however, under which Mr Connell's organisation can resume the ownership of the property at any time between six and 12 months hence, as I understand it. I do not know any more details than that. I will see whether the Treasurer has any information. Senator COLSTON —I direct a question to the Minister representing the Minister for Employment Services and Youth Affairs. I refer to a report in the Courier-Mail newspaper of 23 October 1987 headed `Women claim they were sexually harassed at work site'. Were the women concerned working on a community employment program (CEP) project at the time and, if so, what was the nature of the project? Who was the builder mentioned in the article and have investigations been made into the sexual harassment claim and a further claim that some of the CEP workers were required to work on his private homes? Will the builder be asked to explain his use of CEP project workers on his own homes and reimburse the Commonwealth for any funds he misappropriated? Senator RYAN —I am aware of the article referred to in Senator Colston's question and I have the following information for him. The three women named in the article were employed on a CEP project sponsored by the Macgregor Cricket Club. The CEP project was to develop two ovals and install practice wickets involving land levelling, turfing, tree planting and landscaping and the installation of an irrigation system and electrical conduit. Investigations by the Commonwealth and State government officers into the claims of sexual harassment and misuse of CEP workers on the builder's homes are currently being made. The builder, Mr Trevor Wilson, and the project sponsor will be asked to respond in full to the allegations. Should the claims of misuse of CEP labour be substantiated, full restitution will be sought. The sponsor has been advised by the Department that no more CEP workers will be referred to the project until the claims have been investigated and the situation satisfactorily resolved. Senator WATSON —My question is directed to the Minister representing the Prime Minister. Does the Minister agree with his colleague Mr Willis, who said on Friday that the whole array of effects of the share market crash could be `very considerable' with possible impact on Australia's terms of trade, the exchange rate, interests rates, investor confidence, capital flow and consumer confidence? If so, does he agree that the Government should keep open the option of a mini-Budget before the end of the current parliamentary session? Senator GARETH EVANS —The Government will sensibly examine the implications of the fall in the stock market for the world economy and the Australian economy. It may well be that some of the areas outlined by Mr Willis will require examination. Mr Willis was doing no more than stating an obvious agenda of could-bes, rather than making any findings on the run as to what the implications or results of the fall may in fact prove to be for the Australian economy. That remains to be seen. We will make our assessments over the next few weeks, but we certainly will not be rushing in to form half-baked views about the implications of the market's movements. We see calls for mini-Budgets as essentially fairly mindless, calls for major policy shifts-something which is not being contemplated by the Government. The policy changes, particularly fiscal policy, that have been achieved by the Australian Government are really in advance of the rest of the world and especially the United States. The kind of knee-jerk responses that are suggested by the Opposition would serve only to inflame the sense of crisis, something which we see as being hardly conducive to the restoration of order in the stock market. I am advised by the Treasurer-I think he will be saying as much in the other House-that for all of these reasons there will be no mini-Budget during the remainder of calendar year 1987. As is usual, the Government will consider the option of a statement of initial budgetary measures-a May-type statement-at the appropriate time; that is, early next year. Whether the option to proceed with a May-type statement is taken up will depend on a range of factors which will be weighed up in the balance much closer to that time. Senator BURNS —My question is directed to the Minister for Finance. Has his attention been drawn to an article appearing in today's Australian entitled `Insanity of 1929 repeats itself' and written by Professor J. K. Galbraith? Is it the Minister's view that the lessons Professor Galbraith draws regarding the United States economy need to be given serious consideration in setting Australian economic policy? Senator WALSH —The answer to the first part of the question is that I have seen the article. I do not think that the Australian Government can learn much from it because the Government already knows the points Professor Galbraith made. The Opposition, however, could certainly benefit from studying it because, as I understand it, the Opposition still goes along with supply-side voodoo, incentivation and all that sort of thing. The Liberal Party certainly had supply-side voodoo in the policy it presented during the recent election campaign. I also note for the record that Senator Stone stopped far short of endorsing the proposition that if income tax rates were lower, there would be a very major increase in revenue because people would work harder and so on. Professor Galbraith ridicules that proposition in these words: I do not believe the Reagan-Thatcher doctrine that the rich have not been working because they have too little money while the poor have not been working because they have too much money. Apart from being counter-intuitive, all the empirical evidence of which I am aware supports Galbraith's assessment or, at the very least, does not contradict it. There is only one error of omission on Galbraith's part when he referred to the Reagan-Thatcher doctrine. It is, of course, the Reagan-Thatcher-Howard-Bjelke-Petersen and, to a very limited extent, even Stone doctrine as well, and that is not a comprehensive list. That supply-side voodoo upon which that sort of assessment is based is still the official policy of the Opposition in Australia, as I under-stand it. In regard to the causes of the recent stock market collapse, Galbraith made the point which many others have made, and that is that all of this has happened before. He said: Once this one has worked itself out, there is no early danger of another crash. The financial memory is about 10 years. That is about the time between one episode of sophisticated stupidity and the next. So we don't have to worry for the next 10 years. Although this is directed at the Reagan Adminisration, it ought to be studied and absorbed by the Opposition. Apart from the 10-year cycle or thereabouts to which Galbraith referred, he said: For the disasters of this past week we must hold the Reagan administration substantially responsible. Two great innovations carry a large share of the blame. There was first the extraordinary notion that, by large reductions in taxes, one could have large increases in income. In other words, that is supply-side voodoo. He continued: This produced an unparalleled deficit in the public budget and lodged a great deal of speculative money in the hands of people who put it into the market. I commend the reading of Galbraith's article to members of the Opposition and hope that they devote a very long period to trying to think through the implications of it for their policy. The PRESIDENT —I draw the attention of honourable senators to the presence in my gallery of former Senator Ted Robertson from the Northern Territory. On behalf of all honourable senators, I wish him well on this visit to Canberra. Honourable senators-Hear, hear! Senator HAINES —I refer the Minister for Transport and Communications to his answer to my question of Friday, 23 October concerning the release of 1,500 telegram forms by Australia Post to a private market research firm. Does the Minister recall his statement that `an inexperienced officer' arranged for these telegram forms to be made available to the firm? Given the seriousness of wrongful delivery of postal articles, as evidenced by section 91 of the Postal Services Act 1975, which was recently amended, I point out to the Minister, to include electronic services for the transmission of information and hence covers telegrams, does the Minister agree that it would have been quite inappropriate for a low ranking officer, experienced or not, to have authorised the decision to release those forms? Can the Minister advise the Senate at what level of seniority this decision and authorisation was made at Australia Post, and whether any action will be taken against the person concerned? Finally, can the Minister also advise whether Australia Post officers who followed the instruction to release the telegram forms are subject to any overriding protection under the Postal Services Act against prosecution under section 91, as amended? Senator GARETH EVANS —As I advised the Senate and Senator Haines on Friday, what happened in Australia Post was obviously a serious error of judgment for which the employee in question, I am advised by Australia Post, has been counselled. As to the other matters in Senator Haines's question, she asks for a degree of detail which I could not reasonably be expected to have to hand. Accordingly I will take them on notice and give an answer as soon as possible. Senator CHILDS —My question is directed to the Minister for Finance. Did the Minister hear the Leader of the Opposition, Mr Howard, being interviewed by Mike Dodd on the Australian Broadcasting Corporation's AM program this morning on the Opposition's calls for a mini-Budget? I ask whether Mike Dodd asked Mr Howard: What areas in particular would you like to see cut? and whether Mr Howard answered: I can give you a list if you want to give me another interview. Will the Minister ask Mr Howard for his list of proposed expenditure cuts? Senator WALSH —I certainly will, and I put it on the record now that I would welcome the receipt from Mr Howard of that list of proposed expenditure cuts. I would also certainly welcome his assurance that if the Government decided to proceed with any of them the saboteurs of economic policy who populate the other side of this Senate-- Senator Puplick —On a point of order, Mr President: The Minister was asked whether he would ask Mr Howard for the list. I put it to you that the Minister, having given the answer yes, is now debating the question. The PRESIDENT —I warn the Minister not to debate the question. Senator WALSH —Certainly, Mr President. I would welcome his guarantee that if any of those expenditure cuts were acted upon, that action would not be obstructed in the Senate. I just put a qualification on the list that I certainly look forward to receiving: it must, of course, be net of the various promises and demands for increased expenditure which assorted members of the Opposition have made over the last 12 months, and there must be nothing phoney in it. A prime example of something phoney would be reducing public expenditure on the provision of medical services and doing it in such a way that total expenditure on medical services would increase to 11 per cent of gross domestic product, as it is in the United States. Senator Puplick —On a point of order, Mr President: I put it to you that Senator Walsh is continuing to defy your ruling. While he might have contempt for his own backbenchers asking dorothy dixers, he should be more respectful of you. The PRESIDENT —I think the Minister has finished his answer. Senator WALSH —Yes. Senator SHORT —I address my question to the Minister for Justice and Minister administering the Department of the Attorney-General. Has the Minister noted the statement last week by the Executive Director of the National Companies and Securities Commission (NCSC), Mr Schoer, that the Commission is monitoring stockbroking firms to ensure that they are solvent and able to cope with the volume of business arising from the gyrations on the stock market in recent days? Is the Minister also aware of Mr Schoer's recent statement to Senate Estimates Committee E that a lack of adequate funding and resources has forced the NCSC to downgrade significantly its monitoring and surveillance responsibilities, and that in some areas staff resources are down by as much as two-thirds? Is the Minister satisfied that the Commission does have the capacity to perform its responsibilities, particularly in view of the major developments in the financial markets over the past week? If not, will the Government take urgent steps to increase the resources available to the Commission in order to strengthen public confidence? Senator TATE —I have not available to me in the brief from the Attorney-General specific material which would enable me to reply to statements apparently made by Mr Schoer, the Executive Director of the National Companies and Securities Commission. But I can make a general response on the question of the investigatory resources of the Commission which might help the honourable senator in a more general sense. The resources available to the NCSC include not only the 82 staff at its office in Melbourne but also over 1,400 staff Australia-wide serving in the NCSC's delegates, namely, the Corporate Affairs Commission in each State and Territory. These resources should be used by the NCSC in carrying out its investigative work. Surveillance of the markets and corporate behaviour is a most important function and should be given the highest priority. If surveillance work is suffering because priorities are given to other functions, those other priorities and functions must be carefully examined. In December 1986 the Attorney-General asked questions about the use of resources and the allocation of priorities by the NCSC within the co-operative scheme. The NCSC indicated that it believed that, in the light of the Federal nature of the scheme and because its delegates report directly to their separate governments, it was not appropriate for the NCSC to try to set their internal priorities. The NCSC further suggested that in practice the functions carried out by the NCSC and its delegates are largely separate. The inefficiency and misallocation of resources within the present co-operative scheme demonstrated by this situation is one of the main reasons why the Commonwealth is now moving to establish a truly national system of corporate regulation. In a Commonwealth scheme all the resources in Australia available to the proposed Australian Securities Commission for corporate surveillance and investigation will be able to be effectively managed and co-ordinated to ensure the operation of fair and efficient markets in the national interest. In moving to establish a Commonwealth scheme, the Government is carefully examining current priorities and functions to ensure that scarce and valuable resources are directed away from time-consuming and unnecessary functions to enable more resources to be devoted to essential surveillance and monitoring work. Senator DEVLIN —I direct my question to the Minister Assisting the Minister for Community Services and Health in her responsibility for housing. Is the Minister aware of the Opposition's claims of a $468m cut in public housing funding? Can the Minister explain to the Senate how the Opposition has arrived at this figure? Is this another example of the Opposition's notoriety for supplying incorrect figures to the electorate? Senator RYAN —Mr Porter's claims are completely unfounded. Focusing on current waiting lists for public housing does not take account of the Federal Government's impressive track record in the public housing area since coming to office. The $468m mentioned by Mr Porter is an erroneous figure. It represents the reduction in the total borrowing component of the States' Loan Council borrowing program, plus a reduction in the forward estimate for Commonwealth-State Housing Authority funding in 1987-88. Loan Council funds available for public housing at the concessional rate of 4.5 per cent actually fell by only $170m. The decision to accept cuts to the Loan Council borrowing program, and hence to low interest funds available for public housing, was made by State Premiers at the 1987 Premiers Conference. Premiers could have accepted cuts in other areas. A balanced Budget for 1987-88 and the withdrawal of the Federal Government as a net borrower this year have had a positive impact on interest rates. The predominant rate on new savings bank loans is now 14.5 per cent; some permanent building societies are offering starting interest rates of less than 14 per cent to first home buyers. Dwelling commencements in 1986-87 were a disappointing 116,200, but this was still 10.7 per cent greater than the Opposition's last dismal effort in 1982-83. The Indicative Planning Council for the Housing Industry has forecast dwelling commencements to increase to between 126,000 and 130,000 in 1987-88, a 10 per cent increase on last year. Comparing mortgage repayments as a proportion of income now with the situation a decade ago is meaningless. It ignores the effect of second incomes on borrowing capacity, the impact of inflation on house prices, the average size of loans actually taken out and the impact of government assistance programs. I remind honourable senators that since its introduction in 1983, the first home owners scheme has assisted 246,000 households into home ownership. Senator Short —Will the Minister table the document from which she has quoted? Senator RYAN —No, it is confidential. Senator WALTERS —My question is addressed to the Minister Assisting the Minister for Community Services and Health. Is the Minister aware of Dr Henry Giaretto's highly successful self-help treatment of more than 6,000 sexually abused children and their families at the Californian Institute for the Community as an Extended Family? Will the Minister consider inviting Dr Giaretto to visit Australia so that he can give first-hand help to the Institute's treatment centres here in Australia. If so, when will this take place? Senator RYAN —I am not aware of the particular program or the doctor referred to in Senator Walters's question; therefore, I have no brief on the matter here. If Senator Walters makes the information available to me, I will send it on to Dr Blewett and obtain answers to her question as soon as possible. Senator GILES —My question is to the Minister Assisting the Minister for Community Services and Health in her responsibility for housing. Is it correct that this year-the International Year of Shelter for the Homeless-Commonwealth new money for the supported accommodation assistance program will not be accepted in full by the States and therefore will not be available for assistance to homeless people? Senator RYAN —The Commonwealth has provided new funds each year since the supported accommodation assistance program was introduced by the Labor Government in 1984-85. A total of $76.1m was provided in 1986-87 for refuges, half-way houses, referral services, sexual assault and counselling centres and other support services assisting people in crisis throughout Australia. This represents an increase of 90 per cent on funding for this type of activity since the program was first introduced in 1984-85. The Commonwealth has already guaranteed a further $5m plus indexation funds for 1988-89 to ensure the continued growth of this important work. It is true that not all States and Territories have accepted the full Commonwealth offer of $5m new money under the supported accommodation assistance program for 1987-88. In fact, the Northern Territory has only accepted $11,000 out of the $225,000 new moneys offered. With the exception of South Australia, which has not yet formally accepted the Commonwealth's offer, all other States will accept the new money in 1987-88. Under the terms of the agreement with the States any funds not taken up will be redirected to those States and Territories that have accepted the Commonwealth's offer in full. Thus the $5m new Commonwealth money for supported accommodation in 1987-88 will be fully allocated to new projects and to the enhancement of existing services. In addition to providing $5m in new money, the Commonwealth is also providing some $2.6m for indexing salaries and operating costs of existing refuges and other services. The significant increases in Federal funding in this area reflect the Labor Government's commitment to assist those in real need in the community, even in times of severe budgetary restraint. Senator NEWMAN —My question is directed to the Minister for Justice. I remind him that on the Australian Broadcasting Corporation television program Four Corners last month he said in relation to corruption in the Queensland Police Force that it filled him with foreboding `when the stench of corruption reaches so high that the work of the National Crime Authority (NCA) may have been compromised'. The Minister must be aware that the work of the NCA is also threatened by corruption in other forces. What steps has he taken to ensure that the work of the Authority is not compromised further? Senator TATE —In general I can assure the chamber and, indeed, those who are listening, that the National Crime Authority's operations and the protection of its witnesses-a point particularly raised by Senator Hill in a question a couple of weeks ago-have, as far as one can judge and on advice available to me from Mr Justice Stewart, not been compromised by the events surrounding, in particular, Mr Parker in his role as liaison officer with the National Crime Authority over several years. Nevertheless, a general point needs to be addressed. To that end, only last Friday I wrote to Mr Justice Stewart bringing to his attention the fact that I am placing on the agenda of the intergovernmental committee meeting in Hobart on 27 November the question of the appointment of liaison and contact police personnel whose task it is, as the term implies, to liaise between the National Crime Authority and the State police force concerned. I wrote to Mr Justice Stewart indicating the principles I would like to see adopted are that the nomination of liaison or contact officers should be acknowledged to be subject to the right of refusal by the receiving agency-in other words, that the nominee of the police force concerned is not automatically accepted by the National Crime Authority-and further that the liaison or contact officer nominated should be by reference to the individual concerned and not by reason of the office he or she might hold. Certainly, in Mr Parker's case he has succeeded to the post of Assistant Commissioner (Crime), the liaison officer in that office having been accepted some time before. As I say, I wrote to Mr Justice Stewart on Friday informing him that the matter would be on the agenda on Friday, 27 November, and seeking his views, which I expect to get shortly. Senator BOLKUS —My question is also addressed to the Minister for Justice and follows on from the previous question. I refer the Minister to the recent arrest, following investigations by the National Crime Authority (NCA), of the Assistant Commissioner (Crime) in South Australia, Mr Kevin Harvey, on a charge of conspiring to pervert the course of justice. In view of this most disturbing development, can the Minister advise whether, and to what extent, Mr Harvey would have had access, as a consequence of his senior and specialised position in the South Australian police force, to any NCA sensitive material? Senator TATE —Some of the matters I raised in answer to Senator Newman cover matters raised in Senator Bolkus's question, but in general honourable senators are aware not only that liaison officers are appointed in a formal sense but also that in the exchange of intelligence at the working police level there is quite a bit of tick-tacking between the National Crime Authority and various State police forces. I am advised that Mr Harvey was not a nominated liaison officer to the NCA for the South Australian police force but that he had previously attended a number of National Crime Authority operational conferences as follows: three in 1984, four in 1985, two in 1986 and one in 1987. I am also advised that as far as the Authority is aware at this stage the presence of Mr Harvey at those meetings has not jeopardised any of the Authority's investigations nor put at risk any of the Authority's witnesses or informants. That is the advice I have received from the NCA as late as just before Question Time. Honourable senators will be aware from the answer I gave to Senator Newman that clearly there is a need to tighten up procedures in this liaison contact role. It is to that end that I hope that, at the ministerial level, in late November a good working relationship can be reinstituted. Senator ARCHER —I also ask a question of the Minister for Justice. In answering a question I asked on 9 October, I understood the Minister for Justice to indicate that he favoured the establishment of units `to bring about, within government agencies, a system of prevention, detection and investigation of fraud'. Does this imply that this system would be instead of using the services of the regular police? Would it involve recruiting officers from existing police services to operate it? Would such a scheme only further fragment an already overfragmented law enforcement service? Senator TATE —I was trying to indicate to the Senate that when the Australian Federal Police (AFP), being the pre-eminent law enforcement agency of the Commonwealth, is, under its charter given by this Government in 1983, undertaking its whole orientation to major matters of importance involving breaches of the criminal law, whether they be organised crime, drug trafficking or major fraud against the Commonwealth, it is not thought to be a sensible use of those valuable police resources to have Australian Federal Police engaged in some of the preventive and minor matters which can inundate them otherwise. To repeat the example I have given many times in this chamber, we found that the Federal Police were dealing with tens of thousands of cases of social security cheque theft from letterboxes and with fraud when those who had received the cheques claimed that they had not and got emergency relief through social security or social welfare agencies. The person years that were used up by the Australian Federal Police in pursuit of those matters were a terrible waste of its resources. It is far better that the more highly trained and more goal oriented task forces that we now have within the Federal Police be given the task of pursuing major fraud against the Commonwealth. For that reason, the Commonwealth Government has decided that within each agency upstream of the Australian Federal Police-the prosecution agencies and the courts-much more attention should be paid to preventive measures and to carrying out investigations, as of course many agencies already do. Within the Department of Social Security and the Australian Taxation Office, for example, a lot of the investigations are undertaken by persons well qualified within those agencies. It is hoped that that particular model will be adopted by other agencies to relieve pressure on the Federal Police. Senator ARCHER —I ask a supplementary question, Mr President. Does the Minister believe that the highly specialised investigation of these matters can be carried out by people without a police background? Is he not concerned that middle ranking to senior officers will leave to go to a much better existence in divisions? Senator TATE —The question of the attraction to members of the Australian Federal Police of jobs within other government agencies is one with which I am always concerned. I must admit that there have been occasions when there has been that loss and drift to other agencies, and to the private sector for that matter, because of the skills imparted to the Australian Federal Police officers in their training and experience. But, of course, there are other factors at work, including the superannuation scheme, which my colleague the Minister for Finance and I are working on at the moment in order to make it more attractive for those from the very age groups and rankings that Senator Archer spoke of to remain within the AFP and to give us the benefit of their experience up to a reasonable retirement age. I believe that the fraud control committee established by the Government will call on the Australian Federal Police to ensure that those undertaking these tasks within agencies do acquire from members of the Australian Federal Police some of the skills that are required. I hope there will be co-operation in that transfer of skills. Senator JONES —My question is directed to the Minister representing the Attorney-General. Has the Minister's attention been drawn to reports that the Australian Taxation Office alleges that a former Queensland Police Licensing Branch officer, Mr Jack Herbert, now believed to be overseas, owes unpaid taxes amounting to more than $800,000? Can the Minister say whether this is the same Mr Herbert who is believed to have enormous real estate holdings in Queensland and who is required to give evidence before the Fitzgerald Commission of Inquiry into Possible Illegal Activities and Associated Police Misconduct in that State? What measures have been taken by the Federal authorities to locate Mr Herbert and have him returned to Australia? What has been the level of co-operation from the Queensland Government in this regard? Senator TATE —I have not had drawn to my attention in a formal way any allegation by the Australian Taxation Office that a former Queensland Police Licensing Branch officer, Mr Jack Herbert, now believed to be overseas, owes unpaid taxes amounting to more than $800,000. But I believe that any reference to that Mr Jack Herbert must be to the same Mr Jack Herbert who does hold real estate holdings in Queensland of a significant nature. As I have indicated to the chamber before, the fact is that, if Mr Herbert is overseas, extradition proceedings can be undertaken only by the Federal Government and that can be done only in relation to pending court proceedings and not in relation to a commission of inquiry such as is being undertaken by Mr Fitzgerald. The fact is that the Queensland Government has not approached the Federal Government at all in relation to the return to Australia of Mr Herbert, but should it do so, of course, the Federal Government will undertake in a most co-operative way whatever measures are required-within the limits that I have noted, namely, that it must be in relation to his being sought in relation to pending court proceedings. Senator KNOWLES —Can the Minister for Local Government inform the Senate what the average loss of income will be for local government authorities caused by the substitution of annual payments by quarterly payments of Commonwealth financial assistance to local government? What steps is the Minister taking to ascertain the financial problems that this may cause local authorities? Senator REYNOLDS —I thank Senator Knowles for her question. I am not able to give her a precise figure as to the annual loss to local government of quarterly payments. However, I am able to say that that decision was taken in the context of the May economic statement. It is very important that all areas of government and, indeed, the community generally exercise restraint, and the decision in relation to quarterly payments was made by the Government to ensure that local government was exercising the restraint that was being asked of the rest of the community. In talking to local authorities all over Australia, I am well aware that there was a degree of disappointment amongst many local authorities that they could no longer invest their full year's payments. However, only on Friday when I was speaking to some 13 local authorities in south-east Queensland I received an assurance from them that they were prepared to do their bit in terms of exercising this restraint. I am happy to take on notice the early part of Senator Knowles's question in terms of the actual financial loss, as she puts it, and think it is important that we know this in terms of recognising the contribution of local government. Senator ZAKHAROV —My question is directed to the Minister representing the Minister for Veterans' Affairs. Is the Minister aware of some anxiety among people who are buying their homes through the defence service homes scheme about the sale of their mortgages? There are fears that the sympathetic handling of problems that they have received in the past may cease with that sale. Are these fears justified? Senator REYNOLDS —In answer to the first part of Senator Zakharov's question, yes, I am aware that some people have queried whether their low interest rates would be affected by the sale of the present portfolio of defence service home mortgages. However, I am pleased to say that the terms of any sale will involve preserving the concessional interest rate which applies to existing loans. As to the second part of the honourable senator's question, I would say that the ancillary aspects of the scheme are presently being examined as part of the overall consultative process with the Returned Services League of Australia (RSL) and other bodies. The Government has received a submission from the RSL and has formed a group of officials to be headed by a business person and to include a representative from each of the RSL and the departments of Veterans' Affairs, Defence, Finance, and Prime Minister and Cabinet. The aim of the group is to look constructively at the Government's proposals, along with the variations which the RSL has developed, with a view to presenting an urgent report to Government. It is envisaged that the report will be available in time for it to be considered by Government, with a view to making an announcement of a final decision before the end of this year. Senator PANIZZA —Does the Minister for Finance agree that, to be effective, a wealth tax would have to include the family home? Senator WALSH —That question is based on a number of suppositions, speculations, rumours and so on, including rumours that have been in the Press about what I am alleged to have said at some meeting or other, and, on that basis, I have no comment to make. Senator FOREMAN —My question is directed to the Minister for Home Affairs. The last publication of the Commonwealth electoral roll in book form took place in 1984, prior to the Federal election before last. When does the Government intend to publish the current electoral roll, and in what form? What is the Government's policy towards the availability of the electoral roll? Senator ROBERT RAY —At the beginning of this year it was the intention of the Australian Electoral Commission to print a new set of rolls, following the completion of the national habitation review that was under way at that stage. According to this plan, the rolls would have been produced some time before an expected Federal election, some time in late 1987 or early 1988. The unexpected holding of an election on 11 July frustrated this plan. The rolls could have been printed at that stage, but at a cost of about $800,000, and as there were going to be about 55,000 transactions at the time, the long term use of those printed rolls would have been very marginal, to say the least. So in that election we used certified lists, and these are available to anyone who is interested in obtaining them, via the Freedom of Information Act. Recommendation 17 of the Joint Select Committee on Electoral Reform, which reported to this Parliament about a year ago, suggests that rolls should be printed at least every two years into the life of a government, and that is when we would anticipate the next hard copy coming into print and being available. In the meantime, the Government is intent that, once it completes a full time habitation review, it will be able to make the electoral roll available to a variety of people via microfiche, and certainly to members of parliament and to other interested people. We are also looking at whether we can make the electoral roll available in some sort of computer form for members of parliament, and that is being examined at the moment. We get plenty of letters from people from all over the place, asking why we have not printed an electoral roll and saying how outrageous it is that we have not. Most of those people want to use the roll for chasing people who are dodging maintenance or for some other purpose. The purpose of the electoral roll is simply one thing: to have a person's name crossed off every two years and three months, whenever we hold a Federal election. That is the purpose it serves. It has to be a public document so that everyone can examine it and make sure that it is on the up and up. As such, it has been used over the years by a variety of researchers, real estate agents and everyone else. If any of those people still want to use the roll, they can fork out enough money and get it under freedom of information. However, the one other group that certainly uses the roll, and uses it very effectively, is members of parliament. I am looking at making special arrangements for them, as we will not have a hard copy roll for a couple of years, either via microfiche or floppy discs that they can stick in the brand new and very expensive computers that they are getting. Senator MacGIBBON —My question is directed to the Minister representing the Minister for Defence. Is it a fact that the houses built at Tindal in the Northern Territory for the defence forces are of designs suitable for the cold Adelaide suburban climate? Is it true that the design requires air-conditioning to make the houses habitable, as they are devoid of any self-cooling properties? Is it true that air-conditioning electricity charges will average $1,000 per quarter, which is quite beyond the means of a service family to pay? Senator ROBERT RAY —I do not have any of the finer details to hand at the moment to the question raised by Senator MacGibbon. I will contact the Minister for Defence and get Senator MacGibbon an answer to that question later this week. Senator MORRIS —I direct my question to the Minister representing the Treasurer. Does the Minister have any information in relation to the government process surrounding the establishment of the Campbell Committee of Inquiry into the Australian Financial System? What does the information say about the pace of the implementation of the declaration about the Australian financial system, including the exchange rate? Senator WALSH —Yes, fortuitously I do have some information about the development of policy mentioned in the Campbell report, which was published in last Saturday's Australian newspaper in the review of a book which is to be launched next week by the President elect of the Liberal Party, just to rub a bit more salt in, and which is in fact the authorised biography of the former Liberal Prime Minister, Malcolm Fraser. In that book Mr Fraser, to put it mildly, dumps on Mr Howard. He also dumps on a former Governor-General, but he is probably not terribly relevant to anything these days, except probably the demand for grapes. I read from a quotation of the authorised biography of the former Liberal Prime Minister. It deals with the development of policy which ultimately led to the Campbell Committee of Inquiry. It says: For months Howard produced nothing. In early May the monetary policy committee yet again asked him to bring forward a submission on proposed terms of reference. Fraser was by now frustrated and annoyed by the slow progress Howard was making, and across the top of his . . . Cabinet minute of early February- that is, in 1978, I think- he had scrawled `decision designed to get action. Sick of waiting'. Yet another two months had to go by until, in mid-July 1978, the monetary policy committee finally received the possible terms of reference Fraser had expected to receive five months earlier. A further reference states: In 1977 Professor Rose- who was then an economic adviser to the Prime Minister, Mr Fraser- and the economic adviser in the Treasurer's office, Professor John Hewson- who was once very colourfully described as a meretricious player flitting across the stage-a colourful phrase employed by Senator Stone, as he now is- wrote a joint note to Mr Fraser and then Mr Lynch recommending a more flexible system- that is, on the exchange rate- The prime minister took both the note and its authors to the Cabinet's monetary policy committee. The committee asked them to ``put their idea into action-but not to tell the Treasury who would only try to sabotage it''. I think it is fair enough in that context to read for `not to tell the Treasury', not to tell the then Treasury Secretary or he will try to sabotage it. Finally-I think this bit is too good not to quote: But the biography is harsh in its summary of Mr Howard: ``Even on issues where Fraser and Howard were in agreement . . . Howard, as the minister concerned, seemed not to have the necessary political clout and leadership simply to force things through more quickly in the face of opposition from Treasury.'' Again, I think we are entitled to read for `Treasury' the then Treasury Secretary. The article is headed, `Fraser guns for Howard over economic deregulation ``myth'' '. One of the more unedifying spectacles in recent Australian politics has been the way that the heavies of the Tory side of politics, whether they were in the bureaucracy or the Parliament, have insisted on dumping on each other-and in particular the reciprocal dumping between Mr Howard, Mr Fraser and Senator Stone. Senator PARER —My question is directed to the Acting Leader of the Government in the Senate. I refer to an answer given earlier in Question Time when he dismissed out of hand any suggestions for an early mini-Budget. I refer the Minister to an article by Max Walsh in today's Sydney Morning Herald entitled `What we need to know to avoid financial crisis'. Mr Walsh commented that the Cabinet, when it sits down today, must `realise that the assumptions on which the September Budget was made-especially those applying to business investment and export income-are now inoperable'. I ask the Minister whether he agrees with the conclusions of the article that `tough and rapid fiscal action' is needed in order to keep interest rates as low as possible and that a `May mini-Budget would be tragically late'. Senator GARETH EVANS —When I said earlier that the calls for a mini-Budget were being made mindlessly, I must confess I had in mind more Mr Sinclair than Mr Walsh, whose article at least has the merit of some beginnings of understanding of the rudimentary laws of economics, which is a little more than can be said for the key spokesmen on the Tory side. But, having made that particular peace, I repeat that the Government simply does not see any need for a mini-Budget at this stage. We have no plans for a mini-Budget. The direct impact of the stock market decline on the 1987-88 Budget is expected to be small. The Budget outlook is monitored closely and continuously by the Government. We remain committed to responsible fiscal and economic management. As I said earlier, we will continue to monitor the effects of the fall in share prices on the general economic outlook and we will take appropriate policy action if it is required. No more than that can reasonably be asked of the Government. Senator POWELL —Is the Acting Leader of the Government in the Senate aware that the recommendations of the Constitutional Commission contain the provision that the government of the day may call a joint sitting of both Houses without a prior double dissolution to pass any legislation the Senate has failed to pass in the preceding six months? Is the Minister aware of growing community concern that such a provision would effectively spell the end of the Australian bicameral system, reducing the Senate to the status of a talk shop without any effective relevance to the legislative process? In view of this community concern, can the Minister assure the Senate that the Government will not include this particular provision in any future referendum on constitutional changes? Senator GARETH EVANS —The Government will be considering the Commission's recommendations once it reports fully and finally some time before 30 June next year on the full area of its terms of reference. At this stage the Commission has released only a few recommendations. It is due shortly to begin considering the reports of its advisory committees, which cover a full range of possible constitutional provisions, and will do that in the light of public responses to its initial recommendations or reports. It is important not to confuse, as some have, the views of the Commission with the views of the Government or, for that matter, with the views of the Commission's advisory committees. As to the Commission's recommendation on four-year terms, the Government is committed to a referendum on that subject matter but has not yet decided on the details of its proposal. I think all Australians, including all political parties, should not react prematurely or in any half-baked way to the Commission's deliberations. What we should all be doing is working in a commonly constructive, sensible and rational way-- Senator Stone —With that crowd! You must be joking. Senator GARETH EVANS —Which is beyond the resources, capacity and inclination of a number of honourable senators, not least the former Secretary to the Treasury who is fulminating away on the front bench. All of us should behave in a mature, responsible and constructive way, identify the problems and not go on adding to them. Senator POWELL —Mr President, I ask a supplementary question. Can the Minister tell the Senate whether he believes the recommendation to call a joint sitting without a prior double dissolution would be mature consideration of that topic? Senator GARETH EVANS —The Government is willing to give mature consideration to that and any other recommendation that might be made. Whether we will accept it and what the strengths of the arguments are perceived to be pro and con are matters which the Government will make up its mind about in due course. It is not something to which the Government has addressed its attention. Senator McKIERNAN —I ask the Minister representing the Minister for Foreign Affairs and Trade: What are the implications of Australia's recent ratification of three international nuclear conventions with the International Atomic Energy Agency (IAEA)? Senator GARETH EVANS —Late last month Mr Hayden deposited instruments of ratification for the Convention on Early Notification of a Nuclear Accident, the Convention on Assistance in the case of a Nuclear Accident or Radiological Emergency and the Convention on the Physical Protection of Nuclear Material. Under the notification convention a state is obliged to notify other states which might be adversely affected, as well as the International Atomic Energy Agency-the IAEA-of a nuclear accident involving its military and civil facilities and activities, except nuclear weapons. All five nuclear weapon states have indicated that they will also notify, within the framework of the convention, any nuclear weapon accident which has, or might have, significant radiological effects in another state. The convention on assistance provides a framework for the provision of prompt assistance by states and the IAEA to a state which requests assistance following a nuclear accident or radiological emergency. Finally, the physical protection convention lays down standards for the physical protection of nuclear material during international transport and while in domestic use, storage and transit. It also provides for international co-operation in recovering any nuclear material which may be stolen and in dealing with offences involving such material. Australia's ratification of these three conventions provides further evidence of the Government's commitment to stringent safety standards for the nuclear industry, to strict controls on nuclear materials, particularly Australian uranium, and to the strengthening of the non-proliferation regime. Senator CHANEY —I draw the attention of the Minister representing the Minister for Industrial Relations to the very belated reply I received last week from the Minister for Industrial Relations on the subject of severance pay in the building industry. In particular, I draw to his attention the Minister's indication that the Government would not endorse the severance pay scheme unless the Australian Conciliation and Arbitration Commission was satisfied that it did not breach the wages principles. The Minister also indicated that unless the scheme was modified to fit within the wage principles, the Commonwealth would not agree to its payment on government projects. I note the Minister's acknowledgment that the existing scheme does not adhere to the national wage case principles, and ask him to agree that as a matter of simple logic it must therefore be in breach of the Government's code of conduct. If he agrees with this simple proposition, I ask him whether the Government intends to take action to exclude those who have breached the code of conduct from future government works; and, if not, why not. Senator WALSH —I did glance at the answer supplied to Senator Chaney last Friday, I think. That is the day that I looked at it. But it was just a glance and it was also about three days ago and a few things have happened since. I must confess that I do not recall very clearly what was in that answer, though I accept Senator Chaney's interpretation of it. I think the real question I was asked was whether I agreed, or Mr Willis agreed, that the arrangement does not adhere to the wages policy and therefore the code of conduct. Quite frankly, I do not know whether it does, or whether Mr Willis agrees. I will ask him, as I will ask him what action he proposes to take if it is in his judgment a breach of the code of conduct for builders under government contracts. Senator COLLINS —My question is to the Minister for Justice. Has the Minister seen media reports concerning the recent conviction of Abe Saffron on charges of conspiring to defraud the Commonwealth? Can the Minister expand upon those reports in any way? Is it true that Mr Saffron is also facing proceedings on other charges as a result of National Crime Authority investigations? Senator TATE —Yes, I have seen the reports concerning Mr Abe Saffron's recent conviction on a charge of conspiring to defraud the Federal Government of income tax. This followed investigations by the National Crime Authority under a reference issued to it by the Commonwealth Government. In passing, one of the Opposition's charges was that the intergovernmental committee arrangements whereby the National Crime Authority can exercise its extraordinary powers only on a reference from the intergovernmental committee were such that the National Crime Authority would be crippled in its investigations by governments not co-operating. That has not proved to be the case. Indeed, this is an instance where charges and a successful prosecution have resulted from detailed National Crime Authority investigations. There is little I can add to the media reports of Mr Saffron's conviction, except that the offence occurred between 1969 and 1981, and carries a maximum penalty of three years. It should be noted that the media reports have also raised the possibility of an appeal against the conviction. The trial judge has already been requested to reserve questions of law under the New South Wales Judiciary Act. Finally, I can confirm that as a result of National Crime Authority investigations Mr Saffron and former New South Wales Deputy Police Commissioner William Allen were charged on 11 and 12 March with conspiracy to obstruct the course of justice and to bribe a police officer, and, in the case of Allen, with substantive bribery charges. I am not, of course, in a position to provide any further details on this matter, it being sub judice. I would like, though, to draw attention to the fact that these charges have resulted from detailed Crime Authority investigations that reflect the high level of co-operation between the Commonwealth and State governments and their respective law enforcement agencies. The Authority can undertake such investigations only when ordinary police methods at the State level have failed, and this is an instance where taking on that particular task has fully justified the Prime Minister's undertaking at the election to repeal the sunset clause. That will be undertaken by the Government as soon as possible. Senator REYNOLDS —On Thursday, 22 October, Senator Knowles asked me a question about the increasing level of delays in the processing of immigration applications, and in particular a business migration application from Berne in Switzerland. I undertook to obtain an answer for her. I am advised that the time of 14 months referred to in the honourable senator's question is the maximum time that it took to process a particular business migration application in Berne. This should not be regarded as indicative of the average processing time which, I am advised, is about 4.8 months, based on a sampling period of July 1986 to April 1987. However, I would like to advise Senator Knowles that the Minister, Mr Mick Young, is concerned at the delays which have occurred in the processing of individual cases in the past and, in addition to the issues being addressed generally in the current review of Australia's immigration policy, the Minister has also appointed a consultant to his staff specifically to review these processes. Senator TATE —I would like to provide some material in answer to a question asked by Senator Reid on 22 October 1987. Having raised some general matters of concern, Senator Reid specifically asked what police protection is provided in the Belconnen area of the Australian Capital Territory and how many police have been on duty in each shift in the area of the Belconnen police station in the last three weeks. The answer is as follows: Obviously there is never sufficient police to fulfil every individual community expectation. The ideal situation would be to have police patrolling every street in Canberra, but that would be extremely manpower intensive, and costly. Within the ACT there is a minimum shift coverage of at least 21 police units which have an average response time of less than 8 minutes to an incident. That response is as good as, if not better than that existing elsewhere in Australia. In specifically examining the staffing and patrolling capacity at Belconnen Police Station, it should be noted that the patrols during the last three weeks have averaged 4.47 patrols on morning shift, 4 patrols on afternoon shift, and 4.14 patrols on night shift. In the last six months, police have attended to 19 responses in the Kippax area. Some of these incidences related to alarms and lost children, others for matters involving reports of crime. Police from Belconnen Police Station have addressed store managers and staff from Kippax Fair on security and related problems. The Manager of Kippax Fair, Mr Plows, has recently telephoned the Assistant Commissioner. Mr McConaghy, personally, to thank him for the service provided by Belconnen Police. It is acknowledged that patrols may be tied up for extended times due to the increase in criminal activity within the ACT. However, the level of police patrols is adequate given the geographical layout of the city, and the number of related police activities within the various areas. It should be pointed out that, in addition to general duties patrols, traffic, Criminal Investigation Branch, process service and many of the supporting police units are on hand to provide backup arrangements if required. The PRESIDENT —I inform the Senate that I have received the following letter, dated 26 October, from Senator Stone: Dear Mr President, Pursuant to Standing order 64, I give notice that today I propose to move- That, in the opinion of the Senate, the following is a matter of urgency: That the Senate (1) Express its concern: (i) that Australia's gross foreign debt, at around 40 per cent of Gross Domestic Product (GDP) is now among the highest in the world, and compares with a figure of 13 per cent in the case of the USA; (ii) that Australia's current account deficit in the balance of payments, which is the source of this growing debt, was forecast in the budget papers at $11.5 billion, or four per cent of the GDP in 1987-88 (compared with a figure of 3.3 per cent in the case of the USA); and (iii) that our level of business fixed investment, even prior to recent events in the stock market and financial markets generally, was forecast in the Budget papers to increase by only four per cent in real terms (after allowance of transfers of major government assets to the private sector), or little more than in line with the forecast growth in GDP; (2) note that the state of these fundamental indicators of economic ill-health renders the Australian economy excessively vulnerable to any adverse change in world economic conditions, particularly insofar as any such change may have adverse consequences for the prices of our major export commodities; (3) note the serious risks for Australia which are involved in the foregoing and calls upon the Government to undertake urgently measures to speed up the pace of the economic adjustment which, as conceded in the Budget papers, has to be made; and in particular; and (4) call upon the Government, as an urgent first step in that speeding-up of the adjustment process, to introduce a mini-Budget directed at significantly cutting Government expenditure and reducing the total Public Sector Borrowing Requirement (PSBR) before the Parliament rises in December. Yours sincerely, JOHN STONE Senator for the State of Queensland Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator STONE(Queensland-Leader of the National Party of Australia)(3.10) —I move: That, in the opinion of the Senate, the following is a matter of urgency: That the Senate (1) Express its concern: (i) that Australia's gross foreign debt, at around 40 per cent of Gross Domestic Product (GDP) is now among the highest in the world, and compares with a figure of 13 per cent in the case of the USA; (ii) that Australia's current account deficit in the balance of payments, which is the source of this growing debt, was forecast in the Budget papers at $11.5 billion, or four per cent of the GDP in 1987-88 (compared with a figure of 3.3 per cent in the case of the USA); and (iii) that our level of business fixed investment, even prior to recent events in the stock market and financial markets generally was forecast in the Budget papers to increase by only four per cent in real terms (after allowance of transfers of major government assets to the private sector), or little more than in line with the forecast growth in GDP; (2) note that the state of these fundamental indicators of economic ill-health renders the Australian economy excessively vulnerable to any adverse charge in world economic conditions, particularly insofar as any such change may have adverse consequences for the prices of our major export commodities; (3) note the serious risks for Australia which are involved in the foregoing and calls upon the Government to undertake urgently measures to speed up the pace of the economic adjustment which, as conceded in the Budget papers, has to be made; and in particular; and (4) call upon the Government, as an urgent first step in that speeding-up of the adjustment process, to introduce a mini-Budget directed at significantly cutting Government expenditure and reducing the total Public Sector Borrowing Requirement (PSBR) before the Parliament rises in December. Last week we had, I suppose, one of the most momentous weeks in the economic history of Australia-at any rate within the living memory of most of us. We have had events-not merely, of course, in Australia-triggered initially by what might almost be called a great crash in Wall Street on Monday night, our time, in London and to a lesser degree in Tokyo, but not significantly in Hong Kong for the sole and simple reason that the authorities in that stock exchange chose to close it and suspend trading for all of last week. I understand that the Hong Kong market has opened today and has fallen by some 30 per cent. The reason that the Opposition brought forward this motion of urgency today is our feeling, in light of responses given by Ministers-not only on the other side of this chamber but also in the other chamber-during the course of the past week and in various Press and other media exchanges, that to date the Government has shown very little or almost no sign of appreciating the full gravity of what has been occurring. Senator Walsh, in one of his earliest responses to a question in this chamber last week, said, `these things happen from time to time'. I say to the Minister that a fall of over 20 per cent in the stock market is not something which can be lightly put aside with the almost flippant comment that these things happen from time to time. Incidentally, I say with the utmost good will to the Minister and his colleagues who, I trust, will be responding in the course of this debate on the urgency motion, that I hope we will not receive from that side of the chamber the tired, irrelevant and unworthy remarks we hear far too often in this place relating to events which may or may not have happened five, eight or 10 years ago or some other time. Despite the mirth just expressed by Senator Walsh, this is no laughing matter. I hope we get from Ministers today some serious indication not only of the Government's attitude towards the events of the past week but also their attitude to what they, who occupy the treasury bench in this Parliament, propose to do to address the results of those events. Having made those points, I say straightaway that I personally do not regard the Minister for Finance, Senator Walsh, as the culprit in the events that have led up to the present situation in Australia. I do not regard him as the culprit at all. Indeed, some five weeks before the recent Budget was brought down, Senator Walsh, in a very competent and workmanlike speech on 7 August, made a number of what I think can fairly be described as extremely sapient remarks. At that time Senator Walsh pointed out that, given the nature and severity of Australia's economic problems, we had only three economic policy choices. I shall list them in the order in which the Minister publicly listed them. According to Senator Walsh, the first choice was what he called the draconian choice, described as the process of stabilising the foreign debt by imposing on ourselves a catastrophic depression of indefinite duration and frightening social consequences. The second choice listed by Senator Walsh was what he called the irresponsible choice, which was to ignore the problem until, as he put it in perhaps slightly colourful language-but the Minister is given to colourful language-the International Monetary Fund imposed a solution on us. The third choice was what he called the sensible choice, that is, to stabilise and in time reverse the growth of foreign debt as a proportion of gross domestic product by a combination of consumption restraint, economic restructuring and productivity growth. Clearly, what Senator Walsh was doing at that time, five weeks before the Budget was brought down, was arguing publicly with his colleagues that they had to make the last of those choices-what he called the sensible choice. I suspect that I might differ a little from the honourable senator in what I would regard as the appropriate pace of adjustment, but one thing is quite certain: we clearly both differ from the view taken by his Cabinet colleagues at the time the Budget was brought down. After the Budget was brought down, Senator Walsh made some further remarks on Sunday, 20 September, to a convention of people who, strangely enough, describe themselves as `Labor lawyers'-a contradiction in terms. Senator Walsh referred again to some remarks he had made during the biennial conference of the Australian Labor Party in Hobart at which he had commented in similar terms upon the lack of direction, or lack of seriousness, if you like, of the measures the Government, of which he is a constituent part, had employed to address Australia's growing economic and, in particular, international debt problems. I say again that Senator Walsh is not the culprit. The culprits are the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating). The Treasurer is the culprit because of his personal ambition to move as soon as possible to the Lodge and perhaps, I note in passing, also because of his concerns that any more responsible Budget brought down could have had some adverse consequences for his colleagues in the New South Wales Labor Government who are, as everybody knows, facing an election in the not too distant future. The Prime Minister's most recent contribution to these matters, apart from his contribution to the Cabinet processes leading to a totally unsatisfactory Budget, was, I think, from Tipperary where he said that he thought Australia's economic position was fundamentally sound. I recall that the last time a Prime Minister of this country used those terms was in 1972 when Mr McMahon, now Sir William McMahon, was trying to tell everybody that Australia's economy was basically sound. He was laughed out of office and, if I may say so in passing, quite rightly so. Senator Walsh —You've said that before. Senator STONE —Indeed. In the face of what I hope Senator Walsh will agree are these undeniably grave developments, we have from this Government the following: last week Senator Walsh, in response to Senator Chaney's suggestion that perhaps a postponement of the wage case might be appropriate, said that the suggestion was patently stupid. The next day the Government announced to the Senate that the wage case would be postponed for at least a week. It may be further postponed before we are through. Senator Walsh, in response to a question from me last week, also said-and I think he repeated it in response to other questions-that only to the extent that the events both overseas and in Australia led to two developments, firstly, a fall in the prices for our major export commodities and, secondly, a withdrawal of foreign capital from Australia, could the events be said to have consequences for the real economy. The Minister went on to say that, to that time, there had been no evidence of either. In the first case he said that only 24 hours after the events had occurred, and in the second case it was perhaps 72 hours after they had occurred. He said that by that time no evidence had accrued that either of those things was beginning to happen. That is like Senator Walsh standing in the middle of the road, with a truck coming straight at him at full speed down the road, and saying, `Only to the extent that it actually hits me need I be concerned about it. There is no evidence yet that it has done so and, until it does, I need not be concerned'. That appears to be the line of logic, if I may so describe it, that the Minister for Finance brought to his responses to honourable senators from this side of the chamber last week. Another point that should perhaps be noted in passing is the Minister's suggestion that these days-compared with, say, earlier events in 1929; I think that was the example he mentioned-governments are much more prepared to intervene. That may be of some comfort to Senator Walsh but it is of no comfort whatsoever to me. It is because of the very fact that we have had governments intervening all over the place that we are in the mess that we are in. I regard the suggestion that the preparedness of governments to intervene should be regarded as comforting as a rather chilling indication of the degree of continuing unreality from the other side of the chamber. The fact is that today we in Australia-and not merely we in Australia-are confronted with three basic problems. The first is that the United States economy-and indeed the world economy-is in a mess. Secondly, insofar as our own more parochial concerns are involved, the Australian economy is in an even greater mess. Thirdly, and again insofar as we are concerned, the adjustment process of which we have heard so much in recent days-the process whereby this Government has purported to take action to bring our economic affairs into better balance, to address the problem of our growing international debt, our growing burden of debt service-has been and remains simply far too complacent. Indeed, it was too complacent even before the events of the past week. Let us take very quickly the state of the United States economy because we continue to hear-I think we shall hear it even more frequently in the days ahead-the refrain from the Government side of the chamber that it is all the fault of the United States. I think Mr Keating is even quoted today as having said something along those lines-that the United States should have taken some action to deal with its problems. I am in entire agreement with the Treasurer and, I am sure, the Minister for Finance on that subject. However, the point is that the question of whether the United States does or does not take action to deal with these problems is not within the control of the Australian Government. Until it is, which I think it unlikely to be in my lifetime, the Australian Government's responsibility is to deal with the problems of Australia within whatever is the international economic framework and regardless of what actions or inactions the United States Government, the Government of the Federal Republic of Germany or the Government of the United Kingdom do or do not take. It is that failure to face up to the realities of this uncertain and increasingly dangerous economic world that underlies the failure of the Government and renders it so urgent that the Senate should today agree with this urgency motion to express its concern about all these matters, and in particular to urge the Government to bring down a mini-Budget before the Parliament rises before Christmas. Since the meeting in Paris in February this year of the seven major countries, the so-called G7, we have had an agreement to hold the international exchange rate structure roughly stable within some agreed band. The central banks have been working extremely hard to do that. But that has involved the central banks buying United States dollars at a tremendous rate. What has happened in the course of the past eight months since the Louvre Agreement was undertaken is that virtually the whole of the enormous United States balance of payments deficit has been financed by central banks. It has not been financed by private capital inflow in net terms. There has been private capital inflow but it has done nothing more than offset the private capital outflow. In net terms almost the whole of that enormous United States balance of payments deficit during that time has been financed by central banks. Of course, the process whereby they have done that is by selling their own currencies into their own domestic economies and buying United States dollars. This has pumped up their own money supplies, and what we have seen in the past week or two leading up to the sharp exchanges between Secretary Baker of the United States and Mr Poehl of the German Bundesbank is a process whereby countries like the Federal Republic of Germany and Japan have said, `Enough'. It is now strongly urged-and I entirely agree with the urgings-that the United States should now move, through the Congress, to begin to address its own budgetary problem. I agree with that entirely, but let us be clear about what the economic consequence would be, in the short term at least, if it did so. Of course, the economic consequence of that would be to restrain the growth of activity in the United States economy. That is what we are asking for; that is what the Minister is asking for and that is what the Treasurer is asking for. Let us be quite clear about the fact that that is what we are asking for. So far as the Australian economy is concerned, during the course of the past week we have had a number of most serious developments in the financial markets, and I believe that a great many more have yet to emerge. We have had huge calls being made in the futures market, in the Sydney Futures Exchange market. One small firm there, Australian Corporate Finance, is already in the hands of the receivers. There have been many tragic individual wipeouts, particularly the so-called mums and dads who were enticed back into that market on Wednesday and Thursday by confidence creating, or so-called confidence inducing, calls from Ministers and, indeed, I have to say, from some major entrepreneurs also, who, no doubt with the best of intentions, have nevertheless enticed people back into those markets, as a consequence of which those people have been wiped out. These are the tragic things that occur when markets are in the state that they are in, and when they are receiving no assurances of corrective action from the Government to which they owe their responsibility, in this case, the Australian Government. The Australian Government is simply sitting on its hands and saying that it will not do anything, that it sees no need, that nothing has changed and that the only thing that has happened is that the financial markets are falling apart. In the view of Senator Walsh there appears to be no relationship between the financial markets and the real economy. I have to assure him that there is a relationship and, unless the Government begins to take that relationship more seriously than it has so far shown any sign of doing, it will rue the consequences of not having done so. A similar fallout, of course, has occurred overseas. There is this enormous destruction of wealth-which people thought they had only 10 days ago-in the United States and Britain, to a lesser degree in Japan, today in Hong Kong and, of course, not least, in our own country. Does the Minister not understand that when individuals are faced with that huge loss of wealth, not only in their own holdings but in the pension funds upon which, in turn, many of them will depend, it will have some effect on their behaviour in relation to their consumption patterns? Does he not understand that, as a result, savings are likely to rise, and that there will be-since he appears to find Keynes so attractive-some depressive effects on the level of activity? Does the Minister not understand that, as a consequence of that and similar factors working in those markets, the fears of inflation which have been so prevalent in the commodities market, in particular in recent months, will evaporate and that those commodity markets will be likely to feel the effects of that? Does the Minister not understand that once that inflationary stimulus, if one can call it that, has been removed from those commodity markets the Australian dollar, which is seen as the currency of a commodity country-and we are a commodity currency country-is likely to be affected by that outcome? I put it to the Minister that Australia has become excessively vulnerable, through the large rise in debt which has occurred, to any adverse change in world economic conditions. We are now running the most serious of risks and, as the motion indicates, there is a need to undertake urgently measures to speed up the pace of the economic adjustment which we all agree is necessary. I urge Government members not to respond to this urgency motion with the kind of irrelevancies, flippancies, and unworthy remarks which we have come so much to expect from them but that they seriously address the issues involved, and to do so before this Parliament rises. Senator WALSH(Western Australia-Minister for Finance)(3.30) —I will make some comments later about the details of Senator Stone's urgency motion, which I think is the most verbose in history, but at the beginning I want to make this general observation. In a sense I welcome it, because nowhere in this most verbose urgency motion in history is there reference to the alleged need to reduce taxation. I welcome this motion as an indication of a belated embrace of fiscal responsibility by the Opposition, a very belated embrace. I am flattered that Senator Stone has obviously studied very carefully the speech that I gave on 7 August, and even quoted quite extensively from it today. But there is one section he did not quote, which is relevant to the point I have just made, when I said: In the run up to the election the Ratbag Right, (i.e., the NFF, ASBA- that is, the National Farmers Federation and the Australian Small Business Association- the Queensland National Party and a gaggle of feeble-minded journalists) peddled the nostrum that lower taxation was a function of economic law, that average disposable income could actually be increased, and our economic problems overcome, by bringing back the boozy tax deductible lunch, the tax deductible Mercedes, paying pensions to millionaires and exempting from taxation the speculative gains of compradors and other parasites. For those who are not familiar with the term `comprador', which includes some people who have written about it, I explain that it is a Portuguese word, the rough translation of which in contemporary times means people who skim off the cream, probably because of some indulgence granted to them by the government, without putting any real effort into it. Hence the reference to compradors and other parasites, a comprador being a particular type of parasite. Having made that point I am genuinely pleased to see that in neither Senator Stone's motion nor his speech is there any reference to the voodoo supply-side theory which was being peddled by the Opposition during the election campaign. Of course, the most virulent form of snake oil was peddled by the Queensland branch of the National Party of Australia, of which ironically Senator Stone is a member. So I hope that is an indication of a lasting change in attitude by the Opposition and the intrusion of a significant amount of reality into its perceptions of the world. Whilst I can understand that Senator Stone is not eager to remind people of things that were said by various people some time ago, I am afraid I must disappoint him. Indeed, the substance of the case that Senator Stone made-I think this is a completely fair assessment-is that Australia has a pre-existing economic problem, that is, a large current account deficit. He asserts, and there is certainly less agreement on this, that the decline in share prices over the last week or so has seriously aggravated that problem. I believe it remains to be seen whether it has seriously aggravated that problem. But nobody denies that Australia has a large current account deficit, and that that has imposed economic problems on us. In 1981, in an address to the Agricultural Outlook Conference, which was subsequently published in the Quarterly Review of the Rural Economy, which used to be known, I think, as the Bureau of Agricultural Economics Quarterly Review, Senator Stone-and this is in the context of the 1980-81 fiscal year-said: The current account deficit in 1980-81 is therefore likely to be significantly larger than earlier suggested. This fortunate development- that is, a blow-out in the current account deficit, described then by Senator Stone as a fortunate development- will, of course, work to supplement domestic savings. I am not reviving that quotation just to poke fun at Senator Stone, but because the implications of it are actually much more important. In that period the resources boom was soaring, prior to the wings falling off it, or perhaps some people may argue that it had already soared and it was starting to come down. The damage done by the resources boom hype, firstly, to the expectations of Australians and, secondly, because of the very large overseas debt that was incurred as a result, in anticipation of a major boom, is the origin of the economic problem that this Government inherited, which was subsequently aggravated by the collapse of export prices in 1985 and 1986. We all know that particularly culpable in beating up the expectations of the resources boom which never happened were the then Treasurer, Mr Howard, the then Deputy Prime Minister, Mr Lynch, the then Prime Minister, Mr Fraser, Mr Anthony, Mr Sinclair, and indeed just about everybody who had a prominent position in the government of the day. What is probably less well known, and which again is evident from the address that Senator Stone gave to the Agricultural Outlook Conference in 1981-and in general it certainly was an interesting address, although I thought some of his answers to questions were better, but unfortunately they were not printed in this article-is that Senator Stone himself had a role to play in beating up the resources boom hype. I quote: Significant also is the scope for this strengthening in the growth of private consumption to continue beyond the current financial year. The investment upsurge now gathering pace, which will be concentrated in some of the most productive areas of the economy, should, in the first instance, provide scope for growth in real wages and incomes in those areas. It will also duly produce some reshaping of Australian industry-with beneficial consequences for overall national productivity and real income-as the proportion (at least) of our national resource bogged down in less productive areas begins to diminish under the pressures of these developments. That was certainly beating up expectations of increases in real incomes. In other words, Senator Stone, although his language certainly was much more restrained than the vapid propaganda that was pouring out of the mouths of all other people I mentioned at the time, was accepting the basic proposition, that is, that the resources boom would usher in a new golden era for Australia. Well the boom never really happened, but we have the hangover of that binge still in servicing the huge amount of foreign debt that was incurred in following the so-called boom through. Indeed, as I am sure Senator Stone knows very well-these figures get revised from time to time-after the end of the 1981-82 financial year the current account deficit was assessed at 6.1 per cent of gross domestic product (GDP), the highest it has ever been. I turn now to the motion. These are technical points, but not entirely unimportant. There is a reference to the United States having a current account deficit as a proportion of GDP of 3.3 per cent. That is the estimate for this financial year. The figure for the first half of this financial year was 3.5 per cent of GDP; in other words, that is probably a bit low. Probably more importantly, to juxtapose that with the Australian gross domestic product is to ignore the fact that the statistics of the Organisation for Economic Co-operation and Development, which appear to be the source of those figures, are not comparable with Australian figures because they exclude the liabilities payable in currencies other than United States dollars, and appear to include some equity-type liabilities. In other words, they are compiled on a different basis from the Australian national accounts. Paragraph 2 refers to the fact-and it is a fact-that such a major change as the collapse of, or a very big decline in, the prices of shares in the last couple of weeks `may have adverse consequences for the prices of our major export commodities'. There is no dispute about that from the Government side; it may indeed have those consequences. It will be some time before anybody actually knows whether that has happened. There is no evidence yet that that will happen. If or when it does happen the Government naturally will have to take that into account, as over the last couple of years the Government has taken into account the massive decline in export prices which took place in 1985 and 1986. The final paragraph calls upon the Government `as an urgent first step . . . to introduce a mini-Budget directed at significantly cutting Government expenditure'. I find that a little odd coming from the Opposition. Indeed, I suggest that no credibility should be given to it at all until the Opposition clarifies its position on some of its promises to increase spending. For example, is the Opposition still committed to throwing 500 million taxpayer dollars at building a railway from Alice Springs to Darwin? That policy has never been formally repudiated. In Senator Stone's own State and in his own Party there is a Mr Katter, the son of the member of the House of Representatives and a member of the Queensland Parliament, who every time he is given the opportunity up in northern Queensland babbles on about the need to proceed with the Bradfield scheme. The Bradfield scheme, as I mentioned the other day, is a proposal to dam the coastal flowing rivers in northern Queensland, to dig a tunnel through the Great Dividing Range and to divert the water into the Thomson River and some of the other rivers and, according to the proponents of the scheme, fill Lake Eyre and change forever the climate of Australia. The catch in the scheme, of course, is that, in order to dam a significant amount of water, the altitude at which that must be done requires the water to be pumped up about 1,000 feet before it gets turned back inland. Mr Katter continues, notwithstanding that fact, to describe this Bradfield scheme, which is a sort of fairies at the bottom of the garden or Queensland redneck National Party proposition, as a magnificent scheme to change the climate of inland Australia, to drought-proof Queensland and to generate electricity. There are a number of other technical faults in the proposal such as the fact that, even if the water were impounded and turned backwards, it would not get anywhere near Lake Eyre. Senator Stone —Mr Acting Deputy President, I raise a point of order. I know that you are quite naturally and quite properly very indulgent of speakers on both sides of this House in a debate of this kind and allow them to range quite widely, but I suggest to you that the matters which the Minister is now addressing have nothing to do not merely with his own responsibilities or those of this chamber but with the motion before the chamber. The ACTING DEPUTY PRESIDENT(Senator Morris) —There is no point of order. Senator WALSH —That is absolutely correct, Mr Acting Deputy President. Indeed, this matter is indeed part of my ministerial responsibility. More directly, it is Mr Kerin's or Mr Morris's ministerial responsibility, but, as Minister for Finance, I have a ministerial responsibility for all demands on Commonwealth funds, and there is a Commonwealth water resources program. This Queensland National Party scheme to make water run uphill and generate electricity along the way has the vociferous and impassioned support of at least one Minister in the Queensland State Government. The sorts of people who would believe, of course, that water will run uphill and generate electricity while it is doing so are the sorts of people who believe that one can put a fusion reactor in the boot of a motor car, that Milan Brych had a cure for cancer and that Dr Shrian Oskar was not a crook. In other words, they are all the same sorts of people-they are the Queensland National Party. If Senator Stone is serious about pursuing demands to reduce wasteful public expenditure, I suggest to him that he ought to start with his colleagues in the Queensland National Party. I know he has a difficult task because, firstly, he needs to educate them about such technical realities as those I have mentioned. Senator Stone is well qualified to do this because he started his student life as a physicist-indeed, I think he got a degree as a physicist-so would know very well that one cannot fit a fusion reactor in the boot of a motor car. He would also know that water does not run uphill, let alone generate electricity while it is doing so. So I suggest that he start the educative program not by preaching to people who do not need it but by preaching to those who very clearly do, that is, his Queensland National Party colleagues. Just to go through a by no means exhaustive list of the various promises to increase expenditure which various assorted front bench spokespeople of the Opposition have come out with, I cite firstly the restoration of defence cuts. That was called for by Peter White, the shadow Defence Minister. That would cost $350m. There was also the abolition of the means test on age pensions, conservatively costed at $300m a year. There was the restoration of road funding after cuts-at a cost of $180m. I get lobbied by and I get letters from assorted backbenchers and frontbenchers of the Opposition demanding that the Government spend more money on this and that. Only last week we had Senator MacGibbon demanding that some junket for politicians taking trips to the United Nations, or something like that, be restored, at a cost, I understand, of $100,000. In other words, we are surrounded by all these demands to increase government spending, emanating in the main from the very same people who, when they use the other fork of their tongue, say that there is an urgent demand to cut back on government expenditure. Senator Stone quoted part of an answer that I had given to a question last week. The question had suggested, implied or asserted-I am not too sure now which of those words would be the most accurate-that, because there was a chrono- logical coincidence of the stock market collapse of 1929 and the Depression of the 1930s, the same sort of thing was going to happen again. One could speak for half an hour about this subject, but there are several very profound differences between 1929 and now. One such difference is that in 1929 the Depression probably was not caused by the stock market crash. But leaving that aside, the United States was running a major current account surplus instead of a current account deficit as it has been doing under the Reagan Administration. Another difference is that governments these days have a propensity to intervene if a financial crisis develops, which in the past governments did not have. Senator Stone thinks that that is a pretty terrible thing. Far from being welcome, he believes that it is dreadful that governments should intervene if and when there is a financial crisis. Certainly intervention can be pushed too far to the point where the stick of the capitalist system-that is, bankruptcy for bad management-no longer applies. It would be unhealthy if governments were to bail out all incompetent managers, although again there are frequent demands from the National Party that that should be done. But there is a very big difference between that and governments moving in via the Reserve Bank of Australia, as is the established pattern in Australia, to ensure that trading banks do not become illiquid. The Reserve Bank stands behind them. I thought Senator Stone would have known a little of economic history. There was, I think in 1893-certainly it was in the early 1890s-just such a financial crisis in south-eastern Australia in particular. The damage that that financial crisis did in the State of Victoria compared with New South Wales was immense. In New South Wales the Government intervened; in Victoria the Government did not. Even though Senator Stone is known to have some old-fashioned views about a number of things-I am sure he would not deny that-I really am surprised at the implicit rejection by him of the lender of last resort facilities which are provided by the Reserve Bank for all Australian trading banks and which, of course, were not available at all in the financial crisis of the 1890s; and nor were they available in 1929 or 1930, apart from the fact that the Reserve Bank per se did not exist at that time. In conclusion, I genuinely welcome-even though I do not agree with the Opposition's assumptions-the fact that the Opposition is actually addressing in this motion the things that matter instead of chasing voodoo, supply-side theory about tax cuts down every blind alley. The ACTING DEPUTY PRESIDENT(Senator Morris) —Order! The Minister's time has expired. Senator HAINES(South Australia-Leader of the Australian Democrats)(3.50) —The Australian Democrats will be supporting the urgency motion today although for considerably different reasons from the ones that were expounded by Senator Stone. I am quite sure that neither side of this chamber will find that at all surprising. The motion moved by Senator Stone on behalf of the Opposition expresses its concern about a number of economic factors which have contributed to Australia's current economic predicament. They include three items in the first point of Senator Stone's motion relating to, firstly, our foreign debt as a percentage of Australia's gross domestic product (GDP); secondly, our current account deficit; and, thirdly, the level of business fixed investment. The motion ignores other factors contributing to our current predicament such as the tendency by this Government and other governments, for example, to encourage a move away from equity to debt financing and the deplorable tendency of the so-called private sector to hold the Government to ransom when things do not go its way, something which we would never tolerate from the union movement. For example, I refer to last year's little frolic by the private banking sector in demanding from the Government either that it lift the ceiling on housing interest rates or that it pay the private banking sector some several hundred million dollars by way of compensation in order to prevent it from withdrawing completely money from housing loans. That sort of situation has done nothing much to contribute to a sound and solid financial situation in this country. Senator Stone's motion also ignores the fact that the stock market-the most free market force of all free market forces-has had its own impact on the economy over the last few years and I suggest that it has not been for the better. Worse, Senator Stone's motion ignores the fact that much of the problem we see today has been caused by the increasingly deregulated system that has operated here and overseas and which has fuelled the alternately greedy and then massively panicky behaviour by some of the world's wealthiest men and the companies they own. Senator Stone, in his motion, condemns the Government for the fact `that Australia's gross foreign debt, at around 40 per cent of gross domestic product, is now among the highest in the world and compares with a figure of 13 per cent in the case of the USA'. Australia's gross external debt is very high. At the end of June 1987 it was about $110 billion. However, what is very infrequently pointed out by commentators and speakers on this issue is the fact that the private sector debt is almost $66 billion of our gross external debt; that is, about 60 per cent of it. Senator Walsh in his contribution has already pointed out that this started in quite a significant manner with private company borrowings overseas beginning under the Fraser regime when there was talking up of a resources boom going on across the board from that sector of government and in some parts of the private sector. It has risen to horrific proportions since then very largely because the tax system encourages debt financing, as I said a moment ago, rather than equity financing. In particular, the current Hawke Government-I would have thought this was quite contrary to its ideological basis-continues to allow private companies to borrow overseas to finance takeovers, many of which are highly unproductive, and to write off as a tax deduction its massive interest payments on the money borrowed. That concession does two things: it increases our foreign indebtedness and it decreases government revenue through the tax collection system. I have pointed out in this place on many occasions that we are one of the few countries that do not allow home buyers, for example, to write off their interest payments from their tax liabilities. But the Government does allow private companies to use those interest payments to wipe out the taxable profits-sometimes this applies to almost the entire profits-of the company it takes over and any other company that belongs to its group. It is for that reason-I have said this time and again in this place-that some of the biggest companies in Australia are paying an effective tax rate of around 10, 11 or 12 per cent, something that very few private individuals can hope to do. Senator Stone castigated the Government because Australia's current account deficit in the balance of payments, which is the source of this growing debt, was forecast in the Budget Papers at $11.5 billion or 4 per cent of GDP in 1987-88 compared with a figure of 3.3 per cent in the case of the United States. Certainly our current account deficit is disastrously high and action has to be taken to correct it. For example, we could start by reducing some of the hundreds of millions of dollars that we spend on unnecessary imports either by wiping them out altogether or by imposing some form of luxury tax on them. Currently, for example, we import several hundred million dollars worth of such exotica as caviar, cat food, champagne and exotic fish. I am sure that we could all live quite nicely indeed without a lot of those items and improve our balance of payments in doing so. As I have already indicated, we should also outlaw negative gearing for foreign borrowing when it results in a large outflow in interest payments to foreign lenders. We ought-I understand the Government is at least considering this-to tax superannuation funds on the profits they make when they invest overseas. There is currently no incentive for the big life and superannuation funds to invest on-shore when they get the same tax concessions if they invest off-shore. They can speculate in the Aussie dollar to their heart's content and deny Australian development the access it needs to that investment source. Senator Stone made the final point in the first part of his urgency motion that our level of business fixed investment is low. This is at least in part because too many Australian companies have become speculators in shares and foreign currency dealings. Too much money is being borrowed merely to inflate the value of shares or to speculate against our currency rather than to invest in plant and equipment, to create goods and services which can increase our exports or reduce our dependency on imports. I remind the Senate of some comments that appeared in yesterday's Times on Sunday which quoted Keynes regarding speculating in this way. He made the point, and it is as valid now as it was when he made it, that: Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. That casino mentality is something we have certainly experienced here and elsewhere in the last week or so. No doubt business confidence will be at an all time low following the stock market meltdown, so to speak. We therefore need government action to direct investment into housing, education and the creation of export and import competing industries, industries which are labour intensive and highly productive. I note in passing that, in this litany of comparisons between the United States and Australia, Senator Stone left out the fact that our Budget deficit as a percentage of GDP is considerably lower than that of the United States. In 1986-87 it was one per cent of GDP compared with the United States Budget deficit of 4 per cent. This is a clear indication that the level of the deficit has little impact on the market despite insistence to the contrary from the business sector in recent years. Indeed, despite the expenditure cuts which helped to balance our Budget this year having a disastrous effect on low income families and individuals, the stock market meltdown that occurred last week was as bad in Australia as elsewhere, if not worse. So all the arguments from the private sector that if only the deficit were reduced confidence would be restored have come to very little. Of course this Government should, as Senator Stone has indicated, be speeding up the pace of economic adjustment but not in the way, I suggest, that the New Right proponents of economic rationalism are proposing. For a start, this Government has to put a stop to the very actions that have led to the problem now confronting us. It must put a stop to foreign borrowings by the private sector, and put an end to the lemming-like rush from equity financing to debt financing. In other words, it has to implement policies that motivate long term productive investment instead of short term profit taking in such non-productive areas as the stock exchange and the futures market. The first step, then, is to abolish negative gearing on both foreign borrowings and money borrowed to speculate-and it is speculation; it is no longer any form of serious investment when we are talking about people borrowing simply to speculate in the share market. The second step that the Government has to take is to further limit foreign investment in Australian companies, restricting that investment to minority shareholdings in ventures which will increase productive capacity. Our stock market falls were significantly greater than those in New York, London and Tokyo, I suggest, at least in part because foreign investors immediately sold their Australian share holdings as a first panic measure largely because, as Senator Stone has already pointed out, the Hong Kong market was closed to them. Asian investors, in particular, could not sell their Hong Kong shares in order to reduce their equity portfolios and turned instead to the Australian market because the much vaunted free enterprise Hong Kong market was closed down. Again, as Senator Stone has pointed out, when that market did open there was something like a 30 per cent fall in the first day's trading-a greater fall in Hong Kong than we experienced in the whole of last week. The third step is for the Government to inject more money rather than less into the economy, in particular, into the development of export and import replacement goods as well as into research and development. It must do this in conjunction with similar investment from the private sector, which brings me to the second paragraph of the urgency motion. Senator Collins —The penultimate paragraph is the one reducing expenditure, not increasing it. Senator HAINES —Certainly major changes to the world economy will adversely affect Australia's economy, but to suggest that our export commodities will fall in price in isolation, and hence cause an additional problem, is a nonsense. If our exports are affected, it is highly likely that everybody else's will be, too. I remind the Senate that other people's exports are in many instances Australia's imports, and if things go in that direction world-wide our balance of trade figures may well improve. In any event, the Government should be looking at those assumptions and conventional wisdoms which have led us to this state of affairs. We have to acknowledge that there are no longer economic certainties and that we should be severely restricting private sector borrowings and increasing government revenue in order to finance those areas of need. I picked up the comment from Senator Collins that the second part of this matter of urgency refers to cutting government expenditure. What I am saying is that we should be increasing government revenue and then increasing expenditure in certain areas that are labour intensive. We certainly should be reducing government expenditure in those areas that encourage speculation and encourage the sort of situation that we saw last week. We will be supporting this urgency motion because, by and large, it has hit the nail on the head. The Labor Government has denied almost every one of its ideological commitments, and if it thinks that by pursuing the sorts of practices instigated by the previous Fraser Government it has not contributed to the economic climate that we see today, it is very much mistaken indeed. Senator BISHOP(New South Wales)(4.05) —I support Senator Stone's motion of urgency calling for the Government to face up to its responsibilities and take action to speed economic adjustment in the Australian economy. In doing so I would like to examine the four competing predictions which are current and extant. The importance of the Economic Planning Advisory Council does seem to be diminishing; nevertheless its statement at the end of last year that the debt will only stop rising and stabilise at 40 per cent of gross domestic product (GDP) by 1990 is a prediction worth taking on board. A second prediction comes from the world's two largest rating agencies, namely, the Standard and Poor's Corp. and Moody's Investors Service Inc. Standard and Poor's has said that the Australian economy will not improve unless, firstly, there is a cut in government expenditure; secondly, there is an increase in investment in the manufacturing sector; and, thirdly, we broaden our export base. Moody's says that any improvement at all in our economy is totally dependent upon five factors: the status of commodity prices, the terms of trade, the current account balance, exchange rates and, lastly and most importantly, wages growth. A third prediction has come from the International Monetary Fund, which says very simply that debt will grow in Australia to 45 per cent of gross domestic product, or about $160 billion, by 1992. The fourth prediction is that from the Hawke-Keating Government, and that is simply, `She'll be right, mate'. To summarise the four predictions, three of the four say that improvement in the economy depends on Government action and the Government's ability to cut expenditure, to correct the errors which the 1987-88 Budget simply did not address. So this motion calling upon the Government to take action is timely indeed. Ross Gittins, writing in the Sydney Morning Herald last month, gave a classic example of Treasury- speak-that is, latter day Treasuryspeak-- Senator Childs —Is that old Stonespeak or new Stonespeak? Senator BISHOP —This is post-Stonespeak. Gittins said that the view `She'll be right, mate' was expressed in Budget Statement No. 2 in these terms: The continued implementation of policies which consistently put runs on the board-particularly in terms of downward trends in inflation and in the current account deficit-without driving the economy through the floor, can be expected to produce an acceptable rate of adjustment. As I said, `She'll be right, mate'. It is interesting that in the month since the Budget many people who were imbued with a sense of euphoria have seen that the Budget is not what it was purported to be-that is, balanced-and in fact that the true deficit is probably around $2.5 billion, $1 billion of which comes from the sale of assets which has been set off against recurrent expenditure. Senator Collins —What is the other $1.5 billion? Senator BISHOP —I am being generous; the Reserve Bank of Australia made a profit of $2.5 billion, but in its own annual report it says that it will not continue to trade in the way it has before, when it has made substantial profits. So that is a figure which is not likely to be repeated. This morning's simple statement from Max Walsh, again in the Sydney Morning Herald, calling on the Government to take action I think puts the case succinctly. He says that the Government must realise that the assumptions upon which the September Budget were made, especially those applying to business investments and export income, are no longer operative. She'll be right, mate, or in the terms of Dickens's favourite character, Micawber: He was fresh and full of faith that something would turn up. Or in contemporary jargon-and I note that Senator Walsh is keen on using contemporary jargon when he talks about voodoo economics-I think that we can characterise the present Government's economics as cargo cult economics, that is, something will turn up. Senator Stone —The foreigners will keep on bringing us the cargo. That is what they have been doing for the past four years. Senator BISHOP —Precisely. This morning we saw an example of one part of the Labor Party that is not prepared to wait until something does turn up. We saw Premier Burke taking the lead to make sure that somebody did turn up, with the millionaires club coming to the rescue of Rothwells Ltd. With Burke at the tiller and the lifeboat full of prominent millionaires bent on saving the Australian economy, and in the process themselves, we saw some active participation by people who see that this economy is in dark trouble. In speaking to his motion, Senator Stone called for the Government to give a serious response to the matters that he had raised. He quoted accurately from Senator Walsh's pre-Budget speech in which he said that the Government had three choices. It had a draconian choice, which it will be remembered was catastrophic depression; an irresponsible choice, which involved leaving things alone and waiting for the International Monetary Fund to come in and save us; and a sensible choice, which was a balance between consumption restraint, economic restructuring and productive growth. What Senator Walsh left out was the fourth choice, and that is the cargo cult choice which involves waiting for somebody else to bring something in, again on the grounds that something will turn up. What the country got was a Budget designed with the New South Wales State election very much in mind. We in New South Wales, after 12 tired years of Labor government, have a very tired State, a very tired New South Wales economy and a very tired Government. Barrie Unsworth likes to talk about going back to basics. Fundamentally this seems to mean going back to bully-boy trade union practices, even to the extent that he abused the Press for not putting his photograph in the papers when he was the one who gave a Press conference and all that the New South Wales Opposition Leader did was to put out a Press statement. Mr Unsworth feels that he can demand as of right-a trade union power right-what he wants by way of response from the Press. What we got was a Budget that was designed to try to save that failing Unsworth Government. It is a waste of time; that Government cannot be saved. But the Australian economy can be saved. The Federal Government missed an important opportunity in its last Budget to do something about cutting government expenditure and restoring some means of starting to lessen the overseas debt that Australia has incurred. It is interesting to listen to the discussions as to why this country has incurred such a large debt and to hear, as we did from Senator Haines, that the majority of that debt is private sector debt. It is interesting to reflect on the policies which this Government has stuck to, such as the existence of the Foreign Investment Review Board (FIRB). Many people will give evidence to the effect that the FIRB does not deter investment because it has not knocked back many applications. But the reality is that just because it exists, it acts as an impediment to people wanting to bring in equity investment. It is much easier to bring money into this country from outside by way of debt or loan. It is ironic that during the period when negative gearing was outlawed for private investors in property-negative gearing was an acceptable practice for bringing in overseas funds-it was also an acceptable practice for investing in shares. I suggest that in a roundabout way part of the overheating of the share market could in part have been due to people shifting out of the property market into the share market because they could have the facility of negative gearing. Those who took that course are the people who have been most adversely affected by the collapse. There are some statistics to which it is important to refer in this debate concerning the collection of the tax dollar and the growth of pain that this Government has added to the electorate and the taxpayer at large. The total amount of tax collected in the last Fraser Budget was about $41 billion. The total amount of tax to be collected in this year of 1987-88 is about $73 billion. That is an increase of over 65 per cent. If the average taxpayer is asked whether he or she feels 65 per cent better off, the answer would be a resounding no. I return to comments made by Senator Walsh in his reply to Senator Stone's remarks in moving this motion. Senator Walsh's speech was full of somewhat familiar invective, but he avoided telling us why in his pre-Budget arguments, those which Senator Stone and I have outlined, he was unsuccessful in persuading his Cabinet colleagues to go along with his sensible argument. He gave honourable senators a diatribe which consisted of telling us why this Government cannot be held responsible for its own actions. He told us what it had inherited, what previous people in the bureaucracy had done and what policies the Opposition had put forward, but he refused to accept the responsibility of being in government. That responsibility is that Ministers are responsible for setting policies, for their implementation and for copping what flows from those actions. It is simply not good enough to say that the Opposition must spell out its recipe or response to the present climate. Senator Collins —Only if you want to become a government. Senator BISHOP —Indeed, and it was to the detriment of this country that we did not succeed at the last election, despite the fact that we achieved more votes than the Labor Party did. Once upon a time when the conservative parties used to get fewer votes across Australia than the Labor Party, it used to be called a gerrymander, but after this election it was called clever Labor Party marginal strategy. The important point is that Labor got more seats, but did not get more votes. Nonetheless, it is important to make the point that the Opposition is always prepared to spell out its policies. The Opposition is always prepared to be working to have a government at the next election which will make this a better governed country. But, in the interim, the responsibility for sound, logical, good government, as those opposite are required under the Constitution to give, rests with the present Labor Government. It is no good Senator Walsh giving a diatribe in this House as to why the Labor Government is not responsible for its own actions and why the rest of the world is at fault when Labor has done it all right. It is not good enough to say that the plight of the Australian economy is somebody else's fault. The motion moved by Senator Stone simply seeks to say to this Government, `You were elected. Therefore, you are required to have a response to treat the serious economic plight in which this country now finds itself, to introduce a mini-Budget and to cut government expenditure'. Senator AULICH(Tasmania)(4.18) —The motion before the Senate is not unusual in the sense that in Question Time we have already become accustomed to some fairly turgid and long questions from Senator Stone. Today we have had the first of a long instalment on Stone's theories about world economics and what the Australian Government should do. He has long been a practitioner in the art of hectoring, badgering and telling the world what it should be doing. Senator Stone certainly has not changed his style here today. It is interesting that these comments come from somebody who is a little like some of the failed stockbrokers whom I have heard over the last year. They have had no qualms about prescribing the bitter medicine that the Australian electorate must take if we are to get out of the problems faced not only by the Australian economy but also by economies in the Organisation for Economic Co-operation and Development. Coming from someone who has long held the view that deregulation of any kind is generally a good thing per se, today we had some pretty good evidence of Senator Stone's complete turnaround. He now wants a mini-Budget and direct involvement by the Government in the workings of the economy. At one stage Senator Stone implied that somehow or other the Government should do something about the stock market, the very engine room of capitalist development which was supposed to have been getting this country off the ground, yet presumably he now wants us to get in there and take it over in some way or another. This urgency motion has been written by a man who was chief Treasury official at a time when many of this country's real problems were created. One wonders where he was at that time. Has he waited all this time to get into the chamber in order to turn his views around and at last be his own man? Is he implying that he was not his own man during the Fraser-Howard years, that their fiscal irresponsibility and irresponsible approach to the general management of the economy was nothing to do with him? For example, he talks about Australia's foreign debt as if it were a pet creation of this Labor Government. Yet, what was he saying in the final months of the coalition Government when it was about to go down the chute? That was the time he chose to write an appropriate minute in order to make public his views or prognostications about the Budget deficit-a singularly damaging attack on the Fraser-Howard Government of the day. One of the great factors in that Government's loss had to be the undermining of its particular fiscal policies by the chief Treasury official at the time. Where was Senator Stone when the resources boom was being talked up in 1980, 1981 and 1982-when the level of foreign borrowings that we have now achieved was first set in place? Where was Senator Stone at the Loan Council when ideas were needed which would ultimately have brought at least some responsibility into that arena? Everyone knows that during that period one of the major problems facing Australia was this question of beating up the resources boom; when State governments and semi-government instrumentalities were encouraged to go out and borrow on world markets; when the Loan Council itself became a joke. For example, at that time the Hydro-Electric Commission in Tasmania put forward viewpoints about building a dam on the Franklin River at an eventual cost of $1 billion. That instrumentality was eventually powerful enough to bring down an elected government-at the time a Labor government-in Tasmania. At the same time the railways in the Northern Territory were being promoted and marine boards were being encouraged to build harbour facilities, to get into airports and to borrow on the world market, in yen and deutschemarks. When all those events were going on. when Malcolm Fraser was talking up the resources boom, where was this man-Senator Stone-who has put this motion before us today? He was right there in the thick of it. I do not recall his making any disclaimers about talking up the resources boom. I cannot recall his warning Australian authorities-State and semi-government-that they should not be out there borrowing for a resources boom which might not happen. I cannot recall his saying anything about the Alcoa of Australia Ltd deal in Victoria when discounted energy was to be sold to major investors who would take advantage of the expected increased demand for aluminium products throughout the world. I cannot recall his making any attempt to warn those authorities that tougher times were around the corner or that the Australian dollar, for example, would ultimately and inevitably be devalued. I cannot recall any warnings there. In his own words, Senator Stone has indicated that somehow or other the increase in borrowings overseas has been the result of irresponsibility on the part of this Government. In making a comparison between the level of borrowings and overseas debt in 1980, when Senator Stone was chief of Treasury, and in 1986-87, one has to take into account a number of factors. One is that the Australian dollar was very much overvalued in 1980 and therefore the debts appear to be less in real terms, whereas the Australian dollar is now at about an appropriate value. If one looks at the breakdown of where these foreign debts have been created it shows a very interesting picture. Of total borrowings of about $13.5 billion in 1980, at a rough guess the Commonwealth provided about $5.6 billion. The public, State and semi-government instrumentality borrowings totalled about $1.36 billion and private borrowings were about $6.5 billion. That represented a general breakdown of: the Commonwealth, about 43 per cent; the States, including semi-government instrumentalities, about 12 per cent; and the private sector, about 50 per cent. Now the profile has changed. In 1986-87-I will not include the future figures because at this stage they have not all panned out-the borrowings by the Federal Government were $23.4 billion, compared with public and State borrowings of $29 billion and private borrowings of $65 billion. This breaks down to 21 per cent for Federal Government, about 20 per cent for State government and semi-government instrumentalities and about 60 per cent for private. The picture has changed in the sense that the share of the Commonwealth, as a significant debtor overseas, has dropped from 43 per cent to 21 per cent. The States' share has gone up from 12 per cent to 20 per cent and much of that includes the borrowings caused by people being encouraged during the Stone-Fraser-Howard period to fund themselves into this fake resources boom that was to occur at the time and that was sold to the Australian public under false pretences and, of course, private borrowings. As Senator Stone has indicated so often around Australia, if one is in government, one must not intervene in the market-place; one must not stop borrowings overseas if those borrowings are from the private sector. Senator Michael Baume —You need that to finance your deficit. What incompetent economics! Senator AULICH —At least when I tally a health bill, my health bills add up. Senator Baume's did not, and in doing his sums, he is as much responsible for the total loss of credibility on the other side of the House. If I were him, I would not be talking in this place about whether he was competent over the deferred tax cuts. What has happened? This Government, in contrast to the American Government, which Senator Stone lauds so highly, has at least made a significant and appropriately timed change in its fiscal policy. It has at least made a genuine and successful effort in industrial relations to bring down wages in real terms in this country. Senator Stone —Oh, come on! Senator AULICH —Senator Stone can laugh. He is looking very angry indeed. But in 1981-82 he was caught sitting in Treasury when the wages in this country blew out of control. Senator Stone —Exactly! When your trade union mates blew out the wage system. Senator AULICH —Trade union mates! That is very interesting. Senator Stone was in charge of key areas in this country and yet he had no idea how to run industrial relations, bar vague nostrums being pushed forward to the appropriate Treasurers about keeping real wages down or cutting wages. He did not achieve that because he did not know how. He did not achieve the deregistration of the Builders Labourers Federation because he did not know how. In industrial relations terms he was totally incompetent. He might have known about adding up figures here and there in the back rooms of the Treasury but he had no idea how to deal with the working people of this country. This Government was able to go to the trade union movement to arrange a compact, to arrange policies which have brought down wages growth in real terms. The previous Government was never able to achieve that in the time it was in office. We have to thank the trade union movement. Senator Stone —It has sent Australia broke. That's what your compact has done. For four years you have sent Australia broke. The ACTING DEPUTY PRESIDENT(Senator Morris) —Order! I ask Senator Stone to let Senator Aulich finish his speech in peace. Senator AULICH —It is very interesting, is it not, that Senator Stone, who wanted to have a debate in rational terms, who did not want people interrupting him and who wanted to talk about major issues, is now shouting at the top of his voice like some lunatic from northern Queensland because he cannot stand the heat. He cannot stand the notion that the industrial relations policies in terms of control over the growth of wages and the ability to deal with outlaw unions of the people he worked with in those days totally failed and was the cause of the loss of jobs in the manufacturing sector. He was the cause of the decline of manufacturing from 1981 onwards because he did not know how to handle wages. Senator Stone —It was Mr Halfpenny. Senator AULICH —Senator Stone can blame Mr Halfpenny, but he was in charge and he failed. He does not like the idea that he failed. He is as big a failure as some of the stockbrokers now whose words are coming back to bite them. Let us consider the United States. Ross Gittins, in his article on taxation comparisons between the United States and Australia, pointed out quite clearly that the difference in the amount of taxation paid by the average American compared with the average Australian is about 2 per cent, 2c in the dollar, when we take into account all forms of taxation that hit directly at the pocket of American and Australian citizens. That 2 per cent is basically the difference between this Government's Budget deficit last year and the Budget deficit run up by the American Government. I believe that the lack of courage, the lack of tenacity on the part of the American Government to deal with its budgetary problems is an example that should never be held up by any party in this chamber. This Government has been prepared, year after year, to reduce its Budget deficit to the point where eventually we will have a balanced Budget. It has been prepared to bring down real wages in the interests of the long term development of Australia. It has basically geared itself to attempting to bring down borrowings by the State governments and their semi-government instrumentalities. I cannot believe that Senator Stone and other honourable senators opposite, such as Senator Baume, who cannot add up, can come in here today, put this motion in front of us and say that it is a prescription for the revival of the Australian economy. The ACTING DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator MICHAEL BAUME(New South Wales)(4.33) —The appalling nature of the debate from the Government side is evident, not only from the nonsense that has been said, but also from what has not been said. Senator Stone started the debate on this major issue, this most important subject, this calling upon the Government as an urgent first step to introduce a mini-Budget directed at significantly cutting government expenditure and trying to remove the disastrous risks we face resulting from the Government's inappropriate economic policies by, quite properly, asking for a rational, reasonable, sensible discussion of the issues. We have not had that from any Government senator. The Minister in charge, the Minister for Finance (Senator Walsh), totally rejected the opportunity, totally dismissed it, or at least acknowledging the issues that we face, the problems that we have to deal with. He did not deal with them at all. The Government apparently sees no problems. The last speaker, Senator Aulich, indicated his total incompetence in several areas, not the least being his total lack of understanding of why there is any flow of foreign money into Australia. It is a matter of regret that Senator Stone's hopes for some reasonable and coherent debate on this major issue were not realised. Instead, we had a turgid repetition of-I cannot call it history-rewritten history. I repeat: we had no recognition by any Labor senator that there is any problem whatsoever facing the economy. Are we to believe that everything is wonderful? Maybe that is what the Government is trying to tell the Australian people: `Everything is wonderful. Don't worry. Put your head in the sand. She'll be right'. We heard that back in 1984 during the election. It was only when the Treasurer (Mr Keating), for internal political reasons, decided that everything was not right and that there was a banana republic around the corner that at last the truth came out. We are now reliving that situation. The Government, for its own internal purposes, is pretending that everything is all right. We are not waiting for Mr Keating to come out, as eventually will happen, with his banana republic. In a way Senator Walsh has done a banana republic for Mr Keating by talking about the Argentinean road. Senator Stone —`Further' down the Argentinean road. Senator MICHAEL BAUME —Yes. It is an acknowledgment that we must be part of the way down the Argentinean road for us to go further down. Let us examine the curious attempt by the Government to pretend that everything is all right. We heard Senator Evans today saying that the Government had no plans to change things, before Christmas certainly. That follows what Mr Keating said, which is that there will be no mini-Budget this year, no change in Government policy-`Everything is wonderful, sit back and relax, I am a genius and I am in charge'. He should be on a charge of misleading the Australian people. The other comment we heard from Senator Evans at Question Time today was that the consequences of the market fall would be small in Australia-`Let us not worry, it is only inconsequential'. So once again the Labor Government is telling us not to worry and that Mr Keating is the only person in step. The stock market continued its fall today. Because this Government has decided that there is no need to worry about anything the nation is being put increasingly at risk. This is not just the Opposition's judgment. It is a widespread judgment. I will refer to people of intellectual substance- rather than the Government speakers we have heard today-who recognise the risks we face. But let me deal first with Senator Aulich's total incompetence in the area of private capital inflow. Senator Aulich should recognise that, naturally, when our monthly deficit is $1.3 billion it has to be balanced somehow. It is balanced by money flowing in. If that money is not borrowed specifically by Australians, it is in the form of foreigners purchasing Australian dollars to invest here short term. The great bulk of the figures that Senator Aulich was talking about represent massive short term inflow, short term purchasing of Australian dollars by foreigners because they are fearful of the outcome of the American dollar. Let me assure Senator Aulich that once the American dollar appears to stabilise that money will flow out. The problems we will then face in regard to the value of our currency will be monumental. We are being protected now by the uncertainty and instability of the American dollar from the consequences of the Government's incompetence. We are being protected by the nervousness about the American dollar to the extent that our dollar appears less worse to many investors around the world than the American dollar. Once the American dollar stabilises, I am concerned that the Government's failure to take appropriate action will lead to a real risk of a significant flow of the money of these short term investors, short term lenders, out of Australia. I want to deal at some length with the appalling record of the Australian Government in its attempts to mislead the Australian people into believing that everything is wonderful. We hear comparisons-Senator Aulich made some-with the United States of America. Mr Keating was guilty in the other chamber today of selective quotations from an article in the Wall Street Journal. What he failed to say was that that article in the Wall Street Journal said that Australia is far worse in all these areas than America. We did not hear the Treasurer of this nation having the decency to continue with the quote which he so selectively used when saying that somehow the Wall Street Journal was being congratulatory of him. In fact, it was saying that the Australian situation is far worse, as clearly it is. This motion outlines how much worse the situation is in Australia than in America and how much more vulnerable Australia is to the sorts of swings, the sorts of disasters, which have taken place already in the stock markets and which may well be reflected in other areas of activity such as world trade, in particular world trade in those items on which Australia's prosperity depends. Senator Stone's motion points out that Australia's current account deficit on the balance of payments is now 4 per cent of gross domestic product, which is worse than that of the United States of America. Senator Stone —That is what it was in the Budget forecast. I do not know what it will actually be. Senator MICHAEL BAUME —Indeed. But, even worse, Australia's gross foreign debt is at about 40 per cent of gross domestic product, which is about three times as high as that of the United States. Our debt is three times higher than the United States debt. But we should not worry! Only a week ago the Prime Minister (Mr Hawke) said: The basics of our economy are sound. Only a week ago Paul Keating said: Let me say, in terms of the adjustments that Australia is making, that as a result of this Government's changes Australia is better placed to face whatever international conditions may come its way . . . We have these sorts of statements continually. The Treasurer was asked: What sort of effect will (the stockmarket crash) have on Australia's economy? Mr Keating replied: Well I think in terms of trade and our net export performance I don't think very much. We see this continual self-satisfaction. Of course, Mr Keating has taken the credit for all the adjustments and all the improvements and is now pretending that there is no risk. But what are other people saying? Is Mr Keating right or is Senator Walsh right? Senator Walsh said: On the macro situation, Australia is certainly not out of trouble. Indeed I'm a bit worried that the Budget might be oversold . . . He also said in September-this has been quoted by Senator Stone: Certainly, if there was another commodity price slide, the International Monetary Fund will be knocking on the door again. And I think we all know what would happen to the welfare sector if we are pushed to that point. I stress this bit of Senator Walsh's speech: A country which has a high level of foreign debt and a continuing large current account deficit is a country which has few options. That is the issue. This Government has few options. As time runs out, the fewer options we will have. But it is not only Senator Walsh who has pointed out the realities in his comments about our going down the Argentinean road. Sir Roderick Carnegie, President of the Business Council of Australia, said: Australia is not well placed to handle an adverse external shock. We are having just such a shock. Alan Wood, chief economist with Syntec Economic Services Pty Ltd, has said that economic adjustment is not moving at a fast enough pace. He said: The deficit could, of course, start to blow out in this setting unless the Government does do some further adjustment because of the losses on the revenue side, which potentially are quite large. Of course, that is not what Mr Keating said. He said that there was not much effect at all. Senator Evans repeated that parrot fashion because he would not know. Alan Wood went on to say: What the crash in world markets has done is make that strategy irrelevant. We now have to go to a strategy of much more rapid adjustment in order to try and minimise the impact of this very severe external market crash on us. That was not a member of the Opposition speaking. The quotes I have read are from experts in the market and in the area of financial management. I mentioned Sir Roderick Carnegie, who is one of Australia's leading businessmen. Dr Neville Norman of Melbourne University has expressed doubts over the ability of the Government to meet revenue forecasts. Dr Norman predicted a revenue shortfall of $500m in the current financial year, getting worse in the year after. In this morning's Sydney Morning Herald Max Walsh said: And if the Australian Cabinet, when it sits down today, does not realise that the assumptions on which the September Budget was made-especially those applying to business investment and export income-are now inoperable, that now is the time to heed Senator Peter Walsh, then the recession we now face is going to be much worse than it need be. He said: A May mini-Budget would be tragically late. Ross Gittins has also expressed his concerns. He said: . . . the Indian summer lasted six months: the sky is as cloudy as it ever was. We no longer need to debate whether the Budget should have been tougher and the pace of adjustment faster. There are more such comments. Mr Des Moore, a former Deputy Secretary to the Treasury, said: . . . the Budget is most disappointing not only because of its pursuit of a high risk economic strategy but also because it has missed the opportunity, open to a new Government in its first term, to make much greater progress in reducing Australia's underlying structural problems. The Budget papers acknowledge that ``a good deal of the task remains ahead and virtually all assessments point to a long hard haul''. A less ``gradualist'' adjustment strategy would have still allowed economic activity and employment to increase through greater adjustment on external account but would have avoided the now extremely risky approach of a dash for growth in domestic spending combined with little, if any, external account improvement. Professor Arndt posed the question: What if the confidence should wane? . . . while capital keeps coming in we can finance the current account deficit, balance the Budget and let the stock market set ever-higher records. That was prescient. He went on to say: But what if the house of cards collapses. This Government has indicated to this chamber today that it has no plans whatsoever if the house of cards collapses. It does not even recognise that the house of cards is in danger of collapse. It is still talking about everything being all right at a time when every leading commentator in Australia, when major business people and economists are all saying, `For heaven's sake, you are on the wrong track and the risk is that, as Senator Walsh, a Labor Minister, has said, you will go further down the Argentinean road if you do not take notice of Senator Stone's urgency motion and if you do not introduce as soon as possible a mini-Budget which recognises that the course you as a government are on is the wrong course, that you are not proceeding fast enough and that there is a major and urgent need to change'. Of course, this is exactly what the Opposition has been saying ever since the Budget was brought down. Senator CHILDS(New South Wales)(4.48) —We are discussing a very long-winded matter of urgency introduced by Senator Stone today. It reflects the coalition's confusion on economic matters. It reflects the compromises that have been a characteristic of the coalition since before the last election. It offers nothing new as far as the problems that this country faces at present are concerned. Indeed, it recommends the same old tired cliches in that it says that we should `undertake urgently measures to speed up the pace of the economic adjustment' and, of course, it calls ritually, as the Opposition does, for us to cut government expenditure and reduce total public sector borrowing. Of course, as has been shown earlier today by Senator Walsh, the Opposition is always calling for cuts in government expenditure until specific members of the National Party of Australia go back to their electorates and demand more from the Government. Senator Stone happens to be privileged to be a member of a party that is notorious for having its snout in the public trough. So that is the background to yet another proposal put up by the coalition. What we should do first is to think for just a moment about which policies the Opposition is following. We just had a contribution from an honourable senator who was famous in the last election for presenting Opposition policy. He is no longer on the front bench because he did not get it right. Now we face another change this week-- Senator Michael Baume —What didn't I get right? Senator CHILDS —You did not get the figures right. Senator Michael Baume —What figures? Senator CHILDS —Well, if the honourable senator does not know what the figures are, that shows that he knows even less than I thought. He knows that he did not get the figures right during the election, and that is why he is on the back bench now. Senator Michael Baume —That is absolute rubbish; you are rewriting history-substantiate it; tell the truth for a change. The ACTING DEPUTY PRESIDENT(Senator Teague) —I ask Senator Baume not to interject. Senator CHILDS —Senator Baume represents that past generation in relation to policy formulation in the coalition parties; now I must look to the future of the Liberal Party, and next Friday Mr John Elliott will take over as national president. On Friday he will be the titular head of the Liberal Party; a very important person in any political party. Lo and behold, an article in this morning's Australian Financial Review by Amanda Buckley and headed `Elliott's push for consumption tax angers Liberal MPs', begins in the following way: The Elders IXL chief, Mr John Elliott, set to become Federal president of the Liberal Party on Friday, has annoyed Liberal MPs with his strong public stand in favour of a consumption tax. Mr Elliott told reporters in Port Kembla last week that as president he would continue his push to change the Liberal tax policy in the direction of broadening the indirect tax base to help lower company and personal taxation rates. So, this is from the titular head of the Liberal Party as from next Friday. This is his prescription-not mentioned in the urgency motion put by the Opposition today, but very significant. Of course, we must understand Mr Elliott's form. I think he was adequately described in the Times on Sunday on 9 August 1987 in relation to a comment made on his pedigree as far as these matters are concerned. An editorial entitled `Corporate tax avoidance-a major scandal' commenced as follows: The avoidance of taxation by some of Australia's leading entrepreneurial companies is becoming one of the biggest fiscal scandals of the 1980s. The editorial further stated: Elders IXL's percentage of tax to profit is getting lower every year. A leading securities firm, Prudential Bache, estimated that in 1988 Elders would pay 8.45 per cent of its before-tax profit in tax, against Paul Keating's nominal rate of 49 per cent. That would be one way of celebrating the bicentenary-as a nation of tax avoiders. So, the Liberal Party is being influenced by people such as Mr Elliott, who this week is urging people to buy shares and who next week will be telling the Liberal Party to introduce a consumption tax. Whether in relation to the National Party and its flat tax policy or the Liberal Party's hidden proposals for a consumption tax, the problem is that we cannot get an answer from the coalition on what should be done in this country and, indeed, no one can believe that the coalition has any answers to the serious problems that exist-and nobody denies that there is a serious world crisis at this very moment. The first part of the urgency motion indicates an unfavourable comparison made by the Opposition between the United States and the Australian economies, in comparing gross foreign debt, current account deficit in the balance of payments and levels of business fixed investment. I believe that it is quite ludicrous to make the automatic comparison between the most powerful economy in the world and the Australian economy. However, I will be very happy subsequently to go through that comparison, because one of the significant things that I think we might have seen in this debate, especially when Senator Stone, I think, distanced himself from the Reagan Administration, is that the New Right of politics in Australia is starting to distance itself from President Reagan, the person who has implemented New Right policies in the world. Next, honourable senators opposite will be criticising Margaret Thatcher and distancing themselves from her as well. That is the situation at present. Of course, Senator Walsh has mentioned the New Right supply-side voodoo economics of those leaders referred to, but until this week they have been strongly supported by the New Right people, one of whom, clearly, is Senator Stone. The Opposition members have found it difficult to distance themselves from their pedigree, which I think is a recent pedigree. Prior to the last election Mr Howard and the Liberal Party proposed that the way in which we should respond to a fall in our terms of trade and our national income was by means of unfunded tax cuts-the very policy which is at the heart of the problem in the United States of America where President Reagan has not been prepared to tax wealthy people. Indeed, he has given them tax cuts. President Reagan has put into effect the policy that the Liberal Party advocated before the last election. Of course, such action would have blown out the Budget in Australia, as it has blown out the Budget in the United States, and, had that Liberal Party policy been introduced, although it would have given a false lift initially to our standard of living, it would have given us the same crisis that has occurred in the United States. President Reagan has in fact believed that a country need not pay for the things that it was buying and using and that another generation could pay for those things. Those chickens have come home to roost in the United States. I hope that subsequently I will have time to draw to the attention of the Senate the matter of how President Reagan is culpable in the economic crisis. As a New Right leader, President Reagan is a person that the coalition has followed, by and large, right up until this very week. Commodity prices are referred to in the motion and reference is made to infrastructure. The Liberal Party and the National Party want us to cut infrastructure, yet the very crisis that prevails is, as other speakers have pointed out, very much as a result of the talking up of the mineral boom previously. It is the result of the coalition being prepared in the past to be absolutely irresponsible and, of course, the Liberal and National parties have not been prepared to acknowledge what this Government has done. In concluding my remarks I would like to remind the Senate that the Government has made a $7 billion permanent structural change in the balance of payments, coming from three years of net export contributions, and a 10 per cent decline in real unit labour costs, with a Budget deficit of nearly 5 per cent of gross domestic product (GDP) brought to zero. That is the position at this moment. The Australian Labor Party has been able to implement a wages policy. It is incredible that the Opposition should refer to wages. I think at one stage Senator Stone made a disparaging comment about `our union mates'; however, I point out that it is because of the trade union movement in this country and because of the attitude that this Government has to equity of sacrifice that we have co-operation throughout Australia in an attempt to ensure that we improve our position. We cannot afford the anarchy that Senator Stone represents, if he were to get his hands on the treasury bench. That anarchy can occur at any level, and we see in the United States today, under President Reagan, an anarchy, and that is even when a New Right leader is in charge of government. Although Senator Stone appeared today to be distancing himself from President Reagan, the reality is that President Reagan did not act when he should have acted, and the present circumstances are the inevitable result of his inability to act in this area. Of course, as a conservative leader he is leaving everything to the market. His New Right philosophy involves cutting social welfare, and he has established a record in doubling the deficit in five years. He has increased the armaments bill in the United States to 29 per cent of the budget. He has done all these things without paying for them and, of course, he has pushed the American deficit through the roof which has caused a tremendous crisis for all the Third World countries, indeed, he is the precipitator of this current crisis. This Government has presided over a situation in which the deficit as a proportion of GDP has been reduced from 8 per cent in 1983-84 to 2.2 per cent this year. We have seen manufacturing investment grow by 4.75 per cent in 1986-87. This development of manufacturing investment is very important. Currently conservative people in this country are talking about business tax. Business tax was equivalent to 30.3 per cent of our GDP in 1985, compared with the Organisation for Economic Co-operation and Development (OECD) average of 37.2 per cent. Australia's deficit in 1985 was the third lowest of all OECD countries, and the deficit has been reduced significantly since then. Those are just some of the figures that show that this Government is very responsible, that this Government has taken steps, and will continue to take steps, in a situation where it has the confidence of the people. We do not represent a narrow group of individuals, such as the John Elliotts of the world, who are the almost faceless people now and who cause the coalition to lurch from crisis to crisis. This Government will continue to consult all of the people in the community. We will listen to business people and to the trade union movement, because we do not have a hangup about the two million wage and salary earners and because we know that their contribution to the nation's economy is vital if we are to get over the world crisis that we currently face. Senator MICHAEL BAUME(New South Wales) —Mr Acting Deputy President, I seek leave to make a personal explanation. The ACTING DEPUTY PRESIDENT(Senator Teague) —Does the honourable senator claim to have been misrepresented? Senator MICHAEL BAUME —Yes. A totally false accusation was made during this debate, firstly by Senator Aulich and then repeated by Senator Childs, that I had got my sums wrong in the Liberal Party's health policy in the last election and therefore was unable to add up. There were no such errors in the Liberal health policy, which most certainly did add up at the last election. No accusations at election time to that effect were ever substantiated and there is no substance in the present childish-as in Senator Childs-allegation now being made as some kind of tactic, as is customary, to divert attention to some personal denigration rather than to deal with the issues that I raised. Senator STONE(Queensland-Leader of the National Party of Australia)(5.03) —in reply-Before we move to a division on this urgency motion before the Senate, I would like to close the debate. In doing so, I express my serious disappointment at the total lack of any serious response from the Government side of the chamber to this motion this afternoon. As I said in my opening remarks, this is a serious matter. It is in fact a grave matter. What we have had from three Government speakers this afternoon, led by none other than the Minister for Finance (Senator Walsh), is simply a tirade of obfuscation, of irrelevancies, of casting back to what might or might not have been said on some previous occasion; in other words, a total irrelevancy and above all-perhaps most seriously-a complete failure to face up to the issues which the motion seeks to present. I can clearly recall that after the 1986 Budget many people in the financial community and some commentators and others, certainly those in the business community, argued strongly that the Government should immediately after that Budget-the Budget of a year ago-introduce a mini-Budget to repair the omissions of that 1986-87 Budget. There were, of course, at that time no international crashes on stock exchanges or anything of that kind. The Government stubbornly held to the view that there was no need to act along the lines of those urging it to that view, until May of this year when it was finally forced to acknowledge the truth and the force of the views that had been put to it for the previous nearly nine months and to bring down a May statement of economic measures. History never repeats itself precisely, but we seem to have a situation where, within a week of the 1987-88 Budget having been brought down just over a month ago by this Government, it has been revealed to be, or shown to be-not least by a Minister of the Crown, Senator Walsh himself-totally inadequate to address the problems of the economy. That was before those external events of last week and, as far as our own stock market is concerned, before the domestic events even eventuated. Yet we hear today the Treasurer (Mr Keating) and, in quotation of him, the Acting Leader of the Government in the Senate, Senator Gareth Evans, saying that there will be no mini-Budget during the remainder of the calendar year 1987. What sort of a government is this that takes up fixed, entrenched, rigid, unthinking and dogmatic positions of that kind on purely political grounds and without the slightest regard for the interests of the future of the country? What sort of a government is that? I will tell honourable senators what sort it is: it is a complacent government, a government which has failed even yet to understand what has happened to it and, of course, more importantly, to this country during the past week and which has not yet begun the adjustment process, to use a phrase which has been somewhat overworked, which this Government above all needs to undertake in order to begin to address its own responsibilities. Clearly it is not just the process of adjustment in the economy, the economic situation or economic policy which needs to be addressed; it is the processes of adjustment in this Government's own degree of arrogance and complacency which perhaps should be addressed first. I repeat what I said in my earlier remarks. Does the Government really believe that the events of last week have left the real economy-if one wants to use that term and thereby imply perhaps that the financial economy is not part of the real economy, which is itself a silly position to take up on the Government's part-untouched and unaffected? Even if we thought that about the situation in Australia, do we really believe that those events have left the real international economy, the real United States economy, unaffected? Even if we were to assume that the United States Administration would do what the Treasurer wants it to do and what we all want it to do-that is, to take measures to deal with its own budgetary position and its own balance of payments position-do we really believe that those measures will leave the United States economy, hence the world economy, and hence the demand for Australian exports and exports of other countries to whom we export, unaffected? I will close now in order that we may retain time to have this motion put and, as I foreshadowed, to divide upon it. But in doing so, I strongly condemn the Government for its complete failure to face up to its responsibilities. Question put: That the motion (Senator Stone's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 26 —— Majority . . . . . . . . . 9 —— Alston, R. K. R. Macklin, M. J.Archer, B. 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.Calvert, P. H. Puplick, C. J. G.Chapman, H. G. P. Reid, M. E.Coulter, J. R. Sanders, N. K.Haines, J. Sheil, G.Hamer, D. J. Short, J. R.Hill, R. Stone, J. O.Jenkins, J. A. Tambling, G. E. J. (Teller)Knowles, S. C. Teague, B. C.McGauran, J. J. Vanstone, A. E.MacGibbon, D. J. Walters, M. S.McLean, P. A. Aulich, T. Evans, GarethBlack, J. R. Foreman, D. J.Bolkus, N. Jones, G. N. (Teller)Burns, B. R. Maguire, G. R.Childs, B. K. Morris, J. J.Coates, J. Ray, RobertCollins, R. L. Reynolds, M. E.Colston, M. A. Ryan, S. M.Cook, P. F. S. Schacht, C. C.Cooney, B. Sibraa, K. W.Crowley, R. A. Tate, M. C.Devereux, J. R. Walsh, P. A.Devlin, R. Zakharov, A. O. Crichton-Browne, N. A. Button, J. N.Durack, P. D. Richardson, G. F.Watson, J. O. W. Beahan, M. E.Bishop, B. K. Gietzelt, A. T.Chaney, F. M. Giles, P. J.Lewis, A. W. R. McKiernan, J. P. Question so resolved in the affirmative. Senator REID(Australian Capital Territory)(5.15) —I move: That the Senate take note of the paper. This Family Law Council report entitled `Access-Some Options for Reform' cannot possibly be dealt with in the short time available today. I wish to refer briefly to some matters contained in it and I hope that the debate will then be adjourned so that the full import of the matters raised can be discussed. The question of access to children of a marriage which has failed is one of magnitude. There are frequently problems between the parents over what should occur. There are occasions, of course, when the access and custody arrangements work quite smoothly. I would not ever want to see any legislation interfere with the arrangements which parents make for themselves and their children. Such arrangements are the best possible arrangements. This comment was also made in the debate we had not long ago on the matter of maintenance for children: the best arrangements, given that a marriage has failed, are the arrangements which are made amicably between the parents of the children. But it is recognised, of course, that in the areas of maintenance and access there are considerable difficulties in reaching agreement. The report starts off with a summary of conclusions and recommendations. Paragraph 1.1 says: The Council considers that legislative direction is needed to counteract the notion that a non-custodial parent has a prima facie right of access to her/his child(ren). Mr Acting Deputy President, I think you would find that in the community there is a very widely held belief that the non-custodial parent has a right to access to his or her children. If we are to contemplate legislation to implement this recommendation the matter will need to be discussed widely in the community and be understood by people before any legislation is debated. It is a matter of such importance that a very wide comprehension by the public is necessary. Throughout this report there are references to the need for increased counselling. That issue would not be in dispute but I would remind honourable senators about the actual cost of counselling. Unless the Government is prepared significantly to increase the resources available for counselling we really are precluded from some of the changes which may be desirable, because without the availability of increased counselling we may in fact cause far more problems than we attempt to solve. In talking of the cost of counselling the thought comes to my mind that we spend so much in dealing with marriages that have failed but so little on attempting to keep marriages together. There was an incident recently where the Canberra Marriage Counselling Service Incorporated had difficulty in organising new premises. I am pleased to note that the Government has assisted and that it will be able to move and continue its work. There is a very great disproportion between the resources spent on attempting to help marriages before they finish up in the Family Court and the enormous costs of dealing with them once they do. As I said, mention of the need for increased counselling appears throughout this document. Another recommendation suggests that access agreements between parents should be capable of being registered in a similar way to that in which maintenance agreements may be registered. That, again, picks up the point that I made earlier that the best arrangements are the ones that the parents make for themselves. Paragraph 5.5, headed `Access and child maintenance', states: This Council is strongly opposed to any connection between the payment of child maintenance and access, even if limited to a mitigating factor as recommended by the ALRC. We can stand here and talk for a long time about there being no relationship between access and maintenance. The no fault concept was legislated out but we cannot expunge it from the mind of man. At the very least a very significant public relations exercise would be needed before we could convince many thousands in our community that there is no connection between maintenance and access. It is an important point. Debate (on motion by Senator Tambling) adjourned. Senator POWELL(Victoria)(5.21) —I move: That the Senate take note of the paper. In moving this motion to the 1986-87 annual report of the Primary Industry Bank of Australia Ltd (PIBA) I will make a few remarks on both the bank and the problems facing our primary industries sector at the moment. We should note that in May 1987 the Treasurer (Mr Keating) announced the Government's willingness to sell its interest in the Primary Industry Bank of Australia. On 30 June the Rural and Industries Bank of Western Australia acquired the Commonwealth's share in the Primary Industry Bank. Some three months later, on 18 September, the Government introduced legislation to repeal the various Primary Industry Bank of Australia Acts. This sets a dangerous precedent for a Government intent on privatising Australia's public enterprises. It is the sell first and legislate later mentality. In this case I think it is worth drawing the attention of the community to what has happened. The Primary Industry Bank of Australia was also granted an unrestricted banking authority which makes PIBA Ltd the seventh largest banking organisation in Australia. We have yet to see whether the new PIBA will be able to assist Australian rural producers who are struggling with low export prices, high interest rates, predatory multinationals and foreign investors. All of these factors are tragically forcing Australian farmers off their farms. The Australian Democrats believe that any primary industry or rural bank should actively involve itself in schemes to alleviate the appalling economic situation faced by a growing number of farmers in particular. The situation for many is desperate. Debt levels by farmers have tripled in the last decade. A report by the National Australia Bank Ltd earlier this year calculated that there were some 4,000 bankrupt farmers, that 6,000 could survive with special assistance while a further 17,000 faced failure. In 1985-86 the average farmer received a net farm income of some $6,700, not a magnificent income. While the figure for this financial year is expected to be higher than that figure, the rate of return to capital and management will still be a negative 6.9 per cent. There is a great deal of dedication within the farming community which is not clearly recognised when so much capital is placed in an industry which does not return a financial benefit to the people whose capital is invested in it. About 30 per cent of Australian farmers are expected to record negative farm incomes this year. Apart from the economic effects which farmers and the nation in general experience, there are also harmful social effects on farmers, their families and their communities. One of those effects is an alarming incidence of suicides, particularly by the farmers-a matter which does not draw enough public attention. The Australian Democrats believe that as well as the financial support that can be given, agriculture in this country needs new directions on what types of farming could be undertaken. I draw the attention of the Senate to the enormous support which is given for the primary industry sector in Canada, for instance, which is subsidising farmers to encourage transformation to sustainable agriculture-organic, biodynamic, ecological, biological and chemical free agriculture-and to look to the future, to new markets which are in great demand. That is happening in New Zealand and Australia will again fall behind if it does not happen here. Consumers are looking at the health and environmental aspects of chemical free farming and we should be picking that up in Australia. For a long time the Australian Democrats have called for subsidised interest rates and for using capital which should be provided by the superannuation funds which are now making big money by sending money off-shore. We also think that statutory reserve deposits should be freed up to provide low interest loans for farmers. There is a big challenge ahead for the Primary Industry Bank and the question is whether that challenge will be met. Question resolved in the affirmative. Senator REID(Australian Capital Territory)(5.26) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Reid) agreed to: (1) That the following matters be referred to the Standing Committee on Infrastructure: All notices of intention to modify or vary the Plan of Layout of the City of Canberra and its Environs, and all modifications and variations of that Plan, under section 12a of the Seat of Government (Administration) Act 1910. (2) That the Committee report to the Senate on each notice, modification and variation. (3) That, for the purpose of considering the matters referred to in paragraph (1), the Committee have power to consider and make use of the evidence and records of the Joint Committees on the Australian Capital Territory appointed during previous Parliaments. (4) That paragraph (3) of the foregoing Resolution be communicated to the House of Representatives by Message, requesting concurrence in the paragraph. Senator VANSTONE(South Australia) —I do not believe this motion should be declared formal or not formal. As a consequence of Senator Crowley's comments in the chamber on Friday clarifying her position and clearing the name and capacity of the judge, I seek leave of the Senate to withdraw the motion. Leave granted. Senator VANSTONE —I withdraw notice of motion No. 29 standing in my name. Bills received from the House of Representatives. Motion (by Senator Tate) agreed to: That the Bills may proceed without formalities, may be considered together and be now read a first time. Bills read a first time. Senator TATE(Tasmania-Minister for Justice)(5.30) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- SEA INSTALLATIONS BILL 1987 Passage of this legislation is necessary so that a regulatory system is in place in time for the opening of the floating hotel to be installed at the John Brewer Reef by Barrier Reef Holdings, and to consider proposals for other similar ventures. There have been several proposals for establishing off-shore installations on the continential shelf beyond the territorial seas, mostly, to date, in the Great Barrier Reef area. Some of these can be dealt with under existing arrangements involving the Great Barrier Reef Ministerial Council and the Great Barrier Reef Marine Park Authority, both of which involve continuing Commonwealth and Queensland cooperation on policies and day to day management. However, proposals are now being made which require regulation beyond the scope of those arrangements. This legislation provides a framework to ensure that new developments are technically sound and environmentally acceptable. It also provides a basis for the application of important Commonwealth laws in an area of Commonwealth responsibility where presently no general body of civil or criminal law applies, and for State or Territory laws to be adopted as Commonwealth laws. These provisions are parallel to those already applying under the Petroleum (Submerged Lands) Act, which regulates off-shore petroleum and mineral exploration and extraction. That Act and the Bills are based on the belief that the most efficient approach is to adopt State and Territory laws and to develop administrative arrangements involving State and Territory administrations. This approach also takes account of the satisfactory arrangements we have with the Queensland Government for day to day management of Great Barrier Reef Marine Park activities by the Queensland National Parks and Wildlife Service. It is important that off-shore installations not be used as a basis for evasion of Australian laws, particularly those regulating customs, migration, taxation and quarantine. The proposed legislation will deal with this by requiring contact with the installations to be from the mainland or an adjacent territory, and by including provisions to ensure that the laws in question can be efficiently and effectively applied. The Bills do not cover sales tax and income tax, both of which will be the subject of separate legislation in accordance with the Treasurer's announcement in January this year. The approach taken in the legislation is to require proponents of off-shore installations to seek permits. They will have to provide information about the purpose of the installation, structural and technical issues, the extent of use and occupation by people, insurance arrangements and so on so that proper standards can be applied, and assessments made of the impact on the environment. Where necessary, the Environment Protection (Impact of Proposals) Act will be invoked, as was done in the case of the proposed floating hotel off Townsville, and is now being done for a similar proposal for the Fitzroy Reef. Permits will be accompanied by whatever safeguards are necessary to ensure that safety and environment considerations are paramount in day to day operations. Variation, revocation and renewal provisions have been included to provide a means of continuing monitoring and to allow changes to accommodate any new factors which arise. Thus concerns relating to the number of permitted sea installations, particularly tourist complexes, which were raised during the second reading debate earlier this year, are groundless. This Government is not about to authorise a chain of floating hotels in the Great Barrier Reef region, which this legislation is designed to protect. The application of State laws and the use of State administrations will be an important part of this monitoring, in areas like health standards and others which will normally apply to similar operations on the mainland. The Sea Installations Bill makes clear that the States will be paid for their participation. There are several categories of installations which do not require further regulation such as certain fishing vessels and historic shipwrecks. These are already subject to effective and sufficient regulation. It will also be possible under the regulations to exempt other installations from the new legislation. A provision has been included to allow exemption from particular aspects of the regulatory scheme. This will also ensure there is no unintended interference with existing regulatory arrangements directed at matters not within the objectives of this Bill. On the other hand, care has been taken in defining sea installations to include non-exempted ships which remain constantly or continuously in the seas in question and thereby provide a basis for evasion of the legislation. These provisions acknowledge our obligations in respect of foreign shipping. Since the original Bill has been publicly available, a number of useful comments have been made leading to some changes. For example, the definition of `sea installation' has been amended to provide for further exemptions from the operation of the legislation, including commercial fishing and pearling vessels, navigational and meteorological aids, commercial cargo carriers, wharves and jetties and historic shipwrecks. These exemptions will ensure further that overregulation will not occur. The Government has also recognised the desirability of amending the levy arrangement to permit flexible and simple approach. In some cases, a fixed fee based on revenue or market value may be appropriate, while in others a fee based on the number of visitors may be best. This approach recognises the variety of installation, ranging from fairly simple pontoons to large hotels, which may need to be covered. The development of off-shore installations is already a fact of life. We are committed to harmonising conservation and sustainable development in the natural environment. This includes the seas. This legislation will be part of the Government's policy of protection, wise use, understanding and enjoyment of the environment. This approach is already being applied by the Great Barrier Reef Marine Park Authority to installations subject to its regulations. I commend this Bill to the Senate. SEA INSTALLATIONS LEVY BILL 1987 This Bill is part of a package of Bills to provide for the implementation of the Government's decisions relating to sea installations. The Levy Bill provides a framework for imposing taxes and charges on these installations. This will ensure that the administrative costs of the States and Territories are met, and that general revenue can benefit, as it would if similar installations were located on the mainland. The States have quite rightly pointed out that the development of off-shore installations for commercial purposes should not be at the expense of the mainland economy, and should not provide a basis for evasion of State and Territory legislation. The Commonwealth accepts this, and so the intention is that the levy be set with these factors in mind. I recommend this Bill to the Senate. SEA INSTALLATIONS (MISCELLANEOUS AMENDMENTS) BILL 1987 This Bill makes amendments to Commonwealth legislation necessitated by the sea installations legislative package. The Customs Act 1901 and the Excise Act 1901 are amended to give to officers administering the respective Acts power over such installations, ships, aircraft, persons and goods arriving with or at the installations or departing overseas from such installations. The Migration Act 1958 is amended to identify the point when sea installations and the persons on board enter Australia and when such installations become or cease to be part of Australia. The amendments to the Quarantine Act 1908 apply a wide range of controls under the Act to sea installations. The principal control is to make newly-arrived installations, persons and goods on the installations subject to quarantine. I commend this Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Message received from the House of Representatives acquainting the Senate that, having considered message No. 19 of the Senate, the House has agreed to the Senate's modifications of the resolution transmitted to the Senate by the House for the appointment of a joint select committee relating to video classifications. The ACTING DEPUTY PRESIDENT(Senator Teague) —Mr President has received letters from the Leader of the Government in the Senate, the Leader of the Opposition in the Senate, the Leader of the Australian Democrats and Senator Harradine nominating senators for membership of the Joint Select Committee on Video Material. Motion (by Senator Tate)-by leave-agreed to: That Senators Collins, Harradine, Jenkins, Walters and Zakharov, having been nominated in accordance with the resolution agreed to by both Houses, be appointed members of the Joint Select Committee on Video Material. Debate resumed from 21 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator HAMER(Victoria)(5.32) —The Australian Land Transport (Financial Assistance) Amendment Bill 1987 seeks to amend the Australian Land Transport Act by reducing the amount of excise collected through the Australian Land Transport Program Trust Fund in order to hold the total Federal finance for roads at $1,245m for 1987-88. This is the fourth year in a row that expenditure on roads has been held at that level-the fourth year in a row in which, at a time of rapid inflation, road funding has been held constant in money terms. Since the Hawke Government came to power, spending on roads has fallen by 40 per cent in real terms. This Bill gives effect to an announcement in the May economic statement. As this is a Bill contained in the Budget the Opposition will not be opposing it. However, that will not stop us from making strong condemnation of it, because it is an example-a key example-of the Government's lack of commitment to the measures necessary to get this country out of the mess into which this same Government's reckless mismanagement has plunged it. The Government's own Minister for Finance, Senator Walsh, has claimed that there were about 200 government-funded programs that could not be justified on economic or equity grounds. Yet, rather than tackling these sorts of programs, the Government is reducing the amount spent on roads-roads which are vital to the efficient working of our economy. Quite apart from the share market collapse last week-it is apparently continuing this week-which will give the Government yet another excuse for the deplorable failure of its economic programs, let us look at what is the real state of our economy, how we are going to get out of our current crisis, and the vital contribution that an improved infrastructure such as better roads would play in any recovery. Our gross foreign debt has risen more than three-fold during the life of the Hawke Government. It is now 40 per cent of gross domestic product, compared with 13 per cent in the case of the United States. We are now the third most indebted country in the world. The causes of this rapidly growing debt during the disastrous years of the Hawke Government has been our current account deficit. For this year, the Government has forecast it will be $11.5 billion-$11,500m-or 4 per cent of our gross domestic product. Under the Hawke regime we have been living recklessly beyond our means, borrowing overseas to maintain a standard of living we are not earning. Not long ago the Treasurer (Mr Keating) was saying how much the economy was growing, how much national spending was going up. Certainly it has been growing, but it has been growing by borrowing overseas. We are like a family which has suffered a loss in income continuing to maintain its previous standard of living by borrowing and claiming proudly that it is spending more than anyone else in the street. That can go on for a while, but eventually the hire purchase debts come in-and the debts for this Government are coming in now. Certainly we have been heavily hit by the declining terms of trade within the last few years, but it is worth noting that in the first year of the Hawke Government our terms of trade actually improved, and we did not then hear the Hawke Government modestly disclaiming responsibility for the slight recovery there was in 1983. Our declining terms of trade-the fact that we are getting less for our exports-are a fact of life, and there is no short term recovery in sight. We must adjust our lifestyle, our wages policy and our investment policy to cope with these facts of life. This the Hawke Government steadfastly refuses to do. Let us look at two key areas which we must succeed in if we are to get out of our present economic crisis. Firstly, we must improve our national productivity. Under the Hawke Government, productivity in 1985-86 declined by 1.6 per cent. In 1986-87, there was a further decline of 2.8 per cent. The decline in productivity over the last two years has been about 4.5 per cent. At a time when we are facing a crisis in increasing our exports and import replacement, our national non-farm productivity under the economic management-if that is the right word-of this disastrous Government, has declined by 4.5 per cent. Admittedly the Treasurer promises a small productivity rise this year-but he claimed there was going to be one last year, and there was not. His credibility, except among the parliamentary Press Gallery sycophants, is extremely low-and justly it is extremely low. If we are going to get out of our economic crisis we must improve our productivity, and a vital element of improved productivity is investment in new plant and equipment and infra- structure. The sad thing is that, despite the devaluation of the Australian dollar and the increased competitiveness in both exports and import replacement which has resulted from that, investment in new plant and equipment has not been forthcoming. There has not been the sharp rise in investment in new plant and equipment without which our recovery cannot be said to have started. Despite the devaluation, the collapse of the Australian dollar, since the Hawke Government came to power investment in new plant and equipment as a proportion of gross domestic product has actually fallen. As I say, this is despite the collapse of the Australian dollar which the economic management of this Government caused. Despite this collapse, businesses have not felt sufficient confidence in the Government's economic policy to invest in new plant and equipment-and the Government has shown its own attitude to investment by reducing real expenditure on roads each year for the last four years. There has been a decline in investment in roads in real terms of 40 per cent since the Hawke Government came to power. These roads, as part of the transport infrastructure, are vital to our national productivity. One can understand the attitude of private companies to investment when Australia has an inflation rate two or three times that of its trading competitors, when the productivity of workers in the manufacturing sector is falling rather than rising and when company tax in this country is far higher than that of our trading competitors. Faced with such problems, one can understand why businesses are not investing, but how can one possibly justify the Government not investing in the vital infrastructure on which the future prosperity of this country depends? Roads are particularly important in Australia. We have a very large country, with wide distances between our manufacturing centres. The policy of this Government and the arrogant and grossly selfish behaviour of the maritime and waterfront unions have reduced our coastal shipping to a mere shadow of what it ought to be for a country of our nature. Cargoes which under a rational economic analysis should be sent by sea are sent by land instead. Our rail systems are inefficient and overmanned, and excessively costly to the community. The only efficient form of transport in this country is road transport because it is largely un-unionised. But surely even this Government realises that, if we are to have efficient road transport, we must be prepared to spend money on the road infrastructure. The great crime of this Government is the year by year decrease in the real amount spent on roads. The Treasurer keeps on assuring us that all the economic indicators are on track. That may be true, but what track are they on? I find Mr Keating's remarks like those of the captain of the Titanic assuring the passengers that the ship was on course for New York. Well, it was-but look what happened to it. Roads are vital to our economy, and it is worth noting how the development of roads has gradually become more and more a Federal responsibility. Under the Constitution, the Federal Government has no responsibility for roads, except in the Territories. Since 1922 the Federal Government has been funding roads. This was challenged in 1926 in the High Court, which upheld the Commonwealth's power to make grants to the States under section 96 of the Constitution on such terms and conditions as it saw fit. The Federal Roads Act 1926 specified that a quarter of the grants was to go for the construction of new roads and three-quarters for the reconstruction and maintenance of existing roads. These roads grants were linked to excise in 1931, but that link was removed by the Commonwealth Aid Roads Act 1959 when funds were made available from consolidated revenue. Prior to 1969, 80 per cent of Commonwealth assistance went to rural roads. The Commonwealth Aid Roads Act 1969 introduced four categories for road assistance-urban arterial roads, rural arterial roads, rural local roads and planning and research. Nearly 50 per cent of the road grants at that time went on urban arterial roads. Between 1969 and 1977 the Commonwealth Bureau of Roads reports led to assistance being distributed largely on an analysis of economic benefits, the distribution of roads grants being altered to favour the more populous States. This distribution of road money has remained relatively fixed since 1977. With the change of government in 1972, the Commonwealth accepted responsibility for national highways and major commercial roads through the National Roads Act 1974. At the same time a new category-urban local roads-was added. The States Grants (Roads) Act 1977 combined the two Acts of 1974 and the distribution was slightly altered. In 1982 the Australian Bicentennial Road Development Trust Fund was established to continue until 1989 and to provide funds for national, urban, rural arterial and local roads through a specific excise levy on fuel sales. There has been a long Commonwealth involvement in road grants and the Bill that is now before the Senate amends the legislation introduced by the Hawke Labor Government in 1985. This Bill amounts to an assault on road funding. Federal road financing in Australia will sink to its lowest level in real terms for many years. Sealed country roads in every State are now being torn up and returned to gravel because insufficient money is available for their maintenance. When Mr Peter Morris, the previous Minister for Transport, introduced the original Bill in 1985, he said: The Bill now before the House will be the foundation upon which our overall approach to transport will be based. It provides a use related basis for determining Federal expenditure on land transport systems. Furthermore, the arrangements incorporate an automatic adjustment to match future inflationary movements as measured by the consumer price index. I repeat what the Minister said then: . . . the arrangements incorporate an automatic adjustment to match future inflationary movements as measured by the consumer price index. Like most Hawke Labor Government promises, that one has not been kept. The funds have not been increased in accordance with the consumer price index but in real terms have fallen 40 per cent during the time in office of the Hawke Labor Government. So much for Labor's longstanding policy commitment to the improvement of our nation's road system. I hate to think what Labor would be doing if its longstanding policy commitment was to wrecking the national road system. The present Government is doing a very successful job to that end by its policy of underfunding this vital national asset. In the last four years of the Hawke Labor Government this program has been maintained in dollar terms at $1,245m. In real terms it has been effectively worth about 9 per cent less each year. That is why I say that the drop in real terms in road funding expenditure over the years of the Hawke Government has been 40 per cent. In 1982-83, the last year of the coalition Government, the first year in which the bicentennial road development program had any effect-road funding accounted for 2.12 per cent of total government outlays. Labor Government spending on roads this year is less than 1.6 per cent. The Government is pocketing the difference between the money raised by the 2c levy and the indexed portion of the excise. That is how it balances its Budget. It cuts back on vital infrastructure development, essential expenditure for our national recovery. That is the measure of what this Government is doing. The Government says that it will save $166m this year by cutting road funding-in other words, by not indexing this year, bearing in mind the fact that it has not indexed in the last three years either. Of this, $67.6m will be saved by running down the reserves in the trust funds established for road programs. These trust funds are being run down-one to zero and the other to two-thirds its present level. What will the Government do next year? It has run down the funds by $67m this year, and it will have only $19m left next year, so where will the extra $50m come from even to maintain the current money value of expenditure on roads? This neglect of roads is a national disgrace-a disgrace to this Government. Good roads, good transport systems, are vital for our economic efficiency. Everyone who uses roads in Australia suffers from this Government's action. Increased spending on roads and increased investment in the national economy by the Government are essential if we are to return to being an efficient and effective producer and exporter. Proper expenditure on transport infrastructure is vital if we are to get out of our present economic crisis. Senator SANDERS(Tasmania)(5.50) —It seems as if politicians are constantly talking about roads. This is because roads are the common denominator of our culture. Roads are a measure of how well a government is doing. It is one of the main visible signs of a government that the roads are in good or bad repair. We spent an awful lot of time talking about roads in the Tasmanian Parliament; I did not really think we would spend much time in the Senate talking about roads and up to now we have not. But now we have the topic before us. It is very difficult to give a stimulating speech about roads, but I will give some general observations. Like it or not, this is the age of the internal combustion engine and cars and trucks need roads. If we are to have roads we ought to have good roads. Frankly, I would like to see our society restructured to the point where we do not rely so much on the internal combustion engine. Eventually there will come a time when we will run out of fossil fuels and we will get back to mass transport systems, rapid transit and other ways of moving people. But at the moment we have a high dependence on the internal combustion engine and we need the roads. Consequent upon the May economic statement and the Budget, the Government announced that 1987-88 payments under the Australian land transport program (ALTP) and the Australian bicentennial road development (ABRD) program would be maintained at the same level as last year. In effect, this is a reduction in expenditure on road programs, as Senator Hamer has previously noted. The ALTP was established to replace previous State financial assistance programs for road construction and maintenance. The ALTP is a five-year scheme which will operate until 1990 and is financed through the allocation of a share of the excise on motor spirit and diesel fuel. Section 14 of the Australian Land Transport (Financial Assistance) Act contains the formula for calculating the proportion of excise that will go towards ALTP. Although the share of excise allocated to the ALTP is supposed to be indexed to the consumer price index, the Government's announcement means a reduction in the rate of excise from 3.964c per litre to 3.241c per litre, applicable from 1 July 1987. The grants to the States under ALTP in 1987-88 represent a reduction of $41.6m on the grants in 1986-87, though this is matched approximately by increased funding under the ABRD program. This effective decrease in expenditure on roads has now occurred over several years, as the Democrats have pointed out before. The ALTP is the only Federal program which provides funds for maintenance and anyone who has travelled on arterial roads-particularly in country areas-would realise how badly maintenance is needed. One point which must be made relates to the heavy use of roads by trucks-a major factor in the breakdown of those roads. As a society we should move-and I hope the Government is doing so-in the direction of moving as much transport as possible from the highways to the railways. After all, all fuels are subject to this excise tax and it would be good if some of this excise were diverted towards the railways. For moving bulk goods from one major centre to another, the railways have definite advantages as they cover long distances across the country. I know that the railways are looking at various ways of moving containers, such as putting them one on top of the other, but they have problems with bridge heights. I think this is an area in which we should concentrate on removing as much truck traffic from the roads as possible. The Government has made much of achieving a balanced Budget this year, but running down our vital road system is not an appropriate means to use in achieving this. Apart from the fact that our industries need a well maintained road system, other long term costs will be higher. There will be accidents, causing personal injury and damage to vehicles and these will undoubtedly increase as roads run down. The Federal Government has a clear responsibility in this area, but it has refused to recognise that responsibility in any real sense. The clear trend of road funding-particularly in relation to maintenance of roads-has been downwards since this Government was first elected. Any damage to national road infrastructure is damage to a national asset, and that is to be condemned. The indexation implicit in the plan has been put aside repeatedly and the Australian Land Transport (Financial Assistance) Amendment Bill 1987, like the other Bills before it, will wind back the amount of excise available. This is an awful example of spending priorities and is a clear insight into the importance which this Government places on road funding which, of course, is very low indeed. Despite the disclaimer of the Minister for Transport and Communications (Senator Gareth Evans) in his second reading speech, that these amendments `in no way change the Government's commitment to the development of a road network which will meet Australia's national economic objectives', the Australian people will not be fooled. They have noticed and will continue to observe the deterioration of our road system. Unless this Government reverses the trend, the Australian Democrats will continue to deplore the implications of this Bill. However, the Government is now holding all the cards. If we vote against the Bill the roads will receive no funding at all. Therefore, we reluctantly support the legislation and we hope that in the future the Government takes a good hard look at the road system and gives it the funding that it deserves. Senator McGAURAN(Victoria)(5.56) —I am very pleased to stand here and speak to the Australian Land Transport (Financial Assistance) Amendment Bill 1987 because, as an Australian Democrat senator, Senator Sanders, has pointed out, we must support this Bill as it is a piece of Budget legislation. I also want to point out, as my colleague Senator Hamer has, the flaws in the Bill and the lack of support given to roads, particularly Victorian roads. I do not really know why Senator Sanders bothered to speak to this Bill because the Australian Democrats have spent most of their time lying across roads, thus preventing them from being built through the most inaccessible areas, such as in Queensland. The Democrats are the greenest of greenies and they have no interest in roads in Victoria or any part of Australia. I do not think that the Democrats are at all genuine in their response to this Bill. The National Party of Australia has had the most concern for roads right across this country because, as we all know, they are the lifeline of rural Australia. The debate on the Australian Land Transport (Financial Assistance) Amendment Bill has followed a most serious and potent urgency motion moved by the Leader of the National Party of Australia in the Senate, Senator John Stone. That urgency motion dealt with the whole strategy-or, indeed, the lack of strategy-of this Government's expenditure and Budget priorities. This Bill is a fine example of where it places its priorities. To that extent, this Bill really shows the Government's lack of courage and will, as Senator Stone so clearly pointed out, in relation to the fundamental economic problems. Road funding goes to the heart of the fundamental responsibilities of any government, be it local, State or Federal. This Bill relates directly to the country and rural areas of Victoria, and indeed, of Australia, but being a Victorian senator I have no shame in saying that Victoria is my priority. Today is a sombre time-as the last week or so has been-for the share markets and the economic welfare of this country. Today we have seen the Hong Kong markets collapse. The Australian market is again unsteady and unnerved. There has been a great need for governments and, indeed, business to get back to the fundamentals, to their real responsibilities from which they have drifted away so much in the past five years of this Government. Too many Government Ministers have been caught up with the high-fliers of business. If one wants to see a row of high-fliers in business, one only has to look at the front page of today's Australian newspaper to see how they are all bailing each other out. These are men whom the Prime Minister (Mr Hawke) has gone fishing with, has partied with and has changed legislation for. These people who are on the front page of the Australian today are the high-fliers and they are all bailing each other out. What about the small investor and the small businessman who are affected by this Government's policies or lack of policies for them? They now need the attention of this Government so badly, as Senator Stone clearly pointed out in his motion today. I do not wish to drift too far and wide, but again this Bill is one of the finest examples of how governments must get back to the basic fundamentals of their expenditure. I proudly say that I am a Melbourne City Councillor. For many years the Melbourne City Council has been Labor dominated. So many of the major capital cities have had to suffer Labor-dominated councils. In the Federal, State and local government arenas we have seen Labor-dominated authorities drift far and wide from their basic responsibilities. They have put money into anything that would get them a vote. They have completely wasted the funds of ratepayers and of taxpayers at State and Federal levels on fairy floss schemes which are quite clearly coming undone now that the markets dictate that we should all get back to fundamentals. Senator Stone was probably too kind to Senator Walsh when he said that he did not believe that it was totally Senator Walsh's fault and that Senator Walsh had made some attempt, pitiful as it was, in Cabinet discussions to sway the Treasurer (Mr Keating). I do not feel as kindly towards Senator Walsh. In my time as a senator I have had to listen to that boring, low key-I ask you, Mr Acting Deputy President, to restrain me before I sink to the depths of the gutter Senator Walsh sinks to, as does his colleague Mr Keating when he calls people scum. They also deserve to be called scum for the state they have put this country in today. It is a great worry, particularly as we enter our bicentennial year. Our bicentennial year is a time we should reflect and reaffirm our traditional beliefs, our belief in past Australians who have made this country a very fine and great country-pioneers, properly described by Banjo Patterson and Henry Lawson-the people who settled this nation. Yet we are witnessing the collapse of this great nation. I will never let Senator Walsh forget that what he has done to this country is contemptible. It is lower than the lowest thoughts or words that come to my mind. Out of the respect that I have for this chamber I will not sink to the depths to which this man has sunk. He has my utter contempt. This Bill shows the priorities of this Government, as I have clearly outlined. For the past four years this Government has frozen its expenditure on roads. As Senator Hamer pointed out, there has been a 40 per cent decrease in funding for the lifeline of rural people and, indeed, of all Australians. What a pitiful reflection of this Government's attitude towards rural people. It has been, unashamedly, the National Party's tradition to support the rural people of Australia. They are our roots. We do not deny them, although it should be pointed out that in Victoria we received very broad-based support at the last election. We received many new city votes. That is very much the future of the National Party, although we do not leave our roots behind. In Victoria we received a great deal of new city and country votes. This Bill does not address the great problems of rural Australia and, speaking as a Victorian senator, of rural Victoria. As I travel across the great State of Victoria the clearest issue that comes across to me is roads and the deterioration of roads. Every council I visited during my campaign, and since my campaign, formed small lobby groups to push the issue, to try to force this Government into greater expenditure on roads. If we are not to be led down the Argentinean road, as Senator Walsh commented in a fleeting moment of honesty and integrity which I daresay has now gone and gone for good, we need to get back to the basics, to the fundamentals, of government and what they are all about. I believe that the National Party has the finest policy on roads. I quote from what our policy document states we would do upon return to government: Upon return to government the National Party will ensure that the Federal road finance will equal 6c per litre of fuel excise. As honourable senators will be aware, the fuel excise now is 20c per litre. We would deliver 6c per litre of fuel excise directly to road funding. The policy document continues: This would include the 2c per litre on the ABRD levy which is to be continued beyond 1988. The Australian bicentennial road development program levy is related to bicentennial road funding. I conclude by assuring the people of Australia, and the people of Victoria in particular, that the National Party knows its roots. It knows its foundations. We have never diverged from the fundamentals of government. When re-elected, which I believe will come about at the next election, we will implement our policy. Senator REYNOLDS(Queensland-Minister for Local Government)(6.07) —In speaking in support of the Australian Land Transport (Financial Assistance) Amendment Bill 1987, I must say that I have been rather surprised by some of Senator McGauran's comments. He set out to try to prove how the National Party of Australia was so committed to road funding but seemed to slip up half-way through his speech and say that, in fact, the National Party of Victoria is more concerned with winning votes in the city. I am thoroughly confused. I dare say that many of Senator McGauran's supporters in Victoria are just as confused. Senator McGauran went on to be particularly critical of the Hawke Government and to talk about the Government's neglect of rural areas. In that case, I am not quite sure why the Hawke Labor Government was returned with increased support from rural electorates, particularly in Queensland. The other thing I would like to raise with Senator McGauran is whether he supports Senator John Stone's proposal of a 25 per cent tax. It is well known that if that National Party policy were adopted-heaven forbid!-programs would be cut in every area of government. We would not be here debating the Australian Land Transport (Financial Assistance) Amendment Bill; we would be looking at considerable reductions in government spending and government commitment. Senator Stone —And very big increases in private sector spending, Senator. Senator REYNOLDS —I remember that Senator Stone's entire election strategy in Queensland, when he was in Queensland during the election campaign, was based on major cutbacks. I do not have the statement with me, unfortunately, but I remember specific commitments to cut road funding. That shows the hypocrisy that exists in this chamber. We hear one thing out in the electorate just before an election and we hear pious presentations in this chamber when the Government is acting responsibly. The Government is continuing its road program. It is that continuity that counts. Over the five Budgets brought down by this Government road funding has been 24 per cent higher in real terms than it was for the last five Budgets of the previous Government. Although I guess comparisons would be a little sensitive for members of the Opposition, if they want to make comparisons of Commonwealth road funding as a proportion of Budget outlays, they will find that the average for the five Budgets brought down by this Government is still better than that for the last five Budgets of the previous Government. Let me just put the three basic arguments. Despite the need to restrain government expenditure in a responsible manner, the Hawke Government is committed to improving our terms of trade and reducing the deficit and overseas debt. Yet the Government has determined that the overall level of road funding will remain the same as in 1986-87. (Quorum formed) As I was saying when the quorum was called, while the Government recognises the importance of developing the nation's transport infrastructure no one could realistically expect road funding to be exempt from the review of major expenditure programs. Indeed, it is something of an achievement to maintain spending at this level. It is all very well for Opposition members to be critical. But where is the money coming from? The second point was about the Government's record. Federal road funding provided under the five Budgets of the Hawke Government is 24 per cent higher in real terms than that provided under the last five Budgets of the Fraser Government. This funding level has been achieved against a background of a continuous reduction in the Budget deficit from a prospective $10 billion when the Hawke Government came to office in 1983 to the balanced Budget presented by the Treasurer (Mr Keating) last month. The final argument relates to effort neutrality. Consistent with the recommendations of the Federal Road Funding Inquiry, the Cameron Inquiry, the Federal Government holds the view that the funding of arterial and local roads is basically the responsibility of State and local governments. On this point, Senator McGauran may well like at some time to take up the question of road funding with his colleagues in Queensland. If he is satisfied with the funding levels and the priority given to road funding in Victoria, I suggest he look at the priority given by the Queensland National Party Government to road funding. The Federal Government does not provide top-up funding for these roads, but simply a base level of assistance. The Federal Government is not responsible for funding shortfalls of State and local governments; it is up to State governments to set their priorities. The Queensland National Party Government, as Senator McGauran is probably aware, has some pretty strange priorities. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 22 October, on motion by Senator Gareth Evans: That the Bills be now read a second time. Senator STONE(Queensland-Leader of the National Party of Australia)(6.16) —The States Grants (General Revenue) Amendment Bill 1987 amends the States Grants (General Revenue) Act to give effect principally to decisions first announced at the Loan Council and Premiers Conference meetings in late May this year. In doing so it carries through the policies of the Government announced at that time. The principal of those policies has been to hold the position of the States so that it is totally incompatible with that of the Commonwealth. We have heard-not so much in recent days but certainly at the time of the Budget-a great deal from the Government about the sharp cut in real terms in total Commonwealth outlays which the Government said it achieved in the Budget for 1987-88. I think I recall correctly that the figure quoted at that time was a cut of 2.4 per cent in real terms. If we leave aside the fact that $1,000m of that was obtained by some fancy footwork on the accounting side and that, in the absence of that amount, the cut in real terms would have been 1.2 per cent, what we then find is-this is the point in this comment-that the whole of the cut was achieved in the area of Commonwealth payments to the States, of which this is by far the most important element. In other words, what we have in this area this year is very much a replay-a somewhat reinforced replay-of what we have had in previous years from this Government and indeed, I add, from previous governments, not merely from this Government. We have had a process whereby when expenditure has risen it has risen much more on programs of Commonwealth Ministers than on payments that the Commonwealth makes to the States. When programs have been under some degree of restraint, as they have this year, we have found that that restraint has extended significantly to the States but not to the Commonwealth's own programs. Indeed, I believe I am correct in saying that if we take only the Commonwealth's spending programs, as laid down in the Budget for 1987-88, we find that in fact there was a marginal real increase-not a significant one, nevertheless a slight increase of a decimal point or so-in Commonwealth spending on its own programs in 1987-88 and about a 4.6 per cent cut in real terms, that is, after adjustment for inflation, in Commonwealth payments to the States for expenditure on their programs. As I have said, the single greatest element in that latter area is that with which we are dealing in this Bill. The Commonwealth has once again said that it is in favour of expenditure restraint. What it really means is that it is in favour of expenditure restraint by somebody else; that it is in favour of expenditure restraint by State governments. I totally agree that there is a need on the part of the Government to restrain spending by State governments and to that extent-and I underline the words `to that extent'-I totally agree with the decisions to that effect made at the May Premiers Conference. Indeed, at that time I served for a couple of days in a special capacity as adviser to the Premier of Queensland. As part of my duties I helped his Treasury to produce at that time a document calling upon the Commonwealth Government to undertake even greater expenditure restraint than proposed and indeed actually concluded by the Commonwealth. But the important qualification, or condition, if you like, which was applied at that time by the Premier of Queensland, and with my full advice, was that this should be done on the basis of the Commonwealth also being prepared to make equal cuts in its own spending-and that, of course, is what signally and quite obviously the Commonwealth has totally failed to do. Commonwealth Ministers like the Minister for Finance (Senator Walsh)-although, to be fair, I will absolve to some degree the Minister for Finance from these particular encomiums-run around this country talking about the restraint in their expenditures, but there is no restraint at all in spending by Commonwealth Ministers on their programs. The only restraint that has been applied in this Budget, leaving aside the fancy footwork on the accounting side, is in the payments being made to the States by the Commonwealth. The fact of the matter is that what we have, once again, is the Commonwealth saying to the States, `Don't do as I do; do as I say'. So, in this Bill the decisions of the Premiers Conference-and those which are incorporated in the Bill are the most important decisions-will again result in the funds to be made available to the States from the Commonwealth being cut very much more sharply than the funds being expended by the Commonwealth on its own programs, which, in fact, are not being cut at all in real terms. That is the Commonwealth's view of fiscal equity as between the Commonwealth and the States. That process-and we have had a whole progression of it over the years-results in more and more financial power accruing to Canberra. It is, of course, precisely that process to which those on this side of the Senate, and particularly those in the Party from which I come, object most strongly. We object not merely to the size of government that we now have in Canberra, not merely to this whole big government machine which has grown up here over the years-and, I say again, not merely under this Government-but also to the failure to decentralise government out of Canberra. We have not merely very big government in Australia but a very big part of it in Canberra. That is one of the things which is producing the fiscal constipation from which Australia is suffering these days, particularly under the present Government. Let us look again at the reasons underlying the Government's decision last May to cut substantially the funds available to the State governments, including those in this general revenue area but not confined to it. The rationale underlying that process was that it was desirable to force the State governments to make significant cuts in their expenditures and hence to force them into reducing their demands on the financial markets and to make them reduce their contribution to the total public sector borrowing requirement. What has actually happened, of course, is that in the period since that time all six States have brought down Budgets, and I think that, with only one or two exceptions, they have all shown that they have really paid very little attention to the measures imposed by the Commonwealth at that time. A very interesting article was produced recently by the States' Policy Unit of the Institute of Public Affairs in Perth, Western Australia, which is headed by a director who was previously the Western Australian Under-Treasurer for many years, Mr Les McCarrey, and who is a highly knowledgeable official, concerning a survey of all those State Budgets. Mr McCarrey undertook a similar survey last year, as a matter of fact, at which time I think he awarded the order of the lemon, as he called it-that is to say, the order given to the least responsible State Government Budget-to the State of Western Australia. This year he has given it overwhelmingly to the State of New South Wales. This year it has not even been a horse race; the State of New South Wales has overwhelmingly received this, I think, rather undesirable award from Mr McCarrey, following his examination of the State Budgets. The reason for that, of course, is that the New South Wales Government is once again trying to play the same old three card trick which it has been playing for years and years and which the present Federal Government has been busily emulating ever since it came into place, in Canberra, namely, spending money that it does not have. We have had a succession of high deficit Budgets, not merely from the present Government here in Canberra but, in particular, from its forebears in New South Wales, one might almost say, given the linkages between the factions of the Labor Party. Once again, that situation pertains this year. The economic implication of all that-and this is particularly serious in the case of New South Wales-is that, instead of the measures taken at the Premiers Conference and Loan Council meeting last May actually producing a significant fall in the State component of the total public sector borrowing requirement, while we cannot precisely calculate that element as yet, all the indications are that, when it has been calculated by the Commonwealth Statistician in the next few months, we will find that almost no contribution at all has been made to reducing the State component of the total public sector borrowing requirement. Hence, once again we shall be left, in 1987-88, with a still very large total drain on national finances coming from the total government sector-the government sector overall including both the Commonwealth and the States. Of course, that is the chief element underlying, in turn, the `need' for the Australian economy to draw upon the savings of foreigners, a process which, I suppose, is more technically known as the current account deficit on the balance of payments. That is the factor which, in turn, has led over the years, particularly over the past four years, to this very large rise in the total indebtedness of Australians to foreigners. Senator Maguire —It is all private sector debt. Senator STONE —Senator Maguire is interrupting to suggest that because this debt is in the name of private sector entities it has nothing to do with his Government. If Senator Maguire has some little time, I am prepared to pursue this matter, as indeed others on this side of the Senate have done. Earlier this afternoon Senator Michael Baume gave one of the honourable senator's colleagues a lesson on the same point. Senator Maguire does not appear to realise that a balance of payments deficit must be financed. There are only two ways of financing it: either by borrowing or by selling off bits of Australia-and the present Government has been doing both, I might say, at a pretty handsome clip. But as to the borrowing component, if the funds are not borrowed by governments abroad, they will have to be borrowed by private citizens abroad. It is a simple matter of arithmetic, Senator Maguire. Sitting suspended from 6.30 to 8 p.m. Senator STONE —Before the suspension of the sitting for dinner, I was referring to the importance of the Government's attitude towards the totality of public expenditure and the public sector borrowing requirement in Australia. I was making the point in that connection that the Government's own contribution to rectifying the overall fiscal imbalance in this country has been relatively limited, but that it has in fact, and increasingly this particular year, 1987-88, sought to place a very considerable burden in that regard upon the States. At that time I took the opportunity of connecting those observations with those made earlier this afternoon in the context of the urgency motion, calling upon the Government to address its responsibilities to the Australian people at this time, particularly in the light of the events of the last week which have been, I understand, added to today by a further 100 point fall in the Australian stock market, with a view in particular to calling upon the Government to bring down a mini-Budget before the Parliament rises for Christmas. I shall leave that particular aspect of my remarks there. I want to move now to a rather different aspect of State government finances, of which of course the revenue funds provided for under the States Grants (General Revenue) Amendment Bill, constitute a most important element. In doing so I want to refer to some particularly ill-chosen remarks made in the House of Representatives when this Bill was being debated there on 20 October last, by the honourable member for Lilley, Mrs Darling. Mrs Darling, who represents a Queensland electorate, spoke in a manner which I think might have led one to wonder whether she did. Let me take a sample or two from her remarks. I am referring to page 1150 of the Hansard of 20 October. She said: In past years the Queensland Government has reneged on its responsibilities to Queenslanders by grossly underspending in the area of public housing and missing out on the Federal dollar that it could have had to relieve that situation. At a later point she said: Queensland has done very well on Federal funding. In 1987-88 the Federal Government has increased public housing funding to the States and the Northern Territory to $700m . . . Queensland's allocation is as follows . . . Then she went on to give some, in themselves, meaningless figures as to what Queensland's allocations had been under various elements of the housing program. She concluded by saying: This makes a total of $108,781,000 of Federal funding for Queensland alone. An additional $414m has also been made available in 1987-88 for public housing under Loan Council nominating arrangements at the highly concessional interest rate of 4.5 per cent repayable over 53 years. The facts are, of course-I would not normally speak on a matter of this kind-that the implications of the remarks of the honourable member for Lilley are totally incorrect. The truth is that in recent years, under the tender ministrations of the present Government in Canberra, the Queensland Government has been considerably disadvantaged in a number of these areas. I make it very plain, as I did earlier in my remarks before dinner, that I believe that at the May Premiers Conference and Loan Council meeting this year, there was a case for cutting back the funds available to the States, and indeed as Senator Collins is in the chamber I might add the Northern Territory, even more than was done, but only on condition that that was done in the context of an equivalent degree of financial sacrifice on the part of the Commonwealth Government also as part of, if you like, a general facing up, by Commonwealth and State governments at their respective levels of responsibility, to the real dangers confronting the nation, the evidence of which we have begun to see in a particularly crucial form in the last week or 10 days. I put that caveat to make it plain to you, Mr Acting Deputy President, and to honourable senators opposite in particular, that I am not here tonight, or at any other time, to make a special plea for special treatment for Queensland. As a matter of fact I do not believe that the Queensland Government or the Queensland people have ever asked to be given special treatment. They do ask to be given fair treatment, to be given a fair deal, to be treated equally with other parts of the Commonwealth of Australia, on all fours with the other States-with New South Wales, Victoria, South Australia and Western Australia-all of which States at present are enjoying, if that is the appropriate term, Labor Party governments. But what do we actually find? We actually find that in fact Queensland, and I have very little doubt that the same applies to Tasmania and for similar reasons, is disadvantaged in a number of these areas, including those to which the honourable member for Lilley in the House of Representatives was actually referring, in particular to housing and, in addition, areas such as roads, tertiary education and Aboriginal capital grants. For example, this year Queensland will receive only $29 per capita for housing assistance. That compares with the average for the other States of $37. These comparisons are admittedly based on 1981 census data, and it may be that the 1986 census data would change them somewhat, because I understand that there has been some remarkable growth in the population of Australians of Aboriginal descent between 1981 and 1986, for reasons which are not altogether clear. Nevertheless, based on 1981 census data, some 34 per cent of the total Aboriginal and Islander population in Australia resides in Queensland. Yet that State will receive this year only 27 per cent of total Commonwealth grants for Aboriginal housing. If that were to be placed upon the same basis as that of other States, Queensland would have received almost $5m more this year under that scheme alone. Similar comparisons can be drawn in other areas. Again I emphasise that Queensland has not at any time, so far as I am aware, sought special treatment. But I think the degree of victimisation that is going on is becoming so palpable that even this Government will shortly be unable to deny it. That will certainly be stretching credulity, because the things this Government can deny are extraordinary, if I may say so to Senator Tate. Finally, on this aspect of the performance of the State of Queensland, and having in mind, as I say, these ill-chosen remarks of the honourable member for Lilley, let me revert also to something that I referred to before dinner, when I was speaking about the recent survey by the States' Policy Unit of the Institute of Public Affairs in Perth. In those remarks I referred to what Mr McCarrey, the Director of that Institute, called the `lemon' award among State Budgets this year. That award was, as I said, then given to New South Wales, which not only expanded its total spending faster than that of any other States but in particular expanded its recurrent expenditure, as distinct from its capital expenditure, at an even faster clip proportionately than any other State. I will deal with something which I did not refer to at that time because, although I did not wish to speak about Queensland as such, the remarks of the honourable member for Lilley have led me to do so. I therefore take the opportunity to place on record in this place tonight the following fact: Queensland has won the IPA award for the most restrained and responsible budget for the second year in succession. These are not my words; these are the words of Mr McCarrey of the States' Policy Unit of the Institute of Public Affairs in Perth. I am quoting from its Press release. Mr McCarrey went on to say: The award of the lemon goes to New South Wales, which budgeted for the highest increase in recurrent expenditure of all governments this year. I think it is high time that some of the increasingly overt discriminatory financial practices against the State of Queensland were brought more closely under the financial microscope. Perhaps it is time that that process got more strongly under way. I assure Government Ministers and honourable senators opposite that that process will be got under way. To the extent that this Government feels, in its usual underhand way, that it can in fact discriminate against the people of Queensland by various slightly sly means through its centralised financial control, I think it will be the duty of senators and members from Queensland, such as myself, to begin to drag some of these nasty facts out into the light of day. I can assure honourable senators that we will have not the slightest compunction in doing so, notwithstanding the pained looks upon the faces of some honourable senators opposite at our contemplating to do so. Those few things having been said, I simply conclude by referring again to my remarks before dinner: we have in this Bill the embodiment of the decisions taken by the Commonwealth Government and imposed upon the States at the May Premiers Conference. While, as I say, I have no quarrel with the restraint sought to be imposed upon the States at that time, what is most conspicuous about this measure is that this restraint has in no way been matched by any comparable degree of restraint-indeed, there is no restraint at all-on the part of the Commonwealth Government itself in respect of its own current programs, which, as I have pointed out and which is indeed confirmed also in this statement by the States' Policy Unit of the Institute of Public Affairs, are estimated to grow very slightly in real terms in financial year 1987-88. Senator POWELL(Victoria)(8.13) —I remind the Senate that these Bills which we are debating cognately tonight-the States (Works and Housing) Assistance Amendment Bill 1987 and the States Grants (General Revenue) Amendment Bill 1987-deliver the $1 billion reduction in Commonwealth grants to the States which was outlined by the Treasurer (Mr Keating) in the May economic statement. General purpose capital grants to the States are to be reduced by $715m in this year, leading to an estimated fall in funds for States to spend on capital purposes of 56.5 per cent this year compared with last year. The other $285m which makes up the $1 billion saving announced in the May economic statement is gained by abandoning the Federal Government's commitment to increase by 2 per cent in real terms the general revenue grants to the States in 1987-88. Instead, the Commonwealth has reduced general revenue grants to the States to just maintain their value in real terms in 1986-87. In more ways than one the Hawke Government seeks to be emulating the governments in the United States of America and Australia which responded to the first signs of the 1930s Depression by cutting government expenditure, cutting wages, reducing government borrowing and then waiting for the private sector to take up the slack by creating production and employment. Those policies that failed after 1929 again represent the economic wisdom of our times. J. K. Galbraith, commenting on the contribution of economists to the Depression of the 1930s, said: It seems certain that the economists and those who offered economic counsel in the late '20s and early '30s were almost uniquely perverse. In the months and years following the stock market crash, the burden of reputable economic advice was invariably on the side of measures that would make things worse. In November 1929, Hoover announced a cut in taxes; in the great no-business conferences that followed he asked business firms to keep up their capital investment and to maintain wages. Both of these measures were on the side of increasing spendable income, though unfortunately they were largely without effect. Still, the effort was in the right direction. Thereafter policy was almost entirely on the side of making things worse. Both the Democrat and Republican Parties agreed to aim for a balanced budget. Of course, we now have the Hawke Government bringing in a balanced Budget-balanced, I remind the Senate, at the expense of low income families and individuals. The Liberals and Nationals, of course, would have cut more. We have to consider which Australians suffer as a result of these expenditure cuts. We will look at that in some detail because it becomes clear when we look at the effect that these Bills will have on the money available to the States for the funding of housing. In 1986-87 the Commonwealth made $584.7m available to the States to spend on public housing. This year it is expected to provide $385.6m. This reduction of grants available to public housing comes at a time of increasing numbers of people seeking that very public housing. The poorest Australians are being asked to wait longer for public housing while the Government has encouraged property speculators to make profits and reduce their tax liability by reintroducing negative gearing for rental property. The Opposition has attacked the Government for cutting expenditure to the States' housing programs, but it believes that the Government should have introduced bigger expenditure cuts in this Budget and past Budgets. And, of course, the amendment which the Opposition is proposing to move also criticises the Government for not having reintroduced the negative gearing earlier. Today we hear that the Burke Labor Government has contributed State revenue to bailing out Laurie Connell and his merchant bank, Rothwells Ltd. In effect, the Western Australian Labor Government is providing financial assistance to a man who recently spent $8m acquiring seven waterfront properties on the Swan River to demolish so that he could build a $30m home. It seems, regrettably, that modern Labor governments specialise in reducing housing for the poor while assisting wealthy property speculators. After all, in this year's Budget, Mr Keating announced the return of negative gearing for rental properties-in spite of the fact that in the White Paper on tax reform which preceded the National Taxation Summit, in arguing the justice and equity case for the abolition of negative gearing, it was shown that in 1982-83 14 per cent of individuals with negatively geared property would have had taxable incomes of over $100,000 if negative gearing had been disallowed; while less than 2 per cent would have had taxable incomes below the then average wage. The Minister for Finance (Senator Walsh), some honourable senators might remember, just a couple of weeks ago in an answer to a question I asked him on this matter, admitted that he could not guarantee that this incentive-a little taking up of incentivation on the other side of the House-for the landlord would guarantee the availability of cheap housing for private rental. On 16 October the State government housing Ministers expressed the same scepticism that I expressed here on behalf of the Australian Democrats about whether the restoration of negative gearing was helping to ease the rental crisis in capital cities. They called for more Federal funding for public housing programs. Hence at the time Davidson wrote: To attempt to subsidise rental housing through easing the restriction on negative gearing by subsidising a rich renter class who may or may not pass on that benefit depending on the state of the rental market, will at best subsidise luxury accommodation, the commercial rents as well as the target group, and reintroduce a tax shelter which was blocked for very good reasons in the tax reforms of 1985. Instead of spending the money the Government saved through disallowing negative gearing at the time for rental property on public housing, it has reduced Federal funding for public housing and reintroduced negative gearing for rental properties. To make matters worse, the Government's trade-off for this whole exercise in its backdown on negative gearing is to reduce the 4 per cent depreciation allowance for new residential construction to 2.5 per cent. The 4 per cent depreciation allowance underpins recent developments in Victoria and New South Wales at State level of rental housing trusts intended to boost construction specifically of low cost accommodation. Dropping the allowance places those trusts in jeopardy. The question is just who is entitled to assistance from the Government in these difficult times-the owner of Rothwells bank, the property speculator looking for a tax break or perhaps those low income households and individuals who cannot afford to buy their own homes and cannot get public housing accommodation because there simply is not enough of it? The answer to this question becomes abundantly clear-or it ought to-when we look at some of the facts. The redistribution of aid to the wealthy, of which we had a very clear example today, comes at a time when the number of Australians living in poverty has increased from an estimated 780,000 in 1983 to at least 2.2 million in 1985-86, when the number of millionaires has increased from 30,000 to 50,000 in just the past year and the wealth of two Australians is reputed to have increased in one year by $2 billion, an amount far more than what is needed to lift all Australians out of poverty. Long term unemployment has plateaued and continues to be a fact of life for at least 600,000 Australians. Poverty, which is clearly demonstrated by those figures, and a lack of adequate housing and reliance on the private rental sector are very closely related. Poor housing and social planning exacerbate the problems of people who are in stress; it contributes to ill health in that the impoverished circumstances of many families are a result of the overcrowding and social isolation which is often a response to the housing problems in which they find themselves. Poor physical environments contribute to the ill health of the community which flows from stress, anxiety, depression, abuse and interpersonal violence. Measures which alleviate the housing related problems will, in the long term, contribute to government savings in areas such as health, social security and law and order. Unfortunately, it seems beyond the wit of government to recognise this fact. Already we have seen that recent Government changes to the private rental sector will do nothing to meet the needs of low income Australians. Yet a recent study, which was published in a supplement to the magazine Australian Society, shows that people forced into the private rental sector-the sector which is said, without any evidence whatsoever, to have been given a boost by the reintroduction of negative gearing-because there is not sufficient public housing continue to experience the highest incidence of housing-related poverty, with 20 per cent of them living below the poverty line. I point out in particular that within that 20 per cent an alarming 62 per cent of single parents who are in private rental are living below the poverty line. They have been pushed there specifically by housing costs in the private rental sector because they cannot find public accommodation. Similarly, while the incidence of after-housing poverty is not high in general terms amongst the elderly, it is prevalent amongst those elderly who live in private rental accommodation. The same study published in Australian Society found that 30 per cent of single parents, that is, 5 per cent of all households which are in receipt of government benefits, were paying more than 50 per cent of their income on housing where they were forced into the private rental system. An estimated 40,000 Australians are homeless-they are unable to find homes either in the public or private sector-and 150,000 Australians live permanently in caravan parks. I think we should take a moment to reflect on the fact that the most poorly housed group in Australia is the Aboriginal people. The Aboriginal Development Commission estimates an unmet demand for an additional 16,000 dwellings for Aborigines, a huge amount when one considers that the estimated population of Aboriginals is 160,000. Like so many of the policies in Aboriginal affairs, successive governments' failures to provide adequate and appropriate housing is to our great shame as a nation and will, quite rightly, be receiving warranted public scrutiny in a few months when we commemorate 200 years of white occupation in Australia. Of course, many low income tenants would prefer public housing if it were available to them. In many cases, as I have demonstrated, this would make the difference between their living in poverty or managing to get above the poverty line. The waiting lists for public housing in Australia are said, according to Julian Disney the President of the Australian Council of Social Service (ACOSS), to have doubled over the last five years. The waiting period often exceeds two years and the waiting list nationally is expected to be 250,000 households by 1990. This is the sort of situation which was greeted with such political hysteria in relation to public hospital waiting lists for elective surgery. Yet, instead of taking positive action to address the waiting list problem, as government finally did in relation to hospital waiting lists by providing more funds for public hospitals, the legislation which we are debating tonight constitutes a reduction in Federal support for public housing. As yet, we do not seem to be concerned about that set of waiting lists. The amendment in this legislation which will allow States to nominate a larger proportion of their borrowings under the Loan Council programs for public housing than they have in the past is really very cold comfort indeed. Even if the States nominate 100 per cent of their loans component to housing-and we certainly cannot presume that they will-this amounts to a reduction of $164.4m in available capital funding, according to the figures which have been provided by ACOSS in its Budget response. In 1987-88 the loan component has been reduced by 51.8 per cent to $414m. Similarly, this year funding for the Commonwealth-State Housing Agreement effectively in real terms fell by 6 per cent. To maintain the agreement funding in real terms of $740m was required. Instead, the Commonwealth will provide only $700m to the States and the Northern Territory. The bleak picture for those people on the long public housing waiting lists is reinforced by figures on housing commencements. The predicted level of up to 130,000 in 1987-88 is a substantial increase on 1986-87 commencements and is good news for the building industry and for those in the ranks of home buyers. However, not unnaturally, the number of public housing commencements is down. The provision of adequate housing for low income Australians is, the Australian Democrats believe, one of the major challenges affecting us today, particularly if we are, as the Government has said it is, interested in helping people to get out of poverty, especially those children who are living in poverty and are members of those households which are finding themselves forced into poverty by insufficient public housing. Once they get into the private rental area, they are forced below the poverty line. This is one of the areas, however, in which the Government's contradictory expenditure policy, combined with its continuing tax concessions to the better off, produces unjust and irrational economic outcomes. In what might seem to be a totally unrelated area, there is further evidence of this contradictory policy syndrome, if you like. At the time of the May economic statement provisions were foreshadowed for the collection of maintenance by the establishment of a child support agency, which I think would be widely supported across party lines. But it emerged in that statement that any accommodation maintenance which might be paid would be subject to a special income test. Although we have not seen legislation on this, it emerges from the papers supplied by the Department of Social Security that in the case of maintenance being paid in the form of mortgage payments and property settlements which relate to a house, the provisions proposed will mean that the family home and basic furniture will be treated as income, reducing the money available to buy food and clothing. This is an enormous anomaly. We know that the assets test which currently applies to pensions and benefits exempts the family home and allows for ownership of basic assets such as furniture and household items, but it appears that this precedent will be broken by the proposals for the new maintenance system in the case of sole supporting parents as an arrangement is being made whereby part of the maintenance will in fact maintain the family home. It appears from what we have seen so far that the only option available will be to sell up the family home, so we will have another family out looking for accommodation-a family on a low income, a family no doubt to be pushed below the poverty line because public housing probably will not be available. There will be another family on the ever-extending waiting list. I urge the Government to look at that anomaly and perhaps to admit that, unless this form of assets test on the family home is to be introduced as a discriminatory measure against sole parents, it will have to look closely at it and change its approach before it brings before the Parliament legislation on this issue. The Australian Democrats believe the Government's public housing policy in general needs dramatic redirection, and we need a new flexibility and openness in innovation in our search for new solutions to the problems of financing and ownership and of changing patterns of community need. It probably goes without saying that the Australian Democrats have little sympathy with the amendments which will be moved by the Opposition. Far from wanting to condemn the Government for its tardiness in reintroducing negative gearing, the Australian Democrats were appalled and remain appalled by what is yet another example of discrimination in favour of those most able to look after themselves, against the interests of the disadvantaged in this community. Senator SHORT(Victoria)(8.34) —The Senate is debating cognately the States Grants (General Revenue) Amendment Bill and the States (Works and Housing) Assistance Amendment Bill. It is towards the latter of those Bills that I seek to address most of my remarks this evening; but in doing so I point out that many of the comments of a general nature that one would make about one Bill would also have direct relevance to the other. In general terms, we are talking about two Bills concerning the affairs of government in relation to spending at a time when this country is going through great traumas and uncertainty. Both of those areas of government spending, as well as every other area of government spending, need looking at urgently. I will come back to that later, but I did want to make the point that the two Bills, although different, are related to that extent. The main purpose of the States (Works and Housing) Assistance Amendment Bill, as outlined in the explanatory memorandum, is to amend the States (Works and Housing) Assistance Act in accordance with the new arrangements agreed at the Australian Loan Council meeting on 25 May this year for a variety of reasons, including the payment in 1987-88 of interest free capital grants to the States of $176.1m as part of the State governments' 1987-88 Loan Council program and the payment in 1987-88 of amounts that States may nominate from their Loan Council programs and the Northern Territory from its equivalent general purpose capital advances as being for the purpose of public housing and payable under the concessional loan terms and conditions of the Commonwealth-State Housing Agreement. The Bill also provides for each State and the Northern Territory to provide a certified statement as to the expenditure of funds nominated for the purpose of public housing. In 1987-88, one-third of the total amount of the State governments' Loan Council programs and the related general purpose capital assistance to the Northern Territory will be provided as a capital grant. The Bill provides, as I said, grants amounting to $176.1m this year with the remainder, an amount of $357.2m from the approved Loan Council programs for the States, representing the loan portion of the programs. The Bill also authorises the payment as advances of capital grants in the first six months of the next financial year, 1988-89, of an amount of $88.05m, pending passage of similar legislation in that year. I make the general comment that I find the Government's presentation of these figures very difficult to follow. In the second reading speech of the Minister Assisting the Treasurer (Mr Holding) in the other place, and of course they are reflected in the second reading speech incorporated in Hansard here, the figures are complex. They are difficult to follow clearly because it would appear that there has been a major reduction in the State governments' Loan Council programs for 1987-88-a decline, in fact, of more than half, to a figure of $533.3m. In the Senate at Question Time today the Minister Assisting the Minister for Community Services and Health, Senator Ryan, attempted to explain-I felt in an extraordinarily garbled fashion, if I might say so-that this was not the case. I hope the Minister for Finance (Senator Walsh) will set the record straight when he sums up the debate on this Bill this evening. I do think the presentation leaves something to be desired. What does appear quite certain, however, is that there has been a significant reduction in Federal Government funding for housing in 1987-88. Federal funding for public housing has increased by much less than the rate of inflation. That figure was announced on 30 March last. As well as that fall in real terms in funding for public housing, there has been a major reduction in general purpose grants to the States and in their Loan Council borrowings. The exact effect of these reductions in government spending on housing is uncertain because at the Loan Council meeting on 25 May 1987 the previous arrangements were changed, and now the States can nominate up to the whole of the borrowing component of their Loan Council programs to be received as loans for public housing on the same concessional terms and conditions as those provided under the Commonwealth-State Housing Agreement. Those loans continue to be subject, though, to the condition that the States and Northern Territory will be able first of all to meet the matching requirements of the Commonwealth-State Housing Agreement. As well, the States and the Northern Territory have until 31 December this year to nominate the proportion of their borrowing entitlement that they wish to go into public housing. Until then we do not know the actual amount that will go into public housing. I should make it clear early in my remarks that the Opposition does not oppose the States (Works and Housing) Assistance Amendment Bill. However, the Opposition condemns the Government for the great damage that it has done to the housing industry and the hurt that it has caused hundreds of thousands of Australians, particularly low income earners and young married couples endeavouring to buy and/or, in the present interest rate climate, retain their first home as a result of its general economic policies and its specific policies towards the housing sector. For that reason, on behalf of the Opposition, I have circulated an amendment to the motion that the Bill be read a second time. The amendment adds the following words to the end of that motion: ``, but the Senate condemns the Government for the delay in the re-institution of negative gearing and for the pursuit of economic policies which have: (a) forced a record number of over 161,000 Australians on to public housing lists; (b) resulted in a long period of record high interest rates; and (c) resulted last year in the lowest number of housing starts for the last 20 years, excepting the drought year of 1982-83''. I elaborate on the sentiments contained in that amendment. The housing industry is vital in both economic and social terms, and Senator Powell in her remarks on behalf of the Australian Democrats concentrated on the social terms. Figures provided by the Indicative Planning Council for the Housing Industry-that is, the official body that looks at the housing industry and forecasts its movements-show that in real terms, at 1979-80 prices, annual private sector gross fixed capital expenditure on dwellings is between $6 billion and $7 billion each year. That is a very large figure indeed which incorporates a high level of resource usage in terms of employment, in the use of savings in the community and in borrowings from the financial system. The economic aspects of the industry are very important. The social aspects, though, are just as important. One of the great Australian traditions has been the dream of owning one's own home. Some might say that we have placed too much store on home ownership, to the detriment of investment in other areas which may have assisted a higher economic growth rate. But that is another matter. The fact is that it always has been the goal of most Australians to own their own home. The level of home ownership in Australia is among the highest in the world, even though it has been dropping in recent years. The housing industry is highly susceptible to the overall level of economic activity and to the macroeconomic policies of government. These have an enormous effect on the availability of funds for housing, on the level of interest rates, on the inflation level and on the confidence of home buyers and investors in housing. On each count the Government stands, in the Opposition's view, condemned by the facts. Let us look at a few of those facts. Housing interest rates have been at record levels during most of the term of the Hawke Government's 4 1/2 years in office. Despite the recent easing in some home loan interest rates, they are still far too high, and look certain to go up again in the near future. The increase in building costs in Australia in recent years has gone up broadly in line with the increases in inflation generally-probably, at a higher rate. But even at the general rate of increase, we all know that in Australia those increases have been at rates up to five times and more higher than in other Western nations. The sheer availability of finance for housing has fluctuated considerably. It has been much less available than it would have been had the Government been a less profligate spender of other people's money. During the 4 1/2 years that the Hawke Government has been in office it has managed to spend $25 billion more than it has raised in taxes. That has happened despite the fact that it has raised the overall burden of taxation to the highest level in our history. So despite massive hikes in our tax bill, the Government still needed to be a very heavy borrower on financial markets here and abroad. The Government's domestic borrowings have diverted funds away from housing and have reduced the availability of housing finance and increased its cost-that is, housing interest rates. A recent study by the Real Estate Institute of Australia on home loan affordability has shown that mortgage payments in Australia are taking more and more of the average income earner's wage. Home owners on average are paying now up to 17 per cent more of their income on mortgage repayments than they did just a decade ago. It varies from one city to another, but in Sydney, for example, home owners are now paying 45 per cent of average weekly earnings on an average home loan. Ten years ago that figure was 28 per cent. In Melbourne the average wage earner now pays 14 per cent more of his income in home mortgage repayments than he did 10 years ago. In Brisbane the increase over that period has been 9 per cent, in Canberra 10 per cent, in Perth 3 per cent and in Adelaide 15 per cent. So the affordability of housing has diminished dramatically in the availability of funds and their costs. The borrowings from both sources, domestic and overseas, have pushed up the Government's overall interest bill to staggering heights. This year the Government's interest bill alone exceeds $8 billion, which is more than the Federal Government spends on education and on health, and indeed it is even more than it spends on the defence of this nation. It is no wonder that the level of activity in the housing industry in the year to June 1987 fell so dramatically. Dwelling commencements in 1986-87 totalled 116,200-the smallest number for 20 years with the exception, as I mentioned earlier, of 1982-83 when Australia was in the middle of its worst drought in living memory, which had enormous impact on all economic activity. All areas of dwelling activity fell last year. I refer to private houses for owner occupation, private dwelling construction for investment and rental purposes and public housing, where public housing commencements fell for the fourth successive year. The fall in public housing commencements is a blot on the Australian scene of which this Government should be ashamed. The number of families now on public housing lists totals 161,000. When that figure is multiplied by their dependants, the actual number of Australians who are on public housing lists is staggeringly high. It would certainly well exceed half a million people. Those 161,000 families on the waiting lists is an increase of more than 50,000 since this Government came to office-something like a 50 per cent increase. While those waiting lists grow inexorably and tragically, the Government has failed to take not only specific action but also the necessary broad economic policy decisions to improve the situation. We all know that the housing industry relies essentially on stability and consistency in the policies adopted towards it by government. The biggest investment that most individual Australians make in their lifetime is a house for their now occupation and use. They need stability and confidence to be able to undertake that and to afford the repayments which they program so many years ahead. For those concerned with investment in housing for investment/rental purposes, it is also essential that there be stability and consistency in the policy approach. Let us look at some of the policies in recent years as far as they have affected investment in housing and other residential construction. One important area has been the depreciation allowance for residential and non-residential construction. That was an exciting measure brought in by the Fraser Government in 1981 or 1982 when it gave a depreciation allowance of 2 1/2 per cent of the value of the construction. A couple of years ago the Hawke Government put that figure up to 4 per cent. But now in this Budget it has brought it back to 2 1/2 per cent. Whether the figure should be 4 per cent or 2 1/2 per cent is a matter for debate, I guess. But what is not a matter for debate is the fact that it is unsettling in the extreme for the industry to be subject to changes of that nature-unheralded, without prior notice and without any logical reason for them. The introduction of capital gains tax was a major impediment on investment in dwelling construction for investment and rental purposes. Of course, capital gains tax now applies to homes other than the family home in which one resides. At the same time as that tax was brought in-and these announcements were only two months apart-came the Government's announcement a couple of years ago of the abolition of negative gearing. Taken together, the capital gains tax and the abolition of negative gearing had a quite devastating effect on the housing industry. The Opposition warned the Government of the effects. The Government ignored those warnings. Now, in the latest Budget, it has restored negative gearing because it says that it is in a position to permit the restoration as a result of the introduction of the capital gains tax. But that is an absolute nonsense argument-a totally misleading and wrong argument-because when the Government introduced both measures almost simultaneously it knew that they were both coming in and therefore it should have foreseen the results of that. Quite clearly, the Government made a monstrous mistake with the abolition of negative gearing and it should have the courage to admit that now. The prospects for the housing industry over the year ahead are, in my view, very clouded. The best indication that we have as to the Government's thinking-or, at least, the thinking of the official sources-comes in the August report of the Indicative Planning Council (IPC). That Council has forecast that in 1987-88 the total dwelling commencements will go up to 128,000 from the figure of a little over 116,000 in 1986-87. That figure needs to be looked at very carefully because it was based on a set of assumptions that are no longer valid. It was made at a time when the economic climate was vastly different from what it is now, given the events of recent days. In any case, that figure of 128,000 measures against a required demand for housing-again as stated by the IPC-of between 160,000 and 170,000. If we take the mid point of those figures, even if the 128,000 commencements for this year were maintained, there would still be a shortfall in the IPC's own estimation of a figure not far short of 40,000 dwellings. That is an enormous shortfall at a time such as now. The climate for the housing industry has deteriorated. I have no doubt that it has deteriorated as a result of the events on stock markets and financial markets over the last couple of weeks, and the likelihood of that 128,000 being an overestimate for 1987-88, rather than an underestimate, must be very considerable indeed. Prospects for the shortfall being much greater even than the already large figure of 37,000 that was being forecast have gone up enormously. I want to draw again to the attention of the Senate some of the terms of the Opposition's urgency motion that was passed by the Senate earlier today. That motion contained much that is relevant to the debate in which we are now engaged in respect of both the States Grants (General Revenue) Amendment Bill and the States (Works and Housing) Assistance Amendment Bill. The motion that was passed by the Senate today said, amongst other things: That the Senate (1) Express its concern: (a) that Australia's gross foreign debt, at around 40 per cent of Gross Domestic Product (GDP) is now among the highest in the world, and compares with a figure of 13 per cent in the case of the United States of America; The Senate also expressed its concern: (b) that Australia's current account deficit in the balance of payments, which is the source of this growing debt- the source of the debt and not the other way around- was forecast in the Budget Papers at $11.5 billion or 4 per cent of GDP in 1987-88 compared with a figure of 3.3 per cent in the case of the United States of America; The Senate then noted: the state of these fundamental indicators of economic ill-health renders the Australian economy excessively vulnerable to any adverse change in world economic conditions, particularly insofar as any such change may have adverse consequences for the prices of our major export commodities; The Senate also noted: the serious risks for Australia which are involved in the foregoing and calls upon the Government to undertake urgently measures to speed up the pace of the economic adjustment which, as conceded in the Budget papers, has to be made. Finally, the Senate today called upon the Government: as an urgent first step in that speeding-up of the adjustment process, to introduce a mini-Budget directed at significantly cutting Government expenditure and reducing the total Public Sector Borrowing Requirement (PSBR) before the Parliament rises in December. The Government voted against that urgency motion. I am pleased to note that the Opposition's motion was supported by the Australian Democrats. Having listened to Senator Powell, I can only regret that once again the Democrats are going to demonstrate their policy inconsistency approach by refusing to support the amendment I am going to move in regard to the States (Works and Housing) Assistance Amendment Bill. What my amendment is all about is very much in line with the decisions the Senate took in its urgency motion today. The figures which are the subject of the legislation tonight were determined several months ago at the Loan Council meeting in May. Since then, and since the Budget of 15 September-indeed, since only 10 days ago-the economic world in which we live has changed dramatically. In the last week the stock market in Australia has fallen in value by about 33 per cent, the largest fall of any of the significant stock markets in the world. No one should seriously question the need for us to urgently rework our figures as individuals, as companies and, very importantly, as governments-and, therefore, our policies. The world has changed very considerably indeed. The question now is whether the change in the financial environment in which we operate is a change that will flow through to real economic activity. That is the test for Australia over the period ahead; it is the test for the world over the period ahead. The one thing we can be absolutely certain of is that the prospects for affecting the real economies of Australia and other nations is increasing almost hour by hour. The housing industry and the other areas of government activity will in no way be sacrosanct or shielded from those processes. In the context of this legislation, I renew the Opposition's plea to the Government to look at the urgent need for a mini-Budget and for other necessary economic adjustment policy measures to be taken in this parliamentary session. In making that plea, I commend again the amendment to the States (Works and Housing) Assistance Amendment Bill which I have circulated. I move: At the end of the motion, add: `, but the Senate condemns the Government for the delay in the re-institution of negative gearing and for the pursuit of economic policies which have: (a) forced a record number of over 161,000 Australians on to public housing lists; (b) resulted in a long period of record high interest rates; and (c) resulted last year in the lowest number of housing starts for the last 20 years, excepting the drought year of 1982-83'. Senator BOSWELL(Queensland)(9.03) —Tonight the Senate is debating the States Grants (General Revenue) Amendment Bill 1987 and the States (Works and Housing) Assistance Amendment Bill 1987 which will give effect to the decisions taken at the Premiers Conference. It is interesting to join in this debate to work out just how the financial cake is to be cut up between the States. Queensland has not received its rightful share of Commonwealth revenue. Queensland has been blatantly discriminated against, as it has since this Government took office. Let me read out a few of the items where Queensland has been underfunded by a total amount of $209m. On a per capita basis, tertiary education is down $49m. Housing assistance is down $17m. Aboriginal housing is down $3m. Bicentenary roads, on the length of roads, is $30m down. General purpose capital is $18m down. And, shame of all shames, Medicare funding is $93m down. Senator Bjelke-Petersen —It is a sad story. Senator BOSWELL —Senator Bjelke-Petersen is terribly worried about Queensland being so miserably treated by the Federal Government. The amount of $209m has been taken out of the pockets of all Queenslanders who pay Federal tax. Senator Robert Ray —No gratitude. Senator BOSWELL —There is certainly no gratitude from Queensland when we get continually robbed of our rightful funding. As my Leader, Senator Stone, said, we do not want anything special, but we do want to be treated like Australians. Queensland has a very healthy role in the economy of Australia. Queensland carries the other States in relation to Australia's balance of payments and foreign exchange earnings. For the 12 months to June 1987, Queensland's exports have totalled a record of $7,725m, consistently contributing between 23 and 25 per cent of the nation's exports and proving that Queensland remains the leading export State. Queensland's exports for the period July 1986 to July 1987 rose in value by 18.5 per cent. Queensland exports up to 60 per cent of Australia's coal exports. Every farmer in Queensland pays $16,000 in tariff payments to support secondary industries in Sydney and Melbourne. Yet, when it comes to dividing the cake, Queensland is left right out. It is very bad discrimination, but Queensland is becoming used to it. It has had to put up with it for the last five years. Senator McGauran —Not for long. Senator BOSWELL —This Government may think that it will starve Queensland into submission, starve it into voting for a Labor government, but it will never happen. Queenslanders cannot and will not be bought. The principal general revenue Act of 1985 provided for an increase of 2 per cent in real terms in the 1987-88 level of financial assistance grants and identified health grants. At the Premiers Conference, however, it was decided that the 2 per cent real growth factor was to be dropped, thereby fixing the grants at the same levels as in 1986-87-another Keating promise, another failed promise, that the Australian Labor Party (ALP) and the Federal Government have failed to keep. It is a backdown that the States have had to bear. Even the Labor Party Premier of Western Australia queried the fairness of these cuts. In the Australian on 21 May this year he was reported as saying that Western Australia and the other States were prepared to carry their fair share of the burden but that this was not happening. While the outlays to the States represent 30 per cent of Commonwealth spending, Mr Keating's cuts meant that the States had to carry 50 per cent of the reduction. Mr Burke is reported as saying that he did not believe people had fully realised the effects of such policies. The Federal Government's leadership in resolving our economic problems is sadly wanting. It is a flick pass to the States-and let them carry the responsibilities. That is what this Federal Government has done. It has passed on all the hardships to the States. No State has carried more of the burden than my State of Queensland. It has been absolutely discriminated against. Senator Walsh should hang his head in shame. The $16,000 which every farmer in Queensland pays in tariff payments has not been taken into consideration. Queensland's export industries have not been taken into consideration. One would have thought that because of Queensland's contribution to the economy it would not be discriminated against and that at least it would be treated like every other State. The previous speaker, Senator Short, mentioned that Aboriginals were discriminated against in housing. Certainly the Aboriginals in Queensland have been discriminated against in housing grants. It is not only every Aboriginal Queenslander, but every Queenslander who has had to bear the burden of the discrimination by this Federal Government. Queensland is disadvantaged by such underfunding in the areas of tertiary education, which I have mentioned, roads, housing and Aboriginal grants. Queensland has been further disadvantaged by changes which the Commonwealth made in May 1985 to its formula for distributing tax sharing payments. Discrimination against Queensland has been going on for some time. Let us take the case of tertiary education funding. Day after day in the Senate we have been getting dorothy dixers about why youth unemployment is so high in Queensland. Let me explain to the Senate why it is so high. The Federal Government congratulates itself in the recent Budget on increasing the number of tertiary places available by 5,000. But it neglected to explain that it was the lowest increase in tertiary places since 1983. Participation in tertiary education in Queensland has fallen to the lowest level of all States since the Commonwealth took over funding in this field, reducing State finances by a similar volume of funds. To bring Queensland up to a similar level of per capita funding as the other States, and to give our young people a similar chance to that received by young people living in Western Australia, South Australia, Victoria or New South Wales, we would have to get all of those 5,000 places just to make us equal. But, of course, we will not get them. I say to Senator Walsh that that is why Queensland's youth unemployment figures are higher than the Australian average. I would like him to take special note of that. Underfunding of tertiary education in Queensland amounted to $49m in 1986-87. In total, Queensland was underfunded by some $209m compared with the other States in six key areas of Commonwealth specific purpose payments. In relation to housing assistance, there was a shortfall of $17m in 1986-87. If Queenslanders were to receive the same per capita funding as the other States, 1,600 more Queenslanders could be housed each year. Senator Maguire —How do you work this out? Whose figures are these? Senator BOSWELL —These figures are authentic figures. Senator Robert Ray —From where? Where did you get them? Senator BOSWELL —The Minister can do his own research. I am not here to do the Labor Party's research. Senator Robert Ray —You are just making them up. Senator BOSWELL —I am not here to assist the Labor Party's research. It is particularly shameful, in this International Year of Shelter for the Homeless, to see the Labor Party's pitiful record of looking after public housing needs through its economic mismanagement. We have seen the abolition of negative gearing, a record building industry slump, a record number of families on public housing waiting lists and numbers of people living in caravans and living in cars in back streets. That is this Government's legacy to the housing industry and to the great Australian dream of everyone owning his own home. Senator McGauran —It's gone. Senator BOSWELL —It has gone. There has been underfunding of $3m in Aboriginal housing. Queensland has 34 per cent of the total Aboriginal and islander population in Australia, yet it receives only 27 per cent of the total Commonwealth grants in this area. I stand here as a Queensland senator and proudly say that there is no State in Australia that has done more for its Aboriginals than the State of Queensland. The Queensland Government, through its deed of grant in trust, has given the Aboriginal community millions and millions of acres; they are land wealthy. Through the deed of grant in trust they are able to and are encouraged to go out and start their own farms or cattle stations. Every assistance has been given to the Queensland Aboriginals. I have travelled through the communities and through the islands and I am proud to stand here and say that Queensland has tried to encourage Aboriginals to work out their economies and to give them a lead in developing their own industries. That is something that this Government should acknowledge. Funding for Aboriginal housing in Queensland is down by some $3m. The Australian bicentennial road development program is also suffering significant underfunding. Compared with the total length of declared roads in Queensland, the Commonwealth's allocation to Queensland for 1986-87 was $30m short of what it should have been. With regard to general purpose capital grants, Queensland has received significantly less than its population share warrants. In 1986-87 there was a shortfall of some $18m. The most outrageous imbalance of funding that this Government has handed to Queensland is in the area of Medicare. What honourable senators should really understand tonight, and what the people listening to this debate should take in, is that, if those other areas that I have mentioned have been underfunded, Medicare has been shockingly mistreated. Because Queensland already has a free hospital system, the Commonwealth saw the opportunity to discriminate heavily against Queensland in its funding arrangements. As a result of the totally inadequate additional compensation of $10m offered by the Commonwealth in 1985-86, Queensland received only $32 per person for Medicare funding, compared with $60 per person in New South Wales and Victoria. The comparison is even worse against the other States. South Australia received $81 per person-2 1/2 times more than the Queensland allocation. The shortfall amounted to some $93m that has to be carried by the taxpayers of Queensland. Yet the Queensland Government steadfastly refuses to impose a tax on petrol, cigarettes or beer or to impose a financial institutions tax. My State of Queensland is the lowest taxed State in Australia and it continues to stay that way despite the heavy burden that has been placed on it by this Federal Government. It is absolutely blatant discrimination. It is not only these Bills that assist in perpetuating this unfair funding allocation. The cutbacks imposed by the Commonwealth at the Premiers Conference mean that Queensland will suffer a reduction in general purpose funding in this financial year of $173m, representing a 3.5 per cent decline in real terms. This reduction consists of a decline in general purpose recurrent funding of $51m and a decline in general purpose capital funding of $122m. In addition, Queensland's world-wide borrowing program for semi-governmental authorities has been reduced by $227m-a massive 22 per cent cutback in real terms. Senator Maguire —Isn't that a good thing? Senator BOSWELL —Of course it is not a good thing. It would be a good thing if the Commonwealth made the same reductions as the States. But the annual rate of increase in Commonwealth spending is 4 per cent in real terms while its repayment to the States have increased at an average annual rate of 0.5 per cent. So it is quite obvious that the States are making the real cuts while the Commonwealth is continuing its wild spending spree. It is the double standards to which I object, when every day honourable senators from the Government side stand up and, with their holier than thou attitude, say that they are making real cuts in Government spending when in fact the real spending cuts are being made by the states. In the face of such an unbalanced treatment it is a great tribute to the State of Queensland that it should continue to contribute more than its fair share to the national economy and, in particular, to our export earnings. I point out that the Business Council of Australia-and I do not believe that it is a particular friend of the Queensland National Party Government-has found that Queensland has the lowest levels of State taxes in the country, at some 16 per cent below the average. In addition, it has consistently spent less than any of the other States in the past 25 years. In fact, it has spent at 15 per cent below the average of all the States; so, we can say that not only has it made a very healthy contribution in export earnings and dollar earnings but it has also played a significant role in reducing government spending. I stand here tonight to put on record the facts of how the Queensland Government is performing and the contribution that the Queensland people are making to the economy. Government senators opposite continually attack the Queensland Government and refer to poor economic performance, but in my contribution tonight I have pointed to the facts of the Queensland economy. I know that every Queensland senator on the conservative side, whether National or Liberal, is proud of the contribution that Queenslanders have made to the economy of Australia. Senator MACKLIN(Queensland)(9.22) —by leave-On behalf of Senator Powell, I move the following amendments to Senator Short's amendment: (1) Leave out the words ``delay in the''. (2) paragraph (c), leave out the paragraph, insert the following paragraph: ``(c) resulted last year in the lowest number of housing starts since the last year of the Fraser Government''. Senator WALSH(Western Australia-Minister for Finance)(9.23) —I have not heard much of the debate, although I did hear Senator Boswell telling us what a wonderful condition Queensland is in, which, as Senator Collins said, makes one wonder why not only Queensland as a whole but the National Party is so determined to get rid of the Premier who has delivered that condition. When listening to Senator Boswell I thought I was back in the early 1970s, because he seemed to be the last of the great spenders. Senator Boswell's speech consisted of an almost non-stop tirade of abuse of the Commonwealth Government for not spending more money. I do not know how he reconciles that with the alleged stringency of his Senate Leader and fellow Queenslander. As for what Queensland does or does not get, I noticed that Senator Boswell-or whoever wrote his speech-was selective enough to refer to general purpose capital payments and not to make any mention of special purpose capital payments. He, therefore, took no account of the $650m of taxpayers' funds that has been sunk into the Brisbane Airport, which was an act of appeasement made by John Howard in the twilight of his career as political Treasurer. It was an act of appeasement to the terror from the north. Some $650m of taxpayers' money was sunk into the construction of that new airport, the purpose of which, if anything, on balance, is dysfunctional; that is, as an operating airport it will be less useful than the one it replaced. The international 747s, I understand, will have to taxi about eight kilometres before they can get on to the strip. Of course, Senator Boswell will have an easy solution to that: simply build another international terminal adjacent to the strip-and that would probably amount to another $100m. It is typical of the double standards of the National Party in Queensland that it should be the most vociferous demander of Commonwealth funds for a variety of ill-conceived end uses while simultaneously demanding that total Commonwealth expenditure be reduced. I also understand-unfortunately I did not hear it- that Senator Stone said that he would be very happy to have the financial affairs of the Queensland Government subject to a rigorous and ongoing audit. Senator Stone might be happy to see that happen, but I am sure that the Queensland Government would not be. Therefore, I would not recommend that anyone hold his breath waiting for the Queensland Government to set up a public accounts committee as every other parliament in Australia has done. The Government will not support the Democrats' first amendment, but it will support their second amendment, as that embodies a much more honest statement of history than is the case with Senator Short's amendment as originally moved. That was designed, of course, to absolve from blame the Fraser-Howard team in its last year of Government for presiding over the lowest level of housing starts for 20 years. An attempt was made to blame that on the drought, but even though a drought did occur in that year its effect on housing construction was minimal. If I remember correctly, the number of housing starts in that year was some 102,000, while last year it was about 120,000. The Government will not support the Democrats' first amendment, as it does not accept the original amendment to the second reading motion, but it will support the Democrats' second amendment. Senator STONE(Queensland-Leader of the National Party of Australia) —I claim to have been misrepresented a moment ago by the Minister for Finance (Senator Walsh). Contrary to what he claimed to have been his recollection-and I do not understand how it could have been-as far as I am aware, and the Minister can check the Hansard record, I did not say that I was happy to have the affairs of the Queensland Government subjected to a rigorous audit, although as it happens I am. For the Minister's information, what I did say was that the States Policy Unit of the Institute of Public Affairs in Perth had this year for the second time running indicated, after its examination of State Budgets, that the most responsible Budget brought down by any State Government this year, as was the case last year, was that of Queensland. The DEPUTY PRESIDENT —Order! I understand that it is now the wish of the Senate that the two Democrat amendments be put separately. There being no objection, I will allow that course to be followed. The question is that Senator Powell's first amendment to Senator Short's amendment be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 60 —— Majority . . . . . . . . . 54 —— Coulter, J. R. Macklin, M. J. (Teller)Jenkins, J. A. Powell, J. F.McLean, P. A. Sanders, N. K. Alston, R. K. R. Knowles, S. C. (Teller)Archer, B. R. Lewis, A. W. R.Aulich, T. McGauran, J. J.Baume, Michael MacGibbon, D. J.Baume, Peter McKiernan, J. P.Bishop, B. K. Maguire, G. R.Bjelke-Petersen, F. I. Messner, A. J.Black, J. R. Morris, J. J.Bolkus, N. Newman, J. M.Boswell, R. L. D. Panizza, J. H.Brownhill, D. G. C. Parer, W. R.Burns, B. R. Patterson, K. C. L.Calvert, P. H. Puplick, C. J. G.Chapman, H. G. P. Ray, RobertChilds, B. K. Reid, M. E.Coates, J. Reynolds, M. E.Collins, R. L. Ryan, S. M.Colston, M. A. Schacht, C. C.Cook, P. F. S. Sheil, G.Cooney, B. Short, J. R.Crowley, R. A. Sibraa, K. W.Devereux, J. R. Stone, J. O.Devlin, R. Tambling, G. E. J.Evans, Gareth Tate, M. C.Foreman, D. J. Teague, B. C.Gietzelt, A. T. Vanstone, A. E.Giles, P. J. Walsh, P. A.Hamer, D. J. Walters, M. S.Hill, R. Watson, J. O. W.Jones, G. N. Zakharov, A. O. Question so resolved in the negative. The PRESIDENT —The question now is that Senator Powell's second amendment to Senator Short's amendment be agreed to. Senator SHORT(Victoria)(9.38) —The Opposition's does not agree with the amendment proposed by Senator Powell. I understand, from what Senator Walsh said before, that the Government will support this Australian Democrat amendment and therefore we will not formally divide on it. But I do want to put it firmly on the record that we are opposed to the Democrat amendment because it distorts the truth by deleting half the events of the last 20 years so far as the housing industry in this country is concerned. My amendment to the second reading motion, which is now sought to be amended by Senator Powell reads: but the Senate condemns the Government for the delay in the re-institution of negative gearing and for the pursuit of economic policies which have- amongst other things- (c) resulted last year in the lowest number of housing starts for the last 20 years, excepting the drought year of 1982-83. It is a fact that in 1986-87 housing starts in this country fell to 116,200, the lowest figure for 20 years, with one exception and one exception only, namely 1982-83 when, along with all other areas of economic activity, both domestic and international, as a result of a variety of factors but in Australia's case in particular as a result of the severest drought in living memory, the number of housing starts did fall dramatically. But to amend my amendment in the way being proposed by Senator Macklin is an absolute distortion of the truth of the events in the housing industry in the last 20 years, and therefore the Opposition opposes Senator Macklin's amendment. Senator STONE(Queensland-Leader of the National Party of Australia)(9.40) —I would like to support the remarks that Senator Short just made in opposing the second of the amendments moved by Senator Macklin. In doing so, I express my surprise at the action on the part of Senator Macklin. The first of the amendments he moved tonight was a perfectly understandable one. He moved-and we have just divided upon it-to delete the words `delay in the'. Had this amendment been passed, which it was not, it would have had the effect of not condemning the Government for the delay in reinstituting negative gearing. While I disagree with Senator Macklin, I understand his point of view on that matter. He has made it plain in this place before and so have his colleagues in the Australian Democrats. It is perfectly understandable. But in this second amendment moved by Senator Macklin what he is trying to do is strike out a piece of the truth from the third clause of Senator Short's amendment. Senator Short's amendment would have the Senate condemn the Government, among other things, for the pursuit of economic policies which have: (c) resulted last year in the lowest number of housing starts for the last 20 years, excepting the drought year of 1982-83. Senator Maguire —That was in the Fraser-Howard years. Senator STONE —If the honourable senator likes, he could say `excepting the last year of the Fraser Government'. The fact of the matter is that, whatever we call it, it was the one year in which the number of housing starts was lower than in this last year, 1986-87. I repeat my surprise at Senator Macklin for seeking, I trust inadvertently, to distort the record by seeking to delete the words that Senator Short has included in his amendment and to substitute the words `since the last year of the Fraser Government'. If that amendment is carried-as the Government has indicated that it will be, with its support-that will result in the wording of the amendment reading `economic policies which have resulted last year in the lowest number of housing starts since the last year of the Fraser Government'. It would simply drop out all of the history of the previous 16 years before the present Government came into office. That is what it does; that is the effect of the amendment. I find that extraordinary, because the only thing that that amendment does is to protect the Australian Labor Party. It removes the criticism of the Labor Party previously implicit in the phrase. Why is a prominent number of the Australian Democrats getting up in this House and protecting the Labor Party by moving an amendment on his own recognisance? That is a question we ought to ask Senator Macklin. Perhaps he will elucidate and give us the benefit of telling us why he is moving this amendment. I saw the point of his first amendment, although I did not agree with it. I simply want to say that, while no doubt we shall not have the numbers on this particular amendment, we will certainly have the moral high ground at any rate. Question resolved in the affirmative. The PRESIDENT —The question now is that Senator Short's amendment, as amended, be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 4 —— Alston, R. K. R. Messner, A. J.Archer, B. R. Newman, J. M.Baume, Michael Panizza, J. H.Baume, Peter Parer, W. R.Bishop, B. K. Patterson, K. C. L.Bjelke-Petersen, F. I. Puplick, C. J. G.Boswell, R. L. D. Reid, M. E.Brownhill, D. G. C. Sheil, G.Calvert, P. H. Short, J. R.Chapman, H. G. P. Stone, J. O.Hamer, D. J. Tambling, G. E. J.Hill, R. Teague, B. C.Knowles, S. C. (Teller) Vanstone, A. E.Lewis, A. W. R. Walters, M. S.McGauran, J. J. Watson, J. O. W.MacGibbon, D. J. Aulich, T. Jenkins, J. A.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P.Burns, B. R. McLean, P. A.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R. (Teller)Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cook, P. F. S. Ray, RobertCooney, B. Reynolds, M. E.Coulter, J. R. Ryan, S. M.Crowley, R. A. Sanders, N. K.Devereux, J. R. Schacht, C. C.Devlin, R. Sibraa, K. W.Evans, Gareth Tate, M. C.Foreman, D. J. Walsh, P. A.Gietzelt, A. T. Zakharov, A. O.Giles, P. J. Crichton-Browne, N. A. Button, J. N.Durack, P. D. Richardson, G. F.Chaney, F. M. Beahan, M. E. Question so resolved in the negative. Original question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment or debate. Debate resumed from 23 October, on motion by Senator Richardson: That the Bills be now read a second time. Senator JENKINS(Western Australia)(9.52) —The Australian Tourist Commission Bill 1987 and the Australian Tourist Commission (Transitional Provisions) Bill 1987 are supported by the Australian Democrats. They replace the Australian Tourist Commission Act of 1967 and provide a new legislative base for reform of the Australian Tourist Commission as recommended by the Australian Government Inquiry into Australian Tourism known as the Kennedy report which was issued in 1986. These Bills broadly concur with the Kennedy report apart from the areas of private enterprise and staff conditions which have already been discussed by Senator Puplick. We will be moving amendments to this legislation which are also in accordance with the Kennedy report. Page 63 of the Kennedy report, under the heading `Preservation of the Natural Environment', states: . . . the greater the demand for areas such as Australia's national parks, beaches or snowfields, the less of their original attractive qualities remain. These are non-renewable resources and clearly need some forms of protection from over use and despoliation. While large scale tourism is still in its infancy in Australia, the problems of over use of attractions will not be very prominent, although a slow, persistent attrition of quality may be occurring. When numbers increase significantly over a short or long term span, the problem becomes more acute. Further examples of the importance of factors in the social environment are mentioned on page 62 of the Kennedy report which states: According to the Department of Aboriginal Affairs local Aboriginals face the problem of conforming to the expectations of the tourist and are in danger of being exploited as part of the exotic setting offered by the package tour. The DAA quite rightly point out that the economic value to tourism of Aboriginal culture is dependent upon the acceptance by tourists and operators that continued down grading of Aboriginal culture will destroy its value to their industry and to Australia generally. The amendments we will be moving at the committee stage of the debate will be in accordance with the provisions in the Kennedy report. The objectives of the Australian Tourist Commission are, firstly, to increase the number of visitors to Australia from overseas and, secondly, to maximise the benefits to Australia from overseas visitors. We see our amendments noting the possible adverse environmental and social impact of tourism and we are also in accordance with the principal objectives of the Commission. Part III of the Australian Tourist Commission Bill-it is the most substantial part-deals with the constitution of the Board of the Commission. Like Senator Puplick, I shall also be moving an amendment on that matter. Part IV of the Bill deals with the corporate planning and accountability. There is a problem with clause 29 in part IV which was also raised by Senator Puplick. It was mentioned in the Scrutiny of Bills Alert Digest when the Senate Standing Committee for the Scrutiny of Bills stated: Given that clause (29) provides for the Minister to give directions in `exceptional circumstances' the Committee believes that subclause (4) should be drawn to the attention of the Senate in that it might be considered to insufficiently subject the exercise of legislative power to parliamentary scrutiny. If the Minister's discretion can override the discretion of the Parliament or the people, this is certainly unacceptable to the Australian Democrats. Part VI of the Bill deals with finance and it appears that this Bill will have no additional financial impact. Over the last several years tourism has been a major growth industry for Australia. It has generated much needed employment during periods of change and economic hardship when there have also been serious problems with our export industries. There are many employment advantages in the tourist industry. Firstly, it is an employment-intensive industry and it gives rise to a large amount of casual and part time employment. It can also provide training. I draw the Senate's attention to the Australian Tourism Industry Association 1987 annual report which, under the heading `Education/Training', states: There is a growing concern in the industry about the ability of our educational training system to cope with the gross demands of the industry. Surveys during the year indicated clearly that recruitment into the industry was continuing very rapidly but that available spaces in courses were inadequate to meet demand from applicants or employers. A survey in February 1987 showed applicants greatly exceeding available spaces in all states. Initiatives for 1987-88 clearly must centre on greater industry support for NTITC, greater concentration of the Council's resources on industry training and the development of improved management training at tertiary level. Indeed the leader in the West Australian newspaper on Thursday, 22 October, dealt with tourism. It stated: Western Australia risks losing its share of the lucrative Japanese tourist trade unless we listen carefully to what they want-and make sure they get it. The article further stated: The prediction that Australia will get one million Japanese tourists a year by 1999 represents an opportunity that we cannot afford to miss. It is up to the industry to provide the level of service and facilities needed to attract them, and to encourage some of its employees to learn the language. As well as there being possibilities for training and teachers of the trainees in direct service industries-the hospitality industries-more opportunities should also be made available in the languages area. I also draw to the Senate's attention the fact that it is very important that we encourage tourists to come here again. It is no good giving them a one-off rip-off time, thereby not encouraging them to come back again. It is most unfortunate but often the idea is to rip off tourists while they are here and not encourage them to come back to us. I would like to read to the Senate part of a letter which expresses that very well. The letter was written as a result of the article in the West Australian. It was: I share the concern over our ability to cater for visitors, not only from Japan, but also from all shores. Two weeks ago, as a coach driver on a scheduled tour, I stopped overnight in Kalbarri. The motel owners informed passengers and myself that `this is a production line. We get them in, feed them and get the Bs out'. When two of my startled passengers queried this, the owner's exact reply was, `If you don't like it, youse can rack off'. I hardly think that that sort of attitude will encourage overseas visitors to come back to our shores. So it is very important that, whatever legislation we bring in for the tourism industry, we make sure that the people who service that industry are well trained and do know how to cope with tourists properly. The Bill as it stands treats international tourism as an absolutely beneficial thing, but I put it to the Senate that tourism is a very mixed blessing. I can give personal examples of the effect tourism has had on Fremantle, south of Perth. Until recently, of course, Fremantle was the home of the America's Cup. What happened in Fremantle can happen anywhere, and it is a very good example of the good side and the bad side of tourism. As honourable senators may have read recently in the papers, Fremantle actually gained an award as a result of what happened there in the lead-up to the America's Cup contest. I read again from the West Australian: The award acknowledged the city's 16-year programme of conservation and development, which according to the citation, has made it one of the country's leading tourist destinations. There is no doubt that the city of Fremantle was very much improved as a result of the America's Cup races being held there. A number of old buildings were renovated, and renovated most attractively and sensitively, especially some of the older hotels. The town centre was upgraded. Streets and malls were made more attractive and cycleways and walkways were put in, to the benefit of the local population. There was a lot of trade and hospitality business there and there were tourist shops. There was always a very colourful and exciting atmosphere. In fact, the whole of Perth benefited from the America's Cup. We actually had shopping on a Saturday afternoon, which was unknown before. The extended hospitality hours were welcomed by most people. However, there was a very destructive side, and I think this is what we must bear in mind when we promote tourism simply as a go-getter industry and always beneficial in itself. In Fremantle there was a rise in rents for the people who lived there permanently. Fremantle had previously been a low rental district and lots of people had lived there for many years in a low rental situation. Small blocks of flats were upgraded, sometimes taken over totally by an overseas crew, and the rents were put up, so all round the area people simply had to move out. There was the expectation that the America's Cup races would go on for longer than they did. The finals races, unfortunately, were over rather quickly. There was the expectation of more overseas visitors than there actually were, and lots of people got their fingers burnt as a result. There was also a lot of disruption to general life in the city. So, although there was a very good side of tourism as far as Fremantle was concerned, there was also a negative side which I think we need to look at as far as all areas of the tourism industry are concerned. After all, when one wants to sell up afterwards, there are not that many takers for a second-hand berth for an America's Cup yacht. In Perth we have quite a good understanding of the impact of tourism, especially when that tourism is brought to us by the money-making aspirations of our resident millionaires. We have the example of an enormous eyesore on the Scarborough beachfront. It is known as Observation City, and no doubt it is called Observation City because it can be observed from a great distance, both north and south, on the coastline. It stands out like the proverbial sore thumb. It is the one example of Gold Coast overdevelopment on the Western Australian coast. This is another example of the desire for tourism gone absolutely mad, and again it is of no benefit to the local residents. Another aspect that needs to be examined sensibly and sensitively is the system of penalty rates for people working in the tourist industry and allied concerns. It is an industry where people are frequently required to work after hours, and this often means that just when more staff are needed they are simply not available because the concerns cannot afford to pay them the penalty rates. If we want to increase tourism in this country, which I am sure all of us do and which the introduction of this Bill will aid, penalty rates must be looked at carefully. The timing of the Australian Tourist Commission Bill is very interesting because we will be debating soon the Sea Installations Bill 1987, which deals with the Four Seasons floating hotel in north Queensland. This floating hotel has just been built in Singapore and it was originally expected to arrive in Townsville in October 1987, although I believe it is now expected to arrive in north Queensland by about December. It will be moored 72 kilometres out to sea off Townsville, on the John Brewer Reef, and it will be held stable by approximately 250 tonnes of chains and concrete blocks. It is expected to cater mainly for the Japanese and north American tourist markets. The Great Barrier Reef Marine Park Authority gave permission for the floating hotel to be sited within the boundaries of the marine park. It was feared that mooring the hotel over the Great Barrier Reef would destroy the very area the tourists wanted to see. The Australian Conservation Foundation movement in Queensland and other environment groups brought to the attention of the Government the fact that a hotel moored there could destroy what people were coming to see. As a result, the owners have undertaken not to pollute the water in the marine park and to take care with their rubbish disposal. But there is still the fear that the implications of mooring the hotel there cannot be totally known and there is a danger that pollution over which we can have no control will occur there. As I have said, the Australian Democrats will be supporting the Tourist Commission Bill. We believe tourism is very valuable to Australia from an economic point of view and also from a more intangible point of view, in that when we do have overseas visitors here we can develop important links between individuals. These links may lead to unforeseen initiatives in trade and education but also they can lead to the general development of international understanding, with its positive influence on the prospects for world peace. For these reasons, we regard the tourism industry as very important and, provided that it is appropriately structured and efficiently managed, we hope that it will be encouraged as far as possible. Senator McGAURAN(Victoria)(10.10) —In speaking to the Australian Tourist Commission Bill 1987 it is worth reflecting on the great and timely contribution the tourist industry has played towards investment growth and the building industry. It should always be remembered that the tourist industry is the first face of the Australian nation and of its people. It should always show the best face to our overseas visitors. It should also be noted that the very nature of this industry is that it is very much a people industry. It is a great employer and employs great skills. The statistics show that 400,000 jobs, full and part time, are currently attributed directly or indirectly to tourism. The statistics also show that up to 6 per cent of gross domestic product is employed in the tourist industry, which is a credit to the industry itself. At present a one per cent increase in the number of visitors arriving on our shores will create 500 new jobs. That shows what a great employer the tourist industry is. Unfortunately job positions and the ability to train people in these fine skills which they can carry around the world are not available. Such facilities are not available in Sydney or Melbourne. In Melbourne the William Angliss College had more than 500 applicants for its diploma of hospitality and catering but could take on only 96 students. In Sydney there were positions at the Ryde College of Catering and Hotel Administration for full and part time management courses for 400 students. A total of 790 people turned up for enrolment and camped outside the college to make sure that they could enrol the next day. What a great disappointment to these young Australians-and the industry basically is composed of young Australians-that they cannot be employed and that there are not sufficient facilities and money going towards courses at technical and further education colleges in this growth industry. The tourist industry has exploded for many different reasons over the last decade. It is predicted that by 1988 two million visitors will be coming to our shores, which is double the 1984 figure. There are many reasons for that and they were outlined in the speech of Senator Puplick on this Bill on a previous occasion. Senator Puplick mentioned the attraction to tourists in terms of security when holidaying in Australia, particularly visitors from Europe and the Middle Eastern areas. Another reason is the devaluation of the dollar, which has been stated many times in this chamber and does not need to be gone into in depth. But let us not forget that the main reason that visitors come to our shores is to see this great and unique nation. We have suddenly been discovered, and it is not before time because we are a great nation with a great deal to offer. I unashamedly say, both as a Melbourne city councillor and as a Victorian National Party of Australia senator, that Victoria has the most to offer. The city of Melbourne is unique. It is unique for its gardens and its sporting events such as the Melbourne Cup which is coming up in the next week on the first Tuesday of November. The Melbourne Cup is one of the greatest, if not the greatest, horse racing events in the world. Melbourne is the home of the Victorian Football League grand final, and what a great final series it was this year with the contribution of the Melbourne Football Club. Melbourne has the charm of its trams and eighteenth century buildings. Melbourne, being the first port of call in Victoria, has many great regional tourist areas also. I have had the privilege of visiting many of them. I recently came back from Swan Hill, a magnificent tourist attraction, and I was shown around by the Lord Mayor of that township on the Murray. It has magnificent tourist facilities. So great are those facilities that the film All the Rivers Run, shown last year on television, was filmed in the township of Swan Hill. At the weekend I had the privilege of travelling to Gisborne just outside Melbourne and visiting the Mount Aitkin Estate, which has some of the finest wines and ports in Australia. It is a tourist attraction. I see one Victorian Liberal Party of Australia senator present in the chamber, the newly elected Kay Patterson. I am sure that she would join me in saying that if I see any Victorian senator not drinking and supporting Victorian wines and ports, such as those from the Mount Aitkin Estate, I shall call them to account in this chamber. Senator Collins —That is very irresponsible. Senator McGAURAN —I ask the honourable senator to keep listening to my speech because I shall have a lot to say about the Australian Labor Party and its contribution to tourism, particularly the contribution of New South Wales. This has been an adaptable, large and growing industry. It would grow even more if it were unhindered by this Government's fuel taxes, liquor taxes, sales taxes, entertainment taxes and so on. It would be one of the leading industries and one of the greatest contributors to solving the balance of payments crisis in this nation if only this Government would leave it alone and get off the industry's back. In addition, I would like to concentrate on what I see as the main point of my speech. This industry is being slanted in a biased way by this Government and there is something rotten about this Ministry; there is tremendous Government interference. Shakespeare said, `Something is rotten in the state of Denmark'. I use those words to say there is something rotten in the city of Sydney. I speak both as a Melbourne city councillor and as a National Party senator for Victoria in expressing my concern and anger at the asset stripping of Victoria by this Government, particularly the asset stripping of the city of Melbourne. This asset stripping is being carried out by the right wing of the New South Wales Labor Party based in Sydney. I draw the attention of this Parliament to the waste of funds associated with the move of the Australian Tourist Commission (ATC) from Melbourne to Sydney as the prime example. The Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown) took it upon himself to make this decision to move the Tourist Commission from Melbourne to Sydney before the report of the Kennedy Inquiry into Australian Tourism was properly handed down and debated. So he has already influenced the decision. One wonders what political pressure he put on the Kennedy inquiry to get it to come to the same conclusion. What a shocking conclusion it was when it cost over $3.3m to relocate the Commission, which involved taking only four people from Melbourne to Sydney. One wonders about the decision when they moved into a building owned by Sir Peter Abeles, a man Mr John Halfpenny has suggested we inquire into in connection with his relationship with the Prime Minister (Mr Hawke). Senator Collins —Are you going to climb into bed with Mr Halfpenny? Senator McGAURAN —No, I have no brief for Mr Halfpenny at all. Perhaps Mr Halfpenny, in wanting us to investigate the relationship of the Prime Minister and Sir Peter Abeles, would like us to investigate this particular aspect in moving the ATC into a building owned by Sir Peter Abeles. The Kennedy inquiry ignored the proper submission by the Tourist Commission that it preferred to stay in Melbourne; the inquiry preferred to take the absolutely insane evidence from the Footscray Institute of Technology which was based on the fact that there was a geographical difference between Melbourne and the Federal Ministry in Canberra. It said that it was conducive to policy formulation and setting of planning goals relative to the distance between Sydney and Canberra and that it was probably better if the ATC moved to Sydney. That is one of the most incomprehensible statements that I have heard for a very long time and does no justice to the reputation of what I believe to be a very fine institution. It merely dredges up the old Sydney-Melbourne rivalry and is based on the same reasoning as that given for the removal of this Federal Parliament from Melbourne to Canberra to begin with. Senator Collins —It is in the Constitution. It had to be moved. Senator McGAURAN —Exactly. It was moved from the fine setting in the Exhibition Building in Melbourne to Canberra. That was the sort of rationale that a previous government used and the advice on which it acted in moving the Parliament to Canberra. Section 125 of the Constitution enshrines the rivalry between Melbourne and Sydney. If this Prime Minister is fair dinkum about justifying referendums in 1988, he should put section 125 to the people because it blatantly discriminates against the city of Melbourne. Senator Collins —Going back 100 years is definitely raking over old coals. Senator McGAURAN —We do not forget. Section 125 says that the territory containing the seat of government of the Commonwealth shall be in an area `not less than 100 miles from Sydney'. I will not read the whole section because we all know what the point of it was. It shows just how far back this rivalry between Sydney and Melbourne goes and the New South Wales Right is continuing this rivalry at the expense of Melbourne. The plot certainly thickens, as I said before, especially when we hear that the ATC has moved to a building owned by one of Mr Hawke's good mates. Of course, Mr Halfpenny has called for an inquiry into the relationship between these two characters. However, I do not believe that Mr Halfpenny's concern is at all genuine. He has never had much concern for the Australian people. A more likely explanation is that Mr Halfpenny is still dirty on the Prime Minister for ringing him up late on election night and declaring that he had won the sixth Senate seat in Victoria. That was totally untrue, but Mr Halfpenny took that advice and in the Press on Sunday, Monday and Tuesday he declared he had won victory. He very quickly had to back down. Whoever did the numbers for Mr Halfpenny-I suspect that it was Senator Robert Ray-certainly got it wrong. Now the venom of Mr Halfpenny is certainly coming out against the Prime Minister. Senator Collins —On a point of order, Mr Acting Deputy President: we have been listening to this for five minutes. It is now 10.20 p.m., so I wonder whether the honourable senator could talk about the Australian Tourist Commission. Senator McGAURAN —On the point of order, Mr Acting Deputy President: I would like you to call the back bench opposite to order. Senators opposite have been heckling throughout my speech. The ACTING DEPUTY PRESIDENT(Senator Teague) —There is no point of order on the matter which Senator Collins raised. It is true that there have been too many interjections on my right and I ask honourable senators to listen to Senator McGauran in silence. Senator Collins —I rise on another point of order. I object profoundly to visual signs, such as the one Senator McGauran just made, being made in a House of the Parliament. I ask Senator McGauran not to make obscene gestures across the chamber. It is not a very edifying spectacle. Senator McGAURAN —Are you a baby? Senator Collins —No, but as there are people in the public gallery I do not think that it looks very good if honourable senators do such things. The ACTING DEPUTY PRESIDENT —I did not see any visual gesture. Senator Collins —I will not describe it, but I ask him to withdraw it. The ACTING DEPUTY PRESIDENT —There is no point of order. Senator McGAURAN —I object to that. I deny that there was a visual gesture at all. That is an outrageous allegation against me and my integrity. If Senator Collins wishes to describe this gesture, he can go ahead, but we are wasting valuable time on air. He is a pathetic and trivial senator who is merely trying to stop these proceedings before the broadcast ends. Senator Collins —As an explanation of the gesture, Mr Acting Deputy President, it was his finger and I asked him to withdraw it. The ACTING DEPUTY PRESIDENT —There is not point of order. I ask Senator McGauran to continue his speech and to relate his remarks to the Australian Tourist Commission Bill 1987. Senator McGAURAN —While I am speaking of the cost of moving the ATC it is timely to refer the Senate to Estimates Committee F where Senator Puplick clearly outlined the costs when he questioned Mr Rowe, the head of the ATC. Senator Puplick asked Mr Rowe several questions and Mr Rowe had to admit that the cost of moving four staff members to Sydney was $800,000 per person. Under tight questioning from Senator Puplick, Mr Rowe had to make that admission. Mr Rowe said that redundancy payments, amounting to well over $1m, were the biggest factor. As a result of the move from Melbourne to Sydney there was the cost of moving the staff, shipping the organisation's files to Sydney, leasing new space and getting the best deal available-that is what Mr Rowe dared to say, `getting the best deal in leasing new space'. The evidence is very clear. The moving of the ATC from Melbourne to Sydney was an act of bias. There are many other examples that show clearly that the right wing of the NSW Labor Party has taken several other actions, which I will outline, merely to enhance its electoral prospects and return favours to its campaign contributors. Today's Melbourne Herald carried a story by Penelope Debelle, the State reporter, and it was headlined `Victoria may miss $200m worth of contract'. I wish to read certain sections of that article to the Senate. The article says: Victoria is in danger of losing the race for a major telecommunications contract because of the expected New South Wales election. Victoria, NSW and South Australia are rivals for the location for manufacturing the $200m Tasman 2 submarine cables linking Australia with New Zealand. It goes on to say: Parliamentary sources claim that a deal has been done by the NSW Right-wing faction to ensure the contract will be . . . delivered to New South Wales. Other examples of such a bias include the fact that, although the National Crime Authority did all its work in Melbourne, it is located in Sydney. The Australian Security Intelligence Organisation was dragged out of Melbourne and taken to Canberra. The Australian Broadcasting Corporation (ABC), under its new boss David Hill, has relentlessly moved all its production facilities to Sydney. The ABC has spent $15m in housing, and renting new facilities for, the Sydney Symphony Orchestra at the expense of the Melbourne Symphony Orchestra. Meanwhile the Melbourne Symphony Orchestra is housed in very shabby studios in Glen Waverley. A further example of this Government's bias against Melbourne can be seen in the continued pleas by the Melbourne City Council and the Victorian Chamber of Commerce for a fair deal in having more international flights to Tullamarine Airport. Currently 57 per cent of direct flights to Australia go to Mascot, which is terribly overcrowded. The Government is not willing to direct or promote any new flights to Tullamarine. That is having a severe effect on Melbourne's tourism and commerce. It is very difficult for an international business to set up in Melbourne if its representatives have to fly to Sydney first and then catch an internal flight to Melbourne. It would be far better if they could come directly to Melbourne. This would promote business and tourism. An example of how Melbourne has been disadvantaged by lack of flights is that many of the foreign banks have set up in Sydney in preference to Melbourne, which was once the financial centre of Australia. I believe that it still is or at least will return to being so. I turn to the Bicentenary celebrations. I am sure that all honourable senators will agree with me that the Bicentenary is not a celebration for a nation but has become a celebration for a city. This was highlighted by the fact that earlier this year a meeting of capital city lord mayors condemned the Government for its bias in centring all these celebrations in Sydney. That attitude is dividing the nation and intensifying the existing Sydney versus Melbourne competition. At that meeting of lord mayors the only person missing was the Lord Mayor of Sydney because the Sydney City Council got the sack. Sydney no longer has a Lord Mayor because the City Council got wiped out by the New South Wales right wing. For what reason? So that it could move into the centre of the city-- Senator Collins —I rise on a point of order, Mr President. I sat through ASIO, but I must point out that we are talking about the Australian Tourist Commission Bill. It is a late hour and I do wish the honourable senator would talk about the Bill. The PRESIDENT —There is no point of order. The PRESIDENT —Order! It being 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 10.30 p.m.